Mr Nigel Stormant Panton v Mr Nigel Brophy
| Jurisdiction | England & Wales |
| Judge | Master Clark |
| Judgment Date | 21 June 2019 |
| Neutral Citation | [2019] EWHC 1534 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: PT-2018-000778 |
| Date | 21 June 2019 |
[2019] EWHC 1534 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (ChD)
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Master Clark
Case No: PT-2018-000778
Andy Creer (instructed by Wright Hassall) for the Claimants
Gabriel Fadipe (instructed by Bevan Brittan LLP) for The London Borough of Hounslow
Hearing dates: 14, 27 March 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is my judgment on:
(1) the application dated 20 March 2019 by LB Hounslow (“the Council”) to be joined to this claim;
(2) if the Council is joined, then, by agreement of the parties, whether the relief sought in the claim should be granted.
Factual background
The factual background is largely undisputed.
The claimants are members of an unincorporated association called “The Thames Tradesmen's Rowing Club” (“the Club”). The Club was established in 1897, and its objects are to promote rowing, sculling and related activities. It is affiliated with British Rowing, which is the national governing body for the sport of rowing. It has 50 active members (excluding associate members and guest users).
The Club has until recently occupied a property known as Chiswick Boathouse, Dukes Meadow, Chiswick, London, W4 2SH (“the Boathouse”) from where it carried out its activities.
The Council is and has at material times been the freehold owner of the Boathouse.
The Club's occupation of the Boathouse began in 1987, when it entered into a document in the form of a lease dated 17 November 1987 (“the Lease”) with the Council. The Lease provided for a term of 30 years from 9 August 1985, at an initial rent of £3,300 per annum. The Club paid the rent to the Council on a quarterly basis as provided for by the terms of the Lease.
In the early 1990s, the Council agreed to help Hounslow Hockey Club Limited (“the Company”) fund the installation of a flood-lit all weather hockey pitch adjoining the Boathouse. The Club was encouraged to enter into a joint venture agreement with the Company, as this would provide access for the Company to the social facilities and showers at the Boathouse. It was also agreed that the Lease would be assigned to the Company and the Club as joint tenants. The joint venture was called the Chiswick Boathouse Sports Centre (“the Joint Venture”), and the arrangement was formalised in a signed agreement dated “1992” (“the Joint Venture Agreement”).
This recited that the parties were joint lessees of the Boathouse (although at this stage the Club remained the sole tenant named in the Lease). It provided that the costs and revenue of the Boathouse were to be shared equally; those costs including the rent.
Following the Joint Venture Agreement, the Club and the Company occupied the Boathouse together, and used it as a clubhouse for use by the members of the two clubs. The Joint Venture was named “The Chiswick Boathouse Sports Centre” and the evidence includes draft rules for it in which its objectives are said to include:
“the joint management of [the Boathouse] under the joint leasehold held by [the Club] and [the Company].”
The evidence shows that the management committee of the Joint Venture held monthly meetings, operated a bank account, produced financial accounts and that the two clubs jointly held a liquor licence.
In about 1993, the Council granted a licence (“the Licence”) permitting assignment of the Lease to the Club and the Company, referred to as “the Assignee”. It included the following terms:
“4. ASSIGNEE'S FURTHER COVENANT
The Assignee further covenants with [the Council] that, as from the date of completion of the Assignment, during the residue of the term created by the Lease and any statutory continuation of the Lease, the Assignee will comply with the tenant's obligations in the Lease, whether arising before or after the date of the Assignment.
…
5.3 All covenants by any party to this Licence will be deemed to be joint and several covenants where that party comprises than one person.”
The Assignment itself is not in evidence, but on 15 May 1996, the Company gave notice to the Council of an assignment dated 7 May 1996.
