Jersey Unreported Judgments

[2006]JRC089A

royal court

(Samedi Division)

28^th June 2006 

Before     :		M. C. St. J. Birt, Esq., Deputy Bailiff, and Jurats Allo and Clapham.
Between	Simon John Cannon		Plaintiff
And	Sheila Mary Nicol		Defendant
And	Ian Sinclair Nicol		Party Cited

Advocate J. M. P. Gleeson for the Plaintiff.

Advocate R. J. Michel for the Defendant and the Party Cited.

judgment

deputy bailiff:

1.        In this case the plaintiff alleges that he was in partnership with the defendant in connection with a business carried out under the name of 'Total Recycling' and 'Total Skip Services', which business involved the collection and recycling of material and rubbish, the hiring and collection of skips and latterly the hiring of labour.  The defendant denies that she was in partnership and contends that she merely loaned money to the plaintiff who was carrying on the business on his own account.  The plaintiff also alleges that a property situated at 4 Rue de Martel, Rue des Pres, St Saviour ("the Property") is an asset of the partnership, failing which that the defendant, as one of the joint owners of the property is estopped from denying the interest of the plaintiff therein on the grounds of proprietary estoppel. 

2.        The case concerns events which took place between 1993 and 1999 and the parties did not put details of their relationship into writing.  The result turns therefore substantially on the Court's assessment of the evidence.  We propose to begin by setting out the factual background where matters are not essentially in dispute.  We will refer in particular to documents or events upon which either side has placed particular reliance.  We will then set out briefly the nature of the case for each party before giving our findings firstly in relation to the business and secondly in relation to the Property.  In passing we will describe our understanding of the relevant law as necessary.

The factual background

3.        The plaintiff came to Jersey in 1979 when aged about 18.  Over the following years he ran a number of recycling businesses in partnership with different people at different times.  Initially he traded under the name of B & C Rag and Metals and subsequently under the name of Green Recycling.  By late 1993 things were not going too well and his partners had withdrawn.  He owed various amounts in respect of hire purchase agreements for the recycling bins and machinery and he was also having difficulty in meeting the rent for the premises which he used at McCraig's Quarry in St John.

4.        It was at about this time that he met the defendant when collecting rags from the Rope Walk Decompression Chamber.  The defendant was aged about 68 at the time and had retired from a career in nursing, having worked in South Africa and in Jersey for 27 years with her husband in his private physiotherapy practice which had been sold in 1990 when he retired.  At the time she was undertaking charity work at the decompression chamber.  She was interested in work which would be of benefit to the environment as both her late husband and she were interested in environmental issues.  After they had met on a few occasions at the Rope Walk, the defendant began to tell her of his problems.  We shall revert later to the evidence concerning the establishment of the business relationship between the plaintiff and the defendant but, for the moment, it is sufficient to say, that sometime in late 1993 or early 1994, they came to an agreement whereby, to use a neutral expression, the defendant became involved in the plaintiff's business.  Essentially she would inject funds and would carry out the book-keeping and administrative side of the business whilst the plaintiff, with such labour as necessary, would run the operational side.  It is clear from the evidence of both the plaintiff and the defendant that, until their relationship broke down in late 1999, they had a warm regard for each other and the relationship was run on the basis of complete trust.  In essence, until 1999, matters progressed exactly as envisaged with the defendant contributing funds and looking after the financial and administrative side whilst the plaintiff ran the operational side of the business.

5.        As we shall see, the documentary evidence available in the case does not paint a uniform picture; some favours the existence of a partnership, some does not.  We propose at this stage simply to summarise the essential facts and revert later as necessary to the parties' contentions. 

6.        The business moved temporarily to Les Gillets, D'Amport Farm, St John and application was made for the necessary change of use in respect of the shed at the property.  That was unfortunately unsuccessful and, as we shall see, the need to find suitable premises for the business was to be a recurring problem. 

7.        The plaintiff and defendant agreed that the business should trade under the name Total Recycling and on 9^th March 1994 this business name was registered by the plaintiff as sole proprietor. 

8.        On 10^th March 1994 the defendant consulted her advocate Geoffrey Fiott concerning the proposed formation of a company to be called Total Recycling Limited.  Advocate Fiott's note show that it was envisaged that the company would issue six shares, three to be held by the defendant and three by her son, Mr Ian Nicol ("Mr Nicol") as nominee for her.  She would therefore be the sole beneficial owner.  There is reference in Advocate Fiott's note to the machinery being on hire purchase with Medens and the note also mentions the plaintiff.  According to Advocate Fiott he was told that the business was registered in the plaintiff's sole name.  No further steps were however taken in relation to the formation of a company at that stage. 

9.        At about this time the defendant opened a bank account at the Royal Bank of Scotland in the name of 'Mrs Sheila Mary Nicol - Total Recycling Account'.  This was the account used to conduct Total Recycling's business. 

10.      Total Recycling was desperate for accommodation and in June 1994, partly through the good offices of various Deputies who were particularly interested in environmental matters, Total Recycling managed to obtain a monthly lease of an area in the old abattoir on the Island Site.  The letter agreeing to this on behalf of the Harbours and Airports Committee was addressed to Mr Cannon of Total Recycling Limited, the Committee appearing to have believed that it was dealing with a limited company.    In 1995 the Committee offered Total Recycling a monthly tenancy of a larger area in the old abattoir to which the business then moved.  It was however understood by all concerned that this was only a temporary solution because of the long term plans for redevelopment of the Island Site.

11.      In November 1994, in an application form for public liability insurance for Total Recycling completed in the handwriting of the defendant, the name of the proposer (the application form required the full names of all principals or partners of the proposer to be given) is given as S J Cannon, S M Nicol and I S Nicol.  Although the defendant admitted that the last two names were in her handwriting, she did not agree that the name S J Cannon was written by her.  Be that as it may, the proposal form was apparently in the name of all three although the signature page appears to be missing.  Other insurances appear to have been in the plaintiff's name alone. 

12.      In 1995 various events occurred.  First, in March 1995 the business acquired a skip business called Mini Skips from a Mr Sutton.  The defendant provided the cash element of the purchase price, the remainder being paid by taking over various hire purchase commitments in respect of skips and other equipment.  These agreements were taken over by the plaintiff for the most part with the defendant acting as guarantor although the defendant appears to have taken a few contracts in her own name.  The purchase agreement, which was a home drawn document, was between the plaintiff and Mr Sutton.   

13.      On 21^st June 1995 'Total Skip Services' was registered as a business name.  The form was signed by the plaintiff, the defendant and Mr Nicol and all three of them were shown as partners in the firm.  At the same time as submitting the application form in respect of Total Skip Services a letter handwritten by the defendant but signed by the plaintiff was sent to the Registrar seeking to add the names of the defendant and Mr Nicol to the registration of the business name Total Recycling.  The Registrar informed them orally that a properly completed application form was necessary in order to achieve this but the matter did not proceed.  Accordingly the business name Total Recycling remained registered in the plaintiff's sole name whereas Total Skip Services was registered in the name of the plaintiff, the defendant and Mr Nicol. 

14.      Subsequently the two businesses were in effect combined and run as one.  Both names appear to have been used at different times.  A new bank account was opened at Barclays because better terms were available.  The account was opened in the name of Mrs S M Nicol, t/a Total Skip Services.  The signatories were the defendant and Mr Nicol.  On the account opening form, in answer to the question "Are you a sole trader or in the business as a partnership?" the box for 'partnership' was ticked.   On another page of the form the defendant described her position as 'proprietor' rather than 'partner'.

15.      Secondly, in March 1995, the plaintiff, the defendant and Mr Nicol formed a company called Total Communications Limited through the offices of Advocate Fiott.  The company was owned as to 60% by the defendant, 20% by the plaintiff and 20% by Mr Nicol.  The three of them constituted the board of directors.  The purpose of the company was to deal in mobile telephones and accessories in conjunction with a Mr Sheen, who was a friend of the plaintiff.  The plaintiff had earlier registered the name 'Total Communications' in his sole name and the minutes of the initial board meeting show that this was to be transferred to the company upon incorporation.  The company carried on business for a while but it was not a success and ceased to trade in early 1996. 

16.      In late 1994 and increasingly thereafter Total Recycling made strenuous efforts to obtain a contract with the States for the provision of glass recycling and/or a Material Reclamation Facility ("MRF").  An MRF is a facility for the recycling of various classes of material excluding glass.  To that end Total Recycling obtained a report in July 1995 from Crinc-Wellman Limited on 'Practicalities of the Provision of an MRF'.  There were presentations and correspondence with officers and members of the Public Services Committee at various times.  Initially the running appears to have been made largely by the plaintiff but gradually Mr Nicol took over the lead role in dealing with the politicians and civil servants and seeking to argue the case for Total Recycling.  It became a matter of some public controversy culminating in a States debate in 1997.  Total Recycling continued to press for the right to provide one or other of these facilities as late as October 1999.  There is voluminous correspondence and evidence of many meetings.

17.      It is convenient at this stage to record what was done in relation to social security and manpower returns.  In relation to social security the form was always addressed to Total Recycling at the defendant's home, Carousel.  The employer's declaration was completed in the name of Total Recycling and was signed by the defendant.  The plaintiff was shown as an employee.  In the case of one return, signed on 14^th October 1999 at a time when the parties had begun to fall out, the defendant had signed in the name 'S Cannon'.  As to the manpower returns, only one has been recovered and this relates to June 1995.  The return is addressed to Total Recycling at Carousel and is signed by the plaintiff as employer. 

18.      The business continued to look for permanent accommodation and between July 1995 and April 1996 it seemed that it might have been able to move to La Collette but, on the latter date, the Harbours and Airports Committee decided to refuse permission on the ground that it would allow only marine related activities at La Collette.

19.      In July 1996 Total Recycling obtained an important contract with the Jersey Electricity Company ("JEC").  This was for stripping JEC's cable and recycling the relevant metal.  The contract required Total Recycling to purchase a certain amount of cable each month from JEC.  Total Recycling would make its money by stripping the cable and selling the recycled metal.  The stripping operation required a three-phase electricity supply. 

20.      Very shortly after the contract was entered into, Total Recycling was informed by the Harbours and Airports Committee that the three-phase electricity supply to the Island Site was unsafe and had to be discontinued.  Negotiations took place but eventually the supply was cut off at the end of October 1996.  This meant that Total Recycling had a serious cash flow problem because it had to continue to purchase cable from the JEC but was unable to process and sell it.  Furthermore, the Waterfront Enterprise Board ("WEB"), who appear to have taken over the site from the Harbours and Airports Committee, stated that it required Total Recycling to vacate the premises.  In due course a notice to quit was served followed by eviction proceedings which came before the Petty Debts Court in July 1997.  Throughout this period and indeed beyond, negotiations took place between WEB and Total Recycling.  From Total Recycling's point of view, these negotiations were led by Mr Nicol, who instructed Advocate Fiott.  Eventually the matter was resolved when, as we shall describe in a moment, an alternative property was found.  The defendant  then informed the chairman of WEB that they had found alternative premises and eventually agreement was reached whereby Total Recycling would vacate the Island Site in June 1998.

21.      Towards the end of 1996 certain correspondence with the Comptroller of Income Tax took place upon which the plaintiff places considerable reliance.  Throughout the period the plaintiff was declaring an income of £100 per week on his tax return.  The defendant regularly produced a letter to this effect confirming on behalf of Total Recycling that the plaintiff had received £5,200 in the year.  On 18^th September 1996 the Comptroller wrote to the plaintiff noting that he had declared income from Total Recycling for the 1995 tax year and asking about his involvement with B&C Rag and Metal Merchants as well as a number of other registered business activities.  There is a manuscript file note on the Comptroller's copy of that letter which clearly records a telephone conversation between the plaintiff and the relevant official in the tax department.  Some of it has been left out by the photocopying but the relevant part says as follows:-

"[Tax payer]   telephoned to say that all the other business names have been incorporated into Total Recycling.  He said he is an equal owner of the business, but does not know much about its affairs, other than he draws out £100p/w.  He said that Ian Nicolles (sic) dealt with accounts etc......"

