Lester & Anor v Woodgate & Anor [2010] EWCA Civ 199

Case No B2/2009/1244[2010] EWCA Civ 199
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM TRURO COUNTY COURT
Mr Recorder Martineau
8BJ00052
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 9 th March 2010
Before
LORD JUSTICE SEDLEYLORD JUSTICE JACOBLORD JUSTICE PATTEN
Between
ROBERT GERALD JULIAN LESTERClaimants/and ANN PATRICIA HARDYAppellantsSTEVEN PAUL WOODGATEDefendants/ Respondentsand LOUISE RUTH WOODGATERespondent
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7404 1424Official Shorthand Writers to the Court)
Mr Robert Sheridan (instructed by Goldbergs) for AppellantMr Peter Langlois (instructed by Lyons Davidson) for RespondentHearing Hearing date : 18 th February 2010
JudgmentLord Justice Patten :
[1]This appeal concerns a disagreement between neighbours about a few yards of pedestrian access which, as is far too often the case, has escalated into bitter and costly litigation. The facts have been found with great care and are set out in detail in the reserved judgment of Mr Recorder Martineau, delivered in the Truro County Court on 19 May 2009. I will summarise those which are most relevant to what we now have to decide.[2]The claimants bought a plot of land at Looe in Cornwall from a company called Sherwell Developments Limited (“Sherwell”) at auction in April 2004. It was sold with the benefit of outline planning permission for development. The auction particulars mentioned the existence of an easement in favour of the property but stated that it was disputed. The claimants then constructed a house on the site which is called West View. For convenience, the references in this judgment to West View include the land in its undeveloped state.[3]The easement, as the Recorder found, was a right of way on foot and with wheelbarrows along a path running over the neighbouring property, Copplestone, which the defendants had bought in 2000 from a Mr Mees. It had been created by deed in 1980 by a Mr Holden in place of a right of way granted by a conveyance of 20th September 1963 when the land now comprising West View (which was then part of the garden of a larger property) was sold by the Jeffery family to a Mr Cyril Stevens.[4]West View and Copplestone occupy the land between Shutta Road and Elm Tree Road which run parallel to each other above the harbour at Looe. Because the land slopes steeply up from the harbour side, Shutta Road is cut into the side of the hill and the gardens of the two properties lie some eight to ten feet above the level of the road and are each supported by a retaining wall.[5]The 1963 right of way was granted over a strip of land which measured about 50 feet in length and about 10 feet in width and lay between the boundary with Shutta Road and what was then the western boundary of Copplestone which was in separate ownership. It occupied the space between the retaining wall supporting Copplestone’s garden and the public highway. The retaining wall for what is now West View directly abuts Shutta Road. The evidence at the trial was that in 1963 the right of way was granted from the south-west corner of West View (where there was a gate) along an established path over the strip of land which enabled the owners of West View to get access to Shutta Road. Witnesses described the strip of land as a grassy slope with a path leading down to the road. From West View use of the path would cut about ten minutes off the walk into Looe.[6]In 1974 Mr Holden excavated the strip of land (thereby removing the path down from West View) in order to construct a garage and a parking space on the site. Mr Stevens, who still owned the property which is now West View, commenced proceedings against him in the Truro County Court seeking an injunction compelling reinstatement of the right of way. The action was settled on the terms of a Tomlin order made on 5th May 1975 under which Mr Holden was required to construct a concrete ramp of agreed dimensions along the western boundary of Mr Stevens’ land just inside his retaining wall. Access to the bottom of this ramp from Shutta Road was to be over the newly excavated strip of land owned by Mr Holden who was to grant a right of way over it for that purpose.[7]In the event, these proposals were abandoned and an application was made by Mr Stevens to set aside the Tomlin order. He was evidently concerned that the ramp within his own retaining wall would be too steep to be useable. Instead the parties agreed to the construction of a ramp with a series of staged inclines which the Recorder found was constructed in early 1980 by Mr Holden and ran from the gate in the south-west corner of West View down to a point a few yards from Shutta Road adjacent to the retaining wall of Copplestone. This was a few yards into the strip of land and Mr Holden executed a deed of grant which gave to the owners of West View a right of way on foot and using a wheelbarrow from their property to Shutta Road via the newly constructed ramp and part of the excavated strip. The deed has been lost but secondary evidence of its terms was given by the solicitor who acted for Mr Stevens at the time. On the basis of this evidence, the Recorder found that the new grant replaced the one contained in the 1963 conveyance and there is no challenge to that finding on this appeal.