Chaston & Anor v Chaston

On an appeal by way of review, the court may interfere with a discretionary decision only for an error of principle, failure to consider a relevant matter, consideration of an irrelevant matter, or a decision wholly outside the reasonable range.

Under section 14 of the Trusts of Land and Appointment of Trustees Act 1996, the court has a substantially wider discretion than trustees. It may direct a sale of trust property to one beneficiary where appropriate. The court may consider the intentions of the trust’s creators, the wishes of beneficiaries, an agreement in principle, and any equity arising from reliance. A trustee’s duty is to obtain the best price reasonably obtainable, but the court’s direction itself determines the trustees’ duties.

The appellants appealed against District Judge Watkins’s order under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The order directed that Rock House, inherited by the parties and held for them in unequal shares, should be sold to the respondent at a price fixed through a valuation exercise.

The appellants accepted that the property should be sold but argued that it should be marketed openly. They challenged the court’s jurisdiction to direct a sale to one beneficiary, the relevance of an agreement in principle and the trust’s creators’ intentions, the relevance of beneficiaries’ wishes, the valuation mechanism, and the effect of delay in delivering judgment.

1. The appeals were limited to a review under CPR rule 52.21(1). The findings of fact were not seriously challenged and therefore had to be accepted. Under CPR rule 52.21(3), an appeal could succeed only if the decision was wrong or unjust because of serious procedural or other irregularity.
2. For a discretionary decision, intervention required an error of principle, failure to consider a relevant matter, consideration of an irrelevant matter, or a conclusion wholly outside the reasonable ambit of disagreement. The district judge’s decision fell within that generous ambit. The four-month delay caused no demonstrated prejudice because the case had been decided principally on written evidence and submissions.
3. Section 14 gave the court jurisdiction to direct a sale of the trust property to one beneficiary. The absence of occupation by any party, and the fact that the beneficiaries had not created the trust, did not prevent the jurisdiction from arising. Bagum v Hafiz showed that the statutory discretion was substantially wider than the trustees’ own powers.
4. The agreement in principle that the respondent would buy the property was relevant. It reflected the beneficiaries’ wishes and could raise an equity in the respondent, including a proprietary estoppel equity capable of affecting the existing trust. The court could also consider the trust creators’ intentions as expressed in a letter of wishes.
5. The wishes of beneficiaries with an interest in possession could be considered under section 15(3), whether or not they were trustees. An interest in possession was distinct from a right physically to occupy the land.
6. The trustee’s duty was to obtain the best price reasonably obtainable in the circumstances, not necessarily the highest price theoretically possible. However, the direction to sell was made by the court, not the trustees. The trustees could not breach their duty by complying with that direction. The valuation was intended to establish the true market price, and no basis existed to challenge the district judge’s finding that valuation could properly determine it.
7. The appeals were dismissed. The district judge had made no error of law and had exercised the section 14 discretion lawfully.

• High Court (Chancery Division): appeals from District Judge Watkins were dismissed. The order directing sale of the property to the respondent at a price fixed through valuation was upheld.