Mortgage Corporation v Shaire [2001]
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Mortgage Corporation v Shaire [2001] Ch 743 dealt with the conditions for orders of sale for family homes under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).
Fox and Shaire jointly held a property as tenants in common in equity, with ownership divided as 25% and 75% respectively, reflecting their respective contributions to the purchase price. Fox, without Shaire's knowledge, mortgaged the property, forging Shaire's signature. Subsequently, Fox defaulted on his mortgage payments. The mortgage was found to be valid only for Fox's 25% share of the property. The claimants sought an order from the court, under the Trusts of Land and Appointment of Trustees Act 1996, Section 14, to compel Shaire to sell the property, enabling the claimants to recover the money owed by Fox. The key issue was whether the claimants could rely on TOLATA Section 14 to enforce the sale of the property in order to recover the defaulted mortgage repayments.
The court found in favour of the defendant, Shaire. The court noted that TOLATA had altered the legal approach, shifting from allowing interests to attach to a trust of sale to allowing them to attach to a trust of land. Additionally, the factors to be considered before a sale order under Section 15 of TOLATA had changed. There was no longer a presumption that a sale should be ordered. Instead, the judiciary was granted greater discretion to reach a fair and equitable conclusion, particularly in cases involving the family home, as highlighted by Neuberger J.
In this case, the court did not order a sale of the property. Instead, the defendant was ordered to assume Fox's repayment obligations. This decision illustrates the shift in legal approach brought about by TOLATA, allowing for a more flexible and discretionary assessment of the circumstances before ordering a sale, especially when family homes are involved.
Fox and Shaire jointly held a property as tenants in common in equity, with ownership divided as 25% and 75% respectively, reflecting their respective contributions to the purchase price. Fox, without Shaire's knowledge, mortgaged the property, forging Shaire's signature. Subsequently, Fox defaulted on his mortgage payments. The mortgage was found to be valid only for Fox's 25% share of the property. The claimants sought an order from the court, under the Trusts of Land and Appointment of Trustees Act 1996, Section 14, to compel Shaire to sell the property, enabling the claimants to recover the money owed by Fox. The key issue was whether the claimants could rely on TOLATA Section 14 to enforce the sale of the property in order to recover the defaulted mortgage repayments.
The court found in favour of the defendant, Shaire. The court noted that TOLATA had altered the legal approach, shifting from allowing interests to attach to a trust of sale to allowing them to attach to a trust of land. Additionally, the factors to be considered before a sale order under Section 15 of TOLATA had changed. There was no longer a presumption that a sale should be ordered. Instead, the judiciary was granted greater discretion to reach a fair and equitable conclusion, particularly in cases involving the family home, as highlighted by Neuberger J.
In this case, the court did not order a sale of the property. Instead, the defendant was ordered to assume Fox's repayment obligations. This decision illustrates the shift in legal approach brought about by TOLATA, allowing for a more flexible and discretionary assessment of the circumstances before ordering a sale, especially when family homes are involved.
