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Lord Irvine of Lairg: I shall detain the Committee for only a moment or two. The noble Lord, Lord Clifford of Chudleigh, attributed certain observations to me on a previous occasion or occasions. I have to say that I neither recognise them nor recall them. I am as capable of erring in recollection as any. Hansard will tell. But I have to put on the record of our proceedings that I have no recollection of the observations that he has attributed to me.

The Lord Chancellor: I am not sure that I entirely follow all that the noble Lord, Lord Clifford of Chudleigh, said. The present law is the law under which the cases to which he referred must have been decided. There is no doubt that in matters of disputed residence and access to children, the courts make a decision in the light of all the circumstances. I believe that they do their best to reach the right decision. One of the leading principles under which they make those decisions is to treat the welfare of the children as their primary consideration.

The noble Lord considers that his amendment, Amendment No. 203D, would make matters better. Over the years, the courts have considered these matters.

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In 1973, the noble and learned Lord, Lord Denning, who was and is a very humane and concerned judge, said in relation to conduct:


    "Does this mean that after a marriage has been dissolved, there is to be a post mortem to find out what killed it? We do not think so. In most cases both parties are to blame, or, as we would prefer to say, both parties have contributed to the breakdown. There will be many cases in which a wife, although once considered guilty or blameworthy, will have cared for the home and looked after the family for many years. Is she to be deprived of the benefit otherwise to be accorded to her because she may share responsibility for the breakdown with her husband?"

One has to consider what benefit that particular amendment would give. The noble Lord referred to Whiston v. Whiston. My understanding of the result of that case is that as a result of the wife's bigamy, the court held that no claim should be permitted for financial provision under the existing law. I am not sure whether or not the noble Lord thinks that that was a right decision, but, as I understand it, that was the decision. I doubt whether his amendment would have produced any other decision. I think not. So I do not understand how that case is relevant to supporting his amendment.

However, I should wish to refer this issue to the ancillary relief advisory group. My understanding of the law as it works at present is that conduct can be taken into account if it would be inequitable in the opinion of the court to disregard it. I believe that that is a reasonable basis on which conduct should be considered in relation to financial provision.

So far as concerns the various cases to which the noble Lord referred in the course of his speech, it is very difficult to generalise about these matters. But there is no doubt that, if husband and wife--father and mother--separate, there is a very difficult decision left for the court. My understanding is that the court does its best to do justice in the particular circumstances of the particular case. Certainly, I am not aware of any general view that the courts do not attempt to do justice between the parties in those situations.

So far as concerns the children, I believe that the court seeks to ensure that both parties remain in contact with the children so far as that is possible. Sometimes the nature of the dispute makes that difficult, but I am certain that it is in the best interests of the children that they should remain in contact with both parents in the generality of cases. I believe that that principle guides the court in its consideration. As with other amendments, I am prepared to take the advice of the ancillary relief group, but the present law on this matter was reached after mature consideration and I should be surprised if it can be improved upon.

11.15 p.m.

Lord Clifford of Chudleigh: I am grateful to the noble and learned Lord for his statement. Although I know that we differ on various aspects of this, I am grateful that he has acknowledged that conduct must also be taken into account. I am sure that this subject and the amendments that I have tabled will reappear on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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The Lord Chancellor moved Amendment No. 204:


Page 45, line 32, leave out ("made") and insert ("received by the court").

The noble and learned Lord said: I spoke to this amendment with Amendment No. 197. I beg to move.

On Question, amendment agreed to.

[Amendment No. 204A not moved.]

The Lord Chancellor moved Amendment No. 205:


Page 46, line 5, leave out ("made") and insert ("received by the court").

The noble and learned Lord said: I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 206 to 206F not moved.]

Schedule 2, as amended, agreed to.

Schedule 3 agreed to.

Lord Simon of Glaisdale had given notice of his intention to move Amendment No. 207:


After Schedule 3, insert the following new schedule--
("SCHEDULE MATRIMONIAL HOMES (CO-OWNERSHIP)

Part I
Rights in Respect of Ownership of Matrimonial Home
Chapter I
INTRODUCTORY
Scope of Part I

1.--(1) In this Part of this Schedule--
(a) Chapter II provides, subject to certain exceptions, for husband and wife to become joint owners of land if it is owned by either of them while comprised in a property in which they have a matrimonial home after this Part comes into force; and
(b) Chapter III makes provision as to the rights of a husband or wife in relation to land of which, while so comprised, they are or have been co-owners (whether statutory co-owners or not), and as to related matters.
In this Part "statutory co-ownership" means co-ownership by virtue of the operation of Chapter II, and "statutory co-owner" shall be construed accordingly.
(2) In this Part references to husband and wife and to marriage apply whether or not the marriage was entered into under a law which permits polygamy; but there shall be no statutory co-ownership on any occasion if at the time the husband has more than one wife or the wife more than one husband.
(3) In this Part references to marriage apply to a voidable marriage, notwithstanding that it is retroactively annulled, and references to husband and wife shall be construed accordingly.
Meaning of "own" and related terms

2.--(1) In this Part of this Schedule the expression "own" and related terms refer to beneficial ownership and do not include ownership in a fiduciary capacity.
(2) Subject to sub-paragraph (1) above land is for the purposes of this Part "owned" by a person if, but only if--
(a) he is (within the meaning of the Law of Property Act 1925) the estate owner in respect of the fee simple absolute in possession or in respect of a term of years absolute in possession; or
(b) he has a corresponding equitable interest.

