Family Law

Can the family court order the family home, or indeed any other family property, to be sold (with vacant possession given on sale) and the proceeds distributed on an interim basis before the final financial settlement? The power to make this order is often vitally needed at an interim stage by practitioners and their clients in circumstances where, for example, there are considerable debts, it is known that the property will eventually be sold and perhaps one spouse is doggedly refusing to take a financially sensible and commercial approach.

Practitioners have experienced a 'yes you have this power, no you don’t' over the years.

As long ago as 1992 in Barry [1992] 2 FLR 223, admittedly a case where the family home had already been sold, the court made an order distributing the net proceeds on an interim basis. Then in Wicks (1998) 1 FLR 470, the family law profession was told this power to sell the family home and distribute the net proceeds does not exist, specifically not obtaining interim vacant possession. The profession didn’t worry too much about this decision at the time because Parliament in the Family Law Act 1996 had introduced a much-needed, and much campaigned for, set of interim financial provision orders in what would have been new s 22A(4) MCA 1973 and we were only waiting for the legislation to be brought into force. This never happened. The new financial powers fell with the government decision in the late 1990s not to introduce no-fault divorce. And so the profession was left without this much-needed opportunity and power.

Some relief arrived with Miller–Smith [2009] EWHC 1297 but it was always understood these were fairly exceptional circumstances. We continued to wait. Some parties suffered material financial hardship and injustice without the opportunity for the court to make these interim orders. It now appears the wait is over

In BR v VT [2015] EWHC 2727 (Fam), published on Friday, Mostyn J has made an interim order for sale requiring vacant possession and interim distribution of the net proceeds. The facts have been fully set out in the weekend papers. A matrimonial home worth about £2.47m with colossal debts so that the remaining net proceeds were only about £100,000. These debts were a combination of mortgage, legal costs, tax bills and other liabilities. It was the husband who wanted the sale of the property and vacant possession. Although the court found that he was the one who had been primarily responsible for a number of these debts, nevertheless the order was made. The wife’s home rights, her right of occupation, was terminated.

What is crucial is the circumstances for the acknowledgement now that we have this power and the criteria to be exercised.

The judge looked (para [2]) at the three procedural routes whereby interim relief may be awarded; s 17 MWPA 1882, ss 13 and 14 TOLATA and r 20.2.1(c)(v) FPR 2010. What is not possible (para [3]) is s 24A MCA which only allows orders on or after the making of certain other financial remedy orders, ie not interim. However the judge identified the real problem was the ancillary order for giving up vacant possession.

The judge closely analysed (paras [5]–[6]) Wicks, above, where Ward LJ had said there was no power to order possession. Mostyn J felt the criteria for ordering possession hinged upon what is now s 33 Family Law Act 1996; legislation that governs rights of occupation of a family home and powers to order one party to give up those rights. It is most frequently invoked in the context of domestic violence orders where one party is seeking sole occupation of the family home for their protection. But it is the context in which a family member has a right of occupation, the family home's right. It sets out criteria to be weighed up when that right of occupation may be brought to an end.

In BR v VT Mostyn J stated (para [7]) that there was power to make an order on an interim basis for the sale of property including the family home and power to order vacant possession of the family home (termination of home rights under s 33.3.5 FLA 1996) only if and as long as the factors in s 33.6 have been fully taken into account and balanced. This is irrespective of whether the claim is brought under TOLATA or MWPA (paras [9] and [10]).

This is all incredibly pragmatic, common sense and vitally needed, albeit very late in arriving. The judge is to be highly applauded and praised for dealing with this issue.
What is crucial is that this power now remains (and is not temporary as its previous history) and is available to do justice and fairness at an interim stage in a number of cases. No more can one spouse doggedly refuse, invariably for tactical or emotional reasons, to the sale of a family home which will inevitably be sold sooner or later in the final settlement but which delay will only increase the financial burden on the family at a time of separation.

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This article was originally published on The International Family Law Group LLP's website and has been reproduced here with kind permission.