TOLATA Claims - A Guide For Cohabiting Or Unmarried Couples

TOLATA is the statute that gives the court the power to make orders regulating property ownership, occupation, or use when two or more people own property together.

What is TOLATA?

TOLATA is an abbreviation of the Trusts of Land and Appointment of Trustees Act 1996. It's also sometimes referred to as TLATA.

Potential property disputes may arise as to how much property each owns, who is entitled to occupy it, and/or whether the property should be sold.

However, the court's statutory powers are quite narrow and limited to making orders for sale, declaring the parties' beneficial "shares," or orders concerning how the trustees of a property exercise their powers.

What are the types of TOLATA claims?

Three main types of applications can be pursued:

1. to decide who is entitled to occupy a property;
2. to decide the nature and extent of the ownership of a property; and
3. to decide whether there should be a sale of a property.

The court does not have the power to adjust the proportions in which property is held.

How to prevent a TOLATA claim?

If an application has been made to the court, you will need to follow the process. However, if you are planning to cohabit with your partner or to buy a property as a joint business venture, there are several steps that you can take to reduce the risk of a claim arising if the relationship breaks down.

Consider entering into a cohabitation agreement or a Declaration of Trust, which records your intentions regarding property ownership in writing. This should be regularly reviewed if your intentions or circumstances change, and a record of the financial contributions you both have made to the property should be kept.

TOLATA and Schedule 1 Children Act 1989 Counterclaims

The court's powers in TOLATA proceedings are limited. Claims are determined under property and trust law. 'Fairness' is not featured in property and trust law the way it is in matrimonial law.

In cases where the claim arises due to a relationship breakdown and the family has children, it is important to consider whether Schedule 1 of the Children Act 1989 may also be relevant. Under Schedule 1, the court can consider what measures need to be taken to ensure that any children are financially provided for.

Engaged couples may also have other legislation they can rely on.

How much does making a TOLATA claim cost?

Any process that goes to trial will be expensive, and even if successful, there is no guarantee of recovering costs. TOLATA claims can be prohibitively expensive, given the high level of emotion attached to property ownership and often the limited equity.

The court strongly encourages people to try to resolve their differences through mediation or negotiation and is critical of people (often penalising them with orders to pay a proportion of the other person's legal costs) who make no attempt to settle matters prior to issuing a claim or unreasonably refuse to engage in such attempts during the process.

It is not only your costs you have to consider when bringing a TOLATA claim. After deciding the claim, the judge will decide who will be responsible for the other person's legal costs and can summarily assess the amounts payable if they are not subject to Fixed Costs Rules. The general rule is that costs "follow the event, " meaning the unsuccessful person in the claim must pay all the costs. That is not to say, however, that all incurred costs of the receiving party will be recoverable or recovered.

How will the court decide a claim?

The key issues that the court will consider when determining a claim are:

1. What were the intentions concerning property ownership, and what was the property purchased for?;
2. Was there any written agreement, or declarations of trust?;
3. What financial contributions did each person make to the purchase, upkeep, or improvement to the property?; and
4. How does any order affect the welfare of any children residing at the property?

The court will make its decision based on the specific facts of the case.

How long does a case take?

It is difficult to provide a specific timeframe, as each case is unique, and there will be varying levels of complexity and agreement.

Cases may be resolved through correspondence or other alternative dispute resolution in weeks or months.

Claims that go to trial depend on the listing of court hearings, which in turn depend upon how busy that court is. It is likely to take over a year to resolve a case that goes to trial.

The TOLATA claim process

The majority of TOLATA claims will follow the standard process, formally known as Civil Procedure Rule—Part 7, which is outlined below. A small number of claims are deemed more suitable for the Part 8 process, which is more streamlined but used where there is no significant disagreement on the facts.

