Wicks v Wicks [1997] EWCA Civ 3050 (18th December, 1997)

LORD JUSTICE WARD: Ancillary relief proceedings sometimes advance at the slowest pace, often as a deliberate tactical ploy. The wife and children may be left in pressing need of capital in order to be rehoused. What, if any, power does the court have to make some capital or property provision for her pending the determination of her claims for lump sum and property adjustment orders? That, stating it very broadly, is the interesting and important question which arises on this appeal.

What in fact has happened in this case can be summarised in this way. Mr and Mrs Wicks married in 1985. She is 38 years old, he is aged 60. She is a secretary in a letting agency. He is a property developer. They have two children, a daughter aged 12 and a son aged 6, both at fee paying schools. The husband was a widower and has two adult independent children from his first marriage, Jonathan and Sarah. At the time of the marriage he owned a large house in Surrey and had bought a London house for Jonathan and Sarah. In 1978 the Surrey house was sold and the husband purchased a house in Weybridge in his name and improved it. That was sold at a profit and from proceeds of sale he purchased the property at Abbotswoods Drive, Weybridge. With creditors pressing, he immediately transferred the property to his wife and declared her to be entitled to the whole legal and beneficial interest therein. That notwithstanding, he claims that the property was bought as business venture, the object of which was to carry out substantial improvements to it and make £1m. profit. The husband claims to have spent about £150,000 already and accordingly to have acquired a share - he would say an enlarged share - in the beneficial interest. He estimates that the injection of a further £250,000 would enable him to complete the work and to sell the property for between £1.25m. and 1.5m. His former business partner has indicated a willingness to enter into a joint venture to inject the necessary capital to bring the project to a successful conclusion. These additional works would take six months to complete.

The marriage broke down in November 1995. The wife left. She was admitted to the Priory Hospital for treatment for alcoholism. She and the two children then moved into rented accommodation in March 1996. She presented a petition for divorce at the end of May. She sought all forms of ancillary relief. The husband was ordered to file his affidavit of means but did not do so. He was sentenced to 7 days in imprisonment for that contempt suspended on terms he filed his affidavit within 21 days. Again he failed. In October he went to prison. A decree nisi was granted on 28th October 1996. It has not yet been made absolute. In May the wife was given notice to quit her rented property by 22nd July 1997. After a contested hearing in June, His Honour Judge Oppenheimer made an order that the children reside with the wife. She was receiving no financial support from the husband and claimed income support. The Benefits Agency informed her she had to sell Abbotswoods Drive. The husband objected to the sale and refused to give possession. The wife launched these proceedings.

2. No later than 14 days from being requested to do so by the petitioner’s solicitors in writing, the respondent do deliver up to the petitioner vacant possession of the said property and do not return thereto, for the purpose of facilitating the exchange of contracts for the sale of the said property and the completion thereof; and without prejudice to the foregoing in any event the respondent do no later than one clear day from being requested to do so in writing permit the entry to the said property of such persons as the petitioner shall require for the purpose of valuing and for viewing the said property for sale.

3. From the net proceeds of sale of the said property (defined as the gross selling price less all reasonable costs of sale) the petitioner do receive not less than £250,000 or alternatively not less than 40%, whichever shall be the greater, such sum to be applied solely in purchasing a property for the occupation of herself and the children of the family....pending the final resolution of the petitioner’s ancillary relief claim.”

On 17th July Her Honour Judge Pearlman made an order in those terms upon the petitioner undertaking, pending the final hearing of her ancillary relief application, not to mortgage, charge or otherwise dispose of her interest in the property that she purchased. The judge also ordered the petitioner to set down her ancillary relief application for final hearing. On 29th September 1997 District Judge Moorhouse directed that it be set down for hearing on the first open date after 20th December 1997. On 8th October 1997 the husband finally filed an affidavit of means then some 15 months overdue.

"It seems to me that it is quite clear that this court has got power to order the sale of the family matrimonial home on an interim basis pending determination of the ancillary relief proceedings which, I should add, have not even been set down yet. It is quite clear to me that the court has got power to appropriate an asset to one or other party, pending determination of the ancillary relief proceedings, to meet that party’s contingent claims. Waite J. said that it is simply a matter in each case of looking forward in time towards the eventual hearing at which the Section 25 criteria will need to be applied and posing the question whether the proposed substitution of assets threatens to place a fetter on the dispositive powers of the judge at that hearing and, if it does, whether the threat is justifiable on overriding grounds, individual or family welfare? The essence of that jurisdiction appears to be that the assets are appropriated in the meantime and remain intact and subject to the court’s discretion. It is quite obvious that I have to have regard to all the authorities which state that I have to consider whether appropriation will place any fetter on the court at the final hearing and, if so, whether it is justifiable on overriding grounds of family welfare, whether the merits of the case would otherwise support such appropriation, for example as Thorpe J said in the case of F -v- F , to provide the wife and children with the opportunity to purchase a home....It seems to me, when I look at the law, when I look at the discretion that I have, and all the matters which have been placed before the court, that I fundamentally decide that it is appropriate and just - and if I have to consider the interests of the children - in the interests of the children that I make this order.”

