Derhalli v Derhalli [2021] EWCA Civ 112 - occupation rent pending sale of the marital home?

The Family court made a consent final order (28/9/16) in financial remedy proceedings, providing for the sale of the marital home in H’s sole name, which the parties expected to sell quickly. 

The order also provided:-

that W was to pay the outgoings, but was silent about who should occupy it

that H was to give notice to W if he was to attend the property

and that W had no legal or beneficial interest in the property.

The property took two years to sell, with W and the children living there during that period.

In a move that some might interpret as ungallant, six months after the consent order, H served notice on W (and the children) to vacate, or pay rent for her continued occupation.  W did neither.

In the County Court the judge found in H’s favour - W was ‘a gratuitous licensee terminable on reasonable notice where-after she would be a trespasser liable to pay damages…’.

The Chancery Judge allowed W’s appeal.

In the Court of Appeal (CoApp) the issue was ‘whether the Chancery Division had erred in concluding that, under the terms of the order, the wife was entitled to remain living in the property, rent free, until it was sold’.

The CoApp decided in W’s favour saying the Chancery Judge had simply analysed the true purpose and effect of the order which turned solely on the proper interpretation of the particular order.

At para 39 King LJ said ‘that the solution to this case, as was emphasised by the judge, does not essentially lie in an examination of the legal ownership of the property and whether the wife was in law a gratuitous occupier, but upon a conventional construction of the Order conducted in accordance with the well-known judgment of Lord Neuberger in Arnold v Britton [2015] AC 1619 at [15].

It was further added that the Chancery Division's judgment had neither set a precedent nor implied a licence to occupy into the order; it had simply analysed the true purpose and effect of the order.

At para 23 of the judgement King LJ said ‘In my view, the route taken by the husband by way of possession proceedings was inappropriate. The proper course for the husband to have taken in the present case was for him to have made an application for enforcement or variation of the Order not to the County Court but to the Family Court’.

At para 17 she said ‘The husband could have sought possession of the matrimonial home by virtue of a combination of the powers under s24A MCA 1973, which permits a court at any time after the making of an order for sale of a property to make such “consequential or supplementary provisions as the court thinks fit” which, by FPR r.9.2(2), include an order for possession to “any other person”. Similarly, there is the power to vary a s24A MCA 1974 order for sale under s.31(2)(f) MCA1973.

And at Para 21 she added ’It follows that the principles of construction to be applied in determining the wife's rights of occupation, if any, are the same regardless of whether the court is dealing with a contract or an order and … the county court has the jurisdiction to determine applications such as the present one notwithstanding that the Order with which the court is concerned is not a contract’.

King LJ reminds us of home rights by adding ‘an order can be made during the marriage under s33(5) FLA extending the home rights beyond decree absolute’.