[8]On 23rd April 1980 Mr Holden sold the strip of land (subject to the 1980 right of way) to the then owners of Copplestone and in 1999 West View was purchased from Mr Stevens by Sherwell. This was a company owned and controlled by a Mr Stanley Chitty. The company was able to obtain planning permission for the development of a house on the land and, as mentioned earlier, it was sold at auction to the claimants in April 2004 with the benefit of this planning permission.[9]When the defendants acquired Copplestone in September 2000 the land adjoining Shutta Road was in the state in which it is today. The strip of land was already a car parking space and its dimensions have remained unchanged during their ownership. There is a narrow path immediately adjacent to the retaining wall which runs down steeply on to the parking area but it is largely overgrown and is barely wide enough to enable a person to walk safely down let alone to do so wheeling a barrow.[10]The Recorder found that the ramp constructed in 1980 was no longer useable by the time that West View was purchased by Sherwell in 1999. Mr Chitty’s evidence was that by then the steps ended some height from the road. The Recorder accepted that part of the ramp had either collapsed or been removed before 1999 and that between 1999 and 2000 the owner of Copplestone, Mr Mees, carried out further work to the parking space which involved the removal of most of what remained of the pathway and a considerable quantity of brickwork and debris. He also re-surfaced the parking area. Some of the rubble was dumped by Mr Mees on Sherwell’s land. The Recorder found that Mr Chitty did object to this but did not complain about or challenge Mr Mees’ destruction of part of the ramp and path and his realignment of the retaining wall even though these works constituted a substantial interference with the 1980 right of way.[11]The Recorder held that the removal of a significant part of the ramp by Mr Mees constituted a nuisance which the defendants had adopted by continuing to use the parking space. It is important to emphasise that although the parking of cars in the parking space may make pedestrian access more difficult to the foot of what remains of the ramp and would undoubtedly prevent the use of a wheelbarrow, the reduced size of the ramp effectively renders the right of way unusable and the claimants therefore sought at trial a mandatory injunction for the re-instatement of the ramp as well as an injunction to prevent parking. The latter is of no practical use without the former and the construction of a new ramp to a usable size would have the effect of making parking there impossible.[12]The defendants’ answer to the claim for an injunction was that the claimants’ predecessor in title, Sherwell, had acquiesced in the destruction of the ramp and path and in the extension and re-surfacing of the parking space by Mr Mees so as to make it inequitable for the claimants now to seek to enforce the right of way in the form in which it was granted in 1980. It was not alleged or found by the Recorder that the easement had been abandoned. The defence was based on laches and equitable estoppel.[13]In his judgment, the Recorder accepted that this barred the claim to equitable relief. He said:- “I am satisfied that in this case the defendants are protected, at least from discretionary equitable remedies, by the failure of any dominant owner to object or seek a remedy for either the removal of the ramp, or the more recent diminution of Wall B by Mr Mees to the knowledge of Mr Chitty. Mr Chitty in particular was obviously in a position to object to Mr Mees (as he did about the dumping of spoil above), and chose not to. This enabled Mr Mees to sell to the defendants with apparent benefit of these parking places and no need to give notice of any live dispute or liability relating to interference with the easement. The defendants, because of Mr Chitty’s acquiescence or inactivity, bought the servient tenement without notice of this continuing interference. I am satisfied that if Mr Chitty still owned West View, it would be unconscionable for him to seek equitable relief from the Woodgates; he would be estopped from doing so. I am also satisfied, having had no authority cited to me either way on the point, that the dominant tenant’s slate is not wiped clean of that bar just because Mr Chitty had sold West View. It would be absurd if a person who had disqualified himself from seeking an equitable remedy were able to revive the claim to it by selling to another. Not for nothing is it said that estoppel binds parties and their privies, who include their successors in title the claimants. Mr Sheridan accepted in the course of his submissions that if the benefit of such a defence could avail against a successor claimant, it must be open to me to find that his clients were debarred from equitable relief by Mr Chitty’s inaction. I do so find.”