Sheriff rules house and land on which it was built could be valued separately in matrimonial property dispute



Scottish Legal News

A sheriff has ruled that a family home that was built on a plot of land owned by one party to a marriage but which was not matrimonial property could be valued separately from the land for the purposes of calculating financial provision on divorce.

The pursuer claimed that when the house was built on the land, the land “converted” to matrimonial property as a result of the “accession” of the house to the land, while the defender argued that when the house was built on the land it became “indivisible” from the land and thus “ceased to be matrimonial property”.

However, Sheriff William Summers at Aberdeen Sheriff Court rejected both arguments and held that the house and the land could be valued separately – an approach that was “consistent” with the general theme of the Family Law (Scotland) Act 1985, which defined matrimonial property and set out a statutory framework for dealing with the division of parties’ assets on divorce.

Matrimonial property

The pursuer “GG” raised a divorce action seeking a capital payment of £200,000 from her husband “WG”, which sum was calculated in part on the basis that the house and land was matrimonial property and that the value of that property should be included in the division of the parties’ assets comprising matrimonial property.

The court heard that the defender purchased the plot in 1994 before the parties’ relationship began and that the house was built in 1997, by which time they were in a “stable, long-term relationship”.

The couple married in 2003 and at the date of separation the house had been occupied by the defender, the pursuer and her children for more than 10 years.

A debate took place in relation to the defender’s preliminary plea on the relevance of the pursuer’s averments.

Family home

The pursuer’s case was that the house was acquired by the defender prior to the parties’ marriage for use by the parties as a family home and, as such, it was matrimonial property for the purposes of the 1985 Act.

Upon the house being built upon land which was not matrimonial property, the land in the form of the garden and other ground and buildings required for the amenity and convenience of the house became matrimonial property.

It was accepted that the land itself was not bought by the defender for use as a family home but it was submitted it “converted” to matrimonial property when the house was built on it as the house acceded to the land.

Accession

Thus the issue between the parties was in relation to the practical effect of that accession.

The defender’s position was that the home having been built on land that was not matrimonial property, the home acceded to the land and became indivisible from and therefore neither the land nor the matrimonial home were matrimonial property.

The sheriff did not accept the argument for the pursuer that when the house was built on the land, the land became matrimonial property, but also rejected the argument for the defender that when the house was built on the land it ceased to be matrimonial property.

Judgment

In a written judgment, Sheriff Summers said: “In my opinion, the position is much more straightforward than that contended for by either counsel for the defender or counsel for the pursuer. In the examples given, it does not seem to me that the plot of land which was non matrimonial property becomes matrimonial property by virtue of having a house built upon it. Nor do the matrimonial assets used to buy the house become non matrimonial property simply by virtue of acceding to the plot of land. In my opinion, the underlying nature of the assets is not changed for the purposes of the 1985 Act.

“The 1985 Act set out a new statutory framework for dealing with the division of parties’ assets on divorce. It defined ‘matrimonial property’ in a particular way but by reference to the acquisition of that property rather than ownership of the property by either party. I accept unreservedly the submission for the defender that when the house was built upon the plot of land, the house acceded to the land. I accept that it then came to be owned by the defender. What I do not accept is that in consequence of that the house ceased to be matrimonial property.

“In my opinion…it is open to the pursuer to argue that the blocks, the timber, the pipework, the cabling and the other building materials that came to represent the physical embodiment of the house or ‘family home’ were matrimonial property. Those remain matrimonial property, notwithstanding the construction of the family home on a plot that does not comprise matrimonial property. Within the context of this case it is open to the pursuer to prove that those items used to build the house were acquired before the marriage for use as a family home.”

Practical difficulty

He added: “This approach is consistent with the general theme of the 1985 Act. Although it raises a practical difficulty it avoids the difficulties that emerge from the approach commended by counsel for the pursuer and the approach commended by counsel for the defender.

“One way to deal with that would be to have the house and land valued, and at the same time to instruct a separate valuation of the land assuming that it was undeveloped. That is only one possible way to deal with the issue, but proceeding in that way it might be thought that the difference between the two valuations is a reasonable measure of the value of the house.”

The sheriff that the pursuer had pled a relevant case and he allowed the parties a proof before answer since neither was entirely successful.