Can the Family Court order a party to take out and pay a mortgage in order to meet the other party’s housing needs? This is my framing of the question raised by the appeal in Re A and B (Schedule 1: Arbitral Award: Appeal) [2024] EWHC 778 (Fam). Cobb J answered ‘yes’ to the question. HHJ Evans-Gordon, from whose decision the appeal had been brought, had said ‘no’ (see LT v ZU [2023] EWFC 179). HHJ Hess, in SP v QR [2024] EWFC 57 (B), had agreed with her. Of course, the decisions of the circuit judge(s) cannot be cited as authority, whereas that of Cobb J can.

This article argues that the decision of Cobb J was wrong, and that the circuit judges were right. In particular, I argue that the reasoning is based on a number of misconceptions, and misplaced reliance on the content of the Family Court ‘standard orders’. It also appears to be a case that took a number of wrong turns – the most important of which was to decide an issue of principle which on the facts of the case appears to be entirely academic, as the father was unemployed and very likely had little or no mortgage capacity which he could be ordered to deploy, even if the answer to the question is indeed ‘yes’.

The facts

The issue arose in Sch 1 proceedings. The parties submitted this application to arbitration. There was a shared care arrangement – the children divided their time between the two households equally, so that the Child Maintenance Service (CMS) made a ‘nil assessment’ (see [13] – pursuant to reg 50 Child Maintenance Calculation Regulations 2012 (SI 2012/2677) – though query in such a case there is simply no assessment at all). F owned two properties in London which were heavily mortgaged. Following the separation, M lived in one, F lived in the other. M’s application for internal relocation to Kent was refused – partly based on F’s confidence at that time that M would be able to rehouse in London near the current home. In those proceedings he put forward a proposed budget for M’s London housing needs, and his leading counsel stated that F ‘provides his assurance that the housing fund is protected from any financial liabilities he holds.’

In the arbitration, the parties obtained single joint expert evidence of mortgage capacities and made open offers. F’s open offer was that he would continue to pay the mortgage on the home in which M lived, that M could move to a new property, and that this new property would be bought with a new mortgage that he would take out and pay. We are not told whether F’s offer was a ‘take it or leave it’ style offer. F could have said – ‘I am not obliged to do this and no court or arbitrator could force me to do it. I am willing to do this in order to reach a practical solution to house the children when they are with their mother. But if my offer is not accepted, I reserve the right to withdraw my offer to structure the settlement in this way.’ We must assume he did not do so. Before the arbitrator, it was agreed that:

(i) M and the children would be permitted to remain at their current home for the time being;

(ii) M would be able to move to a replacement property;

(iii) M would allow F to extend the mortgage on their current home (in his name but presumably the lender would want M, as an adult occupier, to consent to the postponement of any rights, etc she might have behind their priority as a condition of any new lending) to allow him to pay a pressing tax bill; and

(iv) F would pay the mortgage on M’s current and replacement home.

Indeed, in his open offer, F sought a provision that M would continue to afford access to mortgage valuers so that he would be able to obtain fresh fixed rate mortgages. M’s open offer stated that she would also be willing to contribute her own mortgage capacity if she could afford to do so. It appears that the actual net capital resources were only £272,000.

Standing back, the only way it would seem that this was going to work was that, once M’s current home could be sold, the new home would be bought in joint names, and a joint mortgage taken out based on their combined incomes and mortgage capacity. It seems that the dispute before the arbitrator was how much M should have as a housing fund for a replacement property, and how this was to be balanced against F’s housing needs and other capital and income needs. By the end of the hearing, the parties had agreed:

(i) the current property would be sold;

(ii) the gross value of that property would be placed towards the new property.

That is a somewhat unusual form of agreement. Of course, F did not own the gross value of the current home. On sale, costs of sale and possibly some capital gains tax would need to be paid, and of course the mortgage would need to be redeemed. The only way I can understand this ‘agreement’ is that F agreed that M’s need for a housing fund was equal to the gross sale price of her current home, and that he was willing to take out a mortgage, on his own or jointly with M, for at least the amount required for her to top up the net sale proceeds to the amount of the gross sale price.

