Fielden v hristie -Miller & Ors

This is a further round in the dispute over the succession to the Swyncombe Estate in Oxfordshire.

The Estate is in two parts. One part is held upon the trusts established by a settlement dated 18 February 1967 Settlement (“the 1967 Settlement”) executed by Charles Wakefield Christie-Miller (“Charles”). The other part is held upon the trusts declared by the Will (“the Will trusts”) dated 15 March 1998 of William John Christie-Miller (“John”) who died on 3 May 1999. John was the only son of Charles. He had no children but left a widow, Kathleen, who died on 20 December 2004.

The Swyncombe Estate consists mostly of land in and around Swyncombe village. It seems that, as the years passed, Charles became concerned about the future of the Estate, in particular the likely impact on it of taxation on his death. (He died in 1976.) A strategy to mitigate the effects of tax was devised whereby the Estate was split into two, to be held in different ownerships, so as to spread and lessen the likely tax. The strategy was carried into effect and resulted in Charles transferring one part of the Estate, then known as the Swyncombe Downs Estate, to John. This was in 1958. In 1967, the remaining part was settled so giving rise to the 1967 Settlement.

It appears that, despite the split ownership, the two parts of the Estate were run as one, a circumstance facilitated by the fact that, as I was told, although no more than discretionary objects under the trust of the 1967 Settlement, John and, after his death, Kathleen were in receipt of the income of the Settlement, effectively as if appointments for life in their favour had been executed.

By the time of Kathleen’s death in 2004, consideration was being given to what was to happen to the Estate, both that part which was subject to the 1967 Settlement and that part now held subject to the Will trusts. Under both trusts, the respective trustees have extensive powers of appointment. The principal contenders for the succession were Samuel Fielden (“Sam”) and Stephen Christie-Miller (“Stephen”). Sam is a grandson of Charles, his mother being one of Charles’s four daughters. He is therefore a nephew of John. Stephen is more remotely related: he is a great-nephew of Charles, his grandfather Geoffrey Christie-Miller being one of Charles’s brothers.

By early 2005 the Settlement trustees had resolved to grant Sam interests in assets subject to the 1967 Settlement. The details of this do not for present purposes matter. It is sufficient to say that deeds giving effect to this were executed in due course. Excluded from these deeds was Home Farmhouse, a property subject to the 1967 Settlement, in which Stephen and his family had resided since April 1996. In March 2007 the Will trustees purported to exercise a power of appointment conferred by the Will trust whereby, subject to certain trusts declared by the Will in favour of Stephen, the Will fund and its income should thenceforth be held for Sam absolutely. The terms of that deed of appointment (“the 20 March deed of appointment”) became a matter of controversy and resulted in the launching by Sam in August 2013 of proceedings against Stephen and former and current trustees of the Will trusts. Stephen defends those proceedings and brings a counterclaim - the part 20 claim – against the Settlement trustees in which, relying on a proprietary estoppel, he asserts an interest in Home Farmhouse, where he and his family continue to live. As I have mentioned, Home Farmhouse is an asset of the 1967 Settlement.

On 22 January 2015, I delivered judgment on an application dated 19 May 2014 brought by the Settlement trustees to strike out Stephen’s part 20 claim. Two grounds were advanced. The first was that the representations upon which the estoppel was based had to be representations made by or on behalf of all of the Settlement trustees if they were to bind them. It was said that Stephen’s statement of case, even read with his reply to the Settlement trustees’ defence, did not sufficiently allege that the representations or assurances relied upon were made by or on behalf of them all. This requirement was referred to as “the unanimity principle”. Stephen contended that the principle did not apply to a claim alleging proprietary estoppel. I ruled against him on this and upheld the trustees’ objection. The second ground involved the so-called non-fettering principle: the principle that trustees cannot fetter the exercise at a future date of a discretion possessed by them as such trustees. The Settlement trustees argued that the estoppel was based on a representation concerning their intention as to the future exercise of their powers under the 1967 Settlement and that accordingly they could not and cannot be prevented from freely exercising that discretion (whether by estoppel or otherwise), with the result that Stephen’s claim was bound to fail. I was not willing to strike the statement of case on that ground. It seemed to me that the non-fettering principle did not necessarily operate to defeat Stephen’s equity if the ingredients of the estoppel which he was asserting were otherwise established. At all events, I was not willing to go so far as to strike out his statement of case at this stage on what seemed to me to be a novel point in an area of developing jurisprudence given the court’s reluctance to decide novel points of law on assumptions of fact rather than on actual findings.

All of this, including the background, is set out at much greater length in the judgment that I delivered.

The matter now comes back to me on a separate application by Stephen, issued on 3 March 2015 (in place of an earlier application dated 24 October 2014), for permission to amend his part 20 claim in the terms of the draft attached to the application. That application had been before me on the previous occasion but time did not allow the amendment application to be heard and, in any event, it seemed sensible for Stephen to take into account what I said on that occasion in the precise formulation of the amendments which he was seeking permission to make.

