Mortgage Corporation v Shaire [2001] Ch 743, ChD
Conditions for orders of sale for family homes under TOLATA.
Facts
Fox and Shaire held a property as joint tenants in law and as tenants in common in equity, with ownership divided as 25% and 75% respectively, in reflection of their contributions to the purchase price for the property. Fox proceeded to mortgage the property, forging Shaire’s signature, but subsequently defaulted on his mortgage payments. The mortgage was found to be valid only for Fox’s 25% share of the property. Thus, the claimants applied to the Court for an order to Shaire to sell the property so as permit the claimant to claim the money owed by Fox, as per the Trusts of Land and Appointment of Trustees Act 1996, s. 14.
Issues
Could the claimants rely on TOLATA s. 14 to enforce the sale of a property so as to recoup the cost of the defaulted mortgage repayments.
Decision/Outcome
The Court found for the defendant, asserting that TOLATA had altered the law’s approach from the earlier method of allowing interests to attach to trust of sale, instead allowing for them to attach to trust of land. Moreover, the relevant factors to be considered prior to a sale order under s. 15 of TOLATA had altered, and there was no presumption that such a sale ought be ordered to permit the judiciary greater discretion in reaching a fair and equitable conclusion, particularly in cases concerning the family home, as noted by Neuberger J. Thus, instead of ordering sale, the defendant was ordered to assume Fox’s repayment obligations.
Updated 20 March 2026
This article accurately describes the decision in Mortgage Corporation v Shaire [2001] Ch 743 and the legal principles established by Neuberger J regarding orders for sale under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), ss. 14 and 15. The core legal analysis remains good law.
Readers should be aware of subsequent developments. The courts have continued to refine the approach to s. 15 TOLATA, and in cases involving a trustee in bankruptcy the position differs materially: under s. 335A of the Insolvency Act 1986 (as amended), after one year from the vesting of a bankrupt’s estate, the court must presume that the interests of creditors outweigh all other considerations unless the circumstances are exceptional. This statutory framework does not apply to mortgagee creditors such as those in Shaire itself, but students should be careful to distinguish the two regimes. The general s. 15 balancing exercise described in this article, without any presumption in favour of sale, continues to apply where the applicant is a mortgagee or other non-bankruptcy creditor. No subsequent legislation has overturned the principles in Shaire, and the case remains regularly cited as authoritative on the weight to be given to the occupation interests of non-debtor co-owners in such applications.
