Davies v Davies [2015] EWCA Civ 1008

Case No A2/2015/2273[2015] EWCA Civ 1008
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE COMBINED COURT
SITTING AT WORCESTER
(HIS HONOUR JUDGE PEARCE-HIGGINS QC)
Venue Royal Courts of JusticeDate Friday, 11 September 2015
Strand
London, WC2A 2LL
B e f o r e:
LORD JUSTICE VOS
Sidney Lyn DaviesClaimant/Respondentv.Margaret Matilda DaviesDefendant/AppellantJohn Anthony DaviesSecond Defendant
DAR Transcript of the Stenograph Notes ofWordWave International Limitedtrading as DTI165 Fleet Street London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7404 1424(Official Shorthand Writers to the Court)
The Appellant, first Defendant, appeared by her grandson, Mr Greg Davies
Between
Sidney Lyn DaviesClaimantMargaret Matilda DaviesDefendant for The Respondents did not appear and were not represented
J U D G M E N T
[1]This is an application by Mrs Margaret Davies, the First Defendant, for permission to appeal the order made by His Honour Judge Pearce-Higgins QC on 15 October 2013 and for an extension of time to file her appellant's notice. That notice was not filed until 13 July 2015; a delay of some 20 months. Since the hearing, there have also been a number of other developments and legal proceedings that are not the direct subject of this application, but with which I will need to deal.[2]When the hearing was called on, Mr Greg Davies, the grandson of the Appellant, who has appeared for her, had not arrived at court. Accordingly, I started to give judgment in his absence, only to be told when I was half-way through that he had arrived. Mr Davies has explained why he was late; because he decided to drive to London and did not find his way very easily.[3]Once Mr Greg Davies had arrived, I declared to him what might appear to be my interest, namely that I live relatively close to the properties that are in question in this litigation. I also told him that I do not have any personal knowledge of the properties themselves or of the parties concerned, but that I had come across Mr John Goodwin, the estate agent who valued the property, but that I was not a friend of Mr Goodwin. I told him that I thought that, since the valuation made by Mr Goodwin was not in issue before me as part of the application for permission to appeal, save in one respect to which I will come in a moment, that could not affect my impartiality. Mr Greg Davies accepted that it was appropriate for me to continue to consider this application. Chronological background[4]The facts are quite complex, but can be summarised for the purposes of these applications as follows. In about 1959, Mrs Margaret Davies, the First Defendant, and her husband, Mr Thomas Lewis Davies, who died in February 1996, moved to Mosewick Farm, Suckley in Worcestershire. That farm was about 50 acres and included a farmhouse and other buildings, no doubt. They had four children. Mr Sidney Davies, the Claimant, is the second son. Mr John Davies, the Second Defendant, who now lives with his mother at Mosewick Farm, is the third son. Mr Greg Davies, who has appeared before me with the permission of Gloster LJ on behalf of his grandmother, is the son of the Claimant.[5]In about 1963, Mr and Mrs Davies senior bought what they called Barrow Mill Farm which gave them another house, a cottage, and some buildings and extra land amounting to some 38 acres. Accordingly, at that stage they were farming in total about 88 acres of land.[6]The judge found as a fact that in 1974 the Claimant had agreed with his father that he could have about 1.3 acres and a barn at Barrow Mill Farm. That is the property which the Claimant calls Bear's Wood Farm but which I shall call simply "the property". It was agreed, according to the judge's finding, that the Claimant should have that land and building for a payment of £6,000 in the expectation that he would convert the barn into living accommodation for himself and his family. The judge also found that this sum was an undervalue at the time and was never actually paid for various reasons, but that the Claimant had invested that same amount of money in the family's farming business and that the father had been happy to see that happen at the time. Mrs Margaret Davies was at that time, he found, preoccupied with the care of her own elderly mother, but, so the judge found, understood what had been agreed as she was present when the discussions had taken place. The judge also found that the Claimant had acted in detrimental reliance on this agreement with his father so as to sell his previous house, to move into the caravan on the site at the property, and to begin the conversion work to the barn, which, as a matter of fact, was never completed.