Savage v Savage

The Court of Appeal considered the meaning of section 15(3) of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) in the context of an application under section 14 for orders about sale of trust land. The court held that section 15(3) identifies additional matters to which the court must have regard (the circumstances and wishes of beneficiaries of full age entitled to interests in possession, or, in case of dispute, of the majority by value) but does not operate to exclude consideration of other factors, including the circumstances and wishes of minority beneficiaries. The court applied ordinary principles of statutory interpretation, gave weight to the non-exhaustive language of section 15 and to the Law Commission materials supporting a flexible judicial discretion under section 14, and relied on valuation evidence about the feasibility and limited effect of selling the land in separate lots. The appeal was allowed because the judge below had misinterpreted section 15(3); the District Judge’s order (which granted the appellant a pre-emptive right to buy the majority interest at a specified price) was restored.

Background and parties. The appeal concerned three parcels of trust land in East Sussex owned in varying shares by Raymond Savage (majority interests) and the children of his late brother (including the appellant, Frank Savage). The properties included land on which Frank ran a location-sensitive business. Financial remedy proceedings produced a dispute about the method of sale. At first instance District Judge Owen gave Frank a right to buy out Raymond’s interest at a specified price before open-market sale. HHJ Farquhar on appeal set that order aside and directed sale on the open market, holding that, by virtue of section 15(3) TOLATA, in a dispute the court could only have regard to the circumstances and wishes of the majority by value.

Nature of the application. The underlying application was made under section 14 TOLATA for orders relating to trustees' functions and the sale of trust land; the relief at issue included whether a beneficiary should have a right of pre-emption to buy the majority interest before a general sale.

Issues framed. The principal legal issue was whether section 15(3) prevents the court, in cases of dispute between beneficiaries, from having regard to the circumstances and wishes of the minority. Secondary issues included whether the judge below was entitled to limit consideration to the majority and whether the District Judge’s factual conclusions on valuation and feasibility of sale in separate lots were open to interference.

Court’s reasoning. The Court of Appeal applied standard canons of statutory interpretation, starting from the ordinary grammatical meaning of the statutory words but read in context. It emphasised the non-exhaustive wording of section 15(1) and 15(3) (use of the word "include" and the direction to "have regard") and concluded those provisions set out matters that the court must consider but do not exclude other relevant factors. The court rejected a rigid application of expressio unius as excluding all other matters. The Law Commission materials and the statutory scheme (section 14 conferring wide discretion) supported a purposive reading that leaves the court able to consider minority wishes where appropriate. The Court also accepted the District Judge’s factual conclusions, based on expert valuation evidence, that sale in separate lots was feasible and that the price set for the pre-emption reflected that evidence.

Result. The Court allowed the appeal, concluded HHJ Farquhar had misinterpreted section 15(3) and restored the District Judge’s order giving the appellant a pre-emptive right to buy out the majority interest at the specified price.

This was an appeal. The Court of Appeal allowed the appeal. The court held that section 15(3) TOLATA identifies additional matters the court must have regard to (the circumstances and wishes of beneficiaries of full age entitled to interests in possession, and in case of dispute the majority by value) but does not exclude consideration of other factors, including the circumstances and wishes of minority beneficiaries. The judge below misinterpreted section 15(3) by treating it as precluding any regard to minority views; the District Judge’s order (granting the appellant a right to buy out the majority interest at a specified price) was restored because the District Judge’s factual findings, including expert valuation evidence, were within the scope of his discretion.

Appeal from the Family Court at Sussex - Brighton. First instance decision by District Judge Owen (order made 23 February 2022). HHJ Farquhar gave a reserved written judgment (17 October 2022) and made an order giving effect to it on 6 February 2023; that order was the subject of this appeal to the Court of Appeal ([2024] EWCA Civ 49).