Disputes Over Sale Flashcards
A trustee in bankruptcy
This is an official, appointed by the court, who becomes entitled to all of the bankrupt’s property when they are adjudicated bankrupt. So if the bankrupt was an absolute owner of a home, the trustee in bankruptcy will become the absolute owner of it. Likewise, if the bankrupt is an equitable co-owner: if they are tenant in common, their share passes to TIB. If they are a joint tenant, their interest is severed, and passes to TIB.
When TIB MUST apply to the court for a sale in the home
The bankrupt was it an equitable co-owner, and another co-owner objects to a proposed sale of the home. Such an application is bought under S 14 TLATA. Then s335A Insolvency Act applies.
TIB does NOT need to apply to the court (relevant for essay questions)
- If the bankrupt is the absolute owner, 2. There is no spouse living with them. 3. And there are no persons under 18 living with the bankrupt (or there are these conditions and the bankrupt doesn’t object to a sale.
Re Citro
The exceptional circumstances test was developed by the courts under section 30 LPA. In this case Lord Nourse stated that disruption of children’s education and home eviction in circumstances were the spouse of the bankruptcy was unable to buy a comparable property did not amount to exceptional circumstances.
Hosking v Michaelides
Exceptional was interpreted to mean out of the ordinary course, unusual, special, or uncommon.
Re Bailey
no postponement until a child completed full time education.
Re Holliday
Case was considered exceptional from Re Citro. The postponement was not too much of a hardship to the creditors. He also declared himself bankrupt to harm his wife. His share alone, once sold, would have still paid the creditors in full. One would normally sell the house than declare bankruptcy.
Judd v Brown
An exceptional circumstance is when one of the occupiers has a serious or terminal illness, which a sale would aggravate. The wife (co-owner) had cancer and was advised by specialist to avoid stress. Note: the condition itself is not enough it must be the move that must aggravate.
Re Bremner
Bankrupt had terminal cancer, the sale was postponed so that elderly wife could care for husband in his final days. The wife’s circumstances tipped this to be postponed to 3 months after his death.
Nicholls v Lan
Wife had long term schizophrenia. The sale was postponed 18months. Combination of factors as the wife had evidence that she could buy out the bankrupt’s share. Had she not been in that position would this have been exceptional? This was deemed that the section 335A precisely captures what the convention requires
Claughton v Charalambous
Court agreed to indefinite postponement where the bankrupt’s wife had a severe illness and restricted mobility. The property had been adapted for her treatment. Note: for prob qs look for if the property has been adapted and also consider the extent another property would have to be adapted.
Barca v Mears & Donohoe v Ingram
These considered the courts strict approach to finding exceptional circumstances and whether such an approach was compatible with ECHR article 8 (the rights of family life and home) and ECHR article 1 (right to peaceful enjoyment of possessions.) In both cases, arguments to establish exceptional circumstances justifying postponement of sale were not successful. Both cases involved usual stress and upheaval and cannot be relied upon as exceptional circumstances.
Barca v Mears
Nicholas Strauss QC suggested (obiter) that the courts should adopt a broader approach when they should apply exceptional circumstances test to comply under their duty in HRA 1998 s 3 (interpret legislation consistently with art 8 ECHR. The judge gives 2 examples. The first is controversial in that it doesn’t include usual consequences which are exceptionally severe. The second is cases where there is slight loss to the creditors would be considered exceptional.
Ford v Alexander
This is an application for permission to appeal a lower court decision and thus not binding authority on the issue. The case wasn’t exceptional under Re Citro. It was argued that in order to have respect for art 8 rights, they should be given more than 12 months. Judge rejected this. The balancing act for s335A.
S14 of TLATA ‘96
When an interested party which includes a beneficiary makes an application to the court to settle a dispute regarding whether to sell a co-owned property. it directs the court to make an order to sell as it thinks fit.
