SITTING AT NEWCASTLE-UPON-TYNE
B e f o r e :
|- and -
Roger Bickerdike (instructed by Major Family Law) for the Respondent ("husband")
Neither counsel appeared in the Court below.
Hearing dates: 20 February 2018
Crown Copyright ©
The Honourable Mr. Justice Cobb :
"The application is made in light of the [wife's] decision to refuse to sell the property, despite the selling agent's view that an offer recently made upon the property should be accepted".
There was no indication on the face of the application form as to the jurisdictional basis for the order sought. The application was supported by a detailed witness statement, to which in due course the wife replied. The application was listed for hearing on 14 December 2017, with a time estimate of 1.5 hours. The wife's solicitors had written into the court unsuccessfully seeking to vacate the hearing, as she could not, herself, be present; the hearing was not vacated, and no further application to adjourn was made.
The arguments on appeal
i) Rule 20.2(1)(c)(v) FPR 2010 bestowed on the District Judge all the power he needed to order sale and vacant possession of The Homestead;
ii) Given the 'financial implosion' experienced by this family in autumn 2017, against the backdrop of the wife's previous agreement to the sale of the property, the judge was right to conclude that there was 'good reason' for the sale at this interim stage;
iii) He respectfully doubted whether BR v VT had been properly decided (insofar as it pertained to the requirements of the FLA 1996), and in any event as the case did not concern an application for an order for interim sale (the husband was the sole owner) Mostyn J's observations about sale were obiter. He further contended that:
a) As the wife in this case was a legal and beneficial owner of The Homestead, section 33 FLA 1996 had no place in the determination of the application for sale or the delivery of vacant possession, as it could not be used to 'terminate' her rights of occupation; the most that the court could do (this point was in fact agreed by Mr Walker-Kane) would be to "prohibit, suspend or restrict" her rights to occupy (see section 33(3)(d) FLA 1996);
b) Part IV of the FLA 1996 regulates occupation of the property, rather than sale, and therefore has no place in a discussion in relation to rule 20 interim order for sale;
c) If, contrary to those primary submission, the FLA 1996 is/was relevant, the judge in fact sufficiently considered the matters set out in section 33(6) and could be said therefore to have undertaken the relevant 'exercise';
iv) An order for sale would be the only order to bring 'financial sanity' to the family.
Permission to appeal / appeal.
"In any question between husband and wife as to the title to or possession of property, either party, [...] may apply by summons or otherwise in a summary way [to the High Court or [the family court] and the court may, on such an application (which may be heard in private), make such order with respect to the property as it thinks fit.]"
"1. Where, in any cause or matter in the Chancery Division relating to any land, it appears necessary or expedient for the purposes of the cause or matter that the land or any part thereof should be sold, the court may order that the land or part to be sold and any party bound by the order and in possession of that land or part, or in receipt of the rents and profits thereof, may be compelled to deliver up such possession and receipts to the purchasers or to such other person as the court may direct. In this order "land" includes any interest in or right over land." (emphasis by italics added).
"(1) Subject to rule 2.65 [the power to refer an application to a different tier of judge] the district judge shall, after completing his investigation under rule 2.62 [investigation on an application for financial relief], make such order as he thinks just.
(2) Pending the final determination of the application, the district judge may make an interim order upon such terms as he thinks just.
(3) RSC Order 31, rule 1 (power to order sale of land) shall apply to applications for ancillary relief as it applies to causes and matters in the Chancery Division."
