England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
HIS HONOUR JUDGE LEVY QC

		Royal Courts of Justice Strand, London, WC2A 2LL
		05/12/2007

Sir Peter Gibson:

1. This appeal revisits the much travelled areas of constructive trust and proprietary estoppel. It is an appeal by the Claimants, Martin Powell and his wife Janet, from the order made on 9 August 2006 by HHJ Levy QC in the Central London County Court. Two properties in Forest Hill, 43 and 45 Montem Road (I shall refer to them collectively as "the Properties" and individually as "No 43" and "No 45"), were owned by Ronald Hobday at his death on 23 July 2003. By these proceedings Mr and Mrs Powell claimed the Properties on the basis of constructive trust and proprietary estoppel. The Judge upheld their claim only to the extent of awarding them £20,000 to be paid out of the proceeds of sale of the Properties. He ordered Mr and Mrs Powell to give possession of the Properties to the Defendant, Betty Benney, the personal representative of Mr Hobday. The Judge ordered Mr and Mrs Powell to pay Mrs Benney's costs from 26 July 2006. On application to this court by Mr and Mrs Powell for permission to appeal, Lloyd LJ refused permission on the papers, but on a renewed application at an oral hearing Rix LJ granted permission.
2. I can summarise the facts from the findings which were made by the Judge after a 2½ day hearing and which Mr and Mrs Powell through their counsel professed not to challenge.
3. Mr Hobday was born on 22 April 1944. He never married and had no children. At one time he worked as a clerk at the British Library, but at all times material to this appeal he was not employed. He lived at No 43. He died intestate and his next of kin are 9 cousins, one of whom is Mrs Benney. She was some 13 years older than Mr Hobday and, until she moved to Cornwall in 1984, had a close relationship with him. After his death she obtained letters of administration to his estate, the net value of which at his death was just under £285,000. Of that sum £280,000 is attributable to the Properties.
4. Mr Powell is a music teacher by profession and pastor of the New Haven Christian Fellowship Church. In 1989 he and his wife started trading as Talents Music Shop from shop premises in Forest Hill ("the Shop"). They have two other retail outlets. Mrs Powell runs the Shop. Music lessons were given by Mr Powell in rooms in the Shop. The Church was also run from the Shop.
5. In or about the summer of 1992 Mr Hobday came to the Shop and soon became a friend of Mrs Powell and later of Mr Powell. Shortly afterwards Mr Hobday suffered the loss of two people close to him, one of whom was his mother. She died in March 1993. Mr Hobday went to pieces. He neglected himself and his appearance became progressively more unkempt. Mr and Mrs Powell befriended him. They performed numerous tasks to assist him with his day-to-day affairs. They purchased food and cooked for him; when he was ill they helped him obtain medical attention; they provided him with money.
6. In the summer of 1993 Mr Hobday informed Mr and Mrs Powell that he was going to leave the Properties to them on his death. He reiterated that intention to them and others on numerous subsequent occasions. In or about August 1994 he invited Mr and Mrs Powell to make use of the Properties as they wished and he supplied them with keys to the Properties. In October 1994 Mr Powell started giving music lessons in No 45. Later, Bible studies and music lessons were given in both of the Properties. The Properties were very untidy and run down and Mr and Mrs Powell took steps to "de-clutter" them.
7. In November 2000 Mr Hobday wrote the following in manuscript. On one sheet of paper he wrote: "23/11/2000 I leave the properties known as 43-45 Montem Road to (1) Mr Martin Powell (2) Mrs Janet Powell, to be help for their teaching works and for their future enjoyment. Signed Ronald Hobday." On a second sheet he wrote: "The deeds for 43/45 Montem Road are in the Coop Bank Lewisham High Street." He signed or initialled that sheet at the foot of what he had written. The document was only found after Mr Hobday's death. Prior to then Mr and Mrs Powell had not known of it.
8. At Christmas 2000 the pipes at No 43 burst, causing flooding. Mr Hobday went to live with Mr and Mrs Powell for 4 months. They arranged for the pipes to be repaired and lagged and for dehumidifiers to be installed for two weeks, all for about £200 which they paid in June 2001. Mr Powell contacted Mrs Benney and informed her of the water damage and of the general difficulties experienced by Mr Hobday. As a result she sent Mr Hobday £5,000 to meet his bills and also sent Mr Powell £500 to sort out his out of pocket expenses on behalf of Mr Hobday. Mr and Mrs Powell arranged for the refurbishment of No 45, an end of terrace house considered more suitable for music teaching than No 43. Rooms were soundproofed. In September 2001 Mrs Benney sent Mr Powell a further £5,000 for the expenditure on No 45.
9. The body of Mr Hobday was discovered by Mr Powell on 27 July 2003. Mr and Mrs Powell arranged for the funeral and Mr Powell conducted the service. The costs of the funeral were paid by Mrs Benney.
10. Mr and Mrs Powell invited Mrs Benney to transfer the Properties to them in accordance with Mr Hobday's wishes and Mrs Benney was minded to do so before she had taken legal advice. However, after receiving legal advice she refused to transfer the Properties. On 13 October 2004 Mr and Mrs Powell commenced these proceedings against Mrs Benney, claiming a declaration that the Properties are held in trust for them. By her Defence Mrs Benney denied the claim and counter-claimed for possession on the ground that the licence under which Mr and Mrs Powell occupied the Properties had been determined.
11. At the trial both sides were represented by counsel who appear before us on the appeal, Ms Bailey for Mr and Mrs Powell and Mr Moeran for Mrs Benney. The Judge in his judgment which he delivered at the end of the hearing described the claim of Mr and Mrs Powell as being that the promise of Mr Hobday served to create a constructive trust and/or a proprietary estoppel with regard to the Properties. He referred to and quoted extensively from the judgments of Robert Walker LJ in Yaxley v Gotts [2000] Ch 162, Gillett v Holt [2001] Ch 210 and Jennings v Rice [2003] 1 P&CR 100. It was common ground before the Judge that in those judgments the material law could largely be found.
12. The Judge then turned to the facts and the pleadings, having noted Robert Walker LJ's statements in Gillett v Holt at p 232 that detriment is an essential ingredient of proprietary estoppel, that there must be sufficient causal link between the assurance relied on and the detriment asserted and that the detriment must be pleaded and proved. The Judge said in paragraph 45 of the judgment:

"Having heard from the witnesses over the last two days, I am quite clear that, in fact, the claimants were extremely kind to the deceased in the years of his life following his mother's death and they did much to help him. Much of this help was not done because of or in reliance [on] the statement which he made that he was going to leave the properties to them but because of their wish to help a man for whom they first had sympathy and then grew to like. There were considerable advantages to them removing the giving of music lessons from the Shop to the premises. The shop would have needed money being spent for redecoration and refurbishment if use there was to continue. As the claimants admitted in their evidence, plans to improve the Shop were not pursued further after the offer from the deceased that they could use his house had been made and accepted."

13. The Judge then went through 8 heads of detriment alleged by Mr and Mrs Powell. Not all of them, as he noted, were pleaded. Some he dismissed because the necessary causal link between the promise and the detrimental reliance was not shown. In respect of some he took account of benefits which Mr and Mrs Powell had received but which were connected with the detriment. In respect of three alleged detriments the Judge commented that they could have been considered at the time Mr and Mrs Powell decided to act on the promise. The Judge, however, accepted that expenditure incurred by Mr and Mrs Powell in reliance on the promise was a relevant detriment.
14. The Judge rejected a submission by Ms Bailey that benefits received by Mr and Mrs Powell should be ignored by him when considering detriment. He expressed his conclusions in this way:

"60. Having heard and considered the evidence of all of the witnesses who gave evidence for the claimants as to assurances which were made and the evidence of the claimants themselves, and the submissions of Counsel, I turn to consider whether the claimants have established that there was, in all the circumstances of this case, either a constructive trust or a claim for proprietary estoppel which can be sustained. The facts of this case are very unlike any of those which have been referred to. In my judgment they are unique. What the claimants have done over a number of years is to befriend a man in need. In the course of befriending him and of hearing that he has made the statement that he was going to leave the premises to them, they have acted to his benefit. The detriments which they claim to have suffered are, however, in my judgment, not such as to establish the pleaded estoppel. It has to be accepted that the deceased made no will at all, although I accept that he expressed to many people his intention to leave the properties to the claimants. However in my judgment they did not rely on such a statement when they decided to help the deceased, both in decluttering his home from 1994 on and thereafter using it for their own purposes, more particularly after the year 2000. Looking at the judgments of Robert Walker LJ in the three authorities which I have mentioned … no constructive trust arises on the facts of this case.

