Raymond William Preedy and Another v Jonathan Anthony Dunne and Others
| Jurisdiction | England & Wales |
| Judge | Master Matthews |
| Judgment Date | 02 October 2015 |
| Neutral Citation | [2015] EWHC 2713 (Ch) |
| Date | 02 October 2015 |
| Court | Chancery Division |
| Docket Number | Case No: HC-2015-000274 |
[2015] EWHC 2713 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Master Matthews
Case No: HC-2015-000274
Robert Bowker (instructed by Charles Russell Speechlys LLP) for the Claimants
Nigel Burroughs (instructed by Jirehouse) for the Defendants
Hearing dates: 15–17 July 2015
Introduction
In these proceedings, the Claimants, as freehold owners of The Albert Arms Public House, High Street, Esher, Surrey ("the Property"), seek an order for possession of the Property against the Defendants, who (or some one or more of whom) are carrying on the pub and restaurant business at The Albert Arms. At the trial of the action, Mr Robert Bowker of counsel appeared for the Claimants, and Mr Nigel Burroughs of counsel appeared for the Defendants.
The Claimants are the present trustees of the trusts of the will of Jean Montgomery, who died on 6 September 1997. The Defendants are, first, one of Mrs Montgomery'sthree children, Mr Jonathan Anthony Dunne (whom, without intending any disrespect, I shall call "Jonathan"), and, second and third, two companies, one of which he entirely owns, but of which he is not currently a director, and one of which he is at least associated with. The Defendants admit the Claimants' title, and admit possession, but defend by reason – and only by reason – of a claim of Jonathan to a right to stay in occupation of the Property on the basis of a proprietary estoppel equity.
During her life Mrs Montgomery, as sole beneficial owner, had run The Albert Arms in partnership with her second husband, Mr Bruce Montgomery (whom, without intending any disrespect, I shall call "Bruce"). Mrs Montgomery had three children by her first marriage: Sarah (now Mrs Fenton), Peter and Jonathan. Again, I shall use their forenames without intending any disrespect. By clause 6 of her will she left the Property to her trustees
"I GIVE to my Executors all my interest in the freehold public house known as The Albert Arms 82 High Street Esher Surrey including the contents thereof the stock in-trade and the goodwill of the business of publicans run from the property for many years by my said husband Bruce Montgomery and myself (the 'Property') to hold on trust to sell call in and convert into money such parts as do not consist of money but with full power to postpone doing so and run the said business for so long as they shall in their absolute discretion see fit and to grant leases of or deal with the same in any manner in their absolute discretion without being liable for loss to hold the same upon the following trusts that is to say –
(a) To pay the income of the Property to my said husband Bruce Montgomery for his life in the event that my said husband Bruce Montgomery does not wish to continue to run the said business after my death. In the event that my said husband Bruce Montgomery does wish to continue to run the said business after my death he may do so for as long as my said Executors shall in their absolute discretion deem appropriate and for so long as he shall run the said business he shall enjoy and be entitled to all the income of the said business
(b) I express the wish and hope that for so long as my said husband Bruce Montgomery does continue to run the said business he allow my said son Jonathan Anthony Dunne to assist in the running of the said business at reasonable remuneration
(c) Subject to sub-clauses (a) and (b) above absolutely for such of my said children Sarah Akehurst Peter Lee Dunne and Jonathan Anthony Dunne as are alive at my death and if more than one in equal shares absolutely PROVIDED that is any of them shall predecease me leaving issue such issue shall on attaining the age of twenty-five years inherit per stirpes."
The executors and original trustees of her will were Mr Anthony Shilson, her solicitor (who drafted the will), and Mr Raymond Preedy, an accountant and incidentally her sister's husband, who is now the First Claimant. In December 2003 Mr Preedy retired from the trusteeship and a Mr Stephen Lewis replaced him. In August 2008 both Mr Shilson and Mr Lewis retired, and they were replaced by Mr Preedy and a Mr Philip (but known as "Charlie") Baker, a local farmer and family friend. Mr Baker is the Second Claimant. Bruce died on 1 February 2013.
