Miller-Smith v Miller-Smith (No 1)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Wilson,Lord Justice Rimer,Sir Mark Potter, President |
| Judgment Date | 02 December 2009 |
| Neutral Citation | [2009] EWCA Civ 1297 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B4/2009/1813 FD 08F 01215 FD 08F 01216 |
| Date | 02 December 2009 |
[2009] EWCA Civ 1297
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE PRINCIPAL
REGISTRY OF THE FAMILY DIVISION
MR RECORDER SAPSFORD QC
Before: Sir Mark Potter, President Of The Family Division
Lord Justice Wilson
And
Lord Justice Rimer
Case No: B4/2009/1813
LOWER COURT NOS: FD 08F 01214
FD 08F 01215
FD 08F 01216
Mr John Wilson (instructed by Mischon de Reya) appeared for the Appellant wife.
Mr James Turner QC and Mr Deepak Nagpal (instructed by Stowe Family Law LLP) appeared for the Respondent husband.
Hearing date: 4 November 2009
Lord Justice Wilson:
A:INTRODUCTION
A wife appeals against an order made in unusual circumstances on the application of her husband by Mr Recorder Sapsford QC in the Principal Registry of the Family Division on 31 July 2009. His order, made two months prior to the hearing of a defended suit for divorce brought by the husband against the wife, was that, as joint owners of the matrimonial home at 23 Egerton Terrace, Knightsbridge, London SW3, in which the wife continued to reside, they should forthwith sell it with vacant possession. The order was made under s.14 of the Trusts of Land and Appointment of Trustees Act 1996 (“ TOLATA”).
The parties hold the home in their joint names as trustees for themselves as tenants in common in equal shares. Its value is hard to identify. The recorder took it to be “not less than £10 million”. But it might be as high as £14 million. For convenience I will take it as £12 million. Two years ago its value was significantly higher. The mortgage debt referable to it now stands at £7 million. The mortgage was placed into a basket of major currencies and this year, while the pound has weakened against other major currencies, its size, when expressed in sterling, has significantly increased. The amount of the instalments payable in respect of the mortgage varies greatly. In October 2008, when the husband issued his application under TOLATA, they were £22,250 per month (or £267,000 per year). By June 2009 they had decreased to £14,200 per month (or £170,000 per year). Other expenses referable to the home, in particular the cost of the housekeeper and the gardener and of utilities, then amounted, according to the husband, to £58,000 per year but, according to the wife, somewhat less. Thus, on 5 June 2009, when the recorder conducted the hearing of the application, regular expenditure on the home, borne by the husband, amounted – on the husband's figures, which the recorder seems to have accepted – to £228,000 per year. Additionally the husband was making an allowance to the wife of £18,000 per year and meeting other expenses on her behalf. In respect of the husband's own accommodation in Belgravia and Oxfordshire, the rent alone was running at £100,000 per year.
The husband's usual net income from all sources is about £350,000 per year. So, when he issued his application, the basis of his case was that the home should be sold because it was impossible for him to continue to maintain it. A week before the hearing the wife appeared to be about to concede the inevitability of a sale on that basis. Three days before the hearing, however, the husband disclosed that, weeks previously, he had been paid an exceptional commission of £1.2 million gross (or £720,000 net) on a corporate deal made in March 2009 in relation to which he had given advice; in his oral evidence to the recorder he described it as a once-in-a-lifetime payment. So the basis of his case became not that it was impossible to continue to maintain the home, at any rate in the short term, but that it was unreasonable to expect him to do so. In response to that revised basis the wife made no analogous concession. She actively contested the application for an order for sale, mainly on the ground that, in the light of the pendency of the defended suit, in which she was disputing that the marriage had irretrievably broken down, the application was premature and should be dismissed.
In the event the recorder decided to order a sale because the home was “far larger than could objectively be justified by reference to [the wife's] reasonable housing need” and because “the purpose for which the property was acquired was to provide a home for both of them while they lived together [and] that purpose can no longer be achieved”. He ordered that the home be marketed forthwith; that completion should not take place until after three months (i.e. not before 31 October 2009); that on completion the wife should give vacant possession of the home; and that “without prejudice to the question of the ultimate apportionment and distribution thereof” the net proceeds of sale should be divided into two equal sums, be placed on deposit and be not distributed to either party without the other's written consent or further order of the court.