[7]The judge found that the arrangement was acknowledged by her after Mrs Margaret Davies became the sole owner of Mosewick and Barrow Mill Farms after the father's death, to which I have already referred, in February 1996. The judge's judgment[8]The Claimant's prayer for relief asked for a declaration that the property (and I emphasise that it was a claim to the property, not to Mosewick Farm or any part of it) was held on trust for him, conveyance of the freehold of the property to him or alternatively, a declaration that his interest should be an monetary entitlement and further or other relief.[9]The judge decided that all the elements of proprietary estoppel were made out; representation, reliance and detriment. He rejected the submission that the Claimant's rights had been abandoned or that the Claimant's claim was barred by delay. He seems also to have found that it would be unconscionable for Mrs Margaret Davies to withdraw from the agreement so long afterwards.[10]The judge then decided that the Claimant's equity could best be satisfied by quantifying it and by providing for the payment to be made or in default, for the property to be sold to provide the necessary funds to pay the Claimant.[11]On the basis of valuation evidence, the judge determined the Claimant's interest in the property at two fifths amounting to £68,000, taking into account the non-payment of the current value of the £6,000 agreed purchase price. He said expressly at paragraph 29 of his judgment:
"The best way to satisfy the equity the Claimant has is to quantify it and provide for that sum to be paid by the First Defendant within a certain time and if not, order that the property be sold to provide the necessary funds for payment to the Claimant."
That passage is, I think, important because it refers to the property and not to Mosewick Farm in its entirety.[12]Finally, the judge found that Mr John Davies, the Second Defendant, had harassed the Claimant and awarded the Claimant damages totalling £8,326.33.[13]When it came to the order, however, it seems that things took a rather different turn. The judge declared in paragraph 1 of the order that, on payment of the £68,000, the Claimant's interest in the property would be extinguished and directed that the Claimant could occupy the property only until 29 October 2013, but could remove certain items from the property before then. He also ordered at paragraphs 4 and 5 that Mrs Margaret Davies should pay 90 per cent of the Claimant's costs and £22,500 on account of the Claimant's costs with interest on all the sums due from the date of judgment. Then, most importantly, the judge ordered as follows:
"6. The Defendant's interest in the property known as Mosewick Farm, Suckley, Worcestershire, WR6 5DT stand charged with payment of the said sums of £68,000 and £22,500 and the interest to accrue thereon. 7. If the Defendant is unable to pay the said sums of £68,000 and £22,500 and the interest to accrue thereon by 12 November 2013, she has permission to apply to the court for further time in which to pay them. Any such application is to be heard on 12 November 2013 with a time estimate of half a day and is to be reserved to His Honour Judge Pearce-Higgins QC."
[14]It will be immediately observed that paragraph 6 of the order does not reflect paragraph 29 of his judgment. It charges the whole of Mosewick Farm with the payment rather than the property that was the subject of the Claimant's claim. It is also to be noted that the Defendant did not apply to the court for further time in which to pay the sums that were mentioned in the order, if not expressly ordered to be paid. Events since the judgment[15]It appears that a number of events have occurred since the judge's judgment that are relevant to the position that has been reached today. I have not been provided with all the papers that might be relevant, but the Claimant's solicitors sent a helpful explanation to the court yesterday that I have been able to consider. I have also provided that explanation and the documents attached to it to Mr Greg Davies in court this morning even though he has not had the time to consider what I have given him.[16]It appears that at some stage after the order had been made, the Claimant applied for a charging order. On 21 November 2014, DJ Khan ordered that:
"The charge created by the order made on the 2nd October 2014 shall continue."