There the net proceeds of the sale of the former matrimonial home (which had been in the wife’s name) were held in the joint names of the parties’ solicitors. Her claims for ancillary relief were thought to be due to be heard three months later. As it happened it fell to me to decide those claims though it was a good deal later than that. When a house came on the market which the wife was anxious to buy as a matter of urgency she applied for an order that a proportion of the fund be paid out to her and applied in the purchase of that new home in her own name solely for occupation by herself and the children. Waite J. said at p. 142:-

"A first sight an application expressed in those terms seems to run the risk of falling foul of a jurisdictional problem. The powers which the court now enjoys under the amended Matrimonial Causes Act 1973 in regard to the disposition of capital, wide though they are, do not include any power to order interim capital payments between spouses inter vivos (as opposed to posthumous claims for which the interim provision is specifically authorised by section 5 of the Inheritance (Provision for Family and Dependants) Act 1975). The dispositive power to order a lump sum of capital to be raised and paid by one spouse to the other can be exercised once only, and cannot be exercised piecemeal - first on interim, then on a final, basis.

Both sides in the present case accept the existence of this limitation on the court’s powers, although each counsel has reserved the right to argue in some future case the courageous suggestion that the power to make interim awards of capital has now been swept into the system by a side wind as a consequence of the very wide language of Rule 2.64 (2) of the Family Proceedings Rules 1991.

The wife submits, however, that when her application was examined for its full terms and effect, the relief which she is asking is not properly to be regarded as an immediate application of capital for her absolute and exclusive enjoyment. She asks for nothing at this stage to be paid over to her absolutely or unconditionally. When the new home had been bought and occupied, she submits to treat it as still being subject to the full play of the court’s discretion under Section 25 of the Act of 1973, accepting that its face value will have to be taken into account in the final allocation of assets between the parties at the main hearing; and in the event of her being ordered to make a capital payment to the husband for any liquid funds taken by her are insufficient, she will submit a charge being placed on her equitable interest in the new home to secure it. Meanwhile she undertakes not to subject the equity to any encumbrances (beyond those to which the relevant proportion of the proceeds of sale of the matrimonial home are already subject in favour of the parties’ bankers).

When her application is qualified in that way, so the wife submits, the relief she claims is not to be seen as an order for interim lump sum payment but rather as a purely administrative direction approving what amounts in reality to no more than a change of investment for an asset which, despite its transformation from cash to reality, will still remain subject every bit as much after the change as it was before to the dispositive powers of the under the Act of 1973.

That concession seems to me to have been made sensibly and properly. I am more than content to act upon it because it does appear to me to be generally desirable that, during the pendency of a final hearing in financial proceedings the court should enjoy an administrative power to approve in suitable cases acts equivalent to the process described in the language of equity as appropriation; that is to say, the allocation of a particular asset to satisfy the contingent claim of a party, notwithstanding that such claim is still unadjudicated, subject to any undertakings or conditions that might be necessary to enable the court at the ultimate hearing to make suitable adjustments to that position before it becomes final. I am therefore satisfied that the wife’s application is of a kind that the courts not only have the jurisdiction to entertain, but should in suitable instances encourage.”

"It is simply a matter in each case of looking forward in time towards the eventual hearing at which the section 25 criteria will need to be applied, and posing the question whether the proposed substitution of assets threatens to place a fetter on the dispositive powers of the judge at that hearing, and, if it does, whether the threat is justifiable on overriding grounds of individual or family welfare.”

Mr Pratt Q.C. who appeared for the husband who had been unrepresented in the court below, submitted that Barry could be distinguish because it applied only where there was a joint fund frozen in the parties’ names and where it was possible to alter the nature of that investment without detriment to the other party. He doubted the correctness of the decision but was not able to offer much argument to demonstrate what was wrong with it. Mr Christopher Wood, counsel for the wife both here and below, was likewise unable or unwilling to offer much argument to support the decision. Since the basis of the jurisdiction was conceded in Barry, full argument has never been deployed to test whether there is the administrative power in the court akin to some equitable doctrine of appropriation which permits the court, “once the matrimonial assets have become frozen by one means or the other”, “to approve a switching of assets from cash to property or vice versa.”

I have found very little in the text books on Equity which deal with appropriation. There are references to rules relating to the appropriation of payments which regulate the priority in which debtor owing multiple sums to a creditor (or with debts of both interest and capital) can discharge such debts. A borrower and lender can agree to “appropriate” a security for an outstanding debt. In the administration of estates there are statutory powers pursuant to Section 41 of the Administration of Estates Act 1925 enabling the personal representative to appropriate any part of the real or personal estate of deceased in the actual condition or state of investment thereof at the time of appropriation in or towards satisfaction of any legacy bequeathed by the deceased or of any other interest or share in his property as to the personal representative may seem just and reasonable according to the respective rights of the persons interested in the property of the deceased. Apart from statute, power to appropriate funds to answer a legacy seem to depend upon either the terms of the will or the legatee’s consent: see for example Re Hall, Foster -v- Metcalfe [1903] 2 Ch 226.

