Patricia Ann Keegan v Terence John Keegan & Anor

A right of way created by a will must be identified by interpreting the will in its factual setting, having regard to the salient physical features existing when it was made. A plan attached to an order may be indicative rather than conclusive where its scale and drafting do not resolve the precise route. A vehicular right of way need not follow an existing public footpath if the access arrangements and practical convenience indicate a different route. During estate administration, personal representatives remain liable for capital gains tax on a disposal by the estate, unless the asset has been transferred to a legatee and the residue ascertained.

Following an earlier trial and an unsuccessful appeal, the court determined two post-trial applications concerning the precise boundaries of land and a right of way gifted under a will, the form of transfer, estate accounts and distribution, capital gains tax, injunctions and costs.

The principal disputes were whether a triangular area formed part of Field 84, where the vehicular right of way over Field 86 lay, and whether capital gains tax on the sale of estate property was payable by the personal representatives or the beneficiaries.

1. The true boundary of Field 84 was the boundary shown on the single joint expert’s Insepes plan. Historic Ordnance Survey maps, evidence of a former well and the surrounding physical evidence justified including the disputed triangle. The trial judgment’s reference to a wedge-shaped field did not determine the precise boundary and did not preclude that conclusion.
2. The right of way was also as shown on the Insepes plan. Its proper route was a straight line from gate to gate, rather than a route immediately alongside the southerly wall or the existing public footpath. The different locations of the pedestrian stile and vehicular gate, together with practical convenience, were decisive. Bolton v Bolton (1879) 11 Ch. D. 968 did not require the servient owner’s proposed route to be adopted; the principle was qualified by the requirement of a convenient way, reflected in Pearson v. Spencer (1863) 1 B & S 571.
3. Patricia was entitled to an injunction requiring removal of the new obstruction and restoration of the road gate. Terence could erect a stock-proof boundary fence only in accordance with the expert’s markers. Further disputes were to be referred promptly to the court.
4. Capital gains tax on the sale of the Property was properly deducted from the estate proceeds. Applying sections 60 and 65 of the Taxation of Chargeable Gains Act 1992, the personal representatives were liable on a disposal during administration. Under sections 1 and 2 of the Administration of Estates Act 1925, Terence held legal title as personal representative; neither executor had become trustee, still less bare trustee, for the beneficiaries before sale. The proposed direction requiring an amended return was refused.
5. Patricia could deduct specified accountancy and reduced legal costs from the estate. Terence was ordered to pay 100% of Patricia’s costs on the standard basis, summarily assessed at £45,000 plus VAT, total £54,000.

• High Court: the trial judgment was upheld after an unsuccessful appeal before HHJ Halliwell, sitting as a High Court Judge, on the permitted issue, reported at [2023] EWHC 3268 (Ch).
• Court of Appeal: further permission to appeal was refused on the papers by Falk LJ.