Certain contact details appear then to have been given.

22.      This was obviously understood by the Comptroller to mean that Mr Nicol was the other equal owner of Total Recycling because he subsequently wrote to Mr Nicol's accountants, Le Sueur Ireson to enquire if this was so and about other matters.  They responded denying that it was so and referring the Comptroller to Mr Pirouet of PBO Financial Services.  Mr Pirouet had been instructed by the defendant in respect of the affairs of Total Recycling.  Accordingly the Comptroller wrote to Mr Pirouet on 19^th November 1996 enclosing the correspondence with Le Sueur Ireson and asking, amongst other questions, whether Mr Pirouet would:-

"............. (2) clarify the position regarding Total Skip Services and Total Recycling; (a) in which accounts are these two businesses incorporated; (b) why was Total Skip Services registered as a partnership between Mr Cannon, Mrs S M Nicol and Mr I Nicol if in fact it is not actually a partnership ....."

Mr Pirouet met with the defendant on 11^th December 1996 in order to prepare a response.  His handwritten file note (which the Court is satisfied he made at the time of the meeting) states as follows:-

"Partnership

Mr Cannon draws salary, manual work.

Once business in profit then they will share.

Mr C can hire and fire after consultation.

Mrs N signs chqs, holds finances.

Ian Nicol advises Mrs N (his mother)."

23.      That same day Mr Pirouet sent a reply to the Comptroller.  Because of its importance we set out the relevant parts in full:-

"I have now met with Mrs Sheila Nicol (widow of the late Mr Keith Nicol) and she has advised me of the following facts relevant to your letter and enclosures:-

1.        Mrs Nicol confirms that neither she nor her son (Mr I S Nicol) have ever been involved with B&C Rag and Metal Merchants or Green Recycling.  However, Mrs Nicol believes that her present business partner, Mr S J Cannon may have been involved with both for, when he and Mrs Nicol became partners in Total Recycling and Total Skip Services in 1995, Mr Cannon had various equipment to his name from earlier trading activities. 

2.        In May 1995 Mr Nicol and Mr Cannon commenced a partnership, trading as both Total Recycling and Total Skip Services.  Mr I S Nicol's name was on one or more of the application for business names but Mr I S Nicol is neither actively nor financially involved in the business but is there in his capacity as her son, to help and advise his mother.  The partnership relationship is that Mrs Nicol provides business finance whilst Mr Cannon carries out the manual work.  They jointly engage staff and suppliers recognise their business as a partnership of them both.  I am in the process of preparing financial accounts for the partnership for the period May 1995 to January 1996.  I reviewed the draft accounts today but Mrs Nicol has still to provide extra information, which hopefully will be forthcoming early in the New Year.  The draft accounts show a considerable loss..........."

It is right to say however that Mr Pirouet did not send a copy of this letter to the defendant. 

24.      In fact the preparation of the draft accounts was not progressed until 1999 and we shall refer to this later.  However on 9^th July 1997 the Comptroller wrote to the defendant and the last paragraph of that letter was in the following terms:-

"I also believe that in 1995 you commenced a partnership trading as both Total Recycling and Total Skip Services.  Could you please confirm when accounts for this partnership will be submitted, and whether you will be dealing with the partnership accounts or whether you wish me to deal direct with an agent in respect of the partnership."

The defendant appears to have taken no action following receipt of that letter either by querying the position with the Comptroller or by approaching Mr Pirouet. 

25.      As we have mentioned above, a continuing problem faced by Total Recycling was the lack of premises.  By the summer of 1997 this was critical.  Eviction proceedings had been instituted by WEB before the Petty Debts Court and the business faced the prospect of being unable to continue because of the lack of premises.  In early October 1997 the plaintiff discovered that the Property (then simply a plot of land with existing development permission for the construction of a commercial building) was available for sale.  There is some dispute as to exactly how he heard about it but this is not relevant.  It is not disputed that he brought the possibility of buying this land to the defendant.  The plaintiff had also made preliminary enquiries of the Planning Department in order to see what might be allowed on the premises.  The Director of Planning, Mr Thorne, faxed the plaintiff a copy of the existing development permission on 7^th October and indicated that he did not foresee any difficulty in the building being used for waste recycling provided that the bulk of the operations were carried out indoors. 

26.      On 14^th October Mr Nicol met with Mr Thorne and, according to Mr Thorne's file note, informed him that Total Recycling was considering acquiring the Property.  The matter proceeded quickly and the defendant and Mr Nicol acquired the Property jointly and for the survivor by contract passed before the Royal Court on 31^st October 1997.  The purchase price was £215,000 and this was provided entirely by the defendant and Mr Nicol.  There are competing versions as to what, if anything, was said by the defendant and Mr Nicol to the plaintiff about the occupation and ownership of the Property.  We will deal with these when we consider the parties' respective cases. 

27.      What is not in dispute is that an application to build a three-storey building was submitted to the Planning Department in December 1997.  In the application form the owner of the Property was correctly given as the defendant and Mr Nicol and the applicant was stated to be 'Total Recycling'.  It is also quite clear that it was asserted that the occupant of the ground floor of the proposed building would be Total Recycling and the fact that the building was to be used for recycling persuaded the Committee to agree certain aspects which they would not otherwise have done.  Thus:-

(i)        On 10^th December 1997 the defendant sent a letter accompanying the application in which she said "We have altered the plans to suit our purpose of recycling". 

(ii)       In a letter dated 22^nd January 1998 written on Total Recycling notepaper, Mr Nicol stated to the Planning Department "......... I confirm that we wish to move our existing recycling/waste management operation to the above site."  

(iii)      Mrs Steedman (whose evidence the Court accepts), the Planning Officer responsible for the planning application, made it clear that the application was determined on the basis of the assertions that the ground floor was to be occupied by Total Recycling which was to transfer its existing recycling operation from the Island Site.  Because of the requirements of the recycling operation the ground floor was allowed to be six foot higher than normal (with the result that the building was six foot higher than the neighbouring properties) and a reduced number of five parking spaces was permitted.  Both of these decisions allowed the building to be larger than would normally have been the case.  The development permission eventually granted allowed the ground floor to be used for recycling purposes and the first and second floors for general storage. 

28.      The firm of N V Bate Associates, structural engineers, was instructed to prepare detailed drawings and technical specifications.  They were originally consulted by the plaintiff and regarded their client as being Total Recycling.  The plans were all prepared in the name of Total Recycling and the tender documents were also issued in that name.

29.      The construction of the building at the Property took place in the latter part of 1998 and the first part of 1999.  Although certain aspects of Total Recycling's business moved to the Property earlier, the full move from the Island Site to the ground floor took place in about June 1999. 

30.      Certain difficulties arose in connection with the building works.  Thus, the defendant and Mr Nicol became embroiled in litigation with the first electrician used, a Mr Gallagher. The only significance of this is that, in the course of instructing their advocate in connection with that matter, Mr Nicol made it clear that Mr Gallagher had been made aware when originally instructed in 1998 that Total Recycling was to occupy the ground floor and that the electricity supply to be fitted therefore had to be suitable for the machinery which would be required for their business. 

31.      The defendant and Mr Nicol also became involved in litigation with Regal Construction (Jersey) Limited ("Regals") who ultimately issued proceedings against them for non payment in respect of disputed work.  The defendant and Mr Nicol instructed their advocate to take the point that Regals had sued the wrong persons; it was contended that they should have sued the plaintiff, on the basis that the tender documents leading to the contract with Regals were in the name of Total Recycling (see for example Mr Nicol's letters to Advocate Grace of 6^th and 12^th July and 21^st August 1999).  However eventually the point was dropped and paragraph 6 of the Answer and Counterclaim filed by the defendant and Mr Nicol in those proceedings said as follows:-

"........ the tender documentation in relation to the plaintiff's claim and the defendant's counterclaim was issued in the name of Total Recycling.  Mr Simon Cannon trades under the name of Total Recycling and Total Recycling acted as agents for the defendants in relation to all matters herein."

We shall return to this later in the context of the defendant's contention that the plaintiff had little to do with the construction of the building.

32.      Healey & Baker had been instructed by the defendant and Mr Nicol in March 1998 to try and find tenants for the first and second floors of the Property.  It was made clear to Mr Buckley of Healey & Baker that the ground floor was to be occupied by Total Recycling.  In due course in March 1999 the second floor was let to a company called Brunel Management Limited but, despite marketing efforts, the first floor remained un-let in September 1999. 

33.      On 9^th September 1999 Mr Buckley wrote to the defendant informing her that Brunel had put forward an offer to take the ground and first floors in addition to the second floor. On 29^th September he received an oral offer from Pentagon (Jersey) Wholesale Limited for the ground and first floors and this was also communicated to the defendant. 

34.      Sometime in late September or early October (the exact date is not known) there was a meeting at which the defendant informed the plaintiff that she required him to vacate the ground floor of the Property.  There were subsequently a number of discussions on which the parties are not agreed and to which we shall refer later.  What is clear is that the plaintiff went away on holiday from mid-October until 1^st November and that on 26^th October terms were agreed between the Nicols and Pentagon whereby Pentagon would take the ground and first floor of the Property for an aggregate rental of £58,000 per annum with the proposed occupation date being specified as 19^th November.  When the plaintiff and his wife returned from holiday on 1^st November they found a handwritten note from the defendant at their home informing the plaintiff that he had to vacate the Property by 13^th November. 

35.      There were subsequently further meetings between the parties at which various proposals were discussed but no agreement was reached.  On 19^th November the plaintiff was served with a notice to quit the Property with immediate effect by the Viscount's Department at the instance of the defendant and Mr Nicol.  It was also on that date that the lease between the Nicols and Pentagon was signed.  The commencement date of the lease was given as 19^th November.  On 25^th November the plaintiff issued the Order of Justice in the present proceedings.  The plaintiff eventually vacated the Property in February 2000.  He was unable to find alternative premises to carry on the recycling business and that accordingly came to an end.  During the course of 1999 the provision of labour had been added to the business and had become an increasingly important part of the business during the year.  Following the eviction from the Property, that became the sole business carried on by the plaintiff and he registered the name 'Total Labour' at the end of November 1999.  As to the skip business, an offer had been received for £30,000 in about June 1999 but had not been accepted at that time.  Eventually the skip business was sold towards the end of 1999 for just under £15,000. 

36.      In order to complete the picture of events at this time, we should note in passing that Mr Pirouet had eventually got round to preparing the draft accounts for the business and had sent these to the defendant on 4^th November 1999.  However, as he said in evidence and as we accept, he had by then forgotten about the meeting held three years earlier on 11^th December 1996 and he prepared the accounts on the basis shown in the bank statements i.e. in the name of Mrs S M Nicol t/a Total Recycling.  On 30^th November (after service of the Order of Justice) the defendant and Mr Nicol came to see Mr Pirouet in his office.  Mr Pirouet prepared a detailed file note of that meeting.  They were most concerned that the accounts showed the defendant as the owner of the business whereas the correct position, they said, was that the plaintiff was the owner.  Accordingly the accounts should have been drawn in the name of 'Mr S Cannon t/a Total Recycling'.  Both the defendant and Mr Nicol in evidence stated unequivocally that Mr Pirouet agreed to change the accounts and that this was done there and then with the name of Mrs Nicol being tippexed out and replaced with that of Mr S Cannon.  As we shall see, the difficulty with this evidence is that, five days earlier, on 25^th November, their advocate had sent a copy of the accounts (which he obtained from the defendant) to Bedell Cristin and this copy of the accounts also had the name of the defendant tippexed out and replaced with that of Mr Cannon. 

