Butler & Anor v Butler & Anor

The parties are siblings. They have been referred to throughout by their forenames, intending no disrespect I shall do the same in this judgment. They jointly own 502 items of 17^th century Chinese porcelain from the Transitional period between the Ming and the Qing imperial dynasty periods. The aggregate value of these items, which have been referred to throughout the trial, somewhat casually, as ‘pots’, has been put at up to £8million. All but one of the pots was purchased by the parties’ father, the late Sir Michael Butler, who began collecting Chinese porcelain from the Transitional period in or about 1960. The great majority of the pots were gifted to the parties by a deed of gift executed by Sir Michael and Lady Butler, as joint owners and donors, on 29.8.87 (‘the Deed’). This gift was added to by Sir Michael and Lady Butler making smaller gifts annually over five subsequent years on 1.1.89 (Footnote: ¹), 1.1.90, 1.1.91, 1.1.92, and 1.1.93. Since then there have been minor reductions to the number of pots owned by the parties as the result of sale, breakage, loss and the return of one pot as a fake.

The terms of the gift as expressed by Sir Michael and Lady Butler, as the Donors, in the Deed were as follows :

“In consideration of their natural love and affection for their children who are the Donees the Donors HEREBY ASSIGN unto the Donees those items until now forming part of the Chinese Porcelain Collection known as the Michael Butler Collection and now to be known as The Butler Family Collection full details of which are set out in the annexures hereto which is presently kept in the Museum Annex at The Old Rectory aforesaid TO HOLD the same unto the Donees as beneficial tenants in common in equal shares absolutely”.

The annexures comprised several lists, extending to some 60 pages, identifying or describing each pot and noting a value for each pot. The additional annual gifts between 1989 and 1993 were identified as individually listed pots, also individually valued, on schedules headed “Pieces added to the Butler Family Collection”. The aggregate value of the BFC as gifted was in excess of £1million.

The reference to the Museum Annex is to certain outbuildings at The Old Rectory, then Sir Michael and Lady Butler’s home, where the BFC was then housed. At the same time title to the Museum Annex was also transferred to the siblings.

Following the initial gift, between about September 1987 and May 1988, the siblings considered making a written agreement to govern their dealings with the BFC. Caroline appears to have drafted at least two versions in letter form but no written agreement was made. The siblings appear to have agreed between themselves that at least during Sir Michael’s lifetime the BFC would be preserved as a collection, subject to financial need on the part of any of the siblings, and would be made available for scholarly study and for exhibition. It appears from the contemporaneous documents that Caroline envisaged that the BFC would probably be divided between the siblings thereafter as they would have their own differing priorities.

In the period 2008 to 2009 Sir Michael transferred an outbuilding and an area of the grounds at The Old Rectory to Charles and commissioned and built a museum (‘the Museum’). In June 2009 Charles proposed a letter form licence agreement by which Charles agreed to make the Museum available, without charge, to house and exhibit the BFC, including for study by scholars. The only contribution to be made by the claimants and Katharine was to “marginal costs”, examples of which were electricity, cleaning, and alarm contract charges but not buildings insurance, rates, or property maintenance expenses. This agreement was entered into by the claimants and Katharine by 31.8.09 and is referred to by the siblings as the Perm Agreement.

Subsequently, Caroline suggested to her siblings that they agree that if one of them had to sell the other siblings would be offered first refusal, and later that they collectively instruct Sir Michael to find a buyer who would preserve the BFC. These suggestions did not lead to an agreement.

Later still, in 2012, following advice from Harcus Sinclair, Sir Michael proposed that the siblings and he form a partnership to own the remaining pots in the Michael Butler Collection and to merchandise that collection and possibly some pots forming part of the BFC. Sir Michael advocated the tax advantages of this proposal as avoiding inheritance tax and achieving savings on CGT. In addition, Sir Michael suggested that the siblings should agree to keep the BFC together as a collection for a decade after his death. In about October 2012 the defendants, but not the claimants, agreed to and did form a partnership with Sir Michael.

In November 2012 Sir Michael executed his will and two letters of wishes. The defendants were appointed executors. The Old Rectory and its contents were left to Charles and Sir Michael’s interest in a London flat and its contents were left to Katharine. In each case the contents included a number of pots. Sir Michael created a discretionary trust of his interest in the partnership of which the defendants were the trustees. By his letters of wishes Sir Michael again expressed his desire that the BFC be kept intact for a decade and expressed his desire that if that happened the partnership should be dissolved and his interest divided equally between the siblings, but if the BFC was broken up or sold at the instance of the claimants, Sir Michael wanted his personal collection to pass to Katharine. As to the residue of his estate, Sir Michael’s wish was that it be divided equally between Caroline, James and Katharine subject to a specific gift of a chattel to each of Caroline, James and Katharine.

Sir Michael died on 24.12.13. Disagreement between the siblings about what should become of the BFC surfaced almost immediately. Caroline and James sought to have the BFC distributed. Katharine and Charles wished to keep the BFC intact and made available for scholarly study and exhibition; they also wished to exploit certain items commercially by merchandising.

The differing views between the siblings as to distribution or preservation of the BFC as a collection were and are strongly held. Relations between the siblings have not always been harmonious; over what should become of the BFC they broke down completely. Mediation requires a willingness on the part of all parties to compromise; in this case it was not a realistic option. On 24.7.14 Caroline and James issued a CPR Part 8 claim against Katharine and Charles seeking an order for division on the basis that the siblings take turns in selecting a pot until there are none left in the BFC, with the result that each sibling’s joint interest in the BFC would be converted into an absolute interest in those pots selected by that sibling.

The legal foundation for the order sought by Caroline and James is s.188(1) of the Law of Property Act 1925 (respectively ‘s.188’ and ‘LPA 1925’) which provides :

“Where any chattels belong to persons in undivided shares, the persons interested in a moiety or upwards may apply to the court for an order for division of the chattels or any of them, according to valuation or otherwise, and the court may make such order and give any consequential directions as it thinks fit”.

Katharine and Charles oppose their siblings’ claim. First, they contend that on the facts s.188 is not engaged because, by reason of sales in 1995 and 1996, Caroline and James are not “interested in a moiety or upwards”. Secondly, they contend that the BFC should be kept as a collection. Finally, as a third alternative, and if necessary, they contend that they – in fact, Charles – should be permitted to buy out their siblings’ interest in the BFC, or part thereof, on specified terms.

The present position as to ownership of pots outside the BFC is that the partnership, of which the defendants are the surviving partners, owns 208 pots; a further 36 pots remain within Sir Michael’s estate or under his will trust; Katharine owns 25 pots; and Charles owns 85 pots. Thus some 354 pots are owned outside the estate by or are under the control of Katharine and/or Charles.

At a case management hearing on 6.2.15, which followed service of the parties’ witness statements, Master Price directed (1) a trial with a time estimate of three days, (2) that standard disclosure be limited to the 1995 and 1996 sales, (3) that factual cross-examination of the parties be limited to the issues of (a) the 1995 and 1996 sales and (b) their motivation, and (4) that the parties be permitted to adduce expert evidence in the fields of (a) ceramic art history and (b) auctioneering and valuation. The parties’ three day estimate was optimistic; in the event, the trial lasted eight days.

