England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT (CHANCERY DIVISION)
LEEDS DISTRICT REGISTRY
(HIS HONOUR JUDGE KAYE QC)

		Royal Courts of Justice Strand, London, WC2A 2LL
		19th June 2012

Lady Justice Arden:

1. At the date of his death on 25 October 2009, Frank Edward Suggitt, whom I shall call Frank, owned some 400 acres of farmland in North Yorkshire and in addition, on or adjacent to that land, a number of houses called Wellfield, then occupied by his son John and his partner and their children; Penank, occupied by his daughter, Caroline, and her son, Thomas, but also Frank during his lifetime; and a third property, Witherholm Hall, which at all material times has been rented out.
2. Frank was divorced, so John and Caroline's mother was living elsewhere and did not live in any of the properties that I have mentioned. Frank had two other daughters, Heather and Rachel; they are not parties to these proceedings.
3. John was the youngest child, who was born on 4 September 1980, so he is now 32. Frank's will, executed in 1997, gave his entire estate to Caroline:

"AND I EXPRESS THE WISH (without imposing a trust) that if at any time my son John Michael Suggitt shall in the absolute opinion of Caroline show himself capable of working on and managing my farmland she shall transfer my farmland to him."

Caroline has not sought to exercise that power, though of course there is nothing to prevent her from doing so at any time. By his will, Frank appointed Caroline and the second respondent to this appeal as his executors.

4. The claim in these proceedings, which so far as material is based on proprietary estoppel, came before HHJ Roger Kaye QC, sitting as a deputy judge of the High Court of Justice Chancery Division in the Leeds District Registry. In his judgment, which is dated 20 April 2011, the judge held that Frank had given John an unconditional promise that some day at least the farmland and, by implication if not expressly, somewhere to live would definitely be his following his father's death. The promise on the judge's findings was unconditional. The promise was made notwithstanding that Frank did not consider that John was fit to run the farm. John had been to agricultural college at Frank's expense; he had failed to complete the course. Frank had offered to take him into partnership and John had refused. John had gone off to York to live with friends where he had run out of money. He ran through a substantial inheritance of £38,000 from a great aunt, and he then had to return home to the farm.
5. When John went off to York, Frank had to decide what to do with the farm. He entered into a farm sharing agreement, first with the Teasdales, and then with the Conings, latterly for ten years due to expire this year.
6. At the date of his death, Frank was not an elderly man. He had suffered from pancreatitis since the 1990s. His final illness was sudden and severe. In the late summer of 2009 he became ill suddenly. He was hospitalised and he died a few weeks later.
7. In his judgment, the judge makes a number of findings. The Suggitts had farmed in North Yorkshire for many generations. John was the youngest child and only son. There was a further farmhouse which I have not previously mentioned called Cornborough Hall, but this had been sold off by the date of Frank's death.
8. John had met his partner, Gemma, while he was at agricultural college. They had had one child and then separated, but they got back together again after John moved back to the farm. As I have explained, they occupy Wellfield and have had two more children there.
9. The judge described the relationship between Frank and John as regards the farm in paragraph 15 of his judgment:

"By the time he left the college (after attending the following year) in 1999, John was helping his father with the harvest and sale of grain. In his evidence John was apt to grumble and complain that his father gave him nothing: no wage, no share, nothing. He seemed entirely to overlook the fact that his father paid everything for him: his food, board, lodging, college fees, living expenses and gave him a share of the grain harvest (the sweepings or left overs was how John characterised or implied it but it amounted to about £4,700 odd paid to John) and of the sheep sales (from which he received about £5,000). In addition John was permitted to set up and run his own herd of beef cattle on the farm and benefitted from the profits (some £12,000 over 2001/2002). The total John benefitted is a matter of some dispute and he himself was slow in forthcoming with the figures or any kind of accounts."