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(3) Where an equitable interest arises under a contract to convey or grant, for valuable consideration, an estate or interest within sub-paragraph (2)(a) or (b) above, the said sub-paragraph (2)(b) shall not apply to the equitable interest so arising if and so long as the consideration has not been paid or transferred.
(4) Subject to sub-paragraph (5) below, where land or an interest in land is held on trust for sale, persons having an interest in the proceeds to arise from the sale and in the rents and profits till sale are for purposes of this Part to be treated as having the equivalent interest in the land; and sub-paragraph (2)(b) above shall include the case where a person is joint tenant or tenant in common of such an interest as is there mentioned.
(5) A person is not to be treated for purposes of this Part as owning land by virtue of an interest he has in it as a member of a partnership; and for this purpose any interest a person has in land as a member of a partnership shall be deemed, notwithstanding that the partnership is dissolved or he ceases to be a member of it, to continue to be one he has as a member of it so long as any other person has any claim on the interest (or the property in which the interest subsists) as a member or former member of the partnership or in right of a former member.
What constitutes a property

3.--(1) Subject to the following sub-paragraphs, references in this Part to a "property" are to be read as references to a house or flat and any garage, outhouse, garden, yard and appurtenances going with it which from time to time constitutes or together constitute a dwelling.
For this purpose "house or flat" includes a maisonette and any other separately occupied part of a building, but does not include a caravan or other structure designed or adapted for human habitation unless it forms part of the land on which it is sited.
(2) Where husband and wife set up or have a home in a property as described in sub-paragraph (1) above, or a man and woman having a home in a property as so described marry, the property shall be taken to extend to any other land which--
(a) is owned by them or either of them and goes with the property as an adjunct to it; but
(b) does not form part of their dwelling either because it is used for business or other non-residential purposes or because it is not in their occupation.
(3) Land not for the time being forming part of a property as described in sub-paragraph (1) above is, in particular, to be regarded under sub-paragraph (2) as going with the property if, given its situation and relation to the property, its primary use is likely to be for, or subservient to, the domestic purposes of an occupier of the property, including in those purposes the provision of accommodation for a parent or other dependant and such professional or business activities as those engaged in them commonly carry on at their homes.
(4) Without prejudice to section 25 of the Interpretation Act 1978, references in this Part to land are to be read as including parts of houses or buildings.
CHAPTER II
STATUTORY CO-OWNERSHIP OF MATRIMONIAL HOME
Construction of Chapter II

4. The following paragraphs of this Chapter are framed for the case where, apart from their operation, the husband is the owner, but are to be read as applying equally, with the necessary adaptations of references to the husband or the wife, to produce the converse result in the case where the wife is the owner; and where each is part owner apart from the operation of those paragraphs that alone does not exclude their operation.
Occasions for statutory vesting in co-ownership

5.--(1) Where at the time when this Part comes into force husband and wife have a home in a property and the husband is owner of the property or part of it, then the two shall thereupon become co-owners in respect of the interest the husband then has as owner of the property or part.

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(2) Where husband and wife set up a home in a property, and the husband is owner of the property or part of it, then the two shall thereupon become co-owners in respect of the interest the husband then has as owner of the property or part.
(3)(a) Where husband and wife have a home in a property, and the husband acquires the ownership or a new ownership of the property or part of it otherwise than from the wife or out of her interest, then the two shall thereupon become co-owners in respect of that interest of the husband in the property or part; and
(b) a husband is to be treated for purposes of this sub-paragraph as acquiring the ownership of a property or part of a property in any case where he becomes the owner whether by acquiring an interest (or further interest) amounting to ownership or by a change in an interest he already has or otherwise.
(4) Where husband and wife have a home in a property, and there is made to the property any addition owned by the husband (whether so owned before it is added to the property or not), then the two shall thereupon become co-owners in respect of the interest the husband then has as owner of the addition.
(5) Where a man and a woman having a home in a property marry one another, and the husband is at the time of the marriage (or becomes on the marriage) owner of the property or part of it, then the two shall thereupon become co-owners in respect of the interest the husband then has as owner of the property or part.
(6) This paragraph has effect subject to the exceptions in paragraphs 7 to 14 below.
Effect of statutory vesting in co-ownership

6.--(1) Where a husband and wife become statutory co-owners in respect of an interest of the husband in a property or part of a property, then--
(a) if the interest is a legal estate, it shall become subject to a trust for them as beneficial joint tenants; and
(b) if the interest is not a legal estate, it shall vest in the two of them as beneficial joint tenants; and
(c) the same consequences (including the creation of a trust for sale and the severance of any joint interest) shall ensue, as if the like result had been achieved by a written declaration of trust or assignment made by the husband.
(2) Notwithstanding sub-paragraph (1)(c) above, no limitation, covenant or condition restrictive of the husband's right to deal with the property shall be taken to extend or have reference to any transfer of ownership under this section.
Exception from statutory co-ownership of joint interests and certain derivative interests

7. There shall be no statutory co-ownership on any occasion in respect of an interest of a husband where the interest either--
(a) is one he has as joint tenant with the wife; or
(b) derives from one he had as joint tenant with her, the joint tenancy having been severed at a time when they had a matrimonial home in the property; or
(c) is one he acquired prior to that occasion out of an interest of hers in respect of which he is on that occasion excluded under paragraphs 8 to 14 below from becoming statutory co-owner (or would be if she retained the interest).
Right of husband or wife to exclude statutory co-ownership in transitional cases

8.--(1) There shall be no statutory co-ownership on any occasion in respect of an interest which a husband has at the date when this Part comes into force (or which derives from such an interest) if before that date--
(a) the husband has by any writing signed by him declared that the interest he has at that date, being a separate interest, is to be free of statutory co-ownership; or
(b) where the interest is not a separate interest, either the husband or the wife has by a writing signed by him or her declared that both the interest the husband has at that date and the wife's corresponding interest are to be free of statutory co-ownership;