Mr Brisby QC, who appears with Mr Wigley for the defendants, takes a preliminary point that Caroline and James have no standing to bring proceedings under s.188 and their claim must fail because they are not “interested in a moiety or upwards”. There is no dispute between Mr Brisby QC and Mrs Talbot Rice QC, who appears for the claimants, that moiety means ‘half share’, at least in the context of s.188.

Mr Brisby QC submits that the moiety point ultimately turns on evidence; however, he makes a further submission by reference to the terms and construction of the Deed. Mrs Talbot Rice QC, who represents the claimants, also approaches the moiety point primarily as one of fact; she takes a different view of the true construction of the Deed to that of Mr Brisby.

The issue arises from the sale at auction of two pots from the BFC in December 1995 and one pot in May 1996. Charles maintained that he was opposed to the sale of any items and further that he was not paid his quarter share of the net proceeds. Accordingly, the defendants contended that Charles has an interest or entitlement in the BFC exceeding one quarter which, when aggregated with Katharine’s share, resulted in Caroline and James having an interest falling short of a moiety. If that is right, Caroline and James would not meet the qualifying criteria as applicants for an order under s.188.

The siblings addressed these sales in their written evidence and were cross-examined at some length.

Caroline’s written evidence included that the siblings agreed to sell pots sufficient to yield £2,000-£3,000 for each sibling and, in consequence, she wrote a letter dated 18.4.95 to Sir Michael on behalf of the siblings instructing him, as curator of the BFC, to select 12 to 20 pots for sale sufficient to raise the specified funds and to sell them at auction. The letter also noted that the siblings required the auction house to account directly to each sibling for a quarter of the net proceeds or, if that was problematic, that payment be made to James, who was then the only sibling living in the UK.

Sir Michael and Lady Butler visited Caroline in New York over Easter 1995. Easter Sunday fell on 16.4.95. Caroline’s letter was drafted to be countersigned by each of her siblings. Obtaining the signatures was to be a task for Sir Michael. It was countersigned by James and Katharine, but not by Charles.

Caroline’s oral evidence included a recollection of a telephone conversation with Charles in the period 6-23.3.95 which, to her surprise, “was a very good conversation, and [Charles] was perfectly agreeable”. Caroline was able to place the period of the telephone conversation as falling between a date of particular sadness for her and the date of the commencement of a holiday.

Charles’ written evidence was short. He based the proposition that he did not agree with the sale on documentation he had been shown in the course of preparing his statement. This indicates that he had no actual recollection one way or the other. However, he firmly denied having received any of the proceeds. Charles gave supplementary oral evidence, addressing Caroline’s evidence about a memorable conversation in the period 6-23.3.95, that he remembered that Caroline had presented the idea of selling some pots in order to bolster the potentially exempt transfer argument for inheritance tax purposes and that he was against that for two reasons : his general disposition in relation to the BFC and not being convinced that sales would have any such effect. Charles was cross-examined with a view to establishing that he was not in a position to say that, at the time, he expressly dissented from the sale; while he accepted that it is “a logical, theoretical possibility” that he did not express any dissent, he refused to accept that he did not do so because he had no such recollection. However, he did not classify his dissent as anything more than an expression of opinion.

These events happened almost two decades ago. That Caroline may have very good reasons for remembering certain events which occurred in March 1995 is one thing, that such reasons somehow reinforce the reliability of her recollection of other events at the same time is quite another. This is not to doubt Caroline’s integrity but to recognise human fallibility in relation to recollection and memory. Of course, the general point about fallibility applies with equal force to Charles’ recollection and memory and to the other siblings’ evidence in so far as it was based on recollection. Outside the context of litigation, recollection of events from the past may be defeated or distorted by a variety of influences and circumstances. Recollection for the purposes of litigation is susceptible to the same and to additional influences and circumstances. In Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) Leggatt J, at [15] – [22], considered the impact of the trial process in civil litigation upon evidence to be given in respect of recalled events or circumstances and concluded that the best approach for a judge to adopt in the trial of a commercial case is to place little if any reliance upon witnesses’ recollections of what was said in conversations or transpired at meetings and to base factual findings on inferences to be drawn from the documentary evidence and known or probable facts. That is valuable guidance which reaffirms a practice long adopted in the Chancery Division.

The available contemporaneous documents are few in number. They include two attendance notes and a letter from a solicitor, Trevor Milne Day, who was Sir Michael’s solicitor, had been retained in connection with the Deed, and was also retained by Caroline to advise in relation to the BFC.

These documents support a finding that the idea that a number of pieces should be sold arose in the course of, or as the result of, discussion between Sir Michael and Caroline when he visited or met her in New York, where Caroline was then living, in about November 1994. Following Sir Michael’s visit, Caroline telephoned Mr Milne Day for advice. One attendance note, dated 8.12.94, reads :

“[BFC]

Father over a month ago. Sell pieces to give money. Potential conflict between her and Charles. Nothing will be done until father dies. Caroline thinks ¼ should go to each. Charles – keep collection as a whole. Father not a [illegible] (Footnote: ²) for him”.

The other attendance note, which is undated but attributed to this period by the parties, reads :

“Trust Deed.

What happens on father’s death? Can we force a sale? Yes.

Appropriate with consent – yes.

Father + sister against an appropriating into 4 discreet sub collections.

Selling now to get benefit, precedent for future.

Is there a cast iron case for it? For Sale

No but not a bad idea”.

Mr Milne Day wrote to Caroline, by letter dated 13.12.94, to confirm their discussion. Mr Milne Day referred to the Deed and the latest of Caroline’s letter form agreements between the siblings, which was dated 2.5.88, as to which Mr Milne Day did not know whether or not it had been agreed to in writing by Caroline’s siblings. Working on the assumption that the siblings had made an agreement between themselves by which they agreed to keep the BFC intact during Sir Michael’s lifetime, Mr Milne Day’s understanding appears to have been that, following Sir Michael’s death, any one of the siblings could force a sale subject to them making some other agreement as to its division. In this context, Mr Milne Day’s advice was :

“On this basis I do not see that a sale now of any assets from the [BFC] with the consent of all four of you either adds or detracts from the force of that agreement. …

As mentioned on the telephone I think it is absolutely essential that any sale proceeds are put into an account operated by you and your siblings alone and any reinvestment is made from that same account”.

The available attendance notes do not record Mr Milne Day’s “absolutely essential” advice.

It is tolerably clear from the above that Caroline and Charles had different views as to what should happen to the BFC after Sir Michael’s death but, on a fair reading of Mr Milne Day’s attendance notes and letter, Caroline had not informed him that Charles was opposed to a sale of selected items from the BFC during Sir Michael’s lifetime. In my judgment, these contemporaneous documents do not assist in undermining Caroline’s evidence. However, the burden of proof rests with the claimants.