37.      The business incurred losses for all the years to 1998 but showed a profit of £30,000 for the year ended 31^st December 1999.  The defendant injected a total of £117,230 (on her figures) or £113,883 (on the plaintiff's version).  Both sides are agreed that she had been repaid £25,492 leaving a balance of either £91,738 or £88,391.  There is also no dispute that the defendant and Mr Nicol  paid entirely for the Property by means of the initial purchase price and the servicing of the mortgage of £550,000 taken out to construct the building.  They have of course had the benefit of the rental in the meantime.  The Property is currently valued at £1,060,000.  We were told that the outstanding mortgage is approximately £390,000.

38.      With that introduction we turn to consider each party's case. 

The plaintiff's case

39.      The plaintiff stated that, after he got to know the defendant through meeting her at the Rope Walk decompression centre, he got talking to her on one occasion and explained the problems he was having in relation to Green Recycling.  Subsequently she telephoned him and asked him to come to her house.  There he met her; Mr Nicol joined them later.  There was a detailed discussion about his recycling business and the plaintiff explained the sort of costs and returns which were applicable in relation to rags and metals as well as other materials.   At the end of the discussion the defendant said that she and the plaintiff were going into business together.  She then said that he must telephone his wife in order to find out the least income that he could survive on.  This telephone conversation took place and the upshot was that, allowing for his wife's income, the plaintiff could get by on £100 p.w.  Mr Nicol, having considered the various figures discussed, then stated that he thought that his mother would have to put £25,000 into the business in its first year.  Agreement was then reached as to the basis on which they would go into business together, namely that she would provide the capital, he would limit his drawings to £100 per week, and that once she had been repaid the business would be the plaintiff's but with the profits being shared between them as to 60:40% in his favour.  The defendant said that she would educate him as to how to run the business properly as she had been in business for years and her son was a financial consultant.  The plaintiff said that he did not attempt to renegotiate any of the suggested terms because he was very relieved that she was stepping in to assist at a time when he would not have been able to continue on his own.  So far as he was concerned it was an agreement to go into partnership on the above terms. 

40.      The defendant then took charge of sorting out the hire purchase situation with Medens.  She took over responsibility for the administration and financial side whereas the plaintiff managed the operational side.  It worked very well and they were a harmonious team.  Mr Nicol was not a partner but he played a significant role, particularly in relation to the attempts to secure either a glass recycling contract or an MRF contract from the States.  He and the defendant agreed to obtain a report from Crink Wellman in 1995 on glass recycling and recycling generally.  They used this to press for a contract from the States.  In February 1996 the plaintiff, the defendant and Mr Nicol attended a meeting at the bank in order to discuss a request for a loan facility to assist with the business on the strength of the Crink Wellman report.  Subsequently the bank wrote to the defendant.  Throughout the duration of the partnership the plaintiff drew only £100 per week other than occasional minor extra cash payments made by the defendant following, for example, a particularly successful sale. 

41.      The name 'Total Recycling' was the defendant's choice.  She gave the plaintiff £10 for the fee to go and register the name.  He did not attribute any significance to the fact that the name was registered in his sole name; he filled in the form he was given. 

42.      In March 1995 the business acquired Mini Skips.  This was a joint decision by the plaintiff and the defendant and was felt to be a sensible step to enhance their position within the waste handling market and to increase turnover.  He denied the suggestion made by the defendant that the purchase was only made in order to assist in obtaining the glass recycling contract.  He stated that the skips would have formed no part of that as the glass was to be delivered by the Parishes to the relevant glass recycling site.   After the purchase the name Total Skip Services was registered in the names of the plaintiff, the defendant and Mr Nicol.  At the same time by letter dated 15^th June 1995, which was handwritten by the defendant but signed by the plaintiff, a request was made to the Registrar of Business Names for Total Recycling to be registered in the names of all three of them.  However the correct form had not been filled out and this latter matter was not progressed. 

43.      As to the Property the plaintiff came across it in early October 1997.  He telephoned the owner to enquire about leasing it and was told that the owner wished to sell.  He immediately informed the defendant and Mr Nicol who came to look at the Property.  They decided to proceed with the purchase.  The plaintiff made contact with the Planning Department in order to enquire as to the position (see para 25 above).  It was realised from the beginning that the Property was the answer to all their difficulties in relation to accommodation.  From an early stage the defendant assured the plaintiff that, now that they had the Property, they would all have security; in particular the defendant assured the plaintiff that he and his wife and family would have security for the rest of their lives.  Mr Nicol assured the plaintiff that, once the building was finished, Advocate Fiott would prepare the necessary paperwork so that everyone's interest in the Property could be set out in writing.  The plaintiff was told that, subject to recovery by the defendant and Mr Nicol of their financial investment in the property, he would have a share of it against which he could raise a mortgage.  Subsequently the defendant stated that the rental income from the first and second floors would be sufficient to cover the mortgage and the business would be able to have the use of the ground floor 'rent free for ever'.  The contract for the purchase of the Property was passed before the Royal Court on 31^st October 1997.  Although it was purchased in the joint names of the defendant and her son, the plaintiff was not aware that Mr Nicol was a joint owner of the Property until recently.  He thought it was in the sole name of the defendant.  The plaintiff did not go into the Royal Court but he met the defendant in the Royal Square afterwards and they went back to his house where, in the presence of his wife, the defendant said words to the effect "........ now its finished no one will ever tell us what we can or can't do, our electricity won't be turned off again and we have security for the rest of our lives.  Of course I won't see it because I'm old but Ian and his family and you and your family will get the benefit from the shed for the rest of your lives."  She went on to say that "....... Even if the recycling business is not there anymore, it will never have to be sold and will provide an income for the rest of our lives".  She repeated on several occasions that once the building was finished the parties would go to Advocate Fiott, her lawyer, and have the whole arrangement 'put on a proper footing' and 'structured out'.  From this the plaintiff understood that the purchase of the property was for the partnership and that the income from the Property would be part of the business and therefore a partnership asset.  However he accepted that he never did find out what his share was because they never got to see Advocate Fiott.

44.      The plaintiff stated that, following the purchase, he became heavily involved in the construction of the building.  It was he who originally instructed Mr Bate and it was always understood and agreed that Total Recycling would occupy the ground floor rent free with the top two floors being let out.  During the construction of the building he spent a considerable amount of time on the project.  In effect he acted as a form of site agent.  He dealt with N V Bate who were in charge of the project and also liaised with many of the other contractors.  He also provided labour from the employees of Total Recycling.  We do not think it necessary to recite in detail the evidence as to the activities undertaken by the plaintiff.  He estimated that he spent about 50% of his week working on the Property at this time. 

45.      There were difficulties in Total Recycling getting into the ground floor not least because of problems over the electricity supply.  A dispute arose with Mr Gallagher, the first electrician chosen, and eventually a Mr Dingle had to complete the work.  Total Recycling was not able to get into the premises fully until June 1999. 

46.      In her evidence the defendant stated that, in May 1999, the plaintiff had told her that he was fed up with recycling on the basis that it was not profitable and accordingly he was winding down the recycling business with a view to ceasing it.  He had decided instead to set up a business to provide labour to building sites.  She said that she had accordingly informed him at that time that she wished to retire from any form of assisting him once he had ceased recycling.  She also said that she told him that, as he was no longer intending to continue recycling, she would be arranging to seek a tenant for the ground floor of the Property.  The plaintiff strongly denied all of this.  So far as he was concerned, following the move to the Property, Total Recycling was for the first time in a position to press ahead in the knowledge that it had a secure set of premises.  He said that the parties did decide however not to proceed with stripping the accumulated JEC cable.  Because none had been stripped for so long the accumulated amount was very considerable and it would take a long time to strip it.  Accordingly, by agreement, the cable was moved from the Island Site to La Saline Quarry for storage before eventually being shipped to England for granulation. 

47.      So far as the plaintiff was concerned he said that the defendant's termination of the partnership and of Total Recycling's occupation of the ground floor came out of the blue.  He was asked to attend a meeting at Mr Nicol's house in late September or early October 1999 at which the defendant was present.  Mr Nicol began by stating that his mother wished to retire from the business.   The defendant then said that the business had been unsuccessful in concluding a contract with the States because of the plaintiff's history with Green Recycling.  She said that they had found a tenant to take the middle floor of the Property but that that tenant would only enter into the lease if he could lease the ground floor as well.  Accordingly Total Recycling would have to find new premises.  She said that she was prepared for the plaintiff to take all the equipment and all the materials debt free and also offered to pay £50,000 in compensation.  No firm agreement was reached at the time and the plaintiff and his wife went on their pre-planned holiday from mid-October to the 1^st November.  When they returned there was a note from the defendant stating that the Property had to be vacated by 13^th November.  Subsequently further meetings took place between them at which the plaintiff was informed that the business had substantial debts and that there was approximately £26,000 left to be repaid on the hire purchase/leasing of the vehicles.  The defendant was insistent that the skip business should be sold.  The plaintiff stated that he eventually paid off all the outstanding hire purchase debts, including those which were in the defendant's own name.  There were apparently further discussions and the defendant said that she would put an offer in writing but this did not happen.  On 18^th November the plaintiff consulted Bedell Cristin and on 19^th November he was served with a notice to quit the Property immediately.  He eventually vacated in February 2000 but the recycling business came to an end in 1999 because of the lack of premises. 

48.      In effect the plaintiff's case is that he entered into a partnership with the defendant in relation to the Total Recycling and Total Skip business, and that the terms were that his drawings would be restricted to £100 per week until she had been repaid the amount which she had invested but that thereafter the profits would be split 60% in his favour and 40% for the defendant.  He also contended that the defendant had terminated the partnership in bad faith in that she had decided that her financial position would be better served by being able to let the ground floor of the Property than to continue with the partnership.  He contended that the Property was a partnership asset; alternatively there was an agreement for a lease or licence; alternatively he had an interest in the Property on the basis of a proprietary estoppel.  The plaintiff accepted that there was an understanding that, if the glass recycling or MRF contract were obtained, a company would be formed in which Mr Nicol as well as the plaintiff and the defendant would have shares.  However the exact interests were never discussed. 

49.      The plaintiff called a number of witnesses in support.  We do not propose to recount their evidence in any detail.  His wife Beverley confirmed that, right at the outset, she had been asked to write down the family's income and outgoings and she identified the piece of paper produced to the Court as being that list.  It was in her handwriting although the defendant had made some annotations upon it.  Subsequently, the plaintiff attended a meeting with the defendant and Mr Nicol during which the plaintiff telephoned his wife in order to confirm that they would be able to get by if he drew £100 per week, which confirmation she gave.   

50.      As to the Property, she confirmed that the defendant and the plaintiff had come back to her house immediately after the defendant had passed contract before the Royal Court on 31^st October 1997.  The plaintiff and the defendant were both in excellent spirits.  The defendant said that both families were set up for life; that the ground floor would be for Total Recycling with the upper two floors being rented out to pay the mortgage.  The recycling business would be there rent free for life.  Once she and her son had recouped their investment in the Property the rent would provide a permanent source of income for both families.  The defendant said further that her lawyer, Advocate Fiott, would draw up the necessary paperwork so that everyone's interest in the Property could be set down in writing. 

51.      Mrs Cannon confirmed that the plaintiff spent much of his time on the site when the building was being constructed.  He was always on the phone to builders, plumbers, electricians etc. 

52.      As to the breakdown in the relationship, she said that, in about September/October 1999 the plaintiff came home one day and said that the defendant and Mr Nicol had said that they no longer wished to be involved with the business.  She said that this came as a terrible shock to them.  Almost immediately she attended a meeting with the plaintiff, the defendant and Mr Nicol.  Either then or at one of the subsequent meetings Mrs Nicol had set out a proposal for the break-up of the partnership.  She suggested that the plaintiff take the business including the trucks, skips etc and that she would pay £50,000 to the plaintiff calculated on the basis of an under-drawing on his part of £200 per week for the previous five years.  She later said that she would not be able to pay this sum for two years and the plaintiff agreed to that delay provided it was put in writing.  The plaintiff and Mrs Cannon then went on holiday for two weeks.  On their return they found the letter from the defendant demanding that the plaintiff vacate almost immediately.  No agreement was ever reached.  

