Ansari v Ansari

Matrimonial home – Registration in sole name of husband – Appellant wife registering home rights under Family Law Act 1996 after husband moving out – Sale by husband in knowledge of appellant’s rights – Purchasers granting charge over property to bank as security for mortgage loan – Whether appellant entitled to set aside charge – Whether charge a “reviewable disposition” under section 37(2) of Matrimonial Causes Act 1973 – Whether bank having defence under section 37(4) – Whether court still having power to order vacation of charge under section 37(3) – Appeal dismissedThe appellant lived with her husband in the matrimonial home, which was registered in the latter’s sole name, subject to a mortgage in favour of a building society. In late 2006, the husband left the property. The appellant registered notice of her matrimonial home rights pursuant to sections 30 to 33 of the Family Law Act 1996. In 2007, the husband sold the property for £88,000. Both he and the purchasers were aware of the appellant’s rights. On completion of the sale, the building society mortgage was discharged and the remaining proceeds of sale were paid to the husband. The purchasers took out a mortgage with a bank in the sum of £75,000 to fund the purchase, which was secured by a charge over the property.The appellant applied to the court for an order forbidding the husband from dealing with the proceeds of sale and to set aside the sale as fraudulent. However, she did not at that time seek any specific relief in respect of the bank charge, which was registered in August 2007. At a hearing of the applications, the district judge held that the sale was a reviewable disposition under section 37(2) of the Matrimonial Causes Act 1973 and that, subject to any argument advanced by the bank as an intervener, both the sale and the charge would be set aside. The bank resisted the making of that order on the ground that it had obtained the charge in good faith and for bona fide consideration within the meaning of section 37(4). However, the judge held that he none the less had power to order the bank to vacate its Land Registry entry pursuant to the power under section 37(3) to “give such consequential directions as it thinks fit for giving effect to the order including directions requiring the making of any payments or the disposal of the property”. He made an order accordingly.An appeal by the bank was allowed on the ground that the section 37(3) power was not sufficiently wide to permit a judge to set aside a disposition by a party other than the husband or wife. The appellant appealed.Held: The appeal was dismissed. (1) The charge granted by the purchasers was not a reviewable disposition within the meaning of section 37(2). That section applied only to a disposition by “the other party to the proceedings”, made for the purpose of defeating a claim for financial relief. That “other party” could only be the respondent to the application for financial relief, namely the husband. The fact that the bank had been granted permission to intervene in the proceedings did not make it a party to those proceedings, as defined in section 37(1). The sale by the husband and the purchasers’ grant of the charge to the bank could not be regarded as a single disposition since they were two separate agreements, contained in two separate documents and made between different parties; the husband was not a party to the bank’s charge.(2) Had the charge been a reviewable disposition, the bank would have had a good defence, under section 37(4), to the claim to set it aside. The fact that the bank had notice of the appellant’s rights, by virtue of their registration, did not put it on notice of the husband’s intention to defeat the appellant’s claim for financial relief. The fact that the wife’s home rights were to remain on the register did not of itself indicate such an intention on the part of the husband. The bank had acted in good faith.(3) Section 37(3) could, in appropriate circumstances, be used to set aside a disposition that was made subsequent to the reviewable disposition, by a party that was not a party to the proceedings for financial relief. The words “consequential directions” in section 37(3) were not confined to directions concerning the repayment of moneys. If all parties conspired to defeat a wife’s claim, both dispositions could be set aside, the first as a reviewable disposition under section 37(2), and the second pursuant to section 37(3). Otherwise, a wife’s legitimate claim could easily be defeated. However, section 37(3) should not be used to set aside a subsequent disposition for valuable consideration to a party that acted in good faith and without notice of the intention to defeat the wife’s rights. Accordingly, section 37(3) did not assist the appellant in the instant case.Christopher McNall (instructed by Beevers, of Manchester) appeared for the appellant; Simon Clegg (instructed by Rees Page, of Wolverhampton) appeared for the defendant/respondent.Sally Dobson, barrister