Nothing in those applications seems to me to justify reliance on any general doctrine of appropriation such as would enable the court to reallocate money or property, a fortiori when the appropriated fund is applied to the purchase of property in the name of only one of the beneficiaries of that joint fund giving that person sole enjoyment of the benefit of that property. With respect to Waite J., as he then was, I see no justification for that slender basis creating an administrative power (whatever that may be) to reallocate property and property rights between the parties contingent upon the final hearing, absent some other power to do so. As his judgment made clear, there is no such other power. Notwithstanding the very great attraction of a practical means of attaining a desirable objective, I, for my part - and most unhappily - feel compelled to hold that Barry -v- Barry cannot be regarded as good law, even in the limited circumstances where the assets to be reallocated are in a joint account.

Here the wife of a very rich man wanted a mere £2.5M to purchase a home for herself and the children pending the determination of her claims for ancillary relief. There was no fund upon which to draw as in Barry but the husband had ample means to provide the money. By her summons the wife sought lump sum provision in advance of the fixture three months thence alternatively an appropriation order in respect of the property she wished to purchase. Whether or not there was jurisdiction to entertain the summons was tried as a preliminary issue. Thorpe J., as he then was, held at p.56E-

"Mr Singleton (for the wife) argues that the court has power to order an interim lump sum, alternatively a lump sum by stages, the first fixed and paid preceding the substantive hearing, and the second quantified at that hearing. Mr Blair (for the husband) marshals the argument that there is no such power and that there is clear authority to that effect. My preference is for Mr Blair’s submissions, but it is not necessary for me to decide the point on this summons for I find that Mr Singleton’s alternative presentation is more relevant to this dispute and more persuasive. He relies on the decision of Waite J. in the case of Barry -v- Barry ...”

"In my experience following divorce and within ancillary relief proceedings, the cost of rehousing the wife and children may be a crucial issue - indeed even the only issue. In most cases it would be undesirable to pre-empt that issue or confine the judicial discretion to be exercised at the final hearing. But where the available assets are very substantial the cost of rehousing the wife and children is only one of a number determinations, the summation of which will be a lump sum that accompanies the mutual dismissal of all claims. In the preparation for the final hearing the purchase of a property in advance of that hearing may be the subject of some tactical manoeuvring. If the husband judges that the cost of a proposed property is less than the budget that the judge might fix, he encourages and facilitates the purchase. If he thinks it more than the budget he obstructs. Conversely, the wife may propose a purchase at the top end of the range, not only to fix that ingredient to the lump sum, but to establish subsequent income and expenditure that will be reflected in the Duxbury calculation.

For the reasons given, I agree that it is undesirable to entertain interim applications for capital relief in most cases but there are undoubtedly is a need to do so in some. I have little doubt that the judges and district judges would zealously protect the deserving claim and give short shrift to the unmeritorious so as to ensure that resort to this kind of interim relief remained very much the exception and did not become a regular step in already expensive litigation. The burning question for me is not whether there should be the jurisdiction to do so but whether any such jurisdiction does in fact exist. Thorpe J. continued:-

"I share the view of Waite J. that such a jurisdiction exists. Not having his knowledge of equity I would not presume to call it appropriation, but I am clear that the court has always exercised an inherent jurisdiction in this area, albeit sparingly and where particular circumstances require it. Mr Blair says such a jurisdiction cannot be linked to any specific statutory powers. That may be. But there are many instances in which the court exercises its inherent jurisdiction to regulate the lives or affairs of parties to proceedings for dissolution before or after decree absolute, perhaps in relation to ancillary proceedings and particularly if there are minor children of the family affected.”

Mr Wood’s researches led him to Halsbury’s Laws volume 37, para. 14 (dealing, it should be noted, with “Practice and Procedure”) and thence to Sir Jack Jacob’s trenchant article on “The Inherent Jurisdiction of the Court”, 1970 Current Legal Problems 23 from which he develops his main argument. He begins with Connelly -v- D. P. P. [1964] A.C. 1254 and the speech of Lord Morris of Borth-y-Gest at p. 1301 that:-

"There can be no doubt that a court which is endowed with a particular jurisdiction has powers which are necessary to enable it to act effectively within such jurisdiction. I would regard them as powers which are inherent in its jurisdiction. A court must enjoy such powers in order to enforce its rules of practice and to suppress any abuses of its process and to defeat any attempted thwarting of its process.”

"The inherent jurisdiction of the court may be defined as being the reserve or fund of powers, a residual source of powers, which the court may draw upon as necessary whenever it is just or equitable to do so, and in particular to ensure the observance of the due process of law, to prevent improper vexation or oppression, to do justice between the parties and to secure a fair trial between them.”

