White v White

LORD JUSTICE THORPE: The appellant is Mark White, the father. The respondent is Deborah Hansford, the mother. The parties in June 1987, when in their late 20s, took a momentous step in their lives. They bought a property for £50,000, funded by a joint deposit of £5,000 and a joint mortgage of £45,000. They bought a freehold. They became beneficial joint tenants. In 1989 their first child, Victoria, was on the way. Accordingly, they extended the house to provide a fourth bedroom. The cost of the extension was largely funded by remortgaging the property. Victoria was born on 23rd October 1989 and her sister Rachael followed on 7th April 1992.

Sadly the parties' relationship deteriorated, and in the spring of 1999 they moved into separate bedrooms. They were unable to resolve their differences by agreement, and on 11th November 2000 the mother issued her application for orders under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (hereinafter referred to as TOLATA). She envisaged that her future would be as primary carer for the two girls in the home at 74, Laughton Road, Northolt. Accordingly, she sought an order deferring the realisation of the father's half share until Rachael achieved the age of 18 or ceased full time education. Her application was supported by a statement. Directions were given by the District Judge, as a result of which further evidence was filed on each side.

On 21st June 2001 the District Judge adjourned further directions to enable the court to consider whether the mother's application under TOLATA should be heard with the Children Act proceedings which the father had commenced in the previous December. His application was for a residence order. What the outcome of that consideration was has not been revealed to us. We only know that in August 2001 the mother left the family home, seemingly conceding that the father would thereafter be the primary carer for the girls. Certainly, a residence order to that effect was made on 29th September 2001.

Of considerable significance is the father's issue of an application for a transfer of the mother's interests in the family home during the childrens' minority. That application was brought under section 15 and Schedule 1 of the Children Act 1989. The father filed a statement in support of that application on 9th November, and by paragraph 4 he said:

I say at once that that order seems to me to have been wrong in principle. As a matter of sensible management in the county court, if one co-owner invokes one statutory power and the other invokes a different statutory power, sensible management demands that the competing applications be conjoined. If one had to be given leading status, I would have myself assumed that it would be the application under Schedule 1, since that statute confers upon the court a much more extensive power, namely the power to make adjustive orders between the co-owners. Of course, I recognise that the applicant under Schedule 1 for any form of capital provision has no personal claim but only a claim on behalf of and perhaps therefore through the children. But, even so, the fact remains that there is within the court the power to make adjustive and not merely declaratory orders. This fundamental error in management was not challenged by the father who continued to act in person. Of course, the evidence in the continuing TOLATA application shifted radically following the making of the residence order in favour of the father.

Thereafter, the mother's case became not an application for deferment but an application for immediate sale, and correspondingly the father shifted from seeking immediate sale to seeking deferment. So the case, when it came before Judge McIntyre on 11th June 2002, had this unusual feature. Each of the parties adopted an end position that was diametrically opposed to their opening positions.

Judge McIntyre, having heard oral evidence from the parties (again, the mother was represented by counsel and the father in person with a McKenzie friend), made an order for the sale of the property. That predictably resulted in the father's application for a restoration of his Schedule 1 application on the basis that the judge's order under TOLATA left him with insufficient funds to rehouse himself and the children. The mother, in her turn, on 17th December issued an application to enforce the order of 11th June, and on 8th January 2003 Judge McIntyre adjourned both applications to await the outcome of the father's stated intention to apply to this court for permission to appeal the order of 11th June.

His notice of application for permission was submitted to this court by solicitors, he ceasing to act as a litigant in person. That application was put before me on paper, and on 19th March I directed an oral hearing on notice of the application for permission and the application for an extension of time, with appeal to follow if permission granted. It seems to me that the applications for permission and extension manifestly succeed. This has proved to be a difficult appeal for this court to determine.

Mr Routley, who represents the appellant, has advanced three arguments on the law, the first to the effect that the judge effectively approached his task under TOLATA as though he were still exercising jurisdiction under section 30 of the Law of Property Act 1925. By that Mr Routley means that the judge presumed that he had to make an order for sale unless the father discharged the burden of establishing a case for deferral. I do not myself believe that the submission can be made good on the terms of the judge's extempore judgment. I would accept the submission of Miss Shuman for the respondent that the judge's summary of his task at page 2 of his judgment demonstrates a proper approach to the issue before the court on that day.

