Whitehouse-Piper v Stokes: Nothing new
Family Law Week has reported the case of Whitehouse-Piper v Stokes [2008] EWCA Civ 1049, which deals with the dreaded 'remarriage trap' in s.28(3) MCA.
The Facts: The parties were divorced in 1994, the wife remarried in 1995 and the husband in 2004. In 1997, when the former matrimonial home was in negative equity, an agreement was reached between the parties that it would be transferred to the husband for no consideration, provided that the wife could be released from her obligation under the mortgage. However, there were some arrears under the mortgage, and the mortgagee was therefore not prepared to release the wife (a common scenario). Accordingly, the agreement was not implemented. In 2005, by which time the property had an equity of £80 - 90,000, the husband sought to have the transfer completed, but the wife responded by issuing an application for ancillary relief, apparently seeking half of the equity. The district judge ordered the transfer, but refused the wife's application for a lump sum. Her appeal to the circuit judge was refused, and she appealed to the Court of Appeal.
The Decision: Lord Justice Thorpe dealt quite summarily with the remarriage trap point, which had been raised by the circuit judge, who was concerned that she was seeking an order against herself. He pointed out that the wife had included all forms of ancillary relief in the prayer in her petition, it was well established that this entitled her to proceed with an application for ancillary relief notwithstanding her remarriage, and Dart v Dart [1996] 2 FLR 286 made it quite clear that she was also entitled to seek an order against herself. As to the wife's lump sum claim, this was dismissed, as she had failed "to show any discretionary entitlement to a balancing lump sum", there being no equity in the property at the time of the agreement.
As I said in the title to this post, nothing new here, but a salutary warning to anyone contemplating reopening an agreement - not only did the wife fail to obtain a lump sum, but she was also ordered to pay the husband's costs.
October 13, 2008 11:14 PM
Odd point: I am largely unconvinced the husband would "almost certainly have achieved the same result" in TLATA proceedings post Stack v Dowden and in the presumed absence of written agreement: I think there would have been serious difficulties establishing a common intention constructive trust given the mortgagee had knocked the proposed agreement on the head, presumably at an early stage. Difficult to be sure without more detail though.
October 14, 2008 1:43 PM
I confess I hadn't considered that - I just took what His Lordship said at face value. It would be an interesting exercise although, as you say, more detail is required.
December 02, 2008 7:39 PM
a someone with a vested interest in the result, I can assure you of the inability of the judges to make an informed decision. The judge accepted then dismissed written testimony of the children in the case who confirmed the validity of the claim. They were also cutoff from benefiting from this claim, a decision I cannot agree with. It seems a solicitor can send an unsolicited letter and although not signed this is enough to lose a case.
In my view the only one who has benefited from this tragedy so far has been the legal profession, if I was able to appeal I would!
December 02, 2008 9:05 PM
Thanks for that, although obviously I can't make any comment.