Wombwell v James

MR JUSTICE HENDERSON: This is a renewed oral application for permission to appeal from the judgment and orders of Her Honour Judge Walden-Smith sitting in the County Court at Central London in a proprietary estoppel case which she heard on 2 and 3 December 2013. She handed down her reserved judgment on 31 January 2014.

By her subsequent orders of 18 and 25 July 2014, the Judge ordered the defendant, Mrs Evelyn James, to execute a 125 year lease of the upper flat at 60 Upham Park Road, Chiswick, London W4 (which I will call "the property") in favour of the claimant, her daughter Mrs Sheila Wombwell, in order to satisfy the equity which the judge held had arisen from certain assurances given by Mrs James to the claimant at a family meeting in the autumn of 2002, and which Mrs James had repeated on a number of subsequent occasions before the claimant moved into the upper flat in March 2004. Permission to appeal has been refused on paper by Kitchin LJ on 16 March of this year. He also refused the defendant's application for a stay of the orders, apart from a limited stay which he granted until after judgment at today's hearing.

Until two months before the trial, the defendant was represented by solicitors, but on 8 October 2013 she dispensed with their services, and in the circumstances set out by the judge in paragraphs 6 to 10 of her judgment, the defendant neither appeared nor was represented at the trial, having made two unsuccessful applications for it to be adjourned. The judge explained in paragraph 11 of her judgment that she therefore adopted a very cautious approach to the hearing and was alive to "the absolute need for all steps to be taken to ensure a fair trial".

Since the date of the judgment, the defendant has again instructed solicitors and counsel, and I now have the benefit of a skeleton argument on her behalf by Mr Nicholas Isaac and Ms Cecily Crampin, as well as an advocate's statement by them for the purposes of today's hearing pursuant to the relevant practice direction. I have also had the benefit of very helpful oral submissions from Mr Isaac.

A further complicating factor in the management and conduct of the trial is that the claimant, although, as the judge found, she is a highly intelligent woman, has been profoundly deaf since an accident in early childhood, and can only communicate through sign language. She therefore gave her evidence through two BSL interpreters. She has three children, Lewis, Ysabella and Charmaine, who also gave evidence, as did her former husband, Mr Vernon Wombwell, from whom she separated amicably in or before 2002 and subsequently divorced.

The facts as found by the judge are clearly set out in her judgment, and for the purposes of today I can summarise them fairly briefly. The property itself is a semi-detached Victorian building with two floors and an attic, together with a large rear garden. It was bought in January 1971 for the defendant and her late husband, who died in 1981, together with their four children, including George Washington James and the claimant. It appears that George James then converted the attic into a self contained flat in the later 1980s and occupied it for a few years before it was let until the mid 1990s. He then occupied it with his then girlfriend from the mid 1990s to 2002. The judge was satisfied from the evidence she had heard that the roof space was separated from the rest of the house, and that the first floor served both the roof space and the ground floor.

The judge then refers to further passages in the witness statements of the defendant and George James, neither of whom of course gave evidence, from which it appears that the defendant felt intimidated and bullied by her son, that he had failed to carry out conversion works at the property to an acceptable standard, although the defendant had given him £25,000 to do so, and by 2002 she was taking legal proceedings against him and had serious fears for her personal safety.

Meanwhile, the defendant enjoyed a close relationship with the claimant, and the claimant and her family lived at the property until they were given a council tenancy by the Local Authority. As a result of her divorce, the claimant received a net sum of £165,000 from her husband to rehouse herself and the children. Her husband himself bought a flat in Chiswick comprising a first floor and converted loft. It was in Vernon Wombwell's flat that the family meeting took place when the first assurance upon which the claimant relies was given. A full description is given of that meeting and what transpired at it in paragraphs 33 to 35 of the judgment. Having considered all the evidence, the learned judge was satisfied:

The judge then turned to the question of reliance on the representations. She described the building works carried out at the property and paid for by the claimant, involving expenditure which she found to have been in the region of £60,000 to £72,000. The judge also records that the claimant gave up her secure rented accommodation on 21 March 2004. The judge said there was no need for the claimant to do so, but she “did so in order to move into the newly created flat which she had been told was to be hers". Although not mentioned in the judgment, it is also material that on 16 February 2004 the defendant had executed a will which contained a gift of the upper floor flat to the claimant for a term not to exceed 125 years, together with a share of the freehold if her trustees thought fit.

It seems that the defendant then had a change of heart in 2005 and thereafter required the claimant to make payments to her. The judge was satisfied, however, that any payments which the claimant made were the result of pressure exerted by her mother, coupled with a concern that the mortgagee might repossess the property. Against this background, the judge found that the requirements of proprietary estoppel were all satisfied. No criticism is made of her self-direction on the relevant law, in which she referred to the most recent decision of the House of Lords in this area in Thorner v Major [2009] UKHL 18, [2009] 1 WLR 776.

At paragraph 46, the judge turned to the question of reliance on the representation. She directed herself, again correctly, that the claimant needed to establish both actual reliance and that it had been reasonable to rely on the representation. The judge then dealt with actual reliance in paragraph 47. No challenge is made to her findings there, which seem to me obviously correct.

At the beginning of paragraph 48, the judge then said that the claimant's understanding of what was being represented to her was a reasonable one in all the circumstances of the case. The judge recorded that the defendant had previously sought to obtain her daughter's agreement to buy the flat, and she had already expressed the desire to have her daughter and her family living in the property with her. At the time, it made absolute sense for the defendant to want the claimant to come and invest money into the property so as to have her own home. The defendant benefited, said the judge, both from having the works done and thereby having a home she could comfortably live in -- she had by that time been without a proper working kitchen for a number of years -- and from having her family around her. The claimant, for her part,benefited from having a flat for herself and her family.