1. There is powerful authority rejecting the contention that the inherent jurisdiction of the court confers a general residual discretion to make any order necessary to ensure that justice be done between the parties. This is too wide and sweeping a contention to be acceptable: see Lord Hailsham’s curt dismissal of Lord Denning’s attempt to do justice in Siskina (Cargo Owners) -v- Distos S. A. [1979] A.C. 210, 262 and also Ackner L.J.’s comments in A. J. Bekhor & Co. Ltd. -v- Bilton [1981] QB 923, 942. The fact that these were cases dealing with the impact of inherent jurisdiction on the power to make injunctions does not seem to me to devalue the strength of the critical observations.

2. In my judgment, it seems upon proper analysis that the power the applicant wives were inviting the court to assume was not a procedural power to control the court’s process but a substantive power affecting the right of the applicant to the relief which she was seeking. The need to distinguish between procedural rights and substantive right was clearly drawn in Moore -v- Assignment Courier Ltd. [1977] 1 W.L.R. 638. Here the claims were for possession of demised premises on the grounds of forfeiture for breaches of covenant, and also for mesne profit. The issue raised was whether, pending a determination of the landlord’s forfeiture action, the landlord was entitled to be paid a periodic interim sum for the use of the land. Section 20 of the Administration of Justice Act 1969 had empowered the court to make rules requiring a party to make an interim payment of debt or damages. No rules had yet been made. The claim was, therefore, brought under the inherent jurisdiction relying on a dictum of Lord Denning M.R. in Tiverton Estates Ltd. -v- Wearwell Ltd. [1975] Ch. 146, 156:-

"...a matter which is procedural from the position of an applicant may be constitutional in the eyes of the respondent...Where procedure is as important as substance, procedural change requires the same degree of political accountability and economic and social foresight as reform of an equivalent rule of substantive law. Major innovations in procedural law should therefore be recognised as an institutional responsibility, not a matter on which individual judges should respond to the pleas of particular litigants. Procedural revolutions should appear first in statutes or in the rules of court, not in the law reports.”

The reality here is that the wife is seeking the enforcement of rights which the Matrimonial Causes Act 1973 does not grant her. She wants an order for sale before section 24A allows the court to order it. She wants money to spend on a house before the financial and property adjustments can be made under sections 23 and 24. To submit, as Mr Wood does, that she only seeks the “use of certain assets” (the matrimonial home and the money) “pending trial”, and that this is not an interim lump sum order or an interim property adjustment order or an interim order for sale, because they confer “upon the recipient no absolute or exclusive ownership of the asset” is disingenuous. She wants the money to buy a new home in her name, under her control, for her sole enjoyment to the exclusion of the husband. If the substantive law laid down by the Matrimonial Causes Act does not permit that to happen, then the court has no inherent jurisdiction to do that which Parliament has not granted it power to do.

The next step in the argument seems to be that because there is the power to grant an injunction there is also the power to make a positive or mandatory order, and he takes the example of the court’s directing the buyers of a vessel to take steps for the release of the purchase price the payment of which was to be by letter of credit in circumstances where the letter of credit would have expired before the underlying dispute would have been resolved: see Astro Exito Navegacion S.A. -v- Southland Enterprise Co. Ltd. [1982] Q.B. 1248. Each of those propositions may be correct but I simply do not understand how the marriage of those principles justifies the conclusions as they are set out in the skeleton argument that:-

It was an unusual case. Connell J. had resumed the part-heard hearing of the wife’s claims for ancillary relief. The husband had throughout been obstructive and intransigent. At an earlier hearing the matrimonial home had been ordered to be sold but there was no equity in the property. The husband was substantially indebted to the bank but the bank manager gave evidence that he would look constructively at any proposal which would enable a capital sum to be paid to the wife in order to rehouse her and the children. It was, however, imperative to achieve that purpose that he reduce his borrowing. He and his brother each owned half the shares in a company owning certain property and the brother was willing to buy out part of the property. Another property was in the name of a company of which the husband was effectively the alter ego. The case was likely to be further adjourned. The wife applied for orders for sale in respect of the two sets of property both of which were charged to the husband’s bank.

Counsel for the wife recognised that there was no jurisdiction to make the orders sought under Section 24A of the Matrimonial Causes Act 1973 as amended because that section only came into operation once the court had made an order under Section 23 or Section 24 of the Act. It is of no avail pending the determination of those claims. For the wife it was then submitted that the court had jurisdiction by virtue of RSC Order 31 Rule 1 which, by operation of Rule 2.64 (3) of the Family Proceedings Rules 1991, “shall apply to applications for ancillary relief as it applies to causes and matters in the Chancery Division”. RSC Ord 31, dealing with “ Sales, etc. of Land by Order of Court: Conveyancing Counsel of the Court ” provides as follows:-

" 1. Where, in any cause or matter in the Chancery Division relating to any land, it appears necessary or expedient for the purposes of the cause or matter that the land or any part thereof should be sold, the court may order that the land or part to be sold and any party bound by the order and in possession of that land or part, or in receipt of the rents and profits thereof, may be compelled to deliver up such possession and receipts to the purchasers or to such other person as the court may direct. In this order “land” includes any interest in or right over land.”

