Savage v Savage

Sale of land – Trust – Trusts of Land and Appointment of Trustees Act 1996 – Land held upon trust for beneficiaries under will including appellant – Appellant appealing against order for sale of trust properties on open market without giving him right of pre-emption – Whether court entitled to have regard to circumstances and wishes of minority beneficiaries under section 15(3) of 1996 Act – Appeal allowed The appellant appealed against a court order made in financial remedy proceedings between the respondent and his ex-wife. The order concerned the method of sale of three parcels of land at Pleasant Rise and Pleasant Rise Farm, Cuckmere Road, Alfriston, East Sussex. The properties included land on which the appellant ran a campsite business. The properties were held upon trust for the respondent and his late brother’s children, including the appellant. The respondent had a two-thirds interest in the largest parcel of land, a three-quarters interest in the second largest, and a one-half interest in the smallest. The remaining interests were held by the siblings. The beneficiaries could not agree on the sale. The district judge made an order under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 giving the appellant a right to buy out the respondent’s interest in the properties before they were offered for sale on the open market, at a price of £66,150. The district judge held that he was not prevented by section 15(3) of the 1996 Act from having regard to the circumstances and wishes of the siblings, as minority beneficiaries, who supported the appellant having a right of pre-emption over the land from which he conducted his business. On appeal, the court held that, because there was a dispute between the beneficiaries, section 15(3) precluded the court from having any regard to the minority beneficiaries. An order was made for sale of the trust properties on the open market without the appellant having any right of pre-emption. The appellant appealed. Held: The appeal was allowed. (1) When deciding the ordinary meaning of the words used and determining which of any linguistically available meanings was the meaning that parliament intended, the court had to have regard not only to the way in which the words were used in the statutory provision in issue, but also to the relevant context. The starting point was section 14 of the 1996 Act, under which the court was given a broad discretion to make orders relating to the exercise by the trustees of any of their functions, having regard in particular to the non-exclusive list of the matters to which the court was to have regard, contained in section 15(1) and (3). Section 15(1) set out a list of factors to which the court had to have regard when considering the exercise of its discretion under section 14, but the list was not intended to be exhaustive. That was the ordinary and natural meaning of the opening words in section 15(1). Even though the court was directed to have regard to a listed matter, it was not bound to give effect to it, or to prioritise it over any of the other listed factors: Bagum v Hafiz [2015] EWCA Civ 801; [2015] PLSCS 230; [2016] Ch 241 considered. (2) Section 15(3) adopted  the same approach, simply adding a matter to the list set out in section 15(1) in two identified cases, namely (i) where there was no dispute, and (ii) where there was a dispute. The matters to which the court was to have regard also included the circumstances and wishes of any beneficiaries of full age and entitled to an interest in possession in property subject to the trust or (in case of dispute) of the majority (according to the value of their combined interests). But like section 15(1), there was no indication that these additional matters were intended in any way to be exhaustive or to bind the court in the exercise of its discretion. Hence, section 15(3) meant that where there was no dispute, in addition to the factors listed in section 15(1), the court had to take into account the circumstances and wishes of any beneficiaries of full age and entitled to an interest in possession in property subject to the trust. Section 15(3) also meant that where there was a dispute, in addition to the factors listed in section 15(1), the court had to take into account the circumstances and wishes of the majority by value. The difference which section 15(3) made was that in the case of a dispute, there was no obligation upon the court to have regard to the circumstances and wishes of the minority. (3) However, consistently with the structure of section 15 as a whole, there was nothing in the wording or structure of section 15(3) that expressly or by implication prevented the court from taking factors other than those listed into account. The structure and purpose of section 15 was to set out the factors to which the court was obliged to have regard: it was not intended to limit other factors that the court was permitted to take into account. The court was not prevented from having regard to the circumstances and wishes of the minority by value. Section 15(3) did not expressly, or by implication, exclude the circumstances and wishes of the minority of beneficiaries by value from being taken into account by the court. It simply did not include those matters in the list of things that had to be considered. (4) The court had a discretion as to the order which it made under section 14. Section 15(1) went on to provide that there were certain matters to which the court had to have regard. Thus, section 15(1) provided that the matters to which the court was to have regard were the specified matters. The judge had to have regard to certain specified factors as set out in section 15(1). It did not say what weight was to be given to those factors. Nor did it say that the specified factors were exhaustive of all the circumstances which the judge must consider: White v White [2003] EWCA Civ 924 considered. In all the circumstances, the judge had misinterpreted section 15(3) and misapplied it to the facts of the present case. The order of the district judge would be restored. He took into account all the relevant circumstances and reached a decision which was both sensible and well within the reasonable ambit of his discretion under section 14. William Moffett and Amber Turner (instructed by Cripps LLP) appeared for the appellant; Simon Sinnatt and Mark Sheppard (instructed by ODT Solicitors) appeared for the respondent. Eileen O’Grady, barrister Click here to read a transcript of Savage v Savage