Barclays Bank Plc v Hendricks and Another
| Jurisdiction | England & Wales |
| Judgment Date | 1996 |
| Date | 1996 |
| Court | Chancery Division |
LADDIE, J
Charging order – order for sale of jointly owned property – chargee's position similar to that of trustee in bankruptcy – chargee's rights to prevail over those of innocent co-proprietor save in exceptional circumstances.
Property – order for sale of jointly owned matrimonial home to recover debt owed by husband – where parties had separated the rights of a creditor who had obtained a charging order prevailed over those of the innocent co-proprietor save in exceptional circumstances.
The matrimonial home was owned by the defendants, husband and wife, jointly, subject to a building society mortgage. After the husband and wife separated the wife and children continued to occupy that house. The husband went to live in another house which was owned solely by the wife. The plaintiff had obtained a charging order absolute against the husband in respect of money borrowed by him, followed in the present proceedings by an order for sale of the matrimonial home under s 30 of the Law of Property Act 1925.
The wife appealed asking for the sale to be deferred until the children had completed their education.
Held – dismissing the appeal: There was no difference between the principles applying to a chargee and a trustee in bankruptcy: the interests of the charge prevailed save in exceptional circumstances. As the defendants had separated, they no longer held the matrimonial home subject to the collateral purpose that it should be jointly occupied by them. The wife had submitted as "exceptional circumstances" that the children would have to move; that they would have to spend more time travelling to school; that the plaintiff would not recover more than a fraction of the debt; that the husband might cease to make financial provision for the family; and that she was the innocent party. None of these points amounted to "exceptional circumstances". Consequently, the interests of the chargee prevailed and the order for sale of the former matrimonial home would be confirmed. However, the wife should not be required to vacate the house until the next school holidays and the sale would be subject to a minimum sale price.
Statutory provisions referred to:Law of Property Act 1925, s 30.
Cases referred to in judgment:Abbey National plc v Moss (1993) The Times, 30 November.
Citro, Re [1990] 3 WLR 880.
Holliday (A Bankrupt), Re [1980] 3 All ER 384.
Jones v Challenger [1961] 1 QB 176.
Lloyds Bank v Byrne[1993] 2 FCR 41.
Michael Sullivan for the plaintiff.
Nicholas Yell for the wife.
MR JUSTICE LADDIE. Nature of the proceedingsThe plaintiff in this action is a bank which was owed various sums of money by the first defendant, Mr Hendricks. Mr Hendricks is married to, but separated from, the second defendant. Before their separation, the defendants lived together with their two children in the matrimonial home in Twickenham ("the first house"). Since then Mr Hendricks has moved out of the first house and has moved into another house, owned by Mrs Hendricks alone ("the second house"). In proceedings in the Queen's Bench Division against Mr Hendricks, the plaintiff sought a charging order absolute against the first house. Mrs Hendricks intervened in those proceedings. A charging order absolute was made on 14 November 1994. All avenues of appeal have now been exhausted. By the present proceedings the plaintiff seeks an order pursuant to s 30 of the Law of Property Act 1925 for the sale of the first house together with certain ancillary relief. On 19 April 1995 Deputy Master Powell made an order which included the following provisions:
"It is ordered ... that the said property be sold without further reference to the court at a price of not less than £200,000 ... that each of the defendants do within 28 days after personal service upon that defendant of this order deliver to the plaintiff possession of the said property."
If that order is enforced, the bank will sell the first house and, after discharging sums due to the Cheltenham & Gloucester Building Society under a mortgage and deducting the costs of sale, recover part of the moneys owed to them by Mr Hendricks from his interest in the remaining equity. The balance would pass to Mrs Hendricks. However, Mrs Hendricks does not wish to leave the house in which she and her children have been living for 10 years. Therefore she now appeals from Deputy Master Powell's order. She asks that the court should exercise its discretion to defer sale of the first house until her two children, who are currently aged 10 and 13, reach the age of 18 or finish full-time education. In the event of the court refusing to take that course, Mrs Hendricks seeks alternative forms of order.
Background factsA number of affidavits were served in these proceedings. From them it is possible to give the following additional background against which this dispute comes before the court.
Mrs Hendricks has explained the deterioration in the relationship between her and her husband. It is clear that his financial problems have created great tension. However a modus...
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