It is to be noted that the application issued by Mrs Wicks in this case expressly seeks the order pursuant to Order 31. That is the sole basis upon which jurisdiction is claimed. The appeal would have to be allowed if only because, although the learned judge referred to order 31, she never directed herself to its provisions and did not ask whether and did not find either that, firstly, this was an application “for ancillary relief relating to land” or, secondly, that it appeared “necessary or expedient for the purposes of (the application for ancillary relief) that the land be sold”.

On the first point, the effect of F.P.R. 2.64 (3) is to make R.S.C. Ord.31 r.1 read: “Where in any application for ancillary relief relating to land ...”. The only application for ancillary relief which relates to land is an application for a property adjustment order. I find it difficult to see how an application, the real purpose of which is to obtain an order for early payment of capital, which by force of the circumstances has to be made pending the final determination of the sections 23 and 24 claims, can on any natural use of language be treated as “an application for ancillary relief relating to land”.

As to the second point, the prerequisite condition for invoking Ord. 31 r.(1) read with F.P.R.2.64 (3) is that “it appears necessary or expedient for the purposes of ( the application for ancillary relief) that the land be sold.” When pressed in argument, Mr Wood submitted that the necessity or expedience for the application for ancillary relief was the need to liquidate assets in order to have a fund available either for equitable appropriation per B arry or to create the funds over which the court can exercise its inherent jurisdiction per F. This does not seem to me to answer why this is necessary or expedient for the application for ancillary relief , adding the emphasis, as opposed to the achievement of the wife’s desire for interim relief. There seems to me to be a fallacy in Mr Wood’s submission. He concedes that the range of ancillary relief provided by the Matrimonial Causes Act is not available to achieve the result he seeks. If that is so the order cannot be made “for the purposes of the (application for ancillary relief).”

I conclude that the only claims relating to land are those brought under section 24 and they fall to be adjudicated only when and only as that section permits. If an order is then made, section 24A provides a mechanism - considered to be lacking before this section was added to the Act - for making it effective by means of an order for sale of property “in which or in the proceeds of sale of which either or both of the parties to the marriage has or have a beneficial interest ...” The exercise of this power of sale is circumscribed in that the sale can only be ordered when the property adjustment (or lump sum) order is made and in that the order cannot take effect unless the decree has been made absolute. The power to order a sale under order 31 is without any such fetters. It cannot in my judgment be used to achieve a result which is inconsistent with its Matrimonial Causes Act equivalent in Section 24A. It cannot be necessary or expedient for the purposes of an application for ancillary relief to pre-empt, indeed to supplant the very provisions of the Act to which the application is subject.

One wonders then why FPR 2.62(3) was introduced. It did not appear in rule 78 of the old Matrimonial Causes Rules 1977 which were limited to the present r.2.64 (1) and (2). Mr Pratt suggests that it was inserted as a result of Crosthwaite -v- Crosthwaite [1989] 2 FLR 86 which decided that Parliament could not have intended that the consequential and supplementary powers provided in section 24A (2), e.g. for the distribution of the proceeds of the sale or the class of potential purchasers, included “a major power to grant a possession order in the face of an equitable interest enjoyed by a joint tenant in possession.” As a result, it was held that the court did not have the power under section 24(A) of the 1973 Act to make a possession order. It is suggested that order 31 was then introduced to cure that defect, that is to say, not so much for the further power of sale - for that is already provided by section 24A - but for the additional supplementary power in Ord.31 to order delivery up of possession of the land to be sold . That may well be.

It does not follow that Order 31 is an original source of jurisdiction. It is a procedural provision the exercise of which is dependant on there being a cause or matter in the Chancery Division relating to land or an application for ancillary relief in the Divorce Court relating to land. In its application in the Chancery Division order 31 seems to remove the need for the previous practice to direct a sale either “with the approbation of the judge” or “out of court” and to give a flexible procedure for the management of any sale. It seems to be purely procedural in its intent and in its effect. I agree with Sir Donald Nicholls V.- C in Panayiotou -v- Sony Music Ltd. [1994] Ch. 142, 149 when he said:-

I conclude that the judge was wrong to assume jurisdiction on any of the grounds which she was urged to seize to found the exercise of her discretion. It is by now obvious that this is not a happy conclusion. Three experienced judges of the Family Division each saw the need on the facts of the case before them to have some power to grant some interim relief. In each case, as in this, the result arrived at by the judge met the demands of justice and fairness, to achieve which the judges had to resort, imaginatively, to expediency to find their jurisdiction.

