Jersey Unreported Judgments

[2005]JRC160

royal court

(Family Division)

14^th November 2005 

Advocate N. S. H. Benest for the Petitioner.

Advocate J. D. Kelleher for the Respondent.

judgment

bailiff:

1.        This is, sadly, the second occasion upon which these matrimonial proceedings have come before the Court on appeal from orders of the Family Registrar.  We use the epithet 'sadly' both because continuing friction between a former husband and wife must inevitably cause distress to the children of the marriage, and because the costs of these battles have further diminished the assets available for division between the parties.  We express the hope that this judgment will finally put an end to a dispute which has gone on far too long.

2.        The history to the dispute following a consent order of 13^th March 2000 was set out in this Court's judgment of 15^th May 2004 and we will not repeat it.  On that day we dismissed an appeal by H ('the husband') against an order of the Family Registrar setting out a process for the transfer of a jointly owned property ('the property') to J ('the wife'). In a nutshell, that process involved the discharge by the husband of the mortgage secured upon the property, the transfer of the property into the sole name of the wife as expeditiously as possible, and the payment by the wife to the husband of 10% of the net value of the property within 14 days.

3.        The thrust of the husband's appeal in 2004 was that it was not possible for him to raise the finance necessary to discharge the mortgage and that he was therefore locked into a situation from which he could not extricate himself.  Furthermore he wished to re-marry and could only do so when he had obtained a decree absolute, which was itself to follow the transfer of the property to the wife. The Court did not accept those arguments, acknowledging that the redemption of the mortgage would be difficult to achieve, but not impossible.

4.        That analysis proved to be correct because, during the early part of 2005, the husband was able to arrange his affairs in such a way as to raise the funds which were required.  Unfortunately, no sooner had he done so than it appeared that the wife was unable to raise the sum of £46,375, representing 10% of the agreed value of the property. Again there was a stalemate.  The husband accordingly applied to the Family Registrar, inter alia, for a variation of the 2004 order and for a decree absolute.

5.        Having heard the parties, the Family Registrar made an order in the following terms -

'IT IS ORDERED that:-

1.        despite the non-fulfilment of the 2004 order, the [husband's] application for a decree absolute of divorce shall be granted forthwith;

2.       until the date in December 2005 upon which the present tenants' lease of [the property] is due to expire, the [wife] shall continue to have the option of availing herself of the terms of the 2004 order insofar as the transfer of [the property] into her sole name free of all charges, provided that she shall pay to the [husband] 10% of the value of the property;

3.        if, for any reason, the terms of the 2004 order have not been executed in full by that expiry date, the 2004 order shall be replaced by the following provisions:-

(a)        the property, [.....], shall be sold for the best price obtained on the open market and as expeditiously as possible (bearing in mind any delay in the departure of the present tenants from [the property] as a result of Petty Debts Court eviction proceedings;

           (b)        the net proceeds of sale shall be delivered as follows:-

                       the petitioner shall receive 90%

                       the respondent shall receive 10%;

(c)        there shall be no order as to costs, save that the costs of the sale be divided equally between the parties.

4        either party shall have liberty to apply in relation to the execution of this order.'

6.        It is against that order that the wife now appeals.  There have been three material changes of circumstance since the order of the Family Registrar was made.  First, the tenants of the property have moved out earlier than anticipated. Secondly, the wife and the children remaining at home, now aged 21, 17 and 15, have moved from premises which the wife had been renting back into the property.  Thirdly, the wife has now been able to negotiate a loan whereby she can afford to pay the husband £46,375.

7.        That loan (of £50,000) has been negotiated with Jersey Home Loans Ltd upon the basis that the lender obtains a first charge over the property, and that the existing hypothec securing the mortgage is discharged.  One of the terms of the loan is that interest only of 4.8% per annum is paid for the period of 5 years from completion.

8.        Even without the information now available to us, we are bound to say that, on the face of it, the order of the Family Registrar was eminently sensible.  He had tried to achieve a clean break which he considered, rightly in our view, was in the interests of both parties.  His revised order enabled that clean break to be achieved without making any serious rupture to the arrangements originally agreed between the parties.

9.        Counsel for the wife submitted however that the order should be set aside for a number of reasons.

10.      First, Counsel submitted that the property was now the family home and should be accorded special protection for that reason.  We find no force in that submission.  The property had not been the family home for some years.  It would be quite unfair now to characterise what has been capital asset of the parties in some different way merely because the wife chose to move the family back into occupation instead of renting some other premises.

11.      Secondly, counsel for the wife submitted that the amount outstanding under the existing mortgage was now £170,000 and not £220,000, and that the husband could accordingly afford to forego receipt of the £46,375 until such time as the property was sold.  This submission was based upon a letter from the mortgagee to the husband which was headed 'Loan £170,000'.  Counsel for the wife did not however suggest that there had been any misrepresentation as to the financial position of the husband in 2004.  We are satisfied that there is no substance in this submission, for a number of reasons but principally because the gross amount outstanding under the mortgage remains in the region of £220,000.   The amount of the loan is only £170,000 because account has been taken of the wife's contribution of £46,375.

12.      Thirdly, counsel for the wife submitted that the order of the Family Registrar providing that 'the net proceeds of sale shall be divided as follows - the petitioner shall receive 90%; the respondent shall receive 10%' was unclear in that it did not specify whether 'net' meant after deduction of the estate agent's commission and legal fees.  We do not agree.  We accept the submission of counsel for the husband that the order explicitly states that 'the costs of the sale be divided equally between the parties'.  The costs of the sale, i.e. the fees of the estate agent, and the legal costs of the conveyance, are to be met by the husband and the wife equally.  The net proceeds of sale, i.e. after deduction of the loan charged upon the property, will be divided in the proportions 90 / 10 between the wife and the husband respectively.

13.      Fourthly, counsel for the wife contended that her client would find it difficult to make ends meet if she were to commit herself to the loan from Jersey Home Loans Ltd.  Strictly, this does not appear to us to be relevant to the issues which we have to determine.  The agreement to which the wife committed herself involved an obligation to pay 10% of the net proceeds of sale or the net value of the property to the husband, and she is bound by that obligation.  We have nonetheless considered the position in the context of overall fairness to the parties.  Counsel for the wife told us that, while the wife could manage to pay the interest payments on the loan of £50,000 while she was receiving maintenance from the husband for their eldest daughter, she would find it more difficult, or impossible, when that maintenance ceased at the end of the daughter's tertiary education in 2 years' time.  There are two reasons why we think that the wife's prospects are not so dire.  

14.      First, she is a qualified radiographer.  She may need to undergo some further training, but we think that she is capable of increasing her earning potential by working a greater number of hours per week than she is able to do at present.  Secondly, although it is not of course a certainty, there is every likelihood that the property will in two years' time have increased in value.  The wife will therefore have options.  She could continue to occupy the property by paying the interest from increased earnings.  Alternatively, she could sell the property and acquire a smaller house which would still accommodate the children living at home.  We recognise that none of these options will be easy.  On the other hand the husband, albeit that he has greater earning power, has come away from the marriage with very little in terms of available capital.  Such are the consequences of marital breakdown.

15.      In our judgment the order of the Family Registrar was fair and reasonable, and the appeal is accordingly dismissed.

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