Newman & Ors v Clarke & Anor

This is a judgment in an application by the Defendants, William Edwin Clarke and Paula Louise Marks, for summary judgment, alternatively for the striking out of the Particulars of Claim, in a claim brought against them by the Claimants, Deborah Verne Newman, Brooke Leverne Newman and Billy Clarke Newman. Mrs. Newman is Mr. Clarke’s daughter and Mrs. Marks’ sister. Brooke and Billy Newman are Mr. Clarke’s grandchildren and Mrs. Marks is their aunt.

There are, in this case, some undisputed facts. On 20 December 1996 Mr. Clarke created an accumulation and maintenance settlement to benefit, amongst others, Brooke and Billy Newman, under which Mrs. Newman and Mrs. Clarke were two of the three original trustees. He transferred to the original trustees of the settlement£150,000 which represented the original trust fund. On 11 April 1997 Mrs. Newman and her husband granted a lease (“the lease”) of 1 Vicarage Drive, Rectory Road, Beckenham, Kent (“the property”) to Mr. Clarke. It is not disputed, on the application, that the lease is one which (subject to circumstances which have since happened and to which I will now turn) is capable, where procedural pre-conditions are met, of being enfranchised under the Leasehold Reform Act 1967 and which entitles Mr. Clarke to obtain the freehold interest in the property. On 19 June 1997 Mr. and Mrs. Newman sold their freehold reversion in the property to the original trustees of the settlement. On 25 June 1997 Mr. Clarke replaced the third of the original trustees as a trustee of the settlement. On 12 September 1997 the original trustees transferred the freehold reversion in the property to Mrs. Newman, Mrs. Marks and Mr. Clarke to hold on the terms of the settlement. On 7 January 1998 they were registered, at HM Land Registry, as the proprietors of the freehold interest in the property. I shall call these facts, in this judgment, the “undisputed facts”.

What is also not contentious is that, on 27 March 2015, Mr. Clarke served a notice under the 1967 Act exercising or purporting to exercise his right under that Act to acquire the freehold interest in the property. In November 2015 he applied to the First-tier Tribunal (Property Chamber) (Residential Property) (“the FTT”) for a determination of the price for and for the determination of the terms of the transfer to him of the freehold interest in the property. Any determination of the price by the FTT is governed, in this case (it was not disputed), by s.9(1) of the 1967 which requires that the price is to be determined principally by reference to the open market value of the property subject to a sitting tenant (i.e. not with vacant possession). The FTT has stayed the proceedings before it pending the determination of the claim.

By, in particular, para.8 of the Particulars of Claim, the Claimants contend that principally Mr. Clarke is or is at risk of being in breach of the rule against self-dealing because he is seeking to acquire the freehold interest in the property. I shall call this issue, in this judgment, “the self-dealing issue”.

Further, by, in particular, para.9 of the Particulars of Claim, the Claimants assert that principally Mr. Clarke is in breach of trust by his seeking to acquire the freehold interest in the property:

Save as raised by me, on the application the parties did not obviously place any reliance on the duties contended for in para.9 of the Particulars of Claim. To my mind they were right to take that course of action.

In my view it is wrong, in the present context, to talk of trustees having a duty to act unanimously. They can only act unanimously, generally (save where, for example, the trust deed provides otherwise), because they are regarded in law as being a single body. It is more accurate, in the present context, to say that, as a matter of generality, a trustee’s act which requires unanimity is of no effect if not carried out by all the trustees. In Cowan v. Scargill [1985] Ch 270 Sir Robert Megarry VC said at p.297: “In an ordinary trust, the trustees can do nothing unless they are unanimous: a majority cannot prevail over a minority…” It follows therefore that the Claimants have no real prospect of establishing that the Defendants are or at risk of being in breach of such a duty and there is no other compelling reason why such an claim should be disposed of at trial.