Pre action

• The claimant (the person making the claim) writes to the defendant (the person being claimed against), setting out their case. This will usually require a response within 28 days, but guidance suggests that up to 3 months should be allowed (on request) for any investigations.
• The defendant should respond to that letter, setting out their position in response, or requesting clarity.
• The claimant and defendant should provide copies of the key documents they intend to rely on.
• Both should try a method of alternative dispute resolution, usually at this early stage, the exchange of 'Without Prejudice' offers.

The Court application

• An application is made by claim form and accompanied by particulars of claim.
• There is a court fee payable.
• The claim form (and particulars) is sent to the court for issuing.
• The claim form (and particulars) is served on the defendant.

Response to the claim

• The defendant has 14 days (from service) to file an acknowledgement of service stating whether they wish to admit or dispute the case.
• If the defendant has filed an acknowledgement, they have an additional 14 days to file a defence (28 days in total from service of the claim). This can be extended by up to 28 days with the agreement of the both sides.
• The defendant can include a counterclaim against the claimant with the defence.

Allocation

• The court provisionally allocates the matter to a 'track' and usually makes directions for the claimant and defendant to file directions questionnaires and confirm the draft directions that they will be seeking to ensure that all the information and documents are prepared and available for a trial.
• These claims are usually allocated to the multitrack. Where the case is allocated to the multitrack, a cost budget (referred to as Precedent H) for the entire claim must be completed by each person.

Costs and case management conference ('CCMC')

• The case is listed for a CCMC, at which a judge considers the timetable and whether they are satisfied that everything has been considered for the effective running of the case to trial. In doing so, the judge will resolve any issues about how the claim should proceed to trial and will amend or approve the cost budgets, limiting the costs that may be recovered for each stage of the process unless further application is made to vary the budget.

After the costs and case management conference

• The direction order made at the CCMC will include a deadline for filing witness evidence, inspecting disclosure documents, and getting expert reports (if required). It might also provide for a further hearing prior to the trial.

Pre-trial review

• If a pre-trial review is listed, a pre-trial checklist will be filed ahead of the hearing. The document is intended to confirm which witnesses will give oral evidence and how long they think the trial will last. Sometimes, the court is satisfied that such a hearing is not required.

Trial

• This is the hearing where a judge reads all of the evidence submitted, hears evidence from the witnesses and then makes a decision, delivering judgment and determining the outcome of the claim.