The Claim Form was issued on 27 January 2015 with particulars of claim attached. The Defence and Counterclaim was filed on 17 March 2015. Directions to trial were given on 18 March 2015. These did not include permission for the adduction of expert evidence. A Request for Further Information in respect of the Defence and Counterclaim was made on 30 March 2015, and responded to on 21 April 2015. In the meantime, on 31 March 2015 the Reply and Defence to Counterclaim was filed. On the same day an order was made for the trial to be heard by me over three days to be fixed. On 1 May 2015 the trial was fixed for 15–17 July 2015, and the parties were informed.
In accordance with the directions made on 18 March 2015, at the end of May witness statements were filed and served in respect of Mr Preedy, Mr Baker and Sarah for the Claimants, and Mr Shilson, Jonathan, Mr Andrew Nicholson and Mr Michael Clark for the Defendants. Mr Nicholson is an accountant who acts or has acted for Jonathan and his companies. Mr Clark is the sole director of the Second Defendant. On 14 July I was asked on behalf of the Defendants to, and did, give permission for witness summonses to be issued in respect of Peter and a Mr Paul Mustoe. Mr Mustoe is Peter's accountant. On the first day of the trial, at the outset, the Defendants applied for an adjournment of the trial on the grounds that Mr Shilson was not available to give evidence. After hearing argument I gave a reasoned judgment, dismissing the application, and the trial proceeded.
There are two other procedural points to mention here. The first is that at the outset of the trial, I mentioned that during my pre-reading I had identified an issue which I thought I should raise, as to how it was possible that trustees holding property for the benefit of others could (even acting unanimously) by themselves create an equity of proprietary estoppel in favour of others having priority over the interests of the beneficiaries.
By the end of the trial it was agreed that this issue would be dealt with in the first instance by way of serial written submissions during the course of the following week. This would enable the parties if they wished to involve leading or other specialist counsel in the preparation of the submissions. I said that once I had considered the submissions I would decide whether I needed to hear any oral submissions on the point as well. I duly received those submissions, and after reading them I concluded that I did not need to hear any further oral submissions.
Secondly, no effective application has so far been made to amend any of the pleadings, so that the claim and counterclaim have been tried up to now on the basis of the Statements of Case in their original form. But Mr Burroughs for the Defendants did tell me, in relation to the point of law envisaged above, that if I considered that it was necessary for the beneficiaries to have acquiesced in or agreed to the trustees' alleged assurances, he would apply for permission to amend the particulars of claim. I consider this later.
Pleaded cases
As already stated, the Defendants admit occupation of the Property, but deny the Claimants' right to possession by reason of Jonathan's claim to a proprietary estoppel equity. As to this, para 3.3 of the Defence states, in a very compressed form:
"As is hereinafter pleaded, it is the Defendants' case that the 1st Defendant and the 2nd Defendant advanced and/or expended monies and/or incurred liabilities and/or expense on the Premises and the business of a public house carried on at the Premises and acted to their detriment with the knowledge and encouragement of the Trustees on the understanding shared by the 1st and 2nd Defendant and the Trustees that the 1st and 2nd Defendant would be entitled to occupy the Premises either alone or together, or through or by licensing their corporate trading vehicles, for so long as the 1st Defendant lived or wished."
A request for further information of the phrase "with the knowledge and encouragement of the Trustees" produced the following lengthy response:
"(a) The 1st Defendant had been involved with running the business of the Albert Arms public house since his teenage years. When his mother died in September 1997, he became more heavily involved. He had an office upstairs and he assisted Mr Montgomery whenever he needed help. This was known to Mr Anthony Shilson and the 1st Claimant (Mr Preedy) who were trustees of Mrs Montgomery's will trust at the time.
(b) By 1999 it had become apparent that Mr Montgomery's management of the business was deteriorating. The Premises had also fallen into disrepair, and the 1st Defendant drew it to the attention of Mr Shilson and Mr Preedy.
(c) Matters came to a head when an electrical fire started on the Premises. There were then discussion between the 1st Defendant, Sarah Fenton (who at that time was working at the Albert Arms), Peter Dunne, Mr Shilson and Mr Preedy about the situation and it was agreed that renovation of the ground and first floors of the Premises was needed.
(d) Initially, the 1st Defendant, Sarah Fenton and Peter Dunne attempted to obtain a loan from Allied Irish Bank to fund the refurbishments. Although the bank made an offer on 2 September 1999, there were difficulties with accepting it principally due to...
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