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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Phoenix v Phoenix & Anor [2020] EWHC 1409 (Ch) (18 June 2020) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2020/1409.html Cite as: [2020] EWHC 1409 (Ch) |
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BUSINESS & PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (Ch)
IN THE ESTATE OF EDNA MAY PHOENIX DECEASED
Fetter Lane, London, EC4A 1NL |
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B e f o r e :
____________________
Philip John Phoenix |
Claimant |
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- and – |
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(1) David Alan Phoenix (2) Colin David Wright |
Defendants |
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Mr Simon Redmayne (instructed by Leathes Prior) for the First Defendant
The Second Defendant neither appeared nor was represented
Hearing: 18th and 19th May 2020
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Crown Copyright ©
Deputy Master Linwood:
Remote hearings
The dispute in essence.
The facts
"I appoint my Sons David Alan Phoenix ("David") and Philip John Phoenix ("Philip") and my Solicitor Colin David Wright of "The Pines" 50 Connaught Road Attleborough Norfolk NR17 2BP to be the Executors and Trustees of this my Will."
"I DECLARE that in this my Will and any Codicil hereto the expression "my Trustees" shall include the person or persons proving this my Will and the survivors or survivor of them or other the executors or executor or trustees or trustee for the time being hereof."
"I give to David and Philip as tenants in common in equal shares all the remainder of my freehold farmhouse and land known as Walnut Tree Farm Deopham and
I DECLARE that Philip shall have the option (such option to be exercised by notice in writing to my Trustees within three months of the date of my death) to purchase David's share of Walnut Tree Farm Deopham at a price Twenty five per centum (25%) below the 19th June 2006 Valuation by Irelands of Nine hundred and ninety two thousand five hundred pounds (£992,500.00.) the 19th June Valuation by Irelands (sic) and such purchase to be paid for over a period of ten years by equal annual payments with interest thereon at Barclays Bank plc base rate for the time being in force."
"To the Trustees of Edna Phoenix,
I Philip John Phoenix wish to exercise my option to purchase Walnut Tree Farm, Deopham from David Phoenix, at the price declared in the last Will and Testament of Edna Phoenix."
The Agreed Issues
(a) Whether, upon a true construction of the Deceased's Will dated 13 June 2013, Philip validly exercised the option set out in clause 5.3 of the Will by personally attending The Pines, 50 Connaught Road Attleborough, Norfolk NR17 2BP on 30 October 2014 and there handing to Colin Wright the Notice dated 29 October 2014?
In the event that the Court determines that the said option was validly exercised and subject to the discretion of the Master at the hearing:
(b) For the purposes of the performance of the option, the following issues arising out of David's claims, at paragraph 3(6) of his Amended Brief Details of Counterclaim, for orders for the payment of monies and interest by Philip to David:
(1) The due date and the amount of each instalment, including accrued interest, due and payable pursuant to clause 5.3 of the Will;
(2) Where any such instalment has not been paid by its due date:
(a) whether interest continues to be payable in respect of any such unpaid instalment under the terms of clause 5.3 of the Will only; or alternatively,
(b) whether it is legitimate and appropriate for interest to be awarded upon any such unpaid instalment pursuant to s.35A Senior Courts Act 1981; and,
(c) if (2)(b) applies, at what rate(s) and for what period(s) such statutory interest is payable upon each such unpaid instalment.
Issue (a): the Law
"...does this by identifying the meaning of the relevant words, (a) in the light of (i) the natural and ordinary meaning of those words, (ii) the overall purpose of the document, (iii) any other provisions of the document, (iv) the facts known or assumed by [the testatrix] at the time that the document was executed, and (v) common sense, but (b) ignoring subjective evidence of [the testatrix'] intentions."
"for identification edged red on the attached plan together with the buildings thereon and also with a right of way to the Dispersal Area and with a right to drain into the septic tank of the adjoining meadow and a right of access for the purposes of emptying repairing and maintaining the septic tank…"
"…share and interest in the business of A R Phoenix Farming Partnership carried on by me in partnership [with Philip] at the date of my death..."
Decision – Issue (a)
i) There is no other provision which facilitates service or provides for the same save clause 1.1 which provides the sole address for service on the Trustees.
ii) It was logical and common sense in all the above circumstances for one address of the sole independent professional executor, known to the Deceased and her sons, to be set out.
iii) The Will is a self-contained resolution of testamentary intention for the brothers to continue farming the parts they were at the time the Will was made, and to enable them – by the discounts in Clauses 5.2 and 5.3 – to continue to do so. Accordingly, in the context of what is known to the Deceased, The Pines is the only address in the whole Will and where the Deceased expected service to be made.
iv) I specifically do not accept that the address was provided to identify Colin Wright as there may be other solicitors of that name. The circumstances were that he was known to all concerned over the years and described as "my solicitor".
v) This construction is necessary to give effect to clause 5.3 without which the position is uncertain in circumstances where it appears the Deceased resolved all the possible loose ends.
vi) The brothers knew Colin Wright's address; it was provided to avoid any dispute and as a natural address for service.
vii) The alternative construction would mean a brother giving notice to himself, which I do not think can be a common-sense construction.
viii) To have addresses other than or in addition to The Pines could lead to uncertainty and conflict.
ix) Notice is to be to the Trustees, not the other brother, in the context that it would be of no surprise to each brother that the other one wanted to exercise their option.
x) An independent trusted individual was required by the Deceased, who knew her sons, the land and the history, to assume the responsibility of receiving notices by way of service, acting upon them and carrying them into effect.
S196
Issue (b): interest
i) the relevant purchase price under clause 5.3 is £372,187.50;
ii) the first of its 10 equal, annual instalments became payable on 30 October 2015 (one year after the option was exercised);
iii) each payment is to include the interest accrued in the relevant year leading up to payment;
iv) the interest rate specified in clause 5.3 is applicable to the option price as a whole (i.e. the whole sum outstanding at the date of each payment);
v) the relevant interest rate applicable to instalments due and payable under clause 5.3 is set out in paragraph 11 of the Case Summary;
vi) the interest rate is applied as a rate per annum.
30.11.14 to 03.08.16: 0.5%
04.08.16 to 01.11.17: 0.25%
02.11.17 to 01.08.18: 0.5%
02.08.18 to 10.03.20: 0.75%
11.03.20 to 18.03.20: 0.25%
19.03.20 and continuing: 0.1%
Issue (b): The Law
"Interest in respect of a debt shall not be awarded under this section for a period during which, for whatever reason, interest on the debt already runs"
"…statutory power does not override the contractual position, so that it cannot fix a different interest rate…"
"1) Interest is awarded to compensate claimants for being kept out of money which ought to have been paid to them rather than as compensation for damage done or to deprive defendants of profit they may have made from the use of the money.
(2) This is a question to be approached broadly. The court will consider the position of persons with the claimants' general attributes, but will not have regard to claimants' particular attributes or any special position in which they may have been.
(3) In relation to commercial claimants the general presumption will be that they would have borrowed less and so the court will have regard to the rate at which persons with the general attributes of the claimant could have borrowed. This is likely to be a percentage over base rate and may be higher for small businesses than for first class borrowers.
(4) In relation to personal injury claimants the general presumption will be that the appropriate rate of interest is the investment rate.
(5) Many claimants will not fall clearly into a category of those who would have borrowed or those who would have put money on deposit and a fair rate for them may often fall somewhere between those two rates."
Discussion and decision: Issue (b)
Deputy Master Linwood
18th June 2020