[14]The claimants also sought very substantial damages. £30,000 was claimed as additional building costs due to their not being able to use the right of way during the construction of the house which they built on West View; £450 for carrying logs via a detour; £2,700 for being unable to pump concrete from the lane and a further £9,850 for the expedients that had to be adopted instead; £17,560 for more robust building blocks than would otherwise have been necessary; £3,540 for having to construct roof trusses on site; and £8,000 for the consequent project overrun. In addition, the sum of £14,000 was claimed as the cost of rebuilding the access ramp plus £1,200 for the scaffolding which would be involved.[15]The Recorder rejected the entirety of the claim for additional building costs. Some of it he found to be “not just erroneous but fictitious”. But none of it could survive the simple fact that the impeded easement which was supposed to have brought about all these losses afforded access only for people on foot and with wheelbarrows. It can have had nothing whatever to do with the alleged construction problems. I am not persuaded that it would right to interfere with the Recorder’s findings in relation to these heads of damage even if the claimants are entitled to recover damages in respect of the interference with the right of way.[16]The Recorder also considered that the estimated costs of constructing a new access ramp were exaggerated. Instead he awarded common law damages for nuisance which he assessed at £10 on the ground that the value of the claimants’ property had not suffered any diminution in value due to the loss or interruption of its enjoyment of the right of way.[17]There was one further consequence. The claimants were ordered to pay all the costs of the proceedings, the amount to be assessed on an indemnity basis. There is no judgment explaining this special order, but counsel for the appellants tells us that it was because of the claimants’ inflated damages claim and their aggressive conduct of the dispute.[18]The claimants appeal (with the leave of Aikens LJ) against both the judgment and the order for costs. They challenge the Recorder’s assessment of their claim for damages but the principal ground of appeal is that he was wrong to conclude that the claim for an injunction to enforce the right of way was barred by laches or estoppel. Laches is, they say, personal to the particular claimant who has delayed in seeking to enforce his rights and cannot therefore defeat the interests of successors in title. Although proprietary estoppel would operate to bind successors in title, that doctrine was not pleaded and, in any event, has no application, they say, to the facts of this case.[19]The defendants have served a Respondent’s Notice by which they seek to appeal against the Recorder’s award of common law damages in the sum of £10. They contend that if the claimants are estopped (as the Recorder held) from enforcing their rights of way it must follow that there has been no actionable nuisance for which damages can be awarded.

Laches and Estoppel

[20]Although the Recorder mentions laches and estoppel together in his judgment, they are separate defences with different and distinct consequences. Laches is a general equitable defence which bars the grant of equitable relief when the claimant has been guilty of undue delay in asserting his rights: see the judgment of Sir Barnes Peacock in Lindsay Petroleum Company v Hurd (1874) LR 5 PC 221 at page 239 (recently endorsed by the House of Lords in Fisher v Brooker [2009] UKHL 41) where he said:- “Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because a party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.”[21]The word laches is also sometimes used to denote the type of passive conduct which can amount to acquiescence and so found an estoppel when it can be shown that the party standing by has induced the would-be defendant to believe that his rights will not be enforced and that other party has, as a consequence, acted in a way which would make the subsequent enforcement of those rights unconscionable.