10. As I have already mentioned, Frank had decided that John was not fit to run the farm and had entered into a farming agreement with the Teasdales. John had made an offer to rent the farm at the time of the offer by the Teasdales, but Frank deemed John's offer inadequate and did not accept it. Frank retained 50 acres for John so that that was all John had to farm on. He did farm on it until 2002 when, as I have already explained, he went off to York on the disastrous episode which led to his return to the farm nine months later, having spent his inheritance.
11. Caroline had been married but was now divorced. Since 2002 she had lived at Penank, a bungalow constructed on the farm with her son, Thomas. While her father was alive he had lived with her but he took some meals also at Wellfield where his mother, Clara, was living and where John and his family also lived. The distance between these two properties is only apparently about 100 yards.
12. By the time John returned from York, the whole of the farm was being managed by the Conings, so John mainly worked elsewhere. His work for Frank consisted of refurbishing Witherholm Hall when it fell vacant to make it ready for a new tenant. This work took place over a period of two years but it was intermittent since he was fully employed elsewhere, first in a public house or in a cycle shop. During that period, however, Gemma came back to live with him.
13. In 2006 Frank took back 30 acres from the Conings for John, so John was able to set up a business on that land breeding poultry and rabbits. There was also a livery business run by Gemma. John also restored some farm buildings and stables at Wellfield, no doubt for use in the livery business.
14. In this same year or thereabouts, Frank received a letter from the solicitors who had drafted his will, asking him whether he wished to reconsider his will but Frank, the judge records, took no action.
15. I should add that there was other money in the estate to which John made no claim in these proceedings. They were substantial monies. He likewise made no claim to the property, Penank, in which Caroline was living.
16. The judge heard many witnesses for John. Hhe heard John himself, his mother, Penny, his two sisters, Heather and Rachel, Gemma and Gemma's mother. He also had a witness statement from Clara, who was now too frail to give evidence in person. She lives in a retirement home. For Caroline, the judge heard each of the executors, the land agent who had let the land to the Conings, and Mr Richard Coning.
17. The judge devoted several pages of his judgment to his assessment of the witnesses. I do not need to set this out, but it is important to state that he was critical of John and found that he was not a reliable witness.
18. As to the law, the judge directed himself carefully. No point has been taken by the appellants on that part of his judgment.
19. As is well known, there are four requirements for proprietary estoppel. There must be an assurance, reliance and detriment. In addition, the relief granted by the court must be the minimum necessary to satisfy the equity. I will need to say more about that and indeed reliance and detriment later.
20. The judge found that there were assurances given. In paragraph 53 of his judgment he describes the assurance as:

"…a repeated promise or assurance to John that led him reasonably to expect that some day at least, the farm land and by implication, if not expressly, somewhere to live would definitely be his following Frank's death."

21. He concludes in these words in paragraph 55 of his judgment:

"Thus while I can well understand why Caroline has advanced a case (based, as she fairly accepted, largely on the will) that the promise made by Frank was conditional, I do not so find. John was a disappointment to his father: he had not made as much of the 50 acres as he had no doubt hoped between 1997-2002, he had not done as well at Agricultural College as he hoped, he had effectively run away to York and spent his inheritance, but his promises and assurances to his son, as a loving father, were unconditional."

22. In the next section of his judgment, the judge dealt with reliance. He found that John had certainly received benefits from his father. He had had board and lodging and the use of the house. He considered that John had overstated his position in the work that he did for Frank, but the judge accepted that he was paid no wage:

"57. Again I regard John's case and evidence in support as weak. But enough is enough. I accept John worked from time to time for no direct wage, I accept he returned to the farm after his break at York (when the money ran out) but this is a man who into adulthood was being fed, watered, and housed by his father free of charge; he received substantial sums of money from family trusts (most it is fair to point out after Frank's death), he received the proceeds from some of the sales of sheep, grain and cattle (above), and supplemented his income by working in the sports shop and pub. John constantly tried to portray himself as someone who had been doing a great deal for nothing for many years. I do not accept that. I do accept he was paid no wage, but that was how it was done and expected to be done in the family. It was the quid pro quo (which is why I accept that there was some reliance). John did not work for nothing, but he did not work for as much as he might have expected had he been an agricultural worker. On the other hand as an agricultural worker he would have had his own living expenses.

