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Cite as: [1969] WLR 328, [1968] EWCA Civ 4, [1969] 2 All ER 616, [1969] 1 WLR 328

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JISCBAILII_CASE_CONTRACT

		Neutral Citation Number: [1968] EWCA Civ 4

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
CIVIL DIVISION.
Appeal from JUDGE DOW
Clerkenwell County Ct,
11th March, 1968.

Royal Courts of Justice,

29th November 1968

B e f o r e :

LORD JUSTICE DANCKWERTS
LORD JUSTICE SALMON
and
LORD JUSTICE FENTON ATKINSON
____________________

Between:

	VIOLET LALGEE JONES (Widow)	Plaintiff
	and
	RUBY PADAVATTON (Married Woman)	Defendant

____________________

(Transcript of the Shorthand Notes of THE ASSOCIATION OF OFFICIAL SHORTHANOWRITERS LIMITED,
Room No.398 Royal Courts of Justice and No.8, New Square, Lincoln's Inn, London, W.C.2).

____________________

Mr A. CHARLES SPARROW, Q.C , and Mr KEITH E. EVANS (instructed by Mesers D.A. Rose & Co ) appeared on behalf of the Appellant (Plaintiff).
Mr GEORGE B.H. DILLON Q.C., and Mr TERENCE L. CULLEN (Instructed by Messrs Jaques & Co.) appeared on behalf of the Respondent (Defendant).
____________________

HTML VERSION OF JUDGMENT
____________________

LORD JUSTICE DANCKWERTS: This is an action between mother and daughter, and one which is really deplorable. The points of difference between the two parties appear to be comparatively small, and it is distressing that they could not settle their differences amicably and avoid the bitterness and expense which is involved in this dispute carried as far as this court.

Both mother and daughter come from Trinidad and appear to be of East Indian descent. At the opening of the story in 1961-1962 the mother was resident in Trinidad. The daughter (who had been married to and divorced from a Mr Wyatt) was living in a flat in Washington, D.C., in the United States, and was employed at a satisfactory salary, with pension right, in the Indian Embassy in Washington She had one child by her marriage, a boy called Tommy, She had been on a holiday with her mother to England in 1957.

A suggestion was made that she might go to England in order to read for the Bar in England and, if she became a qualified barrister, then to go to Trinidad and practise as a lawyer there. There is a dispute as to which of the two parties initiated the idea, but the daughter gave evidence very strongly suggesting that it was her mother's idea. She points to her very satisfactory job with the Indian Embassy in Washington and her flat, and claims to have been unwilling to go to England, and to have been induced by extreme pressure. Her mother intimated that if her daughter would go and read for the Bar as suggested, she would provide maintenance for her at the rate of 200 dollars a month. Unfortunately, the mother (Mrs Jones) was thinking in West Indian dollars in which 200 dollars was equal to £42 a month, and the daughter, living in Washington, was thinking in U.S.A. dollars, in which 200 dollars were equal to £70. The two were plainly not ad idem then, but the daughter, when she received only £42 per month, seems to have accepted that sum without anything much in the way of protest.

Anyhow, the daughter was entered with Lincoln's Inn as a student, and the necessary fees were paid by a Mr Agimudie, a lawyer in Trinidad, as Mrs Jones's agent. Mr Agimudie in a contemporary letter assured the daughter that, of course, maintenance would be provided for her. So the daughter went to England in November 1962 and entered upon her studies for the Bar. She took her son, Tommy, with her. The precise terms of the arrangement between mother and daughter were difficult to discover completely. There is no doubt that the daughter gave consideration for a promise by her mother to provide maintenance at the rate of £42 per month so long as she was reading for the Bar in England by giving up her job and her other advantages in Washington, and by reading for the Bar But various incidental matters appear never to have been thought out at all. There were no terms recorded in writing, no sort of businesslike statement of the parties' respective obligations, not even of how long the mother was to go on paying if the studies ware prolonged or unsuccessful. In fact the daughter has passed all the examinations in Part I except one, but Part II is still to be taken.

The question therefore arises whether any binding legal contract was intended, or whether this was simply a family arrangement, in which one member of the family relies on a promise given by another person and trusts that person to carry out the promise. But such an arrangement is not intended to create actionable legal rights. The situation so far has been called "step one".