The next document is Caroline’s letter dated 18.4.95 to Sir Michael. As between Caroline and Sir Michael it was for Sir Michael to obtain the countersignatures of James, Charles and Katharine as and when he saw them. James and Katharine did countersign, Charles did not. It is not clear from the evidence whether and, if so, when in 1995 Sir Michael and Charles met. On Charles’ evidence they were in touch by telephone. Sir Michael had arranged funding for Charles’ business ventures in the Czech Republic, Russia and Ukraine in part by the bank of which he had become a director and in part personally; Sir Michael had assisted Charles with introductions and business connections; and, Charles had suggested an advisory role for Sir Michael with the government of Ukraine to be funded by the Know How Fund. Thus, there were business as well as family reasons for Sir Michael and Charles to communicate from time to time during this period.

Between June and August 1995 Sir Michael and Caroline corresponded and spoke at the telephone about the selection of pots for sale. In Caroline’s letter dated 20.8.95 to Sir Michael she wrote :

“ … on the subject of the number of pots to sell and which ones, and after having discussed this with the others, I confirm that we only want to sell the smaller number”.

Charles’ evidence in cross-examination was that Sir Michael would have taken Caroline at her word and would not have sought to verify the truth of her implicit assertion that all four siblings had expressly agreed to the sale.

Sir Michael subsequently selected a number of pots and consigned them to Sotheby’s for auction. Sotheby’s were to, and did, account to James c/o The Old Rectory (Sir Michael’s, not James’, home). Sir Michael opened the sale account upon receipt from Sotheby’s and wrote a manuscript note to James on the account and, according to that note, forwarded the cheque from Sotheby’s to James together with a copy of the account for each sibling and instructed James to pay the cheque into his account and pass on quarter shares to each of his siblings. Sir Michael also thought that Sotheby’s had overcharged. He wrote a letter to a director at Sotheby’s which his secretary typed and annotated to the effect that a copy was sent to each of the siblings. At that time Charles was living and working abroad. In the course of his oral evidence Charles said that the postal systems in the countries where he was working were unreliable and that post was addressed to him at The Old Rectory. The likelihood is that the correspondence about the Sotheby’s sale and Sotheby’s charges intended for Charles was sent to him c/o The Old Rectory.

It is common ground that Sir Michael was a meticulous man. Had he been aware that any of his children had objected to the sale it is improbable that he would have assisted as he did without clarifying the position with all the children. As to the possibility that he was unaware of Charles’ objection because of Caroline’s assurance and/or because there was no direct communication between Sir Michael and Charles over the period April to December 1995, I consider that to be unlikely. It may well be that they did not meet, but I do not doubt that they spoke at the telephone during this period; indeed, it is Charles’ evidence that they were in fairly regular contact. Pots, including those comprising the BFC, were of tremendous importance to Sir Michael and I regard it as improbable that the proposed sale of selected pots from the BFC was not spoken of at all by Sir Michael when talking with Charles during this period.

My conclusion in relation to Charles’ objections to the sale of selected BFC pots is that such objections, if any, as he may have had at the time when limited sales were under discussion were not voiced in such a way that any of his siblings or Sir Michael understood him to be opposed to the proposed sale(s) taking place. In other words, Charles may have expressed as his opinion a preference that the pots should not be sold and that the proposed sale would not or might not benefit or make any difference to the inheritance tax position, but all of that is very different from taking a definite stand in opposition to the proposed sale of pots.

The claimants do not challenge Charles’ evidence that he did not present the cheques for his share of the proceeds of sale. James gave clear evidence that he did account to Charles. Charles accepted that James is an honest person “in the main”. Disregarding Charles’ conjecture during cross-examination as to what might have happened, Charles said that, on his instructions, Sir Michael would open post addressed to him at The Old Rectory and that he did tell, or would have told, Sir Michael that he did not want the money from the sales. Charles was uncertain as to when he had told Sir Michael that he did not want his share of the sale proceeds; his uncertainty was as to whether it was before or after the second distribution of proceeds by James.

On the evidence before me, the overwhelming likelihood is that James drew a cheque in favour of Charles for his share following each receipt from Sotheby’s, that James posted the cheques and copy documents to Charles addressed to him at The Old Rectory, and that the cheques came to Charles’ attention. That suffices to discharge James from his obligation to account to Charles and to resolve the first of the moiety issues by reference to the evidence in favour of the claimants.

Mr Brisby QC’s second point is founded on the nature of the gift. Mr Brisby acknowledges that the Deed may be read in two alternative ways, either as the gift of individual items or as the gift of a collection formed as such by Sir Michael and Lady Butler at the moment of executing the Deed, and submits that on its true construction the gift was of a collection. Mr Brisby’s point is that Caroline, James and Katharine should each be taken as having drawn from the collection but Charles should not. Mr Brisby supports this proposition with an example of a collection of 500 silver spoons jointly owned by four people as tenants in common and a sale of three spoons by three of the four owners with the fourth owner not being consulted. Mr Brisby submits that the result would be that the interest of each of the three co-owners who effected the sale would reduce to 124/497 while that of the fourth would be 125/497.

On this basis Mr Brisby QC submits that if Charles’ siblings sold three pots in 1995-6 without his actual consent and without him receiving the proceeds of sale “it is obvious that [Charles] must have a proportionately larger share of what is left in the [BFC]”. Mr Brisby further submits that a precise analogy is to be drawn with cases concerning the rule in Re Hallett’s Estate (1879-1880) LR 13 Ch D 696. The details of Mr Brisby’s submissions appear in the transcript of the hearing for 18.3.16 at pages 70-74; it is not necessary to repeat or summarise these submissions but I do bear them in mind.

Mr Brisby’s general proposition is far from obvious to me. As to the example of the spoons, co-ownership in different proportions reflecting the dealings by some co-owners with the subject matter may be one possible outcome, depending upon all the particular circumstances of the case, but it is by no means the only one nor would it be a usual outcome; the more usual remedy in relation to a proprietary claim would be to trace the assets, the three spoons, or to trace into the substituted assets, the cash, in the hands of the other three. In the main, application of the rule in Re Hallett’s Estate concerns cases where trust monies have been unlawfully mixed by a trustee with his own funds and the aim is to protect the position of the beneficiary. In general terms, the available proprietary remedies involve the beneficiary in electing between following the original asset and enforcing the equitable title or tracing into the substituted asset in the hands of the trustee.

Further, in the present case there is no evidence that either the proposed sale of selected pots or the fact and consequence of the sale were kept secret from Charles. Indeed, Charles’ own evidence, that he was aware of the proposal to sell several pots from the BFC and that he chose not to present the cheques for his share of the proceeds, is to the contrary.

Even assuming Charles did more at the time than express an opinion as to his preference which was at odds with his siblings and that he did object, had the proposed sales mattered to Charles sufficiently, it was open to him to take such action as he thought appropriate to protect his interests. In the event, he did nothing beyond declining to present the cheques which had been sent to him. It is now far too late for Charles to take issue with the sales or to claim an enhanced proportionate interest.