The arbitral award and F’s challenge

The arbitrator decided:

(i) the housing needs of M and the children were £1.1m to £1.13m inclusive of costs of purchase, removal and redecoration;

(ii) the parties should obtain a joint mortgage of £870,000 to achieve this;

(iii) the property would be bought in their joint names;

(iv) the choice of property and of mortgage product was to be agreed;

(v) F would pay the mortgage instalments.

The table at [115] of the judgment of Cobb J showed that the arbitrator required F to contribute £240,000 to the ‘deposit’ part of the purchase of M’s new home (as opposed to £227,795 which F had proposed), and required a joint mortgage of £686,000 (as opposed to the £679,000 F had proposed).

F challenged the arbitral award. His first ground was that the arbitrator had no power to make an award requiring him to borrow money by way of a mortgage on a joint purchase with the mother. There was no power to require him to borrow money in order to satisfy the award in excess of that which he conceded. This ground was referred to in the judgment of HHJ Evans-Gordon in slightly different forms in different places, although the differences would not appear to matter. There were 11 other grounds of challenge which were more akin to grounds of appeal against factual determinations by the arbitrator. A final challenge was that F’s financial circumstances had worsened and the award was now unfair.

One response to F’s challenge would have been to say: what was the point of the arbitration if you were not going to accept the outcome? If you were not willing to take part in a process that could lead to you borrowing more than your offer, what was the point of the arbitration? In that case, the outcome would simply be to set aside the arbitration and order F to pay the entire costs of the arbitration process.

The circuit judge’s decision

HHJ Evans-Gordon held that the power to order a settlement of property under Sch 1 – as with the power to order a property adjustment order under s 24 Matrimonial Causes Act 1973 (1973 Act) – extended only to property to which either parent was entitled in possession or reversion. Where the new home was purchased on mortgage, the settlement could not be of the entire value of the property, but only the equity held by the relevant parent. The court could not order a parent to borrow money or provide property they do not have for the purposes of a settlement. The subject of a settlement of property order must exist at the time the order is made, and the order cannot extend to property to which the parent might become entitled in the future as a result of a loan. The court could not order the parent to borrow money – whether anyone would lend was outside their control.

She therefore held that the Haley challenge to the arbitral award was made good and the whole award therefore fell away. She also held that F’s challenges based on the change of circumstances (including the rise in mortgage interest rates) was made out.

M’s appeal to the High Court

M’s notice of appeal sought an order giving effect to the arbitral award, subject to only minor or updated undertakings. In particular, she argued that the judge had been wrong to hold there was no power to settle property for the benefit of a child which required mortgage borrowing for its funding, and that the judge has been wrong to conclude that a foreseeable change of circumstances was a ground for not making an order to give effect to the arbitral award. M referred to para 58(h)(iii) of the Family Court Standard Orders, which dealt with the ability for a replacement property to be purchased where there was a settlement of property. She also argued that, unless there was power to require a respondent to fund a settlement of property by way of mortgage, the Sch 1 jurisdiction would be unfairly discriminating against mothers where the father was capital poor but income rich.

The decision of Cobb J

Cobb J:

(i) recited the relevant statutory provisions, including the fact that the court is obliged (under s 25(2)(a) 1973 Act and Sch 1, para 4(1)(a)) to have regard to the resources of both parties;

(ii) noted that the terms ‘property’ and ‘settlement’ have always been given a very wide meaning in family law cases (referring, e.g. to Brooks v Brooks [1996] AC 375 at 391);

(iii) cited both Lord Sumption and Lady Hale in Prest v Petrodel [2013] UKSC 34, [2013] AC 415, both of whom stated that the subject of a property adjustment order under s 24 1973 Act was something over which the party had a proprietary right, recognised by the law of property: the court had no power to order a spouse to transfer property to which he was not in law entitled.

