Wilkie v Redsell

LORD JUSTICE SCHIEMANN: Buxton LJ will deliver the first judgment.

LORD JUSTICE BUXTON: As the judge observed this case is an object lesson in what happens when friends fall out and when legal advice is not sought at a time when complex legal transactions are being entered into.

The case concerns three acres of land at Detling in Kent, which were purchased by the claimant (now respondent) Mr Alfred Lewis Wilkie in 1972 for the sum of some £2,000. Mr Wilkie conducted there a pig farming business. At least in its latter condition the land also contained a number of buildings, many of them derelict. In about 1982 Mr Wilkie discontinued that business and met Mr Redsell, the appellant in this court (defendant in the court below). Although the factual history is in a number of respects obscure or disputed, it does seem possible to say that Mr Redsell used the workshop on the premises for repair of vehicles (it is disputed as to whether or not he paid rent or merely provided services in kind to Mr Wilkie for that purpose). The activity on the site appears to have been conducted in breach of the planning requirements; and for a time Mr Redsell lived on the site in a caravan, again apparently in breach of planning regulations. It is a feature of this case throughout that neither of the protagonists have paid any regard whatsoever to the requirements of planning law or to their responsibilities to the Local Authority or the local community.

In 1988 an agreement was entered into between Mr Wilkie and Mr Redsell. They did not have professional advice and the agreement was not documented. It was a substantial matter of dispute at the trial what the terms of that agreement had been.

Mr Redsell contended that he agreed to buy a substantial and defined part of the land extending to about 90 per cent of it, and described as the red land, for the sum of £30,000. The position taken by Mr Wilkie varied during the litigation but his eventual position was that the agreement was that he and Mr Redsell should "share" the red land, whatever that expression might mean, again for a consideration of £30,000.

It may appear surprising that Mr Redsell was willing to pay £30,000 either for an outright interest or for a share in land which was agreed in the evidence to be only worth some £4,500. His explanation at trial was that he intended to build a house on the land and, by concealing its existence from the planning authorities for a period of four years, obtain de facto planning permission for that building. Thereby the value of the land would be enhanced, a matter that enters into the issues in this appeal at a later stage.

I should, however, perhaps say, though only by way of footnote since the matter was not explored before us, that there was some disposition in the exchanges earlier in these transactions (though not before this court) to assume that once the four years had expired whoever it was who controlled the land would have a more or less free hand in altering or replacing the building without the inhibition of planning permission. That view, if it was held, was a misunderstanding of the requirements of planning law, requirements have most recently been explored in the House of Lords in Sage v Secretary of State [2003] UKHL 22.

The judge found in terms (to which I shall have to return) that the agreement had been as Mr Wilkie claimed for the sharing of the red land - the consideration being the payment of £30,000, as both men alleged.

That was in 1988. Between January and November 1990 Mr Redsell was in prison for offences of handling stolen vehicles, offences apparently committed during his occupation of the land.

Soon after Mr Redsell's release from prison Mr Wilkie pressed for payment under the agreement. The judge found that the position was as set out by him in paragraph 21 of his judgment:

At about the same time Mr Redsell constructed a house on the land, using as its basis a disused pig-sty. How much he is expended in that building and what the amenities of the house were, and indeed are, are all in dispute. As a result of that action Mr Wilkie, as the judge found in paragraph 17 of the judgment, asked for rent in the sum of £60. The judge was not clear whether it was per week or per month. However Mr Redsell said that he could not afford to pay any rent and no rent was ever paid.

The judge's findings as to the arrangement between the two men were set out by him in paragraph 14 of his judgment. He said this:

These present proceedings arose after the two men had fallen out with each other, a situation that appears to have commenced in 1995.

Mr Redsell in 1998 sought to impose a caution on the land to protect his own alleged interest. That is again something to which I shall have to return. As a result of that Mr Wilkie brought these proceedings in which he claims possession of the land. His position is that so far as any contract existed it had been repudiated by reason of non-payment on the part of Mr Redsell.

