Smith v Smith

Judgment

Lord Justice Wilson:

A: INTRODUCTION

A wife appeals against an order made in unusual circumstances on the application of her husband by Mr Recorder Sapsford QC in the Principal Registry of the Family Division on 31 July 2009. His order, made two months prior to the hearing of a defended suit for divorce brought by the husband against the wife, was that, as joint owners of the matrimonial home at 23 Egerton Terrace, Knightsbridge, London SW3, in which the wife continued to reside, they should forthwith sell it with vacant possession. The order was made under s.14 of the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”).

The parties hold the home in their joint names as trustees for themselves as tenants in common in equal shares. Its value is hard to identify. The recorder took it to be “not less than £10 million”. But it might be as high as £14 million. For convenience I will take it as £12 million. Two years ago its value was significantly higher. The mortgage debt referable to it now stands at £7 million. The mortgage was placed into a basket of major currencies and this year, while the pound has weakened against other major currencies, its size, when expressed in sterling, has significantly increased. The amount of the instalments payable in respect of the mortgage varies greatly. In October 2008, when the husband issued his application under TOLATA, they were £22,250 per month (or £267,000 per year). By June 2009 they had decreased to £14,200 per month (or £170,000 per year). Other expenses referable to the home, in particular the cost of the housekeeper and the gardener and of utilities, then amounted, according to the husband, to £58,000 per year but, according to the wife, somewhat less. Thus, on 5 June 2009, when the recorder conducted the hearing of the application, regular expenditure on the home, borne by the husband, amounted – on the husband’s figures, which the recorder seems to have accepted – to £228,000 per year. Additionally the husband was making an allowance to the wife of £18,000 per year and meeting other expenses on her behalf. In respect of the husband’s own accommodation in Belgravia and Oxfordshire, the rent alone was running at £100,000 per year.

The husband’s usual net income from all sources is about £350,000 per year. So, when he issued his application, the basis of his case was that the home should be sold because it was impossible for him to continue to maintain it. A week before the hearing the wi