But in 1964 a new element was introduced The daughter was experiencing some discomfort in England. She, with Tommy, was occupying one room in Acton, for which she had to pay £6.17s,6d. per week. In 1964 the mother made a proposal that aha should buy a house in London of some size so that the daughter and Tommy could live in a room or in rooms in the house, and the rest of the house could be let off to tenants, and the rents would cover expenses and provide maintenance for the daughter and Tommy in place of the £42 a month. It is not clear whether Mrs Jonas had in mind a profitable investment in England, or wished to avoid the inconvenience of remitting £42 a month to England, or whether she simply had in mind the difficulties that her daughter was experiencing.

At any rate, a house, No.181, Highbury Quadrant, was found, which was conveyed into Mrs Jones's name. The price was £6,000 and moneys were provided by Mrs Jones in several sums for this. But there were also expenses of the purchase, as well as other expenses, and furniture, as it was desirable that the tenancies should be of furnished rooms. The moneys provided by Mrs Jones were insufficient to provide for all these things; until furniture was provided, there could be no tenants

The purchase was completed in December 1964, and the daughter and Tommy went into occupation on the 31st January 1965. Somehow money was found to buy furniture, and tenants began to arrive in February 1963. The daughter had a power of attorney from her mother.

There was, of course, no written agreement and lots of incidental matters remained open: In what order were the rents to be applied; were outgoings to be paid first, or did the daughter's maintenance come first ? There was a doubt whether the daughter's rights were confined to one room, or could she occupy several ? In fact she occupied not only one room but also a kitchen, and a so-called store room, where various things were stored, but Tommy slept there. This has been called "step two". The question

again arises; Was there any legally binding contract, or was it just an informal family arrangement ?

The daughter had been married on the 6th January 1965 to a Mr Padavatton, who is a lecturer at the London School of Economics, I understand, but it is not clear what part ha has played in these matters. The new arrangement, or the varied old arrangement, whatever it may be, continued until November 1967, The mother, who had also visited England in 1985, came again to England in August 1967.

Mrs Jones, it should be observed, has never received any money from the rents of the house, and she was paying substantial interest on a mortgage on property in Trinidad by which she had raised money for the purchase of the house. There was a moat peculiar incident when, on Mrs Jones's arrival in England, she was driven to the house by Mr Rawlins, her solicitor, and could not get in. But nothing really depends on that. Mrs Jones, who had complained that she could not get any accounts from her daughter, had consulted English solicitors, and before this a summons by the mother against the daughter had been taken out claiming possession of the house, and particulars of claim were delivered dated the 4th July 1967. Of course, the house is the property of Mrs Jones. The mother (Mrs Jones) had given notice to quit on the 20th March 1967. A defence and counterclaim dated the 11th August 1967 had been delivered, which was amended on the 31st February 1968. In these are set out the daughter's version of the arrangements made between the parties, and she counterclaims £1,655.16s.9d., which the daughter claims she has paid in respect of the house, and ought to be reimbursed to her.

On the 11th January 1968 the learned county court judge decided against the mother and dismissed the claim for possession. He gave judgment on the counterclaim in favour of the daughter and referred the matter to the registrar. I do not find the grounds of the learned county court judge's decision easy to understand. He regarded both mother and daughter aa very respectable witnesses, and he accepted the daughter's story in regard to the arrangements between them.

Before us a great deal of time was spent on discussions as to what were the terms of the arrangement between the parties, and it seemed to ma that the further the discussions went, the more obscure and uncertain the terms alleged became. The acceptable duration of the daughter's studies was not finally settled. I think. There was a lack of evidence on the matter, and the members of the court were induced to supply suggestions based on their personal knowledge.

At any rate, two questions emerged for argument: (1) Were the arrangements (such as they were) intended to produce legally binding agreements, or were they simply family arrangements depending for their fulfilment on good faith and trust, and not legally enforceable by legal proceedings ? (2) Were the arrangements made so obscure and uncertain that, though intended to be legally binding, a court could not enforce them ?

Mr Dillon argued strenuously for the view that the parties intended to create legally binding contracts. Be relied upon the old case of Shadwell v. Shadwell, (1960) 9 Common Bench New Series, 159, (142 English Reports, 62), and Parker v. Clark, 1960 1 Weekly Law Reports, 236.

