Bankruptcy Trustees Overcome Block on House Sale Due to Disability

November 15, 2016

Bankruptcy Trustees Overcome Block on House Sale Due to Disability

When the father of a disabled girl was made bankrupt, largely through a series of events outside his control, his trustees in bankruptcy sought a court order for the sale of the house he owned jointly with his wife. The sale was needed, they argued, in order to satisfy the debts due to his creditor, HM Revenue and Customs (HMRC). In addition, the trustees in bankruptcy were keen to have their expenses paid. If they succeeded in this aim, however, the payment to HMRC would be quite small.

The order was granted and the court stipulated that the man's trustees in bankruptcy should receive one half of the beneficial interest in the property, and his wife the other half.

The eldest of the couple's three children was born with a condition known as global developmental delay, and also suffers from dyspraxia and obsessive compulsive disorder. Because she has difficulty with mobility, the family lives in a bungalow that has a layout particularly suited to her needs. The order was therefore postponed for as long as the couple's disabled daughter continues to live at the property.

The daughter is 30 years old and will always need the level of care she currently receives. She has a normal life expectancy. In the circumstances, the trustees in bankruptcy went to court to have the postponement of sale conditions removed.

The district judge found the circumstances of the case to be exceptional and used her discretion to order that the postponement order should be continued indefinitely while the daughter continues to reside at the property.

On appeal to the High Court, the trustees were successful. The judge considered that the district judge had been 'wrong not to consider any alternative to indefinite postponement of the sale' and concluded that 'the need for the property to be sold within a reasonable period is therefore a nettle which has to be grasped'.

He ordered that the sale should be postponed for a further 12 months.