March v Attorney General (Chancery Division, 23 February 2022)
Gavin Bennison obtains vesting order under section 44 of the Trustee Act 1925 in respect of agricultural land.
In March & Ors v Attorney General (Chancery Division, 23 February 2022), Gavin Bennison, instructed by Guy Dorman of Hughes & Dorman, successfully obtained a vesting order under section 44 of the Trustee Act 1925 vesting 30 acres of agricultural land near Hawkhurst, Kent in the claimants on the basis that the Crown had acquired title to the land subject to a common intention constructive trust.
The claim arose from events in the mid-1990s, when the claimants’ father wished for his two sons to ultimately become the owners of farmland owned by him. One of the sons still being a minor, the father incorporated a company, of which he was sole director, and conveyed the land to the company for no consideration in 1995. He stated verbally, in communications with family members and others, that the company was to hold the land on trust for the sons, but this was never put into writing.
Through inadvertence, the company was dissolved in 2009 without the land having been conveyed to the sons. The six-year period for restoration of the company to the Companies Register expired in 2015. Then, in June 2020, the Crown purported to disclaim the freehold estate in the land under section 1013 of the Companies Act 2006 on the basis that the land had vested in the Crown as bona vacantia in 2009. The Crown offered to negotiate a sale of the land to the claimants, but only for full market value (including an overage provision reflecting its alleged development potential).
The claimants challenged this, asserting that, as per Re Strathblaine Estates Ltd [1948] Ch 224, the Crown had only acquired legal title to the land on the company’s dissolution, the beneficial title remaining with the sons. The problem, however, was that the claimants were unable to prove the existence of the trust declared by their father, due to the requirement for signed writing imposed by section 53(1)(b) of the Law of Property Act 1925.
As a result, the sons’ claim for a vesting under section 44 of the Trustee Act 1925 was pursued on four bases. The claim succeeded before Deputy Master Linwood on the primary basis, that the land had been held on a common intention constructive trust for the sons at the date of the company’s dissolution. The common intention had subsisted between the father, in his individual capacity, and the father in his capacity as director of the company. Alternatively, the sons contended that the land had been held on resulting trust, due to either (i) the 1995 conveyance having been gratuitous or (ii) the express trust being unenforceable only due to the lack of signed writing (as per HHJ Paul Matthews in Solomon v McCarthy (County Court, 21 January 2020)). As a further alternative, the sons contended that the land was held on a Quistclose trust. The Deputy Master did not consider it necessary to deal with these alternative bases, making a vesting order under section 44(ii)(c) of the Act on the basis that the land was held on a common intention constructive trust.
The success of the claim means that the sons were able to acquire legal title to the land without payment, as their father (who sadly died in 2016) had wished. The Crown took a neutral position in response to the claim.
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