I have not seen that interim charging order, though it looks as if it was created on 2 October 2014, but the schedule shows that the charge in question was over the registered title to Mosewick Farm (WR149049).[17]Mr Greg Davies has told me this morning that the land that is registered under that title is the land at Mosewick Farm, part of which is called Harp Farm, but that the rest of the area, namely the 38 acres at Barrow Mill Farm, including the property, remains unregistered.[18]It is hard, therefore, at first sight to see what the charging order made on 2 October 2014 and finalised on 21 November 2014 adds to the existing charge contained in paragraph 6 of the judge's order of 27 September 2013. It is also to be noted, as was repeatedly pointed out by the First Defendant, that the order of 27 September 2013 did not actually require the First Defendant to pay anything except costs. This is something to which I shall return.[19]Paragraph 2 of the order of 21 November 2014 adds something by requiring that Mosewick Farm be charged with "payment of £61,114.19 which is the amount now owing under a judgment or order given on 27 March 2014" together with interest and costs. I do not have that order of 27 March 2014, nor can I understand the figure of £61,114.19, which is less than the £68,000 which was the subject of the original order. It appears from what the Claimant's solicitors have said that no part of the £68,000 has ever been paid.[20]On 15 December 2014, District Judge Morrow declared that the Claimant was entitled to an equitable charge over Mosewick Farm under a charging order made on 27 September 2013 and that that charge was registered on the title. He then ordered that if the Defendant did not pay "the judgment debt of £68,000 secured by the charge and his costs to date of... £2,713.60, making together £70,713.60, together with interest at the rate of 8 per cent per annum", the property (i.e. Mosewick Farm) should be sold without further reference to the court at a price of not less than £500,000 and the Claimant's solicitors should have conduct of the sale. That order then directed that the Defendant provide the title deeds, created a 3,000-year term in Mosewick Farm in the Claimant and ordered that vacant possession be delivered on or before 17 March 2015 to the Claimant. This appears to apply to the whole of Mosewick Farm, both the registered part and the unregistered part, notwithstanding that the previous order of 21 November 2014 seems to apply only to the registered part.[21]On 28 April 2015, the County Court at Worcester issued a notice of eviction addressed to Mrs Margaret Davies and all other occupiers at Mosewick Farm to take effect on 2 June 2015.[22]On 29 May 2015, the Appellant made an application to the County Court to stay the proceedings "on the grounds that the liability of the debt is in dispute". She attached a copy of the application made to the Court of Appeal or rather she said she attached a copy of the application made to the Court of Appeal, but in fact the application was not filed until 13 July 2015.[23]On 10 July 2015, the Appellant did not attend the hearing of her own application to the Worcester County Court. District Judge Sheldrake made a number of orders, including striking out the application to stay the judgment, ordering that no further applications were to be permitted by Mrs Davies without the permission of the court and ordering that an application for permission under CPR Part 23 was to be made at least 14 days prior to any date fixed for enforcement proceedings to be carried out, fully supported by evidence. The District Judge also ordered that the Appellant should attend all further hearings in person or by a properly authorised representative.[24]On 13 July 2015, the Appellant filed her appellant's notice. That notice sought orders setting aside the judge's orders and staying execution. Importantly, it said in section 5:
"Item 6 [the charge on Mosewick Farm] is disputed on the grounds that the Claimant did not make an application in accordance with PD 73. He failed to use form N372. Application was made orally by Mr Stimmler (counsel for the Claimant)."
