PROPERTY CHAMBER

FIRST -TIER TRIBUNAL

LAND REGISTRATION DIVISION

 

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

 

LAND REGISTRATION ACT 2002

 

REF/2015/0125

 

BETWEEN

 

David Charles Brereton

Applicant

and

 

Neville Roy Brereton

Respondent

 

Property Address: The Oak, Clun, Craven Arms SY7 8QA

Title Number: SL216906

 

 

Judge Colin Green

 

At: Birmingham Employment Tribunal

On: 4., November 2015

 

Applicant Representation: Nicola Preston of counsel

 

Respondent Representation: David Mitchell of counsel

 

 

 

DECISION

 

 

Introduction

1.                         Roy Neville Brereton ("the Deceased") died on 29 December 2009. By his will dated 17 November 2006 ("the Will"), he appointed Maxwell Brereton and Thomas Brereton to be his executors, made certain pecuniary bequests to his grandchildren, and by clauses 4 and 5 provided as follows:

" 4. Gifts of Property

4.1 I give my freehold property Oak Barn Clun to my son David Charles Brereton and my freehold property Oak Farm Clun to my son Neville Richard Brereton

5. Gifts of Residue

I give the residue of my Estate to be shared equally between my sons David Charles Brereton and Neville Richard Brereton"

2.                         On 6 May 2010 a grant of probate was granted to the Deceased's nephew, Maxwell Brereton. The Deceased's sons, David and Neville are Applicant and Respondent to this reference respectively.

3.                         There is no dispute as to the land and premises which were specifically devised to David by the words "Oak Barn" in clause 4 of the Will. It is also accepted that 62 acres of farmland passed to Neville under the description "Oak Farm". The dispute that has arisen is whether the remaining land and premises owned by the Deceased - land on which a bungalow was built and in which he lived (which land and building are referred to as "the Bungalow") - falls within "Oak Farm" or whether the Bungalow was undisposed of under clause 4 of the Will and therefore passes into residue to be dealt with under clause 5. If the former, Neville is the sole beneficial owner of the Bungalow; if the latter, he and David are entitled in equal shares.

4.                         The view taken by the executor and/or his solicitor was that the Bungalow did pass to Neville under clause 4. Rather than seek a determination of the issue by the court so that the executor could distribute with the protection of a court order, by a TR1 dated 7 March 2012 he transferred the 62 acres and the Bungalow to Neville, who was registered as proprietor on 9 May 2012, a first registration under the above title number.

5.                         By an application dated 20 May 2013, David applied for the entry of a restriction in Form II against that title in the following form:

"No disposition of that part of the registered estate shown edged red on the plan by the proprietor of the registered estate is to be registered without a certificate signed by the Applicant for registration or the Applicant's Conveyancer that written notice of the disposition was given to David Charles Brereton of Oak Barn, Clun, Craven Arms, Shropshire, SYZ 8QA."

In Box 13, the nature of David's claimed interest, justifying such restriction, was stated to be as follows:

"A 50% beneficial interest under a constructive trust to that part of the Property which is the Bungalow known as The Oak and which us for identification purposes shown edged with red on the attached plan (the red land)"

6.                         Objection was made to the application on 10 June 2013, and it was subsequently referred to the Land Registration Division of the Property Chamber.

Conveyancing History

7.                         I summarise the relevant conveyancing history as some reliance is placed on it in dealing with issues I have to decide.

            7.1.                         By a conveyance dated 25 August 1948 Leonard Brereton, the Deceased's father, purchased land and farm buildings of about sixty five acres and five perches. The bulk of such land was farmland.

            7.2.                         By a conveyance dated 6 January 1967 Arthur Brereton (the Deceased's brother) purchased the land now referred to as "the Bungalow" from his father, Leonard.

            7.3.                         Arthur conveyed such land to the Deceased by a conveyance of 14 April 1971, the land being described in the same terms as the earlier conveyance but with the addition of the words "together with the dwellinghouse now erected thereon and called The Oak Clun aforesaid". Although it is clear that the dwellinghouse (bungalow) had been constructed before the 1971 conveyance, it is unclear if it had been built after the 1967 conveyance, and it might have been constructed as far back as 1965.

