Panton & Ors v Brophy & Anor

The claimants, officers and members of an unincorporated association (The Thames Tradesmen’s Rowing Club), sought appointment as trustees and a vesting order under ss.41 and 44 of the Trustee Act 1925 in respect of a leasehold interest in the Chiswick Boathouse. The court held that the Council should be joined as a defendant because the existence of the leasehold was in issue and the Council was directly affected by the outcome. The court found that the combined effect of the 1996 licence and deed of variation was a grant (or at least an agreement to grant) the leasehold on the terms varied and that the legal title vested in the company which, by operation of the parties’ common intention, held the legal title on trust for the company and the Club (so as to give the Club a beneficial interest despite being an unincorporated association).

The Master therefore granted the vesting order sought, holding that if the 1996 documents did not themselves operate as a grant they at least gave rise to a periodic or year-to-year tenancy on the lease terms or an agreement by conduct, and in either event the company held the interest on trust for itself and the Club. The court applied principles governing unincorporated associations, resulting and constructive trusts, and the construction of the 1996 documents, and invoked ss.41 and 44 Trustee Act 1925 to make the vesting order.

Background and parties

The claimants are members and officers of The Thames Tradesmen’s Rowing Club (the Club). The London Borough of Hounslow (the Council) is the freehold owner of Chiswick Boathouse (the Boathouse). The Club had occupied the Boathouse under documents tracing to a 1987 lease, a 1992 joint venture arrangement with Hounslow Hockey Club Ltd (the Company), and a 1996 licence/assignment and deed of variation that extended and varied the lease.

Nature of the application

• The claimants sought appointment as trustees of the Lease in place of the dissolved company and a vesting order under ss.41 and 44 Trustee Act 1925 vesting the remainder of the term (as varied) in them (relief to enable the Club effectively to enforce or re-enter under the lease).
• The Council applied to be joined as a defendant under CPR 19.2(2)(a).

Issues framed

• Whether the Council should be joined as a defendant to the claim.
• Whether, on the construction and legal effect of the 1996 documents (assignment/licence and deed of variation), the Company held a leasehold interest as at its dissolution.
• Whether, if the Company held a legal interest, it held that interest on trust for the Club so that the Club (through trustees) had a beneficial interest capable of being vested by the court.
• Alternatives if no formal grant: whether occupation and payment of rent gave rise to an agreement to grant a lease, a periodic tenancy or an agreement by conduct giving rise to the same equitable consequences.

Court’s reasoning and disposition

The Master held that the Council had a direct interest because the vesting order sought would, in effect, establish the existence of the leasehold and bind the world; accordingly joinder was appropriate. On the merits, the court concluded that the Licence to assign and the Deed of Variation, read together with the parties’ conduct and the recitals, manifested a common intention to grant the lease on varied terms to the Club and the Company. Because an unincorporated association cannot hold legal title, the legal estate took effect in the company (or, in any event, the parties’ conduct produced a tenancy or agreement) and that legal title was to be held on trust for the Club’s members. The court rejected the Council’s arguments that no trust arose and that the Club could not be a beneficial owner; it held that an unincorporated association can be a beneficial owner through trustees and that the contractual/joint venture arrangements supported a trust/beneficial entitlement. The Master therefore made the vesting order in the terms sought.

The court made the vesting order in the terms sought in the claim form and ordered that the Council be joined as defendant. Rationale: the Council was directly affected because the order would establish the existence of the leasehold; the 1996 licence and deed of variation (taken with the parties’ conduct) effected a grant or agreement to grant the lease which vested legal title in the company, which held it on trust for the company and the Club; alternatively occupation and payment of rent gave rise to a tenancy or agreement by conduct with equivalent equitable consequences, so ss.41 and 44 Trustee Act 1925 justified vesting the leasehold in the claimants as trustees.