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and the person making the declaration under sub-sub-paragraph (a) or (b) above has not, before the occasion in question, by a further writing signed by him or her revoked the declaration.
(2) A declaration under sub-paragraph (1)(a) or (b) above must be attested by a person present as a witness when the declaration is signed.
(3) In this Chapter references to a separate interest of a husband or of a wife are references to an interest of his or her not being an interest as joint tenant or tenant in common with the other of them (with no implication that they are married at the time referred to).
(4) In this Chapter references to a document being signed by a person include its being signed for him by his agent.
Right of husband or wife to exclude statutory co-ownership of interests held before marriage

9.--(1) There shall be no statutory co-ownership on any occasion in respect of any interest which a husband has in any land at the time of the marriage (including an interest acquired on the marriage) if--
(a) he has before the marriage by any writing signed by him declared, either specifically with reference to the wife or generally, that the interest is to be free of statutory co-ownership; and
(b) he has not, before the occasion in question, by a further writing signed by him revoked the declaration or (it being a general declaration) directed that it shall not have effect in the case of the wife.
(2) A declaration under sub-paragraph (1)(a) above must be attested by a person present as a witness when the declaration is signed.
(3) For purposes of this paragraph an interest as joint tenant and the interest derived from it by the severance of the joint tenancy are to be treated as one interest.
Right of donor to exclude statutory co-ownership in case of gifts

10.--(1) There shall be no statutory co-ownership in respect of an interest of a husband acquired by gift if the interest given him either--
(a) is a separate interest which is directed by the instrument making the gift to be free of statutory co-ownership; or
(b) is not a separate interest.
(2) Subject to sub-paragraph (3) below, any disposition of an interest in land is a gift--
(a) for purposes of sub-paragraph (1)(a) above, if it is made without consideration in money or money's worth moving from the husband (and is not a disposition by him alone);
(b) for purposes of sub-paragraph (1)(b) above, if it is made without consideration in money or money's worth moving from the husband or the wife (and is not a disposition made by them or either of them alone).
(3) Where a disposition of an interest in land is made by the exercise of a power of appointment, the interest is to be treated for purposes of this section as acquired by that exercise and not under the instrument conferring the power; but the disposition is not for those purposes a gift unless that instrument was made (as well as the power being exercised) without consideration as mentioned in sub-paragraph (2) above.
(4) Where the husband's interest in any land is or was conferred on him as a separate interest by an instrument conferring a power of appointment capable of being exercised in his favour, but he acquires ownership of the land by a release of the power, then if the instrument releasing it directs that the husband's interest is to be free of statutory co-ownership, the direction shall have the same effect under this section as if the husband had acquired his interest by the exercise by that instrument of the power.
(5) For purposes of this paragraph an interest as joint tenant and the interest derived from it by the severance of the joint tenancy are to be treated as one interest.
Exclusion of statutory co-ownership by husband and wife's agreement for or creation of sole ownership

11.--(1)(a) Subject to any written agreement to the contrary

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signed by the husband and wife, there shall be no statutory co-ownership on any occasion in respect of a separate interest of the husband--
(i) if at any time before that occasion the husband and the wife have entered into a written agreement signed by them that the interest is or is to be a separate interest and is to be free of statutory co-ownership; or
(ii) if he has acquired the interest by her express disposition in his favour, or the interest became a separate interest or, being a separate interest, was enlarged or improved by such a disposition; and
(b) in sub-sub-paragraph (a)(ii) above any reference to the wife's express disposition in the husband's favour is a reference to a written disposition made and expressed to be made to him beneficially and made by her or made and expressed to be made by her direction.
(2) Subject to any written agreement to the contrary signed by the husband and wife, there shall be no statutory co-ownership on any occasion in respect of an interest of the husband if the interest is or derives from one in relation to which sub-paragraph (1)(a)(i) or (ii) above was satisfied at some previous time.
(3) For the purposes of this paragraph an interest as joint tenant and the interest derived from it by the severance of the joint tenancy are to be treated as one interest.
Exception from statutory co-ownership where entitlement of husband and wife to shared interest settled by agreement

12.--(1) Subject to any written agreement to the contrary signed by the husband and wife, there shall be no statutory co-ownership on any occasion in respect of an interest of the husband, if--
(a) the interest is not a separate interest, and the fact that they are or are to be joint tenants or tenants in common and, if tenants in common, the relative size of their shares has been specified by a written agreement signed by them or by an instrument such as is mentioned in sub-paragraph (2) below; or
(b) the interest is or derives from one in relation to which sub-sub-paragraph (a) above was satisfied at some previous time.
(2) The instruments referred to in sub-paragraph (1)(a) above are instruments whereby either--
(a) the husband and wife are made beneficial joint tenants or tenants in common of the land or of an interest in it; or
(b) one of them disposes of any right or interest in favour of the other,
being instruments which satisfy one of the conditions in sub-paragraph (3) below.
(3) The said conditions are--
(a) that the entitlement of the husband and wife specified in the instrument as required by sub-paragraph (1) above is in accordance with a prior agreement between the husband and wife; or
(b) that before the occasion in question both the husband and wife adopted the instrument by any act showing an intention to accept the instrument; or
(c) where by the instrument one of them disposes of any right or interest in favour of the other, that before the occasion in question the other adopts the instrument by any act showing an intention to accept the instrument.
(4) For purposes of sub-paragraph (3)(a) above the instrument (if it specifies the entitlement of the husband and wife as required by sub-paragraph (1)) shall be presumed, unless the contrary is shown, to do so in accordance with a prior agreement between them.
(5) For purposes of this paragraph the entitlement of a husband and wife is not specified by an agreement or instrument as required by sub-paragraph (1), if the nature or extent of their interests is left in any relevant respect, other than a respect in which it is affected by the rights of some other person, to be ascertained from outside the agreement or instrument.

