WS v HS (appeal - sale of matrimonial home) [2018] EWFC 11

[2018] EWFC 11Case No DH17D01040
IN THE FAMILY COURT
Date 28/02/2018
SITTING AT NEWCASTLE-UPON-TYNE
Combined Court Centre
The Quayside
Newcastle-Upon-Tyne
Before
THE HONOURABLE MR JUSTICE COBB
Between
WSApplicantHSRespondent
Jonathan Walker-Kane (instructed by Harcus Sinclair LLP) for Applicant (“wife”)Roger Bickerdike (instructed by Major Family Law) for Respondent (“husband”)Neither counsel appeared in the Court below.Hearing Hearing dates: 20 February 2018
Judgment ApprovedTHE HONOURABLE MR JUSTICE COBBThis judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved. All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.The Honourable Mr. Justice Cobb :
[1]There is before the Court an application for permission to appeal, with appeal to follow if permission is granted, against an interim order made by District Judge Pescod, sitting in the Family Court in Newcastle-upon-Tyne, on 14 December 2017.[2]The order under challenge provided for the immediate sale of a former matrimonial home, which I shall refer to as ‘The Homestead’. This order was made in the context of financial remedy proceedings between WS (“the wife”) and HS (“the husband”); those proceedings are at an extremely early stage, having not yet reached a first appointment.[3]By this judgment, I set out my reasons for granting the wife’s application for permission to appeal, and allowing the appeal.[4]I have had the advantage of experienced counsel before me to argue this case on appeal, neither of whom appeared in the court below. Both have advanced significantly more comprehensive and detailed argument than those presented to the District Judge.[5]The appeal requires me to re-visit the important issue of when, and in what circumstances, a court can order the sale of a former matrimonial home by way of interim relief. I recognise that this has been the subject of relatively recent consideration by Mostyn J in BR v VT [2015] EWHC 2727 (Fam) (‘BR v VT’). With due deference to his experience and undoubted expertise in this field, and cognisant of the responsibilities I owe as a judge of co-ordinate jurisdiction (see Willers v Joyce & another (in substitution for and in their capacity as executors of Albert Gubay (deceased)) (2) [2016] UKSC 44 at [9]), I take a different view in part as to the jurisdictional basis for such a claim.