53.      We have already dealt with the evidence of Mrs Steedman, the planning officer, who confirmed that the planning application was made in the name of Total Recycling, that it was at all times asserted that Total Recycling would be carrying on its recycling business on the ground floor, and that, by reason of this factor, the Committee agreed to the building being higher than normal and containing less parking space than normal. 

54.      Mr Bate confirmed that his firm was instructed in November 1997 in relation to the design and structural and technical specification of the building as well as overseeing the tendering process for the various stages of construction.  The initial meetings were all held with the plaintiff but later meetings involved the defendant and Mr Nicol.  At all times he regarded the firm's client as Total Recycling and it was his belief that the plaintiff, the defendant and Mr Nicol were directors of or partners in Total Recycling.  The building was designed to house Total Recycling on the ground floor.  It was for this reason that the ground floor was designed as being higher than normal in order to allow access to skip lorries. 

55.      Mr Bate said that, in a project of that nature, it would be usual to have an overall contractor in charge who would then organise the sub-contractors.  However, in this project the plaintiff was closely involved at all times and co-ordinated other tradesmen and contractors to do selected aspects of the construction work.  In response to the suggestion by the defendant that the plaintiff's role was limited to clearing the site of rubble Mr Bate said that nothing could be further from the truth.  The reality was that the plaintiff's role was akin to that of site manager.  He was heavily engaged on a daily basis, particularly at the start of the project, on all aspects of the build.   He organised the various contractors and also arranged for labourers to assist in various tasks such as block-laying.  Most of the meetings that Mr Bate attended on site in relation to the project were conducted solely with the plaintiff. 

56.      The plaintiff called a number of contractors who worked on the site at various times when the building was being constructed.  We do not propose to repeat their evidence.  Suffice it to say that they all gave evidence that was consistent with that of the plaintiff and Mr Bate as to the amount of work which the plaintiff carried out in relation to the project.  They confirmed that he had spent a considerable amount of time at the site and was generally responsible for contacting and liaising with the various contractors.  In effect he acted as a form of site foreman or site agent. 

57.      Some of the witnesses spoke of additional matters.  Thus Mr Steven Kilshaw had been employed by Total Recycling since 1998.  At that time he asked Mrs Nicol about financial security and she assured him that the ground floor was for the recycling business and the future outlook was therefore very good. 

58.      Mr Peter Louis started working for Total Recycling when it was still at the abattoir site.  He said that the defendant introduced herself as the plaintiff's partner.  When the work on the building began, the plaintiff often took a number of the Total Recycling labourers down to work on the site with the result that Mr Louis was left on his own or with one other labourer to carry on the recycling and skip business at the abattoir site.  Mr Louis decided to find alternative employment once the building was complete.  The defendant tried to persuade him to stay on the grounds that, as the new site was up and running, the plaintiff would be set up for life and Mr Louis's job would therefore be secure. 

59.      Mr Paul McEvoy was employed by Total Recycling on a part-time basis but also worked on the defendant's garden.  Sometime in 1997 or 1998 the defendant, in the course of a conversation during his work on her garden, said that when the new building was up and running the plaintiff would be set for life.  She also told him that the ground floor would be for the use of the recycling business.  Mr William Steel is the plaintiff's brother-in-law and carries on a forge and ironworks business.  He said that he first met the defendant at about the time when Total Recycling moved to the old abattoir and on that occasion the plaintiff had introduced the defendant as his new partner.  Much later, when the Property had been identified, the defendant told him that the ground floor would be for Total Recycling which would operate rent free from the premises. 

The defendant's case

60.      The defendant confirmed the circumstances in which she met the plaintiff at the recompression centre and that, on one occasion, he had talked to her of the difficulties he was having with recycling.  She felt sorry for him and invited him to meet with her at her home in the latter part of 1993.  There was a preliminary discussion on that occasion during which the plaintiff said that he would need to draw £250 per week and that the business would need £25,000 in the first year.  The defendant said that £250 per week was too much and £25,000 was out of the question.

61.      There was a subsequent meeting at her house attended by the plaintiff and his wife.  They brought with them the handwritten note of income and expenditure previously referred to.  It was agreed that, subject to the plaintiff drawing only £100 per week, she would lend such sums as were required to get the business up and running.  An interest rate of 4% per annum was agreed.  This compared with 5.375% that she was getting from her bank at the time.  There was no talk of partnership nor of any profit sharing.  All the defendant agreed to do was to provide financing in order to help an environmentally friendly business. 

62.      In cross-examination the defendant conceded that it was Mr Nicol who had come up with the figure of £25,000, not the plaintiff.  Mr Nicol had worked out from the information supplied by the plaintiff that this was the sum which would be required in the first year of operation. 

63.      Sometime later (it is not clear exactly when) the defendant agreed with the plaintiff and Mr Nicol that, if a glass recycling contract were obtained, the profits would be split as to 60% in favour of the defendant and her son and 40% to the plaintiff.  This would be done through a limited company which would be formed for the purpose with the appropriate shareholdings.  A glass recycling contract would have been potentially very big business and very profitable although it would have involved substantial borrowings by way of bank loan.  It was because of this understanding that the defendant and Mr Nicol involved themselves so fully in pressing States members and officers to award a contract to Total Recycling.  However there was no such agreement in relation to an MRF contract.  If that had materialised the plaintiff would have been entitled to it alone. 

64.      The defendant was somewhat inconsistent as to the profit share which would arise in the event of the glass recycling contract being obtained.  As stated above, in her evidence in chief she said that it would be 60% in favour of herself and her son and 40% to the plaintiff.  This contrasted with what was stated in the Answer and Counterclaim where it was pleaded that, in the event of a glass recycling contract being obtained, the profits would be allocated as to 60% to the plaintiff and 40% to the defendant.  When tested with this in cross-examination the defendant was unable to give a satisfactory explanation. 

65.      She said that the decision to buy the Mini-Skips business was the plaintiff's.  She agreed however to act as guarantor on some of the leases and indeed a few were taken in her name.  In June 1995 the plaintiff 'begged' her and her son to allow their names to be included as owners in relation to the registration of the business name Total Skip Services and for the registration of 'Total Recycling' to be transferred into the names of all three of them.  He said that this would assist in the negotiations over the glass recycling contract by showing that he was not acting on his own.  The defendant and Mr Nicol agreed to his request and signed the necessary forms in respect of Total Skip Services.  The defendant also handwrote the letter for signature by the plaintiff asking for registration of 'Total Recycling' to be transferred to the three of them.  However, she and her son almost immediately regretted what they had done and asked the Registrar if they could withdraw the application.  They were told that this would need the plaintiff's agreement but they took no further action. 

66.      She said that the only occasion on which she had gone into business with the plaintiff was in relation to Total Communications Limited.  There she had arranged for the incorporation of the company to reflect the position and this is what she would have done if the glass contract had been obtained or if she had gone into business with the plaintiff in relation to Total Recycling. 

67.      She agreed that, very shortly after the registration of the business name of Total Skip Services in the name of the three of them, she had opened the account at Barclays in the name of Mrs S Nicol t/a Total Recycling but this was only because the plaintiff was not allowed to hold a bank account in view of his previous business failures.  She could not explain why the account opening form referred to a partnership but said that this had probably been completed by a member of the bank's staff. 

68.      As one would expect, Mr Gleeson questioned the defendant in some detail about the correspondence between Mr Pirouet and the Comptroller of Income Tax in 1996.  In essence she said that Mr Pirouet must have misunderstood her.  She never told him that she was in partnership with the plaintiff; he had somehow got that wrong.  There might have been some discussion about the possibility of partnership if the glass recycling contract was obtained; furthermore she was in a state of shock after her husband had died.  She was asked about Mr Pirouet's file note and described this as 'jottings' which were not answers to questions which Mr Pirouet had asked of her.  She emphasised that she had not seen Mr Pirouet's letter to the Comptroller before or when it was sent; indeed she had been completely unaware of it until it was disclosed by the plaintiff in the current proceedings.  Mr Gleeson probed on this aspect.  He reminded her that the Comptroller had written to her on 9^th July 1997 stating his understanding that she was in partnership with the plaintiff in respect of Total Recycling and Total Skip Services and that she had not disputed this at the time.  More significantly, he pointed out that, in the detailed file note of the meeting of 30^th November 1999 (when the defendant and her son went to protest at the fact that the accounts of Total Recycling were drawn up in the defendant's name) Mr Pirouet had pointed out the correspondence with the Comptroller of Income Tax in 1996, so that she must have been aware of the letter and should have arranged for discovery of it to be given in the course of proceedings.  The defendant, however, said that she had never seen the letter until it was disclosed by the plaintiff during the course of these proceedings.

69.      Turning to the Property she agreed that it was the plaintiff who had brought the possibility of purchasing the site to her but said that there was no question of the plaintiff or Total Recycling ever having any interest in it.  It was always intended to be a completely separate matter and was an investment for her and her family.  Indeed the plaintiff had understood this when he said, when bringing the possibility to her, that he could never repay her enough for standing by him and helping him to get the business up and running. 

70.      She said that the reason Total Recycling was shown as the applicant in the planning application was because they had to show who was going to occupy the ground floor.  She believed that the fact that Total Recycling was the applicant had not influenced the outcome of the planning application in any way.  When she discovered that the name Total Recycling had been printed on all the plans and paperwork in connection with the tender documents, she had contacted Mr Bate and asked for them to be returned and amended.  She said that Mr Bate's office said that the documents had already been sent out and that there was no need to worry as everyone knew that she and her son were the owners of the Property; it was simply a typing error.  Unfortunately this was never put to Mr Bate when he gave evidence.

71.      As to assurances, the defendant denied ever giving any of the assurances referred to by the plaintiff.  She accepted that she had said to the plaintiff that Total Recycling could occupy the ground floor rent free for a period of five months.  The reason for this period was that the plaintiff had given this as the period which he required to strip the accumulated JEC cable.  The defendant was adamant that the assurance of rent free accommodation was given solely by reference to the period which was needed to carry out the cable stripping work and that the plaintiff was aware of this.  There was some uncertainty as to when she informed the plaintiff of this.  Although her witness statement is not entirely clear in this respect, it seems to be indicating that this assurance was given once the construction of the building was well under way, perhaps late 1998.  Conversely, in cross-examination, she accepted that she had told the plaintiff this at the start i.e. some time around the purchase in October 1997. 

72.      As to the part played by the plaintiff during the construction of the Property, she said that this was minimal.  She described him simply as a 'hod carrier'.  His role was essentially confined to arranging for some casual labour to clear up rubbish at the site.  She did not agree that he constituted any form of site agent or indeed any form of agent for her and her son.  When the extract from her pleading in the Regals action (see para 31 above) was put to her, she said that she had never seen this pleading. 

73.      As to Mr McAvoy's evidence, she did not say to him that the plaintiff would be set for life; she would not discuss her business affairs with a gardener.  As to the evidence of Mr Kilshaw, she agreed that she had said that his job was secure because she thought that it was but this was nothing to do with Total Recycling's occupation of the ground floor, which was not mentioned.  As to Mr Steel's evidence, she agreed that the plaintiff had introduced her as his partner but she had immediately corrected him and made it clear that she was not his partner, she had merely loaned him money.  In relation to Mr Louis' evidence, she denied introducing herself as the plaintiff's partner. 

