FRANK PILE v SIMON PILE

A joint tenant of a periodic tenancy may serve a notice to quit without breaching trust where the only trust is the bare trust for sale or trust of land arising from co-ownership. That remains so where the purpose is to obtain a personal benefit, such as a new lease. Different duties may arise where an agreement, partnership, family arrangement or other purpose creates a trust with obligations beyond those inherent in bare co-ownership. Such additional duties require a pleaded and evidential factual foundation. A conclusory allegation of conflict or breach of the rule in Keech v Sandford is insufficient.

Frank and Simon Pile were joint tenants of agricultural and commercial periodic tenancies. Frank entered into an agreement under which the existing tenancies would be terminated and new tenancies granted to his company. Earlier proceedings set aside that agreement and Frank’s notice to quit. Simon then sought an injunction restraining further negotiations and termination of the tenancies.

The County Court held that there was a serious issue to be tried as to whether termination for Frank’s personal benefit would breach trust. It also granted an injunction on other grounds, which were not challenged. The appeal concerned whether the pleaded co-ownership of the periodic tenancies could generate duties preventing termination or termination undertaken to obtain a new lease.

1. Appeal allowed on ground 2. The County Court order was set aside and the application for an injunction was dismissed.
2. Co-owners of a periodic tenancy generally hold it under the trust for sale imposed by the Law of Property Act 1925 or the trust of land arising under the Trusts of Land and Appointment of Trustees Act 1996. The continuation of a periodic tenancy depends on the will of both landlord and tenant. Accordingly, one joint tenant may effectively terminate it by serving a notice to quit.
3. Serving a notice to quit is not the exercise of a statutory or other power vested in trustees for sale, and does not engage the statutory duty to consult under section 26(3) of the Law of Property Act 1925 or section 11(1) of the Trusts of Land and Appointment of Trustees Act 1996.
4. The rule in Keech v Sandford does not itself prevent termination. It presupposes a trust obligation requiring the trustee to obtain a renewal for the beneficiary. A bare trust for sale or trust of land does not impose such an obligation on a joint tenant of a periodic tenancy. The joint tenant may therefore terminate even to obtain a new lease for themselves.
5. Additional fiduciary duties may arise from an agreement or purpose governing the holding, including a partnership arrangement or an agreement that the property should provide a home or remain occupied by a particular person. No such basis was pleaded or supported by evidence here. Allegations that Frank was in conflict or sought to profit from trusteeship were merely conclusory.
6. The court refused permission to appeal on ground 1. Hammersmith LBC v Monk was not binding authority for the precise breach-of-trust proposition, although its reasoning supported the conclusion reached. The authority considered on appeal nevertheless compelled the result.

• High Court (Chancery Division): Appeal from the County Court at Birmingham order of HHJ Rawlings dated 28 April 2022. The order was set aside and the injunction application dismissed.