Essential facts

[6]The husband and wife are in their mid-50s. They have three children. One (P) is receiving tertiary education away from home, one (Q) is in the first year of sixth form in a local private day school, and one (R) is pre-GCSE boarder in a private boarding school. The parties separated in 2016, after approximately 25 years of marriage.[7]The family last lived together at The Homestead. This is a 5-bedroom property with some land. The wife has been, for many years now, a mother and home-maker, having previously enjoyed a successful career. The husband has enjoyed success as a company director; latterly, he was a CEO of a company which, four months ago, went into liquidation. His sizeable income (at one time £250,000 p.a.) dried up more or less overnight; he is now in receipt of job seeker’s allowance. The wife remains living at The Homestead; the husband is currently staying at the couple’s second home, a holiday house, some distance from the family home.[8]The wife issued divorce proceedings in 2017. Within the body of a Form E prepared for voluntary exchange pursuant to an earlier agreement to arbitrate, the wife confirmed her agreement to the sale of The Homestead. There is indeed no dispute even today that the property will be sold; the essential question is when.[9]The Homestead has been on the market, by agreement, for approximately two years. The property is mortgaged, although the mortgagees have agreed a suspension of repayments until April 2018. The original marketing price was £950,000; an offer some time ago at £890,000 was later withdrawn. In the autumn 2017, the market price was reduced to £850,000.[10]In October 2017 the parties received an offer on the property in the sum of £775,000; this was increased to £785,000. The proposed purchasers are keen to exchange and complete by the middle of next month. The husband is equally keen, apparently supported by the selling agents, and he wishes to accept the offer. The wife opposes the sale at this stage, and at that price. She now considers that the property should be retained for the next 18 months or more, while Q completes her education at the local school; she attaches importance to continuity for Q in being able to remain in the family home while she completes her A level exams. She also considers that if the property sells at £785,000 this will represent a sale at a significant undervalue. She proposes that until resolution of the financial remedy proceedings, she will take responsibility for the mortgage repayments on the property. This proposal was set out in a letter to the husband’s solicitors dated 16 October 2017.[11]On 14 November 2017, the husband issued an application for financial relief on Form A. By that application, he sought the following substantive relief:(a) a lump sum order,(b) a property adjustment order in relation to The Homestead,(c) a pension sharing order.[12]On 24 November 2017, the husband issued a separate application under Part 18 of the Family Procedure Rules 2010 (‘FPR 2010’); he sought the “[i]nterim order for sale of [the Homestead]”. The reason for the application was expressed to be as follows:
“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.[13]At the hearing before the District Judge, the advocates for both the husband and wife agreed that this was an “unusual” application, driven, according to the advocate for the husband, by “wholly exceptional circumstances”. The wife’s counsel conceded in his position statement that rule 20.2(1)(c)(v) of the FPR 2010 endowed the court with power to order a sale of the property, but save for that, there was scant mention at the hearing of the procedure or substantive law. There was no mention of the Married Women’s Property Act 1882 (‘MWPA 1882’), the Trusts of Land and Appointment of Trustees Act 1996 (‘TOLATA 1996’) or the Family Law Act 1996 (‘FLA 1996’), nor was the judge addressed to any great extent on the test to be applied on the application.[14]The wife’s advocate repeated the points earlier made in correspondence (see [10] above), and argued that the court ought to be particularly slow to make an interim order which had the effect of materially influencing the outcome of the substantive dispute at the final hearing, with the possibility that it would prejudice the claims of one of the parties.