Law Articles

Trusts of Land and Appointment of Trustees Act (TOLATA) 23/02/2024

The Trusts of Land and Appointment of Trustees Act (TOLATA) 1996 is a key piece of legislation in the UK that addresses disputes related to the ownership and occupation of property, particularly among co-owners or when the ownership is not clearly defined in a deed. TOLATA claims can be broadly categorised into three main types of applications:                                                                                                                                                                                             

1. Occupation: to determine who is entitled to occupy the property.
2. Ownership: to decide the nature and extent of the ownership interests in the property.
3. Sale: to resolve whether the property should be sold.                                                                                                                        

The court, under TOLATA, does not have the authority to alter the proportions of ownership but can make orders regarding the sale of the property, partition, or occupation rights. The process typically begins with pre-action steps, including communication between the claimant and the defendant to outline the case and attempt alternative dispute resolution (ADR) methods like mediation. If unresolved, the claim proceeds to court, where an application is made, and the case is allocated usually to the multitrack due to its complexity. Throughout the process, both parties are encouraged to engage in ADR to potentially avoid the costs and time of a trial. If the case goes to trial, the court will review evidence, hear witnesses, and make a judgment. Costs generally follow the outcome, meaning the unsuccessful party may be ordered to pay the successful party's legal costs.

TOLATA claims are complex and often involve significant legal and financial implications for the parties involved, so it is always best to seek legal advice earlier to help navigate the process effectively.

The pre-action steps for a Trusts of Land and Appointment of Trustees Act (TOLATA) claim involve several key procedures aimed at resolving the dispute before it escalates to court proceedings. These steps are designed to encourage communication, clarity, and, if possible, settlement between the parties involved.

The following is a short summary of the key steps:                                                                                                                                         

1. Pre-Action Letter: The claimant must write to the defendant before making a court application, setting out their case in detail. This letter should clearly outline the nature of the dispute, the claimant's position, and what they seek to achieve through the claim.
2. Response from the Defendant: Upon receiving the pre-action letter, the defendant is expected to respond. This response should address the points raised by the claimant and provide the defendant's perspective on the dispute.
3. Exchange of Key Documents: Both parties are required to provide copies of key documents that they intend to rely on during the dispute resolution process. This step ensures that both sides have access to the relevant evidence and information.
4. Alternative Dispute Resolution (ADR): Before proceeding to court, the parties should attempt to resolve the dispute through ADR methods such as mediation. Engaging in ADR can help the parties reach a compromise or settlement without the need for a trial, which can be both time-consuming and costly.
5. Expert Opinion: If necessary, an expert opinion can be sought to assist the parties in reaching a compromise. This expert evidence can later be used within the court proceedings, subject to the court's permission.
6. Application to the Court: If the dispute cannot be resolved through the pre-action steps, the claimant may proceed to make an application to the court. This involves submitting a claim form accompanied by particulars of the claim. A court fee is payable at this stage.
7. Service of Proceedings: After the claim form is issued, it must be served on the defendant. The defendant then has specific deadlines to acknowledge the service and, if necessary, file a defence or counterclaim.                                                                                                                                                                                                     

It's important to note that there is no specific pre-action protocol for TOLATA claims under the Civil Procedure Rules (CPR). However, parties are expected to follow the general guidance provided in the Practice Direction on Pre-Action Conduct and Protocols. This includes exchanging sufficient information to understand each other's positions, deciding how to proceed, and attempting to settle the issues without resorting to court proceedings.

If a party chooses not to follow the pre-action protocol without good reasons, and the case proceeds to court, the court may consider this non-compliance when giving directions for the management of proceedings and when making orders for costs. The court has the discretion to apply various sanctions for non-compliance, which can include: ordering that the proceedings be stayed while the parties take specific steps to comply with the pre-action protocol or Practice Direction; applying sanctions directly related to costs, such as ordering the non-compliant party to pay the costs of the other party or a portion of them; considering the non-compliance when deciding on the overall costs order at the conclusion of the case.

The emphasis of pre-action protocols is on cooperation between the parties to identify the main issues and encourage settlement before court proceedings start. Therefore, failure to engage in this cooperative process can be viewed unfavourably by the court and result in penalties that could have been avoided with compliance.

For further information and advice on this issue, and other family law issues, please contact us for a free initial consultation on 01992 306 616 or 0207 956 2740 or email us.