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(6) Sub-paragraphs (3) and (4) of paragraph 8 above shall apply for purposes of this paragraph as they apply for purposes of that paragraph.
Exception from statutory co-ownership to avoid severance from other land

13.--(1) There shall be no statutory co-ownership on any occasion in respect of an interest the husband has in a property or part of a property if at the time--
(a) the husband has a substantive interest in any adjoining or neighbouring land which is not comprised in the property nor would be treated under paragraph 3(2) above as so comprised if owned by the husband; and
(b) the difficulties or disadvantages involved in a severance would be such that, on a sale of the whole in the open market for the relevant estates or interests, subject to any subsisting tenancies but otherwise with vacant possession, it would not be practicable for the property or that part of it to be sold as a distinct lot without the adjoining or neighbouring land or, if it had to be so sold, the price to be expected for the whole would be substantially reduced.
(2) Where but for this paragraph a wife would on any occasion have become statutory co-owner in respect of an interest of the husband in a property or part of a property, and afterwards while the husband is owner of the property or that part of it he ceases to be entitled to a substantive interest in the adjoining or neighbouring land or any material part of it (without the wife having in the meantime become statutory co-owner in respect of the interest in the property or the part of it in question), then this Part shall thereupon have effect as if he had acquired his ownership of the property or that part of it on ceasing to be so entitled.
(3) For purposes of this paragraph "the relevant estates or interests" are--
(a) in the case of the property or part of a property in question, the legal estate in respect of which, or in respect of the husband's interest in which, there is an occasion for the husband and wife to become statutory co-owners; and
(b) in the case of the adjoining or neighbouring land, any legal estate in which the husband then has a substantive interest.
(4) In this Part "substantive interest" means a beneficial interest (whether vested or contingent) other than an interest by way of security only, or by way of rent charge or annuity, or by way of charge under section 26 of this Act.
Effect of bankruptcy or insolvency

14.--(1) There shall be no statutory co-ownership on any occasion in respect of an interest of the husband, if at the time the wife is an undischarged bankrupt.
(2) Where a wife, after becoming on any occasion statutory co-owner in respect of an interest of the husband, becomes bankrupt as from that time or an earlier time, then subject to sub-paragraph (4) below the wife shall be deemed not to have become on that occasion co-owner in respect of that interest.
(3) Where a wife becomes insolvent, then--
(a) there shall be no statutory co-ownership on any later occasion in respect of an interest of the husband, if the interest she thereby acquired would be included in the assets to be administered; and
(b) subject to sub-paragraph (4) below, she shall be deemed not to have become on any earlier occasion statutory co-owner in respect of such an interest, if the assets to be administered extend (by relation back) to her then assets.
(4) Sub-paragraphs (2) and (3)(b) above shall not affect any dealing by the wife with her interest before the time when she is adjudged bankrupt or becomes insolvent.
(5) For the avoidance of doubt it is hereby declared that, subject to sub-paragraph (6) below, the circumstances in which the disposition ("the statutory disposition") supposed, by paragraph 6(1)(c) above, to be made by the husband is voidable by reason of his bankruptcy or insolvency are the same as the circumstances in which an actual disposition of that kind would be voidable.

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(6) Where the wife and the husband each become statutory co-owners in respect of an interest which the other has as part owner of the land (the two interests being ones which they have as tenants in common) and--
(a) subsequently the husband becomes bankrupt or insolvent; and
(b) the bankruptcy or insolvency is not one within sub-paragraph (2) or (3)(b) above (so that the statutory disposition by the wife is unaffected by the bankruptcy or insolvency),
the statutory disposition by the husband shall not be voidable by reason of the bankruptcy or insolvency except to the extent (if any) by which the husband's interest as part owner of the land exceeded the wife's (so that avoidance of the statutory disposition will do no more than prevent the wife from having obtained, as co-owner of both interests, more than she had previously as entire owner of the one interest).
(7) This paragraph shall have effect in relation to bankruptcies and to insolvencies under the law of any part of the United Kingdom or elsewhere.
(8) In this paragraph references to insolvency are references to the making, in bankruptcy proceedings, of a composition or arrangement under which assets are to be administered by a trustee for the benefit of the insolvent's creditors and references to the assets to be administered shall be construed accordingly.
Effect of minority or incapacity

15.--(1) Notwithstanding anything in paragraph 6(1)(c) above, that paragraph shall have effect--
(a) in relation to any interest of a husband who is a minor as if he were of full age;
(b) in relation to any interest of a husband who is an incapacitated person as if he were not incapacitated.
(2) A declaration or revocation made for purposes of paragraph 8 or 9 above shall not be affected by the minority of the person making it.
Minority: agreement or instrument excluding statutory co-ownership

