Mr Stephen Trowell KC. The husband and wife made competing applications for an order for sale in respect of the matrimonial home and a yacht. The court found that the wife did not have a beneficial interest in the matrimonial home and ordered the property to be sold. The wife’s application to sell the yacht was unsuccessful as it belonged to a company, AB, who had not been joined to the proceedings.

The matrimonial home

H contended in his Form E that the FMH was owned by a company, and his share in the company was 85.1%. He subsequently asserted that he was the sole beneficial owner of the FMH and produced a nominee agreement between him and the company to that effect ([17]).

The original mortgage term on the FMH in 2013 was five years. Although it was renewed for a further five years in 2018, when H sought to renew the mortgage for a further five years in 2023, he was only able to obtain a one-year extension due to the effect of the war on his finances ([18]). The mortgage was due for renewal again in August 2024, and H’s case was that renewal may be refused, and would only be granted on the basis of allowing an orderly sale of the property. H made his application in order to effect an orderly sale, pointing out that a sale on his behalf would be likely to generate a better price than a sale conducted by the bank ([19]).

A dispute of fact arose as to W’s beneficial interest in the FMH. That was a point of significance as both parties put forward the analysis of the law set out in RA v KS [2023] EWFC 102(B), i.e. that W’s home rights could not be terminated pursuant to s 33(3)(e) if she had a beneficial interest. If W had a beneficial interest, her home rights could only be suspended or restricted pursuant to s 33(3)(d), meaning the property could not be sold ([6]). In light of this dispute of fact, the case was adjourned for a hearing involving ‘one hour of focused oral evidence’ ([7]).

The yacht

H set out that the yacht was owned by a company, AB Limited, in which he owned 90%. He set out that the expenses of the yacht were funded by way of a loan from another company, CD ([21]).

H’s case was that the yacht was being sold. W’s case was that, in reality, H was making no attempt to sell the yacht because he was trying to force W and the children out of their home whilst he retained the yacht. W sought to take over the sale and utilise the proceeds of sale to discharge the mortgage on the FMH ([22]).

Law / discussion

W’s beneficial interest in the FMH

W relied on either a common intention constructive trust (CICT) or proprietary estoppel (PE) ([24]). W’s counsel conceded that PE may not give rise to a beneficial interest ([25]).

H’s counsel submitted that to establish a CICT, W would need to show both a common intention at the time of purchase and detrimental reliance thereafter, and drew the judge’s attention to Thompson v Humphrey [2008] 1 FLR to submit that W could not argue that she had suffered a detriment by moving to England. W’s counsel referred the judge to Winter & Anor v Winter & Anor [2024] EWCA Civ 699 to submit that a narrow view should not be taken when considering detriment ([27]).

In her Form E, W did not assert a beneficial interest in the FMH despite asserting a beneficial interest in numerous other properties ([28]). When this was put to her in cross-examination, W’s answer was that the meaning and significance of a beneficial interest had not been explained to her. She was unable to explain why she was nevertheless able to assert a beneficial interest in other properties ([29]). W also failed to explain why she had asked of H in his questionnaire ‘Does the respondent accept that he is the ultimate beneficial owner of the [FMH]’, a question premised on the basis that she believed he was the ultimate beneficial owner ([32]).

In addition, H’s solicitors had written a letter prior to the application asserting that H would be seeking the termination of W’s rights to occupy the FMH pursuant to s 33(3)(e) of the FLA 1996 ‘because your client has no beneficial interest in the property’. W’s solicitors’ letter in response, dated 29 February 2024, made no suggestion that s 33(3)(e) of the FLA 1996 would not apply because W had a beneficial interest in the property ([34]).

The judge found that the only plausible conclusion was that between submitting her Form E and the letter of 29 February 2024, W did not have at the forefront of her mind that she had a beneficial interest in the FMH ([36]).

W’s case as to her beneficial interest included the following points;

• H was very generous to her;
• W had misgivings about moving to England and did so on the basis of H’s assurances that she would have the security of a home in her own name;
• H referred to the FMH as ‘our home’ or ‘our house’ and as his gift to her, including at a birthday party shortly before completion on the house; and
• shortly after she gave birth to the parties’ youngest child, H did not buy a present for her (as he had when the other children were born), saying the house was her gift ([42]).

H argued the decision to move to England was a joint decision and his extensive wealth provided ample security. He said there were no assurances of a property being bought in W’s name or in joint names but agreed that the move was made on the basis that they would have a good family home in England. And that had happened ([43]). H denied saying that the house was a gift or referring to it as ‘our house’, but accepted referring to the property as ‘our home’ ([44]).