As to the second of the two duties alleged in para.9 of the Particulars of Claim, the authors of Lewin on Trusts (19th ed) say this at para.20-001:

“The…rule is that a trustee, like other fiduciaries, is not allowed to place himself in a position where his personal interest, or interest in another fiduciary capacity, conflicts or possibly may conflict with his duty. The general effect of these rules, which in no way depend on fraud or absence of good faith, is that a trustee is not allowed to derive any personal advantage from the administration of the trust property that is not expressly authorised. In the words of Lord Herschell:

“It is an inflexible rule of a Court of Equity that a person in a fiduciary position, such as the respondent’s, is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict. It does not appear to me that this rule is, as has been said, founded upon principles of morality. I regard it rather as based on the consideration that human nature being what it is, there is danger, in such circumstances, of the person holding a fiduciary position being swayed by interest rather than duty, and thus prejudicing those whom he was bound to protect. It has, therefore, been deemed expedient to lay down this positive rule.””

As the authors of Lewin also make clear in the same paragraph, the general rule against conflicts is articulated in different ways depending on the particular facts. So, in this case, if Mr. Clarke is or might be in breach of the general rule it is because he has or might have infringed the rule against self-dealing. In other words, to my mind the praying in aid of the general rule by the Claimants adds nothing to their case. Their case either stands or falls by reference to the rule against self-dealing.

The allegation (the alleged breach of the second of the two duties set out in para.9 of the Particulars of Claim) which I am now considering is directed too against Mrs. Marks. Suppose, for a moment, that Mr. Clarke is permitted, as an exception to the rule against self-dealing, to acquire the freehold interest in the property under the 1967 Act at a price and on terms which have been determined. It has not been suggested that, in such circumstances, Mrs. Marks (or, indeed, any of the trustees in that capacity) has (have) any power to nevertheless resist the transfer of the freehold interest in the property to Mr. Clarke. It seems to me therefore that, in that scenario, there can be no question of Mrs. Marks “concurring” in the acquisition by Mr. Clarke of the freehold interest in the property, so that she cannot, in that scenario, be in breach of the second of the alleged duties pleaded by the Claimants at para.9 of the Particulars of Claim.

Put shortly therefore, if the Defendants can establish that the Claimants have no real prospect of establishing (i) that Mr. Clarke is in breach of the rule against self-dealing or, at least, (ii) that there is an imminent danger (a sufficient danger to justify a quia timet injunction) that he will be in breach of the rule against self-dealing, whatever the facts of the case, and, if Defendants can also establish that there is no other compelling reason why the case should be disposed of at trial, then there must be summary judgment for the Defendants. If the Defendants cannot establish that then the claim must proceed.

As to this last point I make the following remarks:

I turn then to consider the substance of the application; namely, whether the Defendants are entitled to summary judgment because the Claimants have no real prospect of succeeding on the self-dealing issue.

In doing so I remind myself of what Moore-Bick LJ said in ICI Chemicals & Polymers Ltd. v. TTE Training Ltd. [2007] EWCA Civ 725 at [12]:

“…It is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent’s case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant’s case is bad in law, the sooner that is determined, the better.”

On this application Mr. Holbech, who appeared for the Defendants, places significant reliance on what Hoffmann J said in Spiro v. Glencrown Properties Ltd. [1991] Ch 537, 546 and, in particular the words I have emphasised below:

“…[In] In re Mulholland’s Will Trusts [1949] 1 All E.R. 460 [a] testator had let premises to the Westminster Bank on a lease which included an option to purchase. He appointed the bank his executor and trustee and after his death the bank exercised the option. It was argued for his widow and children that the bank was precluded from exercising the option by the rule that a trustee cannot contract with himself. Wynn-Parry J was pressed with the irrevocable offer metaphor, which, it was said, led inexorably to the conclusion that when the bank exercised the option, it was indeed entering into a contract with itself. But Wynn-Parry J held that if one considered the purpose of the self-dealing rule, which was to prevent a trustee from being subjected to a conflict of interest and duty, the only relevant contract was the grant of the option. The rule could only sensibly be applied to a consensual transaction. While for some purposes it might be true to say that the exercise of the option brought the contract into existence, there could be no rational ground for applying the self-dealing rule to the unilateral exercise of a right granted before the trusteeship came into existence. Wynn-Parry J quoted, at p.464, from Sir George Jessel MR in Gomm’s case, 20 ChD 562, 582, and said:

“As I understand that passage, it amounts to this, that, as regards this option, there was between the parties only one contract, namely, the contract constituted by the provisions in the lease which I have read creating the option. The notice exercising the option did not lead, in my opinion, to the creation of any fresh contractual relationship between the parties, making them for the first time vendors and purchasers, nor did it bring into existence any right in addition to the right conferred by the option.”