74.      According to her evidence in chief, in the early course of 1999, she informed the plaintiff that she wished to retire from her role in assisting him.  The plaintiff pleaded with her that, unless he fulfilled his stripping contract with the JEC, they would not deal with him again.  He said that he needed a period of approximately four months in order to strip the cable.  The defendant said that the parties calculated therefore that he should have completed his cable stripping operation by April 1999.  We should add that that suggests that the conversation when she informed the plaintiff that she wished to retire and the plaintiff pleaded with her must have taken place before Christmas 1998 rather than in early 1999 as the figures do not otherwise make sense.

75.      Be that as it may, the defendant said that in May 1999 the plaintiff told her that he was fed up with recycling on the basis that it was not profitable and accordingly he was winding down his recycling business with a view to ceasing it.  He had decided instead to set up a business to provide labour to building sites.  The defendant said that she confirmed therefore that she wished to retire from assisting him and furthermore that, as he was no longer intending to continue in recycling, she would be arranging to seek a tenant for the ground floor of the Property.  She said that Mr Buckley was informed accordingly.

76.      In September/October 1999 she and her son had received two offers to rent the ground floor. She met with the plaintiff who agreed to vacate the Property as he was now running what was essentially a labour only business.  Discussions took place as to the terms upon which her involvement with the business would cease and these were amicable at that stage.  The plaintiff and his wife left on holiday and in their absence she and her son had reached a firm agreement with Pentagon to let the ground floor.  She agreed that she had left the note for the plaintiff on 1^st November requiring him to vacate within a few days and had subsequently caused a notice to quit to be served.  There were subsequent negotiations but these broke down.  

77.      The defendant said that she had assumed that, once Total Recycling had the necessary three-phase electricity at the Property, the plaintiff had been stripping the accumulated JEC cable.  She said that she only discovered at the beginning of October 1999 that this was not so and that, in July 1999, the plaintiff had arranged for all the cable to be removed to La Saline Quarry from where it was eventually shipped to the UK for granulation.  She discovered this because she had received a bill from D B Cummins (Jersey) Limited dated 31^st July 1999 concerning the hire of some lorries.  She asked for a detailed explanation and received this at the beginning of October.  The explanation showed that the plaintiff had requested the hire of a lorry between 6^th and 8^th July 1999 in order to remove the cable to La Saline Quarry.

78.      She recalled receiving the draft accounts of Total Recycling from Mr Pirouet in November 1999.  She and her son went to see him on 30^th November 1999 in order to point out that they were wrongly drawn in her name.  She was adamant that the accounts were altered by tippexing out Mrs S M Nicol and replacing it with Mr S Cannon at Mr Pirouet's office.  She recalled that the accounts were taken into another room where this was done.  She denied that she or her son had made the alteration. 

79.      In essence she said that she had lost some £90,000, being the amount of her loans to the plaintiff which had not been repaid.  Furthermore Total Recycling had had rent free occupation of the ground floor of the Property during 1999 until February 2000.  It was preposterous to suggest that she or her son, who between them had funded entirely the purchase of the Property either by way of cash contribution or by repayment of the mortgage instalments, would agree to gift any percentage of the freehold interest to the plaintiff; nor had they given assurances about rent free occupation other than for five months.   

80.      Mr Nicol gave evidence and confirmed that he was present at the meeting when the arrangement between the plaintiff and the defendant was reached in 1993.  He thought that it was at the second meeting and he recalled the plaintiff telephoning his wife in order to see if he could get by on £100 per week.  He confirmed that it was he who had come up with the figure of £25,000 on the basis of the information put forward by the plaintiff.  As far as he was concerned his mother had agreed to make loans not enter a partnership.  There was no discussion of profit share. 

81.      He said that some time after the initial agreement, probably in early 1995, an agreement was reached that, if a glass recycling contract was obtained from the States, a company would be formed and the three of them would have shares with 60% going to his mother and him and 40% to the plaintiff.  This arrangement however did not extend to any contract for an MRF.  That would have been solely for the plaintiff's benefit. 

82.      He confirmed that he and his mother had signed the forms in June 1995 to register Total Skip Services in the name off all three of them and they had also approved the letter requesting that Total Recycling be transferred from the plaintiff's sole name into the name of all three of them.  This was done at the request of the plaintiff in order to give him credibility in his negotiations with the States.  Mr Nicol said that the very evening he had signed the form, he had had second thoughts.  He had spoken to his mother and they had agreed that should try to get their names taken off.  Mr Nicol tried to get this done and made some enquiries of the Registrar but it was unsuccessful.  He said that he had not spoken to the plaintiff and requested him to agree to their names being taken off even though the relationship between the parties was extremely good at the time.  He confirmed that he had written numerous letters on behalf of Total Recycling, mainly in relation to glass recycling but also in relation to an MRF.  He further agreed that he had almost invariably referred to 'we' or 'our business' when writing such letters but said that this was merely to avoid endless repetition of the fact that the business belonged only to the plaintiff.  He had also written in similar terms to, for example, his own advocate, Advocate Fiott referring to the 'future of our recycling business'.

83.      As to the Property he confirmed that no assurances were given by him or, as far as he was aware, by his mother save that Total Recycling could occupy the ground floor rent free for the limited purpose of stripping the JEC cable.  He accepted that Total Recycling was put down as the applicant in the planning application but said that he genuinely believed that the application had to be in the name of Total Recycling because it was going to occupy the ground floor of the proposed building.

84.      He agreed with his mother that the plaintiff had done very little in relation to the building.  He agreed that the tenders were sent out by Mr Bate in the name of Total Recycling but said that it was made very clear to Mr Bate shortly afterwards that this was incorrect and that they ought to be changed.  However Mr Bate said that it was not worthwhile to do this.

85.      Despite the concern which they had expressed about the tenders being in the name of Total Recycling, Mr Nicol accepted that he and his mother had adopted a rather different stance when faced with being sued by Regals, who had been successful on one of the tenders.  When Regals sued the defendant and Mr Nicol, Mr Nicol sought to argue that Regals had sued the wrong people and should have sued the plaintiff trading as Total Recycling.  He persuaded his lawyers to write letters to this effect.  Eventually the point was dropped -no doubt as being hopeless - and Mr Nicol accepted in evidence that it was not very moral conduct to take this point when he was asserting that the contracts were in fact with him and his mother as owners of the Property.  He also agreed that the assertion in the Answer filed in the Regals action (referred to at para 31) was inconsistent with the position now being taken, namely that the plaintiff was not any form of agent in relation to the construction of the building. 

86.      He said that he had been told by the defendant that the plaintiff had said in May 1999 that he wished to give up the recycling business.  He agreed however that he had continued to write to politicians pressing for the glass recycling contract on 4^th August and 19^th October 1999 but said that this was because it was still an amicable relationship with the plaintiff.

87.      As to the visit to Mr Pirouet on 30^th November, he gave evidence to the same effect as the defendant, namely that the accounts were altered by Mr Pirouet at that meeting by tippexing out his mother's name and replacing it with the plaintiff's.  When the impossibility of this was put to him he accepted that they must have been amended by someone else and that perhaps it was his mother, although he had no knowledge that this was so. 

88.      Mrs Bellee is the defendant's daughter.  She recalled going to her parent's house, Carousel, in early 1994.  The defendant had told Mrs Bellee that she was meeting the plaintiff to see if she could help him in his business.  When Mrs Bellee got to the house the defendant told her that she had agreed to lend the plaintiff money for his business.  Mrs Bellee worked in banking and asked what interest rate she would charge, to which the defendant replied "4%". 

89.      Mr Buckley did not give evidence but his witness statement was admitted by agreement.  He was the person at Healey & Baker who was responsible for the letting of the ground floor of the Property in 1999 and for the negotiations with Brunel and Pentagon.  He said that he did not recall precisely the sequence of events, namely whether interest was shown firstly by those parties to rent the ground floor and he was merely passing this information on to the defendant; or whether, prior to September 1999, he had been asked by the defendant and Mr Nicol to seek out interest from one or more tenants for the ground floor.  He had reviewed his file and could not find a note or correspondence which dealt with this matter.  He presumed, although he could not be certain, that it was the former situation which applied. 

90.      Mr Pirouet stated that he would have written the letter of 11^th December 1996 on the basis of his understanding from the defendant.  He had forgotten about the conversation and the letter by the time he sent out the draft accounts three years later in March 1999.  He did not accept that he had altered the accounts on 30^th November 1999.

91.      Finally, we heard evidence from Mr Malcolm Taylor, Mr Adrian Pett and Mr Stephen Regal on certain matters in relation to the building of the Property.  We do not think that their evidence takes us any further. 

The law of partnership

92.      We must first decide what in fact the plaintiff and defendant agreed to do.  Having done so, we must then determine whether that agreement amounts to one of partnership or something else (e.g. loan).  In this respect it does not matter whether the parties used a particular label to describe their relationship.  As Lord Templeman put it in Street v Mountford [1985] 2 All ER 289 at 294:-

"Both parties enjoyed freedom to contract or not to contract and both parties exercised that freedom by contracting on the terms set forth in the written agreement and on no other terms.  But the consequences in law of the agreement, once concluded, can only be determined by consideration of the effect of the agreement.  If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they have only created a licence.  The manufacture of a five-pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade."

93.      We must therefore consider the constituent elements of a partnership.  These were helpfully reviewed by Bailhache B in the recent case of Bennett v Lincoln [2005] JLR 125.  The Court approved Pothier's definition of a 'contrat de société' (Coûtume d'Orléans; Traité du Contrat de Société) (1827 Ed) (para1 at 443):-

"Le Contrat de Société est un contrat, par lequel deux ou plusieurs personnes mettent ou s'obligent de mettre en commun quelque chose, pour faire en commun un profit honnête, dont ils s'obligent réciproquement de se rendre compte."

The Court went on to approve the four characteristics which Pothier states are essential to a partnership as follows (in translation):-

"(i)    that each of the parties brings or obliges itself to bring something to the arrangement;

(ii)       that the arrangement is established for the common benefit of each of the parties;

(iii)      that the parties propose, by the arrangement, to make a gain or profit in which each of the contracting parties can hope to have a share of what it has brought to the arrangement; and

(iv)      that the business which is the object of the arrangement and for which the contracting parties entered into the arrangement should be something lawful and that the profit which they propose to withdraw should be an honest profit."

Decision

94.      For convenience we are going to give our conclusions separately in relation to the business and the Property.  We are therefore also going to give particular reasons under one or other of those headings.  But that is for reasons of presentation.  When deciding which evidence to accept, we have considered the totality of the evidence.  Thus, to give an example, some of the deficiencies in relation to the evidence of the defendant and Mr Nicol in relation to the Property have also played a part in our assessment of their evidence in relation to the business.  We have taken the evidence of each witness as a whole in deciding whose evidence we accept and whose we do not. 

(i)      The business

95.      The evidence in relation to the business was somewhat confused.  This is often the case where there are arrangements, which have not been formalised, between parties who trust each other. So, for example, the bank accounts suggest that the defendant was sole proprietor; the registration of the business name of Total Skip Services suggests that the plaintiff, the defendant and Mr Nicol were partners; the social security forms and the plaintiff's income tax returns suggest that he was merely an employee.  None of the parties suggest that any of these scenarios is accurate. Either the business was owned by the plaintiff or it was a partnership between the plaintiff and the defendant. 

96.      However, we have come to the clear conclusion that the agreement between the parties was as described by the plaintiff.  In other words the defendant would contribute capital, beginning with £25,000 (in the first year), the plaintiff would contribute his labour and would restrict his drawings to £100 per week until the defendant was repaid her capital; and thereafter the profits would be shared 60:40% in the plaintiff's favour.  We also find that, as stated by the plaintiff, it was agreed that, if a contract were obtained for glass recycling or for an MRF, a company would be formed in which Mr Nicol would also have an interest.  However that never occurred because no such contract was obtained. 