Mr Sparrow argued on the mother's behalf for the contrary view that there were no binding obligations, and that if there were they were too uncertain for the court to enforce. His stand-by was Balfour v. Balfour, (1919 8 King's Bench Division, 571). The principles involved are very well discussed in Cheshire & Fifoot on Contract (6th edition) at pages 94-96.

Of course, there is no difficulty, if they so intend, in members of families entering into legally binding contracts in regard to family affairs. A competent equity draftsman would, if properly instructed, have no difficulty in drafting such a contract. But there is possibly in family affairs a presumption against such an intention (which, of course, can be rebutted). I would refer to Lord Justice Atkin's magnificent exposition of the situation in

regard to such arrangements in Balfour v. Balfour at pp.578-580.

There is no doubt that this case is a most difficult one, but I have reached a conclusion that the present case is one of those family arrangements which depend on the good faith of the promises which are made and are not intended to be rigid, binding agreements. Balfour v. Balfour was a ease of husband and wife, but there is no doubt that the same principles apply to dealings between other relations, such as father and son and daughter and mother This, indeed, seems to me a compelling case. Mrs Jones and her daughter seem to have been on very good terms before 1967. The mother was arranging for a career for her daughter which she hoped would lead to success. This involved a visit to England in conditions which could not be wholly foreseen. What was required was an arrangement which was to be financed by the mother, and was auoh as would be adaptable to circumstances, as it in fact was The operation about the house was, in my view, not a completely fresh arrangement, but an adaptation of the mother's financial assistance to her daughter due to the situation which was found to exist in England. It was not a stiff contractual operation any more than the original arrangement.

In the result, of course, on this view, the daughter cannot resist hep mother's rights as the owner of the house to the possession of which the mother is entitled.

What the position is as regards the counterclaim is another matter. It may be that, at least in honesty, the daughter should be reimbursed for the expenditure which she had incurred.

In my opinion, therefore, the appeal should be allowed.

LORD JUSTICE SALMON: I agree with the conclusion at which my Lord has arrived, but I have reached it by a different route. The first point to be decided is whether or not there was ever a legally binding agreement between the mother and daughter in relation to the daughter's reading for the Bar in England. The daughter alleges that there was such an agreement, and the mother denies it. She says that there was nothing but a loose family arrangement which had no legal effect. The onus la clearly on the daughter There is no dispute that the parties entered into some sort of arrangement. It really depends upon

(a) whether the parties intended it to be legally binding, and

(b) If so, whether it was sufficiently certain to be enforceable.

Did the parties intend the arrangement to be legally binding ? This question has to be solved by applying what is sometimes (although perhaps unfortunately) called an objective teat. The court has to consider what the parties said and wrote in the light of all the surrounding circumstances, and then decide whether the true inference is that the ordinary man and woman, speaking or writing thus in much circumstances, would have intended to create a legally binding agreement.

Mr Sparrow has said, quite rightly, that as a rule when arrangements are made between close relations, for example, between husband and wife, parent and child or uncle and nephew in relation to an allowance, there is a presumption against an intention of creating any legal relationship. This is not a presumption of law, but of fact, It derives from experience of life and human nature which shows that in such circumstances men and woman usually do not intend to create legal rights and obligations, but intend to rely solely on family ties of mutual trust and affection. This has all been explained by Lord Justice Atkin in his celebrated judgment In Balfour v. Balfour (1919 2 King's Bench Division, 578-580). There may, however, be circumstances In which this presumption, like all other presumptions of fact, can be rebutted. Mr Dillon has drawn our attention to two cases in which it was, Shadwell v. Shadwell, (1860) 9 Common Bench New Series, 159, and Parker v. Clark, 1960 1 Weekly Law Reports, 236. The former was a curious case It was decided by Chief Justice Erle, and Mr Justice Keating, (Mr Justice Byles dissenting) On a pleading point, and depended largely upon the true construction of a letter written by an uncle to his nephew. I confess that I should have decided it without hesitation in accordance with the views of Mr Justice Byles. But this is of no consequence. Shadwell v. Shadwell laid down no principle of law relevant to what we have to decide; it merely illustrated what could never, I think, be seriously doubted, namely, that there may be circumstances in which arrangements between close relatives are intended to have the force of law.

