Ansari v Ansari & Ors

A disposition is reviewable under section 37(2)(b) of the Matrimonial Causes Act 1973 only if made by the respondent to the financial relief proceedings. A charge granted by third-party purchasers therefore falls outside that provision.

Notice of registered matrimonial home rights does not, without more, constitute notice of an intention to defeat a claim for financial relief. Although section 37(3) may permit the court to set aside a later disposition as a consequential direction where recipients participate in the defeating scheme, that discretion should not be exercised against a person who gave valuable consideration, acted in good faith and lacked notice of the relevant intention.

The husband sold the matrimonial home to third-party purchasers despite his wife's registered home rights. The purchasers financed the acquisition by granting the Bank a charge. The District Judge found that the sale was intended to defeat the wife's claim for financial relief, set it aside under section 37(2) of the Matrimonial Causes Act 1973, and directed the vacation of the Bank's charge.

On the Bank's appeal, His Honour Judge Raynor QC held that he was bound by Green v Green [1981] 1 WLR 391. He concluded that section 37(3) did not permit the setting aside of a charge between third parties and a bank. The wife appealed.

The Court of Appeal considered whether the charge was itself reviewable, whether the Bank was protected by section 37(4), and whether the charge could instead be set aside as a consequential direction under section 37(3).

1. The appeal was dismissed unanimously. The Bank's charge was not a reviewable disposition under section 37(2)(b) of the Matrimonial Causes Act 1973. That provision applies only where the respondent to the financial relief proceedings has made the disposition with the relevant intention. The charge was granted by the purchasers, not by the husband. The purchase and charge remained separate dispositions between different parties, although the loan funded the purchase. The Bank's intervention did not make it a respondent to the financial relief proceedings: per Longmore LJ, with whom Wilson and Lawrence Collins LJJ agreed, at [12]–[13].

2. Had the charge been reviewable, the Bank would have been protected by section 37(4). Registration of the wife's home rights gave notice of those rights, but did not itself give notice that the husband intended to defeat her claim for financial relief. The wife accepted that the Bank acted in good faith, and there was no finding that either the Bank or its solicitors knew of the husband's intention: [15]–[18].

3. Section 37(3) is not invariably confined to directions for repayment or disposal of money. Its broad language may permit the setting aside of a disposition made after the respondent's reviewable disposition. For example, relief may be available where successive recipients knowingly participate in a scheme to defeat the applicant's claim. The narrower approach in Green v Green [1981] 1 WLR 391 was not accepted: [19]–[21].

4. Nevertheless, the section 37(3) discretion should not be exercised to set aside a subsequent disposition made for valuable consideration to a person acting in good faith and without notice of the respondent's defeating intention. The Bank neither participated in a conspiracy nor had notice of that intention. The charge therefore remained valid, subject to the wife's registered matrimonial home rights, and Judge Raynor's conclusion was upheld: [22]–[24].

1. Court of Appeal (Civil Division): Permission to appeal was granted by Stanley Burnton LJ. The court subsequently dismissed the wife's appeal unanimously and upheld the restoration of the Bank's charge: [2008] EWCA Civ 1456.

2. Tameside County Court, His Honour Judge Raynor QC: The Bank's appeal was allowed. The directions vacating and restructuring the Bank's charge were set aside, and the remaining ramifications were remitted to the District Judge.

3. Tameside County Court, District Judge Osborne: The sale was held to be a reviewable disposition under section 37(2) of the Matrimonial Causes Act 1973. The judge directed the vacation of the Bank's registered charge and made related financial directions.