Mr Redsell counterclaims for the enforcement of an agreement, preferably of the agreement alleged by him, but if not, then of the agreement found by the judge. The judge rejected all the claims on Mr Redsell's part and granted possession to Mr Wilkie. It is Mr Redsell who now appeals to this court.

I should first deal with the complaints made by Mr Redsell about the factual findings of the judge. Although not clearly so stated in the grounds of appeal, these claims sought to attack the judge's conclusion as to the terms of the contract, which I have already cited from paragraph 14 of the judge's judgment. That attack took the form of seeking to demonstrate that the judge was mistaken on some of the separate points on which he found in favour of Mr Wilkie's version; and therefore that his overall conclusion was vulnerable. The judge had said in introducing his conclusion:

Second the judge, having heard witnesses on both sides, including both the protagonists, formed a general view of the veracity of Mr Redsell. He said this, at paragraph 18 of the judgment:

The judge reached this conclusion about the statutory declaration in paragraph 18:

In these various circumstances it is clear to me that it is quite impossible for this court to go behind the findings made by the judge.

Third, and in any event, all of this complaint only goes to the question of whether the agreement was for the transfer of the whole interest in the red land to Mr Redsell, or only that Mr Wilkie and Mr Redsell should share an interest in the red land. For reasons which I shall develop, on neither basis can Mr Redsell obtain relief, as indeed the judge found.

The relief sought in this court by Mr Redsell is set out in section 9 of his grounds of appeal. He seeks the following:

All of the relief seeks a proprietary interest, either as a beneficial owner under a trust or as legal owner. The judge rejected such relief, even on the basis of a contract as found by him for the sharing of the land, on two grounds. First, in order to obtain specific performance Mr Redsell must show he is ready willing and able to complete his side of the contract, by paying the purchase price, as indeed the relief sought by him as just set out asserted that he would do. In truth, however, he has never offered to do so, has not done so now, and there is no evidence that in fact he could have performed that part of the contract. Second, to seek an equitable remedy (as these remedies are) Mr Redsell must come to the court with clean hands.

I deal with those contentions in turn. First, as to completion, the judge found that there had been no initial payment and that Mr Redsell had only paid a small amount later and under pressure. I have already set out the findings the judge made in his paragraph 21 to that effect.

Mr Denman, counsel for Mr Redsell, argues before us first, that there was no evidence that Mr Wilkie did in fact treat the agreement as being at an end; and secondly, that in any event he waived any right to treat the agreement as at an end because of non-payment. He agreed to the small amounts by permitting Mr Redsell to build the house on the red land. There is, with respect, some force in both of those arguments, but they are beside the point so far as the issues in this court are concerned. What Mr Redsell claims is specific performance now by order of the court. He must be able now to provide the counterparty to the conveyance that he wants the court to order. The judge specifically asked him about that and got no satisfactory answer. The judge said this in paragraph 23:

The best that Mr Redsell can do is to say that, if he is granted specific performance, then he expects to be able, because of the enhanced value of the land, to raise funds to meet the balance of the £30,000. I leave aside the question whether £30,000, or some sum considerably enhanced by interest, would now be the right price. Mr Denman argued that there were no terms or expectations in the contract as to when the £30,000 would be paid. I have to observe that that certainly was not the evidence of Mr Wilkie in a passage that I shall quote, who was pressing for payment as early as 1991. But in any event the claim cannot stand. First, the assertion that the money will be available is speculative. There is no evidence to support it and the judge was right to reject it. Second, in any event, the claim was of a bootstraps nature: the court, it is said, should give relief so that Mr Redsell can fulfil what is a precondition to obtaining that relief in the first place.