In the present case the learned county court judge, having had the advantage of seeing the mother and daughter in the witness-box, entirely accepted the daughter's version of the facts. He came to the conclusion that on these very special facts the true inference must be that the arrangement between the parties prior to the daughter's leaving Washington were intended by both to have contractual force.

On the facts as found by the learned county court judge this was entirely different from the ordinary case of a mother promising her daughter an allowance whilst the daughter read for the Bar, or a father promising his eon an allowance at university if the son passes the necessary examinations to gain admission The daughter hare was thirty-four years of age in 1962. She had left Trinidad and settled in Washington as long ago as 1949. In Washington she had a comfortable flat and was employed as an assistant accountant in the Indian Embassy at a salary of $500 a month (over £2,000 a year). This employment carried a pension. She had a son of seven years of age who was an American citizen, and had, of course, already begun his education. There were obviously solid reasons for her staying where aha was. For some years prior to 1962, however, her mother, who lived in Trinidad, had been trying hard to persuade her to throw up all that she had achieved in Washington and go to London to read for the Bar. The mother would have been very proud to have a barrister for a daughter. She also thought that her plan was in the interest of her grandson, to whom she was much attached. She envisaged that, after her daughter had been called to the Bar, she would practice in Trinidad and thereafter presumably she (the mother) would be able to see much more of her daughter than formerly. The daughter was naturally loath to leave Washington, and did not regard her mother's suggestion as feasible. The mother, however, eventually persuaded the daughter to do as she wished by promising her that, if she threw up her excellent position in Washington and came to atudy for the Bar in England, she would pay her daughter an allowance of $200 a month until she had completed her studies. The mothar's attorney in Trinidad wrote to the daughter to confirm this,

I cannot think that either intended that if, after the daughter had been in London, say, for six months, the mother dishonoured her promise and left her daughter destitute, the daughter would have no legal redress.

In the very special circumstances of this case, I consider that the true inference must be that neither the mother nor the daughter could have intended that the daughter should have no legal right to receive, and the mother no legal obligation to pay, the allowance of $200 a month.

The point was made by Mr Sparrow that the parties cannot have had a contractual intention since it would be unthinkable for the daughter to be able to sue the mother if the mother fell upon hard times. I am afraid that I am not impressed by this point. The evidence which the learned county court judge accepted showed that the mother was a woman of some substance, and prior to the agreement had assured her daughter that there would be no difficulty in finding the money. The fact that, if contrary to everyone's expectation, the mother had lost her money, the daughter would have been unlikely to sue her throws no light on whether the parties had an intention to contract. The fact that a contracting party is in some circumstances unlikely to extract his pound of flash does not mean that he has no right to it. Even today sometimes people forbear from mercy to enforce their undoubted legal rights.

The next point made by Mr Sparrow was that the arrangements between the mother and daughter in 1962 were too uncertain to constitute a binding contract. It is true that the mother said $200 a month without stipulating whether she meant West Indian or U.S. dollars. Obviously she meant West Indian dollars. The daughter says that she thought her mother meant U.S. dollars. This point does not, however, appear to have given rise to any difficulty. For two years from November 1962 until December 1964 the mother regularly paid her daughter £42, the equivalent of 200 West Indian dollars a month, and the daughter accepted this sum without demur.

Than it is said on the mother's behalf that the daughter's obligations are not sufficiently stated. I think that they are plain, to leave Washington with all that entailed, come to London and genuinely study for the Bar there. If the daughter threw up her studies for the Bar, maybe the mother could not have recovered damages, but she would have been relieved of any obligation to continue the allowance.

Then again it is said that the duration of the agreement was not specified Bo doubt, but I see no difficulty in implying the usual term that it was to last for a reasonable time. The parties cannot have contemplated that the daughter should go on studying for the Bar and draw the allowance until aha was seventy, nor on the other hand that the mother could have discontinued the allowance if the daughter did not pass her examinations within, say, eighteen months. The promise was to pay the allowance until the daughter's studies were completed, and to my mind there was a clear implication that they ware to be completed within a reasonable time. Studies are completed either by the student being called to the Bar, or giving up the unequal struggle against the examiners.