Mr. Holbech contended that, whatever the other facts, the claim on the self-dealing issue was bound to fail because:

If Mr. Holbech succeeds on his second, narrower, contention, I do not need to consider his first, broader, contention. The facts which underpin Mr. Holbech’s second contention are part of the undisputed facts. It follows therefore, applying Moor-Bick LJ’s dictum, if Mr. Holbech’s second contention is right, the claim is one which ought to be summarily disposed of. It is therefore to that contention that I now turn.

It is to be noted that Hoffmann J’s dictum is directed to contractual rights. In this case Mr. Holbech has proceeded on the basis that the rights with which I am concerned are not contractual rights but statutory rights. He contends that where the relevant pre- existing rights are statutory rather than contractual rights the case for the application of the exception to the rule against self-dealing for which he contends is an a fortiori one. Mr. Warwick, fairly, did not suggest that, if an exception to the rule against self- dealing in this case would have applied had Mr. Clarke enjoyed pre-existing contractual rights, that exception would nevertheless not apply because the relevant rights are statutory ones. It seems to me, as presently advised, that, unless the cases to which I was taken require me to do otherwise (which they do not), I ought not to distinguish those cases because the rights there being considered were not statutory ones. If Mr. Holbech can establish that there is an exception to the rule against self- dealing if the contractual rights exercised pre-exist the exercisor’s appointment as a trustee, I have concluded that the exception would extend to a tenant’s statutory rights under the 1967 Act.

It is to be noted too that Hoffmann J’s dictum was directed to rights which are unilaterally exercised. I did not understand Mr. Warwick to suggest that a tenant’s rights under the 1967 Act, of the sort under consideration in this claim, are not rights which are to be exercised unilaterally. If he did make that suggestion he was wrong to do so in my view. I have seen nothing to indicate that the service of a tenant’s trigger notice under the 1967 Act is not a unilateral act. I have seen nothing to indicate that the steps which then follow, culminating in a transfer of the freehold interest in the relevant property, require a consensus of the landlord and tenant. Indeed, the FTT application in this case would suggest otherwise.

The point of distinction between the parties on this application and the issue on which this application turns in the light of all I have said is this. Mr. Warwick contends that Hoffmann J’s dictum in Spiro was obiter. This cannot be disputed. Mr. Warwick contends that, in that case, Hoffmann J was considering a quite different issue to the one arising in this claim and, more particularly, that, in that case, Hoffmann J was considering the proper legal analysis of an option, principally for the purposes of s.2 of the Law of Property (Miscellaneous Provisions) Act 1989. This cannot be disputed. Indeed, that this is so can be seen from Hoffmann J’s dictum which I have set out above. The Judge made particular reference to what Wynn-Parry J had said in Mulholland on that issue. Mr. Warwick contends that Hoffmann J was incorrect to have identified an exception to the rule against self-dealing in the second of the highlighted passages which I have quoted from the judgment. Mr. Warwick contended that Mulholland does not support the point made by Hoffmann J in Spiro and, if it does, the cases on which Wynn-Parry J relied on the relevant point in Mulholland do not support that point. Mr. Warwick contended that, on a careful chronological review of the authorities, the exception to the rule against self-dealing for which Mr. Holbech now contends does not exist. Mr. Warwick contends that, whilst respect should be shown to what Hoffmann J had to say in Spiro, ultimately the Judge was (or might be) wrong so that this claim should be allowed to proceed to trial.

It seems to me that the proper approach to the resolution of the point of distinction between the parties is to consider, first, whether Mulholland does support what Hoffmann J said in Spiro and, if it does, secondly, whether the dicta on which Wynn- Parry J relied in Mulholland on the issue support his conclusion in that case.

