Scottish Sheriff Court Decisions

SHERIFFDOM OF TAYSIDE CENTRAL AND FIFE

JUDGEMENT OF SHERIFF L.D.R. FOULIS

F266/07 ADAMS v ADAMS

Perth, 17^th November 2009

The sheriff, having resumed consideration of the cause, orders the sale to the Pursuer of the parties' heritable property at Darnick, Kinnoull Terrace, Perth, PH2 7DY at the sum of £280,000 with entry as at 8^th January 2010; in the event of the parties or either of them failing to execute and deliver to the Pursuer such disposition and other deeds necessary to give her full right to the said subjects, to dispense with such execution and delivery and authorise the Sheriff Clerk, Perth to execute such disposition and other deeds all as adjusted at his sight as is necessary; to find and declare that the sale proceeds of the heritable property, after deduction of any debts and burdens affecting same and all other expenses attending to the sale, shall be deducted in the following manner:- (1) the whole expenses of the sale and the whole balance outstanding in terms of the mortgage with Bristol and West Building Society shall be deducted from the sale price of £280,000 (2) the proceeds of sale thereafter ascertained after the foregoing deductions, 'the net proceeds of sale', shall be divided equally between the parties (3) the sum of £11,140 shall be paid from the Defender's share of 'the net free proceeds of sale' and added to the Pursuer's said share; continues consideration of part (5)(c)(ii) of the motion 7/5 of process; refuses parts (3) and 5(A) to (C) of said motion; appoints parties to be heard on the expenses of said motion on 27^th November 2009 at 2.15pm and further appoints parties to be further heard on said date as to the identity of those carrying out the conveyancing in respect of said sale.

NOTE

The Pursuer's motion, number 7/5 of process, first called before me on 2^nd October 2009. The motion is in five parts. On that date Mr Gibb, solicitor, Edinburgh appeared for the Pursuer. The Defender appeared and represented himself. On that date, having regard to the terms of part one of the motion I indicated that I was of the view, notwithstanding that the Pursuer's production number 5/3/3 of process was a valuation of the subjects at Darnick, Kinnoull Terrace, Perth by Messrs Graham and Sibbald, that I required an opinion from a solicitor/estate agent in the Perth area as to whether the offer from the Pursuer, number 5/3/1 of process, was reasonable and should be accepted. Messrs Thorntons, solicitors and estate agents, Perth were initially instructed. Unfortunately, the person who would provide such an opinion in that firm knew the Pursuer from years back. Accordingly, Messrs Condies, solicitors and estate agents, Perth replaced Messrs Thorntons by interlocutor of 13^th October 2009. If my recollection is correct, on 13^th October 2009 a number of firms were canvassed. The Defender's preference seemed to be Messrs Condies. Their report eventually became available on 5^th November 2009.

Prior to moving me to grant the motion, Mr Gibb indicated that he was amending the motion. The offer from the Pursuer would now be in the figure of £280,000. He suggested that the necessary conveyancing would take somewhere between six and eight weeks. The Defender had agreed that the figure regarding the cheque in the sum of £11,140 was correct. The monthly mortgage payment was £352.20 and accordingly the mortgage payments for which the Pursuer sought a refund totalled £10,093.60 thus the figure of £9,037 required to be replaced by the larger figure. He then proceeded to narrate the background. Some of the background had been provided on 2^nd October 2009 and is summarised in the note appended to that interlocutor. The parties had ceased to live together as man and wife in 2001. The Pursuer had moved out of the matrimonial home in November 2007. She presently stayed with her sister. She paid rent of £500 monthly. She had also paid the mortgage from the time she had moved out. The Pursuer was an employee of the Royal Bank of Scotland and as such could not allow her mortgage to fall into arrears. The Defender worked occasionally but had not paid the mortgage. Heads of agreement regarding the sale of the subjects had been entered into in January 2008. The property had been advertised for sale initially at offers over £325,000. Subsequently, when no acceptable offer had been received, in November 2008 the Pursuer had applied for an order for sale by motion 7/4 of process. At that time, the parties agreed that the property should be exposed for sale at a fixed price of £300,000. Despite that, no offer had been received in the intervening year. He referred to the recent report from Messrs Condies. This indicated that an offer in the sum of £280,000 for the subjects, was a reasonable offer in all the circumstances. He referred to the report noting that the subjects were ill prepared for marketing and sale. The de cluttering related to motor vehicles which were on the subjects. The garden needed tidying. The Defender lived on his own in the subjects. He was not wholly behind the sale of the property. The initial hurdle against the sale had related to the parties' son Charles but his exams were now over. Thus this hurdle had now been overcome. He understood that the Defender's previous solicitors had advised him to accept the Pursuer's original offer in the sum of £270,000.

