John David Sheffield v John Julian Lionel George Sheffield
| Jurisdiction | England & Wales |
| Judge | Master Clark |
| Judgment Date | 13 September 2018 |
| Neutral Citation | [2018] EWHC 2360 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2012-000219 |
| Date | 13 September 2018 |
[2018] EWHC 2360 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Master Clark
Case No: HC-2012-000219
Christopher Pymont QC (instructed by Trowers & Hamlins LLP) for the Claimant
Richard Dew (instructed by Farrer & Co LLP) for the First and Second Defendants
Hearing date: 24 May 2018
Judgment Approved
This judgment deals with the costs order to be made following the parties' agreement reached in respect of the relief ordered in a breach of trust claim.
Parties and the claim
This is the final stage of a claim commenced on 24 November 2010, by which the claimant, John David Sheffield, sought to establish his rights as a direct or indirect beneficiary of a trust in respect of an estate in Hampshire called the Laverstoke Estate (“Laverstoke”).
The trust (“the 1968 Settlement”) was established by a conveyance in 1968 by the claimant's grandparents, Anne Margaret Sheffield (“AMS”) and her husband John Vincent Sheffield (“JVS”), who were the legal owners of Laverstoke. In it they declared that they held Laverstoke on trust for themselves as tenants in common, as to three quarters for AMS, and as to one quarter for JVS.
AMS died in 1969. By her will, she created a further trust of her share in Laverstoke under which the income was to be paid to JVS for life and, on his death, the trust property was to be held for their son, John Julian Lionel George Sheffield (“Julian”) absolutely. Julian is the claimant's father.
By a declaration of trust dated 24 October 1983 (“the 1983 declaration”), JVS declared that he held his beneficial interest in Laverstoke under the 1968 Settlement (including “the net income until sale”) on trust for the claimant. The claimant was aware of the 1983 declaration, but believed that he would only be entitled to benefit from it after JVS died; and he received no income in respect of his beneficial interest during JVS's life.
JVS died on 9 May 2008. Julian thereupon became entitled to AMS's three quarters share under the 1968 Settlement.
In the claim, John sued JVS's executors (“the executors”) and the trustees of the 1968 Settlement (“the trustees”) to recover what he claimed should have been paid to him from 1983 onwards. He also claimed against Julian for relief in respect of benefits Julian had received from the 1968 Settlement. The defendants to the claim were therefore (using the unorthodox nomenclature adopted by the parties):
(1) “the First Defendants”: the executors, including Julian in his capacity as such;
(2) “the Second Defendant”: Julian in his personal capacity;
(3) “the Third Defendants”: the trustees, including Julian in his capacity as such.
The defendants contended, among other things, that the claimant had no right to the trust income because of an agreement between the relevant parties (“the Arrangement”) that the income should continue to be paid to JVS, notwithstanding the 1983 declaration.
The proceedings were tried before HH Judge Pelling QC over 7 days in November 2013. He rejected the defendants' contentions as to the Arrangement, and held that the claimant was entitled to judgment.
A legal issue arose as to the effect of the 1983 declaration: did that make the claimant a beneficiary of the 1968 Settlement (as an equitable assignee of JVS's interest) or a beneficiary of a sub-trust of JVS's interest? The Judge held it was the latter. He therefore concluded that the claimant was entitled to succeed against the executors, but not the trustees, for 25% of the income from the 1968 Settlement from 24 October 1983 until the death of JVS. Julian accepted he was liable to make good the loss arising from his (Julian's) and his wife's acquisition of certain trust property (“the Spring Pond Properties”). Other specific claims of breach of trust (failure to exploit shooting rights on the estate and occupation by JVS of estate property (New Barn House) without regard to the claimant's rights) were also upheld.
The facts and issues in the claim are set out in more detail in the judgment dated 13 December 2013 (“the Main Judgment”), at paragraphs 4 to 27; and, generally, I adopt the definitions used in the judgment.
On 28 February 2014, the judge made an order (“the Main Order”) consequent upon his judgment, for a number of accounts and inquiries. The accounting parties are the executors, who stand in JVS's shoes as a defaulting (sub-)trustee; and Julian, in respect of the transfer to himself and his wife of the Spring Pond Properties and a loan agreement dated 5 July 2007 (“the Loan Agreement”) entered into by him with the trustees. For the purposes of this judgment, I refer to the executors and Julian as ‘the defendants’, since no order for accounting or inquiries was made against the trustees.