[15]At the conclusion of the hearing, the judge gave an ex tempore judgment. The judgment was concise, reflecting the essential arguments of the parties and the judge’s reasoning. The judge concluded that there was “good reason” why it is “desirable” to sell the property. He specifically relied, in reaching his decision, on the fact that:(a) the parties had agreed some time ago that the property should be sold,(b) a sale would help to stem the significant outgoings, and go some way to preserve the family’s depleted funds, they having experienced a “dramatic downturn” in their fortunes by reason of the husband’s recent unemployment,(c) the property needed to be sold at some point, and the current offer “is the best that is likely to be received in the current and foreseeable climate”, and that(d) there were suitable alternative properties available for the parties to rent or purchase. Following the judgment, he amplified his reasoning, referring also to the fact that the wife’s offer to pay the mortgage instalments for the time being was not of great benefit overall, as the expenditure would further diminish the parties’ joint assets.

The arguments on appeal

[16]The wife’s counsel immediately applied to the District Judge for permission to appeal, arguing that judicial discretion had been exercised “inappropriately”. The judge refused the application. That application was renewed to this court; HHJ Moir adjourned the application to be listed before me with appeal to follow.[17]Mr. Walker-Kane, who now represents the wife on the appeal, repeated and enlarged the earlier ground of appeal, namely that the judge had failed properly to exercise his discretion. Materially, he expanded his grounds in writing to this court to assert that the judge failed to recognise that the FPR 2010 did not give him jurisdiction to terminate the wife’s rights of occupation of The Homestead. Specifically, he argued, that an application under section 33 FLA 1996 should have been made to determine the occupation rights of the wife, which could not be brought to an end by rule 20.2(1)(c)(v); no such application had been made to the court below, and no consideration of this point was given by the judge.[18]Mr. Walker-Kane conceded that section 33 FLA 1996 could not in fact have been used to “restrict or terminate” the wife’s property rights in this case as she had a right to occupy The Homestead by virtue of a legal and beneficial interest (see section 33(3)(e) ibid.). He acknowledged therefore that this was a section 33(3)(d) case which gave the court power only to “prohibit, suspend or restrict” her rights; those powers would have been insufficient to oust the wife in order to achieve vacant possession on the sale. So, either way, the court fell into error in making the order sought by the husband. Further and finally, he submitted that if an inferred or deemed application under the FLA 1996 could not ‘terminate’ the wife’s rights of occupation (following a section 33(6) ‘exercise’ per Mostyn in BR v VT), he questioned how a procedural rule could achieve that end.[19]In so arguing, Mr. Walker-Kane effectively disavowed the concession made by the wife’s advocate at first instance (see [13] above) that rule 20.2(1)(c)(v) gave the court the necessary jurisdiction to grant the order sought by the husband and this further opened up discussion about the jurisdictional basis for such interim relief.[20]Neither advocate had addressed the points at [18] and [19] above at the hearing before the District Judge. This additional ground had been clearly set out in the written skeleton argument for this appeal hearing, to which Mr. Bickerdike had responded, also in writing; I therefore granted Mr Walker-Kane permission under rule 30.9 FPR 2010 to present this additional argument on the appeal. I declined his oral request at the hearing to expand his grounds yet further.[21]Mr Bickerdike contended, in opposition to the application for permission, and the appeal, that: 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.[22]I proceeded, with the agreement of counsel, to hear argument on all issues, acknowledging that the wife needed yet to overcome the first hurdle of obtaining permission to appeal before I could truly consider the appeal itself.[23]Permission to appeal is granted in cases where there is a real prospect of success (rule 30.3(7) FPR 2010); ‘real’ means ‘realistic’ rather than ‘fanciful’: see Tanfern Limited v. Cameron MacDonald & Anor. [2000] 1 WLR 1311, also AV v RM (Appeal) [2012] 2 FLR 709, Moor J.[24]For the reasons outlined below, I am satisfied that there is sufficient ground to grant permission to appeal.

