Thompson v Prater

LORD JUSTICE WARD: When this matter first came before me in November 2003, I described it as being very troublesome. It has probably become even more troublesome. These are the horns of dilemma upon which these parties are impaled.

District Judge Chandler made an order on 4 February 2003 that the former matrimonial home be sold and the net proceeds of that sale be paid to the respondent in this appeal, then Mrs Prater now Mrs Thompson. She appealed to His Honour Judge Yelton on 25 July 2003. He ordered that upon Mrs Thompson giving an undertaking to use her best endeavours to procure the release of her former husband from the covenants on the mortgage of the former matrimonial home and, in any event, to indemnify the husband against any claim under the mortgage, it was ordered that he transfer to his former wife all his estate and interest in that property in full and final satisfaction of any claim she might have against him for ancillary relief of any description.

The dilemma is that, under the order, it was envisaged by the district judge that the net proceeds of sale would be paid to the former wife, which would have meant that, after discharging the mortgage, approximately £52,000 odd would have been available for her to re-house herself and her family. Her family by now comprised Jason, nearly 13, William, nearly 11 and Nicole who is 8 years old, the children of the parties before us. In addition, following her remarriage, Mrs Thompson has a little girl who is two and a half years old. Her new husband is disabled and he receives disability benefits. At least for the foreseeable future he appears to be incapable of work. The mother has her obvious difficulties in trying to work because she has a disabled husband to look after as well us a young child. On their disability benefits they are probably ineligible for any mortgage, certainly any mortgage of a sufficient size to enable the equity of £52,000 to be applied towards the purchase of a home large enough to keep that family together.

It was the realisation of that difficulty which prompted Judge Yelton's order. He felt that there might be force in the argument that the district judge was wrong to have held that there was no way in which Mr Prater could take out a further mortgage whilst the existing mortgage remained in force. Under the judge's order, if the former wife gave the undertakings which I have recited, then Mr Prater would be able to approach a building society and would be able to raise sufficient money, jointly with the lady with whom he now lives, to enable him to maintain the considerable contact he has to the children of his marriage. We are told he sees them two weekends out of three and one day in the week, together with half the school holidays. His anxiety is that as Nicole grows older she will need a room of her own and should no longer be required to share with her older brothers. So he has needs of his own for the sake of the children. Those are as much matters going to the welfare of the children when they are in his care during his periods of contact as they are whilst they are in the mother's care. Their needs are for their parents each to have a home large enough to accommodate them. That is the first consideration that has to be borne in mind in his case.

I adjourned the application in November 2003 when Mr Prater submitted that he had been unable to obtain the mortgage of the kind envisaged by Judge Yelton. I urged him to make further inquiries. He has done so and has placed before us the response from various building societies he has approached. The Woolwich, who lent this money on the present mortgage on the matrimonial home, are only prepared to advance monies less the existing debt owing to them; so too, submits Mr Prater, are the Nationwide and the Cheltenham and Gloucester. There is some issue as to whether the applications to those building societies were joint applications or applications in the name of Mr Prater alone, which is how it appears from the correspondence from those building societies.

Mr Prater has satisfied me that it is at least highly arguable that in fact these were joint approaches on his behalf and, coupled with his partner, those building societies are prepared to lend an amount insufficient by a long way to enable him to re-house himself. The Halifax are not prepared to help him at all because of his low credit scoring (which may be a reference to the existing mortgage), perhaps compounded by the fact that at one time that existing mortgage was in arrears. He approached another lender, not one of the regular so-called High Street building societies, who will advance more money at more exorbitant rates, but again not sufficient for the purpose.

It seems to me on that evidence that the basis upon which Judge Yelton approached this matter has been undermined. His order cannot be implemented in the way he envisaged that it would be. Therefore, this court has no option but to allow the appeal and remit the matter back to the judge for further consideration.

I would allow the appeal and order accordingly. But, I add this important postscript. I add it at a moment when I believe it may be that Mrs Thompson has just entered the court. She will hear this no doubt with astonishment and with distress. I assume that her solicitors now accompany her. A representative from the solicitors is here, not having appeared before now (11.55 am) on this appeal listed at 11 o'clock. I am told by the usher that unfortunately they had been in court 47 in error, this being court 74.