In the appeal before us, there was, however, no need to be so creative.Here an application of established principles could have produced the desired result perfectly satisfactorily, though perhaps not as peremptorily as the wife would have desired. On the face of the title to the property it was the wife’s to sell and she did not need an order for sale to be able to do so. The burden would have fallen on the husband to prevent her doing so. He has laid claim to an equitable interest in the property on the basis that, as he stated in his affidavit:-

He has not expressly claimed having acquired an interest by virtue of Section 37 of the Matrimonial Proceedings and Property Act 1970 through his making a substantial contribution in money or money’s worth to the improvement of the property; and that argument may be open to him. There is a convenient vehicle to resolve “any question between husband and wife as to the title to or possession of property”, namely Section 17 of the Married Woman’s Property Act 1882. Any power conferred by that section to make orders with respect to the property includes power to order its sale: see Section 7(7) of the Matrimonial Causes (Property and Maintenance) Act 1958. Section 17 waned in popularity after the introduction of the divorce reforms and the granting of the wide discretionary powers to make adjustments to property rights as now set out in Section 24 of the Matrimonial Causes Act 1973, because, as Ormrod L.J. observed in Fielding -v- Fielding [1977] 1 W.L.R. 1146,1148:-

The power to order a sale of the former matrimonial home will not include a power to order possession of it. Nor should it do so during the subsistence of the marriage. To make an order, as the judge did here, for the husband to deliver up vacant possession is to make an order restricting or terminating the rights of occupation which are conferred upon the husband by virtue of Section 1 of the Matrimonial Homes Act 1983. As Lord Hailsham of St Marylebone said in Richards -v- Richards [1984] 1 A.C. 174, 199H:-

"Where, as here, Parliament has spelt out in considerable detail what must be done in a particular class of case it is not open to litigants to bypass the special Act, nor to the courts to disregard its provisions by resorting to the earlier procedure, and thus chose to apply a different jurisprudence from that which the Act prescribes. Any other conclusion would, I believe, lead to the most serious confusion. The result of a particular application cannot depend on which of two alternative statutory provisions the applicant invokes, where one is quite general and the other deals in precise detail with the situation involved and was enacted at a time when the general provision already existed.”

Whist, therefore, in the circumstances of this case, there were remedies available to the wife to achieve the end she desired, there will be other cases of which Barry, Green, and F are examples where, unfortunately in my judgment, no relief can be given to the wife in distress. Such a conclusion really is nothing short of unfortunate. Each of three experienced judges saw the need for a remedy and I find it disagreeable to disagree with them about the way they proceeded.

It now leaves only one unexplored avenue down which a “courageous” (per Waite J.) advocate may take his chance to travel. This is the route of the interim lump sum, or a variant of it. I made some tentative enquiry in the course of argument to see how far it would go. Mr Pratt very properly pointed to the several hurdles to overcome, inter alia , the strong arguments that:-

By the definitions in Rule 1.2 “ancillary relief” includes “a financial provision order” which means any of the orders mentioned in Section 21(1) of the 1973 Act one of which is a lump sum order. Both Waite J. and Thorpe J. were discouraging of any venture down this path, though no judgment blocks it - yet. If, for the reasons already set out, the Act excludes the power to make an interim order, then the rule cannot create the jurisdiction and the rule would be ultra vires . So that journey seems to go only up a garden path.

(5) In this Section “interim payment,“ in relation to a party to any proceedings, means a payment of account of any damages, debt or other sum (excluding any costs) which that party may be held liable to pay to or for the benefit of another party to the proceedings if a final judgment or order of the court in the proceedings is given or made favour that other party.”

This section is derived from Section 20 of the Administration of Justice Act 1969. There is equivalent power in the County Court conferred by Section 50 of the County Courts Act 1984. The rules are contained in RSC Ord. 29 rr. 9 - 18 which is incorporated into the County Court by CCR Ord. 13, r. 12. Those rules can in turn be applied to matrimonial proceedings by FPR 1.3.

Because a court makes only one order for damages, an order for an interim payment on account of those damages is arguably something in a different category and of a different nature from the final order itself. If so an interim payment on account of lump sum would not itself be a lump sum order offending any the rules relied on by Mr Pratt as set out above. If, therefore, a lump sum order can be construed ejusdem generis with debt or damages so as properly to be included as some “other sum”, then the lacuna which three distinguished judges of the Family Division have found to exist may be capable of being filled. It was an idea which I floated in the search for another basis upon which the court could act to do justice if and when a short-cut was necessary. On further reflection this is probably only a straw at which to clutch because if Parliament intended the 1969 Act to permit interim lump sums, then it is surprising that the 1973 Act did not make that plain and that it was necessary to make express provision for them in the Inheritance (Provision for Family and Dependants) Act 1975. Mr Wood on the wife’s behalf did not wish to argue the points and he was probably wise to disassociate himself from them. I do not give the courageous advocate much encouragement to run the argument on another day in another case but it does not fall to be decided by us.

Returning, therefore, to the matter in hand, the judge was beguiled by the authorities, and, having been invited to approach the matter incorrectly, she fell into error and the appeal against her order must be allowed. There is insufficient material before us to enable us to exercise our separate discretion. I would, therefore, allow the appeal and dismiss the wife’s application.

