A v N [2025] EWFC 371 (B)

Recorder Christopher Stirling. Final hearing in FR proceedings involving an intervener claim from W's elderly mother. Guidance given as to how the representations of third parties should be balanced against the needs of the spouses in accordance with s 24A(6) of the MCA 1973.

Judgment date: 31 October 2025

.https://caselaw.nationalarchives.gov.uk/ewfc/b/2025/371

Recorder Christopher Stirling. Final hearing in FR proceedings involving an intervener claim from W’s elderly mother. Guidance given as to how the representations of third parties should be balanced against the needs of the spouses in accordance with s 24A(6) of the MCA 1973.

Facts

H and W separated in 2023 after a long marriage of some 29 years (including 2 years’ seamless cohabitation); [9]. There were four adult children and one minor child – the minor child and three of the adult children remained living in the FMH with both parties; [10].

The FMH was purchased in H and W’s joint names, and it was common ground that (i) H and W could not have afforded the FMH without R’s financial assistance of a £130,000 contribution to the purchase price [47]; and (ii) from the time of the purchase it was intended that R would live in the FMH with H and W. The FMH was chosen so that semi-separate accommodation could be built, in which R would ultimately reside (‘the Annexe’); [46].

Beneficial ownership of the FMH

Legal principles

Where an elderly parent comes to live with their adult child and spouse and makes a significant financial contribution to their home, two discrete exercises arise. First, the court must establish the extent of the beneficial interest (if any) of the parent in the FMH. Then, the court goes on to consider the usual discretionary exercise under the MCA 1973; [3]. The legal exercises are discrete but the factual implications less so: once the FMH is sold, the elderly parent is likely to go and live with their adult child in their new home, meaning that their share of the proceeds of sale is relevant to the assessment of housing resources. ‘This element of circularity makes pragmatism the touchstone of trying to resolve such disputes’; [4].

At [30]–[44], the judge distilled the principles applicable to common intention constructive trusts. Where a party does not appear on the legal title, the relevant questions are (i) whether there was a common intention that they would have an interest in the property, either expressed or inferred; (ii) if so, whether there has been detrimental reliance on the common intention; and (iii) quantification of the parties’ shares, at which stage the court can not only infer but impute the parties’ intentions; [34].

Discussion

The judge was satisfied that the £130,000 advanced by R towards the purchase price of the FMH was by way of outright gift to W and therefore did not confer on R any beneficial interest; [56]:

In the completion statement, R’s contribution to the purchase price of £130,000 was described as ‘mother gifted deposit’. The judge found it was more likely than not that the conveyancing solicitors established from R herself that the money was to be described as a gift; [48].
R’s suggestion in her written evidence that the £130,000 contribution was referable to her paying £100,000 for the land on which the Annexe was to be built and £30,000 for electrical works was ‘inherently improbable’ – the Annexe had not even been designed at the time of purchase [50].
In her oral evidence, R then suggested the money was advanced as a loan which the judge rejected outright; [51].
The judge accepted R’s evidence that she had gifted all three of her daughters equal sums of c.£350,00 across her lifetime; [52]. The £130,000 was part of R’s £350,000 contribution to W – without that, it was difficult to see how W would have received her £350,000; [53]. W would not have received equal treatment to her sisters if the money was advanced by way of loan or investment in the FMH; [55].

The funding of the construction of the Annexe was subject to a ‘loose but nonetheless clear agreement’ that there would be a distinction in funding between works attributable to the Annexe and the FMH; [58]:

An agreed schedule of R’s evidenced expenditure showed payment from R of £75,720 on the construction and initial fitting-out of the Annexe; [59], c.£20,000 on updating the Annexe and c.£2,400 on roof repairs (expressly limited to roof repairs on the Annexe).
In evidence, H accepted that R was considered financially responsible for the property-related costs referable to the Annexe whilst he and W were responsible for those related to the rest of the FMH; [60].
R initially funded her contribution from a commercial loan of £90,000, repaid from rental income from R’s former home at Y. After completion of the Annexe, R sold Y and repaid the loan; [61].

Only one of the SJEs who valued the FMH complied with the direction to put a value on what the construction of the Annexe had added to the value of the FMH overall. Bairstow Eves stated that the construction of the Annexe likely added £200,000 to the value of the FMH in total, i.e. 13% of the overall value; [62].