It may not be easy to decide, especially when there is such a paucity of evidence, what is a reasonable time. The daughter however, was a well educated intelligent woman capable of earning the equivalent of over £2,000 a year in Washington. It is true that she had a young son to look after, and may well, as the learned judge thought have been hampered to some extent by the worry of this litigation. But, making all allowance for these factors and any other distraction, I cannot think that a reasonable time could possibly exceed five years from November 1962, the date when she began her studies.

It follows, therefore, that on no view can she now in November 1968 be entitled to anything further under the contract which the learned county court judge held, rightly I think, that she made with her mother in 1962. She has much of Part I of the Bar examination still to pass, and necessarily the final has not yet even been attempted.

During a visit to England in 1964 the mother found that her daughter was living in one room in Acton costing £6.17s.6d. a week. This rent represented about three-quarters of the daughter's total income. The mother therefore hit upon the idea of buying a house in London in which the daughter could live more comfortably and cheaply than in Acton. The rest of the house was to be let off in furnished rooms or flats, and after paying the outgoings the daughter was to pay herself the maintenance and remit any balance that there might be to her mother in Trinidad. This scheme, so long as it lasted, provided a convenient method of paying the £42 a month due under the 1962 agreement. Accordingly, the mother acquired No. 181, Highbury Quadrant for £6,000 or so in December 1964.

The daughter moved in in the following month, furnished and equipped the house largely by hire purchase, and tenants began to arrive in February 1965.

The learned county court judge has concluded that in December 1964 the original contract between mother and daughter was varied, or a new contract was entered into whereby the daughter acquired the right to stay on in her mother's house indefinitely. whether the mother liked it or not. I am afraid that I cannot accept this conclusion. It was for the daughter to make out such a variation or new contract. In my view she totally failed to do so.

There la no evidence that the mother bargained away her right to dispose of her house, or to evict her daughter (who was a mere licensee) whenever she wished to do so. The evidence shows that all the arrangements in relation to the house were vary vague and made without any contractual intent. By this arrangement the mother was trying primarily to help her daughter, and also perhaps to make a reasonable investment for herself. When the mother brought the arrangement to an end (as she was entitled to do at any time) she would, of course, have to go on paying £42 a month as long as the 1962 agreement lasted. There is no evidence to suggest that the mother intended the daughter ever to have more than the equivalent of 200 British West Indian dollars a month after December 1964. Nothing was said as to how much the daughter might pay herself out of the rents for maintenance. Certainly she would have to debit herself with some reasonable figure in respect of her accommodation. No doubt something less than the £6.17s.6d. a weak that she had been spending in Acton, but not less, I should think, than about £5 a week. This would leave about £22 a month to be

deducted from the rents for maintenance up till November 1967 when in my view the 1962 agreement ran out, in fact for nearly four years, that is, from December 1964 until today, the mother has not received a penny from the daughter in respect of No. 108, Highbury Quadrant nor, in spite of repeated requests, any proper accounts.

I am not at all surprised that the mother's patience become exhausted in March of last year when she gave notice determining her daughter's licence to remain in the house. The daughter ignored the notice and has continued in occupation with her husband and son, apparently with the intention of doing so indefinitely. She is still there. She seems to take the view (as does the learned county court judge) that she has a legal claim on her mother to house her and contribute to her support and that of her son and husband, perhaps in perpetuity. In this she is mistaken, and so in my judgment is the learned county court judge. The mother began this action for possession of No. 181, Highbury Quadrant in 1967.

For the reasons I have indicated, there is in my view no defence to the action, and I would accordingly allow the appeal.

The learned county court judge has referred the counterclaim. If this reference is pursued, it will involve an account being meticulously taken of all receipts and expenditure from December 1964 until the date on which the daughter yields up possession. This will certainly result in a great waste of time and money, and can only exacerbate ill feeling between mother and daughter with a little good will and good sense on both sides, this could and should be avoided by reaching a reasonable compromise on the figures. I can but express the hope that this may be done, for it would clearly be to the mutual benefit of both parties.

LORD JUSTICE FENTON ATKINSON: The first question in this most unhappy case is whether the arrangement made between mother and daughter in August 1968 was intended to create a legally enforceable contract between them, or was merely one of those family or domestic arrangements whore the parties at the time had no thought or intention of invoking the assistance of the courts should the arrangement not be honoured.

