Wolloff v Patel: what is the jurisdiction of the First-tier Tribunal (Property Chamber) where a party is bankrupt?

Hello Lucinda. I read your post with interest, but I am very unsure why the court would even consider Patel as a beneficiary to a “constructive trust” over the property in Ilford, in which he neither contributed funds for the purchase to, nor lived in – possession. I understand he was a Halifax B/S co-signee for the loan. See below.

Interpretation of Wolloff and Ors. v Patel [2019] UKUT 333 (LC)

FUNDING OF JOINT TENANCY PROPERTY IN ILFORD:

Purchase price of Property 2007 £357,000

Funded by: Halifax B/S £301,500 (84.5%)
Wolloff Downpayment £ 55,500 (15.5%)

Wolloff lived in property Patel did not. Both co-signee’s for the Halifax B/S.

In 2016 Patel was declared bankrupt. If Patel is a Joint Tenant, this severs Joint Tenancy and he becomes a Tenant in Common? If so there is severance… No right of survivorship. The beneficial interest now vests in the Bankruptcy Trustee for Patel’s share, if any. I still cannot see how Patel has any beneficial interest in the property.

Was Patel’s portion of the estate in Ilford – if any to enter into the bankruptcy estate – Trustee’s control?

If we are to look at this case in Trust law, why is it that a RESULTING TRUST is not applied in favour of Wolloff – pursuant to the Balance Sheet principle [hold property in proportion to shares contributed] , rather than the common intention, but in this case does not the infamous evidence issue in §53(1)b on evidence of a common intention constructive trust over land raise its ugly head?

The judge held that Wolloff’s account, supported by a short written statement made by Patel, was truthful and therefore the property had been and was held on constructive trust for P alone.

My question is WHY? Surely in this case there is no contribution in money from Patel, and he does not live in the premises, so why would he have ANY beneficial interest in the property, over which a Bankruptcy Trustee might exert any authority?

Lexis reports “Although there had been no conflicting factual account from the trustees, at trial, they challenged the truth of P’s story by reference to various documents held by P or disclosed by him. The FTT decided that it had jurisdiction to decide the question of beneficial ownership by virtue of LRA 2002, and it decided it in P’s favour. Consequently, it made an order directing the Chief Land Registrar to cancel the restriction application. The trustees were granted permission to appeal on the question whether the tribunal was wrong to conclude that it had any jurisdiction to decide who beneficially owned the property.”

Issues and decisions:

Whether, despite the terms of LRA 2002 ss 73 and 108, the tribunal’s apparent jurisdiction was impliedly excluded by the terms of the Insolvency Act 1986 (IA 1986), or alternatively had to be exercised by requiring the parties to start court proceedings, in a case where the matters to be decided were questions of fact or law that related to a bankruptcy.

The relevant provisions of LRA 2002 were clear. They gave the FTT jurisdiction, on a referral under LRA 2002 s 73(7), to determine such facts relating to the application and the objection as were necessary to enable it to direct the Land Registrar whether or not it was ‘necessary or desirable’ for a restriction to be entered on the register. It was appropriate to note that the court with bankruptcy jurisdiction had power, under IA 1986 s 285(1), to ‘stay any action, execution or other legal process against the property or person of … the bankrupt’. Whether that power was exercisable, or should properly be exercised, in a case where the FTT had jurisdiction to determine whether a bankrupt had a beneficial interest in registered land was a question that should be determined with the benefit of full argument in a case in which the issue arose (see [50], [51] of the decision).

I still am very hazy as to why the court “constructed” a Trust over Patel’s beneficial interest.

Thank you.