There was no express agreement or discussion between the parties about R acquiring an interest in the FMH; [63]. However, the judge did infer a common intention that R would acquire some interest in the wider FMH referable to the extent of the Annexe through her contributions to structural repairs; [67]:

The judge rejected H’s argument that an agreement could not be inferred where R did not even appreciate that she had an interest in the FMH until mid-way through the divorce proceedings. Most lay people do not understand the concept of a ‘beneficial interest’. R clearly understood the Annexe was to be hers and that was why a clear demarcation existed as to who paid for what; [64].
R was advancing sums which were ‘far from insignificant’. The significant borrowings R took out to fund the works could not be ignored; [65], nor could the significant increase to the value of the FMH caused by the construction of the annexe at R’s expense; [66].

There was clearly detrimental reliance on R’s part, in that she had made a significant financial contribution to construction, met the costs of structural repairs and borrowed money at a commercial rate to fund this; [68].

As to quantification of R’s interest:

There were ‘obvious difficulties’ with the approach suggested by R’s counsel, namely to aggregate all R’s expenditure which equated to 15.77% of the current overall value of the FMH. That included the £130,000 which the judge had found to be a gift, and failed to account for growth of the value of the investment over time; [70].
Looking at the value added against the current valuation would suggest a figure of £200,000 on the only evidence available, but that evidence was found only in one estate agent’s valuation and thus somewhat fragile; [72].
The court therefore had to impute shares, and 12% of the net proceeds of sale (approximately 10% of the gross proceeds of sale) was appropriate; [73].

As such, 88% of the net equity in the FMH was to be considered as a matrimonial asset, meaning c.£160,000 to R; [74].

R had a right of occupation in the FMH pursuant to s 12 TLATA 1996, but that was by no means an absolute bar on an order for sale of the FMH; [76].

R was awarded 70% of her costs against H ([84]), summarily assessed at £12,600; [87].

Main financial remedies claim

Legal principles

The judge repeated Peel J’s summaries of the generally applicable principles in WC v HC [2022] EWFC 22 at [89] and principles applicable to private business valuations in BR v BR [2025] EWFC 99; [90].

There was a live issue as to whether the FMH should be sold and s 24A(6) of the MCA 1973 was in play:

6)⁠ Where a party to a marriage has a beneficial interest in any property, or in the proceeds of sale thereof, and some other person who is not a party to the marriage also has a beneficial interest in that property or in the proceeds of sale thereof, then, before deciding whether to make an order under this section in relation to that property, it shall be the duty of the court to give that other person an opportunity to make representations with respect to the order; and any representations made by that other person shall be included among the circumstances to which the court is required to have regard under section 25(1) below.’(emphasis added)

There were no reported cases dealing with how the representations of the third party should be balanced against the needs of spouses or what representations may be particularly pertinent; [92]. The following non-exhaustive factors are likely to be pertinent; [95]:

the extent of the third party’s interest in any property as compared to that of the spouses;
whether the property is the home of the spouses;
whether the property is the home of the third party, and in this regard they have a right of occupation by reason of TLATA s 12, or merely a form of investment;
whether the property has been modified or adapted in some particular way for the benefit of the third party;
whether by reason of the third party’s age or medical condition the fact of the sale will be particularly onerous upon them; and
where the property is the third party’s home whether it is proposed and practical that they will be adequately rehoused with one of the other parties.

Where there is little other prospect of substantive relief between spouses being possible without an order for sale. then it will rarely be the case that the objections of the third party will prevail, unless there is some special factor in the personal circumstances of the third party [97].

Computation issues

The central asset was the FMH with an agreed value of c.£1.3m; [99].

The value of H’s company (providing automated systems for homes and buildings) had been the subject of great dispute; [101]:

Sally Longworth valued the company at £209,000 net in December 2024 and £123,000 net in July 2025, the decline being based on updating accounts showing a considerable decline in turnover and in profit. W argued H had ‘soft-pedalled’ on the business to depress its value; [102].
The judge described it was ‘regrettable’ that so much time and money had been spent on this issue where H was the sole employee and there was no prospect of the business being sold in the immediate future; [104].
The judge accepted that the decline in turnover was largely the result of major contracts coming to an end and unusually large sums being taken out of the company to pay for these proceedings; [107]. H was upbeat about the future; [108].
The judge accepted the capital value put on H’s business by the most recent report, namely £123,000; [112].

