Co-Ownership: TOLATA

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  • Created by: Hope
  • Created on: 06-05-16 17:04
What did co-ownerships used to be held under before TOLATA?
Trusts for sale.
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What was the essential characteristic of a trust for sale? Provision?
Trustees were under an obligation to sell the land. s205 (1) (xxix) LPA 1925
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What is the doctrine of conversion? Does it still exist?
Beneficiaries had an interest in the proceeds of the sale, not the land itselff
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What rights did beneficiaries have then?
No right to occupy the land, no right in the land. Just a right in the proceeds
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What is the scope of TOLATA?
Allows co-ownership to take place as a trust of land, conversion was abolished and trustees have the power to sell, not the obligation
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What happened to the existing trusts for sale after TOLATA? Provision?
They were all converted into trusts of land- s1 (2) (b)
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What else did TOLATA establish? Provision?
A dispute resolution mechanism, s 14/15
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What does TOLATA say about the trustees power's of management? Provision?
Exercise of powers must be unanimous, they have the powers of an absolute owner s 6(1), they shall have regard to the rights of beneficiaries s6 (5)
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Are there any limits to their powers?
The person creating the trust may expressly limit their powers s8
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What powers do trustees have?
Sell (s6(1)), Delegate (s9(1)), Partition (s7), Exclude or restrict (s13(1)) but not without a court order (s13(7))
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What duties to trustees have?
Consult, give effect to beneficiaries wishes
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Are there any limitations to their duties?
Trustees arent obliged to take unreasonable steps to try to consult the beneficiaries
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In which case did Lord Denning create a common law right for beneficiaries to occupy (before TOLATA)?
Bull v Bull
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What does TOLATA say about beneficiary's rights? Provision?
They make it a statutory right to occupy - s12(1)
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When can a beneficiary not have the right to occupy? Provision?
If the land is either unavailable or unsuitable s12(2)
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How does TOLATA regulate disputes over trust property?
S 14 and 15.
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Which section of LPA did s14 and s15 TOLATA replace?
s.30 LPA
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Which section of LPA did s14 and s15 TOLATA replace?
s.30 LPA
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What is a case example of someone going against the purpose of the trust? What was the result?
Re Buchanan-Wollaston's Conveyance- he was not allowed to sell
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Does it make a difference if the purpose of the trust is still ongoing? Example?
Yes, it will weigh heavily against sale. Bedson v Bedson
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What about when the purpose has ended? Example?
That will weigh in favour of the sale. Jones v Challenger - family home, wife left
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What about where minors are involved? Provision?
s 15(c) court noted they wouldn't find end of family home purpose if children involved, even if marriage failed
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What is a case example of minors, with the rule and judge name?
Rawlings v Rawlings, Position different for young kids- Salmon LJ
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How important are minors?
Important, but not everything. Their interest does not automatically prevail
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What about waiting until the child is older? Example?
The CA in Re Ever's Trust said that they can't postpone sale, because circumstances may change. They can indicate the circumstances where a new application might be entertained
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Which provision deals with interests of secured creditors?
S 15(d)
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What was the situation before TOLATA? Old Provision?
s 30 LPA- interest of secured interests prevailed over any beneficiaries/children unless there were exceptional circumstances
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Example of old law?
Lloyds Bank v Byrne
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What changed after TOLATA? Case example?
Mortgage Corporation v Shaire- court has greater flexibility. Interests of creditors are not given special weighting
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What case can you contrast this with? How?
Bank of Ireland v Bell - Seem to be following Shaire, but keep emphasising importance of secured creditors
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Which case seems to support Shaire?
Lloyds Bank v Edwards
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Does Human Rights play a part? Example?
No, NatWest Bank v Rushmer - balancing act in TOLATA was compatible with ECHR s8
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What happens if one of your co-owners goes bankrupt?
The bankrupt person's equitable share vests in the trustee in bankruptcy. Legal title stays the same.
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How can a trustee in bankruptcy make an application for sale? Is it the same process?
They still apply under s14 but the court don't apply the s15 criteria. Instead, they appply s335A of the Insolvency Act
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Does timing of the application make a difference?
Yes, within the first year of bankruptcy, the court can take into account a wide range of factors, but after one year it gets much stricter, and interests of the creditor outweighs all other consdierations
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Is there anyway you can get out of a sale after one year of bankruptcy? Example?
Yes, if you can show exceptional circumstances. Re Holliday- petitioned for his own bankruptcy and value of the house was way more than debt owed. Was just trying to sell house from under his wife and kids
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When do the court usually find exceptional circumstances?
Usually only where there is severe illness or disability suffered by beneficiary or child and would be so disruptive its not fair.
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Who gave the example of a specially adapted house, and in what case?
Walton J, Re Bailey
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Example of mental illness of a spouse?
Re Raval- severe paranoid schizophrenia
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What happens when you can find exceptional circumstances? Authority?
Sale will be postponed. Nicholls v Lan
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How long does the trustee in bankruptcy have to apply for the order for sale? Provision? What happens after the period?
S 283 Insolvency Act- 3 years- interest reverts back to bankrupt
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Any other statutory rejections?
s 313A- application will be rejected if value of home is under £1,000
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What if relationship has broken down but they don't want to sell. When is compensation payable under old law?
Courts could only award compensation to the non-occupying co-owner when they had been deliberately ousted from the house - Dennis v McDonald
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What is the situation now under TOLATA? Provision?
courts are able to impose conditions on a beneficiary who remains in occupation of the trust property. Section says that beneficiary can specifically require rent. s13(6)(a)
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How does this work in practice? Example?
Courts regulate who occupies the property and who pays rent. they use the s15 factors to decide. Murphy v Gooch
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What is the significance of TOLATA?
Aligned the law more closely with reality, recognised the 'use' value of land instead of just its value, improved rights of beneficiaries, improved clarity of dispute resolution, increased flexibility with secured creditors
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Which provision contains the statutory requirements for overreaching?
S 2 (1) (ii) LPA & S 27 LPA
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What are the requirements of overreaching?
Conveyance must be 2 or more trustees, any purchase monies must be paid to two or more trustees, interest must be capable of being overreached, purchaser must acquire legal estate.
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What happens when there are several beneficiaries but the title is held by one trustee? Then what if they sell/mortgage the land?
The transaction is effective, but overreaching cannot take place
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How do we know whos interest takes priority?
In registered land, priority is determined by whether beneficial interest was properly protected or beneficiary has an ‘overriding interest’. If the interest can be classed as overriding or is properly protected, their interest will take priority.
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What happens in unregistered land?
priority is determined by whether the purchaser had ‘notice’ of the beneficiaries’ interest. If they have notice, they will potentially be bound by the interest.
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What happens if the beneficiary hasn't consented to the sale?
The courts have held that if the beneficiary knew about it, they are bound by it. They might claim they didn’t consent, but if they knew about it, it may affect the decision.
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What is case authority for implied consent being enough?
Abbey national BS v Cann
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What happens when one trustee forges the name of the other trustees
Purchaser (inc. mortgagee) able to assert their claim against interest of the fraudulent co-owner only. Overreaching can’t take place because in fact, the money isn’t being paid to at least 2 trustees.
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Other cards in this set

Card 2

Front

What was the essential characteristic of a trust for sale? Provision?

Back

Trustees were under an obligation to sell the land. s205 (1) (xxix) LPA 1925

Card 3

Front

What is the doctrine of conversion? Does it still exist?

Back

Preview of the front of card 3

Card 4

Front

What rights did beneficiaries have then?

Back

Preview of the front of card 4

Card 5

Front

What is the scope of TOLATA?

Back

Preview of the front of card 5
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