97.      We have had the opportunity of seeing the plaintiff, the defendant and Mr Nicol in the witness box together with other witnesses, and having had the opportunity of seeing and hearing them, we have no hesitation in preferring the evidence of the plaintiff.  Our reasons for this are many but we would summarise some of them as follows:-

(i)        We regard the evidence in relation to the letter written to the Comptroller on 11^th December 1996 by Mr Pirouet as highly significant.  Interestingly the terms of the partnership recorded by Mr Pirouet (e.g. "Mr Cannon draws salary, manual work.  Once business in profit, then they will share") are consistent with the terms of the partnership as alleged by the plaintiff.  Yet the plaintiff issued his order of justice well before seeing Mr Pirouet's notes or the letter of 11^th December.  We regard it as inconceivable that Mr Pirouet misunderstood the position in the way alleged by the defendant.  We are quite satisfied that his letter of 11^th December (written the same day as his meeting with the defendant) accurately recorded what the defendant had told him and that this was consistent with the case on partnership put forward by the plaintiff.  We find therefore that when she saw Mr Pirouet in December 1996, she considered that she was in partnership with the plaintiff and that the terms were essentially those alleged by the plaintiff in these proceedings.

(ii)       The defendant says that, if she had seen the letter at the time, she would immediately have corrected it.  But her assertion in this regard is somewhat negated by the fact that, no doubt as a result of the letter from Mr Pirouet, the Comptroller wrote to the defendant some six months later on 9^th July 1997 confirming his understanding that in 1995 she had commenced a partnership trading as both Total Recycling and Total Skips.  Yet she did not revert to the Comptroller to dispute this assertion. 

(iii)      The fact that the plaintiff believed he was in partnership at the time and has just not thought it up once the relationship broke down is supported by the handwritten note of an official in the Comptroller's department recording the plaintiff as saying in 1998 that he was in partnership (see para 21).

(iv)      We have been driven to the conclusion that the defendant and Mr Nicol lied about the alterations to the draft accounts of Total Recycling sent out by Mr Pirouet on 4^th November 1999.  It is clear that the draft accounts were sent out in the name of Mrs S Nicol t/a Total Recycling.  It is also clear that, shortly after this, the plaintiff issued his order of justice on 25th November 1999 in which he alleged a partnership which included the business and the Property.  One can well understand therefore that the defendant realised immediately the potentially very serious consequences if there were a partnership and if this were held to include the Property.  It was no doubt for that reason that she and Mr Nicol hastened to see Mr Pirouet on 30^th November in order to make it clear that in their opinion the accounts were drawn up wrongly and should have been drawn up in the name of Mr S Cannon t/a total Recycling.  However they both went on to say in their evidence that Mr Pirouet amended the accounts into the name of Mr Cannon by tippexing out the name of Mrs Nicol and replacing it with Mr Cannon.  Mr Pirouet pointed out that he would not have done that.  For a start he would have retyped it and secondly there would have been consequential alterations to the figures in that the amount introduced by the defendant would no longer be capital introduced but would be loan capital.  Furthermore, it is clear beyond doubt that the accounts had already been altered because, on 25^th November 1999, the defendant's advocate had supplied copies of the draft accounts to the plaintiff's advocate and these were in the form where the defendant's name had been tippexed out and replaced by the plaintiff's.  This occurred before the defendant and Mr Nicol went to see Mr Pirouet.  We are driven to the clear conclusion that the alteration was carried out by the defendant and/or Mr Nicol and they were both aware of this.  It is not something which could have been forgotten and they therefore were lying in evidence when they said the changes were effected by Mr Pirouet.  The defendant in particular embellished matters by saying that she recalled Mr Pirouet taking the accounts into an adjoining room to make the alterations.

(v)       Unfortunately, this is not the first occasion on which the defendant and Mr Nicol have shown that they are willing to be untruthful in relation to court proceedings.  In 1999 Regals brought proceedings against them both in respect of work done to the Property.  Despite (on their case) knowing that Total Recycling had no interest in the Property, they instructed their advocate to take the point that Regals had sued the wrong people.  They asserted that Regals should not have sued the defendant and Mr Nicol, but should have sued the plaintiff trading as Total Recycling.  They were able to take this point because the tender documents (wrongly on their case) were drawn up in the name of Total Recycling.  They took the point despite knowing that, if any money was owed to Regals, it was owed by them, not Total Recycling.

(vi)      The defendant's version of events is that she had no proprietary interest in the recycling business and her sole interest was as a lender.  The only agreement was that she and her son would have an interest if a glass recycling contract were obtained at which time a company would be formed and all three of them would have shares.  She was clear (supported by Mr Nicol) that this agreement did not extend to an MRF contract.  This seems highly unlikely.   Total Recycling spent money in obtaining an expert report on an MRF as well as glass recycling and Mr Nicol repeatedly pressed Total Recycling's case for an MRF contract as well as the glass recycling contract.   They agreed that both a glass and MRF contract would require additional capital but would be likely to be extremely profitable.  Yet, on their case, if the States had awarded an MRF contract to Total Recycling, the profits would have gone entirely to the plaintiff.  This contrasts with the plaintiff's case which is that, if either a glass recycling or an MRF contract had been obtained, a company would have been formed and Mr Nicol would have had an interest as well as the plaintiff and the defendant.  We prefer the plaintiff's evidence on this aspect. 

(vii)     The defendant was extremely uncertain as to the shares which would exist if a glass contract were obtained.  Her pleadings suggest 60% in the plaintiff's favour whereas her evidence was that it would be 60% in favour of her son and herself. 

(viii)    The defendant's case in respect of her loans underwent a dramatic change late in the day.  In her pleadings (which were in that form as late as the beginning of the trial) she alleged four different loans in specific sums made on specific dates.  In evidence this all changed.  She alleged a rolling facility beginning with an agreement to provide £25,000 in the first year and thereafter providing such further sums as she agreed to put in.  We find the defendant's assertion that she definitely did not have any form of proprietary interest in the recycling business in the absence of a glass recycling contract somewhat inconsistent with the fact that, in March 1994, at the same time as the Total Recycling name was registered in the sole name of the plaintiff, she attended upon Advocate Fiott to explore the formation of a company under the name of Total Recycling which would be wholly owned by her.  We appreciate that this was never progressed but her actions in this respect seem inconsistent with her assertion that she was merely a lender.

(ix)      We appreciate that, as stated earlier, many of the documents are inconsistent.  Nevertheless we think it surprising that, if the defendant was solely a lender as she says, she agreed to herself and Mr Nicol being described as partners on the registration of the name Total Skip Services and agreed to the letter (written by her) requesting transfer of the registration of the name Total Recycling into the names of all three of them.  We accept that, on any view, Mr Nicol was not a partner and that the request was therefore inaccurate but we regard the actions of the defendant and Mr Nicol as more consistent with a situation where the defendant knew that she was a partner than with a situation where she regarded herself purely as a lender.  Furthermore, we do not believe the defendant and Mr Nicol when they say that they immediately had second thoughts and contacted the Registrar to ask if they could be taken off the registration only to be told that they needed the plaintiff's consent.  On their own admission, neither of them approached the plaintiff to make such a request.  At that stage the relations between them were extremely good and, if the defendant was in truth only a lender as she alleges, there seems no good reason for them not to have requested the plaintiff to register the business name correctly in his sole name as proprietor. 

(x)       Furthermore, we find the defendant's apparent concern about being on the business name registration somewhat inconsistent with her willingness, only a week or two later, to open a bank account at Barclays in her sole name trading as Total Recycling with the box headed 'Partnership' being ticked. 

(xi)      The nature and extent of the activities undertaken by the defendant and, to a lesser extent, Mr Nicol in relation to the business are more consistent with her being a partner than a mere creditor.  Thus she was solely responsible for the financial affairs of the business including settling and paying all invoices and administering the bank accounts which were in her name.  She also instructed Cashback Limited or her own lawyer, Advocate Fiott whenever legal proceedings were required and she felt able to settle the eviction proceedings brought by WEB without reference to the plaintiff.  In this respect it is hard to understand how it was originally pleaded by her in paragraph 40 of her Answer that she learned that the plaintiff had been evicted from the Island Site from a report in the Jersey Evening Post.  It is clear that she was much involved in lobbying States' members for the provision of the Island Site in the first place and also in the eviction proceedings. 

(xii)     The repeated use by Mr Nicol of 'we' and 'our business' and similar expressions in the correspondence shown to us is not of course decisive but we think it is more consistent with an understanding that his mother had a proprietary interest in the business rather than that she was simply a creditor with the business belonging solely to the plaintiff. 

(xiii)    Although, as we have said, the documents show considerable inconsistency, we think it is worth referring to the proposal form for public liability on behalf of Total Recycling for the year 1994.  The defendant admitted that this was in her handwriting and against the name of the proposer (where the form states 'show the full names of all principals or partners and the full trading name') the names of the plaintiff, the defendant and Mr Nicol are included.  It is hard to see why the defendant would have put down her name and that of her son as partners if she was merely a creditor. 

(xiv)    We are not to be taken as finding that the plaintiff has been accurate in every last detail of his evidence.  For example, we find that he is wrong in saying that the original agreement in late 1993 was reached at one meeting.  It is clear from his wife's evidence as well as that of the defendant and Mr Nicol that there was in fact more than one meeting.  Similarly, we accept that some of the documents are consistent with him being a sole trader.  Thus Total Recycling remained registered as a business name in his sole name, the manpower returns (judging by the one we have seen) appear to have been made by him as employer and legal proceedings taken by or against Total Recycling seem to have been taken in his name t/a Total Recycling (although this would follow from the fact of registration of the business name in his sole name).   Nor have we forgotten that, according to the plaintiff's own evidence, the defendant, as well as saying in 1993 that the two of them were going in to business together, also said that the business would be the plaintiff's.  Lay people often say things which may be inconsistent when understood in a strict legal sense but we consider the defendant meant simply that the plaintiff would still remain in operational control of the business.  It was to re-assure him that she was not trying to take it over.  Furthermore the fact that the plaintiff gave this evidence despite the fact that he clearly realised its potentially adverse implication assisted us in judging his credibility.

(xv)     We have asked ourselves whether the defendant's age contributed to the difficulties in which she often found herself in the witness box (e.g. her repeated comment that "It's all a muddle").  But our assessment is that this was not so and that the defendant was and remains a very intelligent and capable woman.   All in all, these matters do not cause us to doubt that the agreement reached by the parties was as described by the plaintiff. 

98.      Furthermore, we find that the agreement reached by the plaintiff and the defendant satisfies the requirements for a partnership described in para 93 above.  The plaintiff contributed his labour (including under-drawing); the defendant contributed capital; they undertook a common enterprise (i.e. recycling, skips etc); and they intended to share the profits once the defendant was repaid.    Accordingly we find that there was a partnership between the plaintiff and the defendant in connection with the business carried on in the name of Total Recycling and Total Skip Services.

(ii)     The Property

99.      We do not accept the defendant's evidence that the only assurance which she ever gave was that Total Recycling would be able to occupy the ground floor of the building rent free for a period of five months.  In our judgment the assurances given went further than that.  Conversely, we do not find that the Property was a partnership asset.  Indeed Mr Gleeson very realistically accepted in his closing submission that the evidence had not been sufficient to establish this.  In his evidence the plaintiff said that, although he believed that he would be entitled to some interest in the Property (and indeed said that he assumed that it might be 60%), he agreed that this was never specified and he never discovered what share he was entitled to because this was only to be resolved after meeting with Advocate Fiott and the parties never had such a meeting.  This is clearly insufficient to found a claim based on contract. 

