Property adjustment orders — overviewGeneral principles

The Matrimonial Causes Act 1973 (MCA 1973), s 24 defines the court’s powers to make a property adjustment order for a party to the marriage or to any children upon the grant of a decree of nullity, divorce or judicial separation. There are corresponding provisions in the Civil Partnership Act 2004 (CPA 2004). The order will not take effect until after the pronouncement of a decree absolute or final order (in divorce, nullity or dissolution) or the granting of a decree of judicial separation or separation order. Accordingly, the court does not have the power to make an interim property adjustment order.

There is no definition of property in respect of which jurisdiction may be exercised. As long as the property is sufficiently identifiable to be specified in the order, it may be subject to a property order. A property adjustment order includes:

• a transfer of property

• a settlement of property

• a variation of any pre-nuptial or post-nuptial settlement

• an order extinguishing or reducing the interest of either party under any pre-nuptial or post-nuptial settlement

The court will approach the question of property adjustment having regard to all the s 25(2) factors, with first consideration being given to the welfare of any child of the family. The starting point will be the provision of accommodation for the children during their minority. The overarching objective is fairness, which avoids discrimination between the parties in their respective roles as homemaker and breadwinner. The court must check the effect of any property adjustment order against the yardstick of equality and provide reasons for any departure.

Sale of property

Under s 24A the court has jurisdiction to make an order for sale if there has been a lump sum or property adjustment order. Any third party with a beneficial interest in the property must be given the opportunity to be heard on whether it should be sold.

Transfer of property

The court has the power to order that either party to a marriage or civil partnership shall transfer to the other party, to any child or to such person as may be specified for the benefit of a child, such property as may be specified, being property to which the payer is entitled, either in possession or reversion.

In respect of children, there is no jurisdiction to make an order for transfer to a child if that child is over the age of 18 unless there are special circumstances, eg disability or continuing education.

Third party interests

The court may only deal with property to the extent that one of the spouses or civil partners is entitled to it. Where a third party asserts a beneficial interest in the relevant property, the court must first determine the extent of that interest, applying proprietary principles before conducting the ancillary relief (financial order) exercise. There is no express provision on an application under s 24 that a third party whose interests may be affected by an order must be served with the application, in contrast with the court's duties under s 24A. However, the court cannot adversely affect third-party rights unless those third parties have been given notice of the proceedings and the opportunity to intervene, in which case they will be bound by the court's decision. Where a third party does have such an interest in the relevant property, the district judge should be asked to direct that the appropriate Forms A and E should be served on that person in accordance with their powers under the Family Proceedings Rules 1991 (FPR 1991), r 2.59(3) (for applications issued prior to 6 April 2011) or the Family Procedure Rules 2010 (FPR 2010), 9.13 (for applications issued on or after 6 April 2011).

Mesher and Martin orders

A Mesher order provides for the postponement of sale of the former matrimonial home, allowing the occupying party, usually the primary carer of the children of the family, to remain there. The other party will then have to wait to realise their interest in the former matrimonial home. During the period of deferment, the home can either be held in joint names on trust for sale or transferred to the occupying party with a charge-back to the other. The sale of the property is postponed until the first of specified trigger events.

A Martin order provides for an indefinite postponement of sale: a party to the marriage is to remain in the property for the remainder of their life or until a specified trigger event occurs, eg remarriage or voluntary removal/sale.

Execution of transfer

Under MCA 1973, s 30 the court may direct that the matter be referred to conveyancing counsel of the court to settle the instrument to be executed. In these circumstances the court may direct that the decree absolute/final order be deferred until the instrument has been executed.

Where a spouse or civil partner refuses or neglects to execute a deed of transfer as ordered by the court, the court may direct that the execution be effected by such person as it nominates and a deed so executed operates as if executed by the party originally directed to execute it.