61. I return to Gillett v Holt at page 232, where Robert Walker LJ referred to the judgment of Slade LJ [in Jones v Watkins, 26 November 1987] and said:

'There must be sufficient causal link between the assurance relied on and the detriment asserted'.

In my judgment, in so far as they accepted the defendant's offer 'use my house', the detriment which the claimants claim to have suffered is that they hoped it would be left to them in [the deceased's] will and it was not. However the detriment they actually suffered has been the financial loss which I mentioned, against which they have had the benefit of using the properties certainly from 2000 and to a lesser extent earlier. The issue of the detriment must be judged at the moment when the person who was given the assurance seeks to go back on it. That happened on the death of the deceased when it was found he died intestate. By then the claimants had the enjoyment of the property and had spent the monies as I have found. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust and inequitable to allow the assurances to be disregarded. That is, again, an essential test of unconscionability. Here, the assurance is not to be disregarded but, in my judgment, it would [have] been unconscionable for the claimants to receive the whole of the deceased's estate, having regard to the detriment which they have suffered. The detriment alleged must be pleaded and proved. In my judgment that can be sufficiently represented by a monetary reward of far less a sum than the whole of the deceased's estate.

62. I have also carefully considered the passages following paragraph 41 of Walker LJ's judgment in Jennings v Rice set out above. On the facts of this case, in my judgment, justice is done if the claimants are recompensed for the monies which they have expended as set out and taking account of the time they continued in residence at the premises.

63. Looking at the size of the estate and the disappointment they have suffered, in my judgment it is appropriate to increase the monies due to the claimants from the sums already identified as due to a total of £20,000."

15. In refusing permission to appeal Lloyd LJ said:

"It does not seem to me that the judge made any error of law in concluding that the maximum extent to which the Claimants should be compensated was for their expenditure for the benefit of the deceased, and that they were not reasonably entitled to the whole of either or both of the two properties which the deceased had said he wanted them to have. The case is not unusual by reason of the evidence showing that the deceased intended the Claimants to have a particular benefit. The fact that he wrote it down, but without making a will so as to give legal effect to his intention, does not make it irrelevant for the court to consider the extent of the detriment incurred by the Claimants and to take that into account in assessing the extent of the equity in respect of which they ought to be compensated"

16. On giving permission to appeal, Rix LJ said at paragraph 6 of his judgment that the true basis of the Judge's judgment, that is to say whether it was constructive trust or proprietary estoppel, was somewhat obscure. The Lord Justice suggested that the £20,000 awarded by the Judge was made up of £8,830 in respect of expenditure plus £5,000 for work done by Mr Powell rounded up to £20,000 to reflect Mr and Mrs Powell's disappointment. He described the amount awarded as very modest compared to the value of the Properties. In paragraph 9 of his judgment Rix LJ said:

"It does seem to me that because the judge is ultimately obscure in his reasons as to whether he is or is not finding a promissory estoppel or constructive trust, and because it is obscure whether the judge is giving sufficient weight to the expectation value of the applicants' claim, and because the ultimate sum derived at £20,000 is only a small percentage of the total value of the two houses, even taking subsidence into account, … in my judgment, for each and all of those reasons it seems to me that there is a reasonable prospect of success on appeal for the Powells."

