Trusts

Trustees' powers - excluding or restricting beneficiaries' right to occupy building - power to exclude or restrict each beneficiary to separate parts of buildingRodway v Landy: CA (Lord Phillips of Worth Matravers MR, Lords Justice Peter Gibson and Latham): 4 April 2001The claimant and the defendant were medical practitioners in partnership together.

They purchased a property and constructed a purpose-built surgery funded by a mortgage loan.

The defendant subsequently terminated the partnership.

The claimant sought orders for the winding up of the partnership and the sale of the property, which she claimed was a partnership asset and the defendant counterclaimed for an order pursuant to section 14 of the Trusts of Land and Appointment of Trustees Act 1996 for the partitioning of the property between them, alternatively an order for the parties, as trustees, to exercise their powers under section 13 of the Act to exclude or restrict each other's entitlement as beneficiaries to occupy the property.

On the trial of a preliminary issue it was held that the property was not a partnership asset.

On the trial of further preliminary issues Mr Michael Mann QC, sitting as a deputy High Court judge, ordered that the property should not be sold or partitioned but that the trustees should exercise their powers under section 13 by dividing the property into two separate units and restricting the claimant's right to occupy the right-hand unit and restricting the defendant's right to occupy the left-hand unit.

The claimant appealed.Simon Berry QC (instructed by Cripps Harries Hall, Tunbridge Wells) for the claimant.

Robert Pearce (instructed by Warners, Sevenoaks) for the defendant.Held, dismissing the appeal, that on a proper construction of section 13 of the 1996 Act trustees were entitled, in relation to a single building which lent itself to physical partition, to exclude or restrict one beneficiary's entitlement to occupy one part and at the same time exclude or restrict the other's beneficiary entitlement to occupy the other part.

(WLR)