England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM PRINCIPAL REGISTRY FAMILY DIVISION
(MRS JUSTICE BLACK)

		Royal Courts of Justice Strand, London, WC2A 2LL
		19 May 2010

Lord Justice Thorpe:

1. This is a second appeal in an ancillary relief case. The trial resulted in a judgment by the District Judge in the Principal Registry on 7 May. It was District Judge Cushing.
2. The parties both appealed to the Family Division Judge, and that appeal was the subject of a judgment by Black J given on 6 August 2009. Essentially, she dismissed both appeals, but she accepted the submission of the wife that the provision in paragraph 2 of the judgment of the District Judge was not reflected in her order. Accordingly, two additional paragraphs were inserted: paragraph 4 requiring the husband to transfer to his wife 88 Parsonage Lane, Enfield and 29 Birkbeck Road, N17. Paragraph 5 provided that if the husband executed the necessary documents within 48 hours of being requested to do so and failed, then a district judge might execute on his behalf.
3. The most important paragraphs of the order of the District Judge in the perception of the wife are paragraphs 1 to 3, which deal with the final matrimonial home, 7 Grafton Road, Enfield. The judge ordered a sale of the property and she gave clear directions for the conduct of sale and for the discharge of the proceeds of sale. She required the husband to pay the mortgage pending sale and she prevented him from extending the charge in favour of the Bank of Cyprus to guarantee business borrowings beyond the ceiling of £25,000.
4. Both parties had sought a transfer of the final matrimonial home, and the judge's reasoning for declining those applications is to be found in paragraph 25, when she said:

"It would be impracticable to transfer it into the [wife's] name without her having the means to pay the mortgage, and release the Bank of Cyprus charge on the property which secures the company's borrowing. It would be wrong to transfer it into the [husband's] name, depriving the [wife] of her entitlement in the property."

5. The appeal to the High Court judge achieved little in that regard. Black J, in ruling on the wife's appeal, said:

"She complains first that the District Judge erred in failing to take into account the secure long-term housing arrangements for herself and the children. This ties in really with the point made at number 4 on her reasons, which is her argument that the District Judge should have transferred Grafton Road to her, and let her make arrangements to take over the borrowing, rather than having ordered that it should have been sold, or at least that the District Judge, as she puts it here, should have given her all of the sale proceeds of that property. The difficulty for the District Judge, as is apparent from her judgment, is the scarcity of resources in this case and the pressing need for the parties' debts to be discharged so that there would be an income and a business and so on for the future."

6. As a matter of general principle, it seems to me that if the wife in occupation of the final matrimonial home (having primary regard to the interests of the children) seeks the transfer of the property, in preference to the proceeds of sale of the property, she should ordinarily succeed, providing of course that she can secure the release of the co-owner from the mortgage or charges attached to the property.
7. The District Judge denied her her chance, simply on the ground of impracticability, and the Family Division Judge upheld the District Judge on the perception that the sale was essential to sustain the complex family financial structure. As to impracticability, it seems to me that that was a risk that the wife should have been allowed to run if she was keen to run it. As to scarcity of resources, the sale or retention of the final matrimonial home would make no difference either way. It is not as if any part of the proceeds were going to be available to give sustenance in the overall financial structure. So when the application for permission to appeal was advanced by the wife as a litigant in person, I was sympathetic to her plea that the home to which she and the children were accustomed should not be torn from her and, accordingly, I adjourned for a further hearing on notice.
8. Fortuitously, during the period of adjournment, the appellant's mother has died and we are informed that her share in her mother's estate is likely to be worth about £250,000. So any sense of impracticability of a sale expressed by the District Judge now seems completely unfounded.
9. Although this is a second appeal, I would be minded to allow the appeal on the ground that it satisfies the second limb of the test, namely that there are compelling reasons to grant permission and to then determine the appeal.
10. What contrary argument comes from the husband? He says, well the children are spending as much time with him as with her. That may be, but it does not in any way counter the logic of the wife's case. He points to the importance of his relationship with the Bank of Cyprus, who hold the second charge. Again, it would be a condition of transfer that the wife either came to an accommodation with the Bank of Cyprus or, alternatively, allowed the Bank of Cyprus to retain that charge, despite the fact that the property was no longer jointly owned.
11. I only add that Mr Aziz is in flagrant breach of periodical payments orders made in favour of the appellant. The arrears in the orders made by District Judge Cushing now amount to £48,568 and are rising at the rate of £2,000 per month. In addition to that, it is apparent to me that Mr Aziz is bound to give an account of sums received in relation to the two properties, to be transferred to the wife in accordance with paragraph 4 of the order. An insertion of that by a slip rule amendment does not affect the entitlement of the wife to any rent exceeding expenses between 7 May 2009 and this date.
12. Mr Aziz has admitted that he has received £7,000 by way of rent (£3,000 from one and £4,000 from another) of the properties. He says that he cannot pay that over because he has spent it. That is an unattractive plea and, although it is not strictly in our province, I would, in the interests of cost-saving, direct that he furnish an account to the wife of receipts and expenditure in relation to those two properties between 7 May 2009 and this date within seven days. Obviously he must make expedient arrangements to discharge of whatever is due to the wife thereafter.
13. We cannot conclude this case finally today because at a late stage the wife submitted that the order of the District Judge was further flawed in that she had made an unfair division of the various investment properties. She says that the Family Division Judge failed to deal with that submission. We know from the transcribed judgment that Black J dealt with this case with considerable care. She went through each of the arguments advanced by the husband point by point and when she came to the wife's appeal (paragraph 27) she adopted the same technique.
14. She was working off the Reasons for Appeal and skeleton argument, both dated 20 June and submitted by the wife, so it seems to me unlikely that so careful a judge would have failed to deal with any point that was specifically taken in the reasons for appeal. However, without those two documents we cannot be sure and, accordingly, I would propose that the wife be given a seven-day option to submit these two documents and put her submission to the test. If there was no taking of the point before the Family Division Judge, then no more need be said. We would not entertain a point not taken below. If, on the other hand, the production of the documents demonstrate that by oversight the judge failed to deal with them, then I would propose that the point be remitted to Black J for her specific attention and ruling.
15. So I would grant permission and allow the appeal to the extent indicated.

Lord Justice Rix: I agree.

Lord Justice Etherton: I also agree.

Order: Application granted; Appeal allowed