100.   We find that certain assurances were given by the defendant.   We find that she did say that Total Recycling would be able to have the use of the ground floor 'rent-free for ever'.  We also find that she stated on more than one occasion that the parties now had security for their lives, although we find that, in context, this was a reference to the difficulties over the accommodation which had faced Total Recycling for so long rather than financial security; in other words Total Recycling would have security of accommodation.  Although she may also have made references to the ability of the plaintiff now to buy a house, and the subject of obtaining a mortgage may have come up in this connection, we do not find that anything sufficiently specific was said to give rise a realistic expectation of any interest in the freehold.  In effect we find that the assurances given related to the occupation of the ground floor by Total Recycling rather than to any financial stake which the plaintiff might have in the freehold of the Property.  Indeed the latter would be inherently unlikely given that the defendant and Mr Nicol had come up with the whole of the purchase price, that they alone took on the mortgage and were responsible for its repayments and that the plaintiff had not contributed directly towards the financial cost of the Property. 

101.   We find that, in reliance upon the assurances given as to Total Recycling's occupation of the ground floor, the plaintiff involved himself to a considerable extent in the construction of the building on the Property.  He spent time instructing Mr Bate, he acted as a form of site foreman or site agent in terms of organising and liaising with the various contractors, and he provided labour and worked himself on carrying out various activities on site.  In essence, we accept the evidence of the plaintiff and the witnesses called on his behalf as to the activities which he undertook in relation to the Property. 

102.   Our reasons for preferring the thrust of the plaintiff's evidence to that given by the defendant and Mr Nicol is based upon our overall assessment of their respective evidence but certain particular reasons relating to the Property are worthy of mention:-

(i)        The defendant's pleading and her evidence in chief were to the effect that the assurance was for occupation for five months and that this was only given in late 1998 or early 1999, once she had ascertained from the plaintiff how long it would take him to strip the accumulated JEC cable. 

(ii)       We find this simply not credible.  There is overwhelming evidence that, right from the start in October 1997, it was clearly envisaged by all concerned that Total Recycling would occupy the ground floor for an indefinite period.  Thus:

(a)       The plaintiff telephoned Mr Thorne, the director of planning on 7^th October to enquire what the planning permission position would be if the site were used for waste recycling. 

(b)       Mr Thorne's note of 14^th October 1997 records Mr Nicol as saying that Total Recycling was considering acquiring the Property. 

(c)       The planning application showed Total Recycling as the applicant and gave 'waste recycling and storage' as the proposed use of the Property. 

(d)       The defendant's handwritten letter dated 10^th December 1997 which accompanied the planning application said:-

"We have altered the plans to suit our purpose of recycling".

(e)       Mr Nicol sent a letter on 22^nd January 1998 on Total Recycling notepaper to Mrs Steedman, the planning officer, stating:-

"...... I confirm that we wish to move our existing recycling/waste management operation to the above site". 

He then went on to talk of the requirements of a recycling operation.

(f)        On 11^th February 1998 Mr Nicol wrote again to Mr Thorne emphasising that Total Recycling was under considerable time restraint to move premises and asking the Committee to deal with the matter as soon as possible ....... "as it is an extremely urgent matter for our business".

(g)       We accept Mrs Steedman's evidence that, throughout the planning process, the application was presented as one where Total Recycling would be occupying the ground floor and special requirements (increased height and less parking) were sought on the basis that recycling would be the use applicable to the ground floor.

(h)       In November 1997, in an offer to settle the eviction proceedings brought by WEB in relation to the Island Site, the defendant told the chairman of WEB that Total Recycling had found alternative premises.  This statement achieved its purpose in enabling Total Recycling to stay at the Island Site for sufficient time and can, in context, only have been a reference to the Property. 

(i)        Mr Bate was told that Total Recycling was to occupy the ground floor. 

(j)        Mr Buckley, who was instructed in March 1998 to find tenants for the first and second floor, was told that Total Recycling was to occupy the ground floor.  Consistently with this, the marketing particulars in respect of the Property stated "ground floor - light industrial unit to be occupied by Total Waste Recycling".  It is inconceivable, if the defendant and Mrs Nicol thought that Total Recycling was only going to occupy the ground floor for five months, that they would not have told Mr Buckley that the ground floor would come free shortly and that therefore they would need a tenant for that floor within the foreseeable future.

(k)       We accept the evidence of Mr Kilshaw, Mr Louis, Mr McEvoy and Mr Steel as to what the defendant said to them about Total Recycling's occupation of the new building at the Property. 

(iii)      In cross-examination the defendant was driven to concede that the discussions about the rent free occupation of the ground floor by Total Recycling must have taken place at the time of acquisition of the Property in October 1997.  In our judgment it is highly unlikely that any conversation at this stage would have restricted the proposed occupancy to five months.  There is nothing in any of the material that we have referred to above to suggest that Total Recycling  was to be given only a limited period of occupation.   On the contrary the clear implication was that it was to be on the ground floor indefinitely.  Furthermore it is not apparent that the period of five months could have been ascertained at that stage as being the necessary period for stripping the cable because Total Recycling was continuing to receive a monthly amount of cable for JEC so that the amount was increasing all the time. 

(iv)      Although Mr Nicol conceded in evidence that the involvement of Total Recycling in the planning process had enabled the building to be higher and have fewer parking spaces than would otherwise have been the case, the defendant refused to accept that this was so.  This is wholly inconsistent with the evidence of Mrs Steedman, which we accept. 

(v)       We find Mr Nicol's explanation for the naming of Total Recycling as the applicant on the planning application, namely that the application had to be in Total Recycling's name because it was going to occupy the ground floor of the proposed building, incapable of belief.  On his own admission Mr Nicol had previous experience of property and planning matters.

(vi)      We do not accept the evidence of the defendant and Mr Nicol that, once they discovered that the tenders had been issued in the name of Total Recycling, they sought to have them withdrawn and replaced with tenders in their own name.  This suggestion was never put to Mr Bate and it seems quite inconsistent with their approach to the planning application and to the Regals litigation. 

(vii)     We reject the defendant's dismissive description of the defendant as a 'hod-carrier' in relation to the work which he carried out.  In accepting the evidence of the plaintiff and his witnesses, we are necessarily disbelieving the evidence of the defendant and Mr Nicol to the effect that the plaintiff carried out only minimal work in relation to the building. 

(iii)    Termination of the relationship

103.   We do not accept the evidence of the defendant and Mr Nicol that the plaintiff told the defendant in about May 1999 that he planned to give up recycling.  We have no doubt that, had this been the case, she would immediately have instructed Mr Buckley that the ground floor of the Property would shortly be available for rent and that he should try and find a tenant (particularly given the difficulty there had been in finding a tenant for the first floor).  We find that the defendant did not take any such step.  Furthermore we think it highly unlikely that Mr Nicol would have continued to press politicians on the glass recycling contract in the summer of 1999 if the plaintiff had said in May 1999 that he intended to give up and if (as she claims) the defendant had said back in early 1999 and again in May 1999 that she intended to retire from assisting him.   Nor do we find that the plaintiff had secretly sent the unstripped cable to La Saline Quarry.  We accept his evidence that this was a joint decision taken by the plaintiff and the defendant. 

104.   We find that the defendant and Mr Nicol decided to evict Total Recycling and the defendant decided to terminate her partnership with the plaintiff only once an attractive offer for the leasing of the ground floor of the Property had been made to them in September 1999.  It was a hard-nosed financial decision.  This decision was communicated for the first time to the plaintiff at the meeting held in late September/early October 1999.  It came out of the blue to him.  The decision of the defendant and Mr Nicol effectively brought the business to an end save for the provision of labour which the plaintiff carried forward in the name of Total Labour Services, which he registered in November 1999. 

(iv)    The ability to terminate the partnership

105.   As the Court stated in Bennett, the principles in relation to partnership outlined by Pothier have much in common with English common law.  The partnership agreement in this case had no fixed limit nor was there any specific provision about its termination.  If there were, such provision would of course govern the position on the basis of the maxim 'la convention fait la loi des parties'.  Under English law a partnership at will may be terminated at any time by a single partner provided that he is not acting in bad faith.  According to Pothier (Chapter VIII Part IV), a partnership with no limit of time may be dissolved by any partner subject to two conditions:-

"150     Il faut néanmoins pour cela que deux choses concourent;

1.     que la renonciation à la société soit faite de bonne foi;

2.     qu'elle ne soit pas faite à contre-temps."

In summary in the case of a partnership with no specific limitation of time or provision dealing with termination, any one of the partners may give notice to his co-partners that he no longer wishes to remain in the partnership but it is a prerequisite that such notice must be given in good faith and it is also a prerequisite that the notice should not be given at 'unseasonable time'.  Pothier goes on to explain that the giving of notice to dissolve the partnership in order that the partner giving notice may take for himself some benefit for which, if the partnership were to continue, he would have to account to the partnership would not meet the requirement of good faith and notice would be given at an unseasonable time if, for example, it would be in the common interest of the partnership to defer dissolution. 

106.   The Court is of course not bound to adopt Pothier when ascertaining the customary law of Jersey.  Where the customary law of Jersey on a particular topic has not yet been declared by judicial decision, this Court will often look to some other source for guidance.  In some areas the Court looks first to sources such as Pothier, in others it looks first to the law of England.  But in neither case is it bound to follow the source to which it first looks.  The Court's duty is to declare the law of Jersey and it must do so for a community of the 21^st century.  It is not bound to adopt a rule or principle laid down several centuries ago if it is clearly inappropriate for modern times.

107.   In our judgment there is a considerable question mark as to whether the principle that a partnership of unspecified duration (assuming no specific provision dealing with termination in the agreement) can not be terminated 'at an unseasonable time' is appropriate for modern times.  It is a very vague concept which could give rise to endless argument.  One can imagine almost any partner who does not wish the partnership to be dissolved being able to raise some tenable argument that this is not the appropriate time and it would be better to defer dissolution.  Accordingly we would wish to leave open the question of whether this second limb referred to by Pothier should be adopted as part of the customary law of Jersey, particularly, as it would seem to us that any case where a partner deliberately chose a clearly inappropriate moment to terminate the partnership would be likely to result in his not acting in good faith.  Be that as it may, neither party sought to argue that we should not apply both of Pother's requirements and accordingly we do so in this case.

108.   We find that the defendant did not terminate the partnership in good faith.  As stated in para 37, the partnership was showing a profit in 1999 for the first time and there was therefore a reasonable prospect that the defendant's capital contributions could be repaid so that the plaintiff could begin to receive 60% of the profits.  Furthermore, as we have already stated, we find that the defendant only decided to terminate the partnership once she and Mr Nicol had received an attractive offer for the rental of the ground floor.  In order to accept the offer, they had to evict Total Recycling.  She terminated the partnership (knowing that this would result in the inability of the partnership to repay her) in order to secure a financial advantage for herself at the expense of the partnership.  In our judgment such a termination was not made in good faith.  It was also made at an unseasonable time, so that Pothier's second requirement for valid termination is also not satisfied. 

109.   Although we have found the termination by the defendant to have been made in breach of contract, the fact is that the plaintiff has accepted the wrongful termination in the sense that the recycling and skip business has ceased and the plaintiff is now confined to carrying on business in his own name for the provision of labour.  The partnership has therefore come to an end notwithstanding that the plaintiff could have treated the defendant's purported termination as being of no effect.  His remedy therefore lies in damages for the defendant's breach of contract by wrongfully terminating the partnership.  (See Hamon v Webster [2002] JLR N30).

110.   The question then arises as to the level of damages.  In one sense this is very difficult to ascertain.  The Court has little information about how the business might have developed if it had carried on.  Furthermore, the defendant would have been entitled to terminate the partnership at some other time if she had acted in good faith and if it had not been an unseasonable time.  The partnership having ended, the defendant is entitled to seek a contribution from the plaintiff to the losses which have been incurred and indeed she claims an account in this respect.  Mr Gleeson argues that the defendant took a decision at the time of termination to walk away from her losses, preferring to opt for the rental which she would obtain from the lease of the ground floor.  He argues that she should in effect be held to that decision. 

