In Q v Q [2021] EWHC 1757 (Fam) (28 June 2021) Cobb J dealt with a wife’s stale application for enforcement of arrears of a spousal periodical payments order. In dismissing the wife’s application to enforce the arrears of maintenance Cobb J reminded practitioners of the provisions of s.32 of the Matrimonial Causes Act 1973 (“MCA 1973”) which provides as follows:
“A person shall not be entitled to enforce through the High Court or [the family court] the payment of any arrears due under an order for maintenance pending suit, an interim order for maintenance or any financial provision order without the leave of that court if those arrears became due more than twelve months before proceedings to enforce the payment of them are begun.”
“… the rule of practice in relation to the non-enforcement of ‘stale arrears’ dates from the days of the ecclesiastical courts (see Kerr v Kerr [1897] 2 QB 439 at p. 443), when bank accounts and savings were no doubt much rarer than they are today and maintenance orders were literally a hand (or pocket) to mouth matter. The philosophy underlying the rule must therefore have been that if the complainant waited a year to seek enforcement of the order, she did not need the money, or at least had managed well enough without it, and the husband might reasonably regard the liability as something which he could forget about. This is not to say that the rule has changed in modern times when a wife might reasonably live on her savings for a period and expect to be reimbursed by a single large payment. However, it does point to the fact that the courts should take account of the extent to which the complainant has sought to assert her rights.”
In the following paragraph, Cobb J dealt with the position under the Limitation Act 1980 thus:-
It is, however, important to note that s.32 MCA 1972 is limited to enforcement of “financial provision” orders. Practitioners should not lose sight what this relates to. Financial provision orders are defined by s.21(1) MCA 1973 as:
“The financial provision orders for the purposes of this Act are the orders for periodical or lump sum provision available (subject to the provisions of this Act) under section 23 below for the purpose of adjusting the financial position of the parties to a marriage and any children of the family in connection with proceedings for divorce, nullity of marriage or judicial separation and under section 27(6) below on proof of neglect by one party to a marriage to provide, or to make a proper contribution towards, reasonable maintenance for the other or a child of the family
So, in essence, financial provision is limited to periodical payments orders (either spousal or for children) and lump sum orders.
Property Adjustment Orders are defined separately by s.21(2) MCA 1972 as follows:-
“The property adjustment orders for the purposes of this Act are the orders dealing with property rights available (subject to the provisions of this Act) under section 24 below for the purpose of adjusting the financial position of the parties to a marriage and any children of the family on or after the grant of a decree of divorce, nullity of marriage or judicial separation, that is to say –
- any order under subsection (1)(a) of that section for a transfer of property;
- any order under subsection (1)(b) of that section for a settlement of property; and
- any order under subsection (1)(c) or (d) of that section for a variation of settlement.”
So, property adjustment orders are not caught by the provisions of s.32 MCA 1973: but what of The Limitation Act 1980? Can these orders nevertheless be enforced more than 6 years after the date upon which they were made?
Recently, this author had experience of a case where a property adjustment order had been made requiring the husband to transfer his 50% beneficial interest in a French property to the wife. Nothing had been done for 5 years+ to execute a transfer of the husband’s interest in the property to the wife. The wife then died and her two adult sons (i) inherited her estate and (ii) were her personal representatives. They were thereby placed in the invidious position of having to seek to enforce the order against their own father on behalf of their mother’s estate – but could they, given that more than 6 years had by then elapsed? My solicitors thought not and sought my advice.
I was able to reassure the solicitors that the Limitation Act 1980 did not apply in these circumstances. The answer was to be found in the fact that execution of a judgment, which includes enforcement, is not considered to be a fresh action within the meaning of s.24(1) Limitation Act 1980 and so is not time barred.
The leading case is Lowsley v Forbes [1999] 1 AC 329. The facts can be stated shortly: –
In February 1981 the plaintiffs obtained judgment by consent against the defendant in the sum of £70,000. The defendant then went abroad, and the judgment debt remained unpaid. In 1992 the plaintiffs discovered that the defendant owned property and had a bank account in England. In July 1992 the master granted the plaintiffs leave to enforce the judgment, a charging order nisi on the defendant’s property and a garnishee order nisi over his bank account, both in a sum representing the judgment debt plus 11½ years’ interest. The defendant applied to set aside the garnishee and charging orders on the ground that execution of the judgment was time-barred by s.24(1) of the Limitation Act 1980.
The Court of Appeal, allowing an appeal by the plaintiffs and dismissing a cross-appeal by the defendant, held that the judgment debt was not time-barred by section 24(1) and that the interest accruing on it was not limited by section 24(2).
The House of Lords (Lord Lloyd giving the leading speech) held:
that on their true construction the words “an action … upon any judgment” in s.24(1) of the Limitation Act 1980 meant a fresh action and did not include proceedings by way of execution of a judgment in the same action; and that, accordingly, the plaintiffs were entitled to enforce the judgment by way of garnishee [as Third Party Debt Orders were then called] and charging orders despite the passage of more than six years since the judgment had been entered; and allowing the appeal in part, that the words “no arrears of interest … shall be recovered” in section 24(2) bore their ordinary meaning and the subsection therefore barred execution for interest after six years in respect of all judgments.
Thus, save in respect of claims to interest, applications for Third Party Debt Orders and charging orders may be made notwithstanding the expiry of six years from the date of judgment, and the same principle would thus appear to apply to all other forms of enforcement not governed by specific limitation rules. Therefore, in my case referred to at paragraph 8 above, I was able to advise my solicitors make an application to the court that the District Judge execute the transfer in place of the husband pursuant to s.39 of the Senior Courts Act 1981.
However, while this is the strict position in law, many forms of enforcement process are discretionary and the court may not be sympathetic towards a creditor who has delayed without good cause in enforcing his order.
As a footnote, Roberts J held in Mann v Mann – [2017] 1 FLR 559, after reviewing the conflicting academic texts on the interpretation of Lowsley in relation to the recoverability of interest, that:
[150] “accordingly, in my judgment the wife is precluded by the decision in Lowsley and as a result of s 24(2) of the 1980 Act from recovering arrears [of interest] from 2005 to the present day. Her entitlement to interest as a matter of law on the outstanding sums payable runs for 6 years (and no more)”.
This is entirely consistent with the Court of Appeal decision in Yorkshire Bank Finance Ltd v Mulhall – [2008] 3 EGLR 7 where, (after reviewing Lowsley), Lloyd LJ held
“[24] Thus, if a charging order is made more than six years after the date of the relevant judgment, it will secure arrears of interest on the judgment debt, but only for the period of six years up to the date of the charging order”.
Stephen J. Murray
20 July 2021
Known for his robust and thorough approach to cases, Stephen Murray originally pursued a career with the Derbyshire Constabulary. After two years in the police service he left to go to university; graduated with a law degree from Leicester University in 1985 and was called to the Bar in 1986 by Inner Temple having come in the top 8% in the Bar Finals and won two separate scholarships.
In his early years at the Bar, Stephen had a mixed common law practice. For many years now Stephen has specialised in matrimonial finance (with a particular emphasis on complex financial remedy cases for high net worth clients involving issues such as trusts and company valuations) and related fields, particularly applications under the Inheritance (Provision for Family and Dependants) Act 1975 and cohabitation disputes.
For more information on Stephen Murray please contact Chambers Director James Parks or Senior Clerk Camille Scott by phone 0161 278 8263 or email family@18sjs.com