The inability to complete now, quite apart from the sequential refusal to make any attempt to complete over the 15-year term of the contract, is fatal to any claim for a specific performance. It is also in my view fatal to the alternative way in which the claim is put, in terms of a trust for the benefit of Mr Redsell. First, that is only another way of expressing the substance of the specific performance claim. Second, recognition of a trust would itself be an equitable remedy, which demands that he who seeks equity should do equity, by being ready to perform his part of the bargain on which he relies.

Before the judge Mr Denman sought to resist these conclusions by relying on the building of the house, and the judge's finding that:

This doctrine cannot, however, be used to support the relief that Mr Redsell claims in terms of a proprietary interest. First, Mr Wilkie's evidence was always that he "stood by" only on terms that he will indeed receive his £30,000. That is apparent from a short passage of evidence, in fact drawn to our attention by Mr Denman, when Mr Wilkie was being cross-examined on the first day of the trial. At page 22 of the transcript he gave this answer:

"Standing by" was therefore distinctly on terms. Even if that was not so, in the absence of any evidence of a positive waiver of his contractual rights by Mr Wilkie it would necessarily still be a condition of the relief sought under the doctrine of Ramsden v Dyson, in terms of proprietary interest in the land, that Mr Ramsden would be able to complete.

The other case relied on by Mr Denman is William v Greatrex [1957] 1 WLR 31. The case itself in fact is nothing to do with the issue with which we are concerned because it is a case on laches, a complaint that is not taken in this case against Mr Redsell. It concerned a contract for the sale of building plots and it is the nature of the use of the plots that is of importance. The purchaser went into possession having paid his deposit, started the work, built a house as the contract envisaged, but was then ordered off. Ten years later he sought specific performance of the contract. Paragraph 3 of the headnote reads as follows:

Those considerations suffice to dispose of the relief that is sought before the judge and before us, but the judge also relied on a further ground - lack of clean hands on the part of Mr Redsell.

The judge's findings of fact in relation to that point are not separately expressed and it would have been, I have to say with respect, more helpful to the court if they had been, but I am prepared to assume that he accepted the submissions reported by him in paragraph 18 of the judgment, which I have already read, that Mr Redsell had been evasive about the defence which he offered at the crown court, and further it was to be assumed that he had there sought to distance himself from any ownership of or responsibility for the land on which the various vehicles in respect of which he was prosecuted were to be found. There was nothing in Mr Redsell's evidence or in the submissions in this court to counter that assumption.

It is accepted in this connection that a relevant formulation of the rule is that to be found in the judgment of Scrutton LJ in this court in Moody v Cox [1917] 2 Ch 71. Scrutton LJ said at pages 87-88:

In my judgment this is to a large extent a matter of judgement for the trial judge, as to whether the conduct of the person who seeks the equitable remedy does indeed have an immediate and necessary relation to the equity sued for. In this case the judge did not fall into the trap of thinking that just because Mr Redsell had committed criminal offences that barred him from the relief. But for my part I would think that if the equity sued for is, as it is here, to cause the court to enforce an interest in land; and if the claimant has sworn to another court that he has no such interest in the land; then that latter step may disentitle him from seeking equitable relief to establish a position different from that which he has previously sworn to. The point is not that he has directly misbehaved towards Mr Wilkie, but that he has abused the facilities of the court in relation to the very matter in respect of which he seeks relief. In the circumstances of this case I consider that the judge was entitled to take the view that that in itself disabled Mr Redsell from equitable relief.

Further, the actual decision in Moody v Cox does not help Mr Redsell. The decision was that the fact that the contract sued on had been obtained by bribery did not disentitle a party from obtaining equitable relief under it. But the objection to Mr Redsell's claim was not in relation to the nature of the contract or to the circumstances in which that contract was entered into, but in relation to his own conduct in respect of the claim that he makes under the contract.

I therefore for my part would uphold the judge's view also on the clean hands issue; but as I have emphasised it is not necessary to do so in order to uphold his judgment on other grounds.

