Moylan, Phillips and Snowden LJJ. An appeal by a minority beneficiary concerning the interpretation of s 15(3) of the Trusts of Land and Appointment of Trustees Act 1996. The question that the court needed to determine was whether the statutory direction that the court must have regard to the circumstances and wishes of the majority, where there is a dispute between beneficiaries, means that the court must disregard the circumstances and wishes of the minority.

Facts

An order was made in financial remedy proceedings between H and W, which concerned the method of sale of three parcels of land. The parcels of land were held upon trusts for H and the four children of his late brother (‘the siblings’), and included land upon which one of the minority beneficiaries ran a business. H had a two-thirds interest in the largest parcel of land and a three quarters interest in the second largest land, and a one-half interest in the smallest parcel land. The remaining interests were held by the siblings. W sought the sale of the parcels of land, but the beneficiaries could not agree between themselves the method of sale.

At first instance, DJ Owen made an order that gave one of the minority beneficiaries a right to buy out H’s interest in the parcels of land before they were offered for sale on the open market. In relation to s 15(3), the judge held that the main discretion was conferred by s 14, and s 15 included only a non-exhaustive list of factors. Though the court was obliged to take into account the factors in s 15, it was not governed by them alone (see Bagum v Hafiz [2016] Ch 241).

First appeal

On appeal, HHJ Farquhar disagreed with DJ Owen’s legal analysis as to the interpretation of s 15(3) and set aside his order. The reason being that the wording of s 15(3) meant that once the parties are in dispute, only the wishes and circumstances of the majority beneficiary can be taken into account, and those of the minority cannot be considered ‘through the back door’ of taking them into account as one of the other factors. The minority beneficiary was given permission for a second appeal against the judge’s legal conclusions in relation to s 15(3). The appeal was opposed by H.

Second appeal

Held, appeal allowed on the basis that the judge had misinterpreted s 15(3) and misapplied it to the instant case. The Court of Appeal confirmed that the circumstances and wishes of minority beneficiaries were not so excluded. There is nothing in the wording or structure of s 15(3) that expressly or by implication prevents the court from taking factors other than those listed into account. The structure and purpose of s 15 is to set out the factors to which the court is obliged to have regard and it is not intended to limit other factors that the court is permitted to consider. The first instance decision was restored which gave the minority beneficiary a right of pre-emption in respect of the parcels of land from which he operated his business, despite H objecting and seeking an immediate sale on the open market.