16.--(1)(a) This sub-paragraph applies to an agreement which, under paragraph 11 or 12 above, has the effect of excluding a wife from statutory co-ownership in respect of an interest of the husband in any land, and in this sub-paragraph "the relevant law about minors" means the law relating to the effect on a contract of the minority of a party to the contract.
(b) If the agreement was made in contemplation of the use or possible use by the parties of the land (or a property comprising it) as a matrimonial home, the agreement shall be treated for purposes of the relevant law about minors as a contract for the husband to acquire from the wife her interest as statutory co-owner.
(2)(a) This sub-paragraph applies to an agreement, disposition or instrument which under paragraph 11 or 12 above has the effect of excluding a wife from statutory co-ownership in respect of an interest of the husband in any land.
(b) Where the agreement, disposition or instrument is avoided by the wife or husband by reason of her or his minority paragraph 5(3) above shall apply as if on the avoidance the wife and the husband each acquired (otherwise than from the other or out of the other's interest) the interest she or he then has in the land in question.
Exemption from stamp duty on reversal of statutory co-ownership

17. Stamp duty shall not be chargeable on an instrument executed within two years after a husband and wife have become statutory co-owners of a property or of land comprised in a property, in so far as the instrument operates to vest in each of them the same interest (if any) in any land as he or she would have had if on the occasion in question there had been no statutory co-ownership in respect of any interest of either of them in the property or land comprised in it.

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CHAPTER III
Incidents of Co-ownership of Matrimonial Home

18.--(1) For purposes of this Chapter "relevant land" means land of which a husband and wife are co-owners at a time (after the coming into force of this Part) when it is comprised in a property in which they have a matrimonial home, and includes any such land--
(a) notwithstanding that the land ceases to be comprised in a property in which they have a matrimonial home; and
(b) notwithstanding that they cease to be husband and wife.
(2) For purposes of this Chapter land continues to be relevant land notwithstanding that on death, or on any other occasion, either the husband or the wife ceases to own the land, so long as--
(a) the other remains an owner of the land in respect of the estate or interest in respect of which the husband and wife were co-owners immediately before that occasion; and
(b) that estate or interest is held by trustees.
(3) In this Chapter, where the context permits, in relation to relevant land--
(a) in accordance with sub-paragraph (1)(b) above, references to "husband" and "wife" include former husband and former wife,
(b) in the circumstances specified in sub-paragraph (2), references to the husband and wife being co-owners are references to one of them being an owner, and references to the husband or wife are references to that one of them.
(4) In this Chapter--
(a) "the trusts" means the trusts under which a husband and wife are co-owners of relevant land,
(b) "the trustees" means the trustees of the trusts,
(c) references to a disposition of trust property made by the trustees are references to a disposition by them of, or of any estate or interest in, the estate or interest held by them, not being a disposition incident to or consequent on the appointment, resignation or removal of a trustee,
(d) references to a disposition do not include references to taking a further advance under an existing mortgage or charge.
Qualifications of provisions requiring consent of husband or wife

19.--(1) This paragraph applies to the following provisions of this Schedule ("the consent provisions") namely--
(a) in paragraph 20 sub-paragraphs (1)(a) and (2)(a);
(b) in paragraph 21 sub-paragraph (1);
(c) in paragraph 36 sub-paragraph (1).
(2) The consent provisions shall have effect in relation to any relevant land only if the husband and wife are or have been sole co-owners of the land at a time (after the coming into force of this Part) when it is comprised in a property in which they have a matrimonial home.
(3) For purposes of this paragraph a husband and wife are sole co-owners of land if, regard being had only to substantive interests, they are sole co-owners in respect either of the fee simple or of a leasehold interest.
Rights in respect of trusteeship

20.--(1)(a) The consent of the husband and of the wife shall be required to any appointment otherwise than by order of a court of a new trustee of the trusts or to the discharge of a trustee from the trusts otherwise than on an appointment of new trustees.
(b) A person's consent is required by this sub-paragraph, and shall for purposes of this sub-paragraph be valid and binding, notwithstanding that person's minority.
(c) An appointment or discharge of a trustee shall not be invalid for want of a consent required by this sub-paragraph, nor shall any person be under any liability for making or concurring in an appointment or discharge without that consent unless he knows or ought reasonably to have known that the consent was so required.

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(d) Where a trustee is appointed without a person's consent required by this sub-paragraph, the court may on the application of that person remove the trustee from the trusteeship, unless in the opinion of the court the appointment is one that would have been made by the court in the circumstances.
(2) Where a husband and wife are co-owners of relevant land under the trusts of a legal estate in the land, then--
(a) if either of them is a trustee, he or she shall not without his or her consent be removed from the trusteeship of that estate under any power contained in the instrument creating the trust unless he or she remains out of the United Kingdom for more than twelve months or refuses or is unfit to act in the trust or is incapable of acting therein; and
(b) either of them may be appointed trustee of that estate notwithstanding the statutory restrictions affecting the number of persons entitled to hold land on trust for sale, or those on the appointment of additional trustees, and if appointed by virtue of this provision shall be disregarded in the application of those restrictions; and
(c) if either of them (being of full age) is not a trustee and applies to the court to be appointed trustee of that estate, the court shall make an order appointing him or her trustee of it (and of the proceeds of sale), unless the court sees special reason for not making the appointment.
(3) In this paragraph "the court" means the High Court or a county court, and a county court shall have jurisdiction notwithstanding that, by reason of the amounts involved or otherwise, the jurisdiction would not but for this sub-paragraph be exercisable by a county court.
(4) Where a person withholds consent under sub-paragraph (1) above to the appointment or discharge of a trustee of an estate or interest in land, a separate set of trustees may be appointed in accordance with section 37(1)(a) of the Trustee Act 1925 for the remainder of the trust property (if any), notwithstanding that it is not held on distinct trusts.
(5) This paragraph has effect subject to paragraph 19 above.
Sales etc. to require consent of both co-owners