SIR JOHN VINELOTT: There are in substance two questions. The first is whether the Judge had power to order the sale of the property Abbots Woods Drive and to make an ancillary order for the delivery up of possession by the husband to enable the property to be sold with vacant possession. The second, which only arises if the answer to the first question is in the affirmative, is whether the Judge had jurisdiction to order that part of the proceeds be applied in the purchase of a property for the occupation of the wife and the children of the marriage, pending the final resolution of the wife’s application for ancillary relief and upon her undertaking in the meantime not to mortgage, charge or otherwise dispose of her interest in the property.

It is not clear to me what jurisdiction the Judge had to order the husband to give vacant possession of the property. If the husband was not entitled to occupy the property by virtue of a beneficial interest or contract, the statutory right of occupation conferred by Section 1(2) of the Matrimonial Homes Act l983 could only be brought to an end following an application under sub-section (3) when the court would have to balance the factors set out in that sub-section. No application had been made under that Act. Insofar as the husband claimed to be in possession by virtue of some beneficial interest or contract, I do not understand on what ground a Judge could order him to give up possession with a view to facilitating a sale until the question whether he was entitled to possession by virtue of some interest or contract had been determined or an order made in the application for ancillary relief. The Judge took the view that she had power to make what she described as an ‘interim order’ for sale and, I infer, for ordering the husband to give vacant possession. However, there can be nothing more final than ordering a husband to give up possession and for the sale to a third party of property in which he claims an interest or some contractual right entitling him to remain in possession.

Before us, it was sought to found jurisdiction under Order 31 of the Rules of the Supreme Court in conjunction with Family Proceedings Rules 2.64(3). The scope of that Order has been carefully analysed by Ward L.J. and there is nothing I can usefully add to his analysis. The alternative suggested is the inherent jurisdiction of the Court. I shall turn to this in a moment.

In Barry v Barry [l992] Fam.140 the net proceeds of sale of the former matrimonial home were held in the joint names of the party’s solicitor. The wife applied for an Order that a proportion of the fund be paid to her and applied in the purchase of a new home in her name for occupation by herself and the children pending the hearing of her claim for ancillary relief and on terms that the house would be subject to the exercise of the Court’s discretion on the hearing of that application. The husband did not oppose the application. In those circumstances, it was not strictly necessary for Waite J. to enter into the question whether the Court had jurisdiction to make a coercive Order directing the application of moneys which were the subject of an application for ancillary relief. It may be that the Court’s approval was needed on behalf of the infant children of the marriage, though on the facts of Barry v Barry that consent would have been a matter of form.

However, Waite J. did hear argument on the question whether the Court had jurisdiction to make a coercive Order. His conclusion was that it is “generally desirable that, during the pendency of the final hearing in financial proceedings, the Court should enjoy an administrative power to approve in suitable cases acts equivalent to the process described in the language of equity as appropriation; that is to say, the allocation of a particular asset to satisfy the contingent claim of a party, notwithstanding that such claim is still unadjudicated, subject to any undertakings or conditions that might be necessary to enable the court at the ultimate hearing to make suitable adjustments to that position before it becomes final. I am therefore satisfied that the wife’s application is of a kind that the Courts not only have the jurisdiction to entertain, but should, in suitable instances, encourage”.

It is well settled that personal representatives have an implied power to appropriate assets in or towards satisfaction of a legacy or share of residue where there is a direction or an implied power to sever the legacy or share. The power can be exercised by an appropriation in or towards satisfaction of a settled legacy (with the consent of the person entitled to the income) or a legacy to which a beneficiary is contingently entitled if (and only if) the legacy carries the intermediate income (see Re Hall [1903] 2 Ch 226.) The power of personal representatives to appropriate is now regulated by Section 41 of the Administration of Estates Act l925, but I can see no reason in principle why trustees of an inter vivos settlement should not have the same implied power of appropriation as personal representatives had before Section 41 was enacted.

However, I have been unable to discover any case where executors or trustees have been held entitled to make an interim (as opposed to a partial) appropriation. In general a legatee who is absolutely entitled to a legacy can call for a transfer of any asset appropriated in or towards satisfaction of it. So, also, where stock of an unlimited bank was appropriated towards satisfaction of a settled legacy and calls were made on the stock, the bank having failed, it was held that the liability fell upon the settled legacy in exoneration of another legacy (see Fraser v Murdoch 6 HLC 855).

In a case where executors or trustees feel a doubt as to the propriety of a proposed appropriation, it is open to them to seek the approval of the Court to the appropriation or alternatively a declaration that the appropriation is one which they have power to make. Thus, the Court might be asked to sanction an appropriation in satisfaction of a legacy pending determination of a dispute about the validity of the legacy. However, the Court would have no jurisdiction to sanction an appropriation if the result might be that income was paid to or property enjoyed by a person who might ultimately be found not to be entitled to it.

