Blue Haven Enterprises Ltd v. Tully & Anor (Jamaica )  UKPC 17 (21 February 2006)
Blue Haven Enterprises Limited Appellant
(1) Dulcie Ermine Tully
(2) Eric Clive Robinson Respondents
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REASONS FOR DECISION OF THE LORDS OF THE
JUDICIAL COMMITTEE OF THE PRIVY COUNCIL, OF THE
21st February 2006, Delivered the 29th March 2006
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Lord Nicholls of Birkenhead
Lord Hope of Craighead
Lord Scott of Foscote
Lord Brown of Eaton-under-Heywood
"Dr White paid the purchase price under the  contract and was put into possession of the land by letter dated 29 September 1988…"
The "letter" was signed by Mr Fraser, Mrs Tully's attorney, and was expressed to certify that Dr White was "entitled as from the date hereof to possession …" of the estate. The document, and Dr White's entry into possession, predated the grant by Gordon J of the injunction. Their Lordships infer that by 29 September 1988 Dr White had paid 40 per cent of the purchase price. He was under no obligation to pay more than that until completion and there is no evidence or reason to believe that he did so.
"… the Defendant [Mrs Tully] has entered into a contract to sell the land … and the absence of prosecution of the suit is impeding the said sale."
This was nearly two months before Dr White took possession and it is a reasonable inference that the contents of the affidavit came to Mr Robinson's attention at a time before Dr White had gone into possession of the estate. The information that Mrs Tully had entered into a contract to sell the estate to someone is probably the reason why the injunction granted by Gordon J on 11 January 1989 took the form that it did.
"[Mr Robinson] visited the property where he observed that someone had just begun planting coffee. He wanted to stop anyone from planting coffee on the land. He saw one Mr Dillon on the property whom he asked who was planting the coffee. Mr Dillon said he did not know. Mr Robinson testified that he told him what they were doing is illegal because there was a court order making him the owner of the land. Mr Dillon refused to give his employer's name and Mr Robinson asked him to give his employers a note. Robinson wrote a note including his telephone number and address and requested him to give the note to his employer. The conversation with Mr Dillon lasted about half an hour. About one month later he returned to the property and spoke to Mr Dillon who said he had delivered the message to Dr White."
Mr Dillon was Dr White's farm manager. Thereafter Mr Robinson visited the property about three times a year until 1994. There is no evidence that he spoke again to Mr Dillon.
"He [Dr White] told her he had heard about Mr Robinson, someone came there saying he had purchase the land."
"… in January 1989, when the planting of coffee had commenced Robinson informed Dillon, Dr White's farm manager, of his ownership of the land and sent a note to Dr White informing him of the situation. This information was related to Dr White."
Their Lordships will return to these findings and their significance but it is convenient to record here that both in the courts below and before the Board it was submitted that there was no admissible evidence that Mr Dillon had given to Dr White the note given to him (Mr Dillon) by Mr Robinson. Mr Robinson's evidence that, on his second visit, Mr Dillon had said that he had given the note to Dr White was not evidence that Mr Dillon had in fact done so. Their Lordships agree that Mr Robinson's evidence was not direct evidence of the truth of Mr Dillon's statement. He (Mr Robinson) could not give evidence about what had passed between Mr Dillon and Dr White. The judge's finding that "This information was related [by Mr Dillon] to Dr White" had to be based upon inferences open to be drawn by the judge from other primary evidence.
"A … he [Dr White] wanted to know how that could be and she told him …
Q He said how could that be?
Q Did she respond?
A Yes, she said nonsense.
Q She said nonsense?
A Right. That he wanted to buy the land and she gave him time and he didn't come up with the money and she gave back his money or something to that effect, and he had no claim on the land. He was disgruntled, she said he was a disgruntled person."
