Baker & Anor v Dunne & Ors

Trustees may seek Beddoe relief to implement an existing possession order and realise trust property where the proposed course is supported by clear practical and financial evidence. Vacant possession may be authorised where continued occupation would prevent or materially reduce the value of the trust asset, particularly where the occupier has no legal right to remain.

A proposed later claim may amount to an abuse of process where its merits are clear, the relevant facts were known earlier, the claimant had ample opportunity to raise it, and it is advanced tactically to obstruct the trustees’ proper administration. Delay alone is insufficient. Goodwill belonging to the trust cannot be appropriated by an unlawful occupier merely through trading from the trust property.

The claimants were trustees of the trust created by Jean Montgomery’s will. The principal trust asset was the Albert Arms public house. The first defendant, a beneficiary, had operated a business from the property without a legal right to possession.

The trustees had obtained possession orders and permission to issue a writ of possession. They sought further Beddoe relief authorising them to obtain vacant possession, establish a temporary business with professional management, sell the property, and receive an indemnity from the trust assets. The first defendant opposed the application and threatened claims for breach of trust and passing off.

The central issues were whether vacant possession was in the beneficiaries’ best interests and whether the threatened claims should affect the trustees’ proposed course.

1. The trustees’ application for Beddoe relief was granted. They were authorised to obtain vacant possession of the Albert Arms and to sell it, with an indemnity for their costs from the trust assets.

2. The relevant question was how the trustees should realise the trust’s interest to the best advantage of all beneficiaries. Uncontradicted specialist valuation evidence showed that the property’s value was nil while the first defendant remained in occupation on the existing informal basis, but approximately £2 million with vacant possession and an operating business. The first defendant had no legal or personal interest in the property and no right to possession. His beneficiary status gave him no priority over his siblings.

3. Vacant possession was therefore authorised. The trustees had no effective legal means to regulate the first defendant’s activities while he remained in occupation, and there was a real risk that the full value of the property could not be realised. A new business operated under professional management would not necessarily be the first defendant’s business. He remained free to bid for the property or business alongside other purchasers.

4. The passing-off claim had no real prospect of success. The will gave the trustees the freehold, contents, stock-in-trade and goodwill of the public-house business. Goodwill genuinely personal to the first defendant or his companies would remain theirs, but an unlawful occupier could not appropriate goodwill attaching to the trust property merely by operating a business there.

5. The threatened breach of trust and passing-off claims were also an abuse of process. The court could form a clear view of their merits. The relevant facts had long been known, the first defendant had access to legal advice and ample opportunities to raise the claims, and the proposed proceedings were advanced at a very late stage as pressure against the sale. Delay alone was insufficient, but the delay, litigation conduct and tactical purpose together justified refusing to permit the claims to obstruct the trustees’ administration.