[22]But where the conduct relied on consists of no more than undue delay, it operates only to bar the grant of equitable relief such as an injunction. It does not extinguish the claimants’ legal right or bar its enforcement by, for example, the award of common law damages. For the same reason, mere delay or inactivity by a landowner in respect of the enforcement of his legal rights will not necessarily prevent a successor in title from obtaining even equitable relief for their infringement. The conduct of earlier owners of the property since the date of the trespass or nuisance will be one of a number of relevant factors for the court to consider in determining whether it is appropriate to grant equitable relief to the successor in title having regard to the circumstances relevant to both parties at the time when the court is called upon to make its decision. This point was explained very clearly by Viscount Radcliffe in Nwakobi v Nzekwu [1964] 1 WLR 1019 at page 1024:- “Laches involves essentially a personal disqualification on the part of a particular plaintiff: it cannot be treated as a stigma on the title to land which, once impressed, necessarily descends with the title and affects all succeeding owners. In this it is to be distinguished from a defence such as estoppel in pais which, given the words or acts upon which a defendant has relied and altered his position, bars the remedy from that time on, both in the hands of the original actor and in the hands of those who claim title through him. Laches is not like this. It does not bite at an identifiable moment of time and it can be relied on only when account has been taken of all the circumstances that affect both the immediate plaintiff and the immediate defendant. Lapse of time is always one of these circumstances, and the inaction of a predecessor is not a matter to be ignored, for such inaction may itself lend some support to the defendant's equity. It may well be important from other points of view. It may itself contribute part of the positive evidence of a defendant's title, where that is uncertain: or it may constitute that type of acquiescence which, when analysed, operates as an estoppel, because it has led a defendant to alter his position on the faith of the established inaction. But these considerations are separate from laches, and it only leads to confusion to speak of one in terms of the other.”[23]The defendants relied on an estoppel defence. They pleaded that the claimants’ predecessor in title (Sherwell) ought to have known that the demolition of the ramp and path supporting the 1980 right of way constituted an actionable interference and that, by failing to take any steps to prevent the completion of those works by Mr Mees or the subsequent use by him of the car parking space, Sherwell became estopped as against Mees and his successors in title from enforcing the right of way to the full extent of the 1980 grant. This was the argument that was accepted by the Recorder in the passage quoted above.[24]Points are taken about the adequacy of the pleading but it was sufficient in my view to raise an estoppel defence and to permit the Recorder to determine that issue at the trial. All the available evidence about the destruction of the ramp and the extension of the car parking space was before him and it could not be suggested that the claimants were either taken by surprise or were unable to deal with the estoppel claim. The only real issue on this appeal is whether the facts found by the Recorder are capable of supporting the defence.[25]Equitable estoppel is sometimes classified under various heads such as proprietary estoppel; estoppel by acquiescence or even, on one view, promissory estoppel. But in every case the key to the intervention of equity is the making of a representation or promise about the enforcement of property or contractual rights in circumstances which make it unconscionable for the promisor subsequently to resile. The distinctions in the classifications are justified either by the need to identify the conditions for the creation of the estoppel or in terms of the remedies available for its enforcement. In cases of promissory estoppel, the existing contractual rights are modified by the refusal of equity to allow the full terms of the contract to be enforced. The equity is defensive only. By contrast in cases of proprietary estoppel, the equity can be satisfied, where appropriate, by the grant of permanent property rights over the estate of the person bound by the estoppel which therefore bind his successors in title and are capable by their very nature of being enjoyed by the successors in title of the promisee.[26]Proprietary estoppel is conventionally based on a representation by words or conduct which amounts objectively to a statement about the future enforcement of legal rights or an intention to confer on the representee an interest in property. The court has to determine whether the words used or acts done would reasonably convey to the other party an assurance which it was reasonable for that party to rely upon. In such cases it is not necessary to prove that the representor intended that his words or conduct would have that effect or was even subjectively aware that they did so: see Thorner v Major [2009] UKHL 18. But clearly when such evidence does exist the reasonableness of the reliance is likely to be indisputable.