17. With respect to Rix LJ, I think it tolerably clear that the Judge rejected a constructive trust in paragraph 60 of the judgment, though the Judge can be criticised for not explaining what in the judgments of Robert Walker LJ to which he referred led him to that conclusion. Of the three cases from the judgments in which the Judge cited remarks of Robert Walker LJ, in only one, Yaxley v Gotts, was reference made to a constructive trust and then only in the context of that being on the facts of that case a possible alternative to a proprietary estoppel as a remedy. Whilst the Judge, somewhat confusingly, said in paragraph 60 that the alleged detriments in the present case were not such as to establish the pleaded estoppel, I think that he must be taken to be rejecting the pleaded claim that the alleged detriments entitled Mr and Mrs Powell to the Properties themselves. It is evident from paragraphs 61 and 62 that the Judge was accepting that the proprietary estoppel claim did succeed to the extent that he awarded £20,000.
18. The Judge, in my view, can also be criticised for not explaining more clearly how he arrived at the sum of £20,000 as the award to Mr and Mrs Powell. I would add that I doubt if Rix LJ was right to say that that sum included £5,000 to reflect the work done by Mr Powell. The Judge had already dealt with that by holding that the £5,000, which was the generous estimate of Mr Powell's work, was paid to Mr Powell through the £5,000 paid to him by Mrs Benney. The Judge chose to increase the sum of £8,830, which he found Mr Powell had expended, by what appears to be an arbitrary amount "looking at the size of the estate and the disappointment [Mr and Mrs Powell] had suffered". However there is no cross-appeal by Mrs Benney and I say no more about it. It is Mr and Mrs Powell's case that the Judge should have given them either the Properties or one of them.
19. There are no less than 18 separate grounds of appeal in the Appellants' Notice, though on analysis several of them can be combined into a single issue. That issue is whether the Judge, as Ms Bailey put it, "departed from the principles established in Jennings v Rice", reference being made to Robert Walker LJ, and in particular whether in a case where there is a clear promise made to claimants, the court "ought to have upheld the bargain and/or expectation of [Mr and Mrs Powell] as to do so would have been in accordance with the intention of [Mr Hobday]". Throughout her skeleton argument Ms Bailey had referred, as it were in the same breath, to constructive trust and proprietary estoppel. That is because, as she explained, in her submission the present case falls within the category of cases referred to in paragraphs 45 and 50 of Jennings v Rice. Those are cases in which "the benefactor and the claimant have reached a mutual understanding which is in reasonably clear terms but does not amount to a contract", where "the assurances and the claimant's reliance on them have a consensual character falling not far short of an enforceable contract" and where "if the only bar to the formation of a contract is non-compliance with s 2 of the Law of Property (Miscellaneous Provisions) Act 1989, the proprietary estoppel may become indistinguishable from a constructive trust". In such a case, Robert Walker LJ said, "the court's natural response is to fulfil the claimant's expectations". That category is to be contrasted with cases "where the claimant's expectation is uncertain, or extravagant, or out of all proportion to the detriment which the claimant has suffered".
20. In considering that issue, I have been much assisted by the analysis conducted by Simon Gardner in his article, "The remedial discretion in proprietary estoppel – again" in (2006) 122 LQR 492. In an earlier article, "The remedial discretion in proprietary estoppel" (1999) 115 LQR 438, referred to with much praise by Robert Walker LJ in Jennings v Rice, paragraph 42, and by Mummery LJ in Cobbe v Yeoman's Row Management Ltd [2006] 1 WLR 2964, paragraph 3, Mr Gardner addressed the question what was meant by the exercise of discretion involved in the determination of relief in proprietary estoppel. In his further article Mr Gardner described the position in the light of further authorities, including in particular Jennings v Rice. He noted Robert Walker LJ's division of the range of possible situations into two classes with their differing approaches to relief. As he said at p 494, in the former category, which he called the bargain category, the relief should vindicate the claimant's expectation; in the latter category, which he called the non-bargain category, the relief is arrived at by the exercise of a wider judgmental discretion, influenced – as relevant – by a number of factors including "the claimant's expectation, but also proportionality with [his] detriment".
21. Mr Gardner powerfully criticises Robert Walker LJ's dichotomy, arguing instead for amalgamating the two categories so that a discretion as to outcome is always present, but it is unnecessary to decide whether that criticism is valid as Ms Bailey accepts as correct what the Lord Justice said and relies on his description of the bargain category, into which, she claims, the facts of the present case fall.
22. Ms Bailey suggests that as Mr Hobday intended the Properties to be left to Mr and Mrs Powell and as they had been informed of his intention, a consensual arrangement arose such as brought the case within the bargain category. That is not what Robert Walker LJ described as the factors which bring a case within that category. In Jennings v Rice paragraph 45 he said this:

"In a case of that sort both the claimant's expectations and the element of detriment to the claimant will have been defined with reasonable clarity."

I interpose the comment that in the instant case the element of detriment was not defined with clarity or at all. The Lord Justice continued:

"A typical case would be an elderly benefactor who reaches a clear understanding with the claimant (who may be a relative, a friend, or a remunerated companion or carer) that if the claimant resides with and cares for the benefactor, the claimant will inherit the benefactor's house (or will have a home for life). In a case like that the consensual element of what has happened suggests that the claimant and the benefactor probably regard the expected benefit and the accepted detriment as being (in a general, imprecise way) equivalent, or at any rate not obviously disproportionate."

