Trowbridge v Trowbridge
| Jurisdiction | England & Wales |
| Judgment Date | 2002 |
| Neutral Citation | [2002] EWHC 3114 (Ch) |
| Date | 2002 |
| Court | Chancery Division |
Husband and wife – Property – Divorce – Enforcement of consent order – Wife seeking charging order on husband’s alleged beneficial interest in property – Whether payments made by husband for purpose of putting sums beyond wife’s reach – Whether husband having beneficial interest in property.
The first wife and the husband married in 1971 and divorced by a decree absolute made in March 1992. The husband married the second defendant in April 1992. By a consent order expressed to be made in full and final satisfaction of all financial claims and claims in respect of property between them, the husband was ordered to pay the first wife sums totalling £130,000 together with her costs of the application. The first wife sought to enforce the terms of the consent order. First she sought to make absolute a charging order nisi over the husband’s alleged beneficial interest in property at which he lived with the second wife, known as Bramley House. It was registered in the sole name of the second wife; both the second wife and the husband denied that the husband had any beneficial interest in it. The house had been purchased by the second wife, but the balance of the purchase price had been borrowed by both the husband and second wife and secured by a mortgage on the property. Secondly, the first wife sought to enforce the terms of the consent order by applications under s 37 of the Matrimonial Causes Act 1973 and s 423 of the Insolvency Act 1986 for orders setting aside payments made by the husband to the second wife. Under both provisions, payments were liable to be set aside if the payer’s purpose was to put the assets beyond the reach of, or otherwise to prejudice the position of, actual or potential claimants.
Held – (1) In determining the intention and purpose of the maker of challenged payments the court had to look at all the relevant circumstances, including (a) whether he knew whilst making the payments that the claimant might make a claim for financial relief, (b) the amounts of the payments compared with his available resources, and (c) the reasons which he had for making the payments. Each case had to be decided on its own facts, but in general there was unlikely to be an intention or purpose to defeat claims where one spouse made payments to the other spouse genuinely to meet living expenses, in the absence of special factors. In the instant case, the regular payments made to the second wife exceeded the amount spent by her on their joint living expenses by an appreciable amount. On the balance of the husband’s evidence, his credibility as a witness and in light if all the circumstances of the case, the court was satisfied that the husband’s main
purpose and intention was to put sums paid to the second wife beyond the reach of the first wife.
(2) In the instant case, on the evidence, there was no express agreement between the husband and second wife that the husband was not to have a beneficial interest in Bramley house. As there were no discussions that he should have an interest, a finding of common intention would, as in most cases of shared property, be inferred from conduct. Payments towards the purchase price, whether directly or by way of mortgage instalments, would themselves readily justify that inference. As regards the mortgage for Bramley House, the husband and second wife had an equal interest in that arising from one half of the mortgage loan. The outcome therefore was that the beneficial interest in the property was shared between them in proportions which reflected, inter alia, the payment by the second wife towards the purchase price and costs, and half the mortgage loan; Lloyds Bank plc v Rosset [1990] 1 All ER 1111 applied.
Cases referred to in judgmentArbuthnot Leasing International Ltd v Havelet Leasing Ltd (No 2) [1990] BCC 636.
Blyth v Blyth [1966] 1 All ER 524, [1966] AC 643, [1966] 2 WLR 634, HL.
Brabon, Re, Treharne v Brabon [2001] 1 BCLC 11.
Chohan v Saggar [1994] 1 BCLC 706, CA.
Drake v Whipp[1996] 2 FCR 296, [1996] 1 FLR 826, CA.
Gissing v Gissing [1970] 2 All ER 780, [1971] AC 886, [1970] 3 WLR 255, HL.
Grant v Edwards [1986] 2 All ER 426, [1986] Ch 638, [1986] 3 WLR 114, [1987] 1 FLR 87, CA.
Huntingford v Hobbs[1993] 1 FCR 45, [1993] 1 FLR 736, CA.
Jordan v Jordan (1965) 109 Sol Jo 353.
Kemmis v Kemmis [1988] 1 WLR 1307, [1988] 2 FLR 223, CA.
Lloyds Bank plc v Rossett [1990] 1 All ER 1111, [1991] 1 AC 107, [1990] 2 WLR 867, HL.
MC Bacon Ltd, Re [1990] BCLC 324.
McGrath v Wallis[1995] 3 FCR 661, [1995] 2 FLR 114, CA.
Midland Bank plc v Cooke[1996] 1 FCR 442, [1995] 4 All ER 562, [1995] 2 FLR 915, CA.
National Bank of Kuwait v Menzies [1994] 2 BCLC 306, CA.
Pettitt v Pettitt [1969] 2 All ER 385, [1970] AC 777, [1969] 2 WLR 966, HL.
Springette v Defoe[1992] 2 FCR 561, [1992] 2 FLR 388, CA.