The judge went on in paragraph 49 to say:

"It would plainly be detrimental to the claimant, having reasonably relied upon the defendant's representation that she was to get the upstairs flat, that the defendant could then rely upon her strict legal rights so as to deny the claimant's proprietary interest.”

I pause at this point, because the first ground of appeal is that the learned judge failed to consider and make a reasoned finding on whether the claimant's actual reliance was reasonable. It is said that this is a different question from whether her understanding of the representation was a reasonable one, and that the latter is the only question which the judge expressly addressed. It is submitted that the question of whether reliance is reasonable is an objective one, depending on all the facts and circumstances, and that those circumstances include the vulnerability of the defendant, her old age, and her dependence on the claimant in circumstances which might in a different context have been sufficient to give rise to a presumption of undue influence.

These submissions were attractively advanced and expanded on by Mr Isaac, but in the end I am not satisfied that they offer any reasonable prospect of success on an appeal. If I read the judgment as a whole, it seems clear to me that the judge had all the evidence well in mind, and that it amply justified the finding of reasonable reliance which she did expressly make in paragraph 49 of her judgment. It is true that paragraph 48 began by addressing the rather different question of whether her understanding of the representation was a reasonable one, but much of the rest of that paragraph seems to me just as relevant to the question of reasonable reliance, if not more so, including in particular the fact that the defendant benefited both from having the works done and from having her family around her living in the property.

It might have been better, with the benefit of hindsight, if the judge had set out the factors upon which she relied in drawing her conclusion rather more fully than she did, but in the circumstances I am not persuaded that any clear error can be discerned, either in her approach or in the conclusion which she drew on that point.

The judge went on to consider the issue of detriment, and having satisfied herself it was clearly the case that there was detriment to the claimant, she asked herself how the equity should be satisfied. She then said she had no difficulty in deciding that the minimum required to satisfy it would be the grant of a long leasehold interest. She said in paragraph 52 that the defendant had represented that her daughter was to be given the upper flat, and the judge said that is how flats are normally carved out of freeholds. The judge acknowledged that this would give the claimant more in financial terms than a recovery of her financial investment. On the other hand, that was what the defendant had herself wanted and that was what she had promised to the claimant.

The judge went on in paragraph 53 to consider the terms of the relevant lease. It was to be for 125 years at a ground rent of £150 per annum, doubling every 25 years, and the tenant was to pay 50 per cent of all the costs of repairs to the structure or exterior of the property, together with any shared services, costs and fees. The other covenants were to be of a standard nature. Those terms were reflected and refined in the subsequent orders that were made. I was told today that the 125 year term has now been ordered by the court to begin from the date when the representation was made, that is to say about ten years ago, rather than from any later date.

This is the focus of the second ground of appeal. It is said that the judge failed to carry out any proper analysis, or to give any reasoning for her conclusion beyond her reference to the claimant getting more than her investment back, which in itself suggests that it may not have been the minimum needed to satisfy the equity. The judge is criticised for not taking other relevant circumstances expressly into account, as set out in the grounds of appeal at page 12 of the bundle. Those circumstances include: the occupation by the claimant and her children of the upper flat for over nine years, down to the date of trial; the fact that the flat was the defendant's sole substantial asset; the terms of the will, to which I have already referred; and the fact, which was apparently established on the evidence before the judge, that George James had acquired a 27 per cent beneficial interest in the property in 2004 as a result of legal proceedings which he had himself brought against his mother. It is also questioned rhetorically why 125 years should have been chosen rather than, say, 95, 50, or 25 years.

Again, I think it would have been preferable if the learned judge had expanded on her reasoning in relation to this part of the case, but I am ultimately not persuaded that the appeal on this ground would offer a real prospect of success. It seems to me that this is in substance the kind of case where the relevant assurance was clear in its terms, and close to being contractual in nature. In effect, it was a promised gift of the upper flat in return for doing the necessary works of repair and conversion.

That way of looking at it is to my mind strongly supported by the terms of the will, which of course would only speak from death, and which give a clear indication of what the defendant's own wishes were at the time when her daughter moved into the property. The will itself was in the usual way revocable, there being no suggestion of any testamentary contract having been made, but importantly it does show how the defendant at the relevant time thought that her daughter should be benefited in return for the works which she had carried out.

In that kind of a case, I find the observations of Robert Walker LJ, as he then was, in Jennings v Rice [2002] EWCA 159, [2003] 1 P & CR 100, at 112 to 113 to be apposite. It is true, of course, that the judge had a degree of flexibility and discretion as to points of detail, including the precise duration of the lease and the detailed terms, but on the material before me I am unable to see any solid basis for contending that she erred in principle. Again, I think I must credit her with having in mind all the relevant evidence which she had heard over the two days of the trial in reaching the conclusion which she did.

In conclusion, therefore, I agree with Kitchin LJ that this is not a case where an appeal would offer any reasonable prospect of success, despite the attractive and sustained arguments put before me by counsel, both in their written submissions and orally this morning.

The third ground of appeal, relating to a constructive trust, I can pass over, because counsel accept that in the circumstances it adds nothing to the matters which I have already discussed.

It follows that permission to appeal will be refused and a further stay will also be refused.