COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
BRISTOL DISTRICT REGISTRY
HHJ WEEKS QC
London, WC2A 2LL
B e f o r e :
LORD JUSTICE MANTELL
LORD JUSTICE ROBERT WALKER
| ANTHONY CLIFFORD JENNINGS
|- and -
|(1) ARTHUR THOMAS RICE
(2) JANET WILSON
(3) LINDA ANN MARSH
(4) PETER LEWIS NORRIS
(5) ARTHUR EDMUND NORRIS
(6) PATRICIA MARGARET REED
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Miss B. Rich (instructed by Gould & Swayne) for the 1st Respondent
The 2nd – 6th Respondents not present nor represented
Crown Copyright ©
Lord Justice Aldous:
"He did not need to worry about that, he would be alright and she would 'see to it'. At all times she said to him 'this will all be yours one day' or words to that effect. Nothing was put in writing and while I accept the general thrust of Mr Jennings evidence, it is difficult to be precise about the exact words used several years ago."
"The terms of the offer were too vague and imprecise to amount to a contract. Mrs Royle was prone to saying different things at different times and, perhaps deliberately, couched her promises to Mr Jennings in non-specific terms."
"It is clearly established by the evidence that Mr Jennings believed he was going to receive all or part of Mrs Royle's property on her death."
"I can now move on to consider the matter in the round and see whether it was unconscionable for Mrs Royle to go back on her assurances. In my judgment, it was. As Mr Warner said, Mrs Royle promised Mr Jennings the moon and left him nothing. Mr Gardner [the bank manager] made several attempts to get her to make a will but she chose to die intestate and deliberately disappointed Mr Jennings. That is unconscionable conduct for a person who took the benefit of his services."
"I do not think that he could complain that he had been unfairly treated if he had been left £200,000 in Mrs Royle's will. Most people would say that she would, at least, then have performed her promise to see him all right. The quality of her assurance affects not only questions of belief, encouragement, reliance and detriment, but also unconscionability and the extent of the equity.
In my judgment the minimum necessary to satisfy the equity in the present case is the sum of £200,000."
"The basis of this proprietary estoppel – as indeed of promissory estoppel – is the interposition of equity. Equity comes in, true to form, to mitigate the rigours of strict law. The early cases did not speak of it as "estoppel". They spoke of it as "raising an equity". If I may expand what Lord Cairns L.C. said in Hughes v. Metropolitan Railway Co. (1877) 2 App. Cas. 439, 448: "It is the first principle upon which all courts of equity proceed," that it will prevent a person from insisting on his strict legal rights – whether arising under a contract, or on his title deeds, or by statute, when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties.
What then are the dealings which will preclude him from insisting on his strict legal rights? If he makes a binding contract that he will not insist on the strict legal position, a court of equity will hold him to his contract. Short of a binding contract, if he makes a promise that he will not insist upon his strict legal rights – then, even though that promise may be unenforceable in point of law for want of consideration or want of writing – then, if he makes the promise knowing or intending that the other will act upon it, and he does act upon it, then again a court of equity will not allow him to go back on that promise: see Central London Property Trust Ltd v High Trees House Ltd  KB 130 and Charles Rickards Ltd v Oppenhaim  1 KB 616, 623. Short of an actual promise, if he, by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights – knowing or intending that the other will act on that belief – and he does so act, that again will raise an equity in favour of the other; and it is for a court of equity to say in what way the equity may be satisfied. The cases show that this equity does not depend on agreement, but on words or conduct. In Ramsden v Dyson (1866) LR 1 HL 129, 170 Lord Kingsdown spoke of a verbal agreement "or what amounts to the same thing, an expectation, created or encouraged." In Birmingham and District Land Co. v London and North Western Railway Co. (1888) 40 ChD 268, 277, Cotton LJ said that " … what passed did not make a new agreement, but … what took place … raised an equity against him." And it was the Privy Council in Plimmer v Wellington Corporation (1884) 9 App Cas 699, 713-714 who said that "… the court must look at the circumstances in each case to decide in what way the equity can be satisfied" giving instances."
"For myself, I believe that the law as it has developed over the past 20 years has now evolved a far broader approach to the problem than that suggested by Mr Aldous and one which is in no way dependent upon the historical accident of whether any particular right was first recognised by the common law or was invented by the Court of Chancery. It is an approach exemplified in such cases as Inwards v Baker  2 QB 29 and Crabb v Arun District Council  Ch 179. We have been referred at length to a recent judgment of my own in Taylors Fashions Ltd v. Liverpool Victoria Trustees Co. Ltd (Note)  2 WLR 576 in which I ventured to collect and review the authorities. I there said, at p. 593:
'Furthermore the more recent cases indicate, in my judgment, that the application of the Ramsden v Dyson, L.R. 1 H.L. 129 principle – whether you call it proprietary estoppel by acquiescence or estoppel by encouragement is really immaterial – requires a very much broader approach which is directed rather at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour.'
