Bagum v Hafiz & Anor [2015] EWCA Civ 801 (22 July 2015)

Bagum v Hafiz & Anor [2015] EWCA Civ 801 (22 July 2015)

The court does not have jurisdiction under section 14 of TOLATA to order a beneficiary to sell or transfer their beneficial interest to another beneficiary. However, the court does have jurisdiction to direct trustees to sell the trust property, including to a particular beneficiary with a right of pre-emption, provided the order is within the court's wide discretion under TOLATA and considers the statutory factors. The judge's order was a proper exercise of that discretion.

Citation
[2015] EWCA Civ 801
Parties
Claimant/respondent: Bagum; 1st Defendant/respondent: Hafiz; 2nd Defendant/appellant: Hai
Jurisdiction
England and Wales
Judgment Date
22 July 2015
Procedural Posture
Civil Appeal / Appeal and Cross Appeal From Central London County Court Judgment
Outcome
Appeal and cross-appeal dismissed
Legal Topics
Trusts of Land and Appointment of Trustees Act 1996 (tolata), Co Ownership of Land, Court's Discretionary Powers Under TOLATA, Order for Sale of Trust Property, Beneficiaries' Rights and Interests
Trusts Property Law Civil Procedure Trusts of Land and Appointment of Trustees Act 1996 (tolata) Co Ownership of Land Court's Discretionary Powers Under TOLATA Order for Sale of Trust Property Beneficiaries' Rights and Interests

Case Brief

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Parties

Bagum

Claimant/respondent

Hafiz

1st Defendant/respondent

Hai

2nd Defendant/appellant

Procedural Posture

Civil Appeal / Appeal and Cross Appeal From Central London County Court Judgment

Legal Issues

  1. 1 Does the court have jurisdiction under section 14 of TOLATA to order a beneficiary to sell or transfer their beneficial interest to another beneficiary?
  2. 2 Can the court direct trustees to sell trust property to a particular beneficiary without the consent of all beneficiaries?
  3. 3 Was the judge's exercise of discretion in making the order proper under TOLATA?

Ratio Decidendi

The court does not have jurisdiction under section 14 of TOLATA to order a beneficiary to sell or transfer their beneficial interest to another beneficiary. However, the court does have jurisdiction to direct trustees to sell the trust property, including to a particular beneficiary with a right of pre-emption, provided the order is within the court's wide discretion under TOLATA and considers the statutory factors. The judge's order was a proper exercise of that discretion.

Court Disposition

Appeal and cross-appeal dismissed

Orders

  • The order of HHJ May QC stands: the property is to be sold, with Mr. Hafiz having the opportunity to purchase at a court-determined price within six weeks, failing which the property is to be sold on the open market with liberty for all parties to bid.