Claughton v Charalambous

Claughton v Charalambous [1999] 1 FLR 740, ChD

The effect of exceptional circumstances on the rights of a beneficiary in actual occupation.

Facts

A married couple jointly owned a property which acted as their matrimonial home.  The husband subsequently entered bankruptcy, and his creditors wished to assert their right to sell the home to assist in reclaiming their debts. The wife was in particularly poor health, suffering from renal failure and severe arthritis, and thus sought to assert her beneficial interest in the property alongside the fact of her actual occupation to indefinitely halt the sale of the property. Further relevant was that it was dubious whether the property’s sale would have in fact been beneficial to the creditors.

Issues

Should the sale of property be paused (and thus halting the exercise of the creditors’ rights) in light of the case’s exceptional circumstances, namely the occupant’s grave medical condition.

Decision/Outcome

The Court found for the bankrupt’s wife and determined that that sale ought be halted. Further, in considering whether s. 335A(3) ought apply, the Court has sizable discretion in making a ‘value judgment’ on all the circumstances to reach the most equitable outcome; in light of the wife’s health and the fact that selling the property was unlikely to provide the creditors with the recourse to which they were entitled, a Court could reasonable intervene. Moreover, the Court viewed that there was little scope for appeals in such cases. Thus, in the instant case the order for possession could be reasonably suspended indefinitely in light of the occupier’s terminal illness.