23. The present case is not at all like that typical case in the bargain category. Mr Hobday promised to leave the Properties to Mr and Mrs Powell and offered them the use of the Properties but did not require them to do the detrimental acts on which they now rely or any of them. They decided to avail themselves of his offer to use the Properties and, as the Judge found, incurred some expenditure in consequence but there was no bargain or other consensual arrangement such as would bring the case within the bargain category. Mr Hobday may have known about the detrimental acts but doing them was a matter for Mr and Mrs Powell.
24. Nor is this a case where equity will impose a constructive test. The only species of constructive trust for which Ms Bailey is contending is, as I understand it, a common intention constructive trust where a proprietary estoppel in the bargain category could equally be found. In that context, Lord Justice Walker, who had drawn attention to the overlap between constructive trust and proprietary estoppel in Yaxley v Gotts, supra, at pp 176, 7, more recently has expressed other thoughts on that topic. In Stack v Dowden [2007] 2 WLR 831, [2007] UKHL at para 37 he said:

"I have to say that I am now rather less enthusiastic about the notion that proprietary estoppel and 'common [intention]' constructive trusts can or should be completely assimilated. Proprietary estoppel typically consists of asserting an equitable claim against the conscience of the 'true' owner. The claim is a 'mere equity'. It is to be satisfied by the minimum award necessary to do justice (Crabb v Arun District Council [1976] Ch 179, 198), which may sometimes lead to no more than a monetary award. A 'common intention' constructive trust, by contrast, is identifying the true beneficial owner or owners, and the size of their beneficial interests"

The present case is not one where the court is engaged in identifying the true beneficial owner or owners or the size of their beneficial interests. Instead it is concerned with how it should satisfy the equity to which the detrimental reliance on Mr Hobday's promise and offer gave rise.

25. As this is a case of proprietary estoppel in the non-bargain category, Ms Bailey is plainly wrong to argue for an error of law by the judge in failing to give relief in the expectation measure. In the exercise of his wide judgmental discretion, did the Judge err?
26. If the Judge was right to form the view that the expectations of Mr and Mrs Powell were out of all proportion to the detriment which they suffered, the Judge could properly recognise that their equity should be satisfied in another and more limited way (Jennings v Rice paragraph 50). Ms Bailey submits that the Judge has given insufficient weight to some of the detriments on which Mr and Mrs Powell relied. When asked if she was appealing on the facts, she insisted that she was not challenging the findings of fact. However, in reality that is what she was attempting to do and in a wholly inappropriate manner without clear or sufficient particularisation in the Appellants' Notice.
27. Thus Ms Bailey referred to certain good deeds of Mr and Mrs Powell which were the subject of paragraph 8 of the Amended Particulars of Claim and which are claimed as a relevant detriment. The Judge said in paragraph 52:

"The seventh head of detriment allegedly suffered were the good deeds of the claimants pleaded and particularized at paragraph 8. However, as the second claimant accepted in evidence, those deeds were done out of regard to the deceased and not in reliance on the promise or the stated intention of the decision to leave the premises to them."

