Analysis
A husband and wife met in 1999 and married in 2003. They had one child together, of primary school age at the time of the proceedings. In 2005 the husband and wife moved into a farmhouse owned by the husband’s parents. In 2009 the husband’s parents settled the farmhouse on a discretionary trust for the benefit of their children and remoter descendants. Subject to the power to appoint the capital and income to the discretionary beneficiaries, the farmhouse was held on trust to pay the income to the husband for life, and it was declared that the making of any land comprised within the trust fund available for occupation by the husband was a purpose of the trust. At the expiration of the trust period of 80 years the trust fund was to be held for the husband’s brother, his children and remoter issue.
The husband and wife separated in 2012 and a decree nisi of divorce was pronounced in 2013. Upon the wife’s application for ancillary relief, Mostyn J found that the trust of the farmhouse was a nuptial settlement which was capable of variation under s24(1)(c) of the Matrimonial Causes Act 1973. Mostyn J ordered that the trust be varied so that a sum of £23,000 should be paid to the wife absolutely, and a sum of £134,000 should be provided for the benefit of the wife for life, with the wife entitled to use the capital sum for or towards the purchase of a property for her occupation and having the benefit of the income during her lifetime. A period of six months was allowed for the sum of £134,000 to be provided, and the order permitted it to be provided otherwise than from the assets of the trust.
The trustees appealed against Mostyn J’s decision, arguing that it was not open to him to exercise his discretion in this way, that it was erroneous to make an order which would necessitate the sale of the farmhouse which should be a home for the husband and his children, and that the judgment wrongly proceeded on the basis that the husband’s family would satisfy the order so as to avoid the farmhouse being sold.
Held (dismissing the appeal)
- 1) The parties agreed that the principles on which the power in s24(1)(c) of the Matrimonial Causes Act 1973 should be exercised are set out in Ben Hashem v Ali Shayif [2008] EWHC 2380. The starting point for the exercise of the discretion is s25 of the Matrimonial Causes Act 1973, and the objective is a result that is fair to both sides and which does not interfere with the settlement more than is necessary to do justice between the parties.
- 2) The wife’s need, specifically the need for accommodation, was likely to be more influential than the sharing principle (upon the use of which in these circumstances the court expressed no concluded view). The court would not interfere with the judge’s conclusion that the wife did not have the ability to provide for her housing needs from her own resources, financial or other.
- 3) It was for the judge to determine, on his assessment of the evidence, what the husband’s reasonable needs for accommodation were, and how they would be satisfied. The court would not interfere with the judge’s conclusion that the husband’s family would provide, even if the farmhouse were sold.
- 4) The judge therefore had no choice but to turn to the trust in order to provide for the wife and he was entitled to do so.
- 5) The judge paid sufficient regard to the ‘trust considerations’, including the intention of the settlor and the knowledge of the parties that ultimately the value of the settlement would revert to the estate. Nor had innocent third parties been inappropriately deprived of their rights under the trust. The route chosen by the judge was the least intrusive available.
- 6) The judge was justified in giving the husband’s family the chance to avoid the sale. But he had not required the family to put up the money to do so. It could not be said that his order placed improper pressure on the husband’s family. It simply provided a choice.
7) In both family cases and civil litigation generally it is good practice, but not a mandatory requirement, for any party contemplating an appeal in the first instance to seek permission from the lower court. Ideally the party should do so when the judge delivers or hands down judgment.
JUDGMENT BLACK LJ: [1] This is an appeal brought by the trustees of a post-nuptial settlement (the trustees) against an order of Mostyn J, made on 25 June 2014, varying that settlement by way of ancillary relief following a divorce between the spouses (hereafter ‘the wife’ and ‘the husband’). The husband and the wife are …Continue reading "P v P [2015] EWCA Civ 447"