As to whether the gift was of a collection as such or of many individual items, by the Deed the siblings were given and acquired equal shares as beneficial tenants in common in :

“those items … now to be known as The Butler Family Collection full details of which are set out in the annexures”.

Mrs Talbot Rice QC disagrees with Mr Brisby QC’s submission that the Deed should be construed as a gift of a collection. She submits that the answer to this question is straightforward and that on a natural reading of the Deed the gift was of “items” drawn from the collection build up by Sir Michael and identified in lists referred to as “the annexures”. She submits that by the Deed Sir Michael and Lady Butler gave their children many individual gifts of specifically identified pots and that designation of the gift as the BFC was secondary to the purpose of the gift, which was to pass valuable assets taxable upon death to their children in equal shares and in a tax efficient manner.

I agree with Mrs Talbot Rice QC’s submission. Sir Michael had designated the collection he had built up, and which he owned jointly with Lady Butler, as the Michael Butler Collection and he, or he and Lady Butler, specified the designation for the gifted items. The selection of a name, the BFC, was an express term of the gift and it continued the concept of the pots being connected as a collection and provided a convenient and distinctive collective term of reference. However, identification of what was gifted was established by reference to “those items … full details of which are set out in the annexures”. That was the language used to identify the subject matter of the gift and each sibling acquired a one quarter share in each pot the subject of the Deed. The essential tool for distinguishing the gifted items from those retained by Sir Michael and Lady Butler as the Michael Butler Collection is the lists of items. Had it been important to Sir Michael and Lady Butler to give a collection already or thereby constituted as such, the Deed could easily have been worded differently and to that effect. Even if the gift was of a collection, my decision on the moiety point would not be different for reasons given above.

My conclusions on the moiety point are that (1) the gift in 1987 and the supplementary gifts in 1989-1993 were of individual items, not of a collection; (2) Charles knew of the proposed sale of pots, which took place in 1995-1996, but he did not oppose the sale; (3) Charles knew of but chose not to present the cheques representing his share of the proceeds; and, (4) Caroline and James are interested in a moiety of the BFC and, therefore, have standing to apply for an order under s.188.

By s.188 the court is empowered to make

“ … an order for division of the chattels or any of them, according to valuation or otherwise, and [to] make such order and give any consequential directions as it thinks fit”.

It is self-evident from the language of s.188 that co-owners having only a minority interest in chattels cannot invoke the jurisdiction under s.188, and that co-owners with a moiety or greater interest invoke the jurisdiction by applying for an order for division.

Caroline and James seek an order for division on the basis that the siblings take turns in selecting a pot until there are none left. To ensure a broadly equal opportunity to each side, the claimants propose that the order for selection be Caroline, Charles, James, Katharine. That is the order in which the siblings are named as donees in the Deed. Mrs Talbot Rice QC submits that selection in that order accords with the decision of Simonds J in Knapton v Hindle [1941] 1 Ch 428 which concerned gifts by a testatrix under her will of one house to each of her nephews and nieces, named individuals, her sister, and her brother and the right of choice went according to the order of being named. Mr Brisby QC does not contend for a different scheme for division in the event that I make an order as sought by the claimants.

However, Charles and Katharine do oppose any order which would bring an end to the BFC as a collection. Their primary proposal is that the court should make no order other than to dismiss the application. In the alternative, the defendants propose that they, in fact Charles, be permitted to buy out Caroline’s and James’ interests up to a monetary limit, set by what he can afford at the time, and, if insufficient to effect a complete purchase of the claimants’ moiety or if the court is minded to permit the claimants to retain a number of pots for sentimental or other reasons, that Caroline and James should select pots until the value of their moiety remaining in the BFC has reduced to the available funds. The defendants’ proposal in this form surfaced during trial. It is not how their proposal had been framed in open correspondence from their solicitors, but that may be the consequence of a communication misunderstanding and/or drafting error.

From their researches Mrs Talbot Rice QC and Mr Brisby QC have identified two English authorities concerning s.188. In John Fox & Co Ltd v Ward and Another (1952) 102 LJ 725, the plaintiff had obtained judgment with costs and a bailiff had seized a three piece bedroom suite under a writ of fi fa. Adjudicating on the defendant’s wife’s claim that the suite was her property, HHJ Andrew, sitting at Bow County Court, held that the suite was joint property, which prompted an application under s.188 for a division. HHJ Andrew then held that seizure had caused the beneficial interests to become that of tenants in common. An order for division was refused because it would have destroyed the value of the suite. The judge took the view that s.188 conferred a wide discretion which he exercised by ordering a sale and equal division of the proceeds. In Dornoch Ltd v Westminster International BV (2009) EWHC 889 (Admlty) the subject matter of the litigation was a vessel, FD Fairway, a mega-size trailer hopper dredger, which was involved in a collision at sea off China and became a constructive total loss for insurance purposes. The insured value of the hull and machinery was €73.5million. One of the issues was as to the rights of the claimants as owners of a majority of shares in the vessel. It was common ground between the three legal teams before Tomlinson J that the claimant was entitled to invoke s.188 “to have the vessel realised by judicial process”.

The commentary in relation to s.188 in Wolstenholme & Cherry’s Conveyancing Statutes (13^th Edn) Vol. 1 notes that s.188 is new and confers on the court a jurisdiction which it did not previously possess. The commentary notes that s.188 meets the practical difficulties where chattels have been bequeathed to a class; and, further notes that where chattels are held as partnership property other relief, independently of relief under s.188, is available by way of an order for sale of the assets as a going concern, for which proposition the commentary refers to Featherstonhaugh v Fenwick (1810) 17 Ves. 298 and Taylor v Neate (1888) 39 Ch.D 538.

Respected academic opinion differs as to whether s.188 empowers a court to make an order for sale, at least as a primary remedy, and notes that this question may be avoided in cases where the co-owners are partners and the chattel is partnership property, but not where, as here, the chattels are not partnership property.

Mr Brisby QC draws attention to partnership cases and to matrimonial cases under English law, and to Commonwealth cases under the statutory equivalents to s.188.

Amongst the forms of relief commonly sought between partners are orders for the sale of partnership property. It is the normal form of order on the dissolution of a partnership where there is no agreement between the partners to the contrary, for example in relation to the retirement of a partner. Even where there is no express agreement precluding a sale on dissolution, the court may incline to some other order if necessary and appropriate to achieve fairness and justice between the partners. For the statement of these general propositions Mr Brisby QC refers to Lindley and Banks on Partnership (19^th edn) [23-183/185].

