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Mortgage Corporation v Shaire [2001] Ch 743, ChD

Conditions for orders of sale for family homes under TOLATA.

Facts

Fox and Shaire held a property as joint tenants in law and as tenants in common in equity, with ownership divided as 25% and 75% respectively, in reflection of their contributions to the purchase price for the property. Fox proceeded to mortgage the property, forging Shaire’s signature, but subsequently defaulted on his mortgage payments. The mortgage was found to be valid only for Fox’s 25% share of the property. Thus, the claimants applied to the Court for an order to Shaire to sell the property so as permit the claimant to claim the money owed by Fox, as per the Trusts of Land and Appointment of Trustees Act 1996, s. 14.

Issue

Could the claimants rely on TOLATA s. 14 to enforce the sale of a property so as to recoup the cost of the defaulted mortgage repayments.

Held

The Court found for the defendant, asserting that TOLATA had altered the law’s approach from the earlier method of allowing interests to attach to trust of sale, instead allowing for them to attach to trust of land. Moreover, the relevant factors to be considered prior to a sale order under s. 15 of TOLATA had altered, and there was no presumption that such a sale ought be ordered to permit the judiciary greater discretion in reaching a fair and equitable conclusion, particularly in cases concerning the family home, as noted by Neuberger J. Thus, instead of ordering sale, the defendant was ordered to assume Fox’s repayment obligations.

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