AB v CB

An arrangement is a nuptial settlement where it makes continuing provision for one or both spouses. Where a trust gives trustees power to advance the whole trust property to a spouse, the settlement may comprise the property itself, not merely a right of occupation. Variation requires a careful balance between the matrimonial home and the settlor’s intention that the property should remain within the family estate. Contributions may be compensated through variation without determining whether they create a beneficial interest. The needs of a new partner or later family do not take priority over the first spouse’s reasonable needs.

The applicant sought ancillary relief after separation and divorce proceedings. The former matrimonial home was held in a family trust established during the marriage. The wife argued that the trust was a nuptial settlement capable of variation and that the property and her contributions should be taken into account. The trustees argued that only the husband’s occupation right was variable and that variation should not prejudice the remaindermen or the children.

The court also considered the wife’s needs, the husband’s housing position, the parties’ contributions and the effect of the husband’s later relationship. In a later addendum, the trustees sought permission to appeal.

1. Nuptial settlement. The trust satisfied the test of an arrangement making continuing provision for one or both spouses. The matrimonial home was held for the husband’s benefit and was intended to provide a home for him and his wife.
2. Scope of variation. The court held that the settlement comprised the farmhouse and not merely the husband’s right to occupy it. Clause 5.2 gave the trustees power to advance the whole property to the husband. That feature made the settlement as a whole, and all property captured by it, variable under Matrimonial Causes Act 1973, section 24(1)(c).
3. Exercise of discretion. The court gave substantial weight to the settlor’s intention that the property should remain available as a farm or estate asset. That had to be balanced against the central importance of the matrimonial home and the sharing principle described by Lord Nicholls in Miller v Miller [2006] UKHL 24. The wife received £23,000 outright for contributions to the property and £134,000 on life-tenancy terms, preserving the reversion for the estate.
4. The court considered it unnecessary to decide whether the wife’s contributions created an actual beneficial interest. Justice could be achieved by varying the trust to provide for the value of those contributions.
5. The wife’s needs were assessed in light of her assets and her new relationship. A later partner did not take priority over her claim. The court applied the principle in Vaughan v Vaughan [2011] 1 Fam 46 that an award should not prioritise a second wife, still less an unmarried new partner.
6. The trustees’ application for permission to appeal was dismissed. The judge stated that, as a matter of practice, permission should ordinarily first be sought from the judge at first instance, consistently with Re T (A Child) [2002] EWCA Civ 1736.

This was a first-instance ancillary-relief judgment. In a later addendum, the trustees’ application for permission to appeal was dismissed.