The claimant owned a public house. It set out with the defendant to to acquire the premises or to take a lease of them. The defendant went into occupation, and carried out works. Negotiations continued, but broke down over the form of protection to be given to the claimant’s rights as a minority shareholder in the joint venture company. When the claimant demanded possession, the defendant raised the defence of proprietary estoppel.
Held: ‘Mr Fetherstonhaugh did not dispute that in appropriate circumstances proprietary estoppel could arise. He submitted that, on the evidence and the findings of fact made by the judge, it did not arise in this case. I believe he is right. It is accepted that the appellants expended money and time on the premises. Thus the pertinent question to ask is – what was the expectation that the appellants were allowed or encouraged by the respondent to assume? The appellants’ answer to that question was an expectation that they would be able to occupy and trade from the premises. The Respondent says that it was an expectation that the negotiations would lead to the joint venture company occupying and trading from the premises or it would be purchased if the parties could agree terms. That in fact was the conclusion of the judge. He held that the respondents did not lead the appellants to believe that they would be granted a lease. They did however allow the appellants to expend money and time in the expectation that agreement would soon be reached on the precise terms of the joint venture or after November the premises would be purchased on terms to be agreed. There was no expectation that the appellants could remain if the negotiations for a joint venture failed.
I believe you can test that conclusion by asking – what were the terms upon which the appellants believed that they were entitled to remain and manage the premises? There was no agreement. That was decided by the judge who rejected the appellants’ evidence. The answer, I believe must be ‘terms to be agreed’. Those terms were never agreed.
The case for proprietary estoppel failed when the judge rejected the appellants’ case that there was an agreement between the parties. If there was no agreement then the only expectation that could arise was an expectation that negotiations would be concluded as anticipated. That being so, there could not have been an expectation, which arose due to any action or inaction of the respondent, that the appellants could remain if the negotiations were not satisfactorily concluded.’
Judges:
Aldous LJ, Stuart-Smith LJ
Citations:
[1996] EWCA Civ 1060, (1996) 75 P and CR 447
Jurisdiction:
England and Wales
Cited by:
Cited – Parker v Parker ChD 24-Jul-2003
Lord Macclesfield claimed a right to occupy a castle. The owners claimed that he had only a mere tenancy at will. The exact rooms in the castle which had been occupied had varied over time.
Held: The applicant was entitled to reasonable . .
Cited – Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd ChD 9-Nov-2004
The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally . .
Mentioned – Cobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
Cited – Yeoman’s Row Management Ltd and Another v Cobbe HL 30-Jul-2008
The parties agreed in principle for the sale of land with potential development value. Considerable sums were spent, and permission achieved, but the owner then sought to renegotiate the deal.
Held: The appeal succeeded in part. The finding . .
Lists of cited by and citing cases may be incomplete.
Estoppel
Updated: 03 November 2022; Ref: scu.140927