[25]On 14 August 2015, the County Court at Worcester issued a further notice of eviction addressed to Mrs Davies and all other occupiers at Mosewick Farm to take effect on 1 September 2015.[26]On 18 August 2015, Christopher Clarke LJ declined to grant a stay of execution in the absence of any explanation as to why there had been so much delay in appealing the order made by the judge on 15 October 2014. On 25 August 2015, Gloster LJ granted a stay of execution until the conclusion of this hearing today on 11 September 2015. She too saw no basis for a stay in the absence of an explanation for the delay, but gave the Appellant permission to be represented before me by her grandson, Mr Greg Davies, who has indeed appeared. Grounds of appeal[27]The grounds of appeal are supplemented by a lengthy skeleton argument. The documents are not easy to follow. The grounds seem to show three main areas as follows. First, the facts ought not to have given rise to a remedy in proprietary estoppel because there was no actual detriment to the Claimant and/or the Claimant did not have exclusive possession of the property. Secondly, the Claimant conducted the proceedings so badly by withholding evidence and trial bundles that the claim should not have succeeded. Thirdly, the Defendant did not have a fair trial under Article 6. Fourthly, the judge was biased or appeared to be biased in favour of the Claimant and interfered inappropriately in the evidence given at the trial. Fifthly, the judge had a pecuniary interest because he used John Goodwin, the expert surveyor, as a letting agency. Discussion[28]It seems to me that there are two points that could be argued on this appeal, but they have not been focussed on by the Appellant. The two points are as follows. First, the judge seems to have charged the Defendant's interest in the entirety of Mosewick Farm, probably the whole 88 acres and all the buildings or possibly only 50 acres and the Mosewick Farm house, when there was no claim to such relief in the particulars of claim and when he said in his judgment, as was logical, that the property only should be charged. All that the Claimant sought was an interest in the property amounting to a barn and 1.3 acres or the money. Now it appears the Claimant has a charge over and an order for the sale of the whole farm worth seemingly over £1 million. The value of the property was £150,000 or more, so was more than enough to satisfy the monetary awards that the judge had provided. This ground of appeal seems to me to have been signalled (rather inadequately but just sufficiently) in Section 5 of the appellant’s notice to which I have already referred.[29]The second point is that notwithstanding subsequent orders, there never was a judgment for the payment of £68,000 on 27 September 2013. There could have been and it seems that the judge intended that there should have been, but there was not. So the subsequent proceedings may eventually prove to have been unsoundly based.[30]In any event, on the basis of the information I do have, it seems to me to be arguable that the judge ought to have limited any charge he was granting in respect of the monetary awards to a charge on the property amounting to the barn and 1.3 acres and should not have put a charge on the whole 88 acres and the buildings at Mosewick Farm. I would, therefore, be inclined to give permission for an appeal on that point, subject to the question of an extension of time.[31]Christopher Clarke LJ asked for the Appellant's reasons for the delay. The reasons given focus on the time it took to get together the grounds of appeal and the necessary legal research. Indeed, Mr Greg Davies' oral submissions today have demonstrated that he has done a great deal of legal research and reading and has sought to persuade me that the grounds of appeal based upon the attack on the finding of a proprietary estoppel could succeed. But in my judgment, none of the time taken for legal research amounts to a valid excuse for delay, let alone for a delay of such severity. All that said, however, it is clear to me that the Appellant and her grandson are not sophisticated litigants in person. The Appellant herself is 90 years old. She is in fair health, according to her grandson, but reacts adversely to stress. I doubt that she has really appreciated the gravity of what is happening and I doubt that she has focussed on the very serious orders that have been made against her since the outcome of the trial before the judge. It seems to me that she may have focussed instead on the unfortunate fall-out within her family.[32]In all these circumstances, it seems to me just and proportionate in the very exceptional circumstances of this case to grant an extension of time at least to appeal paragraph 6 of the judge's order. It will be necessary, in order to support that grant of permission to appeal, to stay all further enforcement of the order, including the charging order, the order for sale and the warrants for possession, until determination of the appeal. If it turns out that the Claimant should only have had a charge on the property, then all those proceedings will need to be reconsidered. The Appellant may wish to consider whether to seek permission to appeal those orders out of time, particularly the charging order and the order for sale, since they may in their own right have been granted on the basis of a misunderstanding. I cannot say whether that is right or wrong at this stage because I have not heard full submissions from the Claimant, nor have I seen all the documents, but at least at the moment it appears to have been a real possibility.[33]I will turn now to deal with the remaining grounds of appeal advanced on behalf of the First Defendant. The remaining grounds of appeal Ground 1: the facts ought not to have given rise to a remedy in proprietary estoppel[34]In my view, there is no basis for the argument, on the facts found by the judge, that there was no actual detriment to the Claimant. He found that there was actual detriment in that the Claimant had sold another property, had moved into the property with his family, on the faith of his father’s representation and in reliance on the understanding that he had with his father. On that basis, he undertook works of conversion to the barn. Moreover, there is no basis to say that the judge was wrong to find that the Claimant had exclusive possession of the property, if indeed there was any such requirement, which I doubt. In these circumstances, the main ground of appeal that Mr Greg Davies seeks to advance, which is effectively to re-argue the facts that were heard before the judge and determined on the evidence, has no real prospect of success. Ground 2: the Claimant conducted the proceedings so badly and inappropriately by withholding evidence and trial bundles that the claim should not succeed[35]Mr Davies has elucidated this claim in argument before me. He complains that the witness statements for the Claimant were withheld from the First Defendant because she had not produced any evidence in support of her case. This, as it seems to me, is something of a misunderstanding. What the First Defendant should have done is inform the Claimant's solicitors that they were not intending to adduce any evidence or provide any witness statements, in which case they would have been provided immediately with the witness statements for the Claimant. I remarked in the course of argument that in cases that were tried before the Civil Procedure Rules came into effect, it was extremely common for evidence to be adduced without any warning at all to the other parties. In these circumstances, that cannot be a proper ground for appeal.

