Van Laethem v Brooker & Anor [2005] EWHC 1478 (Ch)

[2005] EWHC 1478 (Ch)IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONCase No HC 04 C 01030Venue Royal Courts of JusticeStrandLondon WC2A 2LLDate Tuesday, July 12, 2005
Before
MR JUSTICE LAWRENCE COLLINS
Between
PENELOPE SUSAN VAN LAETHEMClaimantKIM HENRY BROOKERDefendantCARADOC ESTATES LIMITEDDefendant
Miss Miranda Allardice and Miss Charlotte Street (instructed by Blake Lapthorn Linnell) for claimantMr Christopher F Sharp QC and Mr Daniel Leafe (instructed by Rickerbys) for defendantsHearing: April 6, 7, 8, 11, 12, 14, 2005
JUDGMENT

I Introduction: Caradoc Court

[1]Caradoc Court, Ross-on-Wye, Herefordshire, is a very large Grade II listed mansion situated about four miles from Ross-on-Wye. It stands on a site which was the reputed home of the British chief Caradoc Vraich-Vras, or Strong Arm, a knight of King Arthur’s Round Table. The earliest parts were built in the late 16th century and alterations and additions were made principally in the early 17th and mid-19th centuries. It sits in grounds of about 18 acres. In 1983 permission was given for change of use from agriculture and residential to a health and leisure complex including a hotel. In April 1984 permission was given for change of use to a residential home for the elderly or to a nursing home.[2]Caradoc Court became a ruin when it was gutted by a fire in 1986. The owner had been a local builder, from whom it was then purchased by a development company. Subsequently there was an application for restoration and extension to form twenty apartments and the erection of five cottages in a walled garden and associated car parking. There was an agreement under the Town and Country Planning Act 1971, section 52 (now Town and Country Planning Act 1990, section 106)with the planning authority, South Herefordshire District Council. Under the agreement permission to build cottages in the grounds was dependent on the restoration of Caradoc Court.

