University of Leeds

LAW 123

Critically analyze the extent to which the court protects the interest of the occupiers in the family home against the interest of creditors in the context of trust of land under the Trust of Land and Appointment of Trustees Act 1998 and in the context of insolvency regime under the Insolvency Act 1986. Name: Poh Zuan Yin I.D. Number: 200569944 Word Count: 13192 Supervisor: Adam Baker 1 200569944 LAW 3320 – Long Dissertation 13200 words Table of contents Chapter 1: Introduction 1.1: Introduction ................................................................................................ 1-2 1.1.1: An overview of TOLATA ......................................................................... 2-3 Chapter 2: Various aspects pertaining to home interest protection under TOLATA 2.1: The purposes for which the property subject to the trust is held .................. 4 2.1.1 The interpretation of collateral purposes ................................................. 5-6 2.1.2 The meaning of “family” under the surviving purpose .............................. 7 2.1.3 Problems with the meaning of “family” in the original purpose............... 8-10 2.1.4 Termination of purpose upon charge .................................................... 10 2.2 Welfare of minor .................................................................................... 10-12 2.3 The interests of any secured creditor of any beneficiary 2.3.1 Proprietary priority .............................................................................. 13-15 2.4 Human Rights argument under Article 8 of the ECHR ............................ 15 2.5 Other circumstances and wishes of the beneficiaries ............................ 15-16 2.6 The rationale behind the court’s decision ................................................ 16 2.6.1 The importance of credit ...................................................................... 16-17 2.6.1.1 Unemployment rate and new business start-up ................................. 17 2.6.2 Family home as security ..................................................................... 18-19 2 200569944 LAW 3320 – Long Dissertation 13200 words Chapter 3: Various aspects pertaining to home protection under Insolvency Act 1986 3.1 Introduction ............................................................................................. 20-21 3.2 The amendments made by the Enterprise Act 2002 .............................. 21-23 3.3 Disputes involving a trustee in bankruptcy 3.3.1 Application for sale made following business failure ........................... 23-24 3.3.2 Application for sale made following failure to bring sale under s.15..... 24-25 3.3.3 Application for sale made following the debtor’s own petition of bankruptcy …………………………………………………………………………..25 3.4 The meaning of “exceptional circumstances”......................................... 25-26 3.4.1 When the creditor would be not prejudiced by any delayed sale .......... 26 3.4.2 Long delayed in bringing proceedings by the trustee in bankruptcy ...... 27 3.4.3 Creditor’s interest in the property is less than the debt owed ................ 27 3.5 When exceptional circumstances are justified ........................................ 28-30 3.6 The reasons behind the court’s decision in trustees in bankruptcy cases ....30 3.6.1 Creditors’ interest versus needs of children .......................................... 31 3.6.2 Creditors’ interest versus interests of the non-bankrupt spouse.......... 31-32 3.7 Exceptional circumstances and the issues on human rights .................. 32-34 3.7.1 Proportionality ..................................................................................... 34-35 3.7.2 Legitimacy of the legitimate aim ......................................................... 35-36 3.7.3 Procedural safeguards........................................................................ 36-37 3 200569944 LAW 3320 – Long Dissertation 13200 words 3.7.4 Margin of Appreciation.......................................................................... 37 3.8 The Ford v Alexander [2012] EWHC 266 (Ch) judgment ..................... 38-39 3.9 The conflict between bankruptcy proceedings and matrimonial jurisdiction ………………………………………………………………………. 