The proposed amended counterclaim – as the part 20 claim is described – has been added to, and no part of it deleted, in the interval that has elapsed since I gave judgment. The resulting pleading, I regret to say, leaves much to be desired. In Tchenguiz v Grant Thornton UK LLP [2015] EWHC 405 (Comm) Leggatt J said this (at [1]):

“Statements of case must be concise. They must plead only material facts, meaning those necessary for the purpose of formulating a cause of action or defence, and no background facts or evidence. Still less should they contain arguments, reasons or rhetoric. These basic rules were developed long ago and have stood the test of time because they serve the vital purpose of identifying the matters which each party will need to prove by evidence at trial.”

Those requirements are well established, well known and of universal application. It is unfortunate that in a number of respects Stephen’s counterclaim fails to measure up to them. Thus, the pleading is excessive in length, difficult to comprehend and not as logically ordered as it should be. It contains matters which are more in the nature of background facts or evidence than necessary averments. There are also paragraphs which are in the nature of argument.

I give some instances. Paragraph 7, the first paragraph of the counterclaim, repeats the whole of Stephen’s defence. That defence runs to 50 pages. Most of it is concerned with Stephen’s case in relation to Sam’s claim concerning the 20 March deed of appointment. The proposed amendments (they are exclusively concerned with Stephen’s estoppel claim against the Settlement trustees) are, it would seem, in amplification of paragraphs 10 and 11 of that defence. Together with the new additions made since I gave judgment on 22 January, the proposed amendments run to some 22 pages. They are numbered 11A to 11N. Paragraph 11A does not bode well: it states that Stephen refers to his reply to the defence to counterclaim of the Settlement trustees “and, in particular, paragraphs 4.1.1 – 4.1.3, 4.5.1 – 4.8, 4.10.1 – 4.10.4, 4.13.2 – 4.13.8, and 4.19 and, “so far as is necessary, incorporates the same as part of this amended counterclaim …”. The reader immediately asks himself: which of those many paragraphs is it “necessary” to incorporate into the pleading and for what purpose?

Paragraphs 11B to 11D seek, according to paragraph 11E, to maintain the contention that Stephen is not precluded from maintaining his counterclaim insofar as it is based on the representations made to him by Mr Jodrell notwithstanding that both of Mr Jodrell’s co-trustees did not authorise him to make the representation. This was the very proposition I had said, in my judgment, was not open to Stephen to advance. It seems therefore that the amended pleading takes no account of this. Mr Goodfellow acknowledged that this was so and that the paragraph needed amendment but submitted nevertheless that the preceding paragraphs were material to the issue of reasonable reliance. If that is indeed so, there is a more logical place in the pleading for those matters. There are other problems. For example, paragraph 11G.3 does not appear to be of any relevance to the purpose for which it and other paragraphs are inserted in as much as, according to paragraph 11F.3, paragraphs 11G.1 – 11.K are pleaded as particulars of acts or omissions by the Settlement trustees which encouraged in Stephen a belief that he was the next beneficiary of the 1967 Settlement. Paragraph 11G.3 appears to be concerned with communications passing exclusively between the Settlement trustees.

The overall result of these and other infelicities is that the reader has great difficulty in following what is being said, and to which issue the particular allegation is said to relate. He has to rummage backwards and forwards and has frequently to dip into the defence and occasionally into the reply to understand what is being alleged. Even then, it is difficult at times to see where the plea fits in to the overall picture. If for no other reason, the pleading if it is to be amended, must be recast so as to comply with the requirements summarised in the citation from Tchenguiz.

As the pleadings stood at the time of the earlier hearing before me, the estoppel claimed was founded entirely on the two representations Mr Jodrell is alleged to have made to Stephen, the first in late October 1994 (as pleaded in paragraph 2.6 of Stephen’s defence) and second, in October 1995, as pleaded in paragraph 2.8 of the defence (strictly, a representation made jointly by Mr Jodrell and Mr Morcom). It was to the sufficiency of those representations, if made, that the challenge based on the unanimity principle was directed when the matter was argued before me at the earlier hearing. For the reasons set out in my judgment on that occasion I was satisfied that the pleaded case was defective. I summarised the position and set out my conclusions at paragraph 26 of the judgment. I do not need to repeat what is stated in that paragraph.

It appears from the proposed amended pleading that Stephen now wishes to ground his estoppel claim on a wider basis. This emerges from paragraph 11.F.3. Paragraphs 11.F.1 and 11.F.2, when taken with (new) paragraph 11.F.4, seek to plead how the other Settlement trustees agreed that Mr Jodrell should make the representations to Stephen, set out in paragraphs 2.6 and 2.8 of his defence or, if they did not agree that he should make them, how they became aware and accepted or, if this is different, acquiesced in the substance of what was represented on those occasions. (In passing, I should say that I have criticisms of the materiality of some of the matters set out at some length in paragraph 11.F.4 as going more to background facts and evidence than to material facts necessary for the purpose of formulating the cause of action.) This related to the claim, as I understood it to be, when the matter was before me in its unamended form.