On the same date, the parties recorded their agreement as to a number of matters in a letter dated 28 February 2014 (“the 2014 agreement”) from the claimant's solicitors, Trowers & Hamlins LLP to the defendants' solicitors, Farrer & Co LLP. The total financial value of the agreed accounts was £99,805.94. It was also agreed that a number of the accounts ordered by the Main Order would not be pursued by the claimant.
The following accounts and inquiries were pursued by the claimant (referred to by the relevant paragraph number in the Main Order):
§2(a): 1987 Farming Partnership (income)
An account of the net income received by JVS (or if greater which he was entitled to receive) from the farming partnership constituted by the deed of partnership dated 27 May 1987
The amount payable in respect of this account was agreed in the 2014 agreement; though not the interest payable under §4 of the order.
§2(b): 1995 Farm Business Tenancy (rent)
An account of the net income received by JVS under the 1968 settlement (or if greater which he was entitled to receive) in respect of the rent from the farm business tenancy dated 19 October 1995
§2(c): 2006 Farm Business Tenancy (rent)
An account of the net income received by JVS under the 1968 settlement (or if greater which he was entitled to receive) in respect of the rent from the farm business tenancy dated 10 August 2006 down to 9 May 2008
§2(d): Shooting Rights
An account of the net income which should have been received by JVS under the 1968 settlement from 19 October 1995 in respect of shooting rights (including stalking rights)
§2(e): New Barn Properties & Cowlease Cottage
An account as to the occupation rent payable by JVS to the claimant respect of various properties collectively referred to as ‘the New Barn Properties’ occupied by JVS, in which account the executors were to be credited with an occupation rent payable by the claimant to JVS in respect of the property Cowlease Cottage
§2(h): Rickyard Barn Insurance
An account of the amount (if any) received by JVS in respect of the indemnity paid (if any) on the destruction of Rickyard Field Modern Hay/Store Barn
The amount payable in respect of this account was agreed in the 2014 agreement; though not the interest payable under §4 of the order.
§2(i): Chalk Pit Infill
An account of the amount (if any) receivable by JVS under the 1968 Settlement in respect of the Chalk Pit infill
The amount payable in respect of this account was agreed in the 2014 agreement; though not the interest payable under §4 of the order.
§2(j): Wayleaves
An account of the sums (if any) receivable by JVS under the 1968 Settlement in respect of wayleaves
The amount payable in respect of this account was agreed in the 2014 agreement; though not the interest payable under §4 of the order.
§2(k): Spoil Spreading
An account of the sums (if any) receivable by JVS under the 1968 settlement in respect of spoil spreading
§2(l): Timber Sales
An account of the sums (if any) receivable by JVS under the 1968 settlement in respect of the sale of timber
§2(n): Non-FBT land
An account of the sums (if any) receivable by JVS under the 1968 Settlement in respect of the areas of land subject to the 1968 Settlement but not let under the FBTs referred to above
The amount payable in respect of this account was agreed in the 2014 agreement; though not the interest payable under §4 of the order.
§4: Interest
An account or inquiry as to the interest to be paid by the executors in respect of sums found to be due pursuant to the above accounts
§5: Spring Pond Properties
§5(a): Current market value
An inquiry as to the current market value of the Spring Pond properties as at the date of the order
§5(b): Value of Julian's improvements
An inquiry as to:
(i) the cost of the improvements to the Spring Pond properties paid for by Julian which have had the effect of increasing the capital value of the properties, together with interest if appropriate; and
(ii) the difference in value between the properties in their improved and unimproved condition.
§5(c) Value of the claimant's interest in the Spring Pond Properties
Provision that the claimant's interest in the Spring Pond Properties should be determined by deducting the lesser of the 2 sums in §5(b) from the current market value, together with interest if appropriate; with the claimant's share to be one quarter of the resultant sum, to be paid to him by Julian.
§5(d): Interest on the claimant's share
Provision for interest to be paid to the claimant on the value of his share from...
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