Mr Routley submits, secondly, that the judge was quite wrong to hold that this was not a case in which either subsections (a) or (b) of section 15(1) of TOLATA were engaged. Mr Routley submits that the judge simply overlooked the evidence given by the father at paragraph 11 of his first statement, when he asserted that an additional purpose of the purchase of the family home arose at the stage of remortgage in order to pay for the bedroom extension. Once that evidence was overlooked, submits Mr Routley, the judge manifestly failed to have regard to those two factors which the statute required him to regard.

His third submission on the law was that the judge's obligation to have regard to general circumstances under section 15(3), given the dispute between the parents, denied him the freedom to elevate such general considerations above the criteria for which Parliament elected in section 15(1). I did not myself find that submission either easy to follow or persuasive.

So Mr Routley then came to criticise the judge's findings in the area of fact and his weighing of the discretionary bounds. A number of his submissions did not seem to me to stand up, given the very clear findings that the judge had made as to the father's earning capacity and as to his mortgage capacity. It seems to me that in this area Mr Routley had really only three submissions that merit further consideration. The first was his presentation of the argument in relation to intentions and purposes which he had already advanced as a point of law. It was demonstrated that, apart from the father's plain statement in paragraph 11 of his first statement, he had during the course of his oral evidence emphasised the importance of the extension of the property when the first child was expected in order to ensure that the children would all have bedrooms of their own. The point was obliquely put during the husband's cross-examination of the wife, and it was certainly put emphatically during his submissions. It is nowhere referred to in the judgment. The judge simply overlooked that element of the father's case.

The second point that deserves record is the manner in which the judge dealt with the unusual feature of the case, namely the dramatic shift in ground that each parent had made following the making of the residence order. Mr Routley submits, in my view with some force, that truly analysed that was a neutral consideration, since each was as culpable as the other. It was unfair for the judge to have castigated the father without equal castigation of the mother.

His final point, which seems to me to be by far and away the most powerful, was his criticism of the manner in which the judge had dealt with the father's primary submission, namely that the welfare of the children demanded deferral. In his judgment, whilst he understandably recorded at page 10 that the consequences and risks for the children was the consideration that had given him the greatest cause for concern, he thereafter did no more than record the mother's response that in her view the children would and could adapt, and that sharing a bedroom, if need be, would be no hardship to them. The judge simply made no findings in relation to that response and did not explain how he had in the end reassured himself against that greatest concern.

However, it is to be emphasised that this is an extempore judgment given at the end of a long day. As Miss Shuman has submitted, it must be implicit in the judgment that the basis of the judge's reassurance was the clear finding that an order for sale would not preclude the father from down-sizing to a three bedroom property in the same locality, enabling the girls to stay at the same school. The judge said expressly on the evidence:

This gives rise not only to considerations of fairness but also to considerations of waste. The mother has been publicly funded throughout. The father is now publicly funded. There has been a full-scale hearing on one of the applications. That has left major issues still unresolved. There will have to be full-scale preparation for those major issues. There will have to be a further full-scale trial. That risks to waste both public funds and also court resources. Judge McIntyre endeavoured to impress upon these parents the advantages of a negotiated or mediated settlement. I would only endorse that recommendation to the full. Surely it should not be impossible for these two parents to arrive at some sort of negotiated or mediated conclusion at the outcome of this appeal without plunging into another round of litigation on facts that will be necessarily different given the passage of what is likely to be 18 months between the two trials, with all the shifts and changes that are inevitable as the children grow older and as the father is liberated to put more time into his work. The Court of Appeal runs a dispute resolution scheme to which the parties may have recourse if they please despite the conclusion of the appeal. I would urge them to give consideration to seeking the help of this court's ADR scheme by the appointment of a mediator.

My last generalisation is that it does seem to me that in these cases where Schedule 1 is invoked it would be, as a matter of general case management, highly desirable that the judge who deals with section 8 applications should also deal with the money applications. If the money applications are complex it may need to be reserved to a judge with an ancillary relief ticket. In that event, it may preclude determination by the judge who has been handling the section 8 applications. But as this case illustrates another judge, Judge Catlin, has been wrestling with great difficulties, very sad difficulties, concerning the relationship between the two girls and their mother. That of course will inevitably have given him an insight into the family dynamics which would be of great value in the determination of the financial applications.