i) The inherent jurisdiction of the High Court does not extend so far as to afford a general residual discretion to make any order necessary to ensure that justice be done between the parties: "[t]his is too wide and sweeping a contention to be acceptable" (at p.478); (see further  below);
ii) There is a need to distinguish between procedural and substantive rights (my emphasis). RSC Order 31 (adapted for financial remedy cases by rule 2.64 of the 1991 Rules) at that time provided that where "necessary or expedient for the purposes of the cause or matter that the land or any part thereof should be sold, the court may order that the land or part to be sold and any party bound by the order …". The power in RSC Order 31 is/was not a source of jurisdiction enabling the court to make orders for interim sale of property (at p.481). The wife in Wicks v Wicks was in truth inviting the court to exercise a substantive power (affecting her right to the relief which she was seeking in the main suit), not a procedural power to control the court's process (see p.478);
iii) The power of sale is to be treated distinctly from the power to order up possession. The husband should not have been required to vacate the matrimonial home save and except where the court has taken into account and balanced the factors set out in s1(3) of the Matrimonial Homes Act 1983 (now in section 33 FLA 1996) (see above);
iv) This area of the law is ripe for reform (at p.486).
"The reality here is that the wife is seeking the enforcement of rights which the Matrimonial Causes Act 1973 does not grant her. She wants an order for sale before s24A allows the court to order it. She wants money to spend on a house before the financial and property adjustments can be made under ss 23 and 24. … If the substantive law laid down by the Matrimonial Causes Act 1973 does not permit that to happen, then the court has no inherent jurisdiction to do that which Parliament has not granted it power to do."
At p.482, in relation to the power of sale contained in section 24A, he said this:
"The exercise of this power of sale is circumscribed in that the sale can only be ordered when the property adjustment (or lump sum) order is made and in that the order cannot take effect unless the decree has been made absolute. The power to order a sale under Ord 31 is without any such fetters. It cannot in my judgment be used to achieve a result which is inconsistent with its Matrimonial Causes Act equivalent in s24A. It cannot be necessary or expedient for the purposes of an application for ancillary relief to pre-empt, indeed to supplant the very provisions of the Act to which the application is subject"
Adding (at p.487):
"It does not follow that Ord 31 is an original source of jurisdiction. It is a procedural provision the exercise of which is dependent on there being a cause or matter in the Chancery Division relating to land or an application for ancillary relief in the Divorce Court relating to land. In its application in the Chancery Division Ord 31 seems to remove the need for the previous practice to direct a sale either 'with the approbation of the judge' or 'out of court' and to give a flexible procedure for the management of any sale. It seems to be purely procedural in its intent and in its effect. I agree with Sir Donald Nicholls V-C in Panayiotou v Sony Music Ltd  Ch 142, 149 when he said:
'These rules [the Rules of the Supreme Court] regulate and prescribe the "practice and procedure" to be followed in the Supreme Court: section 84 of the Supreme Court Act 1981. They regulate the exercise by the court of its jurisdiction; they cannot extend the court's jurisdiction or confer a jurisdiction which, in the absence of rules, the court would otherwise lack.'"
"By an order under TOLATA, … the court lays down only one piece of the jigsaw, namely that the home be sold, without its being able to survey the whole picture by laying down the others" (the full citation, from which this is an extract, appears at  below).
9.7.— Application for interim orders:
(1) A party may apply at any stage of the proceedings for—
(a) an order for maintenance pending suit;
(b) an order for maintenance pending outcome of proceedings;
(c) an order for interim periodical payments;
(d) an interim variation order; [...]
(da) an order for payment in respect of legal services; or
(e) any other form of interim order.
(2) An application for an order mentioned in paragraph (1) shall be made using the Part 18 procedure.
It specifically did not introduce an interim power of sale.
"(1) The court may grant the following interim remedies – …
(c) an order – …
(v) for the sale of relevant property which is of a perishable nature or which for any other good reason it is desirable to sell quickly …'
(2) …'relevant property' means property (including land) which is the subject of an application…"
"… that if the court has before it an application by one spouse for an interim order for sale of a piece of property (howsoever formulated), and that piece of property is the matrimonial home occupied by the other spouse, then the court cannot order vacant possession of it (whether under s 17 of the MWPA, TOLATA or procedural rules) without first undertaking the exercise required by s 33 of the Family Law Act 1996 (the successor to the Matrimonial Homes Act 1983). It seems to me that to do otherwise would be to by-pass specific legislation on the point and to fall foul of Lord Hailsham's proscription" (emphasis by italics added).