It may be that the Court has an inherent jurisdiction to take necessary steps for the preservation of family assets pending the hearing of a claim for ancillary relief. For instance, the assets may include the tail end of a long lease, the market value of which is rapidly diminishing; or the assets may include shares in a private company for which an offer has been made on very favourable terms. So, also, the court may have an inherent jurisdiction to direct the investment of moneys in a form which will produce income which can be the subject of an order for interim maintenance by for example, requiring moneys to be placed on an interest bearing deposit account. It is unnecessary, and would be undesirable, to endeavour to decide whether such a jurisdiction exists and the limits within which it can be exercised. What is clear is that, for the reasons set out in the judgment of Ward L.J., the claim that the court has an inherent jurisdiction to make an interim lump sum order or to direct the application of assets the subject of a claim for ancillary relief in the way suggested cannot be supported. Part II of the Matrimonial Causes Act l973 contains an elaborate code governing financial provision and property adjustment orders which includes, in Section 22, provision for maintenance pending suit; it would be remarkable to find that the court has a much wider inherent jurisdiction to make interim orders for lump sum payments or for the application of matrimonial assets for the benefit of one of the parties pending suit. As Peter Gibson L.J. has pointed out, the fact that a power to make an interim order for payment of a lump sum has been introduced by Section 15 and paragraph (v) Schedule II of the Family Law Act l996 is again a strong indication against the existence of the wide inherent jurisdiction which it is sought to establish.

The judge, very understandably in the state of the authorities, thought it quite clear that the court had power to appropriate an asset to one or other party, pending determination of the ancillary relief proceedings to meet that party's contingent claim. In Barry v Barry [1992] Fam. 140 it was conceded that the court had jurisdiction to make such an order, and Waite J. expressed the view not only that it was generally desirable that the court should have an administrative power to approve "acts equivalent to the process described in the language of equity as appropriation" but that the court had the jurisdiction to do so. It is not clear to me that Waite J. was saying that there was some equitable power to appropriate assets to satisfy a contingent claim. It may be that he was not saying anything more than this: what is called by equity lawyers a power of appropriation is used when, for example, assets are allocated by trustees to shares of a trust fund held for beneficiaries contingently entitled thereto. But such appropriation in such a case is almost invariably performed under a power expressly conferred by the trust instrument or by s.41 Administration of Estates Act 1925 when applicable, and I am not aware of the existence of some general equitable power of appropriation allowing the interim appropriation of assets by a trustee to a contingent beneficiary. If and in so far as Waite J. was suggesting that there was such general power in equity, I cannot agree with him. In any event it is hard to see how the court exercising its judicial functions could be equated with a trustee administering a trust fund.

In 1970 Sir Jack Jacob described the inherent jurisdiction of the court as "a virile and viable doctrine which in the very nature of things is bound to be claimed by the superior courts of law as an indispensable adjunct to all their powers" (1970 Current Legal Problems 23 at p.52). But in my judgment the inherent jurisdiction, valuable and beneficial though it is in its proper procedural sphere in relation to litigation, cannot be invoked by the court to arrogate to itself the power to give substantive relief, particularly so in an area so much controlled by statute. The fact that Parliament has now expressly conferred on the court the power to make an interim order for the payment of a lump sum or a series of such sums (s.22 A(4) Matrimonial Causes Act 1973, introduced by s.15 and para.3 sch. 2 Family Law Act 1996) is a further pointer against the availability of the inherent jurisdiction to confer the power in question.

I am in entire agreement with Ward L.J. in his comments on these rules. I find it difficult to see how the application for ancillary relief in Green v Green [1993] 1 F.L.R. 326 could have been said to relate to land when the husband merely owned shares in two companies which owned land. I can well understand Connell J.'s desire to find a solution so that the petitioner and her child could be provided with a home, but I do not think that the court had power in that case to order a sale of the land.

In the course of argument reference was made to the power of the court to make orders for interim payments, though Mr. Wood, in my view rightly, did not found any argument on this section and the rules made pursuant thereto. It is sufficient that I say this: I have difficulty with the notion that an interim lump sum order made in divorce proceedings would come within the definition of "interim payment", meaning, as it does, "a payment on account of any damages, debt or other sum". It seems to me that an interim lump sum order is not of the same kind as an order to pay damages or a debt and that it is inherently improbable that Parliament would have intended by that (or its predecessor) statutory provision to confer the power to make an interim lump sum order before decree absolute when so clearly the matrimonial legislation did not allow it.

England and Wales Court of Appeal (Civil Division) Decisions

WICKS v. WICKS [1997] EWCA Civ 3050 (18th December, 1997)

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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Wicks v Wicks [1997] EWCA Civ 3050 (18th December, 1997) URL: http://www.bailii.org/ew/cases/EWCA/Civ/1997/3050.html Cite as: [1999] Fam 65, [1998] 3 WLR 277, [1998] 1 FCR 466, [1998] Fam Law 311, [1998] 1 All ER 977, [1997] EWCA Civ 3050, [1998] 1 FLR 470