Trust for sale — Sale and possession sought by trustee in bankruptcy — Whether purpose of trust continues — Whether trustee stands in shoes of beneficiary — Whether postponement of orders until children 16 years proper order — Appeals by the trustee in bankruptcy allowed
Domenico and Carmine Citro are two brothers; on October 22 1984 they were made bankrupt and on May 29 1987 a trustee was appointed of the brothers’ separate and joint estates. Each brother owned a half share in their respective matrimonial homes; their respective wives held the other half shares. Following applications by the trustee, Hoffmann J, after considering the personal circumstances of the wives and their children, made orders (June 15 1989) declaring that each bankrupt had a half share in their respective homes and ordered possession and sale, subject to a proviso that the order should not be enforced until the youngest child in each case reached the age of 16 years.
The trustee appealed contending that in exercising the court’s discretion under section 30 of the Law of Property Act 1925, sale and possession should be ordered in the interests of the creditors. The respondent wives contended that so long as the purpose of each trust continued, namely for the provision of the respective matrimonial homes, sale should not be ordered: see Jones v Challenger [1961] 1 QB 176.
Held The appeals were allowed and the period of postponement substituted by shorter periods.
Where a spouse who has a beneficial interest in the matrimonial home has become bankrupt under debts that cannot be paid without realisation of that interest, the voice of the creditors in any application under section 30 of the Law of Property Act 1925 will usually prevail over the voice of the other spouse and a sale will be ordered within a short period. The voice of the other spouse will only prevail in exceptional circumstances and no distinction is to be made between a case where the property is still being enjoyed as the matrimonial home and a case where it is not.
In the present cases there were no exceptional circumstances.
Re Holliday [1981] Ch 405 distinguished.
Bernard Devlin (instructed by Stoneham Langton & Passmore) appeared for the appellant; and James Cameron (instructed by Phelps & Lawrence, of Swindon) appeared for the respondents.