The recorder was told that the hearing of the defended suit was fixed to begin on 22 September 2009. In the event it did not begin until 5 October 2009. We are told that, at its conclusion on 9 October 2009, the judge held that the wife had behaved in such a way that the husband could not reasonably be expected to live with her and that their marriage had broken down irretrievably; and that he therefore granted the husband a decree nisi of divorce.
B: THE HISTORY
The wife is aged 44 and the husband is aged 70. They began to cohabit in 2003. The husband's first wife had died in 1999 and he had been Chairman of ICI until 2001. The wife, who had not previously been married, had been its Company Secretary until just prior to their cohabitation. They were married in June 2004.
The parties bought a long lease of the home in August 2005 and they bought its freehold in January 2006. The long lease cost about £4 million and the freehold cost about £2 million. The size of the home is 3,800 sq ft; it is on five floors and has substantial gardens both back and front. They embarked on elaborate works of renovation. Builders, decorators and others worked on it from January 2006 until April 200The parties so reconfigured it as to reduce the bedrooms to four. The husband took a considerable interest in the works; but the wife directed them. Her energy and flair were major contributors to its ultimate style and beauty. Inclusive of the renovation costs and the incidental costs of the purchases, the cost of the home was £7.4 million, of which £5.5 million was borrowed under the mortgage. Of the balance, the husband contributed just over £1.5 million; and the wife contributed just under £0.4 million, which represented the net proceeds of her flat in Hampstead and which, apart from a policy worth £40,000, was in effect her only capital.
The parties moved into the home in April 2007. But by then they were in receipt of marriage counselling. The husband left the wife in August 2007. He returned to live with her there in November 2007 but finally left her in January 200So they occupied the home together only for six months in all. The husband filed his petition for divorce in May 2008; sadly the main subject of his petition, and therefore of the wife's answer filed in July 2008, surrounded responsibility for difficulties in her relationship with his three adult children. The breakdown of the marriage was a source of intense pain for both parties; and, obviously, the wife was slow in becoming able to accept the fact of it.
By letter dated 30 June 2008, aware that the wife intended to defend his petition, the husband's solicitors informed her solicitors that a sale of the home was urgent and inevitable. But, by her solicitors, the wife disagreed. When, in October 2008, he issued his application under TOLATA, the husband also issued applications for a sale of the home under s.17 Married Women's Property Act 1882 and for an occupation order, prohibiting her exercise of her right to occupy the home, under s.33(3)(d) of the Family Law Act 1996. On 6 May 2009 a circuit judge directed that all three applications should be listed for hearing on 5 June 2009 and, in doing so, he rejected a submission on behalf of the wife that they should be listed to be heard only after, albeit perhaps immediately after, the hearing of the suit. On 5 June 2009 Mr Turner QC, on behalf of the husband, informed the recorder that his principal application was that under TOLATA and that the other two applications were only by way of “belt and braces”.
C: DISCUSSION
Mr Wilson's broad, primary, submission to us on behalf of the wife is that it was premature for the recorder to order a sale of the home in advance of any decree of divorce; that the circuit judge's direction for the preliminary hearing of the husband's application under TOLATA was made prior to the substantial, exceptional, payment to the husband and thus at a time when he was credibly contending that he could not afford to maintain the home; that at the hearing of the suit for divorce, which the recorder knew to be imminent, the wife would not only deny that she had behaved in such a way that the husband could not reasonably be expected to live with her but would also aver that, even if she had so behaved, the marriage had not broken down irretrievably; that, by finding that the purpose for which the home had been acquired, namely as a home in which the parties might live together, was a purpose which could no longer be achieved, the recorder impermissibly pre-empted that second stage of the enquiry to be conducted by the judge who heard the suit; that TOLATA was an inappropriate...
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