Discussion

[25]The only substantive application before the Court, in this case, is the husband’s application for certain limited and specific forms of financial relief under section 23 and section 24 Matrimonial Causes Act 1973 (‘MCA 1973’) which he issued on 14 November 2017 (see [11] above).[26]The orders sought by the husband can only be made on or after granting a decree of divorce or nullity of marriage, and cannot take effect until/unless the decree has been made absolute (section 23(5) and section 24(3) MCA 1973). Various orders (including lump sum and property adjustment orders) made under section 23 and section 24 can be accompanied, and are capable of being enforced, by an order for sale pursuant to section 24A MCA 1973.[27]Exceptionally, the court may make an order for sale under section 24A in order to give effect to a legal services payment order under section 22ZA MCA 1973 (an amendment introduced in 2013 by the Legal Aid, Sentencing and Punishment of Offenders Act 2012). Save for this limited exception, it is well-established (and see BR v VT at [3] on this point) that an order for sale under section 24A cannot be made as an interim measure during financial remedy proceedings.[28]It is equally well-recognised that the court possesses the power to make interim orders for sale of matrimonial property under section 17 MWPA 1882 (as amended) and under sections 13 and 14 TOLATA 1996. Section 17 MWPA 1882 (as amended) reads:
“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.]”
[29]This statute has largely fallen into desuetude save in relation to the circumstances which pertain here. In this regard, Ward LJ in Wicks v Wicks [1998] 1 FLR 470 (see p.483) considered that section 17 MWPA 1882 provided a “convenient vehicle” to resolve any question between a husband and a wife as to the title or possession of property, including a power of sale. Mostyn J in my view correctly questioned dicta in Wicks v Wicks to the effect that an order under section 17 MWPA 1882 does not include an order for possession; in that regard he cited the decision of a “strong” Court of Appeal in Short v Short [1960] 1 WLR 833. That said, Mostyn J went on to declare that in order to make an order effectively giving vacant possession under any of the routes for sale adopted, the court should nonetheless undertake a section 33(6) FLA 1996 ‘exercise’ (see BR v VT at [7]) to establish whether property rights should properly be brought to an end. In that exercise, the court would consider(a) the housing needs and housing resources of each of the parties and of any relevant child,(b) the financial resources of each of the parties,(c) the likely effect of any order, or of any decision by the court not to exercise its powers under section 33(3), on the health, safety or well-being of the parties and of any relevant child, and(d) the conduct of the parties in relation to each other and otherwise.[30]The conjunction of sections 13 and 14 of TOLATA 1996 enable the court not only to order sale, but also to order that the beneficiary should give vacant possession of land (a view confirmed by Wilson LJ (as he then was) in Miller Smith v Miller Smith: see [23]). Section 15 of TOLATA 1996 sets out relevant matters to which the court is to have regard on the issue of sale.[31]The propositions outlined above (save for the amendment in relation to legal services payment orders) were extensively discussed by the Court of Appeal in the judgments in Wicks v Wicks. In that case, the wife sought an interim order for sale and possession of property to enable her to buy a property for herself and the children pending determination of her financial remedy claim; her claim was brought under the relevant part of the Rules of the Supreme Court (Order 31) and of the Family Proceedings Rules 1991 (rule 2.64) then in force.[32]RSC Ord 31, as it was, dealing with ‘Sales, etc. of Land by Order of Court: Conveyancing Counsel of the Court' provided as follows:
“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).[33]Rule 2.64 of the Family Proceedings Rules 1991 provided that:
“(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.”
[34]The Court of Appeal in Wicks v Wicks, in allowing the husband’s appeal against the interim order for sale, concluded that the court had no power to grant the order sought under the rules of court. From the judgment of Ward LJ, the following important points deserve highlighting: 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 [35] 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 s 1(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).[35]Three passages from the judgment of Ward LJ deserve full citation here. At p.479 he said this:
“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 s 24A 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 s 24A. 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 [1994] 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.'” ‘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.'”
[36]There then came the Court of Appeal’s decision in Miller Smith v Miller Smith [2009] EWCA Civ 1297, [2010] 1 FLR 1402. This concerned an application by a husband for an order for interim sale under section 14 TOLATA 1996 (he also issued applications “by way of belt and braces” [9]) under the MWPA 1882 and the FLA 1996). A sale was ordered; the wife’s appeal against the order for sale was dismissed. Wilson LJ discussed the wide discretion afforded to the court under section 15 but appeared generally reluctant to endorse the use of TOLATA 1996 to make significant orders in advance of the final hearing of the financial remedy application. He recited the arguments on this point at [14], and at [18] observed: “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 [59] below).[37]On 6 April 2011, the FPR 2010 came into force. These rules of procedure, self-evidently it may be thought, lay out a “procedural code” (rule 1(1) FPR 2010) crafted “with the overriding objective of enabling the court to deal with cases justly” (ibid.). The rules waved in a new rule 9 FPR 2010 (‘Applications for a Financial Remedy’) and rule 20 FPR 2010 (‘Interim Remedies’). Rule 9 (as amended by the Family Procedure (Amendment No. 2) Rules 2013/1472) provides as follows: 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.(3) …(4) …(5) …” It specifically did not introduce an interim power of sale.[38]The relevant part of rule 20.2 for these purposes provides as follows:
“(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…” (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…”
[39]Rule 20 was given prominence in 2015 by the decision of Mostyn J in BR v VT, where he expressly contemplated (at [2]) three “procedural” routes to achieve interim sale:(1) section 17 MWPA 1882,(2) by an order made under sections 13 and 14 of TOLATA 1996 (which depends on both spouses having a beneficial interest in the property), and(3) under rule 20.2(1)(c)(v) of the FPR 2010.[40]In BR v VT, Mostyn J recognised that there were limitations of each of the ‘routes’ (including the route under rule 20) in that none of them explicitly provided for vacant possession. He therefore went on to hold at [7]:
“… 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 [1984] 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.”
[41]There then followed further consideration of the powers available under rule 20 FPR 2010 at one of the interlocutory staging-posts of the lengthy litigation of Joy v Joy [2015] EWHC 455 (Fam), where Sir Peter Singer was presented with an application for interim sale under rule 20.2(1)(c)(v): the item under consideration for sale was the husband’s 1928 4.5 litre racing Bentley. In order to decide whether the Bentley qualified as "relevant property" for the purposes of rule 20.2(2) the judge considered whether it was property "as to which any question may arise on an application." He concluded (per [37]) that there was:
“…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 ([41]) 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’, specificallyrule 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 [42]:
“… 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.[42]Finally, in this context, I have considered the case of Goyal v Goyal [2016] EWCA Civ 792, [2016] 4 W.L.R. 140, [2017] 2 F.L.R. 223, where at [41] McFarlane LJ said:
“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).[43]In short, this confirms that although an order may be both practical and convenient will not, and cannot, engage a jurisdiction which does not exist.

