Bank of Ireland Home Mortgages Ltd v Bell

Bank of Ireland Home Mortgages Ltd v Bell [2001] 2 All ER (Comm) 920, CA

Factors for consideration in balancing the rights of creditors and beneficiaries in exceptional circumstances for a sales order application under TOLATA.

Facts

A husband and wife jointly owned a house, which acted as the family home for them and their teenage child. The husband subsequently defaulted on mortgage payments owned on the house and the relationship disintegrated, resulting in divorce. The mother and child continued to be in occupation of the house, and the husband’s creditors, the claimants, sought a sale order under the Trusts of Land and Appointment of Trustees Act 1996, s. 14. The wife contested this claiming that she and her child had a beneficial interest in the property and that exceptional circumstances were present as it would cause the child distress to be forced to vacate the property.

Issues

Were the present circumstances sufficiently exceptional to merit the rejection of a sales order by the creditors under TOLATA s. 14.

Decision/Outcome

The Court found for the claimants, the Bank of Ireland, and ordered that the property be sold. They reasoned that the husband’s mortgage loan had been unpaid for several years and the proceeds of the sale of the house would not even entirely cover his debts. Given the size of the debt and the duration for which it had already gone unpaid, the emotional difficulties that may face the seventeen year old child were relatively more minor. Giving due regard to all the circumstances, the greater inequity would be in denying the creditors any repayment.