Windle (a bankrupt), Re [1975] 3 All ER 987, [1975] 1 WLR 1628.
ApplicationThe claimant (first wife), Ann Trowbridge, sought to enforce a consent order by which the first defendant (husband), Barry Trowbridge, was ordered to pay sums totalling £130,300 to her within 56 days, together with £10,000 in respect
of her costs of the application. The second wife, Susan Trowbridge, acted as the second defendant. The facts are set out in the judgment.
Stephen Jourdan (instructed by The Family Law Consortium) for the claimant.
Geoffrey Ames (instructed by Macdonald Oates) for the first defendant.
Karen Walden-Smith (instructed by Gordon Bancks & Co) for the second defendant.
DAVID RICHARDS QC.INTRODUCTION[1] The claimant in these proceedings Mrs Ann Trowbridge and the first defendant Mr Barry Trowbridge were married in 1971 and separated in January 1991. They were divorced by decree absolute made on 3 March 1992. Mr Trowbridge had for some time before then been living with the second defendant Mrs Susan Trowbridge and they were married on 4 April 1992.
[2] By a consent order made in the Principal Registry of the Family Division County Court on 7 May 1999 and expressed to be made in full and final satisfaction of all financial claims and claims in respect of property between them, including ten costs orders in favour of Ann Trowbridge, Mr Trowbridge was ordered to pay sums totalling £130,300 to her within 56 days, together with £10,000 in respect of her costs of the application. Mr Trowbridge has to date made no payments in accordance with that order.
[3] Ann Trowbridge now seeks to enforce the terms of the consent order in two ways. First, she seeks to make absolute a charging order nisi over what she alleges is Mr Trowbridge’s beneficial interest in the property at which he and Susan Trowbridge now live. The property is known as Bramley House, Hatch Lane, Kingsley Green, Haslemere, Surrey (Bramley House). It is registered in the sole name of Susan Trowbridge and they both deny that he has any beneficial interest in it.
[4] Bramley House was purchased in October 1997 for £325,000 (plus expenses of nearly £6,000), of which £161,000 was provided by Susan Trowbridge out of her own resources and the balance of £170,000 was borrowed by Mr Trowbridge and Susan Trowbridge and secured by a mortgage on the property. In addition. £102,000 was spent on extending and refurbishing the house, of which £30,000 was raised by a further mortgage loan to Mr Trowbridge and Susan Trowbridge and the balance was paid by Susan Trowbridge out of her own resources. Mr Trowbridge paid the monthly instalments on the mortgage between November 1997 and June 1999, totalling nearly £52,600. Since then Susan Trowbridge has met all the mortgage instalments out of her own funds.
[5] While the liability of Mr Trowbridge in respect of the mortgage loan without more would in accordance with principles established in authorities such as Pettitt v Pettitt [1969] 2 All ER 385, [1970] AC 777 and Gissing v Gissing [1970] 2 All ER 780, [1971] AC 886 give Mr Trowbridge a beneficial interest in Bramley House, it is the case of Mr Trowbridge and Susan
Trowbridge that they had agreed by the time of purchase that he would not have a beneficial interest. It is accepted on behalf of Ann Trowbridge that if such an agreement were made it would have the effect of denying any beneficial interest to Mr Trowbridge, but she contends that no such agreement was made.
[6] Secondly, Ann Trowbridge seeks to enforce the terms of the consent order by applications under s 37 of the Matrimonial Causes Act 1973 and s 423 of the Insolvency Act 1986 for orders setting aside payments made by Mr Trowbridge to Susan Trowbridge between July 1997 and April 2000. Most of the payments were regular monthly amounts of £2,000 (from July 1997 and December 1998) increasing to £3,000 (from February to July 1999). There were certain other payments to which I will refer later. The challenged payments amount in aggregate to some £98,000. In addition, if there were an agreement that Mr Trowbridge was to have no beneficial interest in Bramley House, Ann Trowbridge seeks to set aside the mortgage payments made by Mr Trowbridge.
[7] I will deal in more detail with the relevant statutory provisions later in this judgment, but in broad terms under both s 37 of the 1973 Act and s 423 of the 1986 Act payments are liable to be set aside if the payer’s purpose is to put assets beyond the reach of, or otherwise to prejudice the position of, actual or potential claimants. Ann Trowbridge contends that Mr Trowbridge’s purpose in making the challenged payments was to put funds beyond her reach as an actual claimant after 16 November 1998 (when she made the application which led to the consent order dated 7 May 1999) and as a known potential claimant before that date. Mr Trowbridge and Susan Trowbridge deny that this was his purpose in making any of the payments. It is their case that his purpose was to contribute to their joint living expenses and to reimburse Susan Trowbridge for her expenditure supporting him between 1991 and October 1997. It is also their case that his purposes were the same...
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