Conclusions

[44]I introduced my discussion of the law above ([25-27]) by rehearsing various timeworn propositions deriving from statute, which taken together make clear that the court does not have jurisdiction under the MCA 1973 in divorce proceedings to make a property adjustment order pending decree of divorce, and no such order shall take effect unless the decree has been made absolute. The order for sale can only be made on or after the making of the financial remedy order.[45]Given that section 24 and section 24A MCA 1973 is a barred route to relief at an interim stage, I am unable to conclude that an application brought under a generic procedural rule (rule 20 FPR 2010) can deliver a result which is specifically prohibited within the claim before the court. The FPR 2010 regulate the practice and procedure of the court; they cannot extend the court’s jurisdiction which, in the absence of the rules, the court would otherwise lack (see generally [35] above). Nor, as McFarlane LJ recently confirmed in Goyal (see [42] above) can the inherent jurisdiction fill the ‘perceived gap’.[46]In short, the only active substantive claim before the court is that made under sections 23 and 24 MCA 1973, which specifically barred the specific interim relief claimed, and falls to be adjudicated only when the section permits.[47]This reasoning coincides with that of Lord Millett in On Demand Information plc v Michael Gerson (Finance) plc [2002] UKHL 13; [2003] 1 A.C. 368, HL (“On Demand Information”) to which I drew counsel’s attention during the hearing before me. In this case, Lord Millett said (in relation to Order 29 rule 4 Rules of the Supreme Court 1965 [Interlocutory Injunctions; interim preservation of property] (the predecessor to CPR 1998, rule 25) that:
“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).[48]A power to make interim orders for sale does repose within the MWPA 1882, and TOLATA 1996 but there were no applications under those statutes before District Judge Pescod for determination. I am satisfied that applications under either statute would provide the court with inherent power for the court to order vacant possession of the property. In so concluding I rely: 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 [5]; ii) In relation to section 13 and 14 TOLATA 1996, on the comments of the court in Miller Smith at [16], and of Mostyn J in BR v VT at [4].[49]I am of the view that a formal application under one of those statutes must be before the court before an application for interim sale, under its provisions, can properly be entertained. Given the implications of the relief sought, it would not be right for an application of this nature to be deemed to have been made, or otherwise inferred. Although a contrary view may be said to have been given (i.e. of the need for a formal application under MWPA 1882) in the case of Ward v Ward & Greene [1980] 1 WLR 4 (“I have never understood the advantages of multiplying pieces of paper”: Ormrod LJ), that case was dealing with a materially different situation, in which it was argued that in order for the court fully to flex its powers at final hearing under section 23 and section 24 MCA 1973, it was necessary to issue a separate application under the MWPA 1882 (or the Law of Property Act 1925). Indeed, Ormrod LJ was clear that the factual “circumstances” must be such as to “bring the case within one or another of those Acts [i.e. MWPA 1882, or LPA 1925] which give the necessary power to the court to order sale”. Of course, in this case, given the timing of this interim application, the factual circumstances cannot bring the case at this stage within the powers of the MCA 1973 (the statute under which the only application before the court is made).[50]Crucially, it seems to me, only once a substantive jurisdiction is laid before the court, can the court consider how, procedurally, it should exercise its power. It is at this stage that rule 20 FPR 2010 comes into play.[51]Even if, contrary to my conclusion, rule 20.2 FPR 2010 operated to give a court a free-standing power to order sale in these circumstances, it would not have given the court the power to order the delivery up of vacant possession. For this reason, Mostyn J found himself on the facts of BR v VT (and with the concurrence of both counsel) conducting a section 33(6) exercise (see [10]) in order to consider whether to ‘terminate’ the wife’s rights to occupy the home. In contrast to the position on these facts, in BR v VT the wife appears to have had only ‘home rights’ (section 33(1)(a)(ii)) (see [35]) which attracted weaker protection under section 33(3)(e). Having conducted the relevant exercise, at [36] Mostyn J effectively “terminated” the wife’s “rights of occupation”.[52]On the facts of this case, it is notable that – even though District Judge Pescod purported to exercise a power of sale under rule 20 – he: 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.[53]I must add that, had I not decided this appeal on other grounds, I would have had grave misgivings about purporting to terminate a wife’s rights of occupation of the former matrimonial home simply on the basis of a deemed application under the FLA 1996. Mostyn J saw no need for a specific application, on the basis that the court would make a “supplemental order” ([4]) to the order for sale, and the point was not apparently taken in BR v VT that there should have been an application before the court. Mostyn J felt that it was sufficient for the court simply to undertake the section 33 ‘exercise’, drawing, understandably, on what Wilson LJ had said in Miller Smith at [23] (“one may say, broadly, that it would be surprising if an order that in effect a spouse should give vacant possession of a matrimonial home under TOLATA were to be made in circumstances in which the applicant could not have secured an occupation order.”). My misgivings derive from a combination of the following: 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 [1999] 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.[54]Assuming that there is a proper application before the court to which rule 20.2(1)(c)(v) can attach, how then does the court apply the procedural steps required? Rule 20 contemplates a two-stage test: 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’)?[55]First the applicant must establish that there is a “good reason” for a sale. That is the ‘threshold’. If the threshold is crossed, the applicant must then demonstrate that it is right for the court to exercise its discretion to order a sale. This summation of rule 20.2 was discussed by David Richards J in Bank of Scotland v Neath Port Talbot CBC [2006] EWHC 2276 (Ch), August 11, 2006, unrep at [27] (‘Port Talbot’): “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”.[56]What constitutes ‘good reason’ will be decided in each case on its own facts. I do not regard it as helpful or necessary to seek to define the phrase, though given the extraordinary nature of the application for interim sale, the reason must be correspondingly ‘good’; one knows a ‘good reason’ when one sees one. In the On Demand Information case,Lord Millett described the jurisdiction thus:
“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).[57]David Richards J in the Port Talbot case commented at [22]: “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”.[58]At the discretionary stage, the court will consider a wide range of issues. These will include the factors reflected in the relevant statute: under the MWPA 1882 these are essentially unlimited (“such order as it thinks fit”) but are more fully defined (albeit not exclusively) for a TOLATA 1996 claim (section15 TOLATA 1996). If a party wishes an interim order for sale and needs to terminate a spouse’s home rights under section 33 FLA 1996, then the provisions of section 33(6) FLA 1996 will be considered at this stage. Under either statute, the court will consider all other relevant circumstances. Plainly, if ‘good reason’ is made out for an interim sale, this will be a powerful factor in the discretionary exercise (see the citation at [55] above).[59]The weight to be given to the competing or collateral considerations will depend on the circumstances of the individual case (see David Richards J in Port Talbot at [24]). It is at this discretionary stage that I would pay particular regard to what Wilson LJ said in Miller Smith: that is to say that the court should embark on the discretionary exercise:
“…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

