England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
(Appeal of Petitioner husband from
Order of Mr Justice Purchas,
London, November 26, 1976.)

		Royal Courts of Justice,
		10th March 1977

LORD JUSTICE STAMP: We need not trouble you, Mr Wall. This is an appeal from an order of Mr. Justice Purchas made on November 26 last whereby he reversed an order made by Mr. Registrar Tickle in relation to the former matrimonial home of the parties to the suit. The learned registrar had ordered a sale of the matrimonial home and a division of the net proceeds between the parties in equal shares on the footing that the husband should discharge the rather small mortgage debt which was charged on the property. The learned judge reversed that order, deciding that the matrimonial home should be held in effect upon trust for the wife during her life or until her remarriage or such earlier date as she should cease to live there. The matrimonial home is at 27, Plane Avenue, Northfleet.

The history of the matter, put shortly, is this. The parties were married in 1957 and there were no children of the marriage. The husband is now 43 and the wife 46. On September 27, 1972, the husband left the matrimonial home to live with the party cited. The divorce proceedings were begun, I think, originally by the husband, but in fact on October 4, 1974, I think on the wife's cross-application in her answer, a decree nisi was granted on the basis of the husband's adultery, and that decree was made absolute on November 19, 1974.

The value of the house was agreed to be about £11,000. It had been purchased in the husband's name at approximately the time of the marriage in 1957 for £1,800, of which £1,300 had been raised on mortgage. When the matter came before the judge the amount outstanding on mortgage was £661, plus £229 arrears of interest. The judge treated the equity as of a value of approximately £ 10,000. Neither party had any capital assets of any significant value except such interest as they had in the matrimonial home. Both parties are employed, the husband earning about £30 a week net and the wife about £23 a week net.

The husband is living with the party cited in a three-bedroom council house. He intends to marry her, and he saw no difficulty in obtaining a transfer of the tenancy of this house to him and the party cited, who has two children of a former marriage aged 12 and 9, and recently gave birth to a child of whom the former husband is the father. So - and this is one of the important features of this case - the husband has a secure roof over his head. The parties' solicitors accepted that the equity in the house belonged to them in equal shares. The registrar found, if such a finding was necessary, that the wife's share of the equity of a sale would not enable her to purchase alternative accommodation.

It is of primary concern in these cases that on the breakdown of the marriage the parties should, if possible, each have a roof over his or her head. That is perhaps the most important circumstance to be taken into account in applying section 25 of the Matrimonial Causes Act 1973 when the only available asset is the matrimonial home. It is important that each party should have a roof over his or her head whether or not there be children of the marriage.

The judge in the instant case, in my judgment, approached the matter correctly. After a careful review of a number of authorities he turned to consider and apply the provisions of section 25 of the Matrimonial Causes Act 1925. In relation to section 25(1)(a), the income and earning capacity of each of the parties in the instant case disclosed that each had a reasonable earning capacity, and that the wife's earnings were such that the registrar made only a nominal order for periodical payments in her favour. I would interrupt the recital of the judge's judgment by remarking that if the wife is allowed to remain in occupation of the matrimonial home the risk that the husband will ever be ordered to make periodical payments to her is, as I see it, negligible. In the absence of the unlikely event of a dramatic improvement in his fortunes he will as a practical matter be relieved by the effect of the judge's order of the risk of having to make periodical payments to the wife in the future, for she will have a roof over her head for as long as she requires it and will be under no liability to pay rent.

The learned judge continued by referring to section 25(1)(b) of the Act, relating to the financial needs, obligations and responsibilities which each of the parties to the marriage had or was likely to have in the foreseeable future. He pointed out that there was no evidence that the husband had any immediate need for a capital sum in order to support his present way of life, and that he had a secure roof over his head. He went on to say a little later in the judgment that the wife, on the other hand, needed either the matrimonial home in which she was presently living or some alternative accommodation. He pointed out that the registrar had found: "... even with the sale of the matrimonial home the net equity available to the wife would not enable her to purchase alternative accommodation." He went on to say:

"The wife had applied to the council for a council house; the finding of the learned registrar in this respect is at paragraph 8: 'There is, of course, no guarantee that she will succeed in her application to the local authority but she will have £5,000 to invest and the interest would enable her to pay a reasonable rent.' The parties have agreed to accept the findings of the registrar otherwise I would have some reservation about this proposition as a secure alternative to the wife's remaining in the matrimonial home."

Mr. Aglionby, on behalf of the husband, submitted that there was a good possibility of the wife obtaining the council accommodation, but there is no evidence whatsoever that she has, or is indeed likely to obtain, such accommodation. Apart, however, from that, I would require a good deal of convincing that it would not be contrary to public policy to make an order for sale of the matrimonial home so as to put £5,000 into the pocket of the husband, and, incidentally, approximately the same amount into the wife's pocket, in the belief that the wife would be rehoused in council accommodation. Quite an important question of public policy is, I think, there involved, and the decision of Mr Justice Browne in Brent v. Brent (1975 Fam. Div.) does not assist Mr. Aglionby, nor does the decision of this court in Thompson v. Thompson (1976 Fam. Div. p. 25), which was concerned with quite a different question.