21.--(1) The trustees shall not without the consent of the husband and of the wife make any disposition of trust property.
(2) A person's consent is required by this paragraph, and shall for the purposes of this paragraph be valid and binding, notwithstanding that person's minority.
(3) The requirements of sub-paragraph (1) above, for any case within that sub-paragraph, shall take the place of any requirement of consent that might arise from the land having been acquired for a matrimonial home or other common purpose.
(4) This paragraph has effect subject to paragraph 19 above.
(5) A disposition made without a consent required by this paragraph shall be of no effect.
(6) Where the trustees hold a legal estate sub-paragraph (5) above has effect--
(a) where the legal estate is registered land, subject to paragraph 24(2) and (3) below;
(b) where the legal estate is not registered land, subject to section 4(9) of the Land Charges Act 1972 (inserted by paragraph 30(2) of this Schedule).
Court jurisdiction as regards consents and powers of trustees

22.--(1) The court shall have power on the application of any person interested to declare whether a person's consent is required by paragraph 20 or 21 above or by paragraph 36 below, in the case specified in the application.
(2) If--
(a) any consent to a disposition by the trustees, or to their taking a further advance under an existing mortgage or charge, whether required by this Schedule or not, cannot be obtained, or

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(b) the trustees refuse to sell, or to exercise any of the powers conferred by sections 28 and 29 of the Law of Property Act 1925 (powers of management, and delegation of powers),
any person interested may apply to the court--
(i) for a vesting or other order for giving effect to the proposed transaction, or
(ii) for an order directing the trustees to give effect to the proposed transaction,
and the court may make such order as it thinks fit.
(3) In considering under sub-paragraph (2) above a consent required from a person as being or having been one of the parties to a marriage the court may have regard to the welfare (if affected) of any children of the family within the meaning of the Matrimonial Causes Act 1973.
(4) In this paragraph "the court" means the High Court or a county court, and a county court shall have jurisdiction notwithstanding that, by reason of the amounts involved or otherwise, the jurisdiction would not but for this sub-paragraph be exercisable by a county court.
(5) The jurisdiction exercisable under section 30 of the Law of Property Act 1925 or section 17 of the Married Women's Property Act 1882 shall not be exercisable where the jurisdiction under this paragraph is exercisable.
Trustees holding a legal estate in unregistered land

23.--(1) This paragraph applies where the trustees hold a legal estate which is not registered land.
(2) So long as the husband or the wife is not one of the trustees there may be registered in the register of land charges under section 2 of the Land Charges Act 1972 a land charge for his or her benefit to be known as a land charge of Class G.
(3) Registration of a Class G land charge for the benefit of the husband or wife shall constitute registration--
(a) of that person's beneficial interest under the trusts; and
(b) if applicable, of the requirement of consent by that person imposed by paragraph 21 above,
and notwithstanding that registration of that person's beneficial interest under the trusts shows that the legal estate is subject to trusts, registration of the land charge, or failure to register it, shall not affect any other person's interest under the trusts.
(4) The Land Charges Act 1972 and the other enactments mentioned in Chapter I of Part IV of this Schedule shall be amended as provided in that Chapter.
Registered land

24.--(1)(a) Where the registered land is relevant land production of the land certificate shall not be required by section 64(1)(c) of the Land Registration Act 1925--
(i) for an application for the entry on the register of a restriction with reference to the requirement that there shall be at least two trustees; or
(ii) for an application for the entry on the register of a restriction with reference to the requirement of consent imposed by paragraph 21(1) above; and
(b) accordingly in section 64(1)(c) of the Land Registration Act 1925 after the words "except as hereinafter mentioned" there shall be inserted the words "or as provided by paragraph 24(1) of Schedule (Matrimonial Homes (Co-ownership)) to the Family Law Act 1996".
(2) A purchase under a registered disposition, as defined in section 3 of the Land Registration Act 1925, shall not, as against the purchaser, require the consent of any person under paragraph 21 if that consent requirement is not protected by a restriction or other entry on the register.
(3) Sub-paragraph (2) above is without prejudice to section 59(6) of the Land Registration Act 1925 (failure to register matters capable, in the case of unregistered land, of registration under the

30 Jan 1996 : Column 1436

Land Charges Act 1925) or any other provision of the Land Registration Act 1925 concerning matters which have not been protected by entry on the register.
(4) For the removal of doubt it is hereby declared that the rights capable of being overriding interests under section 70(1)(g) of the Land Registration Act 1925 (which protects the rights of persons in actual occupation or in receipt of the rents and profits of registered land) do not include--
(a) in the case of land held on trust for sale, interests or powers which are under the Law of Property Act 1925 capable of being overridden by the trustees for sale; or
(b) in the case of settled land, interests or powers which are under the Settled Land Act 1925 and the Law of Property Act 1925 or either of them capable of being overridden by the tenant for life or statutory owner.
Further advances on mortgages

25. Chapter II of Part IV of this Schedule, which relates to mortgages made for securing further advances, shall have effect.
Application of proceeds of sale

