The Family Court has jurisdiction to order a sale of matrimonial property before making a final order in divorce proceedings. However, it is a complex area fraught with difficulties and there is a clear distinction between the court’s powers depending upon the nature of the right of the spouses to occupy the property.

Associate Sophie Arrowsmith considers those difficulties following the recent decision in RA v KS [2023] EWFC 102, a case involving an application for an interim order for the sale of a matrimonial property. The decision provides useful judicial guidance on the test the court will consider when making an interim order for vacant possession to enable a sale of a matrimonial property.

Background

The wife (the applicant) applied for an interim order for the sale of a property known as the Barn. The husband (the respondent) opposed the application. The applicant and respondent both had a legal and beneficial interest in the property but, importantly, the respondent occupied the property. The applicant made her application under section 17 of the Married Women’s Property Act 1882 (“MWPA”). Section 17 of MWPA provides that if there is a dispute between a husband and wife relating to property, either of them may apply to the court to make any order the court thinks fit.

The matter was heard before Recorder Allen KC.  He concluded that on an application for an interim order for sale, the court could not terminate the rights of occupation of the respondent  if they had a beneficial interest in the property.

The law

To arrive at his judgment, Recorder Allen KC analysed the case law, including Mr Justice Mostyn’s judgment In BR v VT [2015]. This identified three procedural routes to seeking an interim order for the sale of property before the making of a final order. These are:

• Section 17 of the Married Women’s Property Act 1882;
• Sections 13 and 14 of the Trusts of Land and Appointment of Trustees Act 1996, which provide that a trustee of land or a person who has an interest in a property subject to a trust may apply to the court for an order relating to the exercise of the trustees’ functions or declaring the nature and extent of a person’s interest in the property; and
• Rule 20.2(1)(c)(v) of the Family Procedure Rules, which states the court may grant an order for the sale of a property that is of a perishable nature or if for any other good reason it is desirable to sell quickly. Importantly, this can enable the court to grant an interim order for the sale of a property.

It is now clear that under each of the three procedural routes, the court must assess the criteria set out in section 33(6) of the Family Law Act 1996 before ordering vacant possession to enable a sale to take place. Section 33(6) states that in deciding whether to make orders regarding occupation of a property, the court must consider several factors, including the housing needs of each party and any children and the financial resources of each party.

In applying the law, Recorder Allen KC felt he was unable to terminate the respondent’s rights to occupy the property. Accordingly, he could not order a sale of the property. He based his decision on the provisions of section 33(3)(d) of the Family Law Act 1996 (“FLA”).

Section 33(3)(d) states that in making an order, the court can “prohibit, suspend or restrict the exercise” of rights to occupy a property deriving from a beneficial interest. Therefore, Recorder Allen KC determined that he could not make an interim order to sell the property with vacant possession because to do so would permanently terminate (not “prohibit, suspend or restrict”) the respondent’s rights to occupy the property as a beneficial owner. In refusing to make the order, he noted that none of the words in section 33(3)(d) convey permanent extinction given that prohibit means “to prevent”, suspend means “temporarily prevent”, and restrict means “to limit”.

Recorder Allen KC clarified that the position would have been different if the respondent did not have a legal and beneficial interest in the property and instead had ‘home rights’, where a spouse has the right to occupy a property as result of their marriage but do not hold a beneficial interest in the property (eg where the house is held legally and beneficially in the name of the other spouse). In that scenario, the court noted the specific power to terminate those home rights and order vacant possession by virtue of Family Law Act s33(3)(e). Having done so, the court could order a sale of the property following one of the three procedural routes identified above.

Conclusion

The judgment in this matter helpfully sets out the clear procedure to be considered when making an interim order for sale with vacant possession. The judgment reiterates that we must consider the balancing exercise as set out in section 33 of the Family Law Act 1996.

The court’s powers are limited depending on the basis upon which the property is occupied. The court does not have the power to extinguish rights to occupy deriving from a beneficial interest permanently or irrevocably. The position is different if the respondent’s rights of occupation are based on them having home rights arising from the marriage.

The court is required to undertake an analysis of section 33 of the Family Law Act 1996 before making orders for vacant possession to enable a sale to take place. When making an application of this nature, the applicant must specify in their application their case regarding the respondent’s right of occupation.

Adrian Clossick, Partner and Head of Divorce and Family Leeds, says: “It is notoriously difficult to obtain interim orders for sale of a property in divorce proceedings. Previous case law demonstrates the courts’ reluctance to make interim orders for sale and this decision further confines the circumstances in which interim orders will be available to divorcing couples.  Given the complexity of the law in this area, specialist legal advice should always be sought at the very earliest opportunity.”