23. Did John therefore rely on the promises or assurances? The answer in my judgment is yes. The necessary degree of linkage is in my judgment established. John worked on the farm in the expectation and reliance that the farmlands would be his one day."
24. In the next section of his judgment, the judge dealt with reliance. This he dealt in one long paragraph (paragraph 59):

"Reliance and detriment are often the same or overlapping concepts in this area. In my judgment it can be fairly said that John acted in some measure to his detriment or changed his position in reliance on the promises made by his father and in the expectation he would inherit even after his break with his father when he left for York. Both before and after his 9 months in York he at least did some work on the farm, he agreed to go to college to learn necessary skills, he helped with the sheep and grain and built up a beef herd. But all in all it was nothing like the sort of work done in Thorner v Major. John's problem is he wants the maximum for the minimum. The work he did was barely, vaguely and weakly particularised: after his return from York he worked on Witherholm and the outbuildings - this seems to have been some stripping of wallpaper, clearing rubbish, gutters and work in the garden when he was supposed to be off work sick. He mended fences (almost certainly those round his own 50 acres in the period 1997-2002), cut grass and maintained some machinery. He developed, with his father's encouragement, the livery and poultry and other related activities on the acreage recovered by his father from the Conings, Gemma moved in and lived with him at Wellfield on which John also did work. The profits made went back in one form or another into the business. On the other hand, as Miss Toman's helpful analysis showed, John had also benefitted much more than he attempted to portray, from working for the Teasdale's, from grain sales, from sheep sales and from beef cattle sales. Nevertheless, save for the break in York, it is, in my judgment, fair to say, as does Miss Reed, that John positioned his whole life on the basis of the assurances given to him and reasonably believed by him."

25. I note that the judge held that it could be fairly said that John had acted to his detriment or, alternatively, changed his position in reliance on the assurances, "in some measure".
26. In the next section of his judgment, the judge dealt with unconscionability. The judge held in essence that it would be unconscionable to deprive John of his reasonable expectations based on the assurances. At the same time, the judge held that he was satisfied that Frank had not promised him everything that John had suggested. In particular, the judge held that Frank had promised Caroline that she would be rich, and he knew that she had lived all her life with him after his divorce, save for the two years that she was in Holland or in university.
27. The judge went on in paragraph 61 of his judgment to hold:

"In my judgment what Frank had in mind was much as his actions dictated: his will had specified the farm land (not the houses), but he also must have known John needed somewhere to live. In 1997 that was Penank, a bungalow tied by its agricultural restriction to the land so at least in 1997 he might reasonably have contemplated John continuing to live there. Later, with adulthood and a new partner, Gemma and children that clearly became no longer possible. But the broad thrust of the promise was reasonably clear: the farmland and (by implication) somewhere to live."

28. The judge then considered what relief should be granted. He considered this matter at some length and concluded that John was entitled to the farm land and to Wellfield.
29. On this appeal, Mr Michael Jefferis, for the appellants, does not challenge the finding of the judge that there were unconditional promises made to John, in the terms set out by the judge in his judgment. He has however made six submissions which I will take in turn.
30. Mr Jefferis's first submission is that the weaker the evidence that promises were made, the stronger the evidence has to be of reliance and detriment. This submission is primarily based on the judgment of Mr Randall QC in Thorner v Major [2009] UKHL 18. I need not set out the passage. The position in this case is that there is no doubt that the assurances were given: the judge so found and there is no challenge to those findings. Therefore, we have to proceed to consider reliance and detriment on the basis that the promises had been made.
31. Where doubt is raised as to whether assurances have been given then the court may wish to look for confirmation to the strength of the evidence about reliance and detriment. The requirements of proprietary estoppel are not watertight requirements and it is a matter of substance whether they have been fulfilled. In my judgment, the dictum of Mr Randall QC amounts to no more than recognising these points. It does not, however have application here.
32. Mr Jefferis's second submission is that, reliance and detriment being overlapping concepts, they must in law still be satisfied individually. In my judgment, that submission is unexceptionable.
33. His third submission is that reliance needs to be "real". I would accept that it must certainly be of a sufficient quality to justify the weight that is being placed upon it. In this case, on Mr Jefferis's submission, there was insufficient evidence of reliance. He submits that reliance is not established if the claimant points to something that would have been done anyway. However, Mr Jefferis does not specifically point to any matter falling within that particular category. The thrust of his submission is that John only ever did what it was in his best interests to do and what had suited him at the time to do. Therefore it could not be said that he could have suffered detriment to any material degree. I will deal with detriment in a moment quite separately. Mr Jefferis submits that it was not reasonable for John to rely on the promise that he would receive the whole farm when he had incurred so little by way of detriment. John clearly did not feel tied to the farm because he had gone off to York for nine months.
34. For my own part, I do not consider that simply going off to York shows that John did not intend to rely on his father's promise. He was a very young man when he went, 21 or 22. There was no evidence that, when he went to York, he did so with a view of never coming back; there is no reason why he should not have gone off to York for a period of time, then returning to the farm to work there until it became his own.
35. The more substantial argument in my judgment is over detriment. On detriment, Mr Jefferis submits that detriment has to be real, or substantial, to give rise to an estoppel claim. He relies on the judgment of Mummery LJ in Uglow v Uglow [2004] EWCA Civ 987. He also relies on Gillett v Holt [2001] Ch 210. In my judgment it is sufficient to refer to what Walker LJ, as he then was, held in that case, at page 232. Walker LJ there held:

"There must be sufficient causal link between the assurance relied upon and the detriment asserted. The issue of detriment must be judged at the moment when the person who had been given the assurance seeks to go back on it. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded – that is, again, the essential test is one of unconscionability."

36. Turning to the facts, Mr Jefferis submits that, as the Conings had taken over the farm, there was therefore very little for John to do. In my judgment, the judge's findings on this point are clear. He was satisfied that there was both reliance and detriment and he dealt with both of those matters separately. They are clearly connected matters; reliance is what a person does on the faith of some matter and detriment is usually the result: they are very closely connected. Clearly, the same factual matters may show both reliance and detriment. That is why Walker LJ held in Gillett v Holt at 225 that the concepts were "often intertwined".
37. Here, undoubtedly, there were substantial benefits to John in living at the farm. Frank paid the utilities bill for Wellfield and indeed he must have done so for Penank as well when John lived there. He did the basic weekly shopping for John and his family. He provided John with a house. In the past he had allowed him to farm. John had made profits from the arable crop and the beef cattle, as I have explained above, and John kept those profits. However, once John returned from his sojourn in York, there was little for him to do because the Conings had taken over the farm, but he did do work at Witherholm House. That was a limited amount of work because, at the same time, he worked, as I have explained, at one stage, in a public house. He worked 40 hours per week in the sports shop.
38. However, the point remains. In my judgment it was for the judge to determine as a matter of fact and evaluation whether there was sufficient reliance and detriment. We can only interfere with the judge's judgment if it was perverse or clearly wrong. Here, the judge, having heard a substantial amount of oral evidence, was satisfied that John had done various acts such as assisted with the restoration of Witherholm Hall. He also held that John had positioned his life at the farm. In the final sentence of paragraph 59 of the judgment is, in my judgment, important. He held, having already referred to this, that John had:

"…positioned his whole life on the basis of the assurances given to him and which were reasonably believed by him."

I have no doubt the judge carefully considered his words.

39. In my judgment, the judge was entitled to hold that there was sufficient reliance and detriment. I accept that the burden on John was to show these matters and that the judge took a very realistic assessment of the work he had done. He held that the work he had done was not as heavy, or as onerous, as a farm labourer would have done and that in addition the farm labourer would have to have paid his own living expenses. There were many benefits obtained from Frank, but the fact remains that he did work for Frank unpaid from time to time. He was also based on the farm, and that is where he based his life. I repeat again the sentence that I quoted from paragraph 59:

"[John] positioned his whole life on the basis of the assurances given to him and which were reasonably believed by him.