In Mulholland Wynn-Parry J said this at pp.461-3:

“This is an action brought by the plaintiffs as beneficiaries under the will of the testator, Thomas Ambrose Mulholland, against the defendants, Westminster Bank Ltd. one of the two executors and trustees of the testator, for an order setting aside a conveyance dated 31 July 1947, by which certain freehold property forming part of the estate of the testator was conveyed to the bank.

By a lease, dated 1 September 1936, the testator leased to the bank certain property known as 173, College Road, Great Crosby, Lancashire, for the term of 21 years from 31 March 1936. By the lease it was provided that the bank should have the option to purchase the demised premises as an estate in fee simple in possession free from incumbrances subject to two conditions (i) that the option should not be exercisable during the life of the testator without his consent, and (ii) that, if the testator should die during the term created by the lease, the bank should have the option to purchase at the price of £2,500 by giving not less than three calendar months’ notice in writing of such intention at the expiration of the year in which the testator should die or at the expiration of any subsequent year. By his will, dated 26 July 1937, the testator appointed the bank and his widow, the fourth plaintiff, to be the executors and trustees of his will, and declared that the bank should be entitled to remuneration in addition to the customary share of brokerage in accordance with the bank's scale of fees then in force free from duties, and, further, that the bank should, without being liable to account for any profit made thereby, be entitled to act as banker and transact any banking or allied business on behalf of his estate on the same terms as would be made with a customer in the ordinary course of business. He settled his residuary estate on trust for his widow for life and directed that on her death it should be divided among his children who should survive him and attain 21 years of age. The testator had three children, all daughters, who survived him and attained the age of 21, and they are the first three plaintiffs. The testator died on 28 March 1942, and his will was proved by the bank and his widow on 25 September 1942, in the District Probate Registry at Liverpool. By a notice in writing, dated 11 July 1946, the bank exercised the option to purchase granted by the lease. After considerable correspondence between the bank's solicitors and a firm of solicitors acting on behalf of the trustee department of the bank and the widow, as the executors and trustees, as to the requisitions on title, the content and scope of the property, rights to be conveyed and assured, and other similar matters, the property in question was conveyed to the bank by a conveyance dated 31 July 1947, made between the bank and the widow, of the one part, and the bank, of the other part. The point, taken at one time, that the notice of 11 July 1946, did not comply with the terms of the option was not pressed, and the validity of the notice was not disputed.

It was contended that the plaintiffs, as beneficiaries under the will, were entitled to have the conveyance set aside because at the date when the bank exercised the option they were trustees of the property the subject-matter of the option; that, as trustees, they were not entitled to place themselves in a position where their duty and their interests conflicted; and, therefore, having accepted the executorship and trusteeship, they had effectively precluded themselves from exercising the option. Reliance was placed on the well-known passage of Lord Cranworth LC in Aberdeen Ry. Co v. Blaikie Brothers, where he said (1 Macqueen 471):

“A corporate body can only act by agents, and it is of course the duty of those agents so to act as best to promote the interests of the corporation whose affairs they are conducting. Such agents have duties to discharge of a fiduciary nature towards their principal. And it is a rule of universal application, that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect. So strictly is this principle adhered to, that no question is allowed to be raised as to the fairness or unfairness of a contract so entered into. It obviously is, or may be, impossible to demonstrate how far in any particular case the terms of such a contract have been the best for the interest of the cestui que trust, which it was possible to obtain. It may sometimes happen that the terms on which a trustee has dealt or attempted to deal with the estate or interests of those for whom he is a trustee, have been as good as could have been obtained from any other person,—they may even at the time have been better. But still so inflexible is the rule that no inquiry on that subject is permitted. The English authorities on this head are numerous and uniform…It is true that the questions have generally arisen on agreements for purchases or leases of land, and not, as here, on a contract of a mercantile character. But this can make no difference in principle. The inability to contract depends not on the subject-matter of the agreement, but on the fiduciary character of the contracting party, and I cannot entertain a doubt of its being applicable to the case of a party who is acting as manager of a mercantile or trading business for the benefit of others, no less than to that of an agent or trustee employed in selling or letting land.”