39-42 Chapter 4: Comparative Study of the Homestead Exemption in Overseas Jurisdictions 4.1 United States ........................................................................................ 43-46 4.2 New Zealand......................................................................................... 46-49 Chapter 5: Conclusion …………………………………………………………. 4 200569944 LAW 3320 – Long Dissertation 13200 words Table of Cases United Kingdom Alliance & Leicester Plc v Slayford [2001] 1 All ER (Comm) 1, [2001] CP Rep 52 (CA) ............................................................................................................……24 Bailey, Re [1977] 1 WLR 278,[1977] 2 All ER 26 (Ch) …………………….... 11, 29 Bank of Ireland Home Mortgages v Bell [2001] 2 All ER (Comm) 920, [2001] 2 FLR 809 (CA) ... ……………………………………………...…4, 8, 9, 11, 12, 15, 16 Banker’s Trust v Namdar [1997] EGCS 20 (CA) ……………………………2, 4, 10 Barca v Mears [2004] EWHC 2170 (Ch) ………………………………..... 32, 33, 35 Barclays Bank Plc v O'Brien [1993] 3 WLR 786, [1994] 1 AC 180 (HL) ……. 1, 18 Bedson v Bedson [1965] 2 QB 666, [1965] 3 All ER 307 (CA) ………………….. 6 Byford, Re [2003] EWHC 1267 (Ch) ………………………………………………. 22 Citro, Re [1990] 3 WLR 880, [1991] Ch 142 ……………………. 23, 25, 26, 33, 34 Claughton v Charalambous [1999] 1 FLR 740 (Ch) …………………………….. 26 Dean v Stout [2004] EWHC 3315 (Ch) …………………………………………... 25 Doherty v Birmingham City Council [2008] UKHL 57, [2009] 1 AC 367 ............ 36 Dunbar Bank plc v Nadeem [1998] 3 All ER 876, [1998] 2 FLR 457, (1999) 31 HLR 402 (CA) ……………………………………………………………………….. 18 Ever's Trust, Re [1980] 1 WLR 1327 (CA)......................................................... 12 First National Bank v Achampong [2003] EWCA Civ 487 ……………………………………………………....4, 5, 7, 10, 11, 12, 13, 14, 15 5 200569944 LAW 3320 – Long Dissertation 13200 words Foenander v Allan [2006] EWHC 2101 (Ch) ……………………………………. 28 Ford v Alexander [2012] EWHC 266 (Ch) ………………………………………. 37 Foyle v Turner [2007] BPIR 43 (Ch) .......................................................... 27, 38 Ghaidan v Godin-Mendoza [2004] UKHL 30, [2004] 2 AC 557 ………………. 39 Gorman, Re [1990] 1 WLR 616 (Ch) 629 ………………………………………. 29 Hill v Haines [2007] EWHC 1231 (Ch) ...…………………………………………42 Hill v Haines [2007] EWCA Civ 1284, [2008] Ch 412 ……………………... 39, 41 Holliday, Re [1981] Ch 405, [1981] 2 WLR 996 (CA) …………….. 25, 26, and 35 Hosking v Michaelides [2006] BPIR 1192 ………………………………………. 32 Hounslow LBC v Powell [2011] UKSC 8, [2011] 2 AC 186…………………..... 34 Karia, Re [2006] BPIR 1226 (Ch) ………………………………………………... 27 Kay and others v Lambeth London Borough Council [2006] UKHL 10, [2006] 2 AC 465 [110] ……………………………………………………………………….. 36 Le Foe v Le Foe [2001] EWCA Civ 1870......................................................... 29 Lewis v Metropolitan Property Realizations Limited [2008] EWHC 2760 (Ch) [2010] Ch 148 ……………………………………………………………………... 21 Lowrie, Re [1981] 3 All ER 353 (Ch) 356 ………………………………………. 31 Lloyds Bank v Byrne [1991] 1 FLR 369, (1991) 23 HLR 472 (CA) …….. 1 Manchester City Council v Pinnock [2010] UKSC 45 …………. 33, 34, 37, 38, 39 Mortgage Corpn v Shaire [2001] Ch 743, [2001] 3 WLR 639, [2001] 4 All ER 364 (Ch) ……………………………………………………………………….... 15, 17, 36 6 200569944 LAW 3320 – Long Dissertation 13200 words National Westminster Bank v Rushmer [2010] EWHC 554 (Ch) ..................... 15 Rodway v Landy [2001] EWCA Civ 471, [2001] Ch 703 ……………………….. 6 Royal Bank of Scotland Plc v Etridge (No.2)[2001] UKHL 44, [2002] 2 AC 773 (HL) .................................................................................................................. 18 Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432, [2007] 2 WLR 831 ………..4 Thames Guaranty Ltd v Campbell and Others [1984] 3 WLR 109, [1985] QB 210 (CA) ………………………………………………………………………………….. 30 Turner v Avis [2007] EWCA Civ 748 ……………………………………………... 42 Turner v Avis [2009] 1 FLR 74 (Ch) ………………………………………………. 27 White v White [2003] EWCA Civ 924..………….………………..………………... 6 European Connors v UK (2005) 40 EHRR …………………………………………………... 36 United States Ashhurst v Given (Pa 1843) 5 Watts & Serg 323, 330 …………………….... 16 New Zealand Official Assignee v Pannell [1966] NZLR 324 …………………………………….. 47 Official Assignee v Lawford 1984] 2 NZLR 257 ................................................. 48 7 200569944 LAW 3320 – Long Dissertation 13200 words Table of Statut