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Housing Need: A Plea for Change

The key evidential issue in most financial remedy claims is housing need: not, admittedly, the ‘big money’ cases that grace the law reports; but in the more typical case where more modest assets must somehow be fairly divided so as to meet needs.

Anyone who has bought a property will know that the golden rule is, no matter your budget, the house or flat you really want is going to be out of reach. House hunting involves compromise: location over size, convenience over traffic noise, number of bedrooms over condition of house. It can be a frustrating and opaque experience, thanks in part to English conveyancing rules (where agreements are only binding on exchange), and in part to estate agents who tend to fall into two camps: incompetent (see Lionel Hutz from the Simpsons) and/ or belligerent (see Glengarry Glen Ross: Always Be Closing).

The problem – and it is I’m afraid a very real problem – is how the issue of housing need is currently resolved in court. There are basically three stages to the current procedure:

  • At the First Appointment, the court will typically direct both parties to file property particulars and evidence of mortgage capacity. This may support the assertion in Form E as to capital needs;
  • At the FDR, the bundle will probably contain a selection of ten or a dozen property particulars. The FDR judge will therefore have some idea of what each party contends for, but no evidence explaining their preferences (the FDR will generally take place before s.25 statements are exchanged). In some cases, the position statements (exchanged at 11am before the FDR) will provide an explanation; in some cases they will not. In any event, (1) the FDR judge may be reluctant to give an indication on what is fundamentally a factual issue without having heard the parties’ evidence; (2) but in any event the court’s ultimate function is not to identify the precise property in which the applicant should live, but to make a broad brush assessment of housing need; and (3) the property particulars prepared for FDR generally won’t be the ones before the court at a final hearing, because of changes in the housing market, and sometimes changes (i.e. a reduction) in the available assets to go around.
  • In advance of a final hearing, the parties exchange further property particulars, upon which they are cross-examined at final hearing. Sometimes these are explained in the s.25 statement; sometimes they are not, whereby a request will be made to take the applicant through these in – often lengthy – examination in chief. In which case potentially pivotal evidence is heard for the very first time during the hearing. Then, following some frantic scribbling by the other counsel, there will follow what is often the longest section of the cross-examination, which typically generates significantly more heat than light.

So, what is the problem with that?

Firstly, as with income need, the current system enables – one might say incentivises – each party to aim high (or low), in the expectation that the court will probably navigate somewhere between the polarities of each party’s case. In practice what this means is that a judge will have from the wife’s side a half-dozen property particulars at, say £1 million; and a half dozen from the husband’s side at £500,000, with nothing in the middle. Some judges will fill this evidential gap by going online during the hearing to take a look at Rightmove. Others will apply a ‘judgment of Solomon’. The effect is that the court’s finding of fact on housing need – which may be the main driver of capital division – is based not on either party’s evidence but informed guesswork, or upon a judge making his own enquiries by searching online during the hearing:

Second, documentary evidence of housing need involves the operation of a species of Sedley’s Law of Documents: property particulars are frequently illegible, sometimes consisting of little more than a postage stamp sized photo, they can be printed in such small font that it is impossible to read, they may not contain a floor plan, they frequently have already been sold and so are off the market, etc.

Thirdly, oral evidence about housing need is often of fair to middling quality. There are, admittedly, some instances where a helpful or useful answer is given (e.g. “No, I can’t live there. It’s a retirement home not available to the under 60s and I have three young children”, or, “No, that house is outside the catchment area of the school we agree our children should go to”), but such answers will be an island in a sea of generalised, and often self-serving, comments about a property being “outside my support network”, “the house is ex-council” or “it’s near to a dodgy area”. In every case there may be at least one odd or unexpected answer which tells more about the witness than the case.

Fourthly, many practitioners seem to think that the way to succeed on this issue is to instruct their lay client to religiously visit every single property so that when cross-examined, they can triumphantly respond “I’ve been there. The plumbing’s dodgy”, whereby counsel can submit in closing that their client’s evidence on housing need was eminently credible whereas the other party’s was not (often because he has not actually visited them). In some cases this can be quite unfair: not everyone can devote the hours it takes to visiting a dozen properties, particularly if they have child care responsibilities or are holding down a job. But in any event, the evidence must be taken with a pinch of salt bearing in mind what is actually being asked here (effectively, what is your opinion of a properly which you’ve already said is too cheap?). It is not difficult to say something is wrong with a property: query whether this is actually a substantial issue that genuinely means it is unsuitable, or can little weight be attached to the evidence?

At the end of this sometimes unedifying process, the judge is meant to reach a view as to housing need based upon (a) property particulars which are probably all outside the reasonable or affordable bracket, (b) documents which are either illegible or which don’t provide the necessary information, (c) oral evidence which might be sporadically relevant but which more often is emotive and self-serving.

In such circumstances, in an discretionary area of law which requires a fair outcome for both parties (on what might be described as a zero sum game), the court should not be blamed in reaching a broad based view, which might even have the appearance of reverse-engineering.

What can be done?

I have the following suggestions (some of which I appreciate are already followed by some practitioners):

(1) At an early stage in the case (e.g. in a questionnaire) the objective basis of a party’s case is tested. In an ideal world, Form E could be revised to require more information. But otherwise this could be raised within a questionnaire: “Please state (a) how many bedrooms you seek, (b) in which area(s) you are looking, (c) what sort of property you are looking for, including in size, (d) what other factors are important, e.g. in relation to catchment areas etc.”

(2)    That there must be in every bundle (FDR and final hearing) an agreed map showing where the parties’ properties are located;

(3) That all of the property particulars must include a floorplan, showing total floor space in square feet, and must be legible. Many judges find this information most useful in getting a feel for the issue;

(4) Perhaps most controversially, that the parties collaborate to produce a range of property particulars, to bridge the evidential gap between what one party seeks and what the other asserts will suffice. Accordingly the court will be able to see, not only what each party contends for, but what could be afforded in the middle. This would not form part of either party’s case but it would mean the court could (in its quasi-inquisitorial function) ask a witness about properties somewhere in the middle. Hence if W says she seeks £1m and H says £500k, that there should be a selection of properties somewhere in the middle.

Ultimately, housing need – which is often the pivotal argument in determining how assets are divided – should be addressed in a more rigorous and fair way, and less like an outpost of the Wild West.

Alexander Chandler QC

24 August 2022

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