Potter v Potter
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BALCOMBE,LORD JUSTICE NICHOLLS,SIR GEORGE WALLER |
| Judgment Date | 06 July 1989 |
| Judgment citation (vLex) | [1989] EWCA Civ J0706-5 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 89/0676 |
| Date | 06 July 1989 |
[1989] EWCA Civ J0706-5
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COLCHESTER AND CLACTON COUNTY COURT
(HIS HONOUR JUDGE WILLIAMS)
Royal Courts o Justice
Lord Justice Balcombe
Lord Justice Nicholls
and
Sir George Waller
89/0676
1986 D No.2003
and
MR. STEPHEN MILLEN (instructed by Messrs. Wansbroughs, Solicitors, Bristol, Avon, BS99 7UD) appeared on behalf of the Petitioner (Appellant).
MR. R. HAYWARD SMITH Q.C. and MR. B. SYLVESTER (instructed by Messrs. Fisher Jones, Solicitors, Colchester, Essex, C01 1JR) appeared on behalf of the Respondent (Respondent).
This is an appeal by the petitioner wife, with the leave of Nourse L.J., from an order of His Honour Judge Williams made in the Colchester and Clacton County Court on 10th October 1988 in the course of financial ancillaries between husband and wife in divorce proceedings. By that order the judge dismissed the wife's appeal against Mr. Registrar Sherratt's dismissal of her application for an order that the transfer to her by the husband of his interest in the former matrimonial home should be executed by the registrar.
The parties were married in 1975. The matrimonial home was No.23 Garden Farm, West Mersea, Colchester, Essex. It was registered in the joint names of the parties and was subject to a mortgage with the Chelsea Building Society. The marriage was dissolved by decree absolute dated 7th January 1986 made in the course of divorce proceedings instituted by the wife. On 11th June 1986 the wife gave notice of application for periodical payments for herself and the two children of the family, a lump sum and a property adjustment order. That application eventually came before Mr. Registrar Sherratt on 1st December 1987 when he made a consent order, of which the relevant parts are set out below:
"AND UPON the Petitioner undertaking to indemnify the Respondent in respect of liabilities under the Chelsea Building Society Account Number 037944–954 and to use her best endeavours to secure his release from his covenants thereunder.
BY CONSENT
IT IS ORDERED that:
1. The Petitioner do pay or cause to be paid to the Respondent by 31st May 1988 a lump sum of £6,000.
2. Upon payment by the petitioner of the said lump sum in paragraph 1 above, the Respondent do transfer all his share or interest in the former matrimonial home situate at 23 Garden Farm, West Mersea, Colchester, Essex absolutely subject to the mortgage with the Chelsea Building Society.
3. Upon the said transfer all the Petitioner's claims for periodical payments, lump sum and property adjustment orders be and are hereby dismissed.
4. Neither party shall thereafter be entitled to make any claims against the other's estate under the Inheritance (Provisions for Family and Dependants) Act 1975."
On the day following the date of the order the solicitors then acting for the wife told the Chelsea Building. Society of the substance of the order, saying (as was the case) that she then intended to raise the £6,000 by surrendering the two insurance policies that were collateral security for the mortgage loan and borrow the balance from her father: the mortgage would then be converted into a straight repayment mortgage if the building society agreed. The same solicitors then sent the building society a copy of the order on 17th December 1987. However, the wife then changed her mind, and decided to raise the £6,000 from the building society, who were willing to lend her this sum by way of a complete re-mortgage of the property rather than by way of a further advance. The wife's application for a remortgage was delivered to the building society on 27th January 1988.
There was then an interval which was caused in part by delay on the part of the building society, in part by the absence on holiday of the wife's father, her proposed guarantor, and in part by the failure of the building society's solicitors who, at their own suggestion, were instructed to act for the wife on the re-mortgage, to appreciate that the transaction was being effected pursuant to the term of the order of 1st December 1987. However, they prepared a transfer of his interest in the house for execution by the husband, and this was received by the husband's solicitors on 24th May 1988, in adequate time for him to have executed it before 31st May.