Immediately following the Assignment, on 8 May 1996, the Club, the Company and the Council entered into a deed of variation dated 8 May 1996 (“the Deed of Variation”) of the Lease. This recited:
“WHEREAS:
1. This Deed is supplemental to a Lease made between [the Council] and [the Club] and dated 17 November 1987 (hereinafter called “the Lease”)…
2. The Leasehold interest in the Lease is now vested in [the Club and the Company]
3. [The Council] and [the Club and the Company] wish to vary the terms of the Lease in manner hereinafter appearing”
The substantive terms of the Deed of Variation varied the Lease to extend its term so that it expired in 2033, increased the annual rent payable to £6,750 with effect from 26 February 1993, and made other small changes, including increasing changing room facilities. At clause 12 it provided:
“The Lease shall continue in full force and effect in all respects save as hereby modified by this Deed.”
On 5 May 2009, the Company was dissolved. The Club continued to occupy and use the Boathouse, and to pay rent to the Council.
On 19 June 2018, the Council's solicitors wrote to the Bona Vacantia Department setting out the factual background. Paragraph 4 of the letter stated:
“Although the grant of the lease in 1987 was void, the effect of the assignment and variation in 1996 (and indeed subsequent demand for and payment of rent by our client) was a valid grant of the amended Lease to [the Company]. That leasehold interest is the subject of this letter, and in relation to which our client applies under section 1013(4) of the Companies Act 2006.”
The letter required the Crown representative to decide whether he would or would not disclaim the Company's leasehold interest.
By a Notice of Disclaimer dated 29 June 2018 under s.1013 of the Companies Act 2006, the Treasury Solicitor disclaimed “the Crown's title (if any)” the leasehold interest in the Boathouse.
On 18 July 2018, the Council's solicitors wrote to the Club, asserting that it had no proprietary or contractual interest in the Boathouse, and giving it notice that the Council intended to take possession of it on 19 August 2018. It in fact took possession on 20 August 2018; and since that time the Club has been in temporary accommodation.
The claim
The claimants seek orders that:
(1) they be appointed as trustees of the Lease in place of the Company, which is alleged to be the former trustee of it;
(2) the remainder of the term of the Lease, as varied by the Deed of Variation, be vested in them.
The claim is made under sections 41 and 44 of the Trustee Act 1925 (“the Act”). These provide, so far as relevant:
“ 41.—Power of court to appoint new trustees
(1) The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient difficult or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees either in substitution for or in addition to any existing trustees or trustees, or although there is no existing trustee. In particular and without prejudice to the generality of the foregoing provision, the court may make an order appointing a new trustee in substitution for a trustee who lacks capacity to exercise his functions as a trustee, or is a bankrupt, or is a corporation which is in liquidation or has been dissolved.
44. Vesting orders of land.
In any of the following cases, namely:-
(i) Where the court appoints or has appointed a trustee, or where a trustee has been appointed out of court under any statutory or express power;
(ii) Where a trustee entitled to or possessed of any land or interest therein, whether by way of mortgage or otherwise, or entitled to a contingent right therein, either solely or jointly with any other person—
…
(c) cannot be found, or, being a corporation, has been dissolved;
the court may make an order (in this Act called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct:
Provided that—
(a) Where the order is consequential on the appointment of a trustee the land or interest therein shall be vested for such estate as the court may direct in the persons who on the appointment are the trustees;”
The claimants accept that as an unincorporated association, the Club could not hold a legal estate in land; and, therefore, that the Lease did not vest any legal interest in it: see Camden LBC v Shortlife Community Housing (1993) 25 HLR 330.
Their claim is based on the Assignment which, they say, took effect as a surrender of whatever interest was created by the Lease, and a re-grant of the Lease to the Company on terms as varied by the Deed of Variation. Their case is that the Lease was then held by the Company on trust for itself and the members of the Club.
On dissolution of the Company, the claimants' case is that only the Company's legal interest and its own beneficial share would have passed to the Crown as bona vacantia; but that the Club's beneficial interest would have been unaffected by the dissolution: referring to s.1012 of the Companies Act 2006.
The effect of the disclaimer was that the Company was, the...
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