[60]In Wicks v Wicks, Ward LJ referred (at p.477) to applications for orders for capital relief as “very much the exception”; for many reasons I am sure that must be right, and I have already remarked that the advocates in this case had aptly described the application before the District Judge as unusual.[61]A matrimonial home is often the main asset acquired during a marriage. It is so in this case. Not uncommonly issue will be joined between the parties (particularly where there are dependent children) as to whether it should be retained, and if so for how long. The apportionment of the shares of the parties to the proceeds of sale may be dependent on a large number of factors which may only be fully appreciated on a full review of the section 25 MCA 1973 criteria. Courts will be slow to take any interim step which may pre-empt the exercise of the wide discretion at final hearing; it is only then that all the pieces of the ‘jigsaw’ (see [59]) come together. That said, there will be cases where it would be right to do so, and as rule 20.2(1)(c)(v) makes clear, ‘good reason’ needs to be shown for an order for sale before the court can exercise its interim powers.[62]It follows from all that I have said that I have reached the conclusion that the District Judge reached a result, in material ways aided and abetted by the advocates before him, which was in the end ‘wrong’ (per rule 30.12(3)(a) FPR 2010). There was no proper application before him on which he could make an interim order for the sale of the former matrimonial home. Of course, there had been no argument on this point at first instance, as the wife’s counsel had conceded that rule 20.2(1)(v)(c) FPR 2010 endowed the court with all the necessary powers to make the order for sale and vacant possession which the husband sought.[63]I therefore propose to allow the appeal and set aside the order made by District Judge Pescod.[64]If I am wrong in my analysis above, and the court was entitled to proceed on an application for interim sale simply under the procedure rules (rule 20.2(1)(c)(v) FPR 2010), I am satisfied that DJ Pescod did not: i) Perform the two-stage test under rule 20 as required (discussed above [54]), either adequately or at all. Further, only one of the four grounds relied on in his conclusion (see [15](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 furtherin value during the interval between the application for sale and the determination of the proceedings or question (see [56] 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.[65]Echoing the comments of Ward LJ in Wicks v Wicks (at p.486, referred to at [34](iv) above) I would suggest that the issue of interim capital relief is one which is now long overdue for reform. It may be that opportunity can be taken to examine again this issue within the proposals currently under discussion to achieve the administrative de-linking of divorce and dissolution cases from any related proceedings for a financial remedy, as proposed by the Family Procedure Rules Committee (July 2017).[66]That is my judgment.

Cited in 5 later judgments