26.--(1) Where the interest of a husband and wife in any relevant land is sold during the marriage, then either of them who pays or has paid the whole or part of the cost of acquisition of a new home (that is to say, of another property in which they have or propose to have a matrimonial home in place of the home in the property comprising that land) may require the other to apply in meeting the cost of acquisition of the new home a sum amounting to the other's share of the proceeds of the sale or any less sum and, if the other does not, may apply to the court for an order requiring it.
(2) In sub-paragraph (1) above--
(a) the reference to an interest in land being sold shall extend to any disposal, by the trustees, or by the husband and wife, for a consideration in money (and references in this section to proceeds of sale shall be construed accordingly); and
(b) the reference to acquisition includes acquisition before the coming into force of this Part, and before the making of any decision to have a matrimonial home in the property.
(3)(a) On an application for an order under this paragraph, the court may make such order (if any) as the court thinks just; but the court may refuse to make an order if the court thinks it just to do so having regard to lapse of time or other matters.
(b) The court may in particular by an order under this sub-paragraph--
(i) direct the respondent to make to the applicant or any other person such payments at such times as may be so directed; and
(ii) direct that any payment to be made by the respondent under this sub-paragraph shall be secured for the benefit of the applicant on any substantive interest of the respondent in the new home.
(c) An order of the court under this sub-paragraph shall not affect the substantive interests of the applicant and the respondent in the new home except in so far (if at all) as the extent of their respective interests is affected by the proportion in which they bear the cost of acquisition.
(4) The jurisdiction conferred on the court by this paragraph shall be exercisable by the High Court or by a county court, and shall be exercisable by a county court notwithstanding that by reason of the amounts involved or otherwise the jurisdiction would not but for this sub-paragraph be exercisable by a county court.
(5) A husband or wife's right under sub-paragraph (1) above, and the court's power under sub-paragraph (3), to require money to be applied in meeting the cost of acquisition of a new home shall be limited to the amount (or further amount) from time to time needed in order that the cost may be borne by the husband and the wife in proportion to their respective shares of those proceeds of sale, but includes the right to require any such amount to be applied in reimbursing to him or her money applied in meeting that cost.

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(6) Any reference in this paragraph to the proceeds of sale of land is a reference to the net proceeds after meeting the costs of or incidental to the sale and after satisfying any sum secured on the interest sold.
(7) For purposes of this paragraph the cost of acquisition of the new home shall be taken to include--
(a) the cost of any improvements or alterations to the property undertaken in order to adapt it for the purposes of the husband and wife; or
(b) where the new home is provided by the erection of a house, the cost of erection, in addition to the cost of acquisition of the site.
(8) It is immaterial for purposes of this paragraph that the new home is not in England or Wales.
(9) Sub-paragraph (1) above shall have effect subject to any agreement made between the husband and wife, and shall not apply where either the husband or the wife is not an owner, but the land is relevant land by virtue of paragraph 18(2) above.
Part II
PROVISIONS APPLYING TO MATRIMONIAL HOME OR OTHER LAND
Equal co-ownership of husband and wife not disturbed by payments for acquisition or improvements

27.--(1) So long as two spouses are equal co-owners of any land in England or Wales either as joint tenants or as tenants in common having equal shares with one another, any contribution made by one of them in money or money's worth to meeting the cost of acquisition or to the improvement of the land shall be deemed, for the purposes of any rule of law or presumption as to the effect of such a contribution in conferring an interest or larger interest on the person making it, to be made equally by the two of them, except where they became tenants in common having equal shares with one another by the operation as between themselves of any such rule of law or presumption.
(2) Any reference in sub-paragraph (1) above to a contribution to meeting the cost of acquisition or to the improvement of the land includes expenditure on or with a view to the repayment of money borrowed to defray the cost of acquisition or of an improvement.
(3) In relation to the rule as to improvements this paragraph shall be deemed always to have had effect, except where the marriage has been terminated before the time when this Part comes into force, or before that time either--
(a) one of the spouses has by any contribution acquired under the rule a share or additional share out of the beneficial interest of the other, and the extent of that share has been ascertained by agreement between them or by order of a court; or
(b) one of the spouses by writing signed by him or her or for him or her by his or her agent has directed that this subsection shall not apply.
(4) This paragraph shall not affect the operation of the rule as to improvements as that rule is applied by section 2(1) of the Law Reform (Miscellaneous Provisions) Act 1970 (property of engaged couples if engagement terminated), except where an agreement to marry is terminated by death after this Part comes into force.
Application of certain rules to engaged couples

28.--(1) Subject to sub-paragraph (2) below, where after the coming into force of this Part a man and a woman enter into an agreement to marry one another, then as regards land in England and Wales the rule as to improvements and paragraph 27(1) and (2) above shall apply as if their agreement to marry had been implemented.
(2) Where an agreement to marry is terminated otherwise than by death, the beneficial interest of the parties to the agreement in any land shall be the same as if this paragraph had not been enacted.
Interpretation of Part II

29. In this Part--
(a) "co-owner" has the same meaning as in Part I;

30 Jan 1996 : Column 1438


(b) "the rule as to improvements" means the rule of law explained by section 37 of the Matrimonial Proceedings and Property Act 1970.
Part III
MISCELLANEOUS
Sharing of "winkling money"

30.--(1) Where two spouses have a home in a dwelling-house (whether a house or part of a house) of which they have, or one of them has, a statutory tenancy under the Rent (Agriculture) Act 1976, or the Rent Act 1977, and either of them receives any pecuniary consideration in respect of the giving up of possession of the dwelling-house, the other shall be entitled to receive from that one a sum equal to half the net amount or value of that consideration.
(2) For the purposes of this paragraph "pecuniary consideration" includes any consideration in money or money's worth other than land and interests in land; and the net amount or value of the pecuniary consideration received by a spouse is the amount or value of it reduced by the amount or value of any consideration which that spouse gives in order to enable possession of part of the dwelling-house to be obtained from another and given up.
Rules as respects registered and unregistered land

31. The powers of making rules under section 144 of the Land Registration Act 1925 and section 16 of the Land Charges Act 1972 shall include power to make provision for the purpose of implementing this Schedule.
PART IV

