Re Citro

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Re Citro

Edgware June 2010.JPG

Central Edgware: the heavily-indebted bankrupts had a 50% and 100% share in two attractive privately built houses in outer north-west London.
Court Court of Appeal
Citation(s) [1991] Ch 142
Case history
Prior action(s) Appellant largely lost at first instance, having to wait until the youngest children reached 16 before any sales.
Subsequent action(s) none
Case opinions
Decision by Nourse LJ
Bingham LJ
Dissent Waller LJ
Keywords
Co-ownership, bankruptcy, expensive homes, homes in family occupation of the bankrupt, bankrupt co-owners, non-bankrupt co-owner, multiple families, children's educational needs

Re Citro [1991] Ch 142 is an English land law and bankruptcy law case, concerning co-ownership of land, and an order for possession on bankruptcy of one co-owner.

English land law Law of real property in England and Wales

English land law is the law of real property in England and Wales. Because of its heavy historical and social significance, land is usually seen as the most important part of English property law. Ownership of land has its roots in the Anglo-Saxon system of Bookland and in the Anglo-Saxon multiple estate, a feudal system transformed by William the Conqueror and his influx of many new chief landlords after 1066. The modern law's sources derive from the old courts of common law and equity which includes legislation such as the Law of Property Act 1925, the Settled Land Act 1925, the Land Charges Act 1972, the Trusts of Land and Appointment of Trustees Act 1996 and the Land Registration Act 2002, and the European Convention on Human Rights. At its core, English land law involves the acquisition, content and priority of rights and obligations among people with interests in land. Having a property right in land, as opposed to a contractual or some other personal right, matters because it creates privileges over other people's claims, particularly if the land is sold on, the possessor goes insolvent, or when claiming various remedies, like specific performance, in court. Capital taxation, the industrial revolution and reform of the established church has resulted in a shift from predominant ownership by the church and landed gentry to largely agricultural, minority aristocratic ownership. This means today sites for development belong to a complex web of owners able meet market demand-side forces for development, tempered by supply-side forces including the values enshrined in public planning policy to protect green spaces and promote sustainable, locally diverse and socially useful development of land.

A concurrent estate or co-tenancy is a concept in property law which describes the various ways in which property is owned by more than one person at a time. If more than one person owns the same property, they are commonly referred to as co-owners. Legal terminology for co-owners of real estate is either co-tenants or joint tenants, with the latter phrase signifying a right of survivorship. Most common law jurisdictions recognize tenancies in common and joint tenancies, and some also recognize tenancies by the entirety, which is a joint tenancy between married persons. Many jurisdictions refer to a joint tenancy as a joint tenancy with right of survivorship, but they are the same, as every joint tenancy includes a right of survivorship. In contrast, a tenancy in common does not include a right of survivorship.

Contents

Facts

Domenico and Carmine Citro went bankrupt and he had a solvent ex-wife. The remaining assets were a half share in their two family homes — Domenico had separated from his ex-wife and had his own house, co-owned with his new wife with three children, youngest 12 years old in Dryfield Road, Burnt Oak, Edgware of mid-to-high price in outer north-west London, being typical of private housing in London Borough of Barnet. Carmine continued to live with three children, youngest 10 at Bell Lane, Hendon, a similar value house in the same Borough. The debts owed exceeded the value of the bankrupts' interests (equity) in the homes. The trustees in bankruptcy applied for declarations and for orders for sale under the Law of Property Act 1925, section 30 (now replaced by the Trusts of Land and Appointment of Trustees Act 1996, section 14).

London Borough of Barnet Borough in United Kingdom

Barnet is a suburban London borough in North London, England. It forms part of Outer London and is the largest London borough by population with 384,774 inhabitants and covers an area of 86.74 square kilometres (33 sq mi), the fourth highest. It borders Hertfordshire to the north and five other London boroughs: Harrow and Brent to the west, Camden and Haringey to the southeast and Enfield to the east.

Hendon suburb situated in the London Borough of Barnet

Hendon is a London urban area in the Borough of Barnet, 7 miles (11 km) northwest of Charing Cross. Hendon was an ancient parish in the county of Middlesex and has been part of Greater London since 1965. Hendon had a population of 52,972 in 2011 which includes the West Hendon and Colindale wards that are separated from Hendon by the NW9 postcode area

Law of Property Act 1925

The Law of Property Act 1925 is a statute of the United Kingdom Parliament. It forms part of an interrelated programme of legislation introduced by Lord Chancellor Lord Birkenhead between 1922 and 1925. The programme was intended to modernise the English law of real property. The Act deals principally with the transfer of freehold or leasehold land by deed.

