Ram v Ram & Ors

A court drawing a consent order must remain within the parties’ agreed terms. Additional enforcement provisions, particularly those supported by a penal notice, require separate proceedings on notice and a proper opportunity to be heard.

Under section 24A of the Matrimonial Causes Act 1973, an order for sale requires a present beneficial interest in possession or reversion. A possible surplus from an uncompleted bankruptcy gives the bankrupt no such interest. Third-party beneficial owners must also be allowed to make representations before an order is made; a later liberty to apply is insufficient.

The husband appealed against an order made by Hedley J in ancillary relief proceedings. Correspondence between the spouses’ solicitors had produced a four-term compromise intended to achieve a clean break. The resulting order went further by directing the sale of property vested in the husband’s trustee in bankruptcy, continuing periodical payments and imposing an immediate enforcement regime supported by a penal notice.

The husband challenged the provisions exceeding the compromise and the court’s jurisdiction to order the sale. His brothers separately challenged the sale and possession orders affecting property in which they held beneficial interests. The central issues were whether the additional provisions had been made fairly and whether section 24A of the Matrimonial Causes Act 1973 conferred jurisdiction over property vested in a trustee in bankruptcy.

1. The husband’s appeal was allowed. The order had to be reduced substantially so that it expressed the agreed compromise without the additional enforcement machinery. The agreement contemplated a consent order and a clean break. It did not contemplate an immediate order for sale, continued periodical payments or a penal regime. Such enforcement provisions could be obtained only through separate proceedings on notice, with a proper opportunity for the husband to be heard.

2. Section 24A(6) of the Matrimonial Causes Act 1973 required the husband’s brothers, as non-parties holding beneficial interests in the property, to receive an opportunity to make representations before an order for sale was made. Giving them liberty to apply after the event did not satisfy that mandatory requirement.

3. Lady Justice Arden, with whom Lord Justice Thorpe and Lord Justice Neuberger agreed, held that section 24A(1) requires a party actually to have a beneficial interest in the relevant property. An interest in reversion is a present entitlement to a future interest, such as ownership subject to a lease or life interest. It does not encompass a merely contingent possibility.

4. Property in a bankrupt’s estate vests in the trustee under section 306 of the Insolvency Act 1986. Discharge does not reverse that vesting. Although section 330(5) entitles the bankrupt to any eventual surplus, the bankrupt has no beneficial interest in particular unadministered assets until the surplus is finally ascertained. The husband therefore had no beneficial interest in the property, whether in possession or reversion, and the court had no jurisdiction under section 24A(1) to order its sale. Nor was there any inherent jurisdiction to do so.

5. An order requiring an act to be done must specify the time for compliance. Where a penal notice is attached, that time should run from service of the order.

6. Application 0882 was granted and the husband’s appeal allowed. The brothers’ application 2247 for an extension of time and permission to appeal the original order was refused. Application 2248 was granted, the appeal allowed and Judge Hindley’s subsequent order set aside in its entirety.

1. Court of Appeal (Civil Division): In [2004] EWCA Civ 1684, the husband’s appeal was allowed and Hedley J’s order was substantially reduced to reflect the parties’ compromise. The brothers’ appeal against Judge Hindley’s consequential order was also allowed, but their out-of-time application to appeal Hedley J’s original order was refused.

2. High Court, Queen’s Bench Division, Birmingham District Registry: Hedley J made an ancillary-relief order on 3–4 March 2004 which incorporated the parties’ compromise but also imposed further sale, payment and enforcement provisions.

3. Subsequent trial-court proceedings: Judge Hindley made orders implementing Hedley J’s order, including possession and sale relief concerning 11 Westfield Road. Those orders were set aside by the Court of Appeal.