Chaston vs Chaston [2018] EWHC 1672 (Ch)

WTLR Issue: Summer 2018 #172

CHASTON & ORS

V

CHASTON

Analysis

The parties were three of the four children of Sybil and John Chaston (‘the parents’). They inherited from their parents a freehold property (‘the Property’). The Property was currently held by the Appellants and the Respondent upon trust for the Respondent as to 50%, and as to 25% for each of the two Appellants. 


In proceedings brought under s14 of the Trusts of Land and Appointment of Trustees Act 1996 the District Judge ordered that the Property should be sold to the Respondent at a price to be determined by a valuation exercise. 


The hearing before the District Judge took place on 21 July 2017, at which there 
was no oral evidence, but at which oral submissions were heard supplementing 
written submissions. The First Appellant then applied to adduce further evidence. The District Judge permitted such evidence to be adduced, and directed that written submissions on it be made by 24 August 2017 in order to avoid the cost of a further hearing. He did not then deliver his judgment until 9 January 2018, more than four months 
later.


The Appellants appealed the judgment of the District Judge contending that the Property should be placed on the open market and/or that the District Judge’s order should be set aside by reason of his delay in handing down judgment.


Held:


1) An appeal is limited to a review of the decision of the Court below, unless the court considers that in the circumstances of a particular appeal it would be in the interests of justice to rehear the case. The appeal in the instant case was one appropriate simply for a review. 


2) It was accepted that there may have been some fading of the impact the oral arguments during the four months’ delay in handing down the written judgment. However, most of this will have occurred in the days following the hearing, and the Judge’s notes and the written submissions will not have faded at all. There was no scope for, and no evidence of, any prejudice arising to the parties as a result of the delay in handing down judgment, frustrating though that must indeed have been for both parties and their lawyers. Insofar as the appeal was based on delay, it was rejected. 


3) The District Judge had power to direct the sale of the Property to one of the beneficiaries, even though there was currently no one living in the Property. The parents bought the Property as a family home so that, as the District Judge found, if any of the children wished it, it could be kept within the family. 


4) The Judge had found as a fact that the four children had reached an agreement in principle that the Property was to be sold to the Respondent. This was a matter of some significance, and was properly taken into account by the District Judge. It was an aspect of the wishes of the beneficiaries of the trust of land, and it raised an equity in favour of the Respondent who had relied upon the agreement by selling his own property and putting his furniture into storage. 


5) The court rejected submissions that: (a) that the intentions of those creating the trust should not be taken into account in so far as they could only be ascertained from a letter of wishes, rather than from a trust document; (b) no attention should be paid to the wishes of the beneficiaries, since none of them had the right to occupy the Property; and (c) the wishes of the beneficiaries could only be taken into account to the extent that they were trustees.


6) It was accepted that the benefits accruing to a trust by a reason of a sale to one beneficiary (such as speed, lower sale costs, etc) have to be balanced against the advantages of an open market sale, i.e. that it would realise the true, and potentially a higher, market price. However, since the Judge’s decision to order a sale to the Respondent was a matter of judicial discretion, it was not open to challenge on appeal merely on the basis that another judge might or would reach a different conclusion as a result of the exercise of the same discretion.


7) A trustee is not always bound to obtain the best possible price for an asset on sale. The duty is to obtain the best price reasonably obtainable in the circumstances, which may not be the same. Elements of a duty of care may also play a part. This was a trust with (now) only three beneficiaries, all of the full capacity. If they all agree on a private sale to one of themselves for a given price (even a known undervalue) no one can complain. It was not self-evidently true that valuations were always lower than what was obtained in the market, and no evidence was adduced in support of that proposition. Indeed, most property lawyers of any experience will know of cases where valuations of property were obtained which exceeded the price obtained on a subsequent sale.


8) The decision to sell to one of the beneficiaries was, in this case, being taken by the court, and not by the trustees at all. The court in giving its direction is entitled to take into account a wider range of matters than the trustees themselves. So the court may well reach a decision not open to the trustees on the material available to it. The court then directs the trustees what to do. Accordingly, the trustees cannot be in breach of duty in selling at the direction of the court.


9) There was no proper basis for challenging the finding of the District Judge that the valuers were able to determine the market, even in the absence of comparable properties. Every immovable property is unique, because every location is different from every other. Accordingly, the court rejected the argument that the Property was in a unique location, and that the market price could not be adequately ascertained by valuation.


10) Even though the District Judge had referred, in one paragraph of his judgment, to providing a “fair price”, he elsewhere referred to the court determining the true market value. It was, therefore, clear that the Judge intended the valuer to value the market price, rather than a fair price. Furthermore, in giving directions to the trustees for a sale at a fair price, the Judge meant that he was not acting unfairly, unjustly or capriciously as between beneficiaries. 


11) In conclusion, the District Judge did not make any errors of law, nor act unjustly in the procedure that he followed. In exercising the discretion under s14 of the Trusts of Land and Appointment of Trustees Act 1996, he took into account all the matters which she should have taken into account, did not take into account anything which he should not have taken into account, and his decision could not be stigmatised as “wholly wrong” so as to enable the court to set it aside. On the contrary, his decision fell within that generous ambit with within which reasonable disagreement is possible.


Introduction
 [1] This is my judgment on two appeals (one by each appellant) from the decision of District Judge Watkins, handed down on 9 January 2018 but embodied in an order dated 23 January 2018. Both appellants’ notices were filed on 12 February 2018. Permission to appeal was given by Birss J on 19 April …
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Counsel Details

Raj Sahonte (New Square Buildings, 12 New Square, Lincoln’s Inn, London, WC2A 3 SW, tel 020 7419 8000, email clerks@newsquarechambers.co.uk) instructed by Thomas Simon Solicitors (62 Newport Road, Cardiff, CF24 0DF, tel 029 2055 7200) for the First Appellant.


The Second Appellant appeared in person



Timothy Walsh, instructed by Wards Solicitors LLP (52 Broad Street, Bristol, BS1 2E, tel 0117 9292811, email contactbristol@wards.uk.com) for the Respondent


Cases Referenced

  • AEI Rediffusion Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507
  • Ashany v Eco-Bat Technologies Ltd [2018] EWCA Civ 1066
  • Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577, CA
  • Audergon v La Baguette Ltd [2002] EWCA Civ 10
  • Bagum v Hafiz [2015] WTLR 1303, [2016] Ch 241
  • Bassano v Battista [2007] EWCA Civ 370
  • Biogen Inc v Medeva [1997] RPC 1
  • Bond v Dunster Properties Ltd [2011] EWCA Civ 455
  • Buttle v Saunders [1950] 2 All ER 193
  • Collins v Collins (No 2) [2016] WTLR 1145, [2016] 2 P & CR 6
  • EI Du Pont Nemours and Co v ST Du Pont [2006] 1 WLR 2793
  • English v Emery Reimbold and Strick Ltd [2002] 1 WLR 2409
  • Flannery v Haifax Estate Agencies Ltd [2000] 1 WLR 371
  • Piglowska v Piglowska [1999] 1 WLR 1360
  • Roache v News Group Newspapers Ltd [1998] EMLR 161
  • Saunders v Vautier (1841) Cr & Ph 240
  • Tanfern v Cameron McDonald [2000] 1 WLR 1311

Legislation Referenced

  • Trusts of Land and Appointment of Trustees Act 1996 s14, 15