            7.4.                         After the death of Leonard, land described as "Oak Farm" was assented to the Deceased by an assent of 27 May 1974, which largely corresponds to the land purchased by Leonard in 1948.

            7.5.                         By a deed of gift dated 1 ^st April 1997 land was given by the Deceased to Neville, described as adjoining "The Oak" of which he was registered as proprietor on 20 August 1997 under title number SL100036, with the description "New House". A new property was constructed on this land into which Neville and his family moved on Christmas Ever 1998. From about the middle of 1995 until that time they lived in a caravan in the garden of the Bungalow.

            7.6.                         In about 2002/2003 David moved into one of the barns which had been developed by him, which is the subject of the specific devise of "Oak Barn" in clause 4 of the Will.

            7.7.                         Although the Deceased lived in the Bungalow until his death, as a result of ill health he was unable to farm the farmland behind it for some years previously, and so it was tenanted. Prior to that however, it had been farmed by him. The position at the date of the Will was that his sons lived either side of the Bungalow, Neville on land which had been given to him by the Deceased, David on land which would be given to him by the Will.

Construction of the Will

8.                         The issue is simple to formulate: on the true construction of the Will, do the words "Oak Farm" in clause 4 include reference to the Bungalow? Answering that question is not quite as straightforward however, and I am grateful to both counsel for the patient and comprehensive manner in which they addressed the issue.

9.                         In dealing with matters of will construction, the starting point is the speech of Lord Neuberger in the recent decision of the Supreme Court in Marley v. Rawlings [1], who stated at paragraphs 19 and 20:

"19. When interpreting a contract, the court is concerned to find the intention of the party or parties, and it does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by the parties at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of any party's intentions. In this connection, see Prenn , at pp 1384-1386 and Reardon Smith Line Ltd v Yngvar Hansen-Tangen (trading as H E Hansen-Tangen) [1976] 1 WLR 989 , per Lord Wilberforce, Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 , para 8, per Lord Bingham of Cornhill, and the survey of more recent authorities in Rainy Sky , per Lord Clarke of Stone-cum-Ebony JSC, at paras 21-30.

20 When it comes to interpreting wills, it seems to me that the approach should be the same. Whether the document in question is a commercial contract or a will, the aim is to identify the intention of the party or parties to the document by interpreting the words used in their documentary, factual and commercial context. As Lord Hoffmann said in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2005] 1 All ER 667 , para 64, "No one has ever made an acontextual statement. There is always some context to any utterance, however meagre." To the same effect, Sir Thomas Bingham MR said in Arbuthnott v Fagan [1995] CLC 1396 , 1400 that "courts will never construe words in a vacuum".

10.                         Where there is ambiguity in a will, s. 21 of the Administration of Justice Act 1982 provides:

" 21. Interpretation of wills—general rules as to evidence.

(1) This section applies to a will—

(a) in so far as any part of it is meaningless;

(b) in so far as the language used in any part of it is ambiguous on the face of it;

(c) in so far as evidence, other than evidence of the testator's intention, shows that the language used in any part of it is ambiguous in the light of surrounding circumstances.

(2) In so far as this section applies to a will extrinsic evidence, including evidence of the testator's intention, may be admitted to assist in its interpretation."

In respect of s. 21, Lord Neuberger said:

"25 In my view, section 21(1) confirms that a will should be interpreted in the same way as a contract, a notice or a patent, namely as summarised in para 19 above. In particular, section 21(1)(c) shows that "evidence" is admissible when construing a will, and that that includes the "surrounding circumstances". However, section 21(2) goes rather further. It indicates that, if one or more of the three requirements set out in section 21(1) is satisfied, then direct evidence of the testator's intention is admissible, in order to interpret the will in question.