Whilst, having heard the judgment read by counsel, I could wish that it had been more succinct, that statement at least is one to which I adhere."
"… the courts have acted upon the basis that they have to determine not only the extent of the equity, but also the conditions necessary to satisfy it, and they have done so in a great number and variety of cases. I need refer only to the interesting collection of cases enumerated in Snell's Principles of Equity, 27th ed. (1973), at pp. 567-568, para 2 (b).
In the present case the court does have to consider what is necessary now in order to satisfy the plaintiff's equity. Had matters taken a different turn, I would without hesitation have said that the plaintiff should be put upon terms to be agreed if possible with the defendants, and, if not agreed, settled by the court. But, as already mentioned by Lord Denning MR and Lawton LJ, there has been a history of delay, and indeed high-handedness, which it is impossible to disregard. In January 1969 the defendants for reasons which no doubt they thought good at the time, without consulting the plaintiff, locked up his land. They removed not only the padlocks which he had put on the gates at point B, but the gates themselves. In their place they put a fence – rendering access impossible save by breaking down the fence. I am not disposed to consider whether or not the defendants are to be blamed in moral terms for what they did. I just do not know. But the effect of their action has been to sterilise the plaintiff's land; and for reasons which I have endeavoured to give, such action was an infringement of an equitable right possessed by the plaintiff. It has involved him in loss, which has not been measured; but, since it amounted to sterilisation of an industrial estate for a very considerable period of time, it must surpass any sort of sum of money which the plaintiff ought reasonably, before it was done, to have paid the defendants in order to obtain an enforceable legal right. I think therefore that nothing should now be paid by the plaintiff and that he should receive at the hands of the court the belated protection of the equity that he has established. Reasonable terms other than the money payment, should be agreed: or, if not agreed, determined by the court."
"Weighing such considerations this court concludes that the equity to which the facts in this case give rise can only be satisfied by compelling the plaintiff to give effect to his promise and her expectations. He has so acted that he must now perfect the gift."
"I would respectfully adopt that passage as an accurate statement of the decided cases and the law. In the present case the respondent clearly has assumed that he will be allowed to stay in this house for the rest of his life rent free. In my judgment this is a case where the respondent has to be content with something less than his expectations. The Recorder should have considered the position of the appellant and her needs and balanced those against the present use of the premises made by the respondent and his present need for them."
"These general considerations have been discussed (with a review of the leading English authorities) by the High Court of Australia in Commonwealth of Australia v Verwayen which understandably was not cited to us by counsel. The judgment of Mason C.J. contains a discussion of the law of estoppel which is of particular value. I will cite three passages which are relevant to what I have said and to the correct approach to the present case.
In conformity with the fundamental purpose of all estoppels to afford protection against the detriment which would flow from a party's change of position if the assumption that led to it were deserted, these developments have brought a greater underlying unity to the various categories of estoppel. Indeed, the consistent trend in the modern decisions points inexorably towards the emergence of one overarching doctrine of estoppel rather than a series of independent rules. The element which both attracts the jurisdiction of a Court of Equity and shapes the remedy to be given is unconscionable conduct on the part of the person bound by the equity, and the remedy required to satisfy an equity varies according to the circumstances of the case. As Robert Goff J. said in Amalgamated Property Co. v Texas Bank  QB 84 at 103: 'Of all doctrines, equitable estoppel is surely one of the most flexible.' However in moulding its decree, the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct.
… it should be accepted that there is but one doctrine of estoppel which provides that a court of Common Law or Equity may do what is required, but not more, to prevent a person who has relied upon an assumption as to a present, past or future state of affairs (including a legal state of affairs), which assumption the party estopped has induced him to hold, from suffering detriment in reliance upon that assumption as a result of the denial of its correctness. A central element of that doctrine is that there must be a proportionality between the remedy and the detriment which is its purpose to avoid. It would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant assumption.
The other aspect clearly illustrated by the quotations which I have made from Mason C.J. is the need for proportionality. This is to say little more than that the end result must be a just one having regard to the assumption made by the party asserting the estoppel and the detriment which he has experienced. Here it is unreal to suggest that the conclusion of the County Court judge is proportionate to what happened over 15 years earlier. Similarly, it is unreal to say that the Defendant has suffered any injustice. He expended money in 1976 and 1978 upon his then family home and he and his family fully enjoyed the benefits of such expenditure. He also enjoyed within the same framework over a period of 15 years the rent-free occupation of the property. By the same token it cannot be properly said that there was anything unconscionable in Mrs Sledmore seeking possession of number 15A in 1990.
In my judgment there is no estoppel operating against the plaintiff. Her claim in this action falsifies no legitimate assumption or expectation. The effect of any equity that may in any earlier time have existed has long since been exhausted and no injustice has been done to the defendant. The plaintiff is entitled to an order for possession and the defendant's counterclaim must be dismissed. This appeal should be allowed accordingly."