Was the mother legally binding herself to support the daughter at the rata of £500 a year for a wholly uncertain length of time whatever changes might come about in their respective circumstances ? Was the daughter assuming a contractual obligation to pursue her legal studies to successful completion whatever the difficulties aha experienced, and whatever attractive alternatives might appear, such as possible marriage or well paid employment ?

If the teat were the giving of consideration by the daughter, the answer would be simple. She gave up well paid work and good living accommodation and removed herself and her son to England, where she began her studies in November 1962. But the giving of consideration by the daughter cannot decide the question whether the parties intended to make a binding contract.

Lord Justice Atkin, in Balfour v. Balfour (1919 (2) King's Bench Division) at page 578 of the report put it in this way: "To my mind those agreements, or many of them, do not result in contracts at all, and they do not result in contracts even though there may be what as between other parties would constitute consideration for the agreement. The consideration, as we know, may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other. That is a wall-known definition, and it constantly happens. I think, that such arrangements made between husband and wife are arrangements in which there are mutual promises, or in which there is consideration in the form within the definition that I have mentioned. Nevertheless, they are not contracts, and they are not contracts because the parties did not intend that they should be attended by legal consequences".

On the other hand, I do not think that the lack of formality and precision in expressing the arrangement is necessarily an indication that no contract was intended having regard to what the court knows of the parties and their relationship. The problem is, in my view, a difficult one, because though one would tend to regard a promise by a parent to pay an allowance to a child during a course of study as no more than a family arrangement, on the facts of this case this particular daughter undoubtedly gave up a great deal on the strength of the mother's promise.

In my judgment it is the subsequent history which gives the boat guide to the parties' intention at the material time. There are three matters which seem to me important: (1) The daughter thought that her mother was promising her 200 United States dollars, or £70 a month, which she regarded as the minimum necessary for her support. The mother promised 200 dollars but she had in mind 200 British West Indian dollars, £42 a month, and that was what she in fact paid from November 1968 to December 1964. Those payments were accepted by the daughter without any sort of suggestion at any stage that the mother had legally contracted for the larger sum. (2) When the arrangements for the purchase of No. 181, Highbury Quadrant were being discussed, and the new arrangement was made for maintenance to come out of the rents, many material matters were left open: How much accommodation was the daughter to occupy; how much money was she to have out of the rents; if the rents fell below expectation, was the mother to make up the difference below £42, or £42 less the sum saved by the daughter in rent; for how long was the arrangement to continue, and so on. The whole arrangement was, in my view, far too vague and uncertain to be itself enforceable as a contract; but at no stage did the daughter bring into the discussions her alleged legal right to £43 per month until bar studies were completed, and how that right was to be affected by the new arrangement. (3) It is perhaps not without relevance to look at the daughter's evidence in cross-examination. she was asked about the occasion when her mother visited the house and she, knowing perfectly well that her mother was there, refused for some hours to open the door. She said

"I didn't open the door because a normal mother doesn't sue her daughter in court. Anybody with normal feelings would feel upset by what was happening".

Those answers and the daughter's conduct on that occasion provide a strong indication that she had never for a moment contemplated the possibility of her mother or herself going to court to enforce legal obligations, and that she felt it quite intolerable that a purely family arrangement should become the subject of proceedings in a court of law.

At the time when the first arrangement was made, mother and daughter were, and always had been, to use the daughter's own words, "very close". I am satisfied that neither party at that time intended to enter into a legally binding contract, either then or later when the house was bought. The daughter was prepared to trust her mother to honour her promise of support, just as the mother no doubt trusted her daughter to study for the Bar with diligence, and to get through her examinations as early as she could

It follows that in my view the mother's claim for possession succeeds, and her appeal should be allowed.

There remains the counterclaim. As to that I fully endorse what Lord Justice Salmon has aaid as to the manner in which that should be disposed of.

ORDER: Appeal allowed.

Judgment below varied by entering Judgment for plaintiff for possession of the premises No.181, Highbury Quandrant. London. N.5 on or before 1st March, 1969.

Terms in such Judgment as to reference of quantum in respect of counterclaim to Registrar to stand.

Costs of appeal and hearing below to be taxed under provisions of Third Schedule to Legal Aid and Advice Act, 1949.

Leave to appeal to House of Lorda refused.

No order on cross-notice.