Mrs Tully's explanation of Mr Robinson's advent, referred to in the last passage of the cited transcript, must have been relayed by Dr White to Mrs White. If, as Mrs White's evidence appears to suggest, Dr White's request for an explanation about Mr Robinson and his interest in the estate was not put to Mrs Tully until the 1992 telephone conversation, Dr White's previous disinterest is very puzzling. A prudent person in Dr White's position would surely either have contacted the individual who had claimed to be the owner of the estate or the vendor with a request for an explanation, or, indeed, have done both things. A possible explanation is that Dr White did contact Mrs Tully after receiving from Mr Dillon Mr Robinson's note and that Mrs White was recalling an earlier conversation between Mrs Tully and her husband. In the absence of any relevant findings of fact, however, this puzzle must be left unresolved. But what is certain is that Mr Robinson's note to Dr White elicited no response from Dr White to Mr Robinson and that Mr Robinson's request to be given Dr White's name had been refused by Mr Dillon, Dr White's farm manager.
"… we are unable to proceed to complete your sale at this time, as a prior Purchaser whose contract we had rescinded has obtained a judgment in his favour in respect of the purchase of the subject lands."
This letter constituted the first formal notification by Mrs Tully to Dr White of Mr Robinson's prior contract. It is a notification that she or her attorneys ought to have been given, at latest, promptly after the 11 January 1989 order made by Gordon J.
The present proceedings
"If a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a court of equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own. It considers that, when I saw the mistake into which he had fallen, it was my duty to be active and to state my adverse title; and that it would be dishonest in me to remain wilfully passive on such an occasion, in order afterwards to profit by the mistake which I might have prevented."
And in Willmott v Barber Fry J famously stated the five so-called probanda that a claimant should endeavour to establish. He said, at pp 105–106:
"A man is not to be deprived of his legal rights unless he has acted in such a way at would make it fraudulent for him to set up those rights. What then are the elements or requisites necessary to constitute fraud of that description? In the first place the plaintiff must have made a mistake as to his legal rights. Secondly the plaintiff must have expended some money or must have done some act (not necessarily on the defendant's land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. It he does not know of it he is in the same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff's mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the court to restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this will do."
In both the passage cited from Lord Cranworth's speech and the passage cited from Fry J's judgment, the necessity for showing the defendant to be guilty of unconscionable behaviour clearly appears. Lord Cranworth uses the word "dishonest". Fry J speaks of "fraud". Subsequent case law has reduced the rigidity of Fry J's apparent insistence that each of the five probanda be established to the letter. In Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd (Note) QB 133, 151–152 Oliver J (as he then was) said,
"the more recent cases indicate, in my judgment, that the application of the Ramsden v Dyson … principle – whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial – requires a much broader approach which is directed at ascertaining whether, in particular circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour."
"So far as acquiescence pure and simple is concerned the defendants could not lawfully object to the work and could be under no duty to Taylors to communicate that which they did not know themselves, namely that the non-registration of the option rendered it unenforceable. So far as encouragement is concerned, it is not in my judgment possible fairly to say that the mere presence of the defendants' representative at a site meeting 'encouraged' Taylors in their belief that the option was valid."
Oliver J summed up the situation at p 157:
"Whilst, therefore, it may not seem very admirable for the defendants to avail themselves of a technicality which runs counter to the common assumptions entertained by all the parties to the transaction, that is what the law permits them to do; and I cannot find, in the circumstances of this case, and even given the flexibility of the equitable principles, that Taylors have discharged the burden of showing that it is dishonest or unconscionable for them to do so."
So, absent any acquiescence or encouragement or any other species of representation by the defendants on to which Taylors could fasten, the defendants' behaviour could not be shown to be unconscionable.
"If a party in possession of an estate, knowing that another claims the property, will, with his eyes open, spend money upon it, I know of no case in which it has been held that he can, in the absence of special circumstances, keep the lawful owner out of possession, unless he will re-imburse the party in possession the expenditure he has made. …… I speak, of course, of those cases in which the claim of the party out of possession has been distinctly made. Here Henry Harding made claim to the entirety of the property in question from the commencement of the correspondence I have referred to …. It was said, indeed, that Henry Harding, seeing the expenditure going on, ought in fairness to have reasserted his claim, but that as a question of law I cannot accede to."
Similarly, in the present case, their Lordships do not think that Mr Robinson, who had been told that his note had been delivered to Dr White, needed to have reasserted his claim. The fact that he did not reassert it cannot, in the circumstances of this case, reasonably be described as "dishonest" or "unconscionable".