"I cannot accept the proposition which seems to underline Mr Fletcher's submissions, that once the factual basis for some proprietary estoppel is put in place that a right of enjoyment for life is more or less automatically established. On the contrary, that ignores the Court's insistence on it being the minimum equity that is to be satisfied and on the need for the Court to adopt a flexible approach."
"Since Mr Gillett has established his claim to equitable relief, this court must decide what is the most appropriate form for the relief to take. The aim is, as Sir Arthur Hobhouse said in Plimmer v Wellington Corporation (1884) 9 App Cas 699, 714, to "look at the circumstances in each case to decide in what way the equity can be satisfied." The court approaches this task in a cautious way, in order to achieve what Scarman L.J. in Crabb v. Arun District Council  Ch 179, 198, called "the minimum equity to do justice to the plaintiff." The wide range of possible relief appears from Snell's Equity, 30th ed. (2000), pp. 641-643."
"Sledmore v Dalby is a good illustration of the flexible nature of the court's jurisdiction. But on the facts of this case I do not consider that Mr Campbell's rent-free occupation has had the effect of extinguishing his equity. Nevertheless I see considerable objections to Mr Sisley's proposal that Mr Campbell should be granted a life interest in 26 St Boltolph's Road for so long as he wishes to live there.
In the first place such an order would be disproportionate: Mr Campbell has a moral (and, as I see it, a legal) claim on the property, but it is not so compelling as to demand total satisfaction, regardless of the effect on other persons with claims on the Ascoughs' estate. In the second place it would be administratively inconvenient. It would produce a situation of a trust of land (under the Trusts of Land and Appointments of Trustees Act 1996) which would probably involve disproportionate legal expenses (including trustees' remuneration) and might well lead to further disputes (especially in relation to Mr Campbell's keeping the property in good repair and condition). In exercising its discretion the court can have regard to the need for a "clean break": Pascoe v Turner  1 WLR 431, 438-9.
Taking these and all other relevant circumstances into account, I have come to the conclusion that it would not be right to confer on Mr Campbell (who began as a lodger with one out of four bedrooms) a right in respect of the whole house which might hold up the administration of the estate for a whole generation and might also have the effect of eliminating the other beneficiaries' interests because of mounting interest on the County Council charge. That charge (with accrued interest) now amounts to about £64,000. The present value of the house, unencumbered with vacant possession, is about £160,000.
The court has a very wide discretion in satisfying an equity arising under the doctrine of proprietary estoppel. That discretion includes power to award a fixed sum charged on the property. I would declare Mr Campbell is entitled to the sum of £35,000 charged on the property, but that he must give up possession of the property to enable it to be sold by Mrs Ascough's executors, and that interest on the sum of £35,000 should not start to run until 56 days after Mr Campbell has given vacant possession in order to enable the house to be sold. The sum payable to Mr Campbell will not by itself enable him to buy a freehold house in Worthing, but it will assist him with rehousing himself."
Lord Justice Mantell:
Lord Justice Robert Walker:
" ... was prone to saying different things at different times and, perhaps deliberately, couched her promises in non-specific terms."
He made that observation in relation to the failure of the contract claim, but it is relevant to the estoppel claim also.
"In fact the court must look at the circumstances in each case to decide in what way the equity can be satisfied"
Scarman LJ's reference to the minimum does not require the court to be constitutionally parsimonious, but it does implicitly recognise that the court must also do justice to the defendant.
"In a suit founded on such part performance, the defendant is really 'charged' upon the equities resulting from the acts done in execution of the contract, and not (within the meaning of the statute) upon the contract itself."
So with proprietary estoppel the defendant is charged with satisfying the equity which has arisen from the whole sequence of events. But the parallel is only faint since in the case of estoppel there is no contract and the nexus between the benefactor's assurances and the resulting equity is less direct; the assurances are only half the story. In Dillwyn v Llewelyn (1862) 4 De G F & J 517, 522 Lord Westbury expressed the point in terms which anticipated Lord Selborne:
"The equity of the donee and the estate to be claimed by virtue of it depend on the transaction, that is, on the acts done, and not on the language of the memorandum [which amounted to an imperfect gift]."
"had subordinated her own life to that of her father and [whose] attentive and affectionate service, often no doubt at considerable inconvenience to herself, put her assistance on a higher plane than that of a domestic servant".
" ... is to say little more than that the end result must be a just one having regard to the assumption made by the party asserting the estoppel and the detriment which he has experienced."
The essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result, and a disproportionate remedy cannot be the right way of going about that. Cases on interim injunctive relief have recognised the importance of proportionality in the granting of equitable remedies: see for instance Lock International v Beswick  1 WLR 1268, 1281. Where the court is granting final relief after investigating all the facts proportionality is even more important.