I have set out this passage from Wynn-Parry J’s judgment at length because:

Wynn-Parry J continued at p.463:

“The principle which emerges from those passages is that the existence of the fiduciary relationship creates an inability in the trustee to contract in regard to the trust property. The case, as I read it, does not touch the position arising where the contract in question has been brought into existence before the fiduciary relationship. That in such a case the trustee is not precluded by the subsequent fiduciary relationship from asserting his rights under the pre-existing contract emerges clearly from such cases as Vyse v Foster, Hordern v Hordern, Re Lewis and Re Macadam” (emphasis added).

Wynn-Parry J. concluded, at p.464:

“…as regards this option, there was between the parties only one contract, namely, the contract constituted by the provisions in the lease which I have read creating the option. The notice exercising the option did not lead, in my opinion, to the creation of any fresh contractual relationship between the parties, making them for the first time vendors and purchasers, nor did it bring into existence any right in addition to the right conferred by the option. The notice amounted to no more than the exercise by the bank of a right conferred by the option in 1936. If that be the true position, it must follow that, the only contractual right having been created before the fiduciary relationship arose, the principle underlying Vyse v. Foster and the other cases following it must apply. For these reasons the bank was entitled, notwithstanding its acceptance of the executorship and trusteeship of the testator’s will, to exercise the option, the conveyance must stand, and the action must be dismissed with costs.”

I agree with Mr. Holbech that Hoffmann J, in the passage from Spiro which I have quoted, did properly articulate what Wynn-Parry J. held, particularly in the passage at p.463 of the report which I have highlighted above. Having held that Aberdeen did not deal with the interaction between the rule against self-dealing and a pre-existing contract, the Judge held that there were dicta in the cases he cited to support his conclusion to the effect that there was an exception to the rule where the contract (right) in issue was a pre-existing one.

As to Vyse, Wynn-Parry J said, at p.463:

“In Vyse v. Foster the question arose because a deceased partner in a partnership, the partnership agreement governing which contained a provision that the surviving partners should purchase the share of the deceased partner on terms set out in the deed, appointed a surviving partner his executor and trustee. In the course of his opinion Lord Cairns LC said (L R 7 HL 332):

“My Lords, in point of fact the testator appointed as one of his executors one of his partners, Mr. Henry Vyse. I apprehend it to have been perfectly clear that the testator could not, by appointing one of his partners as his executor, annul that partnership contract which he had deliberately entered into. I cannot admit that it was necessary for the person so appointed executor to disclaim the executorship in order to save his contract. In the view, at least, of a Court of Equity, I apprehend that the contract remained in full vigour, even although there might, from the peculiar position of the executor as a surviving partner, be reasons for watching narrowly the course which he would take with regard to the fulfilment of the contract.”

To my mind this passage in Vyse does provide support for the conclusion Wynn-Parry J reached in Mulholland as to the existence of an exception to the rule against self- dealing. I have concluded that the Lord Chancellor’s dictum was of general application and was correctly interpreted by Wynn-Parry J. I understood Mr. Warwick to suggest that Vyse is only authority for the proposition that, after the event, a court can sanction a transaction carried out in breach of the rule against self-dealing. I understood him to say that an exception to the rule against self-dealing cannot be derived from that case. It is right that the headnote suggests that, on one issue, the court was being asked to sanction a transaction after the event but as I read that case it is not authority only for the limited proposition for which Mr. Warwick contends. In any event, as I have said, the Lord Chancellor’s dictum I have quoted seems to me to be of general application.