There is one further matter. The court was initially attracted to the view that it was unfair that Mr Redsell should lose his possession of the land, leaving behind a house that, however defective it was alleged to be, would enhance the value of the land in the hands of Mr Wilkie, when Mr Wilkie had, as the judge found, stood by and allowed the house to be built. We wondered whether those considerations might lead to the creation of an equity, not in terms of the proprietary interest sought by Mr Redsell, but at least in the nature of the licence to remain of the type broadly envisaged in Ramsden v Dyson. Careful scrutiny of the pleadings and of the submissions before the judge indicated that a plea to that effect had been included in the relief sought, though very much as a fall-back from the main relief. The judge did not refer to this in his judgment, and no complaint was made of his failure to refer to it in the grounds of appeal. We however invited Mr Denman to consider whether he wished to amend his grounds of appeal to bring that argument before this court, and he did indeed make such an application.

Having had the benefit of more mature consideration on the point, and of the submissions of Mr Baldock, we refused the application. We did so not merely on grounds of lateness, but for more substantial reasons. Those are as follows. First, the essence of Ramsden v Dyson is that the court will intervene to impose terms that do justice to both parties. It was conspicuous that the various orders suggested by Mr Denman to accommodate his client on the land made no reference to any payment on his part. A gratuitous licence plainly would not be equitable. Nor would it be an easy task, and certainly not one that this court could undertake, to determine what the proper charge should be for the right to remain in occupation.

Secondly, as Mr Baldock pointed out, although it could be said, and the judge found, that Mr Wilkie "stood by", his evidence already set out was that he stood by in the clear expectation and demand that his £30,000 was to be paid. Therefore in this case also equity could not be done between the parties unless Mr Redsell completed his side of the bargain, particularly bearing in mind that £30,000 was the price he had been prepared to pay for the land on which he was to build a house. Here again I was not attracted to the argument that equity would be served by Mr Redsell being given his rights now and paying for them later, particularly because, if he acquired only a personal licence to remain, his ability to raise finance against his interest would be even more problematical for him than his ability to raise finance against an ownership interest.

Third, even on the basis on which the case was put to him, the judge was sceptical as to whether specific performance was workable. He set out his doubts at paragraph 22 of the judgment. While that view might not necessarily have been correct in relation to a situation where there was to be a pure and clear-cut ownership relationship, it clearly raises very cogent considerations in regard to any sort of licence arrangement: with the need to negotiate a wide range of covenants; continued relations between two men between whom there is plainly a very high degree of friction; and potential problems with regard to land use and the enforcement of planning requirements. In that connection our attention was drawn to the fact that Mr Wilkie was in debt to the local authority in the sum of £14,000 incurred by the local authority when they cleared the land of the debris left by what was alleged to be Mr Redsell's unlawful car braking activities. That is but an illustration of the further problems that might await. There is no reason to think that any arrangement to be made, even if otherwise there was good reason for it, would be anything but unworkable.

Fourth, if, which is not appropriate, we were to investigate the overall justice of the matter, it is far from clear that Mr Wilkie will obtain a windfall so significant as to render it unjust that he should recover possession. We know nothing about the value of the house, save that the judge on the evidence that he had heard thought it of very poor quality. I have already pointed out that assumptions about the latitude granted to the owner of the land through the mere existence of the house with regard to further planning developments is extremely doubtful. What we do know is that Mr Redsell has been in possession of the land for nearly 15 years, paying off only a very small amount of his contract debts and rejecting Mr Wilkie's request for a separate rent in respect of the house. There would, at the very least, have to be a clear, indeed an overwhelming, case against a possession order for such a case to be raised at this very late stage. No such case has been demonstrated, and in my view it would be very unlikely to be demonstrable.

I would therefore dismiss this appeal, both in respect of the matters that were argued before the judge and in respect of the further matter that was gratuitously introduced into it on the initiative of this court.

LORD JUSTICE DYSON: I agree.

LORD JUSTICE SCHIEMANN: I also agree.