White v White

The Court of Appeal considered competing applications under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) and the Children Act 1989 (Schedule 1). The primary legal issues were the matters to which the court must have regard under section 15(1) and section 15(3) of TOLATA, whether "intentions" and "purposes" can include intentions formed after the creation of the trust, and case management where co-owners invoke different statutory regimes.

The court held that the judge at first instance had applied the correct statutory framework under the 1996 Act, that "intentions" in section 15(1)(a) refer to the common intention of the persons who created the trust (normally at or before creation) and do not extend to unilateral later intentions, and that a purported subsequent additional purpose could not be found without evidence of the other co-owner's agreement. The court also held that section 15(3) permits the judge to have regard to the circumstances and wishes of adult beneficiaries and to assign such weight as appropriate.

Although the Court of Appeal found procedural mismanagement in the county court by subordinating the father's Schedule 1 application, it concluded that the first-instance judge had understood the essential task and reached a defensible discretionary balance between the mother's need to realise capital and the children's welfare; accordingly the appeal was dismissed.

The parties bought the family home as beneficial joint tenants in 1987. They remortgaged and extended the house when expecting their first child. After relationship breakdown, the mother issued an application under section 14 of TOLATA in November 2000, initially seeking deferral of realisation so she could remain primary carer; later her position shifted towards seeking immediate sale. The father issued an application under section 15 and Schedule 1 of the Children Act 1989 seeking transfer of the mother's interest in the property for the children's benefit. The county court (Judge McIntyre) adjourned the father's Schedule 1 application and heard the mother's TOLATA application, later ordering sale of the property. The father sought restoration of his Schedule 1 application and permission to appeal the sale order.

The appeal raised these principal issues:

• Whether the first-instance judge had wrongly applied a pre-TOLATA approach (section 30 Law of Property Act 1925) rather than the 1996 Act;
• Whether the judge failed to have regard to section 15(1)(a) and (b) by overlooking the father's evidence that an additional purpose (to provide a home for the children) arose after purchase;
• Whether intentions for section 15(1)(a) include intentions formed after the trust was created;
• Whether section 15(3) permits the judge to have regard to the circumstances and wishes of adult beneficiaries in dispute and what weight may be given.

The Court of Appeal (Thorpe LJ, Arden LJ, Bodey J) held that the judge had applied the 1996 Act and that any suggestion that "intentions" includes unilateral later intentions was incorrect: "intentions" should be read as the intention of the persons who created the trust, and a subsequent change of purpose requires agreement by the co-owner. Section 15(3) was held not to exclude consideration of adult beneficiaries' circumstances and wishes; weight is a matter for judicial discretion. The court criticised the county court's case management in subordinating the father's Schedule 1 application but, balancing the factors and given the judge's findings about the father's ability to rehouse the children, concluded that a retrial of the TOLATA application was not justified. The appeal was dismissed. The court recommended mediation and noted the desirability, in cases invoking Schedule 1, of the same judge dealing with both child and financial applications where practicable.

(i) Nature of the relief sought: the mother sought orders under TOLATA (initially deferment, then sale); the father sought transfer/adjustive orders under Schedule 1 of the Children Act 1989 and deferment of sale.

(ii) Issues framed by the court: correct statutory test under TOLATA (section 15), meaning and timing of "intentions" and "purposes", scope and weight of factors in section 15(1) and 15(3), and procedural case management where competing statutory remedies are invoked.

(iii) Court's concise reasoning: the 1996 Act governs trusts of land and supplies the relevant checklist; "intentions" relate to the intentions of the creators of the trust in common and do not embrace unilateral later intentions; a later additional purpose requires evidence of agreement by the other party; section 15(3) allows regard to adult beneficiaries' circumstances and wishes with weight for the judge to decide; despite management errors the first-instance judge reached a defensible discretionary outcome balancing the mother's capital needs and the children's welfare, so the appeal was dismissed.

Appeal dismissed. The Court of Appeal held that the first-instance judge applied the Trusts of Land and Appointment of Trustees Act 1996 and reached a defensible discretionary balance between the mother's need to realise capital and the welfare of the children. The court clarified that "intentions" in section 15(1)(a) denotes the common intention of the persons who created the trust (normally at or before creation) and that a later unilateral change of purpose cannot be found without the other co-owner's agreement. Section 15(3) permits consideration of adult beneficiaries' circumstances and wishes and the judge may assign such weight as he or she thinks fit. Although the county court's case management was criticised for subordinating the father's Schedule 1 application, the appellate court declined to order a retrial of the TOLATA hearing.

Appeal from Uxbridge County Court (His Honour Judge McIntyre). The Court of Appeal (Civil Division) dismissed the appeal. Neutral citation: [2003] EWCA Civ 924.