The 'proscription' referred to in that passage is that contained in Richards v Richards  1 AC 174, at 199H:
"Where, as here, Parliament has spelt out in considerable detail what must be done in a particular class of case it is not open to litigants to bypass the special Act, nor to the courts to disregard its provisions by resorting to the earlier procedure, and thus chose to apply a different jurisprudence from that which the Act prescribes."
"…no reason in logic or principle why for this purpose the restored application for enforcement of maintenance pending suit and legal services provision orders hitherto made is not "an application" within which questions as to the Bentley may arise" (emphasis by italics added).
He helpfully clarified () that the order sought was to satisfy a claim for enforcement under the rules applicable to '[e]nforcement of orders for the payment of money', specifically rule 33.3(2)(b) FPR 2010, because the husband had contended that he was unable to comply even in part with past orders without recourse to those proceeds. He went on at :
"… the purpose of the orders I am making, and in due course of any order for sale and for any payment to W from the proceeds of sale, is and will be to secure and then to enforce subsisting court orders to or towards the extent to which they remain unsatisfied after H's variation application" (emphasis by italics added).
That is to say, the interim sale of the Bentley was not proposed as an interim order for sale pursuant to section 24 /24A MCA 1973, but as an enforcement measure; in this regard, it is readily distinguishable from the instant case.
"In the context of family law the authority of Wicks v Wicks and other cases make it plain that there is no separate residual or inherent jurisdiction available for deployment to fill in any perceived gaps or to meet what the court may see as the justice of the case if that outcome cannot be achieved by an order within the statutory scheme." (emphasis added).
"The Order [RSC O29 r4] does not give the court power to make a free-standing order for sale as a form of independent relief. The property in question must either form the subject matter of the proceedings in which the order is made or be property as to which a question arises in those proceedings. It is the existence of the proceedings or question which gives rise to the difficulty and makes it necessary to invoke the assistance of the court." (emphasis by italics added).
i) In relation to section 17 MWPA 1882, on the wording of the section itself, the views of the 'strong' court in Short v Short, and adopt the comments of Mostyn J in BR v VT at ;
ii) In relation to section 13 and 14 TOLATA 1996, on the comments of the court in Miller Smith at , and of Mostyn J in BR v VT at .
i) Did not undertake the section 33(6) exercise explicitly or inferentially; neither advocate drew to his attention the requirements of the FLA 1996, nor the decision in BR v VT, nor did he make any reference in his judgment to the provisions of section 33(3)/(6) (ibid.);
ii) Even if he had undertaken the section 33(6) exercise, he could not have 'terminated' the wife's rights of occupation on these facts because she had the protections of section 33(1)(a)(i) FLA 1996, which permits the court only to 'prohibit, suspend or restrict' her rights of occupation.
i) A spouse with "home rights" (if in occupation) has a right not to be evicted or excluded from the matrimonial home or any part of it by the other spouse except by an order under statute (Part IV FLA 1996);
ii) The powers vested in the court by Part IV of the FLA 1996 (particularly sections 33-38) are described as Draconian; they may have the effect of overriding proprietary rights, and are therefore "restricted to exceptional cases" (Chalmers v Johns  1 FLR 392 at p.397); exceptional relief of this kind should not generally spring from a deemed or assumed jurisdiction;
iii) A section 33 order cannot be made of the court's own motion (unlike a non-molestation order, see section 42(2)(b) FLA 1996); it is clear from the rules that an application for an occupation order must be made in writing and supported by a statement of evidence (rule 10.2 FPR 2010). Although the court has the general power to take any step or make any order for the purpose of managing the case and furthering the overriding objective (rule 4.1(3)(o) FPR 2010) I am far from convinced that the court should deploy that (albeit useful) catch-all rule to provide a jurisdiction for the making of such a significant order, particularly when legislators have deliberately distinguished between non-molestation and occupation orders, when providing for the grant of the former order of the courts own motion, but not the latter;
iv) There is a material difference between the "termination" (section 33(3)(e)) of a spouse's home rights, and the "prohibition, restriction or suspension" of his/her rights of occupation (section 33(3)(d)). I do not consider – indeed neither counsel argued – that prohibition, suspension or restriction is synonymous with termination, and I do not consider that a 'prohibition' could be used to exclude a wife during the period of the conveyance of sale simply so as to give vacant possession to the buyer. It is important for the applicant for an order to assert his/her case specifically and clearly as to the respondent's 'rights';
v) As a wife's legal and beneficial interest cannot be 'terminated' under the FLA 1996, it would not in my view be right to seek to do so by conducting a section 33(6) "exercise" before reaching a conclusion that such rights ought to be extinguished.
