HL Deb 30 January 1996 vol 568 cc1433-7

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—

  1. (a) notwithstanding that the land ceases to be comprised in a property in which they have a matrimonial home; and
  2. (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—
  1. (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
  2. (b) that estate or interest is held by trustees.
 (3) In this Chapter, where the context permits, in relation to relevant land—
  1. (a) in accordance with sub-paragraph (1)(b) above, references to "husband" and "wife" include former husband and former wife,
  2. (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—
  1. (a) "the trusts" means the trusts under which a husband and wife are co-owners of relevant land,
  2. (b) "the trustees" means the trustees of the trusts,
  3. (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,
  4. (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—

  1. (a) in paragraph 20 sub-paragraphs (1)(a) and (2)(a);
  2. (b) in paragraph 21 sub-paragraph (1);
  3. (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. (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—

  1. (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
  2. (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
  3. (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—

  1. (a) where the legal estate is registered land, subject to paragraph 24(2) and (3) below;
  2. (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.—(I) 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—

  1. (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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  2. (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—
  1. (i) for a vesting or other order for giving effect to the proposed transaction, or
  2. (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—

  1. (a) of that person's beneficial interest under the trusts; and
  2. (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—

  1. (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
  2. (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(I)(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 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—
  1. (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
  2. (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—

  1. (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
  2. (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—
  1. (i) direct the respondent to make to the applicant or any other person such payments at such times as may be so directed; and
  2. (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. (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—
  1. (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
  2. (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.

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