Mr Brisby QC also refers to Syers v Syers (1876) 1 App Cas 174 and orders derived from the decision in that case by which the court may, in the exercise of the wide discretion to achieve a fair and just result upon dissolution of a partnership, decline to make an order for sale and instead make an order permitting the purchase of a partner’s share by another partner following a valuation on a going concern basis. In Syers itself a partnership at will had come into existence upon the advancement of £250 paid in consideration for a one eighth share of the profits of the business. The House of Lords took into account as relevant to the appropriate order the fact that one partner’s share was seven times the size of the other’s. Sale of the partnership’s assets and business as a going concern was a default order to arise only if the purchase was not effected by the partner with the greater interest. Mr Brisby draws attention to more recent authority. In Hammond v Brearley and Burnett (unreported) 1992 WL 12678533 Hoffmann LJ, with whom Neill and Mann LJJ agreed, described the decision in Syers v Syers as exceptional, notorious for being more frequently cited than applied, but a valuable discretion which should be used when it suits the justice of the case. One such case is Mullins v Loughton and others [2003] Ch 250, in which Neuberger J concluded that the partnership should be dissolved but that, rather than it being wound up, the appropriate remedy in the circumstances was to order the defendants to buy out the claimant because, on the available information, that would achieve a more just result than dissolution.

Mr Brisby QC also refers to two matrimonial cases. In Bothe v Amos [1976] Fam 46 the parties had been husband and wife and had jointly owned the lease of shop premises with a flat above which they had occupied as their matrimonial home. The husband had carried on a grocery business from the shop and the wife a sub-post office. Following divorce, the wife applied under s.17 of the Married Women’s Property act 1882 for a half share in the property and in the goodwill and assets of the business and for an order for sale. In so far as relevant to this case, the Court of Appeal held that in circumstances where the statute conferred a power to order the sale of property it also had power to order a transfer of the title because there could be no sale without such transfer. In K v K (ancillary relief; property division) [2005] EWHC 1070 (Fam) Baron J ordered a division of jointly owned antiques having an aggregate value of some £330k on an alternate choice basis with any unwanted items being sold and the proceeds divided and any inequality in value after division being equalised by set-off or payment.

Mr Brisby QC refers to a number of Commonwealth cases decided in Australia and New Zealand which concerned chattels and statutory provisions almost identical to s.188.

Tillack v Tillack [1941] VLR 151 concerned a motor car jointly owned by a separated husband and wife. The relevant statutory provision was s.187 of the Property Law Act 1928 of Victoria (‘s.187’) which provided :

“Where any chattels belong to persons in undivided shares, the persons interested in a moiety or upwards may apply to the court for an order for division of the chattels or any of them, according to a valuation or otherwise, and the Court may make such order and give any consequential directions as it thinks fit”.

The wife claimed to have paid more than half of the purchase price and to have a corresponding interest. In the proceedings, the wife’s counsel submitted that s.187 conferred a power to direct a sale. The husband did not participate in the proceedings. Lowe J simply stated his decision to order a sale and give the wife conduct of the sale. Since Tillack the law in Victoria appears to have moved on. S.187 has been re-enacted as s.187 of the Property Law Act 1958 (‘the 1958 Act’) and became s.187(1) with the introduction of further provisions by the Property (Co-ownership) Act 2005. A new s.187(2) was introduced which provides that if the chattels are goods (defined as personal chattels or fixtures severable from the land) an application must be made under different provisions of the 1958 Act, also introduced in 2005, and the relief sought must be an order for (a) sale and division of the proceeds among the co-owners, or (b) physical division of the goods among the co-owners, or (c) a combination of (a) and (b).

Ferrari v Beccaris [1979] 2 NSWLR 181 concerned a racehorse owned by the parties as tenants in common in equal shares. The plaintiff sought an order for sale on alternative bases one of which was pursuant to s.36A of the Conveyancing Act 1919 (‘s.36A’) which provides :

“Where any chattels belong to persons jointly or in undivided shares, the persons interested in a moiety or upwards may apply to the court for an order for division of the chattels or any of them, according to a valuation or otherwise, and the court may make such order and give any consequential directions as it thinks fit”.

McLelland J rejected the proposition that s.36A did not apply to cases where the chattels were not susceptible to physical division and favoured the interpretation of the expression “division” as embracing, where appropriate, conversion into money and distribution thereof; in so doing McLelland J took into account that in many cases realisation and distribution of the proceeds was the only way of carrying out a division. McLelland J found Tillack to be of assistance, and concluded that on its true construction s.36A did authorise the sale of a chattel in appropriate circumstances. McLelland J also held that the plaintiff could do either but not both of having the conduct of the sale and being the purchaser.

In Hargreaves and Another v Fleming [1975] 1 NZLR 209 a husband and wife jointly owned a motor vehicle. In part satisfaction of liabilities to his employers the husband assigned his interest in the motor vehicle to them subject to the rights of his wife. Upon the judge, Casey J, finding that the wife was a co-owner and that the assignment severed her joint tenancy with her husband, the employers sought an order under s.143 of the Property Law Act 1952 (‘s.143’) that the wife be entitled to retain the car on condition that she pay them half its valuation at the date of judgment. S.143 provides :

“Where any chattels belong to persons jointly or in undivided shares, the persons interested in a moiety or upwards may apply to the Court or a Judge thereof for an order for division of the chattels or any of them, according to a valuation or otherwise, and the Court or Judge may make such order and give any consequential directions as the Court or Judge thinks fit”.

Casey J noted that s.143 envisaged only a physical partition of chattels which was obviously impractical. The judge was referred to Tillack but noted that the application in that case was not opposed and the judgment very short; in fact it was a mere statement of the decision made. Casey J also noted that the corresponding New Zealand statutory provision relating to partition of land did contain an express power of sale. Casey J considered that the order sought fell outside the scope of the statutory provision but, after referring to the long practice in the Chancery Court in England to order a sale of partnership property on dissolution, ordered a sale and division of the proceeds based on a valuation as at the date of assignment by the husband.

Hostick and Welch v The New Zealand Railway and Locomotive Society Waikato Branch Inc [2007] WTLR 1563 concerned a steam locomotive of the JA class, JA1267. Justice Asher concluded that the locomotive was jointly owned by those who contributed to its purchase in the proportions of their contributions. Justice Asher held that s.143 conferred a power on the court to order a sale of the locomotive because physical division was clearly impractical. In so doing Justice Asher agreed with the decision of Casey J in Hargreaves and noted that an order for sale was made under corresponding Australian legislation in Tillack. Justice Asher also noted that the practice of the English Chancery Court had included ordering a sale on dissolution notwithstanding that a literal interpretation of the partnership agreement might require physical division, as in Cook v Collingridge (1823) Jac 607 where physical division was impractical.

Drawing on the cases referred to Mr Brisby QC makes the following submissions as to the approach a court should take to an application under s.188 :

Mr Brisby QC draws attention to the fact that there is not a single case under s.188 or the equivalent Commonwealth statutes where an in specie division has been ordered; rather the orders made by the courts have been for sale.

Mr Brisby also commends a Syers type order in this case as having three advantages. First, it serves to minimise the effects of capital gains tax (‘CGT’), at least for the defendants. Secondly it also serves to maximise the return to the claimants, by avoiding auctioneer’s commission plus VAT for the vendors, and, again, minimise the cost to the defendants, by avoiding auctioneer’s buyer’s premium plus VAT. Thirdly, it serves the interests of all parties because no sibling is actually seeking an order for sale.