111.   We find that, in the unusual circumstances of this case, the amount claimed by the defendant is the most accurate measure of the loss suffered by the plaintiff as a result of the defendant's wrongful termination.  If the partnership had carried on and been profitable, the plaintiff could have expected the business to have repaid the defendant in full.  At that stage each would have drawn the agreed share of profits.  He has been denied the opportunity of achieving that state of affairs by reason of the wrongful termination of the defendant.  That is his loss.  We therefore assess his damages as being the amount which, on the taking of an account, he would be found liable to pay to the defendant in respect of her capital contribution and the losses incurred.  The upshot is that the defendant's claim in this respect is netted off against the plaintiff's damages and no sum is payable in either direction.

(v)    Proprietary estoppel

112.   We have found that the plaintiff has no interest in the freehold of the Property.  As an alternative Mr Gleeson submitted that the statements made by the defendant and Mr Nicol amounted to an agreement for a lease or licence of the ground floor.  We do not agree.  There was insufficient certainty in what was said to satisfy the requirements for a contract to enter into a lease or licence.   We therefore turn to consider the question of estoppel.

113.   It was clearly established in Macon v Queree [2001] JLR 80 that the doctrine of proprietary estoppel forms part of the law of Jersey.  Neither counsel sought to argue otherwise and in our judgment Macon was correctly decided.  The general principle was stated as follows at 92:-

"Where one person, A, has acted to his detriment on the faith of a belief, which was known to and encouraged by another person, B, that he either has or is going to be given a right in or over B's property, B cannot insist on his strict legal rights if to do so would be inconsistent with A's belief."

114.   Commissioner Page QC then helpfully set out certain principles which he extracted from the leading case of Gillett v Holt [2000] 2 All ER 289.

"(i)   Although it is customary and convenient to marshal the circumstances of any particular case under the classic headings of assurance, reliance and detriment, the doctrine cannot be treated as being sub-divided into three or four watertight compartments.

(ii)   The fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine.  In the end the Court must look at the matter in the round. 

(iii)   Even an equivocal representation can give rise to a proprietary estoppel. 

(iv)  Detriment is not a narrow or technical concept.  It need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is substantial.  The requirement must be approached as part of a broad enquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances. 

(v)   There must be sufficient causal link between the assurance relied on and the detriment asserted.  The issue of detriment must be judged at the moment when the person who is 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 of unconscionability."

115.   We have no hesitation in finding that the requirements for proprietary estoppel are met in this case.  Assurances were given.  Although they were stated in varying terms the essential element to them was that Total Recycling would be able to have rent free occupation of the ground floor of the Property 'for ever' or 'for life'.  In reliance upon that assurance the plaintiff acted to his detriment.  The detriment consisted inter alia of the time (up to 50%) which he spent as de facto site agent during the construction of the building, the provision of labour and his failure to seek alternative premises at any time after October 1997 when he had been assured of Total Recycling's occupation of the building which was to be constructed.  Indeed, in his closing submission, Mr Michel conceded that, if we found that assurances had been given (which of course he did not concede) he would accept that the plaintiff had acted to his detriment in reliance thereon. 

116.   The question then arises as to what remedy the Court should award to vindicate the equity arising as a result of the estoppel.   Mr Gleeson submitted that where a claimant has established his claim of proprietary estoppel, the basic rule is that the established equity should be satisfied by making good the expectation aroused by the assurances which have been given.  In this respect he referred to two interesting articles: Gardner 'The remedial discretion in proprietary estoppel' (1999) 115 LQR 438 and Cooke 'Estoppel and the protection of expectations' (1997) 17 LS 258. 

117.   Those two articles were considered by the English Court of Appeal in Jennings v Rice [2002] EWCA Civ 159.  The court rejected the proposition argued for by Mr Gleeson.  Thus, having reviewed a number of authorities, Aldous LJ summarised the position as follows at para 36:-

"36    Both the result and the reasoning of the judgment in Campbell's case are inconsistent with Mr Warner's submission [which was to the same effect as Mr Gleeson's].  There is a clear line of authority from at least  Crabb's case to the present day which establishes that once the elements of proprietary estoppel are established an equity arises.  The value of that equity will depend upon all the circumstances including the expectation and the detriment.  The task of the court is to do justice.  The most essential requirement is that there must be proportionality between the expectation and the detriment.

37    Mr Warner warned against the conclusion I have reached.  He submitted that it led to uncertainty and that the appropriate course was to satisfy the expectation.  I accept that the flexible approach adopted in the past may mean that there is room for what has been referred to as a judicial discretion, but the rigidity of the approach advocated by Mr Warner can lead to injustice which could not form the basis of an equitable result.  ......."

118.   The Judgment of Robert Walker LJ was to like effect.  Having referred to the two articles which we have mentioned, he posed the issue which faced the court as follows at para 42:-

"........ both [the articles] are concerned with whether the fundamental aim of this form of estoppel is to fulfil the claimant's expectations, or to compensate him for his detrimental reliance on the defendant's non-contractual assurances, or is some intermediate objective; and (following on from the identification of the correct principle) the nature of the discretion which the court exercises in granting a remedy to the claimant.  The articles amply demonstrate that the range of English authorities provides some support for both theories and for a variety of intermediate positions; and the recent Australian authority (especially the decision of the High Court in Commonwealth of Australia v Vermayen (1990) 170 CLR 394) has moved in favour of the reliance loss theory."

The judgment repays reading in full.  In passing Robert Walker LJ comments that, if the claimant's expectations are uncertain (as will be the case with many honest claimants) then their specific vindication cannot be the appropriate test (para 47) and that it is no coincidence that the statements of principle refer to satisfying the equity (rather than satisfying or vindicating the claimant's expectations) and he summarised his conclusion as follows at para 50:-

"To recapitulate: there is a category of case in which the benefactor and 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."

He concluded by saying at para 56 that the essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result and a disproportionate remedy cannot be the right way of going about that.

119.   We respectfully agree with the views expressed by the Court of Appeal in Jennings.  The Court has a discretion as to how to satisfy the equity which arises.  As Robert Walker LJ said in Gillett at 311:-

"Since Mr Gillett has established his claim to equitable relief, this court must decide what is the most appropriate form for the relief to take.  The aim is ...... to 'look at the circumstances in each case to decide in what way the equity can be satisfied'.   The court approaches this task in a cautious way, in order to achieve what Scarman LJ (in Crabb v Arun DC [1975] 3 All ER 865 at 880, [1976] Ch 179 at 198) called 'the minimum equity to do justice to the plaintiff'.  The wide range of possible relief appears from Snell's Equity (30^th Edition, 1999 (pp 641-643)."

120.   We turn to apply these principles to the present case.  The assurances were indeed somewhat uncertain.  We have already found that they could not realistically give rise to any expectation of an interest in the freehold.  What expectation did they give rise to in respect of occupation?  Clearly the plaintiff could not have seriously believed that Total Recycling could occupy the ground floor rent free 'for ever'.  That was a meaningless assurance.  Similarly, in the context of a partnership carrying on business, the reference to 'for life' cannot reasonably have been understood literally.  As we have already seen, a partner can terminate a partnership at any time provided he or she acts in good faith and it is not an unseasonable time.  The plaintiff cannot have expected Total Recycling necessarily to go on for the whole of his life; it could have been lawfully terminated by either partner at any time subject to the matters we have referred to.   The assurances have to be understood in the context of a commercial enterprise rather than a personal occupation of residential premises.  The assurances also have to be considered in the context of the relief and exhilaration of both parties, at the time that the assurances were given, that the pressing accommodation problem had finally been overcome.  In our judgment the expectation aroused by the assurances was for rent free occupation for a reasonably lengthy but unspecified period. 

121.   Furthermore, as the authorities make clear, we must have regard to the level of detriment.  The plaintiff undoubtedly suffered detriment by relying on the assurances, in that he spent much time in 1998 and 1999 at the site and he also did not look for alternative premises although, given the difficulties which had been experienced in the past, there can be no certainty that he would have found any premises even if he had looked for them.  In addition, as the Court has said, the matter has to be looked at in the round.  Mr Michel made the point that in many respects the defendant has already been the loser in this case.  She is the one who has lost £90,000 and she and her son are the only people who have contributed financially to the Property.  The defendant also carried out unpaid work in administering the financial side of the business.  Conversely it could be said that the plaintiff also lost by drawing wages which were about £150 to £200 p.w. less than his labourers were being paid.

122.   A further question relates to the manner in which the equity could be vindicated.  The promise was for rent free occupation by Total Recycling.  That cannot now take place.  Total Recycling no longer carries on business and in any event the premises are let commercially.  The remedy therefore has to be a monetary one.  How is this to be measured?  The rent free occupation, if it had occurred, would simply have been a benefit to Total Recycling in terms of a lack of an expense.  But, given that we cannot now order a period of rent free occupation, the only sensible way in which to vindicate the plaintiff's equity is to award him a monetary sum based on the rental value of the premises.  Indeed both counsel ultimately accepted this in their closing submissions. 

123.   We think further that we should take a figure based on 60% of the rental value because that is the share of the profits of Total Recycling which would have accrued to the plaintiff after the defendant had been repaid.  We appreciate that that eventuality had not yet occurred at the time of the revocation of the assurance but we think that fairness and equity dictate that we should compensate the plaintiff on the basis that that situation had occurred and that he was therefore entitled to 60%. 

124.   The exact rental currently paid for the ground floor is not easy to calculate because the ground floor has historically been let in conjunction with the first floor.  The original rental for the two floors in November 1999 was £58,000 per annum.  Since then, pursuant to the nine-year lease granted to Pentagon, the rental has been increased in accordance with the Cost of Living Index and it was £65,871 in mid-2005 with a further increase due in December 2005.   However, as sometimes happens, it would appear that a particular rental based on the Cost of Living increase has outstripped the market rental because, according to the report from Bull & Co, obtained by the plaintiff (which the defendant did not dispute), the market rental value as at August 2005 was £33,408 p.a. in respect of the ground floor and £26,990 in respect of the first floor making a total of £60,398 p.a.  In our judgment we should vindicate the equity by awarding the plaintiff a multiple of 60% of £33,408 i.e. £20,045. 

125.   The question then is, how many years would be a fair reflection of the equity which has arisen as a result of the estoppel?  We repeat that the award has to be made in the context of rent free occupation by a partnership carrying on a business.  The assurances were given in the context where either party could have terminated the partnership lawfully at an appropriate time or where the parties might have agreed that it was no longer viable to carry on the business.  It is noteworthy that the business had been unsuccessful in obtaining any contract from the States.  Taking the matter in the round and having regard to the need for the remedy not to be disproportionate to the detriment, we think that an award based on a notional three years' occupation would be appropriate. 

126.   In the circumstances we therefore award the sum of £60,135.  We note that, although the rental figure we have taken is the current market rental, that figure has not changed materially from the rental figure as at November 1999 (based on the combined figure for the ground and first floor i.e. £60,398 compared with £58,000).  In the circumstances, the plaintiff having been kept out of his money during the course of the proceedings, we think it right to award interest at the court rate since the date on which the order of justice was issued.

127.   We should add that the plaintiff only seeks relief against the defendant notwithstanding that the Property is owned by the defendant and Mr Nicol jointly.  We consider that each was an agent for the other in respect of the assurances given and accordingly, had it been necessary, we would have made an award against both of them.  But, in view of the fact that the plaintiff brings no claim against Mr Nicol, the point does not arise. 

Authorities

Street v Mountford [1985] 2 All ER 289.

Bennett v Lincoln [2005] JLR 125. 

Coûtume d'Orléans; Traité du Contrat de Société (1827 Ed).

Hamon v Webster [2002] JLR N30.

Macon v Queree [2001] JLR 80.

Gillett v Holt [2000] 2 All ER 289.

Gardner 'The remedial discretion in proprietary estoppel' (1999) 115 LQR 438.

Cooke 'Estoppel and the protection of expectations' (1997) 17 LS 258. 

Jennings v Rice [2002] EWCA Civ 159.