a) Is the property "perishable" or is there any other "good reason" for making the order ('the threshold stage')?
and if so,
b) How should the court exercise its discretion ('the discretionary stage')?
"Satisfying the court that there is good reason for an order for sale under the provision is, however, no more than the threshold issue. It is only then that the question arises as to whether the discretion to order the sale should be exercised. Of course, the existence of good reasons for an early sale is, itself, a strong factor in favour of making such an order, but there may be other factors which may need to be put in the balance on both sides. Additionally, even if, in principle, the court was minded to make the order, the mechanics of sale might themselves raise prejudice to the other party's position such as to make it inappropriate to make the order. In the end, the court must look at all the factors in the round and make its decision".
"The purpose of the court in exercising the power to order a sale is to avoid the injustice that would otherwise result by the property becoming worthless or significantly reduced in value during the interval between the application for sale and the determination of the proceedings or question" (emphasis by italics added).
"There is no express or implicit limitation on what may constitute "good reason" for these purposes. It is certainly not necessary that the property should be perishable or depreciating. That much is clear from the inclusion of land within the definition of "relevant property".
"…by asking itself whether the issue raised by the application can reasonably be left to be resolved within an application for ancillary relief following divorce. It is in principle much more desirable that an issue, as here, about sale of the home should be resolved within an application for ancillary relief. For there the court will undertake a holistic examination of all aspects of the parties' finances, needs, contributions etc; will devise the fairest set of arrangements for the future housing and finances of each of them; and, to that end, will provide for the transfer of capital, as well perhaps as for payment of future income, from one to the other. By an order under TOLATA, on the other hand, the court lays down only one piece of the jigsaw, namely that the home be sold, without its being able to survey the whole picture by laying down the others. So at this threshold stage of the inquiry into an application under TOLATA between spouses the court will, in particular, have regard to the question whether, within a time-frame tolerable in all the circumstances, the parties will become able to apply for ancillary relief. Furthermore if, at first sight, there appears to the court to be any measurable chance that, on an application for ancillary relief made within that time-frame, the respondent to the application for an order for sale under TOLATA will be able to preserve her or his occupation of the home by securing an outright transfer of ownership of it or a variation of the trust, it is hard to conceive that an order for sale would reflect a proper exercise of discretion".
Determination of the appeal
i) Perform the two-stage test under rule 20 as required (discussed above ), either adequately or at all. Further, only one of the four grounds relied on in his conclusion (see (b) above) could on any evaluation represent a 'good reason' for an immediate sale (the so-called financial imperative), but the judgment was light on analysis of whether an interim sale (particularly as it was potentially at an undervalue) would in fact make a significant difference to the family's finances. Materially, it was not being asserted that the property was at risk of becoming worthless or in danger of reducing further in value during the interval between the application for sale and the determination of the proceedings or question (see  above). Specifically, the judge appeared, wrongly in my view, to weigh in his reckoning of 'good reason' the fact alternative accommodation would be available to the parties in the event of a sale;
ii) Consider, let alone conduct, the relevant 'exercise' under, section 33(6) of the FLA 1996 in order to establish whether the wife's rights of occupation could/should be terminated.