The judge went on to consider the effect of section 25(1)(c) of the Act, pointing out that it was "relevant to have regard to the fact that the family before the breakdown of the marriage lived in modest, comfortable circumstances in their own house upon which a reasonably small mortgage was being paid off." In this connection I would emphasise that the parties, had the marriage continued, would almost certainly, as the judge pointed out, have remained in the house and would not have been in a position to enjoy the equity comprised in the matrimonial home in the form of a liquid asset until they reached the age of retirement and perhaps moved into smaller or more modest accommodation. The judge added:

"At least, therefore, it is likely that for a further 16 or 20 years until the husband retired the inchoate asset represented by the matrimonial home would have been of no practical financial value to either party. In a sense the proceeds of the sale of the matrimonial home in the immediate or not too far distant future would represent an uncovenanted bonus arising out of the breakdown of the marriage from which both parties might benefit, provided that the wife is fortunate enough to find a partner who will provide her with secure and suitable accommodation as the husband has been able to do. Such a course would clearly be just as between the parties and in accordance with the provisions of section 25 of the Matrimonial Causes Act 1973. However, such a sale giving one the bonus unimpaired, but the other the bonus impaired by its immediate and necessary application to secure a roof would not, in my judgment, be doing justice between the parties. Bearing these matters in mind I am unable to say, nor indeed is there any evidence to this effect, that by deferring the realisation of the only asset, namely, the matrimonial home, will either party and in particular the husband suffer any damage in relation to the financial position in which they would have been had the marriage continued and each had discharged his or her financial obligations and responsibilities to the other. If it is appropriate to balance the incidence of the order upon each of the parties in studying whether it is just to make the order then I would say, without hesitation, that in these circumstances the degree of hardship likely to fall upon the wife if she is forcibly removed from the matrimonial home will greatly exceed the hardship inflicted upon the husband by being 'kept out of his money' which in this case means little in the context of the continuation of the marriage and the unavailability of the matrimonial home as a liquid asset."

The learned judge concluded that it would be wrong to order an immediate sale of the property. I can only say that I agree so much with the way that the matter was put by the judge that I do not think it could be put better, and I entertain no doubt that he came to the right conclusion.

Mr. Aglionby relied extensively on the decision of this court in Goodfield v. Goodfield, (unreported Court of Appeal transcript 19th June 1975) which bore many similarities to the present case. There the facts (and I take them again from the judgment of the judge in the instant case, who made a careful analysis of the case) were these:

"The marriage lasted about 13 years until 1968 when the husband went to live with another lady with whom he was still living at the time of the proceedings. The wife remained in the last matrimonial home with their son aged 17. Apart from a small amount of capital saved by the wife the only asset was the matrimonial home, the net value of the equity in this property was about £9,500. Before the district registrar the wife's application resulted in an order that the matrimonial home should be transferred into the joint names of the husband and wife. This was agreed between the parties. The registrar also ordered that the beneficial interest in the house should be divided in equal shares between them, again by consent. The registrar then ordered that the wife should be permitted to remain in the matrimonial home until her re-marriage, death or sale of the property and the order provided that such sale should not take place without the express consent of the wife. The effect of the order was that the wife should be permitted to remain in the matrimonial home until her re-marriage or death or unless she consented to a sale. The husband appealed from the registrar's order to the county court judge, Judge Sir Ian Lewis. The judge upheld the decision of the registrar on the basis that in his opinion in all the circumstances it was fair though he recognised the hardship that it entailed to a man without any capital assets and earning not a very great weekly wage. The judge thought it was fair for two reasons. First, he attached importance to the fact that the wife had lived in the home for almost 20 years and throughout the marriage, including a period of some six years since the husband had left home. Secondly, he declared that he did not believe that the wife could find any reasonable accommodation for a sum of £4,750 which was her share of the equity. Although it was not specifically mentioned it was assumed in the Court of Appeal that the judge's finding that it would be difficult if not impossible for the wife to acquire housing appropriate to her needs included a council house or rented accommodation. On this aspect of the case Lord Justice Scarman who delivered the leading judgment in the case with which Lord Justice Cairns agreed felt able to overrule the judge's finding of fact on the basis that with cash resources of nearly £5,000 behind her it was inconceivable that she should not be able to find some kind of accommodation even if that involved a drop in standards."

So, in the view of the Court of Appeal in that case, an order for sale and division of the proceeds of the matrimonial home did not involve leaving the wife without a roof over her head. That, in my judgment, is the difference between that case and the instant case. I accordingly obtain no assistance in the decision of the instant case from the judgment of the Court of Appeal in that case.

