C Putnam & Sons v Taylor & Anor

A charging order over one co-owner’s beneficial interest in a family home may be enforced by sale, even where the other co-owner is not personally liable for the debt. The court must balance the interests of the beneficiaries, the purposes for which the property is held, any relevant welfare considerations and the secured creditor’s interest. Human rights are relevant to that balancing exercise, but do not automatically prevail over the creditor’s rights. A sale may be postponed to allow an orderly private sale and alternative accommodation, but the court should not defer enforcement indefinitely where there is no realistic alternative source of payment.

The claimant sought possession and sale to enforce a final charging order securing a judgment debt against Mr Taylor’s interest in the family home. Mr and Mrs Taylor were registered joint proprietors. Mrs Taylor argued that she was solely beneficially entitled because she had largely funded the household and that enforcement would unfairly displace her, although she was not liable for the debt.

The court considered whether the beneficial joint tenancy had been altered before the charging order and, if not, whether the charging order should be enforced under the Trusts of Land and Appointment of Trustees Act 1996, having regard also to Convention rights.

1. Beneficial ownership. The registration of Mr and Mrs Taylor as joint proprietors gave rise to a presumption that they were beneficial joint tenants. Their original intention in 1979 was a beneficial joint tenancy. Conduct alone did not establish any earlier variation. The later written agreement in January 2006 was sufficient between them to change their beneficial interests, but it was made after registration of the charging order and could not defeat the claimant’s secured interest.
2. Effect of the charging order. At the date of the charging order, each spouse had a joint beneficial interest. The order severed that interest, leaving equal tenants in common. Mr Taylor’s share was liable to satisfy the judgment debt; Mrs Taylor’s share was not.
3. Discretion to order sale. Under sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996, the court had to balance the purposes of the trust and the beneficiaries’ circumstances and wishes against the interests of the secured creditor. The statutory factors were not exhaustive. The legislation was compatible with Convention rights, and Articles 8 and 1 of the First Protocol required relevant interests to be considered but did not give Mrs Taylor priority.
4. Outcome. The claimant had no realistic prospect of payment other than from Mr Taylor’s share, and continued refusal of a sale would leave it waiting indefinitely while the debt increased. Mr Taylor’s illness justified previous postponements but not indefinite exclusion of the creditor. A sale was therefore ordered. The defendants were given until 15 June 2009 to sell by private treaty and secure alternative accommodation. If no sale occurred, possession was to be given to the claimant, with liberty to apply for an extension where a sale was genuinely imminent.