40. A successful challenge of the judge's conclusion that detriment was real and substantial would have to be on the basis that the judge's evaluation of those matters was perverse. I do not consider that this court can say that the judge was not entitled to reach the conclusion that he did in the exercise of his evaluation of all the evidence. I am also satisfied that the judge when he spoke of reliance and detriment had in mind real and substantial detriment and was leaving out of account anything that could only be regarded as minimal or insufficient to meet the equity.
41. Mr Jefferis's fourth submission is that there had to be a change of position that was significant. This submission in my judgment does not raise any new point. The judge treated change of position as an alternative to detriment. There was no evidence in this case that John would have pursued some other career which he expressly gave up, as there has been in other cases, but the fact is he did return to the farm and was available for work when Frank asked him to do it. The highest the judge put it was that there was some measure of detriment. There were, as I have explained, substantial benefits which John obtained from his father. He also had not mentioned that he used Frank's tractors and machinery to work with subcontractors and third parties. Nonetheless, for the same reason I have given in relation to reliance and detriment, I do not consider that this court can interfere with the judge's decision on this point. He had to make findings and to make an evaluation as to whether there was a real change of position. He was satisfied having heard all the evidence. Nothing in my judgment that Mr Jefferis has put forward indicates to me that we could hold that his finding was perverse.
42. Mr Jefferis's fifth submission is that it was not unconscionable for Frank to decide to leave the farm on the terms that he left it, in the terms of his will. In my judgment this submission overlooks the fact that unconscionability in this context is unconscionable conduct in failing to give effect to the assurances. The judge found the assurances involved the unconditional transfer of land. Accordingly, the fact that in the absence of the assurances Frank might properly have decided to deal with the farm as he had done in his will does not seem to me to ask the right question.
43. Mr Jefferis's sixth submission is that the relief granted was disproportionate. He submits that, when satisfying the equity, the court should approach the task in a cautious way and do the minimum necessary to do justice to the claimant. In addition, he submits, there has to be some degree of proportionality between the level of detriment and the relief awarded. There is no issue about the court having to do the minimum necessary to do justice to the claimant. It was submitted in this case below that the judge should simply make an award for the unpaid element of John's wages for his work on the farm or helping to restore Witherholm Hall. In my judgment, the judge was correct to reject that possible manner of relief. That would have done the minimum, yes indeed, but it would not have done justice to the claimant given the assurances he had, on the judge's findings, been given and his acting to his detriment.
44. The real issue over this proposition is on the basis of proportionality. Mr Jefferis's submission is put forward on the basis of paragraph 50 of the judgment of Walker LJ as he then was in Jennings v Rice [2002] EWCA Civ 159, which I will now set out:

"50. To recapitulate: there is a category of case 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. I have already referred to the typical case of a carer who has the expectation of coming into the benefactor's house, either outright or for life. In such a case the court's natural response is to fulfil the claimant's expectations. But if the claimant's expectations are uncertain, or extravagant, or out of all proportion to the detriment which the claimant has suffered, the court can and should recognise that the claimant's equity should be satisfied in another (and generally more limited) way."

45. In my judgment, this principle does not mean that there has to be a relationship of proportionality between the level of detriment and the relief awarded. What Walker LJ holds in this paragraph is that if the expectations are extravagant or "out of all proportion to the detriment which the claimant has suffered", the court can and should recognise that the claimant's equity should be satisfied in another and generally more limited way. So the question is: was the relief that the judge granted "out of all proportion to the detriment" suffered?
46. In my judgment, this particular question is again a question of evaluation and judgment. That judgment was exercised by the judge in favour of John in his award of the farmland and indeed of Wellfield; I will deal with Wellfield in a moment. I do not, however, consider that in principle, we can interfere with the exercise by the judge of his evaluation of what was out of all proportion unless it is shown to have been clearly wrong. Since the promise was that John should have the farmland unconditionally, I do not consider that to grant him the farmland, whatever that means, could be said to be out of all proportion.
47. Mr Jefferis attempted at one point to submit that the judge should only have awarded him a limited proportion of the land, say 75 per cent (that is my figure). But that submission was not put to the judge. It was not put in the grounds of appeal, nor in the skeleton argument supporting the grounds of appeal. When we pointed this out to Mr Jefferis, Mr Jefferis indicated that he would not press it. It was based on an open offer which has been made since the grounds of appeal were filed with this court. I need not, therefore, pursue that submission further.
48. The real issue, in my judgment, is whether the judge was right to give John Wellfield as well as the farmland. I am not there using 'farmland' in the technical sense, but in the sense in which it is used in the world or the sense in which it was used, if that was the word used by Frank, in making the repeated assurances which the judge held had been made.
49. The judge in the passages I have already set out from his judgment clearly found that the assurances included a place to live. He had no doubt that:

"Frank did not want John to be homeless." (Judgment paragraph 56).