So, in the end, how should this appeal be resolved? There are undoubted deficiencies in the extempore judgment but against that the prospect of a retrial is one that is inevitably unattractive. I have reached the conclusion, not without considerable hesitation, that, in the end, the judge has well understood his essential task, and he has arrived at a discretionary conclusion, balancing broadly the two most important competing considerations, namely the mother's need for realisation of her only capital in order to acquire a home, and the competing interests of the girls who, as the father has throughout emphasised, have known no other home. Accordingly, I am satisfied that it would not be right against that reality to put all that into the melting pot and order a retrial of the TOLATA application. The ultimate conclusion between these two, if not negotiated, will be decided by further proceedings in the county court.

LADY JUSTICE ARDEN: I agree but I would wish to add some observations on the points of law which have been raised by this appeal. The appellant raised four points of law. Mr Routley for the appellant addressed them as three points, but the second, it seems to me, contains two points of law. Accordingly, I have subdivided that point so that in my judgment there are four submissions.

The first point was Mr Routley's submission that the judge misdirected himself when he said in his judgment (page 2) that:

In the light of the judge's judgment, I do not consider that the appellant's point is correct. In the passage that I have read the judge was merely setting out the mother's application and the contrary position as he saw it. He went on in his judgment quite clearly to apply the 1996 Act. Thus, for example, he had regard to the welfare of the children which is a specific requirement of the 1996 Act.

I turn to the second point of law which, as I have explained, I have separated out from the next point of law. The appellant submits that the judge was entitled to have regard to intention of the parents formed after the trusts of land was created. The relevant words in section 15(1)(a) of the 1996 Act are that:

The question then remains whether the intention could include intention subsequently come to, as Mr Routley submits. I do not myself consider that this is the correct construction. Parliament has used the word "intention" which speaks naturally to the intentions of persons prior to the creation of the trust. If that were not its meaning, then it is not clear whether the court should be looking at the parties' intention at the date of the hearing or at some other antecedent point in time and, if so, what date. If Parliament meant the present intention, it would have used some such word as "wishes" rather than the word "intention" which implies some statement or opinion as to the future. In all the circumstances, I consider that the appellant's submissions on the point of law on this point are not correct.

I turn now to what I have termed the third point of law, and it was put in this way. It is that the judge had failed to deal with a submission by the father that there was an additional purpose come to after the property was purchased and the parties had been living there. This was based primarily on paragraph 11 of the father's statement of 22nd February 2001, in which he stated that the trust was entered into to provide a home for the mother and himself but subsequently there arose an additional purpose, namely to provide a home for the children. I would accept that, for the purposes of section 15(1)(b), purposes could have been formulated informally, but they must be the purposes subject to which the property is held. The purpose established at the outset of the trust which, on the judge's finding, did not include the provision of a home for children, could only change if both parties agreed. There was no evidence from which the judge could find that the mother agreed to the additional purpose spoken to by the father. Nor was the assertion that there was such a purpose ever put to the mother. Notwithstanding Mr Routley's submission, I would not accept the argument that the judge's omission to deal with the additional purpose undermines his decision.

The fourth point of law is based on the interpretation provision of section 15(3) of the Act. This provides:

On this point I refer to section 14(2) which provides that:

Finally, I would like to add an observation about the overlap of jurisdiction between this Act and the Children Act 1989. Where there are children and where both parties have an interest in property, prima facie both Acts will apply. There are some differences between the two Acts. For example, under Schedule 1 to the Children Act 1989 orders can be made for the benefit of the children. Likewise, section 13 of the 1996 Act confers an express power to restrict the entitlement of a party to occupation with power to order compensation or to adjust the benefits to which a party is entitled under the trust. The powers under each Act are not therefore co-extensive. Unless for some special reason it is not desired that the court should consider exercising powers under both Acts, it seems to me that the application should be under both Acts and the exercise of the powers under each Act should be considered by the same court and at the same time.

MR JUSTICE BODEY: I agree with the judgments delivered. There is nothing I would like to add.