The wider (albeit related) estoppel is introduced by paragraph 11.F.3. According to that paragraph, it relies on the matters set out in paragraphs 11.G.1 to 11.K although, as I have mentioned, the relevance of some of those matters to this wider estoppel plea is difficult to grasp. This wider plea is that acts and omissions of the Settlement trustees, not confined to the oral representations made in October 1994 and October 1995, gave rise to a reasonable expectation in Stephen that he was to be the next beneficiary of the 1967 Settlement. Relevant to this, I assume, is that, as is well settled, proprietary estoppel is not dependent upon the existence of some statement, whether oral or written, amounting to a representation or promise. It may arise, and indeed very often arises, where no statement has been uttered but where the person asserting the estoppel acts to his detriment in the belief that he is to acquire an interest in the land of another and that other either knows that the person is doing so in that belief and has in some way (short of making some positive statement) encouraged that belief or has stood by and allowed the person to continue to act to his detriment. See, for example, Thorner v Major at [2009] UKHL 18; [2009] 1 WLR 776 (at [54] and following). See also the statement of Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustee Co Ltd (Note) (1979) quoted at [17] in my earlier judgment. I do no more than summarise the position.

Mr Goodfellow took me to a number of documents which either on their face or inferentially suggested that the Settlement trustees assumed that Stephen would inherit the Estate on John’s death. He also referred me to various actions taken by Stephen from which it is open to infer that he regulated his conduct in the belief that this was how the trustees viewed the future. There was, for example, the fact that starting in March 1995 Stephen attended formal meetings of the Settlement trustees. He says that this was because he was understood by them to be the next to succeed to the Estate and that his participation in those meetings occurred precisely because he understood that he was the next in line. He draws attention to the circumstances surrounding his and his family’s move from the Newbury area to take up residence in Home Farm House and the contributions made to its refurbishment at the expense of the 1967 Settlement, and also by John by himself. He points to the low rent he was required to pay (and how it was shared) for his occupancy and the reasons for this. He says that all of this occurred on the same shared assumption. He points also to his purchase from the Oxford Diocese of the Old Rectory in Swyncombe Village, the disadvantageous terms of the purchase and the manner in which the transaction was funded and explains how this was, with the exception of the local church, the only part of Swyncombe Village which was not already within the Estate and how his action in acquiring and refurbishing that property for letting was praised by the Settlement trustees. He mentions their agreement to discharge certain fees for advice given to him in connection with the purchase because, he says, its acquisition assisted in retaining the integrity of the Estate as a whole. Stephen contends that he would not have proceeded with this transaction if he had not thought that he would be the main beneficiary under the 1967 Settlement following the death of John and Kathleen. He contends that the Settlement trustees knew this to be so. He also draws attention to written instructions to counsel to advise in 2002. The instructions were prepared on behalf of both the Settlement trustees and the Will trustees. Reference is made in them to “the intention that Stephen Christie-Miller, who has taken a considerable amount of interest in his family and the estate, should be the successor”. Mr Goodfellow suggested that this makes clear that, for some time at least, Stephen was viewed by, among others, the Settlement trustees as the person who would inherit after the death of John and Kathleen. In the same vein Mr Goodfellow drew attention to a memorandum by the fourth defendant, Caroline Cannon-Brookes (one of the Settlement trustees), that those instructions were approved by the Settlement trustees.

Although, for the reasons set out earlier, I am not willing to give permission for the amendments, as presently drafted, to be made, I am willing, as I indicated at the end of the hearing, to give Stephen a further and final opportunity to produce a pleading which sets out his case against the Settlement trustees paying full regard to the requirements summarised in the citation of Tchenguiz. Rather than have to dart backwards and forwards, and from one pleading to another to see what the claim is, the amended pleading – so far as it is concerned with the estoppel claim against the Settlement trustees (I am not concerned with the other pleaded issues) - must set out what the material facts are (and no more) which constitute his cause of action. The pleading must set out what it is that Stephen relies on to attach “knowledge” to each of the trustees. Given the wider claim that is now made, this should not be difficult. The pleading must, as it seems to me, set out his story simply and logically.

I shall give Stephen 21 days from the formal delivery of this judgment to serve an amended pleading. If the Settlement trustees do not oppose the further amended pleading I should be so informed, together with any further directions which are sought, so that I can make an appropriate order giving permission for the amendment and making any appropriate directions. If, however, the Settlement trustees object to the further amendment, or the directions are not agreed, it may be necessary to fix another oral hearing. If the costs of application to amend, and also of the strike-out application brought by the Settlement trustees, can be dealt with without the need for a further oral hearing, I will be happy to deal with those as well without a further hearing. I already have the written submissions of both sides on costs. I am content that any further submissions on costs should come to me in written form. They should first be exchanged so that the other side can comment on them before they are forwarded to me.