Re Citro (A Bankrupt)

Where a co-owner is bankrupt, the creditors' interests will usually prevail and sale will be ordered, unless there are exceptional circumstances.

Citation
[1991] Ch 142
Court
Court of Appeal (Civil Division)
Year
1991
Subject
Land Law
Topic
Co-ownership and trusts of land

Facts

Two brothers, Domenico and Carmine Citro, were declared bankrupt. Each of them owned a half share in his matrimonial home, the other half belonging to his wife. The trustee in bankruptcy applied for orders for sale of the homes. The wives argued that sale should be postponed until their youngest children reached 16, because they would be unable to find other homes in the same area, and the children's schooling would be disrupted. The judge postponed sale.

Legal principle

The Court of Appeal ordered sale without substantial postponement. Nourse LJ said that, where the interests of creditors conflict with those of the bankrupt's family, the creditors' interests will usually prevail, and sale will be ordered unless there are exceptional circumstances. The eviction of the family, the loss of the home and the disruption of the children's schooling, though distressing, were the melancholy consequences of debt and improvidence, and were not exceptional. The principle is now in section 335A of the Insolvency Act 1986.

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