I was also taken by the parties to Re McAdam [1946] Ch 73. Wynn-Parry J in Mulholland did not identify any particular part of Cohen J’s decision in McAdam on which he relied. I agree with Mr. Holbech that the passage from McAdam Wynn- Parry J is likely to have in mind is this one at pp.79-80:

“The next case on which Mr. Christie relied was the case of In re Lewis. The headnote reads: “L. was a trustee of his father’s will. His father had been one of the managing directors of a partnership firm, and by the will L. was nominated to be a partner in the firm in the place of his father, but he was to hold the share in the partnership to which he thus succeeded upon the trusts of the will. L. had, prior to his father’s death, acted as salesman of the firm at a salary. He continued so to act after his father’s death, and after his admission as a partner, under an agreement with the other members of the firm. The agreement to employ L. was made bona fide and was for the interest of the firm and thus of the trust estate. Held, that L. received his salary as salesman by virtue of his agreement with the firm and not by reason of the trusts of the will and that, consequently, he was entitled to retain the salary in addition to certain remuneration which he obtained under the will for acting as managing partner and that he need not account for the salary to the trust estate.” I think the material portion of Warrington J’s judgment is as follows: “Now does this gentleman by receiving this salary receive it by virtue of his position as trustee of the estate of the testator? I am of opinion that he does not. Does he receive it by virtue of his position as a partner? In my opinion he does not. He receives it not by virtue of anything done by the testator, but by reason of the agreement which he has made with his co-partners that one of the expenses of the firm should consist in the payment of this salary, and in the payment of this salary to him.” Then, after pointing out that there was no decided case precisely on this point, he treats the case as governed by the principle on which In re Dover Coalfield Extension, Ld. was decided. I respectfully agree with the decision in that case. It seems to me that the distinction between that case and this is that there he secured the appointment as salesman not by virtue of the exercise of any discretion in him as trustee, but by virtue of a bargain with his co-partners; whereas in the present case the plaintiffs got their appointment, by the exercise of a power which is vested in them - not, it is true, by the testator’s will, but by the articles of the company approved by the court, but none the less vested in them as trustees.”

To my mind this passage too supports the distinction effectively made by Wynn-Parry J in Mulholland between the exercise of rights existing before the exercisor’s appointment as trustee and the exercise of other rights.

In Mulholland Wynn-Parry J was referred to and distinguished Wright v. Morgan [1926] AC 788. In that case there was assigned to a trustee a right of pre-emption to purchase land which right was contained in a will trust of which the trustee was a trustee and which was triggered by acts of the trustees in that capacity. It was not contended, in that case, that there was an exception to the rule against self-dealing in respect of a unilateral right vested in a person which had been vested in him since before he became a trustee. That is hardly surprising, because the facts did not support such a contention. To my mind there is no reason to suppose that Wynn-Parry J was not right to conclude that the decision in Wright was effectively not on point.

In the light of the foregoing, I have concluded that Mr. Holbech’s contention is right. Because Mr. Clarke became a tenant under the lease before he became a trustee and, because his right under the 1967 Act derives from the lease which was made before Mr. Clarke became a trustee an exception to the rule against self-dealing applies in this case (whatever the other facts might be).

Mr. Warwick drew my attention to Kim v. Park [2011] EWHC 1781 (QB). In that case Tugendhat J had before him an appeal in a libel claim in which both parties were litigants in person. At first instance the Master had struck out the Particulars of Claim because they failed to identify anyone to whom the alleged libel was published and they failed to plead sufficient facts from which the identity of any such person could be inferred. It was accepted, in that case, that the missing plea was a necessary constituent of the cause of action on which the Claimant relied. At the first instance hearing the Claimant had indicated to the Master that he intended to call as witnesses at any trial individuals who had read the material in question. Before the Master handed down a reserved judgment, but after the hearing, the Claimant had provided witness statements to the Master from individuals who claimed to have read the material. It was against that background that the Judge said:

“40 …where the court holds that there is a defect in a pleading, it is normal for the court to refrain from striking out that pleading unless the court has given the party concerned an opportunity of putting right the defect, provided that there is reason to believe that he will be in a position to put the defect right. In para.19 of his judgment the Master recorded that the Claimant had informed him that he already had witnesses. On 17 January 2011 the Claimant demonstrated that that was not wishful thinking, or a bluff, by submitting the statements that he did submit.

“41 In those circumstances I conclude that it was wrong in principle for the Master to strike out the claim without giving the Claimant an opportunity of rectifying the defect in his case. Accordingly this appeal will be allowed.”

