Clutton v Clutton

Section 25A(1) requires the court to consider whether a clean break is appropriate, not to pursue one regardless of other statutory considerations. An out-and-out transfer of the matrimonial home may therefore be unjust where it permanently deprives the other spouse of any share in the marriage’s sole capital asset. A Martin order, postponing the former spouse’s charge until death, remarriage or cohabitation, may achieve finality while preserving a fair share. A Mesher order should be used exceptionally. It is unsuitable where there is real doubt that the occupying spouse will be able to re-house when the charge takes effect, but may be appropriate where sufficient capital will then be available to provide alternative accommodation.

The husband appealed from an order made by His Honour Judge Arthur in the Birkenhead County Court on 11 July 1989. The judge had ordered him to transfer his entire interest in the former matrimonial home to the wife, making a clean break without preserving any contingent share for him.

The parties had been married for 20 years and had two children. Their former matrimonial home was their only capital asset. The husband sought a Martin order giving him one-third of the proceeds on the wife’s death, remarriage or cohabitation. He later sought a Mesher order postponing enforcement until the younger child reached adulthood. The central questions were whether the clean-break objective justified an immediate out-and-out transfer and whether either form of postponed interest was appropriate.

1. Appeal allowed in part. The clean-break objective under Matrimonial and Family Proceedings Act 1984, section 25A(1), is not an overriding principle. The court must consider whether terminating the parties’ financial obligations is just and reasonable in the circumstances.
2. Per Lord Justice Lloyd, an out-and-out transfer was plainly wrong because it deprived the husband for ever of any share in the sole capital asset without sufficient corresponding benefit to the wife. The husband’s greater earning capacity and the termination of maintenance obligations did not justify that result. The Court of Appeal could intervene because the judge gave no reasons and the conclusion was plainly wrong, while recognising the limited appellate function described in Whiting v Whiting [1988] 2 F.L.R. 189.
3. A Martin order was appropriate. A charge taking effect on the wife’s death, remarriage or cohabitation preserved the husband’s eventual share while avoiding the disadvantages associated with an immediate sale. The suggested division of one-third to the husband and two-thirds to the wife was appropriate.
4. A Mesher order was rejected. It remains available exceptionally where the children’s interests require continued occupation and sufficient assets will enable the occupying spouse to re-house when the charge takes effect. It should not be made where that re-housing outcome is materially uncertain. That uncertainty existed here.
5. Mr Justice Ewbank agreed that flexibility is required, but that an asset acquired by the spouses’ joint efforts should generally remain capable of eventual sharing. Postponement until death, remarriage or cohabitation does not generally create the re-housing difficulties associated with postponement until children grow up. The order was varied so that the proceeds would be divided one-third to the husband and two-thirds to the wife on the wife’s death, remarriage or cohabitation. The appellant received the costs of the appeal, subject to the stated enforcement and legal-aid directions.

• Court of Appeal: allowed the husband’s appeal in part and replaced the order transferring his entire interest with provision for division of the sale proceeds one-third to the husband and two-thirds to the wife on the wife’s death, remarriage or cohabitation.
• Birkenhead County Court: His Honour Judge Arthur ordered an out-and-out transfer of the matrimonial home to the wife on 11 July 1989, without giving reasons.
• Registrar Yates: On 24 October 1988, ordered transfer subject to a £7,000 charge in favour of the husband, together with maintenance and costs provisions.