Glossary of terms

• Acknowledgement of service: A document by which a defendant acknowledges a claim.
• ADR (Alternation Dispute Resolution): A series of options open to people to avoid court and some of the time and costs that come with the court process.
• Allocation of case: The court allocates the matter to a 'track';
• Tracks:
  • Small claims track: claims worth less than £10,000 where a trial is not likely to exceed 1 day.
  • Fast track: claims worth more than £10,000 where the trial is likely to last more than 1 day.
  • Intermediate track: a newly introduced category that handles cases that are more complicated than those suited for the fast track, but not complex enough for the multitrack.
  • Multitrack: Claims considered to be specialist proceedings are allocated to this track regardless of value.
• Allocation questionnaire: A questionnaire is used to help determine which track is most appropriate for the case.
• Arbitration is a privately funded, out-of-court form of dispute resolution that can provide an outcome if matters proceed on a contested basis. It is a highly adaptable process that involves working with an appointed arbitrator to manage the case. If an agreement cannot be reached, the arbitrator will make the decision.
• Calderbank offer: An offer of settlement written 'without prejudice save as to costs'. Its effect is that the court cannot refer to it except at the conclusion of the matter when dealing with the issue of costs. The court has complete discretion to decide what weight should be attached to it when considering what costs order to make.
• Case management: The court has a duty to actively manage each case, and as such, this procedure may be adapted to the particular circumstances.
• Case management conference ('CCMC'): A short hearing to identify and understand the issues in the case and consider whether they can be narrowed before trial.
• Claimant: The person making the court application.
• Claim form: The document used to start proceedings. It contains information about the claimant, defendant, and case (accompanied by particulars of the claim).
• Chronology: A timeline of key events, with a brief outline and dates relevant to the proceedings.
• Consent order: When both sides reach an agreement which resolves the dispute, the agreement is written up into a document, which is signed and records the agreement reached. Once this consent order has been judicially approved and sealed, it becomes legally binding and determines the claim. Note: A Tomlin Order is a type of consent order under which a court action is stayed (not finally determined) upon agreed terms, included within a schedule to the order, usually as the agreement contains steps that the court cannot compel a party to complete.
• Costs orders: An instruction issued by the court concerning the costs of the proceedings.
• Costs budget (Precedent H): This is a prescribed form that the court requires the parties to the case to fill in detailing their costs. It is necessary to control the amount of costs recoverable by either party at the end of the proceedings.
• Court bundle: Documents needed by the court to conduct a hearing. Prior to each hearing, the claimant has the responsibility to try to agree on the contents of the bundle with the defendant and to prepare and file a copy of the bundle with the court. If the claimant is not legally represented but the defendant is, it becomes the defendant's responsibility to prepare the bundle.
• Court fee: The claimant must pay an initial court fee upon issuing the claim. Depending on the track, the claimant may also pay further hearing fees (unless a matter proceeds on a counterclaim alone, in which case the hearing fees are payable by the defendant).
• Civil Procedure Rules('CPR'): These rules are a procedural code that enables the courts to deal with civil claims fairly.
• Defence and counterclaim: The defence is the defendant's rebuttal of the claimant's case and response to the particulars of the claim. A counterclaim is filed when a defendant states that he has claims of his own to make against the claimant, either by way of set off against the claimant's claim or as stand-alone claims.
• Defendant: The person or people receiving the court application.
• Directions: The steps that must be taken and complied with to move a case forward may include the disclosure of documentary evidence, expert evidence, preparation of witness statements, and the timescales for these actions to be complied with.
• Disclosure: Disclosure of documents relating to the case is governed by the Civil Procedure Rules. Each person must complete a disclosure form including a list setting out all of the documents which
  • they rely upon,
  • adversely affect their case,
  • adversely affect another person's case,
  • support another person's case,
  • which they are required to disclose by a relevant practice direction. The other person can then request to inspect any documents they wish to.
• Expert advice: such things as property valuations, or taxation issues.
• Trial: The final hearing at which the court imposes a final decision on the parties.
• Mediation: is a confidential and impartial process. Together with their chosen mediator, both sides set the pace and agree on topics for discussion and the frequency of meetings. The mediator helps facilitate a supported conversation to try to reach an agreement in respect of the claims/property interests.
• Part 7 claim: The Part 7 procedure is used when the facts of the case are disputed.
• Part 8 claim: The Part 8 procedure is used for claims in which the court's decision concerns a question on which there is unlikely to be a substantial dispute of fact.
• Part 36 offer: An offer of settlement to avoid the matter going to trial must be submitted in accordance with the rules set out in Civil Procedure Rules Part 36. The main rules are that the offer must be in writing and remain open for 21 days or more.
• Particulars of claim: The specific detail and pleading of the claimants case.
• Pre-action letter: This is a letter warning the other party that proceedings will be issued unless matters can be resolved. The claimant must set out in a letter the nature of the dispute and what they will be asking the court to do to resolve matters. It should also set out the background to the matter and legal arguments which the claimant will rely on.
• Pre-action: this protocol explains the conduct and steps the court normally expects parties to take before commencing proceedings. No specific pre-action protocol exists for TOLATA claims, but the Practice Direction: Pre-action Conduct and Protocols should be followed.
• Pre-trial checklist: A form which the claimant and defendant must complete (usually following the expiry of the date upon which the last of the directions should have been complied with). It deals with compliance, witness and expert details, legal representation details, and the timeframe of the trial.
• Service of proceedings: Civil Procedure Rules Part 6 deals with the service of documents. The court usually serves the claim form. The court will send the claimant a notice that includes the date on which the claim form is deemed served.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.