The learned, having having come to the conclusion that a sale ought not to be ordered at the present time, went on to consider for how long a sale ought to be postponed and mentioned as one possibility a term of 10 years. He came to the conclusion that the wife should have the house during her lifetime, or until her remarriage, or until she should voluntarily decide to give up residence in the property. He came to that conclusion bearing in mind, he said:

"that the wife herself will be anxious, other things being equal, to enjoy her half of the proceeds of the sale, in other words the uncovenanted cash bonus. There will be no incentive upon her to remain in the matrimonial home unless it is reasonable for her so to do in all the circumstances. In other words, if suitable alternative accommodation becomes available there will be an incentive upon her to accept it and thus enable both parties to enjoy the proceeds of the sale of their joint asset."

I am bound to say that I find it difficult to accept that particular reasoning. I think the wife, the order being made in the form in which the judge made it, will be most unlikely to give up her occupation of the matrimonial home, and I do not think that consideration ought to affect one's conclusions on the matter. On the other hand, a most important point to which the judge did not direct his attention seems to me to be this: that the injustice to the wife of making an order that the house be sold at some specified time in the future might well turn out to be greater than would be the case of an order for sale at the present time. It is at least likely that the wife will be in a far worse position to fend for herself in 10 to 20 years' time than she is at present, and I should have thought that to postpone the sale until some specified date in the future would cause her great hardship when that time arose. For that reason I think that the order which the judge made was the correct order, notwithstanding that one of the reasons for making it was not in my judgment well founded.

I would dismiss the appeal. The actual order made by the judge I think requires some amendments which can be dealt with after my brethren have given judgment.

LORD JUSTICE ORMROD: I agree, and but for the matters on which Lord Justice Stamp has just commented I should have been content to accept Mr. Justice Purchas's as my own. I only want to add one or two observations arising out of Mr. Aglionby's submissions. I appreciate the point he has made, namely, that it is difficult for practitioners to advise clients in these cases because the rules are not very firm. That is inevitable when the courts are working out the exercise of the wide powers given by a statute like the Matrimonial Causes Act 1973. It is the essence of such a discretionary situation that the court should preserve, so far as it can, the utmost elasticity to deal with each case on its own facts. Therefore, it is a matter of trial and error and imagination on the part of those advising clients. It equally means that decisions of this court can never be better than guidelines. They are not precedents in the strict sense of the word. There is bound to be an element of uncertainty in the use of the wide discretionary powers given to the court under the Act of 1973, and no doubt there always will be, because as social circumstances change so the court will have to adapt the ways in which it exercises discretion. If property suddenly became available all over the country many of the rationes decidendi of the past would be quite inappropriate.

This case was rightly approached by the judge. He adopted the Browne v. Pritchard [1975] 1 W.L.R. 1366 approach. It is clearly a case where needs far outweigh resources in importance. It is a case where both parties need a secure home at a price which each can afford, and that they have under the judge's order. It seems to me that it is exactly right.

I entirely agree with what my Lord Justice Stamp has said in relation to the question of public policy in making orders for the sale of property in circumstances such as these, in reliance on local authorities to provide housing for people who would thus be enabled to obtain some free capital at the public expense. That would require most careful consideration as a matter of policy.

Secondly, whenever it is to be argued that the wife could find alternative accommodation for herself out of her share of the equity, whatever that may be, or obtain council accommodation, there should be evidence put before the court to that effect. The unsupported assertions and speculations which are made in the course of argument in these cases are not satisfactory. It means that the court has to use its own imprecise knowledge of the property market and may well make mistakes. So if it is going to be said that the wife could get alternative accommodation, let there be some evidence to that effect. Otherwise it will have to be assumed that it is not possible.

The only other matter on which I want to comment is this. Mr. Wall in his submissions to the judge below commented upon the fact that a practice seems to be developing of postponing the sale of matrimonial homes in similar cases to this until after the youngest child has reached the age of 18, or whatever the appropriate age may be and no further. Mr. Wall made the point that that practice is in danger of ousting the general discretion of the court under section 25 of the Act. I think there is a good deal of force in that. As my Lord, Lord Justice Stamp pointed out in argument. that form of order originated in this court in a case called Mesher v. Mesher, where it was no doubt aptly suited to the circumstances prevailing in that case. But it was never intended to be a general practice. There is no magic in the fact that there are children to be considered. All it means is that the interests of the children take priority in these cases, so that often there can be no question of sale while the children are young. But the situation that will arise when the children reach the age of 18 requires to be carefully considered. Otherwise a great deal of hardship may be stored up in these cases by treating it as a rule of thumb that the matrimonial home should then be sold. It is not a rule of thumb. In some cases it is the only way of dealing with the situation. For example, take a husband who has an onerous mortgage round his neck. He may badly need some capital as soon as it is reasonable to give it to him. In such a case a wife who remains in the matrimonial home with the children may have to endure the hardship of giving up the matrimonial home to relieve the husband's hardship. But that is a matter of weighing each individual case on its merits, of weighing up each side's resources and trying to ensure that neither party is rendered homeless.

For these reasons I agree that the appeal should be dismissed.

SIR JOHN PENNYCUICK: I agree with both judgments which have been delivered and do not wish to add anything.

Appeal dismissed. No order for costs before registrar or in Court of Appeal save legal aid taxation of both parties' costs.