The risks are illustrated in a ruling where one party applied for an order for sale under s14 Trust of Land and Appointment of Trustees Act 1996 (ToLATA).

In V v W¹, the couple co-owned a £440,000 four-bedroomed property in which they had brought up their two children. V is an accountant and W ran his own haulage company, though illness has prevented him working since 2015.

The relationship started in 1995 but ended New Year’s Day 2017. Now in their early fifties, they still lived in the property during the week though V was essentially confining herself in an en suite bedroom in what is an “intolerable” situation.

V asked the court for a declaration under ToLATA as to their respective beneficial entitlements in the property and for an order for sale. Separately, W applied under schedule 1 Children Act 1989 for V’s share to be held on trust for at least eight years (when the youngest child reaches 21 or finishes full time education).

One working day before the final hearing, W conceded an equality of shares. Originally, he argued that the beneficial interest should be divided 85/15 in his favour. The remaining issue was whether the property should be sold, and when

ToLATA

Vincent HHJ set out the relevant matters in s15 ToLATA on an application for a declaration. He also considered the factors relevant to W’s application under Schedule 1 of the 1989 Act (later observed that both pieces of legislation emphasise different factors, but both require the court to consider all the circumstances).

Considering the relevant s15 factors on the evidence, he concluded:

V and W did not record their intentions in relation to the trust: they bought the property together and there was evidently no discussions when they bought it or until their separation about what would happen to the property if they separated.

The property was brought for the purpose of a family home.

The welfare of the child who is still a minor was a matter of concern to the judge.

There was enough equity to discharge the mortgage, but W cannot meet it in full without parental assistance. He also lacks the cash to invest in it over the next few years.

Schedule 1

Vincent HHJ identified several problems with not ordering a sale now, for example, W’s inability to fund the mortgage payments. His conduct had also prevented V taking on as much childcare as she wanted, though the current situation most resembled ‘shared care’ so W would find it difficult to show an entitlement to apply for a schedule 1 order.

The judge therefore ordered that the property be placed on the open market and sold for the best price possible, although one party could consider buying the other out.

Practitioners will note that he stressed on a ToLATA (or schedule 1 application), he was “not directed as I might be had the parties been married, to strive to achieve an outcome where a lower earner in the partnership may effectively be compensated by the other to achieve parity”.

Rather, he was to “look in the round” at the parties’ financial situations and the children’s needs, taking this into account when considering what if any property orders to make.

V and W (ToLATA – schedule 1 – whether to defer sale of jointly owned property) [2020] EWFC

Written by Nicola Laver, a non-practicing solicitor and a qualified journalist. She is also editor of Solicitors Journal.