Gandesha& Anor v Gandesha & Ors

Under Trusts of Land and Appointment of Trustees Act 1996, the court’s discretion to order sale is wide. Where land is expressly held on trust for sale, postponement of sale for a secondary purpose is conditional on that purpose remaining capable of fulfilment. A unanimous-consent clause must be construed with the trust as a whole and will not ordinarily prevent sale where an irretrievable breakdown means that property can no longer serve its intended purpose as a shared home. The court must consider the statutory factors and all relevant circumstances. Occupation rent depends on constructive exclusion, assessed factually, and on whether the occupying co-owner’s conduct caused that exclusion. It also requires actual use and enjoyment of the relevant property by the person said to be in occupation.

The appellants and respondents were five brothers, or representatives of a deceased brother’s estate, who held a large family property in equal shares. A 2015 declaration of trust stated that the property was held on trust for sale, with power to postpone sale, and was to remain a home for the brothers and their families. It also prohibited sale during the brothers’ lifetimes without unanimous written agreement and stated that no individual or family could demand sale.

Following a serious and irretrievable family breakdown, two brothers left the property and sought an order for sale under section 14 of the Trusts of Land and Appointment of Trustees Act 1996, together with occupation rent. The County Court refused both claims. The appeal concerned the proper construction of the declaration of trust, the exercise of the section 14 discretion, and constructive exclusion for occupation-rent purposes.

1. Appeal on sale. The appeal against refusal of an order under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 was allowed. The declaration had to be construed holistically, having regard to its language, purpose and surrounding circumstances.
2. The property was expressly held on trust for sale with power to postpone sale. Sale was therefore the fallback position. The postponement served the secondary purpose of preserving the property as a home for all five brothers and their respective families. That purpose remained operative only while it could be fulfilled.
3. The principles in Jones v Challenger [1961] 1 QB 176, supported by In re Buchanan-Wollaston’s Conveyance [1939] Ch 738 and Finch v Hall [2013] EWHC 4360 (Ch), applied. A consent provision intended to reinforce a trust’s secondary purpose should not, absent clear language, be construed to frustrate the primary purpose of sale after the secondary purpose has failed.
4. The relationship between the brothers had irretrievably broken down. The property could no longer be a home for all the brothers and their families, even though some family members continued to live there and the absent brothers retained keys and possessions. The unanimous-consent provisions therefore did not prevent an order for sale. The statutory factors, including the absence of relevant minors or secured creditors, and the wider circumstances made sale neither unjust nor inequitable.
5. The respondents were to have a reasonable opportunity, after independent valuation, to buy out the appellants’ 20 per cent shares before sale.
6. Occupation rent. The appeal on occupation rent was dismissed. The County Court had been entitled to find that the appellants were not constructively excluded when they initially left. Later conduct could have made their return unreasonable, but the remaining occupiers had little or no use of most of the rooms from which the appellants were excluded. In those circumstances equity did not require payment of occupation rent.

• High Court (Queen’s Bench Division): Appeal from the County Court at Central London. The refusal of an order for sale under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 was overturned, with directions for an opportunity to buy out the appellants’ shares. The occupation-rent claim was dismissed.
• County Court at Central London: HH Judge Wulwik refused the application for sale and the claim for occupation rent in an order dated 25 October 2019.