The recently reported case of WZ v HZ [2024] EWFC 407 (B) (1 May 2024) provides guidance on how to manage the common occurrence of one spouse holding out in the family home despite an order for sale.

Gathering the evidence of frustrating a sale is not always straightforward. There are a multitude of ways that a spouse-in-occupation can dissuade an otherwise willing purchaser from making an offer. Where appropriate evidence can be secured, the judge seeking to ensure implementation can consider the following:

• where it can be justified, varying downwards the quantum of any maintenance;
• reducing the term of that maintenance;
• ordering possession; and
• exercising the Thwaite jurisdiction to adjust the provision in the first financial order.

In the case report, DJ Doman applied all four, laying out carefully the legal approach he adopted as regards to Thwaite and possession.

This case provides guidance for the frustrated spouse (and their solicitors) and a warning to the spouse-in-occupation. In WZ v HZ, the ultimate turn-around has been dramatic for the occupying spouse, even though the whole family is woefully out of pocket from the costs and delay generally.

Background

In February 2021, the wife in occupation was ordered to sell the family home from which various elements of financial provision would be made for her, including her rehousing with one teenage child, with a fund of £650,000 plus costs.

Over the following three and a half years, the wife steadfastly – and creatively – refused to co-operate in this and in other aspects of the court’s order, preferring to remain in occupation of the former family home. This included:

• knocking down the ‘For Sale’ sign;
• lying about COVID testing rendering her unable to permit viewings; and
• bombarding the court and H’s solicitors with emails and applications at an alarming rate.

The Applications

In May 2024, DJ Doman had a range of applications to consider, significantly:

1. H’s application for possession of the family home.
2. H’s application to vary downwards the spousal periodical payments. One has a real sense that H’s success was in some measure the judge’s reaction to W’s conduct in the period since the first order and indeed at the hearing, which included ripping pages out of the witness bundle, screwing them up and throwing them around the court room. The term was reduced, and the quantum revisited in light of the judge’s findings regarding the wife’s earning capacity.
3. More significant was the judge’s reliance upon Thwaite to vary the original order:
   1. expunging a pension sharing order if W did not progress it in time;
   2. reducing her re-housing fund to provide funds for her to meet the order for costs made in relation to the post-first-order-enforcement-proceedings; and
   3. varying the detailed provisions of the order to permit sharing of the profits now anticipated on sale of the home (and to give H the funds to discharge a lump sum order that he had been unable to discharge to that point).

Thwaite Application

The Thwaite jurisdiction is available where:

• an order remains executory (yet to be implemented);
• changes since the order was made have undermined the intention of the judge; and
• where the conduct of the respondent:
  1. can be criticised; and
  2. has contributed to the loss.

Here the judge decided that he had power to revisit the order and re-make it to remedy the unfairness that would otherwise exist. DJ Doman anchored his decision firmly on the guidance given by HHJ Reardon in H v W [2023] EWFC 120, in particular at [56]:

‘there is usually a close link between the executory nature of the order and the disaffected spouse’s ability to frustrate it. This is particularly obvious in property sale or transfer cases, where, however tightly-drafted the order, the owner of the property is likely to have a number of opportunities to obstruct and delay the sale or transfer, or otherwise to diminish the value of the asset, in the pre-implementation period. The Thwaite jurisdiction would appear to be the only remedy available in such cases, where the change in circumstance has brought about a foreseeably disaffected spouse, rather than an unforeseeable event.’

And at [57]:

‘it is my view that the Thwaite jurisdiction does exist as a separate remedy to Barder. I would suggest that it may be particularly apt where:

a) the respondent has culpably acted in such a way as to diminish the value of an asset, or otherwise to frustrate the intention behind the order;

b) there is a link between the executory nature of the order and the change in circumstances: i.e. it is the fact that the order remains executory that has provided the respondent with the opportunity to frustrate it; and

c) the applicant might well fail the first limb of the Barder test because the respondent’s conduct was foreseeable.’

Here the original order that had provided for W to receive all the proceeds from the sale of the family home, and H to top up this equity (if there was a shortfall) to £650,000, plus stamp duty, plus moving costs was varied:

1. to reduce the sum for W’s housing needs to £545,000. This variation then created the slack from which W could discharge an order for costs made against her for £130,000; and
2. with any profit over and above the £650,000 to be paid to H.

Possession

DJ Doman also reflected on whether, three years on, it was time to make an order for possession to remove W from the home to enable the sale as, over this period, not one prospective purchaser had entered the property.

The application was considered under FPR 9.25, which provides power to make orders to deliver up possession. The rule gives no guidance as to the criteria upon which the discretion should be exercised.

DJ Doman drew together the guidance of the overriding objective and additionally adopted the balance of harm test from the statutory provisions in s 33 of the Family Law Act 1996, adopting the guidance given by Mostyn J in BR v VT [2015] EWHC 2727 at [7].

Take-aways

This report provides insight as to how the Thwaite jurisdiction can be used in conjunction with more common maintenance variation powers to remedy unfairness, in particular where one party is operating in a high-handed way, in defiance of the court. A high evidence threshold may need to be hurdled, so it is important to keep a detailed record.

In this case, the order would have been harder to achieve without counsel being able to point to a trail of efforts to secure compliance from the occupier. In addition, the need to assist the judge with cutting through the noise, whilst carefully laying the stepping stones on what to do next, is ‘a must have’.

The orders in this case are a remedy for the extreme case, but DJ Doman’s analysis now provides the guidelines and approach that may assist others facing this predicament.