The building blocks of his decision were (my numbering):

(1) funds that a party can borrow, including borrowing capacity by way of mortgage, were plainly a resource within s 25(2)(a) and para 4(1)(a). The judge had been wrong to say that resources were limited to assets to which the party was entitled [93];

(2) relying on s 54 Family Law Act 1996 (1996 Act), he considered ‘beneficial entitlement to property extends beyond the equity and, most pertinently here, includes occupation of the whole’ [95];

(3) a settlement of property under the 1973 Act, such as a Mesher order, can include property which is subject to mortgage, and so can such an order under Sch 1 [93];

(4) following Mostyn J’s ‘decision’ in CH v WH [2017] EWHC 2379 (Fam), [2017] 4 WLR 178, the Family Court has the power to order the release of parties from a mortgage and to indemnify the other against liability. It can also order a party to pay a mortgage [98];

(5) because the court’s powers were not ‘confined to the four corners of the statute’ [100], the court had the power to order a sale of property under Sch 1, and to direct that a new property be purchased on trust, despite the lack of an express provision in Sch 1 conferring such powers [102];

(6) building on the decision of Cohen J in MT v OT (Schedule 1 Order) [2018] EWHC 868 (Fam), [2019] 1 FLR 93, it was possible for a settlement to include provision for a replacement property without offending the principle in Phillips v Peace that there could only be one settlement of property order [102];

(7) provision of housing under a Sch 1 settlement can include provision raised by way of mortgage, as happened in DE v AB [2011] EWHC 3792 (Fam), [2012] 2 FLR 1396. In that case Baron J ordered the father to settle the sum of £250,000 towards the mother and children’s housing needs, and noted that the mother could, if she wished, make a contribution to those housing needs by way of mortgage not exceeding £250,000 [104];

(8) in proceedings of this kind, a parent can be compelled into a joint property purchase, into an insurance contract, and to discharge or indemnify a debt for which they are not contractually responsible. These are essential ancillary powers for carrying out property adjustment into effect, even though none are expressly set out within the statute [105].

He summarised these and drew the threads together at [122]. Cobb J allowed the appeal, but did not simply make an order to give effect to the award. He considered the arbitrator had had the power to make an award in the terms he had, and the court had the power to make an order to give effect to that award. However, he considered that where there was a significant change in circumstances between the date of the award and the time the court is asked to make an order to give effect to the award, the court could decline to make the award into an order, so long as the change was something out of the ordinary [117]. The case would be remitted for a judge to consider whether F’s circumstances had indeed changed and that the change was out of the ordinary [127].

Analysis

It would be surprising if the court’s power to settle property under Sch 1 was wider than the court’s powers of property adjustment under the 1973 Act. Until this decision I had not seen a single case in nearly 30 years of practice at the Bar where a respondent was ordered to take out fresh mortgage borrowing as part of a property adjustment or settlement order. I have settled several cases on that basis, but only where the respondent was willing to commit to take out a fresh mortgage (and usually by way of undertaking to use his or her best endeavours to obtain mortgage finance).

There can be no quibble with items (1), (3) and (7) of the reasoning above. As to (1), the court must take resources into account, and resources can of course include mortgage capacity. Resources also include assets held in trust or by a company. The fact that the court must have regard to them under the checklist does not mean that the court has the power to make orders acting directly on them – for example, properties held in companies which are both legally and beneficially owned by a company cannot be the subject of a property adjustment order. The court might well make a lump sum order on the basis that the respondent can borrow money to raise the funds needed to pay the lump sum, especially where the respondent wishes to retain a capital asset which might otherwise be sold. But even here the court cannot order the respondent to borrow money to fund the lump sum: it simply makes an order based on the ability to borrow and includes a default provision if he does not or cannot borrow.

In addition, Mesher orders and other orders involving deferred interests are invariably made where there is insufficient capital for both parties to house mortgage free. It can be no surprise, therefore, that a Mesher order can be made in respect of a property subject to mortgage. However, the usual form of such settlement is where:

(i) B transfers his legal title to A.

