Savage v Savage

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In the recent case of Savage v Savage [2024] EWAC Civ 49, the Court of Appeal ruled on a dispute between a divorced couple, Raymond and Vanessa Savage. The case involved complex financial arrangements, spousal maintenance but importantly also considered the application of the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”) over the ownership of a property.

The property comprised of three parcels of land which were held on trust for Raymond, as majority beneficiary, and his four nieces and nephews, the minority beneficiaries. Following an order for sale pursuant to the divorce, a dispute arose as to how the land was to be disposed of. One of the minority beneficiaries, Frank, ran a business on part of the land and wished to retain his interest; whilst Raymond intended to sell the property on the open market and obtain a fair share of the value.

Under section 15(3) of TOLATA, the Court is obliged to take into consideration the circumstances of the minority beneficiaries. Here they all supported Frank in obtaining a pre-emption right over the sale of the land held in trust. Initially the County Court therefore allowed a right for Frank to buy out Raymond’s interest. This decision was in accordance with section 14 of the TOLATA which grants the relevant Court power to order a sale on the terms it deems fit.

Upon appeal, the High Court dissented and held that Raymond’s interest as a majority beneficiary took priority over that of the minority beneficiaries and therefore overturned the County Court’s decision and ordered a sale of the land without a pre-emption.

Frank further appealed the decision, and in the Court of Appeal, it was held that the intention of TOLATA is to provide the Courts with wide discretion as to the factors which it must have regard to in ordering such sales. The original decision of the County Court was upheld, and the Court of Appeal ordered that the sale of the land would be subject to Frank’s pre-emption right.

This case serves as a timely reminder of the Courts wide discretion when applying TOLATA in sales of jointly owned land. Whilst TOLATA seeks to outline matters that must be taken into consideration, it does not specify the weight attributable to each factor, in particular the wishes and circumstances of majority and minority beneficiaries – the outcome of this case will assist in this respect in the future.

This article is for general purpose and guidance only and does not constitute legal advice. Specific legal advice should be taken before acting on any of the topics covered. No part of this article may be used, reproduced, stored or transmitted in any form, or by any means without the prior permission of Brecher LLP.

Ematice Mokhtari

Trainee Solicitor

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