[27]Many of the earliest cases arose out of circumstances in which no express encouragement in the form of words was given by the landowner but where the other party built on or made improvements to the former’s land in the mistaken belief that he owned or had rights over it. In such cases the landowner’s passive and uncomplaining acquiescence in what is done may amount to an assurance that the other party will continue to enjoy rights over his land on which it would be reasonable for that party to rely. A much quoted example is Dann v Spurrier (1802) 7 Ves 231 where a tenant carried out improvements to leasehold property in the belief that he had an option to extend the lease exercisable without the concurrence of the landlord. Although the case was decided by construing the lease in the tenant’s favour, Lord Eldon LC expressed the view that:- “this Court will not permit a man knowingly, though but passively, to encourage another to lay out money under an erroneous opinion of title; and the circumstance of looking on is in many cases as strong as using terms of encouragement.”[28]Where the conduct relied on to found the estoppel is acquiescence by the landowner a number of different factual situations may exist. The work may well have commenced before the landowner was aware of it and therefore without his being given any opportunity to object. In some cases this state of affairs may continue until the work is complete. In other cases the landowner will become aware that the work is being carried out and will then have an opportunity to object to its continuation.[29]There is no doubt that if the landowner becomes aware of the work and knows that the other party is carrying it out in the belief that he owns the land in question or has rights over it but fails to object, his silence will be treated as a species of equitable fraud sufficient to found an estoppel. The same will apply a fortiori if he positively encourages that belief. It is this factual scenario which supports the statement of principle in Dann v Spurrier and the well-known passage from Lord Kingsdown’s speech in Ramsden v Dyson (1866) LR 1 HL 129 at page 170 that:- “If a man, under a verbal agreement with a landlord for a certain interest in land, or under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and, upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation.”[30]But what of cases where the work is carried out without any actual or justifiable belief as to title and is properly regarded by the landowner as a trespass? The view of the House of Lords in Ramsden v Dyson was that silence would not be sufficient in such circumstances to raise the equity at least in relation to the expenditure at that time. Lord Cranworth LC (at page 141) said that:- “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. But it will be observed that to raise such an equity two things are required, first, that the person expending the money supposes himself to be building on his own land; and, secondly, that the real owner at the time of the expenditure knows that the land belongs to him and not to the person expending the money in the belief that he is the owner. For if a stranger builds on my land knowing it to be mine, there is no principle of equity which would prevent my claiming the land with the benefit of all the expenditure made on it. There would be nothing in my conduct, active or passive, making it inequitable in me to assert my legal rights.”[31]This brings me to the decision of Fry J in Willmott v Barber (1880) 15 Ch.D. 96. The plaintiff was an unlawful sub-tenant who spent money on the land demised to him in reliance on an option granted by the tenant under which he would be able to acquire the remainder of the property comprised in the headlease. Both the sub-tenancy and the option had been granted without the landlord’s consent and in breach of covenant. The sub-tenant sought specific performance of the option coupled with a declaration that the landlord had unreasonably refused consent to the sub-tenancy. The issue as between him and the head landlord was whether the landlord was barred by acquiescence from relying on the breach of covenant and, as Lord Walker has pointed out in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55 at paragraphs 56-58, Fry J’s five probanda were formulated in that context rather than as a statement of law which was intended to be of general application in cases of equitable estoppel.[32]The relevant passage in Fry J’s judgment is at page 105:- “It requires very strong evidence to induce the Court to deprive a man of his legal right when he has expressly stipulated that he shall be bound only by a written document. It has been said that the acquiescence which will deprive a man of his legal rights must amount to fraud, and in my view that is an abbreviated statement of a very true proposition. A man is not to be deprived of his legal rights unless he has acted in such a way as 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 upon 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. If 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.”