(ii) A does her best to get B off the mortgage and indemnifies him in relation to the mortgage.

(iii) The property is held with B having a deferred interest either by holding as tenants in common with B’s interest not realisable until the trigger events, or by way of B having a deferred charge.

(iv) A will have the ability to move house and take all the net sale proceeds with her to her new home (subject to B’s deferred interest), but at that point, unless B specifically agrees (and they very rarely do so), A will have to get a mortgage on her own.

The fact that the property being settled is subject to mortgage does not mean that the court can order a person to take out a fresh mortgage either at the time of the settlement or later on.

As for (7) and DE v AB, in Sch 1 cases involving modest means, it is often the case that the applicant cannot be housed outright. The housing needs of the applicant and children will often be met from two sources: the settlement of the respondent’s capital, and the applicant herself raising or sustaining a mortgage. This can be by her retaining use of a jointly owned property, having the equity settled on her and then paying the existing mortgage. Alternatively, the respondent can provide cash which will be invested in a property to be purchased in the applicant’s name, with the applicant topping up as required by way of her own mortgage. The mere fact that the applicant can contribute to her own housing needs by way of paying a mortgage does not mean that the court can order the respondent to pay the mortgage or take out a new one. Of course, if the court had jurisdiction to make a periodical payments order for the benefit of the children (i.e. it is not just a CMS case), the court could make a maintenance order for the respondent to contribute to those mortgage costs. Conceivably, the court could make a lump sum order payable by instalments to cover the mortgage payments (as Wilson J did in R v R (Lump Sum Repayments) [2003] EWHC 3197 (Fam), [2004] 1 FLR 928). But these are orders for payments, not orders that a respondent obtain fresh mortgage finance.

Turning to the more contentious aspects of the reasoning. First, building block (2) above seems irrelevant. Section 54 1996 Act is a provision which says that, when determining whether a person has a right to occupy a property for the purposes of Part IV of the Act (and thus, for instance, under which section a person can apply for an occupation order), you ignore any right to possession of a mortgagee. So, if A owns a house subject to a mortgage, one of the old-fashioned forms of mortgage is the grant of a long lease under s 85 Law of Property Act 1925 – this might affect A’s right to occupy by virtue of his estate for the purposes of s 30 1996 Act. If A has defaulted on the loan and the mortgagee has obtained a possession order, again this would affect A’s right to occupy by virtue of the legal estate. All s 54 1996 Act does is to tell the court to ignore any right to possession that a mortgagee has in deciding whether or not A is an entitled applicant for the purposes of ss 30 and 33. It seems a bit of a stretch to use this provision to hold that the court has the power to order a party to take out a mortgage under s 24 1973 or Sch 1, para 1(2)(d) or (e).

CH v WH

As for CH v WH and the Family Court Standard Orders, CH v WH is not a decision by Mostyn J, so much as a press release. There was no argument from any counsel. It is an attempt to create a judicial precedent for the views expressed by the Financial Remedies Working Group. The fear was that, with the removal of legal aid from financial remedy work, there would be whole swathes of litigants in person who would not be willing to give undertakings to indemnify the transferor of the jointly owned family home or to use their best endeavours to procure the release of the transferor from the mortgage. So a view was taken that the court did in fact have the power to make these orders.

I largely disagree. The court has no power under s 23 1973 Act or Sch 1, para 1(2)(a), (b) or (c) to order payments to be made to a third party as opposed to the applicant. Schedule 1 only allows payments to be ordered to the applicant for the benefit of the child, or to the child himself. Section 23(1)(a) and (c) allows the court to order periodical payments or lump sums to the other party to the marriage. This is in contrast to periodical payments for the benefit of a child under s 23(1)(d) which can be made payable to ‘such person as may be specified in the order’ and which can therefore include school fees, etc being paid direct to the school.