28. Ms Bailey criticised the Judge for not taking account of a witness statement of Mr Powell in which he had claimed to have acted in reliance on Mr Hobday's promise and argued that Mrs Powell's evidence did not relate to Mr Powell's good deeds. That criticism and that argument have to be rejected. The Judge was plainly entitled on the basis of Mrs Powell's evidence as to why the deeds of both Mr and Mrs Powell were done to find as he did. Moreover paragraph 8, in marked contrast to paragraphs 6 and 7 of the Amended Particulars of Claim, does not assert any action in reliance on Mr Hobday's promise and the good deeds, on Mrs Powell's evidence, commenced before the promise was made. It is obvious that Ms Bailey is wrongly challenging a clear factual finding.
29. Ms Bailey criticised the Judge in that he "failed to attach sufficient weight to the fact that the Appellants or each of them had lived with the promise of [Mr Hobday] from 1993 until the date of his death and had shaped their lives around the said promise for almost a decade". When asked where this detriment was pleaded, she referred us to paragraph 25 of the Amended Particulars of Claim, which referred merely to Mr and Mrs Powell in reliance on Mr Hobday's promises occupying the Properties and spending money on them. When asked under which of the 8 heads of detriment put to the Judge this point came, she was unable to say and could not produce any document to show that this particular point was ever put to the Judge. The Judge was of course well aware of the relevant chronology and of what Mr and Mrs Powell did once told of the promise to leave them the Properties and of the offer to use them. No error by the Judge in relation to this point has been shown.
30. Ms Bailey submitted that the Judge had "misconstrued" the weight to be attached to any finding of the existence of a benefit when considering the issue of detriment, asserting that in law the existence of a benefit does not serve to extinguish a detriment the detriment which has been suffered. No authority was given for this proposition. In my judgment it would offend common sense to leave out of account a benefit received in connection with a detriment when considering the detriment for the purpose of proprietary estoppel. In Jennings v Rice paragraph 51 Robert Walker LJ, in considering the difficulty of quantifying the detriment, referred to the fact that the claimant may receive some "countervailing benefits", and that is one of the reasons why he went on to say that in such circumstances a wider judgmental discretion has to be exercised.
31. Ms Bailey was on surer ground in criticising the Judge for commenting, as he does in respect of three heads of detriment, that they were matters which Mr and Mrs Powell could have considered when acting in reliance on Mr Hobday's promise. I agree with her that that is irrelevant and no answer to the point.
32. However, two of the relevant detriments were rejected by the Judge on other grounds as well. One related to an alleged loss of passing trade through music lessons being conducted at No 45 and not at the Shop. That had not been pleaded and so had not been particularised, and the Judge thought that nothing much turned on it. The other related to plans to improve the Shop on which a brake was put when Mr and Mrs Powell decided to use the Properties. Ms Bailey said that if the Shop had been improved, it would have become more valuable whereas improvements would now cost more. The Judge rejected this alleged detriment primarily on the facts. He found that it was a considerable benefit to Mr and Mrs Powell not to have improved the Shop because of the money which they saved. The Judge was not satisfied that it was the fact that they expected to inherit the Properties which made them move lessons from the Shop, but found it was the saving of money which was the reason. The accounts of the Shop, which might have thrown light on this point, were not disclosed. On these two detriments in my judgment the Judge was entitled to conclude as he did, notwithstanding his irrelevant comments.
33. The third of the detriments on which he made the like comment was what the Judge called "unhappy incidents" which occurred while Mrs Powell was alone in the Shop. This detriment was not pleaded or referred to in any evidence other than in response to the last question in re-examination. Mrs Powell was asked whether the absence of her husband from the Shop while he was at the Properties had any effect on the day to day running of the Shop. In the course of a lengthy and wide-ranging answer she revealed her concern at being left alone in the Shop because of two incidents, one involving a drug addict said to have come towards her "with unpleasant intention" and the other involving a man who came into the Shop and threatened to kill her. The Judge was entitled to ignore that unpleaded detriment which would have cried out for particulars had it been pleaded as Mrs Powell described.
34. The Judge has not always expressed himself as felicitously as he might in the judgment. Thus in paragraph 61 the Judge said that it would have been "unconscionable" for Mr and Mrs Powell to receive the whole of Mr Hobday's estate, when I think that he must or should have meant "disproportionate". Having considered all the many points that Ms Bailey takes on the Judge's judgment I am left wholly unpersuaded that he was wrong to form the view that the expectations of Mr and Mrs Powell to receive the Properties worth £280,000 were out of all proportion to the detriment which they suffered. Nor am I persuaded that the Judge could not properly conclude that their equity should be satisfied by a monetary award no greater than £20,000.
35. Finally Ms Bailey challenges the Judge's order on costs. In the grounds of appeal it is simply stated that the Judge fell into error by not ordering Mrs Benney to pay Mr and Mrs Powell's costs. In her skeleton argument Ms Bailey said that it was only in the closing submissions for Mrs Benney that Mr and Mrs Powell were able to establish the existence of an assurance by Mr Hobday to them. Ms Bailey said that, despite that fact, the Judge did not order Mrs Benney to pay Mr and Mrs Powell's costs "either up to the date of the rejection of the Part 36 offer or otherwise" and that this was an unreasonable exercise of the Judge's discretion. That was the first and only mention of a Part 36 offer in all the voluminous papers put before us. We are told that the Judge gave no separate judgment on costs, but we have not been supplied with a transcript of the hearing relating to costs nor a note agreed between counsel and approved by the Judge of what was said to and by the Judge about costs. In these circumstances it would seem to me to be quite wrong to entertain an appeal on costs. Without this court knowing what was put to the Judge or any observations which he made on costs, an argument that the Judge erred in the exercise of his wide discretion is hopeless.
36. For these reasons I would dismiss this appeal.

Richards LJ:

37. I agree.

Lloyd LJ:

38. I also agree.