Mrs Talbot Rice QC submits that the court has no jurisdiction under s.188 to make such an order. In consequence, albeit for a different reason, she agrees with Mr Brisby QC that I should not make an order for the sale of the BFC.

Another point of common ground is that Mrs Talbot Rice QC acknowledges that it is open to the court to decline to make any order on the claimants’ application. Mrs Talbot Rice submits that such an order would be unrealistic in the circumstances of this case. She submits that s.188 confers a very limited jurisdiction, albeit one which is entirely appropriate to the circumstances of this case.

Mrs Talbot Rice QC also refers to Lindley and Banks on Partnership (19^th edn) [23-183/185] and s.44 of the Partnership Act 1890 and submits that the partnership authorities provide no assistance because on dissolution the objective is to settle the firm’s liabilities in order of priority and sale of the partnership’s assets to achieve that end is the default setting. Mrs Talbot Rice contrasts the primary objectives of s.188 and dissolution of a partnership. In the former, the primary objective is distribution between co-owners of chattels they co-own. In the latter, as s.44 of the Partnership Act 1890 makes clear, the primary objective is settling external liabilities and then repaying to partners their advances and capital according to their respective entitlements before dividing the residue according to their profit sharing ratio.

Turning to the English authorities, Mrs Talbot Rice QC notes that the report of Fox is not of HHJ Andrew’s judgment but is a reporter’s summary. The only reasoning evident from the summary is that division would be destructive of the three piece suite’s value; in other words it would be impractical. Mrs Talbot Rice observes that there is neither an examination of the s.188 jurisdiction nor an explanation of the basis on which s.188 confers a power of sale. Mrs Talbot Rice submits that Dornoch is of no assistance because it was common ground that s.188 permitted a sale of the chattel.

Mrs Talbot Rice QC submits that the Commonwealth authorities are, in the main, similarly flawed for lack of reasoning. That may be fair comment on the judgment in Tillack, which contains no reasoning, but not of the other cases. In Hargreaves Casey J referred to Tillack; but he did go on to note that physical partition of the chattel, a motor vehicle, was obviously out of the question and to consider English law on partnership dissolution. The impracticality of physical division was also the underlying rationale in Hostick. In Ferrari, McLelland J’s reasoning is clear from the way he framed the alternative possible interpretations of the statutory provision, although he too referred to Tillack.

On the question of whether the court’s power extends to a Syers type order, Mrs Talbot Rice QC draws attention to and distinguishes the circumstances of the case whereby a partner with a one eighth share sought to impose a sale on the unwilling majority representing the other seven eighths interest in the firm. Mrs Talbot Rice also refers to Rahnema v (1) Rahbari (2) Ansari, an unreported decision of Mr Ivory QC sitting as a deputy High Court Judge in 2008. On the issue of whether the judge had power to make what would have been, in effect, a compulsory purchase order relating to a house in London at a price to be determined by a valuer, the deputy judge doubted whether that could be done if opposed by the party to be bought out, and held that in any event the more appropriate order would be to order sale in the open market rather than at a valuation. Mrs Talbot Rice submits that it would be unfair and unjust to impose a compulsory purchase order on co-owners of chattels who are unwilling to sell.

As to Mr Brisby QC’s propositions as to the law, Mrs Talbot Rice QC sees the law rather differently. Her responses to Mr Brisby’s submissions are :

As neither the claimants nor the defendants seek, and both would oppose the making of, a straightforward order for sale, it will not be necessary to make a formal decision as to whether s.188 does or does not contain such a power unless I reach the conclusion that the alternative orders proposed by the siblings are inappropriate. However, I cannot altogether disregard this point when considering the scope of s.188 in the round.

In my judgment the subject matter of the English authorities, a three piece suite and a wrecked vessel, renders those cases readily distinguishable from this case. Further, and no less importantly the decisions were not based on a reasoned consideration of s.188.

As to the Commonwealth authorities, perhaps the change in the statutory provisions in Victoria is indicative of a different view being taken in that state since Tillack, but neither Mrs Talbot Rice QC nor Mr Brisby QC made any submissions as to that. A motor vehicle, a railway locomotive, and a racehorse are obviously incapable of division without destruction; they are inappropriate subject matter for an order for an in specie division between co-owners.

It would be unsatisfactory if the courts of England and Wales were unable to provide a practical remedy for a co-owner having at least a moiety interest in chattels not realistically capable of division without destruction. In the High Court in England and Wales recourse might be had to the court’s inherent jurisdiction to provide the obvious answer, ordering a sale, without placing any strain on the scope of s.188. The answer might be more difficult for a case in the County Court, unless transferred to the High Court.

To take just one example, suppose three items of equivalent value (monetary and sentimental) are the subject of a claim under s.188 by one of two equal co-owners. It would be unsatisfactory if the court could only provide a partial remedy by making an order concerning only two of the three chattels and be forced to leave the co-owners to their own devices in order to break the deadlock over the third. Why should the court be unable, as part of its order and consequential directions, to cause the sale of the remaining chattel and equal distribution of the net proceeds? On this basis the approach of McLelland J in Ferrari is attractive. McLelland J’s recourse to the language of the statute and the meaning of the word ‘division’ is also compatible with the Shorter Oxford English Dictionary definitions of ‘division’, which includes “the action of distributing among a number”, and ‘distribute’ which includes “dispensing, bestowing, or dealing out in portions”.

I take as a reasonable starting point that Parliament will have enacted s.188 as a provision to assist the courts in doing justice as between co-owners unable to agree between themselves what is to become of their jointly owned property. Parliament was obviously not looking to serve or protect the interests of those having a minority interest in co-owned chattels. Parliament also recognised that for co-owners valuation or commercial interests might not be the only or the appropriate criteria for doing justice. Beyond that, the only fetter to the court’s power to make any order it thinks fit is the word “division”. Moreover, the criteria for deciding upon a division are very wide : “ .. or otherwise”. From this I take the view that the court is empowered by s.188 to take a flexible and case by case approach aiming to deliver justice according to the particular circumstances of the case. Should it become necessary to decide the point, I would prefer Mr Brisby QC’s submission that the language of s.188 is wide enough to enable a court intent upon making an order as between co-owners not to be forced to make either no order or an incomplete order thereby leaving one or more chattels unaddressed, and possibly causing ongoing expense to, the co-owners. Whether an order made by the court directing a sale should, for example, permit a co-owner to have conduct of the sale or to be a purchaser, or permit a combination of division between co-owners (and on what basis) and sale would be fact sensitive. I do not consider that the partnership dissolution cases provide a direct analogy or compelling guidance. I do hold the view that the aim of Parliament will have been to enable the court to achieve practical justice between co-owners of chattels who have fallen out over what is to become of their jointly owned asset(s).

It is a fact that, by the Deed and the subsequent annual gifts, Sir Michael and Lady Butler made a positive decision not to cause the BFC to be preserved as a collection for scholarship and appreciation, or at least not to prioritise that aim, but, instead, made a positive decision to pass on the items comprising the BFC to their children in a tax efficient manner, or at least prioritised that aim.