26 Accordingly, as I see it, save where section 21(1) applies, a will is to be interpreted in the same way as any other document, but, in addition, in relation to a will, or a provision in a will, to which section 21(1) applies, it is possible to assist its interpretation by reference to evidence of the testator's actual intention (eg by reference to what he told the drafter of the will, or another person, or by what was in any notes he made or earlier drafts of the will which he may have approved or caused to be prepared)."

11.                         There was no dispute concerning such matters, or on the evidence to which I could have regard in construing the Will as this was a case of ambiguity, either under s. 21(1)(b) or (c). It was accepted that in principle I could consider the statement of Robin Wayne, the solicitor who took instructions for and drafted the Will, but it was also acknowledged - in my view, correctly - that his evidence did not assist. The matters in dispute concerned the weight or significance which I should attach to the evidence as an aid to construction. Whatever the use made of the words "Oak Farm" elsewhere however, ultimately what I have to decide is what they denoted in clause 4 of the Will and whether this was limited to 62 acres of farmland or extended to the Bungalow.

12.                         On behalf of David, I was encouraged to regard the words "Oak Farm" as limited to the farmland and not including the Bungalow. Reliance was placed on a number of 'formal' documents which referred to the Bungalow as "the Oak" and which distinguished it from the farmland, so that if the Deceased had intended to dispose of the Bungalow, he would have used "the Oak" rather than the quite distinct "Oak Farm".

        12.1.                         The 1971 conveyance of the Bungalow refers to the land as "the Oak".

        12.2.                         The 1997 deed of gift and a declaration of solvency of the same date describes the land the subject of the gift as adjoining "the Oak".

        12.3.                         In the Deceased's previous will of 15 September 1982 his address is given as "The Oaks" and in the Will his address is stated to be "The Oak"

        12.4.                         The letter from the solicitor enclosing the Will is addressed to "the Oak".

        12.5.                         The death certificate, for which Neville was the informant, gives the Deceased's address as "the Oak", as does the grant of probate.

        12.6.                         In a letter written to the executors of his will dated 17 September 1982, the Deceased gives his address as "the Oak"

13.                         In addition, the land assented to the Deceased in 1974, which was a separate title from the Bungalow, describes it as "Oak Farm".

14.                         On behalf of Neville, the following matters were highlighted:

        14.1.                         There is a council tax entry for "The Oaks", a mixed use property, so the words cannot be referring to just the Bungalow.

        14.2.                         Animal movement forms signed by David in 1996 confirm movement from "The oak" which can only be a reference to farmland, not residential premises.

        14.3.                         An application for planning permission in respect of farm buildings gives the address of "The oak".

        14.4.                         Correspondence from the bank to the Deceased giving an address of "Oak Farm", which clearly were not intended to be delivered to a piece of farmland but the Bungalow. On the other hand, the address on the business bank account is "The Oak".

15.                         In my view, the evidence does not establish any regular or coherent pattern of usage for either "Oak Farm" or "the Oak", or that certain instances of use should take priority over others. There is no reason to suppose the Deceased preferred one form over another and unsurprisingly, he and others used these terms interchangeably. Where the same thing can be referred to by different names and the same name can be used to refer to different things, I must look elsewhere for assistance.

16.                         I consider that the most significant matter is that the 62 acres and the Bungalow formed a single unit: the Bungalow was the farmhouse for the farming operations on the adjoining land. The fact that the titles were acquired independently and that at the date of Will the Deceased was not capable of farming himself are irrelevant. For the purpose of disposing of such land and buildings, I consider that the Deceased would have considered them as forming a single property.

17.                         Supportive of such a view is that clause 4 of the Will is headed "Gifts of Property". This does not mean that the Deceased was obliged to dispose of his real property within that clause, or that he could not effectively have done so by allowing it to fall into residue, subject to the provisions of clause 5. Nevertheless, it would be natural for him to include all his real property in clause 5, and if he considered that "Oak Farm" did not include the Bungalow, one would have expected him to make some reference to it and to whom it was to pass. The fact that he did not do so - although not conclusive in itself - lends support to the view that he was using "Oak Farm" to include both the farmland and the Bungalow.