50. The judge considered that Frank had given the farmhouse by implication. In my judgment, this was a question for the judge on the basis of the evidence which he heard as to the assurance and the terms on which it was given. The farm had always had a farmhouse on it. When John farmed the land, he had sheep on it. Since it has been managed by others, it has been used for cereal and vegetable crops. During those periods, it would not have been necessary to have a farmhouse on the farmland. But Frank could not have intended that John would only farm that way. Use of the farm for livestock was clearly contemplated and foreseeable and it would, at the least, then be desirable for John to have a farmhouse as well as the farmland. Moreover, Wellfield is a three-bedroom house, it is therefore appropriate and not excessively large for John's needs. It is also situated on or adjacent to the farmland. While John did not occupy it at the date of Frank's will, he did occupy it in Frank's lifetime and at the date of Frank's death. In my judgment, it was a matter for the judge whether the promises made by implication included a place to leave, because he had heard all the evidence. In my judgment, for the reasons given, it cannot be said his judgment on this point was perverse or such that this court should interfere.
51. I have taken into account both the farmland and Wellfield are very valuable. Their aggregate value was said to be some £3.3 million. Wellfield alone was said to be worth some £760,000. However, the fact is that, on the judge's findings, the assurances were made and the values only reflect the assurances.
52. Mr Jefferis points out that there is a pending claim by John under the Inheritance (Provision for Family and Dependants) Act 1975. In my judgment, all we can do, as Sullivan LJ pointed out in argument, is to say that, if there is such a claim, Caroline does not concede that it is necessarily a substantial claim and we have not heard the claim itself. It is impossible, therefore, to attach a particular value to it. Moreover, if this appeal fails, that claim is also to be dismissed.
53. For the reasons which I have given, I would dismiss the appeal.
54. There remains John's renewed application for permission to appeal, and this is on two grounds. The first ground is that the judge refused to order that certain outbuildings at Cornborough Hall and Witherholm Hall should be allocated to John. In paragraph 63 of his judgment, the judge dealt with the question of outbuildings as a question of principle. He said:

"In my judgment John should have the farm land (subject to the arrangements as regards to the Conings) and a house in which to live. I am inclined to think that this should be Wellfield where he and his family now live. I do not consider he should be entitled to the money in the business accounts or other assets beyond what might be regarded as incidental farm machinery but should also include farm outbuildings incidental to the farming activities and insofar as they can be regarded as separate structures from farm houses (the intent being the houses can be separated from the outbuildings)."

55. The judge then gave judgment in a separate hearing in November 2011, and excluded from the properties to be held for John certain outbuildings at Witherholm Hall and Cornborough. In each case he found that the properties were more incidental to the farmhouses than to the farm land. They were not at Frank's death used for farming because the farm was managed. They could, however, be used for farming and John would like to use them now.
56. In my judgment, the judge heard the evidence on this point. The question whether the outhouses were incidental to the farm houses or to the farming activities involved again a question of evaluation for him. The question of whether the outbuildings constituted separate structures was not simply a question of whether they were physically separate, but whether they were to be regarded as separate, which involved again an evaluation of facts. There was no question of principle involved and there was no basis on which the judge's evaluation of those questions of fact could be said to be wrong, and I would therefore refuse that renewed application for permission.
57. There is then a renewed application for permission to appeal against the judge's order that 25 per cent only of the costs of the action were payable by the appellants to the respondent. Ms Penelope Reed QC, who appears for John, took us through each of the factors on which she relied. It is clear that the judge considered each of those factors in turn. The question of the proportion of costs to be paid by the losing party to the successful party was one for the judge. In matters of costs, judges have wide discretion. Ms Reed did not point to error of principle. Her real argument was that the judge had failed to give sufficient weight to certain matters and the fact that they had made only very small offers to settle this matter. Questions of weight were questions for the judge in the exercise of his discretion. No error of principle is indicated. In those circumstances I would refuse the application for permission on that ground also.

Lord Justice Sullivan:

58. I agree.

Sir Nicholas Wall:

59. I also agree, so the appeal will be dismissed and the renewed applications for permission to appeal are also refused.

Order: Appeal dismissed, applications refused.