Mr. Warwick argued that the Claimants have real concerns about the way the hearing of the FTT application will be conducted by the Defendants. The Claimants are principally concerned that the Defendants will adduce expert evidence in support of an illegitimately low figure for the price to be fixed by the FTT and that Mrs. Newman, who is a party to the FTT application, will be precluded from adducing contrary evidence. Mr. Warwick took me to the directions given by the FTT, which strike me as being standard directions. One of those directions is that:

“The parties’ valuers must by Thursday 14 January 2016 exchange valuation calculations and meet to clarify the issues in dispute”.

As I have noted, the FTT proceedings have been stayed. Mr. Warwick’s point is that the landlords (Mrs. Newman, Mrs. Marks and Mr. Clarke) must act unanimously and they are all named as respondents to the FTT application so that the directions do not permit Mrs. Newman to adduce her own expert evidence.

I cannot speak about the FTT procedure. What I can say though is that, applying the overriding objective, I would be surprised if a court operating under the Civil Procedure Rules did not, if appraised of the particular circumstances of this case, ensure that its directions permitted Mrs. Newman to adduce her own expert evidence. That Mr. Warwick’s point may be unreal is reflected in Mrs. Newman’s statement in opposition to the application before me in which, at para.32, she indicates that she intends to submit expert evidence as to value to the FTT.

Nevertheless, the broader question I have to consider is whether, applying the overriding objective, and, Mr. Warwick says, consistently with Kim, I should give the Claimants an opportunity to amend their Particulars of Claim to properly plead their concerns relating to Defendants’ conduct of the FTT proceedings.

Whilst it is right that Tugendhat J was considering the matter only from the perspective of a statement of case having been struck out, it seems to me that, in this context, the same approach should be adopted in this case whether or not the correct disposition of the application before me is that there should be summary judgment or that the Particulars of Claim are struck out.

Mr. Warwick has not formulated, whether in writing or orally, any alternative claim based on the Claimants’ concerns. He has not spelled out the legal bones of such a claim. Even had he done so, it seems to me, as presently advised, that such a claim, if it depended on an alleged breach of trust, would not rely on the rule against self- dealing. In fact, it may be that any such claim would not be a breach of trust claim at all but, instead, a Part 8 claim under CPR Part 64 for directions. If I were to give Mr. Warwick an opportunity to formulate amendments to the Particulars of Claim, any draft statement of case he produced would be likely to effectively set out a wholly new claim.

The position in Kim was very different. In that case, the proposed amendment would not have altered the substance of the underlying claim which, after the amendment, would have remained unchanged. The proposed amendment was a short one and, to a degree at least, was a technical one. It was clear to Tugendhat J what the amendment was likely to be, because there was evidence before the court as to the identity of individuals likely to be named in the amendment.

In considering the overriding objective it is appropriate for me also to consider the stage which the present claim has reached. In February 2016 the Defendants filed and served their Defence. I say nothing in this judgment about the appropriateness of that step. What I do need to record, however, is that, if the Claimants were permitted to amend the Particulars of Claim, the Defence is likely to have to be substantively amended. On 23 June 2016 the Deputy Master gave initial directions on paper. A costs and case management conference was fixed for 1 August 2016. On 29 July 2016 the Defendants indicated that they intended to make the present application. The costs and case management conference was used therefore to give directions for the present application.

It seems to me that, if I gave the Claimants an opportunity to draft an amended statement of case and if they were then permitted to amend in the terms of the draft, there would be no significant step in the claim which would not have to be taken again. It is difficult to see, apart from the act of issuing, what step so far taken in the claim might not be required to be retaken. Further, it seems to me that the arguments as to costs are likely to be the same whether I summarily dismiss the claim or the Claimants are permitted to make very significant amendments to the Particulars of Claim.

Taking all these matters into account and considering the overriding objective more generally, I have concluded that this is not a case where it would be appropriate to give the Claimants an opportunity to consider amending their Particulars of Claim.

It follows, from everything I have said, that I summarily dismiss the claim.