I observed to Mr Gibb that I was a little troubled by the part of the motion which sought vacant possession of the subjects. The offer was one made by one spouse to her husband and herself in respect of the matrimonial home. If I granted the motion, the Pursuer would become the sole proprietor of the matrimonial home. In light of the terms of section 14(2)(d) and (3) of the Family Law (Scotland) Act 1985, I foresaw a difficulty. I observed that the only way the occupancy rights of a spouse could be overcome was by the grant of an interim exclusion order in terms of section 4 of the Matrimonial Homes (Family Protection)(Scotland) Act 1981. Mr Gibb referred me to the amendments made to that legislation made by the Family Law (Scotland) Act 2006. The fact that the Pursuer was offering to purchase the property overcame section 14(3) of the 1985 Act.

The Defender indicated that he was not against the sale of the house. He confirmed that the asking price had initially been £325,000. This had been reduced to £300,000. He confirmed that an offer had been received in October/November 2008 in the sum of £280,000 but that had included his Persian rug which he valued at £5,000. He had rejected that offer. He was not being obstructive regarding the sale. He had shown sixty people round the property, ten viewing the property on more than one occasion. He had carried out maintenance tasks to make the property more marketable. He indicated what he had done. He indicated that he would be prepared to accept an offer in the sum of £300,000. His wife could reduce her mortgage commitment by changing the mortgage to an interest only mortgage. In 2008, capital constituted seventy per cent of the mortgage repayment, in 2009 it constituted sixty five per cent of the repayment. Until the financial side was settled he could not obtain alternative accommodation. If an offer for £300,000 was made, he would accept that offer and move out. There was the prospect of an offer for the property in that sum. This offer was linked to his offering the sum of £150,000 for this potential purchaser's property in Tay Street, Perth. Messrs Jameson and MacKay, solicitors, Perth acted for this person. She had seen the property five times, the first time in June/July 2009. Another person based in Holland had viewed the property and had been due back in Perth at the end of October 2009.

The Pursuer's motion is founded on section 14(2)(a) of the Family Law (Scotland) Act 1985. In terms of section 14(1) of that legislation, the order for sale can be made prior to divorce. In terms of section 8(2) of that Act such an order shall be made if justified by the five principles laid out in section 9 of the 1985 Act and reasonable having regard to the parties' resources.

Although an order for sale is normally followed by an offer from a third party, there is nothing to prevent one of the spouses offering. I refer to the opinion of Lord McCluskey in Scrimgeour v Scrimgeour 1988 SLT 590.

In late January 2008 the parties entered into Heads of Agreement, number 5/3/2 of process. In terms of that document, the parties agreed that the subjects would be marketed for sale no later than 1^st April 2008 with entry no later than 24^th May 2008. In light of this, looking at the terms of the amended motion and the purchase price offered by the Pursuer, the opinion given by Messrs Condies, the time the property has been marketed, the interest in the sense of persons viewing but the lack of offers, I consider that the offer in the sum of £280,000 is a reasonable one in all the circumstances and should be accepted. It has to be remembered that the present motion was first intimated to the Defender's then solicitor on 25^th August 2009, a notice of opposition lodged on 3^rd September 2009 and the motion first considered on 11^th September 2009. I appreciate that on that date, the Defender's solicitors withdrew from acting, but I assume that by that time the Defender was aware of the terms of the motion. Accordingly, by the time I considered the motion on 6^th November, over two months had passed since the motion was intimated. If there was real and realistic prospect of an offer by others, I would have expected another offer or offers to have been forthcoming. This had not been the case.

The next issue is whether the order for sale should be made having regard to the principles in section 9 of the 1985 Act. The Pursuer's only crave in the record relating to finance is for an order for sale. This crave is based on the net free proceeds of sale being divided equally between the parties. The Pursuer's crave seems to be based upon a fair sharing of the matrimonial property and the economic disadvantage suffered by the Pursuer together with the economic advantage derived by the Defender from the contributions of the Pursuer. The Defender craves capital of £100,000 and this claim seems to be based on the equitable sharing of the matrimonial property. Whilst, in the pleadings reference was made to the parties' son Charles and the avoidance of any upheaval to him being the reason for the refusal of an order for sale, this argument was not pursued before me in respect of the motion. The mortgage in respect of the subjects is averred by the Defender to be in the sum of £55,000. This is not disputed. I suspect the figure may now be lower in light of submission made to me. If I grant the order and title was transferred into the Pursuer's sole name, the reversion in the subjects would be sufficient to meet the Defender's financial claim. Accordingly, if I grant part 2 of the motion 7/5 the Defender's claim for capital will not be prejudiced. In light of the Pursuer's payment of the mortgage and the Defender's inability to do so, it seems to me that an order for sale is ex facie perfectly justified both having regard to the section 9 principles and the parties resources.