[33]One can see the influence of Ramsden v Dyson in much of this. Strictly applied, these conditions would exclude cases in which the claimant’s work and expenditure is not attributable to a mistaken belief that he was entitled to act as he did (e.g. a case of deliberate trespass or nuisance) or in which the defendant is unaware that the claimant’s actions are carried out under such a mistaken belief. But, in subsequent cases, the courts have held that it is not necessary for all five probanda to be satisfied in every case or (therefore) for the acts of the party seeking to rely on the estoppel to have been motivated by a mistaken belief as to his rights. Those conditions are a useful test of what might amount to unconscionable behaviour in such a case but they are not intended to apply indiscriminately regardless of the particular facts or circumstances in question.[34]So in Shaw v Applegate [1977] 1 WLR 970 the defendant installed amusement machines in his premises in breach of a restrictive covenant. The adjoining owners who were entitled to the benefit of the covenant took no action for about two years despite being aware of the existence of the machines. The Court of Appeal rejected a defence based on estoppel by acquiescence on the ground that the plaintiffs were confused as to whether the defendant’s activities constituted a breach of covenant. But, having referred to the five probanda, Buckley LJ said this:- “As I understand that passage, what the learned judge is there saying is that where a man has got a legal right, as the plaintiffs have in the present case, being legal assignees of the benefit of the covenant binding the defendant, acquiescence on their part will not deprive them of that legal right unless it is of such a nature and in such circumstances that it would really be dishonest or unconscionable of the plaintiffs to set up that right after what has occurred. Whether in order to reach that stage of affairs it is really necessary to comply strictly with all five tests there set out by Fry J may, I think, still be open to doubt, although no doubt if all those five tests were satisfied there would be shown to be a state of affairs in which it would be dishonest or unconscionable for the owner of the right to insist on it. In Electrolux Ltd v Electrix Ltd ((1954) 71 RPC 23 at 33) Sir Raymond Evershed MR said, at p. 33:
'I confess that I have found some difficulty—or should find some difficulty if it were necessary to make up my mind and express a view whether all five requisites which Fry, J., stated in the case of Willmott v. Barber, 15 Ch.D 96 must be present in every case in which it is said that the plaintiff will be deprived of his right to succeed in an action on the ground of acquiescence. All cases (and this is a trite but useful observation to repeat) must be read in the light of the facts of the particular cases.'
So I do not, as at present advised, think it is clear that it is essential to find all the five tests set out by Fry J literally applicable and satisfied in any particular case. The real test, as I say, I think must be whether on the facts of the particular case the situation has become such that it would be dishonest, or unconscionable, for the plaintiff, or for the person having the right sought to be enforced, to continue to seek to enforce it.” 'I confess that I have found some difficulty—or should find some difficulty if it were necessary to make up my mind and express a view whether all five requisites which Fry, J., stated in the case of Willmott v. Barber, 15 Ch.D 96 must be present in every case in which it is said that the plaintiff will be deprived of his right to succeed in an action on the ground of acquiescence. All cases (and this is a trite but useful observation to repeat) must be read in the light of the facts of the particular cases.'[35]A similar approach was taken by Oliver J in Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] 1 QB 133; and by the same judge in the Court of Appeal in Habib Bank Ltd v Habib Bank A.G. Zurich [1981] 1 WLR 1265 at page 1285:- “For myself, I believe that the law as it has developed over the past 20 years has now evolved a far broader approach to the problem than that suggested by Mr. Aldous and one which is in no way dependent upon the historical accident of whether any particular right was first recognised by the common law or was invented by the Court of Chancery. It is an approach exemplified in such cases as Inwards v. Banker [1965] 2 QB 29and Crabb v. Arun District Council [1976] Ch. 179. We have been referred at length to a recent judgment of my own in Taylors Fashions Ltd v. Liverpool Victoria Trustees Co Ltd [1981] 2 WLR 567 in which I ventured to collect and review the authorities. I there said, at p. 593:
“Furthermore the more recent cases indicate, in my judgment, that the application of the Ramsden v Dyson LR 1 HL 129 principle — whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial — requires a very much broader approach which is directed rather at ascertaining whether, in particular individual 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.”
