Where there is a dispute between beneficiaries, a court considering an application under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 is not constrained to consider only the circumstances and wishes of the majority beneficiaries by value.
The Court of Appeal has considered the extent of the court’s powers, allowing an appeal in Savage v Savage [2024] EWCA Civ 49.
The case concerned an order made in financial remedy proceedings between the respondent – the appellant’s father – and his ex-wife concerning the sale of three parcels of land in Alfriston, East Sussex. The properties included land on which Frank Savage ran a campsite and were held on trust for Raymond Savage and the four children of his late brother, of which Frank was one. Raymond held a majority interest in the properties, the children a minority one.
The district judge’s order of February 2022 provided that Frank should have a right to buy out Raymond’s interest in the properties for £66,150 (based on expert evidence) before they were offered to the open market. The order recorded: that the court was not restricted from considering the interests of the children as minority beneficiaries; that it took account of Raymond’s circumstances and wishes, as majority beneficiary; that the minority beneficiaries supported Frank being given a right of pre-emption over the land from which he conducted his business; and, while Frank could buy land elsewhere, this was not the same as continuing a location-sensitive business in the same location.
On Raymond’s appeal, the judge ordered the sale of the properties on the open market without giving Frank a right of pre-emption. He decided that, since there was a dispute, the court was constrained to consider only the circumstances and wishes of the majority beneficiary and not those of the minority beneficiaries. Frank appealed.
The Court of Appeal confirmed that the court has a broad discretion under section 14 of the 1996 Act to make whatever order it “thinks fit” on trustee applications concerning the exercise of their functions or when declaring the nature or extent of an interest in trust property. Section 15 lists factors to which the court must have regard when exercising its discretion, but the list is not intended to be exhaustive.
Where there is a dispute, the court is obliged to consider the circumstances and wishes of the majority beneficiary. While there is no such obligation in respect of minority beneficiaries, there was nothing to prevent the district judge from taking them into account. The district judge’s order was restored.
Louise Clark is a property law consultant and mediator
