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In Financial Proceedings, time is of the essence. Where matrimonial assets are at the risk of repossession, a failure to act swiftly can lead to serious and irreversible financial consequences for both parties. In a recent matter, we successfully secured an interim order for sale of matrimonial properties to preserve the matrimonial port and to prevent avoidable dissipation of assets.  

In this case, the spouses had three matrimonial properties, which includes a matrimonial home, a buy to let residential and a commercial property all owned by the spouses as tenants in common. The parties were separated and divorced. During the course of the financial proceedings, both spouses lost their jobs and their liabilities increased substantially. One of the matrimonial properties, i.e, the buy to let house was already repossessed by the banks due to default on mortgage payments. The matrimonial home and the commercial property subsequently fell under the risk of repossession due to significant mortgage arrears. It is relevant to note that during repossession, a property would be sold at an auction at an undervalue which does not properly contribute to the matrimonial pot and it results in the dissipation of assets without proper reason. 

Hence, we made an application to allow interim sale of a matrimonial asset while the outcome of the proceedings was awaited under the following legal provisions

1. Rule 20.2(1)(c)(v) of the Family Procedure Rules provides powers for interim order for sale of a relevant property which is of a perishable nature or which for any other good reason it is desirable to sell quickly
2. Section 17 of the Married Women’s Property Act 1882 grants the court powers to deal with questions between husband and wife as to property to be decided in a summary way.
3. Section 14 of the Trusts of Land and Appointment of Trustees Act 1996 grants the powers for a court make an order on the application of person who has interest in the property. 
4. Section 7(7) of the Matrimonial Causes (Property and Maintenance) Act 1958 provides the power to sell the property.

The court was referred to various precedents which includes 

1. In WS v HS [2018] EWFC 11, Mr Justice Cobb observed in para 56 that “The purpose of the court in exercising the power to order sale is to avoid the injustice that would otherwise result by the property becoming worthless or significantly reduced in value during the interval between the application for sale and the determination of the proceedings” 
2. In BR v VT reported in [2015] EWHC 2727 (Fam), Mr Justice Mostyn observed in para 2 that “ There are three procedural routes whereby such interim relief may be awarded. The first is by means of an order made under section 17 of the Married Women’s Property Act 1882 (“MWPA”), as clarified by section 7(7) of the Matrimonial Causes (Property and Maintenance) Act 1958, which expressly confirms the power to order a sale. The second is by an order made under sections 13 and 14 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). This route depends on both spouses having a beneficial interest in the property. The third is under FPR 2010 rule 20.2(1)(c)(v). This provides that the court may grant as an interim remedy an order “for the sale of relevant property which is of a perishable nature or which for any other good reason it is desirable to sell quickly”

The judge referred to various authorities and agreed with our legal position. The court recognised the imminent risk of repossession and ensured that the properties could be sold for their true value on the open market and the sale proceeds to be held by the solicitors to be distributed to the parties after the conclusion of the financial proceedings. This preserved the matrimonial pot and ensured that the parties do not lose everything to bank fees and below value auction prices.