In the recent, V v W [2020] EWFC 25, decision of HHJ Vincent sitting in the Family Court at Oxford, it was ordered that the family home should be put on the market and sold as soon as possible notwithstanding the father's request that the sale be deferred until after the youngest child had finished full-time education.
On the face of it, this appears to be a surprising decision by the Family Court. It was made during the UK Government-imposed lockdown as a result of the global COVID-19 pandemic and at a time when the father (who occupied the family home with the youngest child) had been unable to work due to illness for the last five years. However on the facts, this was a pragmatic approach by the Family Court.
V and W were in a relationship from 1995 to 2017. They have two children; the eldest is 19 and the youngest is 14. V (the children's mother) and W (the children's father) purchased the family home together in 1997. They both occupied the property until they separated in 2017; after separation, V continued to stay in the family home from Monday to Friday each week. At the time of the hearing, V was in full-time employment. W was self-employed but had been unable to work due to illness since 2015. W hoped that he may be able to return to work if his condition improved after further treatment.
V applied for an order under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 ("ToLATA") for a declaration as to the parties' beneficial entitlements to the property and for its sale. W made an application under Schedule 1 of the Children Act 1989 for V's share of the family home to be held on trust for the benefit of the parties' youngest child until such time as he finishes full-time education. W initially alleged that the beneficial interest in the family home was held 85/15 in his favour; however, he conceded that the beneficial interest was held 50:50 one working day before the final hearing.
Section 14 of ToLATA confers a wide statutory power upon the Court. It enables any person who is trustee of land or has an interest in property which is subject to a trust of land to make an application to the court for an order relating to the exercise by the trustees of any of their functions or a declaration as to the nature or extent of a person's interest in the property which is subject to the trust. Therefore, the scope of section 14 enables the Court to order the sale of property. The language used within section 14 of ToLATA is rather esoteric, but it applies to co-owners of property who are regarded as trustees of land under ToLATA.
When determining whether to make an order under section 14 of ToLATA, section 15 sets out that the Court must have regard to (a) the intentions of the person(s) who created the trust, (b) the purpose for which the property subject to the trust is held, (c) the welfare of any minor children who occupy the property subject to the trust as their home and (d) the interests of any secured creditor of any beneficiary. The Court held that section 15(c) of ToLATA (i.e. the welfare of any minor children) is a relevant factor to consider but it is not the most important consideration.
Schedule 1 of the Children Act 1989 allows a parent (or the person with whom the child is to live as specified in child arrangements order) to apply to Court for a wide array of orders which provide for the child financially. W applied under schedule 1(d) of the Children Act 1989 for V's share in the family home to be held on trust for their youngest child until he finishes university (at which point it would revert to V). W asserted that he was the child's primary carer.
When determining whether to make an order under schedule 1 of the Children Act 1989, the Court must have regard to all of the circumstances, including: (a) the income, earning capacity, property and financial resources which each person has or is likely to have in the foreseeable future, (b) the financial needs, obligations and responsibilities which each person has or is likely to have, (c) the financial needs of the child, (d) the income, earning capacity, property and other financial resources of the child, (e) any physical or mental disability of the child and (f) the manner in which the child was being, or was expected to be, educated or trained.
This matter was heard remotely via the Cloud Video Platform due to COVID-19 restrictions. The Court refused W's request for a stay of the application under schedule 1 of the Children Act 1989 because, inter alia, the period of the stay was uncertain and would cause unnecessary delay for the parties and their children. The Court also considered that there was an overlap of the issues in the two applications and it was argued that by staying one of the applications (as W sought) would allow W to improve his position and have another attempt on the ToLATA application.
The Court granted V's application for an order for sale of the family home. V was continuing to contribute towards the mortgage on the family home but at the time of the application, V was isolating elsewhere and was not, therefore, able to benefit from her contributions towards the mortgage payments. HHJ Vincent stated in her judgment that "it would not…be reasonable to expect [V] to contribute towards the mortgage payments in circumstances where she is not living in the property and not receiving any occupation rent from [W]".
W could not afford to live in the family home without assistance from his parents or from V. In evidence, W stated that continued financial assistance from his parents was not guaranteed. In a letter to the Court from W's parents, they stated that it was an ever-increasing struggle for them to pay for the youngest child's school fees. W was unable to provide a realistic timescale for his return to work or evidence about the level of income which he could expect to receive. Both parties had unsecured debts and W did not provide any indication how he would service these without the sale of the family home.
The Court considered that there was a significant risk that the family home could be repossessed in the event that W could not afford to keep up the mortgage payments. There was evidence that the mortgage had been in arrears previously whilst W was responsible for the repayments. Further, the Court considered there to be a risk that W may not be able to maintain the family home during the period of deferment which he sought.
V and W needed to live separately and they both wanted accommodation which would enable them to spend time with their two children.
The period of deferment of sale sought be W was ranged from 7 years to 8 years depending upon whether the youngest child had a gap-year before completing an undergraduate degree. At the top end of that range, the period of deferment of sale would have meant that V would be approaching her 60th birthday by the time she was able to release her interest in the property. It was submitted that V would be highly unlikely to obtain a mortgage at that age even with the deposit from the sale of the family home.
The Court also noted that V had been exposed to the consequences of a poor credit rating and that she would continue to face that risk if the property was not sold for seven or eight years.
The Court rejected the argument that the youngest child needed to live in the family home which was near to his grandparents and to his school and which had a garden. These were not 'needs'; his needs were to be financially supported, clothed, fed and have his daily needs provided for. There was also evidence that the child's school had expressed concern at the current living arrangements.
It was clear that V was more financially secure than W. However as the parties were not married, HHJ Vincent commented that she was not required (as she might otherwise have been) to achieve an outcome whereby the lower earner in the relationship is compensated by the breadwinner.
At first glance this decision seems surprising but as ever it turned upon the particular facts of this case. Both the status quo and W's proposed deferment of sale would leave V in an invidious position which would have restricted her ability to separate herself financially from the relationship. Viewed through that lens, this decision is a balanced one which causes the least harm to everyone involved.