John Baylis & Anor v Syed Ali Haider & Ors
[2024] EWHC 187 (Ch)
Sharon Barnard v Gwendolyn Ruth Brandon & Ors
5 December 2023
[2023] EWHC 3043 (Ch)
High Court
Imagine a house sale gone wrong. The buyers found out the sellers lied, so the sale was canceled. But then the buyers did some tricky things with the house and other properties. A judge decided who actually owned what, and who had to pay who, and ordered the houses to be sold fairly to resolve everything.
Key Facts
- •Sharon Barnard (C) and David Clive Richards (D4) are former partners who sold Home Barton Farmhouse (the Farmhouse) to Gwendolyn Ruth Brandon (D1), Martin Brandon (D2), and Matthew Potts (D3) in 2014.
- •The sale was rescinded due to fraudulent misrepresentation by C and D4.
- •D123 (D1, D2, and D3) subsequently transferred the Farmhouse and other properties (Properties 1 & 2) to Rupert Clifford Brandon (D5).
- •D5 later sold part of Property 1 (Property 3).
- •The case involves disputes over the construction of the Trial Order, the validity of the transfers to D5, the amount of judgment debt, and the sale of the Farmhouse and Properties.
Legal Principles
Construction of court orders should give words their natural and ordinary meaning, considering context and the order's object. Judge's reasons are admissible but caution is needed regarding parties' submissions.
Banca Generali SPA v CFE (Suisse) SA and another [2023] EWHC 323 (Ch)
Rescission of a contract due to fraud treats the contract as never having existed.
Johnson v Agnew [1980] AC 367
A mortgagee cannot sell property to itself, its agent, or nominee, or under a scheme to regain the property.
Emmet & Farrand on Title
A trustee is entitled to reimbursement for properly incurred expenses while acting on behalf of the trust.
Trustee Act 2000, s31
Trustees are not entitled to remuneration for acting as trustees.
Trustee Act 2000, s29
Mortgagees in possession must act reasonably and fairly in managing the property and obtaining fair market value upon sale.
Silven Properties Ltd v Royal Bank of Scotland plc [2003] EWCA Civ 1409
Under TOLATA s12, beneficiaries of a trust have a right to occupy if the trust purposes include occupation or the land is held for their occupation.
Trusts of Land and Appointment of Trustees Act 1996, s12
Outcomes
The Trial Order gave C and D4 an immediate equitable interest in possession of the Farmhouse, not a contingent interest.
The wording of the Trial Order, coupled with the aim of rescission to restore parties to their pre-contract positions, supports this interpretation. D123’s arguments regarding potential unfairness relate to the merits of the original order, not its construction.
D123 did not have a right to occupy the Farmhouse.
They had no equitable interest, and the Trial Order lacked an explicit order for occupation. TOLATA s12 does not confer a right of occupation on C and D4.
The 2019 transfer of the Properties to D5 was a void ‘sale to self.’
D5 acted as a nominee for D123, with an understanding the properties would be returned. No consideration was paid. This engaged the prohibition against a mortgagee selling to itself.
The Farmhouse and Properties should be sold, with a court-appointed receiver to manage the sale.
Given the mistrust between parties, a receiver is the most practical approach to avoid further disputes.
D123 must account for a £15,000 undervalue on the sale of Property 3.
D5, acting under D123's direction, sold Property 3 for £35,000, while its value was £50,000. D123 failed to take reasonable precautions to obtain the fair market value.
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