Judgment

High Court

Hoffmann J made orders for possession and sale but considering the circumstances of the two (successive) wives and their children, and because a half share left for the wives would not be enough to buy accommodation in his view reasonably nearby, and his assessment of finding equally good education in the area, he ordered the sales be postponed until each of the youngest children became 16.

Court of Appeal

Nourse LJ allowed the lenders’ appeal, whose interests would usually prevail. Financial hardship is not an exceptional circumstance. ‘Exceptional’ means beyond the normal ‘melancholy consequences’ of bankruptcy so hardship, eviction, relocation do not qualify as exceptional circumstances. The circumstances must be special, not just unusual.

Sir Martin Charles Nourse was a Lord Justice of Appeal of England and Wales, who served as Vice-President of the Civil Division of the Court of Appeal of England and Wales from 2003 until his retirement from the bench in 2006.

Bingham LJ concurred, regretfully, because he said prior cases pointed this way and it was important to avoid arbitrariness. Still, he said submissions on a moratorium were to be invited.

Waller LJ dissented.

See also

Bankruptcy in the United Kingdom is divided into separate local regimes for England and Wales, for Northern Ireland, and for Scotland. There is also a UK insolvency law which applies across the United Kingdom, since bankruptcy refers only to insolvency of individuals and partnerships. Other procedures, for example administration and liquidation, apply to insolvent companies. However, the term 'bankruptcy' is often used when referring to insolvent companies in the general media.

English property law refers to the law of acquisition, sharing and protection of valuable assets in England and Wales. While part of the United Kingdom, many elements of Scots property law are different. In England, property law encompasses four main topics:

Related Research Articles

An estate, in common law, is the net worth of a person at any point in time alive or dead. It is the sum of a person's assets – legal rights, interests and entitlements to property of any kind – less all liabilities at that time. The issue is of special legal significance on a question of bankruptcy and death of the person.

Specific performance

Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. It is typically available in the sale of land, but otherwise is not generally available if damages are an appropriate alternative. Specific performance is almost never available for contracts of personal service, although performance may also be ensured through the threat of proceedings for contempt of court.

A trustee in bankruptcy is an entity, often an individual, in charge of administering a bankruptcy estate.

Security interest legal concept

A security interest is a legal right granted by a debtor to a creditor over the debtor's property which enables the creditor to have recourse to the property if the debtor defaults in making payment or otherwise performing the secured obligations. One of the most common examples of a security interest is a mortgage: When person, by the action of an expressed conveyance, pledges by a promise to pay a certain sum of money, with certain conditions, on a said date or dates for a said period, that action on the page with wet ink applied on the part of the one wishing the exchange creates the original funds and negotiable Instrument. That action of pledging conveys a promise binding upon the mortgagee which creates a face value upon the Instrument of the amount of currency being asked for in exchange. It is therein in good faith offered to the Bank in exchange for local currency from the Bank to buy a house. The particular country's Bank Acts usually requires the Banks to deliver such fund bearing negotiable instruments to the Countries Main Bank such as is the case in Canada. This creates a security interest in the land the house sits on for the Bank and they file a caveat at land titles on the house as evidence of that security interest. If the mortgagee fails to pay defaulting in his promise to repay the exchange, the bank then applies to the court to for-close on your property to eventually sell the house and apply the proceeds to the outstanding exchange.

<i>Bankruptcy and Insolvency Act</i> the statute that regulates the law on bankruptcy and insolvency in Canada

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The Trusts of Land and Appointment of Trustees Act 1996, usually called "TLATA" or "TOLATA", is an Act of Parliament of the United Kingdom, which altered the law in relation to trusts of land in England, Wales, Scotland and Northern Ireland.

<i>City of London Building Society v Flegg</i>

City of London Building Society v Flegg[1987] UKHL 6 is an English land law case decided in the House of Lords on the priority given to overriding interests and overreaching interests.

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Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555 (1935), was a decision by the Supreme Court of the United States that ruled the Frazier–Lemke Farm Bankruptcy Act unconstitutional in violation of the Fifth Amendment. This unanimous decision was one of the Court's many rulings that overturned President Roosevelt's New Deal.

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Re Dennis [1996] Ch 80 is an English land law case, concerning co-ownership of land.

<i>Bristol & West Building Society v Ellis</i>

Bristol & West Building Society v Ellis [1996] is an English land law case, concerning mortgage arrears, specifically the definition of "such time as the court thinks reasonable" for its suspension of possession orders under section 36 of the Administration of Justice Act 1970.

<i>Barnes v Addy</i>

Barnes v Addy (1874) LR 9 Ch App 244 was a decision of the Court of Appeal in Chancery. It established that, in English trusts law, third parties could be liable for a breach of trust in two circumstances, referred to as the two 'limbs' of Barnes v Addy: knowing receipt and knowing assistance.

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References

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