Whilst, having heard the judgment read by counsel, I could wish that it had been more succinct, that statement at least is one to which I adhere.” “Furthermore the more recent cases indicate, in my judgment, that the application of the Ramsden v Dyson LR 1 HL 129 principle — whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial — requires a very much broader approach which is directed rather at ascertaining whether, in particular individual 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.”[36]In Jones v Stones [1999] 1 WLR 1739, a dispute between the owner of neighbouring houses, the defendant placed a number of flower pots on a dividing wall. The plaintiffs sought an injunction for their removal. This was met with a denial of trespass on the ground that the wall was a party wall and, in the alternative, with a defence of estoppel based on acquiescence by the plaintiffs over a period of three years. The judge held that the wall belonged to the plaintiffs but that, by not objecting to the flower pots for that period of time, they had encouraged the defendant to assume that he was entitled to keep them there and were therefore estopped from seeking their removal.[37]The Court of Appeal reversed the judge on the issue of estoppel. Aldous LJ treated the law on estoppel by acquiescence as laid down by Oliver J in Taylors Fashions. He went on:- “At the heart of estoppel or acquiescence lies an encouragement or allowance of a party to believe something to his detriment. Thus the first question to determine is whether any action or inaction by Mr. and Mrs. Jones has encouraged Mr. Stones to believe that he was entitled to place the oil tank on the wall in the position that he did and to keep the flower pots there. Second, if there was such encouragement, then it is necessary to consider whether that caused detriment to Mr. Stones. Third, the court should decide whether in all the circumstances of the case it was unconscionable for Mr. and Mrs. Jones to assert their legal rights.”[38]On the judge’s findings the defendants had placed the flower pots on the wall in the belief that it was jointly owned by them. That belief had not, on the evidence, been induced or affected by the claimants’ inactivity nor therefore had any detriment been suffered by them in reliance on the plaintiff’s conduct.[39]These authorities, I think, indicate the need to take a flexible and very fact-specific approach to each case in which an estoppel by acquiescence is relied upon. Shaw v Applegate confirms that there may be cases where the principle can apply even though the initial interference with the property or legal rights was clearly and perhaps knowingly tortious. In such cases the absence of a mistaken belief of right on the part of the defendant will be one of the factors to be considered in determining whether the claimant’s enforcement of his legal rights would now be unconscionable. As explained in Jones v Stones, a deliberate act of trespass or nuisance is unlikely to have been influenced by the position taken up by the claimant to the invasion of his legal rights or therefore to have given rise to any detriment on the part of the defendant in terms of the work or expenditure which he carried out. This, I think, is the point made by Lord Cranworth in Ramsden v Dyson, although his views are, I believe, closely linked to the relatively conservative approach of the common law as to the circumstances in which a party in the position of the landowner was under a duty to speak. So far as relevant, it is now clear that an obligation to make one’s position known is not limited to cases where silence would amount to some form of deception. The commonly accepted test is that set out by Lord Wilberforce in Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 at page 903 which is whether:- “Having regard to the situation in which the relevant transaction occurred, as known to both parties, a reasonable man, in the position of the “acquirer” of the property, would expect the “owner”, acting honestly and responsibly, if he claimed any title to the property, to take steps to make that claim known …”[40]If the claimant’s conduct at the time takes the form of encouraging the defendant to believe that his otherwise tortious interference with the claimant’s property will be waived and not objected to and, in reliance on that, the defendant subsequently acts in a way which can be characterised as detrimental then the position is, I think, different from the facts considered in Ramsden v Dyson and the court does then have to decide whether the causative effect of that conduct is sufficient to bar the enforcement of the legal right. In this connection it is important to bear in mind what Robert Walker LJ said about detriment in Gillett v Holt [2001] 1 Ch 210 at page 232:- “The overwhelming weight of authority shows that detriment is required. But the authorities also show that it is not a narrow or technical concept. The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances. There are some helpful observations about the requirement for detriment in the judgment of Slade LJ in Jones v Watkins 26 November 1987. There must be sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded—that is, again, the essential test of unconscionability. The detriment alleged must be pleaded and proved.”