The judge disposed quickly of the issue of two real properties in X Country, rental properties transferred to H by his parents and subject to a usufruct; [115]. H transferred the properties back to his parents during proceedings, which was found to have had virtually no practical effect as the properties were non-matrimonial, illiquid and H derived no financial benefit from them; [117]. The properties should not even have been on the asset schedule; [120].

Housing need

It was agreed that W’s future property would need to accommodate R. However, W’s proposed properties (costing £1.175m–£1.3m) were unaffordable; [126]. Two rooms would be needed on top of the two rooms for W and R to accommodate the children; [128]. W could rehouse appropriately at £750,000 in a 4/5 bed home, with adaptations for R at a cost of £15,000. W’s total housing need (accounting for SDLT and moving costs) was £800,000 ([129]) from which R’s share of the proceeds of sale of c.£160,000 would be applied. W therefore needed c.£640,000 of matrimonial funds; [130].

H’s housing need was for a house costing £490,000, requiring a total housing fund of £510,000; [131].

Earning capacities and income needs

H’s likely sustainable income from the company was c.£95,000 gross, consistent with the figures H had historically withdrawn from the company in salary to himself and W and dividends; [136]. That would give a net income of £5,602 pcm; [137].

W was 58 and re-entering the labour market. To suggest (as H did) that she could immediately re-enter the labour market full-time and earn £24,000 pa net was wholly unrealistic; [138]. W’s contention that she would only be able to work part-time was also unrealistic; [139]. W was likely at the outset to have a modest income of c.£1,250 pcm net, but within three years that should increase to closer to £1,750 pcm net and hopefully more thereafter; [140].

W’s budget of £4,292 pcm should be reduced to £3,850 pcm, leaving a monthly shortfall of £1,913 after CMS payments. A modest household contribution from R and at least some of the (working) adult children should be expected, at no more than £200 pcm. The shortfall should then be rounded up to £1750 pcm; [141].

H’s budget of £4,064 pcm seemed very high for a single person and should be reduced to c.£2,000 after mortgage payments of £1,579; [143].

Mortgage capacities

It was agreed that W had no mortgage capacity; [144]. H had a mortgage capacity of c.£185,000, bearing in mind he would be paying significant maintenance payments at the outset; [145].

Disposal

It was wholly impractical for W to retain the FMH as H would be left without liquid capital and unable to rehouse; [146]. An order for sale would cause no undue disadvantage to R who would be rehoused with W; whilst the Annexe was adapted for her needs, this could be reproduced in another property. In another case, where other capital resources existed, R’s circumstances might tip the balance against a sale but here there was simply no other option; [147].

W had a total capital need of £746,094 comprised of her housing need and £106,000 of hard debts. That represented 56% of the net equity; [148]. H would be able to rehouse on 32% of the equity i.e., £426,417.92; [149].

A stepped reduction in maintenance over seven years was appropriate ([153]) such that H would pay £1,750 pcm for three years, £1,250 pcm for two years and £750 pcm for two years thereafter (once the youngest child had completed school); [152].

Costs

H argued that W had engaged in litigation misconduct in a number of matters. Fundamentally, there was simply not enough money to fund costs orders so no order as to costs should be made; [162].

The judge was subsequently made aware of a Calderbank offer made by R to H’s solicitors offering to accept £200,000 in full and final settlement of her claims, but found where this came five days before the trial it should not affect the costs award; [170].

Award

The judge ordered as follows:

The FMH should be sold forthwith on the open market for sale and after payment of the mortgage and sales costs, the net sales proceeds should be divided as follows: 12% to R; 56% to W and 32% to H;
Otherwise, each should retain the capital assets in their sole name and immediate capital clean break and income clean break for H;
H should pay spousal maintenance to W as follows:

From the date of the order until 1 October 2028 at the rate of £1,750 pcm;
From 1 October 2028 until 1 October 2030 at the rate of £1,250 pcm;
From 1 October 2030 until 1 October 2032 at the rate of £750 pcm;
From 1 October 2032 the term will end and there will be an income clean break for W but there will not be a s 28(1A) bar.