In light of this conclusion, the next matter which I have to consider is whether I can grant vacant possession towards the end of 2009 if an order for sale is made. At present, the Defender is a one half pro indiviso proprietor of the subjects. As a result of the granting of any order for sale, once the Pursuer becomes the sole proprietor of the subjects, it seems to me that the Defender automatically acquires occupancy rights in terms of section 1 of the Matrimonial Homes (Family Protection)(Scotland) Act 1981. The subjects are described in condescendence 4 of the record as the former matrimonial home and it appears that they fall within the definition of matrimonial home in terms of section 22(1) of that Act. The provisions of section 1(7) of that Act do not apply. The Defender has continued to reside in the subjects since the parties' separation. In terms of section 3(5) an order regarding occupancy rights cannot be made if it, in effect, excludes the other spouse from the subjects. The only way such exclusion can be achieved is in terms of section 4. That does not apply in the present circumstances. An order in terms of section 14(2)(d)(i) of the 1985 Act cannot be made until decree of divorce is granted at the earliest. I do not consider that I can order vacant possession.

It may seem that this is a somewhat contrary outcome. However, section 4(7) of the 1981 Act clearly sets out that where both parties are entitled to occupy the matrimonial home, then an action of ejection by one against the other is incompetent. According to Clive The Law of Husband and Wife in Scotland, this provision was inserted to counter any suggestion from Price v Watson 1951 SC 359 that such a remedy was possible in respect of joint proprietors. In light of that, it seems to me that it would be iniquitous for one spouse, gaining an order for sale in circumstances such as the present, to avoid the terms of section 4(7). Indeed, if it did, it might be a reason for refusing such an application. Further, it might be considered that in the event of granting the order, the effect is very similar to the granting of a transfer of property order. Such an order can only be granted at the conclusion of a divorce or within a specified period thereafter.

In light of the inability to gain vacant possession from the Defender, should the order for sale be made? I consider that it should. It is clear that the Defender seeks an offer of £300,000. In his words, he would accept an offer in that figure and then move out. With all due respect to the Defender, all the information that I have before me points to this being an unrealistic position to take in the present circumstances. In terms of the heads of agreement, the parties agreed that the property was to be marketed not later than 1^st April 2008 with entry no later than 24^th May 2008. Eighteen months on, the property is still on the market. The only other offer which has actually been submitted for the property was in the same figure now offered by the Pursuer. Having regard to the Defender's stated position, if the order is not made now, but rather delayed to the conclusion of the divorce, the present state of affairs could continue for long enough. The Pursuer would no doubt continue to pay the mortgage. To grant the order now clarifies the situation.

Turning to the remaining paragraphs of the motion, I consider that entry by 8^th January 2010 is reasonable to enable the necessary conveyancing to be carried out. Mr Gibb indicated that six to eight weeks should be allowed. In view of the Festive Season, the date I have identified seems realistic. I do not see any need for paragraph 3 of the motion but shall grant paragraph 4. Accordingly, if either party does not sign the necessary deeds, the Sheriff Clerk can execute such deeds as are necessary.

Turning to part 5 of the motion, parts (a) and (b) clearly have to be granted. Turning to part (c)(i), the Defender accepted liability for the sum of £11,140 and I shall give effect to the relevant part of the motion. In relation to part (c)(ii), the Defender made an observation that a significant part of the mortgage repayments will reduce the amount of the loan itself and thus the Pursuer will benefit. That may be the case. However, the terms of the Heads of Agreement are clear on this point. The Defender undertook to reimburse the Pursuer from his share of the proceeds of sale any mortgage payments she had made. The amended figure is now £10,093.60. Whilst I did not understand the Defender to dispute this figure per se, I think the Pursuer should exhibit confirmation of payment of the mortgage before I order the deduction and payment. I have no real reason to doubt that the Pursuer has made the necessary payments. However, the obligation undertaken by the Defender commenced on 1^st February 2008 in terms of the Heads of Agreement and by my reckoning that is a period of twenty two months. Mr Gibb advised that the monthly repayment is now £352.20. I appreciate that interest rates have dropped and this might have affected these repayments. However, on the basis of the current monthly repayment figure, I calculate twenty two payments amount to £7,748.40. There is a significant difference between the two figures. I shall continue consideration of that part of the motion for that purpose. This could either be dealt with at the pre proof hearing assigned for 5^th February 2010 or the hearing on the expenses of the motion which I have hereafter assigned.

Turning to parts A, B, and C of part 5 of the motion, these largely repeat the earlier parts of that paragraph. In light of my decision regarding vacant possession, I shall refuse these parts of of the motion.

In terms of the Heads of Agreement, it was envisaged that Messrs Jameson and Mackay would market the property and the Pursuer's solicitors carry out the conveyancing. In light of my decision, the former firm's role is rendered redundant. I think it would be prudent to clarify that the Pursuer's agents are still to undertake the conveyancing. It seems sensible but in the circumstances, I consider that there should be no opportunity for misunderstanding. The expenses of the sale should also be clarified if at all possible. Clearly, there will be estate agency costs incurred to Messrs Jameson and Mackay. Accordingly, I shall appoint the matter to call to clarify this matter.

I was not addressed upon the expenses of the motion. I shall hear parties in respect of this matter on 27^th November 2009. At that time I shall also deal with the issue regarding the expenses of Messrs Condies providing their report.