It was said in CH v WH that the power to make payment to B plainly includes the power to make payments on behalf of B. The powers to order payments in respect of mortgages under s 40 1996 Act had to be spelt out because the court had no power to order direct payment in those proceedings.

This reasoning is, with respect, suspect. First, the terms of the statute are clear, and the contrast between s 23(1)(a) and (d) is instructive. Secondly, the innovation in the 1996 Act was to take the power that had been present in matrimonial cases, under the Matrimonial Homes Act 1983, to order payment of outgoings, and extend it to all cases where an occupation order was made where at least one party was ‘entitled’, i.e. one made under s 33, s 36 or s 37. No one had used the power under the 1983 Act for two reasons – one, if the parties were married, an order could be made for maintenance pending suit in the divorce suit in any event, and two, as was predicted at the time of the 1996 Act and as it came to pass, the orders were likely to be unenforceable. An order for A to pay money to B creates a judgment debt. It is enforceable as such. If it is within the definition in Sch 8 Administration of Justice Act 1970 (1970 Act), it can also be enforced by way of judgment summons. But the orders under s 40 do not create a judgment debt – it is an obligation not to pay the other party but a third party. Nor was Sch 8 1970 Act amended to include orders under s 40 1996 Act. Accordingly, the Court of Appeal confirmed in Ngwobe v Ngwobe [2000] 2 FLR 744 that most orders under s 40 1996 Act are unenforceable. Thirdly, there is the analogy of Burton v Burton [1986] 2 FLR 419 – the court in making an order for sale has no power to direct payments to third parties out of the net proceeds of sale.

The apparent power to grant an indemnity is said to be derived from the power of the Court of Chancery to order or decree an indemnity, being the relief initially ordered in Salomon v A Salomon and Co Ltd [1897] AC 22. In fact, there is no free-standing power to order an indemnity in any court. The court ordered an indemnity in Salomon because the company’s liquidator expressly pleaded that the company was the mere agent of Mr Salomon, and as such he was obliged to indemnify the company. The relation of principal and agent raises by implication a contract on the part of the principal to reimburse the agent in respect of all expenses, and to indemnify the agent against all liabilities, incurred in the reasonable performance of the agency. The judgment against Mr Salomon for nearly £8,000 entered by the trial judge was set aside because the House of Lords held that the company was not the mere alias or agent of Mr Salomon. Salomon therefore does not help anyone decide what the powers of the Family Court might be. In fact:

(a) an order for an indemnity is in effect a shorthand for a declaration that A is obliged to indemnify B and judgment against A in the amount of the sum covered by the indemnity;

(b) such an order for an indemnity can only arise where the relationship between the parties is such that, under the general law, the obligation to indemnify arises;

(c) accordingly, there is no general power for the High Court or any other court to order one party to proceedings to indemnify the other.

Before we leave indemnities, it is permissible for the Family Court to order an indemnity in two distinct ways:

(i) where A and B jointly own a property and B is ordered to transfer his beneficial interest in the property to A, but remains on the title because the mortgagee will not allow B to be released. In those circumstances A and B are now trustees and hold on trust for A. A, as the beneficiary, is obliged to indemnify the trustee for any liability the trustee incurs in connection with his role as a trustee. Because under the general law the obligation to indemnify arises, the Family Court has the power to order an indemnity in this set of circumstances;

(ii) an order can be made which has the effect of an indemnity. If A is to indemnify B in relation to any matter, the Family Court could make an order that provided that A must pay to B the amounts if any which B is obliged to pay in respect of the matter to any third party forthwith on demand by B to be reimbursed. There is no inherent difficulty with a contingent lump sum, nor an unliquidated lump sum where the amount to be paid depends on future events. However, in a matrimonial case, the court can only make a lump sum order on one occasion (see Coleman v Coleman [1973] Fam 10). Accordingly, if a lump sum order has already been made, or claims for lump sum orders have been dismissed, no ‘indemnity’ lump sum order can be made. This is not a difficulty in Sch 1 cases because the court can make a lump sum order under para 1(2)(c) on more than one occasion: see para 1(5)(a).