18.                         I do not consider that the use of "The Oak" as the Deceased's address in the Will is a reliable guide to the construction of clause 4. How a person gives their address and how they choose to describe a gift of property are quite separate matters.

19.                         Neville's evidence, which was unchallenged, was that he spoke with his father in Shrewsbury hospital a few weeks before he died and they discussed what he was going to do with the Bungalow. The Deceased told him that he should "pass it on" to make sure the grandchildren did not go short and got a good start in life. I accept that this is self-serving evidence which should be treated with caution, but I cannot disregard it altogether.

20.                         Mr. Mitchell, on behalf of Neville, also made submissions based on the Deceased's good relationship with Neville, poor relationship with David, that he would have preferred Neville to receive the Bungalow and would have wanted to avoid problems with their co-ownership of land as the brothers did not get on. Although I am prepared to sit in the Deceased's armchair in construing his will and to consider evidence of his actual intentions, I do not have a mandate to try and get inside his head and speculate. Family relationships are notoriously complex matters, and how a person behaves towards family members on a day to day basis or at family gatherings and functions is not necessarily indicative of how he might view matters when it comes to making a will. I consider that making findings in respect of these things is outside my remit and/or a needlessly speculative exercise, and my view on the correct construction of clause 4 does not have regard to them.

21.                         Accordingly, I find that on the true construction of clause 4, the words "Oak Farm" include the Bungalow, so that the registration of the land in the above title number was correct and David cannot claim a beneficial interest in any part of that land. Such a finding means that, strictly speaking, the remaining issues which were argued do not require determination. For the sake of completeness however, and in case I am wrong on the issue of construction, I will consider them.

Estoppel

22.                         There had been differences between the parties concerning the extent of the land subject to the specific devise of "Oak Barn" (which adjoins the Bungalow) to David under clause 4 of the Will. They met on site and a sketch plan was agreed which marked the boundaries and in consequence of which the executor's solicitors wrote to David by a letter of 5 July 2010:

"I am writing to you concerning the legacy of Oak Barn left to you by your father in his Will. I have spoken to your brother Neville who has given me a plan of the boundaries of Oak Barn. I understand that Oak Barn itself is as shown in blue on the plan attached to this letter, however in the spirit of family harmony and in the hope that this will provide a better solution for you both, Mr Neville Brereton has suggested that the boundaries for the land transferred to you under the will are as drawn red on the plan. This will allow you more land than if you had just had Oak barn on its own.

I should advise you at this point that you would be wise to obtain independent legal advice in this matter from someone who can advise you on the rights and covenants that may be need to be included in the title.

Please can you confirm as soon as possible that you are happy with the boundaries as drawn to enable me to draw up a draft transfer If this suggestion causes any argument or dispute I will revert to the original intention of the will which was to transfer Oak Barn to you without any additional land.

I look forward to hearing from you shortly please."

The transfer of Oak Barn to David proceeded on this basis.

23.                         I do not consider that an estoppel can have arisen so that David would be prevented from contending the issue of construction dealt with above and is bound to accept that the Bungalow belongs solely to Neville. There was no clear and unequivocal promise, assurance or representation that David would make no claim to an interest in the Bungalow, not by virtue of boundaries, but on the footing that it was not disposed of under clause 4 of the Will and fell into residue, to which he was entitled to a half share under clause 5. The boundary agreed upon and any additional land from the Bungalow included as part of Oak Barn is consistent with David and Neville being entitled to the additional land jointly as part of the Bungalow.

