''Mortgage Corporation v Shaire ''
001Ch 743 is a widely reported
English land law
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 feudal ...
case relating to the
Trusts of Land and Appointment of Trustees Act 1996
The Trusts of Land and Appointment of Trustees Act 1996c 47, 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.
B ...
. Such a status specifically flowed from an instance of
non est factum
(Latin for "it is not ydeed") is a defence in contract law that allows a signing party to escape performance of an agreement "which is fundamentally different from what he or she intended to execute or sign". A claim of means that the signatur ...
mortgage fraud
Mortgage fraud refers to an intentional misstatement, misrepresentation, or omission of information relied upon by an underwriter or lender to fund, purchase, or insure a loan secured by real property.
Criminal offenses may be prosecuted in eith ...
where the mortgage lender and the defrauded co-owner wished to accelerate and delay sale respectively. The case is relevant to
matrimonial law
Marriage law refers to the legal requirements that determine the validity of a marriage, and which vary considerably among countries. See also Marriage Act.
Summary table
Rights and obligations
A marriage, by definition, bestows ...
in that the respective equitable shares in the home awarded to Mrs Shaire and Mr Fox in 1987 matrimonial proceedings were never defined and it fell to the court to define these.
The parties accepted the settled law of mortgages that the mortgage could only be applied against the defrauding co-owner's share, not against the innocent co-owner who was duped and was without knowledge of the mortgage loan.
The court made broad, reasoned announcements on the end of the old law and old doctrine of "trusts for sale". The extent of co-ownership was a side issue, determined also by the case. It fixed the Mrs Shaire's share at 75% and her partner for the past three-to-four years at 25%.
Facts
Mr Marvin Fox and Marsha Shaire lived at 74 Winchmore Hill Road,
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
N14 as joint tenants following a transfer at the time of the divorce proceedings in 1987. Mr Fox died in 1992, and it transpired he had forged Mrs Shaire's signature, and mortgaged the property to Mortgage Corporation. It was accepted their charge was valid against his share. However, payments were not met and the bank applied for a possession order under
TLATA 1996
The Trusts of Land and Appointment of Trustees Act 1996c 47, 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.
B ...
section 14. Mrs Shaire argued that under section 15 her interest should prevail over those of the creditors.
Judgment
Neuberger J held that Parliament intended with
Trusts of Land and Appointment of Trustees Act 1996
The Trusts of Land and Appointment of Trustees Act 1996c 47, 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.
B ...
(ToLATA) s 15 to replace trusts for sale with trusts of land, and thus give the court more discretion and 'to tip the balance somewhat more in favour of families and against banks and other charges'. The interest of the chargee was just one factor, and there was no suggestion that it should be given more weight. It was in the court's discretion. In the circumstances, the court would not make an order until the parties had had an opportunity to consider the consequences of the court's conclusions on the law. Old cases should be treated with caution.
[ 001Ch 743, 760]
Instead, the claimant's interest should be converted to a loan for Mrs Shaire to pay off over time. If she could not meet the requirements of the loan, then the court would order a sale, but only after consideration had been given to properties available to Mrs Shaire with the money that would be realised upon sale of the house. The court also held that Mrs Shaire would never have intended for Mr Fox to have a 50% interest in the property, and therefore set his share at 25%.
See also
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English property law
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 ...
*
English trusts law
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the ...
References
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2001 in England
English property case law
English trusts case law
High Court of Justice cases
English land case law
2001 in United Kingdom case law