W’s solicitors inspected the conveyancing file on the purchase of the FMH and raised that there was no consent to the mortgage and no waiver of rights document, as would have been expected given that W was occupying the property ([46]). A Consent to Mortgage and Waiver of Rights document was subsequently found from the August 2018 remortgage, saying that any rights W might have under s 30 of the FLA 1996 would be postponed and subject to the Lender’s rights and powers under the mortgage ([48]). The judge found that the document had been explained to W when she signed it by the solicitor ([49]).

The judge found that H was a man used to power, but enormously stressed by the turn his life had taken. His evidence must be treated with care. W was charming and engaging but frightened, and fell back on incomprehension when the questions became tricky ([53]).

The judge rejected W’s case that she had a beneficial interest in the FMH. Her position was undermined by the presentation of her position in her Form E, Questionnaire and the letter of 29 February 2024 ([55]). It made no sense for her to ask H if he accepted that the property was beneficially his when she considered it beneficially part hers ([56]). W knew the home was owned legally by a company from the Consent to Mortgage and Waiver of Rights document that she signed and the solicitor explained to her. Her first knowledge of this could not have come with the involvement of her solicitors on separation. As such, her evidence could not be considered as reliable ([57]).

Whilst H was likely the driving force to move to England, W had not proved on the balance of probabilities that she left her native country on assurances she would have security of a property in her own name in England. That H referred to the FMH as their home did not give W more than home rights under the FLA 1996. Although the judge accepted that H may have referred to the house as ‘our house’, this did not carry any connotation of beneficial ownership. It was not at all likely that H would have gifted a house now worth c.£40m to W on the birth of their youngest child ([58]).

Given the judge’s findings, it was unnecessary to consider whether moving to England could amount to a detriment sufficient to give rise to a CICT, or an interest pursuant to the doctrine of PE ([59]).

The yacht

It was undisputed that the yacht was legally registered in the name of AB, who in correspondence were asserting beneficial ownership of it ([63]).

The judge asked W’s counsel how, when AB were not joined to the proceedings and were asserting ownership (with some good cause), he could deal with an application under the MWPA 1882 (which deals with questions ‘between husband and wife’) to sell what they considered to be their yacht ([64]). W’s counsel’s response was that AB had been served with the application and had chosen not to engage in the proceedings, and so the judge should make an order and give them a limited opportunity to engage before putting it into effect. The judge found this was not an ‘adequate’ way forward; the yacht was legally theirs so this was not a dispute between husband and wife. The judge was unable to reach through AB and its corporate responsibilities, pull the yacht out and sell it without AB being a party to these proceedings ([65]).

In relation to r 20.2(1)(c)(v), W’s counsel did not address the judge on the different analyses of Mostyn J in BR v VT [2015] EWHC 2727 (Fam) and Cobb J in WS v HS [2018] EWFC 11 in answer to the question whether the provision gives the court the power to make an interim order for sale of property. The judge declined to investigate this point, but commented that even if the FPR do give rise to an independent power of sale, he would be hindered in dealing with the application without AB’s involvement ([66]).

W’s application for an interim order for sale of the yacht was therefore rejected ([67]).

Exercise of the court’s discretion under s 33(e)

Having determined that W had no beneficial interest in the FMH, the judge considered the factors under s 33(6) to determine how to exercise his discretion under s 33(e).

The judge formed the view that in the light, in particular, of the parties’ financial resources and ability to meet the housing needs of W and the children in rented accommodation, the property should be marketed for sale and, if an appropriate sale is forthcoming, sold forthwith. W and the children should remain in occupation until completion of the sale or if agreed a prior move to rental accommodation. W’s home rights would terminate on the completion of a sale ([86]).

Consequential directions

The judge made the following consequential directions:

• W should be kept fully informed of all material developments in the sale of the FMH, but an obligation should be placed on her not to disrupt any viewings and to co-operate reasonably with the sale process ([89]).
• H should keep W informed as to all material developments in relation to the sale of the yacht, producing at least every two months an account as to marketing and an account as to offers received ([90]).
• The net proceeds of sale should be held in an escrow account to be held by solicitors who act on the sale ([91]).
• H should make payment to W (which could in due course be debited from the funds in the escrow account) to cover her rent, deposit and a monthly amount for staff and bills ([92]).
• H’s application to meet school fees and his rent from the escrow account was rejected ([94]).