However, the husband's solicitors then took objection to the form of the transfer, on the grounds that it did not recite that it was made pursuant to the order of 1st December, and that a clause in the printed form referred to the possibility of preexisting covenants. Since this clause had not been completed by the wife's new solicitors, that objection had no substance, and for my part I am not convinced that their objection to the absence of the recital had any substance either. However, as Mr. Hayward Smith Q.C. for the husband accepted that his was a technical argument, and did not depend on whether the husband was justified in rejecting the transfer, thereby causing the date of 31st May to go by without the wife's having been able to raise the £6,000 by way of re-mortgage from the building society, I need not consider further whether the husband was entitled to reject the draft transfer. If he was not, it merely serves to emphasise the lack of merit in his case.
By the letter dated 21st June 1988 the husband's solicitors took the point that, as the time limit (31st May) for payment by the wife of the lump sum of £6,000 had passed, and there was no power in the court to extend the time limit, the husband was not bound to transfer his interest in the house to the wife. He was not prepared to do so and would therefore remain a joint tenant of the property. The husband has maintained that position to this day.
It was in these circumstances that on 25th July 1988 the wife applied to the county court for an order that the deed of transfer of the house be executed by the registrar or by such other person as the court should direct on the grounds that the husband had failed to comply with the court's order of 1st December 1987. The registrar dismissed the wife's application on 12th September 1988, and, as I have already said, the judge dismissed her appeal.
Before I turn to deal with the main issue which arises on this appeal, there are certain subsidiary matters which I should mention. Mr. Hayward Smith submitted that, even if contrary to his main submission, the court had power to extend the time for payment by the wife of the lump sum of £6,000, the wife had never expressly applied for an extension of time. Therefore this court, having no relevant original jurisdiction, could not make such an order in this appeal. However, in response to questions from the court he accepted that, if an extension of time were necessary, it was implicit in the wife's application of 28th July that time should be extended. He also accepted that liberty to apply for the purpose of working out the order of 1st December 1987 could be implied: also that it was open to the husband to seek to enforce the payment of the lump sum of £6,000 after 31st May.
The main questions which arise on this appeal may be stated thus:
(1) Was the husband's obligation under the order of 1st December 1987 to transfer his interest in the house to the wife conditional upon payment by her of the lump sum of £6,000 by 31st May so that if, for whatever cause, the wife failed to pay the sum of £6,000 before that date, the husband never became subject to the obligation to make the transfer?
(2) If that is the true construction of the order, has the court any power to extend the time for payment?
The construction of the order.
The order, like any other legal document, must be construed so as to give effect to its spirit and purpose. See Thompson v. Thompson [1986] Fam. 38, and in particular per Oliver L.J. at pp. 47–48. On looking at the order, and in particular at clauses 1 and 2, I am left in no doubt that its true purpose was to enable the wife to buy out the husband's interest in the matrimonial home, and that the date of 31st May 1988 was the equivalent to the contractual date for completion in an ordinary contract for the sale of land. However this was not an ordinary contract; it was a consent order made in the course of matrimonial proceedings and there is authority in this court that the terms agreed, once embodied in an order, derive their authority from that order and not from the underlying contract—see Thwaite v. Thwaite [1982] Fam. 1. There is the further point that it is by no means clear that the court has power, in financial ancillaries, to order a sale by one party to another of his or her interest in property. The powers conferred by Part II of the Matrimonial Causes Act 1973 make no express reference to a sale by one party to another; however, the court is empowered to make a lump sum order—section 23(l)(c)—and a transfer of property order—section 24(l)(a)—and the combined exercise of these two powers can, as here, enable the court to order what is in fact a sale by one party to the other of an interest in property.
On this construction of the order, although the payment by the wife of the lump sum of £6,000 was a condition precedent for the coming into existence of the husband's obligation to transfer his interest in the matrimonial home to the wife, it was not necessary for that purpose that the £6,000 had to be paid before 31st May. That date was fixed so as to make clear the time within which the wife had to raise the money, and to...
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