[41]In the present case, there was no evidence as to precisely how and by whom (if anyone) the ramp constructed in 1980 was removed prior to 1999. What the Recorder did find was that in 1999 Mr Mees carried out further work to his land which involved enlarging the car parking space by removing most of the remaining pathway and its supporting brickwork. Mr Mees did not give evidence at the trial and it is not therefore possible to say whether or not the works were carried out in the belief that the right of way had already, in effect, been abandoned. The judge found on the basis of Mr Chitty’s evidence that Sherwell (through Mr Chitty) was aware that the works did interfere with the right of way but made no objection either to the excavation of the path (as opposed to the dumping of the material) or to the tarmacing and subsequent use of the extended parking space up to 2004.[42]The Recorder makes no reference to any of the relevant authorities on estoppel by acquiescence and it is not clear to me to what, if any, authorities on this point he was referred to. But he in effect applied the test laid down in Taylors Fashions by asking himself whether Mr Chitty’s decision not to object to the destruction of the footpath made it unconscionable for Sherwell (and therefore the claimants as its successors in title) to seek now to enforce the 1980 right of way as granted. The Recorder answered this question in the affirmative because Mr Mees had relied on Sherwell’s acquiescence by selling Copplestone to the defendants without notice of any pending dispute about the right to use the parking spaces. The claimants’ case is that this is insufficient to establish either proprietary estoppel or estoppel by acquiescence so far as that is any different.[43]I am unable to accept that submission. Although proprietary estoppel is (as its name suggests) largely concerned with cases in which the defendant acquires some right over the claimant’s property as a result of the latter’s conduct towards him, I can see no reason why the principles involved are not capable of equal application to a case in which the defendant is alleged to have committed an act of nuisance by interfering with an easement over his own land. In both cases the claimant’s conduct relates to his property interests and the estoppel operates to bar the enforcement of the claimant’s legal rights just as in Shaw v Applegate it would have barred the enforcement of the restrictive covenants which bound the defendant’s land. It may be more appropriate to label this estoppel by acquiescence but the principles are essentially the same.[44]On the Recorder’s findings of fact this is not a case, like Jones v Stones, where the existence of the car parking space and its continued enjoyment owed nothing to the stance taken by Sherwell and was not relied upon by Mr Mees. It seems to me that Mr Chitty’s complaint about the dumping of the rubble but his acceptance of the ultimate state of affairs on the ground was a recognition that the owners of Copplestone would be entitled to use the parking space without interruption by the 1980 right of way which Mr Mees was entitled to rely upon in formulating his replies to preliminary enquiries on the subsequent sale of his property. The Recorder was therefore entitled to find that this amounted to an assurance or encouragement of the kind necessary to found an estoppel. In these circumstances, the Recorder’s conclusion that it became unconscionable thereafter for Sherwell and its successors in title to seek to enforce and reinstate the 1980 right of way is one which he was entitled to come to on a consideration of all the relevant circumstances.[45]But I add that even if the only defence under consideration was laches in the correct sense of that term the Recorder would, I think, have been entitled to find (for the same reasons) that the balance of justice had, by 2005, tipped firmly in favour of the defendants so far as the grant of any injunctive relief was concerned.[46]For these reasons, I would dismiss the claimants’ appeal against the judgment of the Recorder.

The cross appeal

[47]This leaves the defendants’ cross appeal against the award of nominal damages for the nuisance occasioned by the removal of the right of way. As mentioned earlier, the award was based on the Recorder’s assessment of the diminution in the value of West View attributable to the loss of the easement. Although the Recorder may have been right in his calculation of this sum, the award was, in my view, wrong in principle.[48]His dismissal of the claim for an injunction was based, as I have explained, on a defence of equitable estoppel and not merely on one of laches. The effect of such an estoppel is to bar not merely the grant of an equitable remedy but the enforcement of the legal right itself. Consistently with this, the defendants’ continued use of the car parking space cannot constitute an actionable nuisance and no action even for damages can therefore lie. For the same reason, the claimants would not be entitled to damages for the additional costs of their development attributable to the loss of the right of way even if the Recorder had accepted their evidence as to the amount of that loss.[49]I would therefore allow the cross appeal and dismiss the action.

Costs

[50]To allow an appeal against the order for costs it has to be shown that the order was wrong in principle and therefore exceeded the legitimate bounds of the Recorder’s discretion under CPR 44.4. We have heard no real argument on this point nor do the grounds of appeal disclose any clear error of principle. In these circumstances, it is not open to us in my view to interfere with the order which was made.

Lord Justice Jacob :

[51]I agree.

Lord Justice Sedley :

[52]I also agree.[53]I would add that, although the appeal against the award of indemnity costs has wisely not been pressed, the order made by the Recorder was in my view an exemplary use of the power to mark the courts’ disapproval of the use of litigation to intimidate.

Cited in 5 later judgments