Constructive Trust

24.                         On the footing that the Bungalow fell into residue, it is disputed that David's interest amounts to an interest under a constructive trust. It is accepted by David that the estate remains unadministered and therefore, Mr. Mitchell argued that David can have no beneficial interest until administration is complete, relying on the following passage from Marshall v. Kerr [2]:

"The relevant common law and law of the Administration of Estates Act 1925 were explained by Lord Radcliffe delivering the advice of the Privy Council in Commissioner of Stamp Duties (Queensland) v. Livingston [1965] AC 694 and were summarised by Buckley J. in In re Leigh's Will Trusts [1970] Ch. 277 , 281-282:

"(1) the entire ownership of the property comprised in the estate of a deceased person which remains unadministered is in the deceased's legal personal representative for the purposes of administration without any differentiation between legal and equitable interests; (2) no residuary legatee or person entitled upon the intestacy of the deceased has any proprietary interest in any particular asset comprised in the unadministered estate of the deceased; (3) each such legatee or person so entitled is entitled to a chose in action, viz. a right to require the deceased's estate to be duly administered, whereby he can protect those rights to which he hopes to become entitled in possession in the due course of the administration of the deceased's estate; (4) each such legatee or person so entitled has a transmissible interest in the estate, notwithstanding that it remains unadministered. This transmissible or disposable interest can, I think, only consist of the chose in action in question with such rights and interests as it carries in gremio. . . . If a person entitled to such a chose in action can transmit or assign it, such transmission or assignment must carry with it the right to receive the fruits of the chose in action when they mature.'

And per Lord Browne-Wilkinson at 165F:

"A legatee's right is to have the estate duly administered by the personal representatives in accordance with law. But during the period of administration the legatee has no legal or equitable interest in the assets comprised in the estate."

25.                         It is also contended that there is no obligation to distribute residue in specie and David's remedy would be to sue the executor for due administration and obtain a financial remedy because he has not received his due share of the residuary estate.

26.                         Against this it is argued that the transfer by the executor to Neville was a mistake since it was on the footing that it formed part of a specific devise of the Bungalow to him, whereas it actually formed part of residue. Therefore, Neville - aware of David's claim at the time of the transfer to him - has held the Bungalow on constructive trust as it would be unconscionable for him to claim sole beneficial ownership. David has a right to trace his interest in residue to the Bungalow, a proprietary tight which gives him an interest in the Bungalow, capable of protection by a restriction. A number of authorities were cited in support: Westdeutsche Bank v. Islington LBC [3], Fosckett v. McKeown [4] and Re Diplock [5], together with s. 38(1) of the Administration of Estates Act 1925:

"An assent or conveyance by a personal representative to a person other than a purchaser does not prejudice the rights of any person to follow the property to which the assent or conveyance relates, or any property representing the same, into the hands of the person in whom it is vested by the assent or conveyance, or of any other person (not being a purchaser) who may have received the same or in whom it may be vested."

27.                         In my view however, such an analysis depends of David being able to establish that he had a proprietary interest in the Bungalow prior to the conveyance to Neville which would give rise to a constructive trust or tracing. It is clear from Marshall v. Kerr that he would have no such interest. It may be that he could compel the executor to recover the Bungalow and assert proprietary rights in respect of it, but again, that is not the same thing as his having a proprietary interest in the Bungalow as part of residue. A right to due administration is not an interest in any specific asset. Absent a proprietary right in the Bungalow, there is nothing which would qualify as the subject of a restriction.

Conclusion

28.                         Accordingly, I will direct that the Applicant's application be cancelled.

Costs

29.                         In this jurisdiction, costs usually follow the event. In principle, it follows that the Respondent is entitled to his costs since the date of the reference. If he wishes to claim costs, the following directions will apply.

        29.1.                         The application for costs must be made in writing by 29 February and copied to the Tribunal office and the Applicant's solicitors. Copies of all supporting invoices, and counsel's fee notes should accompany the application. In so far as the application includes legal costs, it must be accompanied by a schedule of those costs suitable for summary assessment, and must certify the dates on which the relevant work was undertaken.

        29.2.                         The Applicant's solicitors should by 14 March send to both the Tribunal office and the Respondent's solicitors a response to the costs application, dealing with both the Applicant's liability for costs (should this be contested) and the amount of costs.

        29.3.                         The Respondent's solicitors may, before 28 March, send to the Tribunal office and Applicant's solicitors a short reply to such response.

30.                         If a costs application is made, I will after 28 March give further consideration to that application.

 

 

 

 

 

 

Dated this Friday 5 February 2016

 

 

 

 

 

By Order of The Tribunal