CHAPTER I
CLASS G LAND CHARGE: AMENDMENT OF OTHER ACTS
Land Charges Act 1972 (c. 61)

32.--(1) In section 2 of the Land Charges Act 1972 (the register of land charges) after subsection (7) there shall be inserted the following subsection--
"(7A) A Class G land charge is a land charge registrable under paragraph 23 of Schedule (Matrimonial Homes (Co-ownership)) to the Family Law Act 1996."
(2) At the end of section 4 of the Land Charges Act 1972 there shall be inserted the following subsection--
"(9)(a) A land charge of Class G (as described in paragraph 23(3) of Schedule (Matrimonial Homes (Co-ownership)) to the Family Law Act 1996) shall, as against a purchaser of the land to which it relates, or of any interest in such land, be unenforceable unless the land charge is registered in the appropriate register before the completion of the purchase.
(b) Accordingly, unless the land charge is so registered before the completion of the purchase, the purchase shall overreach the beneficial interest of the person for whose benefit the land charge is registrable whether or not the requirements of section 27(2) of the Law of Property Act 1925 (capital money not to be paid to a single individual as trustee) are complied with.
(c) Unless the land charge is so registered before completion of the purchase, the purchase shall not as against the purchaser require that person's consent under paragraph 21 of Schedule (Matrimonial Homes (Co-ownership)) to the Family Law Act 1996."
Law of Property Act 1925 (c. 20)

33. At the end of section 2(3)(v) of the Law of Property Act 1925 (interest protected by registration not to be over-reached under section 2(2) of that Act, but subject to the exceptions in paragraphs (a) and (b) of the said paragraph (v)) there shall be inserted the following paragraph--
"(c) an equitable interest registrable as a land charge of Class G".

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County Courts Act 1959 (c. 22)

34. In Schedule 1 to the County Courts Act 1959 (county court jurisdiction under section 1(6) of the Land Charges Act 1972) in column 2 against section 10(8) of the Land Charges Act 1925 (re-enacted in the said section 1(6) for the words "or Class E" there shall be substituted the words "Class E or Class G".
CHAPTER II
MORTGAGEES MAKING FURTHER ADVANCES
Preliminary

35.--(1) This Chapter applies where the estate or interest held by the trustees is subject to a mortgage made, whether before or after the coming into force of Part I of this Schedule, for securing further advances.
(2) In this Chapter--
(a) "mortgage" includes a charge, and "mortgagee" shall be construed accordingly,
(b) "mortgagee" includes any person deriving title under the mortgagee.
Further advance to require consent of both co-owners

36.--(1) The trustees shall not without the consent of the husband and wife borrow any money by way of further advance secured by the mortgage.
(2) A person's consent is required by this paragraph, and shall for purposes of this paragraph be valid and binding, notwithstanding that person's minority.
(3) This paragraph has effect subject to paragraph 19 of this Schedule.
(4) It is hereby declared that no obligation to make a further advance shall be enforceable against the mortgagee so as to require him to make it without a person's consent required by this paragraph.
Avoidance of charge securing a further advance

37. If a further advance is made without a person's consent required by paragraph 36 above, the mortgage, so far as it secures that further advance, shall be of no effect if, and only if, before the making of the further advance--
(a) notice in writing was served on the mortgagee or his agent by or on behalf of the person whose consent was required stating that that consent was required, or
(b) that person's consent was required to the creation of the mortgage, and the mortgagee knew that that consent had been given.
Cases in which a further advance overreaches interest of husband or wife

38.--(1) The mortgage, so far as it secures a further advance, shall not overreach the interest of the husband or wife under the trusts if the further advance is paid or applied in contravention of section 27(2) of the Law of Property Act 1925 (capital money not to be paid to a single individual as trustee), and the mortgagee had, before the making of the advance, effective notice, as defined in paragraph 39 below, of that interest:
Provided that if the husband or wife was the person to whom, or by whose direction, the further advance was paid or applied this sub-paragraph shall not apply to that person's interest under the trusts.
(2) Except as provided by sub-paragraph (1) above the mortgage, so far as it secures a further advance, shall overreach the interests of the husband and wife under the trusts.
(3) This paragraph has effect whether or not the interest of the husband or wife under the trusts can be or is registered or protected under the Land Charges Act 1972 or the Land Registration Act 1925.
Meaning of effective notice

39.--(1) For purposes of paragraph 36 above the mortgagee has effective notice in the circumstances specified in this paragraph.

30 Jan 1996 : Column 1440


(2) The mortgagee has effective notice when notice in writing is served on him or his agent by or on behalf of the spouse stating that the relevant land, or the trustees' estate or interest, is subject to trusts.
(3) The mortgagee has effective notice as from the time when the mortgage is made if the trusts arose before that time and--
(a) the mortgage was made by two or more persons, or by a trust corporation known to the mortgagee to be acting as a trustee, or
(b) the mortgage did not overreach the interest of the husband or wife under the trusts.
(4) Notice under sub-paragraph (3)(a) above is effective notice of the interests under the trusts of both the husband and the wife, and notice under sub-paragraph (2) or sub-paragraph (3)(b) above is effective notice of the interest of the spouse by or on behalf of whom the notice is served, or as the case may be of the spouse whose interest was not overreached.").

The noble and learned Lord said: Amendments Nos. 207, 208 and 209 were grouped with a paving amendment and, although they were not considered, they were open to debate. In those circumstances, I do not propose to move them.

[Amendment No. 207 not moved.]

[Amendments Nos. 208 and 209 not moved.]

Schedules 4 and 5 agreed to.

Schedule 6 [Amendments of Children Act 1989]:


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