It is also a fact that relations between the claimants and the defendants are not harmonious. Caroline expressed the view, with evidence based examples, not all of which held water, that Katharine has acted unilaterally in relation to the BFC. Katharine, not without sadness for the loss, described her relationship with Caroline as hostile and with James as non-existent. Trust between the claimants and the defendants has broken down and there is no realistic prospect of them being able to agree and co-operate voluntarily in matters concerning the BFC.

As to motivation, the claimants’ evidence was that they wish to enjoy the property gifted to them 25 to 30 years ago; they wish to take possession of the number of pots representing their respective shares in the BFC; and, they wish to be free to exercise personal and complete control over those pots. It is common ground that pots were a feature of family life for the siblings from childhood. That Caroline genuinely wanted to possess the pots and to retain at least some, if not all, of them for reasons of sentiment was accepted by the defendants. The claimants, particularly James, were cross-examined on the practicalities of housing and enjoying 125 pots each. In part this cross-examination was aimed at exposing James’ stated motivation as being insincere. The extent to which he has a developed viable plan for accommodating a quarter of the BFC may be questionable but, having heard and observed James, I do not consider him to be other than honest and sincere as a witness. I accept that he too wishes to display privately and enjoy at least some of the pots that he would own if the claimants succeed.

It is common ground that the BFC is unique and of outstanding importance to the study and appreciation of Chinese art and culture in the 17^th century. The defendants rely upon the significance of the BFC to scholarship and for exhibitions as being of crucial importance to their motivation in opposing the claimants’ application. Katharine has invested considerable time and effort in studying, cataloguing, and creating a database of the BFC and Sir Michael’s other pots both under his tutelage and since his death. The defendants’ wish to preserve the BFC is also, in part, a matter of respect for Sir Michael’s wishes. Katharine has had or made time to study, appreciate and enjoy the BFC in the Museum both during Sir Michael’s lifetime and subsequently; her motivation is underpinned by very strong emotional and academic attachment. My understanding of Charles’ motivation is that it is founded substantially on his perception of what the BFC represents to the world at large and as an enduring tribute to his father.

In my judgment, the motives of each sibling are genuine and rational. It does not seem to me that there is anything about their different motives which should expose them to criticism or weaken the case for the different results that they seek to secure.

Similarly, in my judgment there is nothing in the conduct of any of the siblings, some of which was explored at some length during the trial, which should influence the decision to be made in a way adverse to either the claimants or the defendants.

Expert evidence on behalf of the claimants in the field of art history and auctioneering and valuation was given by Lars Tharp, a Fellow of the Society of Antiquaries, member of the Oriental Ceramic Society (‘OCS’), art consultant and lecturer having a special interest in ceramics. Mr Tharp’s early career was spent at Sotheby’s where he gained experience as an auctioneer. He is also familiar to viewers of the television programme Antiques Roadshow having appeared as a specialist appraiser of oriental art works for some 30 years. Mr Tharp’s self-appraisal includes that he inhabits both the commercial and the academic camps in his field.

Regina Krahl, a past President of the OCS, gave expert evidence on behalf of the defendants on ceramic art history. She has been a consultant and adviser to numerous international museums and private collections, a post graduate lecturer at SOAS, and an academic writer. She is very familiar with the pots collected by Sir Michael and knew him for many decades.

Mr Robert McPherson, assistant secretary of the OCS, gave expert evidence on behalf of the defendants on auctioneering and valuation. Mr McPherson has 35 years experience as an antiques dealer and he specialises in Chinese porcelain.

The joint statement of the experts is short and unusual. They met but “were unable to agree a Joint Statement”.

All three expert witnesses took as background circumstances that in addition to the BFC there is a further collection of some 350 pots, not forming part of the BFC, built up by Sir Michael until transferred into the partnership he formed with the defendants or retained by him and bequeathed by his will. Although not a collection as such, these pots were referred to by the expert witnesses as ‘the Wider Collection’.

The experts were agreed that in the course of building up and exhibiting his collection Sir Michael brought international recognition to Chinese porcelain of the Transitional period and that the BFC provides a route through the period with a clear chronological foundation. Mrs Krahl explained that the BFC and the Wider Collection acquired international fame through the Shanghai exhibition in 2005.

Mr Tharp and Mrs Krahl disagreed about the effect that removing half the pieces from the BFC would have on its integrity as a collection and on the result of combining half the BFC with the Wider Collection. Mrs Krahl’s view was that what would be left with the defendants would inevitably cease to be representative of the Transitional period and therefore lose or jeopardise its unique position as a collection without equal in private or in public ownership, and have a disastrous effect on the standing of both the BFC and the Wider Collection. Mr Tharp’s view was that although the half of the BFC retained by the defendants would be different in nature from the BFC as presently constituted, if the defendants’ aim was to preserve a collection representing the styles, expertise and chronology of period this could be achieved by careful selection on a pooled basis. This was all the more so if the defendants worked to complement the Wider Collection. To make good his point with an example, Mr Tharp referred to brush pots (16 in the BFC and a further 10 owned outside the BFC). Mr Tharp also expressed the view that even if withdrawn from academic study and exhibition, the pots selected by the claimants would not be entirely lost to scholarship because they have all been catalogued and photographed. Moreover, on the evidence before me it appears that the defendants’ collection would still be without equal in private or public ownership.

The expert evidence as to value was very general. Neither Mr Tharp nor Mr McPherson ventured a value with an underlying methodology or rationale. Neither Mr Tharp nor Mr McPherson gave evidence as to a probable overall value of the BFC. The value of £8million was said to be an insurance valuation. Mr Tharp and Mr McPherson recognised that a premium or ‘halo effect’ (Mr McPherson’s phrase) or ‘kudos’ (Mr Tharp’s term) attaches to the BFC by reason of its provenance and composition. Mr Tharp’s view was that by combining half the BFC with the Wider Collection the defendants would be able to preserve an enhanced value for their pots.

There was a suggestion that 20% of the pots comprising the BFC represent 80% of its value, but that proposition was unsupported by evidence sufficient to form the basis of a finding.

As to realisation, if there was to be a sale, Mr McPherson favoured one or two highly publicised large scale auction sales, possibly spread over two or three dates and venues but all marketed and catalogued as one or, at most, two auctions. Mr Tharp considered that a well marketed sale at auction of 125 to 250 pots would be more sensational and achieve higher prices than a series of sales of say 20 pots. To an extent the experts agreed, although Mr Tharp also considered there to be a risk that one or two large scale sales might turn out to be counter productive. A further point of agreement between Mr Tharp and Mr McPherson was that marketing is very important to a successful outcome at an auction sale.

I reject the proposal by Mr Brisby QC that the court should decline to make any order. S.188 exists for the purpose of providing a remedy to co-owners interested in a moiety or upwards. The parties are in deadlock as to what to do with and about the BFC, and relations between the claimants and the defendants are sour if not acrimonious. Those are compelling reasons for making an order.