The reference to being able to refer the matter to the conveyancing counsel of the court under s 30 1973 Act or Sch 1, para 13 does not appear to take matters further. The content of the instrument to be executed by the parties is determined by what the court can lawfully order. The mere fact that parties might agree to include provision in the instrument where they have agreed the terms of a consent order (including undertakings) does not enlarge the court’s powers.

As for orders to procure release from a debt, it is trite law that the Family Court has the power to transfer property, including the right to sue for a debt, but it cannot transfer responsibility for a debt. The practice had always been to offer an undertaking to use reasonable endeavours or best endeavours to procure the other party’s release from the mortgage. This was effected by way of undertaking precisely because there was no power for the court to order the transfer of the obligation to pay the debt.

Standard Orders

The next element of reasoning is that the court must be able to include this provision in the order, because the provision is contained in the Family Court Standard Orders. The Standard Orders are a helpful precedent, but they no more define the court’s powers or state the law than does a Practice Direction. The court can declare a Practice Direction which incorrectly states the law to be ultra vires – see S v S [2015] EWHC 1005 (Fam), [2015] 1 WLR 4592, where Munby P struck down FPR PD 30A, para 14.1 (which at that time stated that the only way to challenge a consent order was by appeal).

The Standard Orders contain provisions for:

(a) order 2.1: para 71 – order to resign as director/company secretary;

(b) order 2.1: para 64 – order to procure release from mortgage;

(c) order 2.1: para 65 – order to pay outgoings on property.

None of these have any legal basis and are based on nothing more than wishful thinking. Anyone who has had the misfortune of appearing in front of me when I sit as a DDJ will know that I do not accept consent orders with these terms included as orders and not as undertakings. When we draft consent orders, we take on the role of transactional lawyers. Why would any sensible transactional lawyer, needing to include a particular provision, chose to reject the provision in a way that everyone knows will work, and decide instead to include it in a way which is open to doubt?

There are other parts of the Standard Orders, including some referred to by Cobb J, which are less clear cut:

(i) order 2.2: para 57(c) – order directing either party to be responsible for the mortgage on a settled property;

(ii) order 2.2: para 57(e) – order directing either party to be responsible for insuring the property;

(iii) order 2.2: para 57(g)(iii) – on the applicant moving home and a replacement property being purchased within the settlement, the trustees shall have full power as if they were beneficial owners thereof to execute such mortgage deed as may be necessary to enable the purchase to be completed.

As for (i) and (ii), if property is settled for A’s use, the court could certainly provide that A pay the mortgage as a condition of the settlement, and indemnify B if he remains liable on the mortgage and is therefore a trustee (see above). However, in the light of the reasoning above, this is not a solid basis for saying that B can be ordered to pay the mortgage. In relation to insurance, if the respondent B is an owner or trustee of the property, one of his obligations as trustee will be to insure the property for the benefit of both A and himself – as capital will in due course revert to him. I can see the argument that A in occupation should have to pay the insurance and thereby indemnify her trustee, but it is less clear cut how B could be ordered to insure the property. It might be said that, unlike having a mortgage, insurance is such a necessary part of being a property owner that it is inherent in the court’s powers of settling property that someone in the position of owner can be required to insure it.

As for (iii), this provision allows the trustees on purchase of the replacement property to take out a mortgage to complete the purchase. It does not require them to do so. In so far as the template appears to suggest that a respondent can be ordered to take out a fresh mortgage, I say this is wrong, and the inclusion of the provision in the template cannot change the court’s statutory powers.

Interestingly, whilst the court has the power to order security in respect of a lump sum payable by instalments, and can order secured periodical payments, it is generally accepted that the court cannot order the payer to take out a life assurance policy to protect the future stream of maintenance payments. The Standard Orders include life assurance as undertakings. Yet, if the decision in Re A and B is correct, might it be argued that a respondent can be ordered to make this kind of provision against his or her will? What are the limits of the powers of ‘the essential ancillary powers for carrying property adjustment into effect’ which are not contained in the statute?

