The house the Grants built
Family briefing: how do the matrimonial property rules apply to a family home built on land acquired by one party before the relationship began?
The recent Sheriff Appeal Court decision Grant v Grant  SAC (Civ) 4 (15 February 2018) could have far-reaching consequences for family law clients who have self-built the family home.
The appeal concerned a debate on whether a plot of land in Aberdeenshire and a house built on that land were, together, “matrimonial property” for division between the parties in terms of the Family Law (Scotland) Act 1985.
The 1985 Act, s 10(4) defines matrimonial property as all property belonging to the parties of the marriage (or either of them) at the relevant date which was acquired by them (otherwise than by way of gift or succession from a third party) before the marriage for use by them as a family home (or as furniture/plenishings for such a home), or during the marriage but before the relevant date.
In the pot?
In this case the husband acquired the land in 1994, prior to the start of the parties’ relationship. In February 1996 the parties began living together and later that year moved into a mobile home on the land, engaged an architect and secured the necessary panning permission and warrants to build a house. In 1997 they moved into the completed house. They had children in 1998 and 2001 and they married in 2003.
For the husband it was contended that the land and house were not “matrimonial property” and not in the pot for division – the land having been acquired prior to the parties’ relationship, it was therefore not matrimonial property. When the house was built it acceded to the land (becoming part of the land). As a result, the house itself was also not matrimonial property.
The wife’s position was that both the land and the house were matrimonial property. Although her husband was the legal owner, this did not of itself determine what constituted matrimonial property.
On a proper interpretation of the 1985 Act, both the land and the house were matrimonial property.
At first instance the sheriff held that the house and land fell into two separate classes. The land on which the house had been built was not matrimonial property, but the house (the materials used to build it) was, and the value to be shared would be based on the house value. Neither party agreed with this conclusion. There was an appeal and a cross-appeal.
Not for property law
The Appeal Court pointed to the fact that the term “matrimonial property” is not one derived from property law but is a construct of the 1985 Act. The appeal turned on the proper application of s 10 of the Act. First it had to be determined what constituted the property in question. It was held that the house and land was a single item of property, not two separate parts. Being a single item of property, it was “acquired” when the house was completed. The husband was trying to treat the matter as one of property law, which it was not. While the law of accession regulated ownership, it did not determine whether the property was matrimonial property.
Whether the property was “acquired” for use as a family home depended on the parties’ intentions, and the wife had made sufficient averments to warrant inquiry into whether the property was matrimonial property. The matter was remitted for proof.
The court was keen to emphasise, however, that the identification of matrimonial property is only one step in determining what orders for financial provision should be made. Matrimonial property should be shared “fairly”, but fair division is not necessarily equal division. It will be within the sheriff’s discretion, at proof, to decide whether to divide the matrimonial property unequally.
At first glance this may seem like the right outcome, but how would that apply to someone who has been gifted or inherited land before the parties meet, and once they are in a relationship builds a family home? The case also raises important questions for both property and family lawyers about how to protect their client’s pre-marriage assets from any claim on the breakdown of a relationship. Clear advice must be tendered to clients who intend to build on land which they owned prior to the marriage or which is gifted or inherited during the marriage. They could inadvertently convert non-matrimonial property into matrimonial property. The use of pre- and post-nuptial agreements should be considered in any such cases.
Anna Maitles, senior solicitor, Morton Fraser LLP