Smith v Herbert [2014] EWHC 4177 (Ch)

WTLR Issue: June 2016 #160











The claimant was, together with his sister and brother, a beneficiary entitled to an interest in possession in land comprised within the Edmondsham Estate (children’s property) by virtue of a deed of appointment made in 1979 in exercise of a power contained in a settlement dated 17 March 1965 created by the late TAH Medlycott. Each life tenant was given power to settle his or her share on trust for such one or more of his or her children in such shares as should be appointed by deed or will. In default of appointment, each life tenant’s children were entitled to the capital in equal shares subject to a power given to the trustees to enlarge the life tenants’ shares in the children’s property. The proceedings had a lengthy history during the course of which the claimant sought to argue that his share in one third of the income of the children’s property gave him the right to occupy a part of the land comprising the children’s property. Eventually, a limited restraint order was made forbidding the claimant from making any further application without first obtaining permission from Master Teverson. On 18 July 2013 the claimant applied for permission to make a further application but, by order dated 16 December 2013, Master Teverson refused except in relation to one point; namely a claim under the Trusts of Land and Appointment of Trustees Act 1996 (1996 Act) that the claimant be allowed to occupy one of several residences comprised in the children’s property. An application notice was issued on 11 August 2014 in effect requesting an order that the trustee defendants let the claimant into possession of one of those residences comprised in the children’s property. Section 12(1)(a) of the 1996 Act gave a beneficiary who was beneficially entitled to an interest in possession in land subject to a trust of land the right to occupy the land at any time if, at that time, the purposes of the trust included making the land available for his occupation (or for the occupation of beneficiaries of a class of which he was a member or of beneficiaries in general). This was subject to a proviso that a beneficiary did not have a right to occupy land if it was either unavailable or unsuitable for occupation by him. The claimant sought to argue that a power contained in the 1965 settlement, which had been carried over into the 1979 appointment, for the trustees to permit a beneficiary of the trust to reside in or occupy any land forming part of the trust property by itself made it one of the purposes of the trust to provide property for the occupation of a beneficiary.

Held (dismissing the application):

It was, of course, for the beneficiary who claimed the right to occupy land subject to a trust of land to prove that he had that right and the time at which the existence of the right was to be tested was the date of the hearing. There was authority that power to acquire immoveable property for residence, occupation or use and enjoyment in specie by any person interested in possession in the income of the trust fund, being an additional power in the context of the life interest settlement, was not of itself sufficient to satisfy what were described as the alternative conditions contained in sub-paragraphs (a) and (b) of s12(1) of the 1996 Act. While the facts of the two cases were different and the power in the present case was in a wider form, this made no difference as a matter of law. What was necessary in every case was for the court to look carefully at the terms of the trust to see whether they contained a statement for the purposes of the trust sufficient to engage s12(1)(a) of the 1996 Act. It could not sensibly have been intended by the legislature to provide that everything that the trustees were empowered to do, however trivial and however remotely unlikely it was ever to take place, must nevertheless be regarded as one of the purposes of the trust. Indeed, the purposes of the trust instrument must be distinguished from a due exercise by trustees of their powers thereunder. Obviously, there were cases where, for example, two people buy a property together which they intend to use as a home. In such a case, this will give rise to a trust, statutory if not express, under which it is highly likely that the court would hold that one of the purposes of the trust was for the property to be used as a residence by those people. This case was different, originating as a discretionary settlement and subsequently being transformed into an accumulation and maintenance settlement. There was nothing in the terms of the trusts, whether as originally settled or as subsequently appointed out, which indicated that it was in any realistic sense a purpose of those trusts to provide homes for beneficiaries. The fact that trustees have as one of their additional powers the ability to provide for the residence of a beneficiary did not change the position. Even if the claimant had the right to occupy as his residence one of the houses comprised in the children’s property, none of them were in fact available for occupation by him at the date of the hearing because they were all currently tenanted on assured shorthold tenancies and the trustees had a long settled policy not to evict any tenant whose rent was not in arrears. This applied even if, as a matter of fact, the lease of one of the properties was due to run out within a day or two of the hearing. If Parliament had wanted to confer a right for which the claimant was arguing, it would have been simple to insert some such words as ‘within a reasonable time’ after the word ‘unavailable’ in s12(2) of the 1996 Act. Otherwise, none of the properties could be regarded as unsuitable for occupation by the claimant and his family.

DEPUTY MASTER MATTHEWS: Introduction [1] This is my reasoned decision on an application brought by notice dated 11 August 2014, in effect for an order that the relevant defendants (whom I shall simply call the defendants), trustees of certain trusts, do let the claimant in this action into possession of one of seven identified properties …
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Counsel Details

The claimant appeared as litigant in person.

Mark West (Radcliffe Chambers, 11 New Square, Lincoln’s Inn, London WC2A 3QB, tel 020 7831 0081, e-mail for the defendants.

Cases Referenced

  • Chan v Leung [2002] EWCA Civ 1075
  • F Long v Farrer & Co [2004] EWHC 1774 (ChD)
  • Inland Revenue Commissioners v Eversden [2002] WTLR 1013

Legislation Referenced

  • Trusts of Land and Appointment of Trustees Act 1996, ss12-15