One or two property settlement orders?

One of the arguments in Re A and B was whether a settlement which required settlement of existing capital and then the provision of funding from a mortgage amounted to an impermissible ‘second’ settlement. It has been settled law for some time that Sch 1 allows a settlement of property order to be made on only one occasion, which cannot be subsequently varied: Phillips v Peace [2004] EWHC 3180 (Fam), [2005] 2 FLR 1212. An applicant cannot supplement her housing needs after the existing settlement has been made by asking for another bite at the housing cherry. Cohen J rode into this debate in MT v OT in 2018 by holding that it was possible to make an order allowing the applicant mother to move house some 10 years after a property settlement order had been made. That decision is difficult to follow – if at the time a property settlement order is made, it includes provision for the applicant to move and for the settlement to move to another property, there is no further settlement or variation of the existing settlement. But if the original order did not contain that provision, it is difficult to see how a later order allowing for deferral of the respondent’s interest beyond sale is not an impermissible further property settlement order or variation of the existing settlement. Ultimately, the two settlements argument did not feature to any great extent in the judgment – the issue was the extent of the court’s powers in making one settlement of property order, not how many settlement orders were being made.

Practical issues

In Re A and B, the arbitrator’s award included provision that £870,000 be raised by way of a joint mortgage, with both parties to provide all documents required by the mortgagee promptly, and to execute all documents required to give effect to the mortgage application within 48 hours of being requested to do so. The mortgage product was to be chosen by agreement of the parties. F was to pay the mortgage either until sale or until he was bought out.

An IFLA arbitrator has the same powers as the Family Court, so it is safe to assume, on the reasoning of Cobb J, that the court had power to make orders in these terms. The practical issues include:

(i) Who selects the broker? Does the court nominate one if they cannot agree?

(ii) Does the mortgage application only get made once the parties have disclosed their financial information to the broker?

(iii) What if one party mistakenly or deliberately gives incorrect information such that the lender is not willing to offer the mortgage as ordered by the judge?

(iv) What if the lender will not offer that level of loan even if everyone does everything they should?

(v) If one party will not sign the loan application form, can the court make an order that someone else sign the application in place of that party? How would that work in the age of docusign and other electronic methods of signature? Would the lender accept someone else’s signature on behalf of the recalcitrant party?

(vi) Would the lender be willing to lend to someone who does not want to borrow the money?

Conclusion

Generations of family lawyers have understood that the court cannot directly order a person to take out a mortgage or obtain finance as part of the court’s property adjustment powers. This decision would overturn this conventional wisdom. We were told by Lord Brandon in Jenkins v Livesey [1985] AC 424 at 444F–H that the terms of the order must come clearly within the court’s powers under ss 23 and 24 1973 Act. Directing one party to be responsible for mortgages and loans was ‘not within those powers’. The proper way to do it was by way of undertakings.

This is still good law, and this is what makes this decision wrong. Indeed, much of the building blocks in the judge’s reasoning are highly questionable. The main reason why Sch 1 is underused in low value cases is because the Child Support Act 1991 deprives the court of the ability to make periodic provision. It would be jolly useful if the court could order a party to be relieved of debt or order a party to obtain a mortgage for the benefit of the other. But the court’s powers are clearly set out in the statute. The creeping extension of these powers, however well-intentioned, is simply wrong. This is not a sterile or technical objection. It goes to the heart of what we do as financial remedy practitioners. The statutes have given the courts specific powers. In contested cases, the court must use those powers. Where the parties agree, they can fashion settlements which are more flexible, and which go beyond the court’s powers. If it is felt that the court’s powers should be extended, it is preferable for the Law Commission/Parliament to act. The danger with an incrementalist extension is that at some point a higher court may come along and say that none of these orders are properly made and so cannot be enforced. Unpicking that situation would likely be even worse than the predicament of the parties in this case.