Ground 3: the Defendant did not have a fair trial under Article 6

[36]This too is a ground that cannot succeed. There is no evidence put before me that the judge conducted anything other than a fair trial in accordance with the usual rules of practice and procedure.[37]There is often a common misunderstanding that just because the judge appears to be advancing points of view in the course of argument, there cannot be a fair trial. In this case, it seems to me the judge's judgment demonstrates that he considered the competing positions with propriety. Ground 4: the judge was biased or appeared to be biased in favour of the Claimant and interfered inappropriately in the evidence at the trial[38]This is really another way of putting the same point. I have seen no evidence to suggest the judge was in any way biased and I do not believe that this ground is fairly arguable. Ground 5: the judge had a pecuniary interest because he had used Mr John Goodwin, the expert surveyor, as his letting agent[39]This, in my judgment, is also a total misunderstanding. In a small area, like that of Worcestershire, it is impossible to imagine that a local judge would not be acquainted with and possibly even have used a local agent himself. There was, in any event, no dispute, as I understand it, as to the value of the property which really affected the outcome of the case. There is, in any event, no reason to suppose that the judge had any real interest in the case as a result of his acquaintance with Mr Goodwin. In these circumstances, I do not believe that this ground has any prospect of success. Disposal[40]In these circumstances, I intend to extend time for the filing of an appellant's notice and give permission for an appeal in respect of paragraph 6 only of the judge's order dated 27 September 2013. The Appellant should not, however, be prevented from arguing that paragraphs 1 to 5 were inappropriate in consequence, if it were to be shown that paragraph 6 was either a mistake or wrongly drawn, but the Appellant will not be permitted to appeal the substantive merits of the proprietary estoppel claim.[41]I will direct that the Appellant files revised grounds of appeal and a revised skeleton to comply with the terms of this judgment and that those documents are filed within 35 days of today's date. Those documents should deal only with the issues that I have indicated are fairly arguable. I will stay all further enforcement of the order dated 27 September 2013, including the charging order dated 21 November 2014, the order for sale dated 15 December 2014 and the warrants for possession of April and August 2015, until final determination of the appeal. I will also stay the enforcement of any order for possession of Mosewick Farm and of the property.[42]I should not leave this application without making something else very clear. The best result for the Appellant will be if she can save Mosewick Farm. She has no chance, as I see it, of saving the property from sale. She would, therefore, be best to engage with the Claimant's solicitors to find a way in which an agreement could be reached to sell or transfer the property so that effect can be given to the substance of the judge's 27 September 2013 order as soon as possible. She will need to pay the Claimant the money the judge assessed, namely £68,000 and costs and interest. The appeal will not change that reality or is not likely to. There is enough equity in the property to discharge her debt to the Claimant and that should, if possible, be achieved without further hostile family litigation.[43]I will direct that this appeal be heard by three judges, of which one may be a High Court Judge with at least one Chancery Lord Justice or Lady Justice and that the time estimate should be one day.