Mr Brisby QC advances five reasons for making an order that would entitle the defendants to purchase all or some of the pots that would otherwise go to the claimants on an in specie division. These are : (1) the devastating effect that an in specie division would have on the academic and cultural importance of the BFC; (2) the diminution in value of the entire BFC caused by such a division and the additional adverse impact on the defendants’ interests in the pots outside the BFC forming the Wider Collection; (3) the scope for catering for the claimants’ financial motivation in other ways than by division in specie; (4) the severe adverse tax consequences of an in specie division which would trigger significant CGT liabilities; and, (5) the intentions of the original gift and Sir Michael’s wishes.

Taking the last point first, there is nothing in the Deed to suggest that the intention of the original gift was to encourage or bring about the preservation of the BFC as such for an enduring period. The contemporaneous documents show that the siblings shared a common intention to keep the BFC intact for Sir Michael’s lifetime but no more than that. Preservation after Sir Michael’s death seems to have been voiced at around the time of the partnership proposal, more than two decades later. Sir Michael’s wishes, including as expressed in his letter of wishes, may have some moral standing but they are of no legal significance.

As to (1), Mrs Talbot Rice QC submits that the fact that a collection of artworks may be or is of unique academic, cultural and historic importance is not sufficient to trump the rights and wishes of an owner in order to maintain its integrity as a collection. Mrs Talbot Rice QC refers to the decision of HHJ Purle QC in In the Matter of the Wedgwood Museum Trust Limited (in administration) [2011] EWHC 3782 (Ch). In that case the principal issues were whether a collection comprising Wedgwood china described as being “part of [the nation’s] cultural heritage and of immense importance”, and portraits of the Wedgwood family by Reynolds and by Stubbs were held on charitable trusts or were owned by the company and whether they were available to settle the company’s liabilities. HHJ Purle QC held that the china and paintings were gifted outright to the company from which it followed that they were available to settle the company’s liabilities. Thus, the Wedgwood case was not directly concerned with this point.

I accept that the removal of 250 pots from the BFC would be likely to have a material effect on the BFC as such and, to a lesser - but not necessarily immaterial - extent, an effect on the Wider Collection. For example one of Sir Michael’s earliest purchases, a green bamboo wine pot, is highly distinctive and unique among both the BFC and the Wider Collection. Division would not be destructive in the literal sense, as in the case of a motor car, a vessel, a railway locomotive, or a three piece suite. I am not in a position to prefer Mrs Krahl’s evidence and to reject Mr Tharp’s evidence that careful selection by the defendants to complement their pots outside the BFC would enable them to own and control a unique and unrivalled collection of Chinese porcelain representative of the Transitional period for academic and cultural appreciation and for exhibition. Moreover, there was no evidence that what would remain in the ownership and control of the defendants would be other than the largest collection of such porcelain.

As to (2), the evidence as to valuation was very general in nature. The evidence does not indicate that there is only one or only a small but odd number of highly valuable pieces with the result that division by selection on a 1-2-3-4 basis would be likely to work monetary injustice. As to the element of premium or halo effect conferred by provenance, this would remain in so far as past ownership by Sir Michael adds value to any item. The overall halo effect would be put at risk. However, Mr McPherson’s approach to a sale was designed to preserve the halo effect, in so far as possible and at least in part, on initial sale out of the BFC, should that occur. That the halo effect would be partly lost to the moiety of the BFC retained by the defendants is likely but they have no interest in selling and monetary value is not a priority for them. Were their view to change they could liaise with their siblings about acting in concert to maximise the return to all four siblings from those pieces they were individually willing to sell. That division might diminish the halo effect attaching to the Wider Collection, excluding the BFC, is not a relevant consideration.

As to (3), I have already rejected the proposition that the claimants’ motivation is solely or primarily financial. Such a finding could not be made on the evidence. Addressing the claimants’ financial motives in other ways by way of court order is complex. In essence the scheme proposed by the defendants would involve a buy in, up to an as yet unspecified monetary limit which may not equal the value of the claimants’ moiety, by Charles. On Charles’ own evidence, however willing he may be, he is not in a position to put himself forward as an able buyer now or possibly at all within the two year time limit the defendants propose. Charles gave some oral evidence about his proposed share sales and the tax position in the relevant jurisdiction. Mrs Talbot Rice QC submits that this was a selective snap shot which could and should have been prefaced by written evidence and supporting documentation sufficient to enable the claimants and the court to form a reasoned view as to the amount and prospects to be committed by Charles. That is a reasonable observation.

As to (4), neither Mr Brisby QC nor Mrs Talbot Rice QC is in a position to make clear affirmative submissions as to the tax consequences of an in specie division between the siblings. Based on the material drawn to my attention by Mr Brisby QC, in particular HMRC’s guidance in Helpsheet 293 Chattels and CGT (2015), I can see that there is a possibility that the BFC may be classified as a set. The criteria for a set noted in the guidance are that the chattels are similar and complementary to each other and worth more together than separately. On Mr Brisby’s submissions classification of the BFC as a set would have a very significant tax consequence. The normal low value exemption whereby individual items sold for less than £6,000 do not attract CGT would be replaced by applying the £6,000 limit to the entire set. The issue of whether or not the BFC is a set was not canvassed or argued before me for a finding in this case and Mr Brisby QC entirely appropriately confines his submissions in this case to pointing out that there is a risk that the BFC may be a set for CGT purposes. It would not be necessary for there to be a sale for monetary consideration in order for there to be a disposal for CGT purposes. In his closing submissions Mr Brisby QC includes a worked example on the basis that the BFC is a set having a value of £8million and a cost, or initial value, for the purposes of calculating a chargeable gain of £1.043million; on his calculation, ignoring individual annual allowances, each sibling would face a CGT liability in excess of £260,000. Mrs Talbot Rice QC submits that CGT is a fact of life and not a relevant consideration. She further submits that if the BFC is a set the tax consequence may be that an in specie division is not a taxable disposal. It is not necessary for me to express a view as to which, if either, of Mr Brisby and Mrs Talbot Rice is correct. CGT is not a new tax. It existed at the time of the original gift in 1987 and it may be assumed that the Deed, which was intended to be tax efficient from the Donors’ standpoint, was not entered into other than on the basis that the Donees would have to make their own tax plans or put up with any CGT or other tax consequences. I do not regard CGT as a factor which should influence the decision I reach.

In my judgment the appropriate order to make is that sought by the claimants. The BFC is readily divisible between the parties. There is no evidence that a 1-2-3-4 selection process would produce an unjust result whether by reference to value or otherwise. The defendants’ pre-emption proposal is insufficiently specific or certain to form the basis of a workable court order and, in any event, it would preserve the deadlock and do nothing to abate the disharmony between the siblings for a further period of up to two years. Of course, if Caroline and/or James wish to sell any or all of the items they select it would be sensible for them to ensure that the defendants are aware of that intention and welcome to make an offer as well, as of course is the case, as being free to bid at any auction, but that is not a matter for the court to regulate.