Be that as it may, I hope both will listen carefully, as too, I hope, will Mr Prater. The most imperfect of the many imperfect solutions to this case is that Judge Yelton's order be capable of being implemented. That would leave this mother and her family in the former matrimonial home which is obviously satisfactory for their purposes. But if Mr Prater and his partner were able to raise money from a building society, they would have at least have the opportunity of being placed in a favourable enough position to maintain their own housing need and, more importantly, meet the housing needs of these children when they visit their father.

It must not be forgotten that the matrimonial home was purchased by Mr Prater seven years before the marriage. In fairness, which is the object of this exercise, each should at least emerge from this marriage with a roof over their head sufficient for their need and their children's needs. The best way of achieving that is by cooperation. Cooperation seems to be singularly lacking in this case which is its misfortune. Unless there is cooperation, and unless there is a joint attempt to resolve this problem, when the matter goes back to His Honour Judge Yelton, he may be (I stress "may be") in the unhappy position of being forced to accept that the district judge was right in saying that it is impossible for this former husband to borrow money satisfactorily, with the inevitable result that the house will have to be sold and the mother and family cast upon the local authority's duty to re-house her as one who has become unintentionally homeless. Given the disabilities of her present husband and the young age of her family, she undoubtedly will attract a sufficient number of points in local authority housing requirements to be re-housed by the local authority. No doubt that is something which all would wish to avoid.

The best way to achieve that is for Mr Prater to join with Mr Cumming, the wife's solicitor, in a joint approach, first to the Woolwich Building Society and, if necessary, thereafter to other building societies to endeavour to persuade the building society to accept the undertaking to indemnify Mr Prater in respect of the mortgage repayments and to advance money to him sufficient or at the full amount which the joint means of himself and his lady will justify. If the Woolwich Building Society will not, I hope a joint approach to the other High Street lenders may be more forthcoming. Perhaps the Nationwide would be first to be the recipient of that joint approach.

It is incumbent for this purpose that Mr Prater fully cooperates, with cards on the table, indicating in his applications to the building societies, precisely what his income is, precisely what the income of his partner is supported by the necessary documents that would need ordinarily to be produced to a building society on a mortgage application. I expect they will want three months of pay slips and P60s. Whatever their ordinary requirements are, that will have to be laid before them. That it is laid before them openly and to the knowledge of the former wife in this case is an inevitable part of that process.

If Mr Prater is not willing to be open and forthcoming in that regard, he may suffer the consequences of that foolish attempt to conceal his financial position. As the district judge observed, this is a case about capital disposition, not income disposition. There is no continuing claim for periodical payments by a wife who has remarried.

The wife, through her representatives, must use their best endeavours, their contacts, their skills, their conveyancing knowledge, all their endeavours to put up a viable case to the building societies as they cast themselves on the mercy of the building societies to help this family in their current distress. It may be that the decision will need to be taken at a level above that of the local branch. I think the Woolwich in particular needs to consider this family's predicament at a high level.

For that purpose this judgment, together with copies of the previous judgments -- the one I gave in November 2003 together with the judgment of His Honour Judge Yelton -- should be available to be shown to the building societies so that they may see this court's concern and this court's hope that, if necessary, a charitable view is taken of this family's dilemma and some attempt is made to assist them in a way which does not utterly prejudice the building society's security. The building society have a property with a value assessed about two years ago at £120,000. There is ample equity in the property. I would have thought this was safe security. That of course is a matter for the building society, but I do hope they would take some heed of our words and come to the assistance of this unfortunate family.

The appeal will be allowed, the matter remitted to the judge, if my Lord agrees, and a transcript of this judgment is to be available at public expense with liberty to disclose it to the building societies concerned.

SIR MARTIN NOURSE: I agree with the judgment of my Lord and with the order proposed by him. I only wish for my own part to emphasise the pressing need for cooperation between Mr Prater and Mrs Thompson without which there must be a real possibility that the house will have to be sold; an outcome disastrous to all concerned, especially for the three children of the marriage and the young daughter of Mr and Mrs Thompson.