II Dramatis personae

[3]The claimant is Mrs Penelope van Laethem (“Mrs van Laethem”). The first defendant is Mr Kim Brooker (“Mr Brooker”), and the second defendant is Caradoc Estates Ltd (formerly called Great Central Railway (Southern Division) Ltd). For convenience I shall generally refer to it by its present name.[4]Mrs van Laethem married Regis van Laethem in 1965, and they had two daughters, Lucie and Sophie. They were divorced in 1973. She married Mr Mark Beeston in 1975and they adopted a son, Alexander (“Alex Beeston”).[5]At the time Mrs van Laethem and Mr Brooker met in about April 1985, Mrs van Laethem was aged about 44 and married to Mr Beeston. Mr Brooker was single and aged about 29. He was living with his parents at Sulgrave Court in Sulgrave, Northamptonshire.[6]A close friendship developed between Mr Brooker and Mrs van Laethem. Mrs van Laethem left Mr Beeston in January 1986. Mr Brooker was named as co-respondent in the divorce proceedings commenced at that time by Mr Beeston. Mr Brooker says that their relationship was not a sexual one at that stage, although it had become one by the summer of 1986.[7]Mrs van Laethem went to live with her parents at the Coach House, Warmington, near Banbury, until September 1986, when she bought Basildon House, Great Bourton, for £110,000, which had been provided by Mr Beeston in the course of the divorce proceedings. A decree absolute was granted in 1987. Custody of Alex Beeston was given to her former husband.[8]Mrs van Laethem’s father died in 1987. Her mother, Mrs Dora Hollis (“Mrs Hollis”) sold the Coach House, Warmington, in September 1999, and, after a period living in a mobile home in the grounds of Caradoc Court, she lived in the East Wing of Caradoc Court in 2001, where she lived until a few months before her death in April 2002.[9]Mr Brooker’s parents lived at Sulgrave Court, Sulgrave, Northamptonshire. Mr Brooker worked in his father’s business. His father owned, and was managing director of, Central Electronics Ltd (“CEL”), a security alarm business, which assembled security systems, and had a staff of about 3 or 4 persons. It stopped trading in the mid 1990s and went into liquidation in 1999. Mr Brooker’s father died in September 1996, and his mother died in September 1997.[10]Mr Brooker also had a collection of old railway rolling stock which he intended to restore. In the early 1980s he set up a company called Great Central Railway (Southern Division) Ltd, which, as I have said, was later called Caradoc Estates Ltd. The two shares in the company were registeredMr Brooker and his father each owned one share[11]Mrs van Laethem had a particular interest in interior design/furnishings/antiques. She traded in antiques in a small way from about 1986 until about 2002 (part of the time with her friend Mrs Joanna Allan). In 1988/9 Mrs van Laethem established an interior design consultancy, County Homescapes Ltd, with a Mr Bateman. Mr Brooker had a talent for joinery, and was also skilled at organising building work. Mrs van Laethem says that she realised that Mr Brooker was good as a builder, because he oversaw substantial building works on his parents’ house. She encouraged him to start a combined building and joinery business. In 1990/1 Mr Bateman transferred his interest in County Homescapes Ltd to Mr Brooker, when it was renamed Ravens Oak Ltd, which became the vehicle for his joinery/building business. Caradoc Estates Ltd later became a 43% shareholder in ROL.[12]Mr Brooker was the only witness of fact on his side. His wife made witness statements, but Mr Brooker adopted them for the purposes of the oral evidence. The witnesses for Mrs van Laethem were:(1) Mrs Janine Hamel-Findhammer, who knew Mr Brooker and Mrs van Laethem as a result of her mother’s close friendship with Mr Brooker’s mother, and later with both Mr Brooker’s parents and Mr Brooker. Her evidence was very supportive of Mrs van Laethem, and it mainly concerned the relationship between Mr Brooker and Mrs van Laethem, and what she saw of Mrs van Laethem’s work on Caradoc.(2) Mr Bruce Teuten, who was the father-in-law of Mrs van Laethem’s daughter, Lucie. His evidence was mainly concerned with what he understood to be Mrs van Laethem’s contribution.(3) Mrs Joanna Allan, a friend of Mrs van Laethem. She ran a small antiques business with Mrs van Laethem until about 2002. Her evidence was mainly concerned with what Mrs van Laethem had told her about her (and her mother’s) contribution to Caradoc and her relationship with Mr Brooker.(4) Alex Beeston, Mrs van Laethem’s adopted son, whose relevant evidence was mainly about Mrs van Laethem’s contribution.(5) Paul Martin, who worked for Humberts, estate agents, in 2003, and who gave evidence about what Mr Brooker told him about Mrs van Laethem’s interest in that part of Caradoc to which I shall refer as the Development Land. III The dispute[13]The legal title to the house and surrounding land was held by Mr Brooker on one title when it was bought in 1991. The legal title to part of the surrounding land has been held by what is now Caradoc Estates Ltd since 1993, when the legal title was split, with Mr Brooker retaining the house and the rest of the land. I shall generally refer to the part still vested in Mr Brooker as “Caradoc Court”, and the part held by Caradoc Estates Ltd as the “Development Land”, and to them together as “Caradoc”. Planning permission to build 6 new houses on the Development Land was granted in 1995.[14]Mr Nicholas Hextall (of John D Wood & Co), the single joint valuation expert, gave evidence of the value of the property. Caradoc Court is valued at £1,150,000, comprising the house and amenity land (16 acres). The Development Land (2 acres) is valued at £550,000. The total value of Caradoc is therefore £1,700,000.[15]This is an application under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 for a declaration of Mrs van Laethem’s interest in Caradoc Court and the Development Land. Mrs van Laethem sought relief from the court which would have given her a 50% interest in Caradoc Court and the Development Land, but now seeks somewhat less.[16]Mrs van Laethem’s case is that she is entitled to an interest in Caradoc Court and the Development Land by virtue of a common intention constructive trust or by proprietary estoppel. Mr Brooker’s case is that it was never agreed that Mrs van Laethem should have any interest in the property and any claim that she may have had upon him was settled in 1999 when he purchased a nearby property, Oakleigh, in her sole name. By way of counterclaim, Mr Brooker says that Mrs van Laethem misled him as to the extent of the monies he owed her when he acquired Oakleigh and that as a consequence she has in fact been overpaid by a sum stated in the counterclaim to be about £86,000, but now said to be as much as £140,000. IV The properties: an overview[17]It is not possible to understand the contentions of the parties or the history of this matter without an overview of the properties and some associated matters. In this section I shall set out shortly (without making any findings on disputed matters and at the risk of over-simplification) the history of the relevant properties in order to set the scene for the parties’ contentions and the detailed history. Basildon House[18]Mrs van Laethem purchased Basildon House at Great Bourton in the course of her divorce proceedings in September 1986 for £110,000. In March 1992 she charged it in favour of Mortgage Funding Corporation plc to secure a loan to her of £100,000 in connection with the purchase of Caradoc. She sold Basildon House for £205,000 in July 1994, and paid off the loan from Mortgage Funding Corporation plc. Caradoc[19]Caradoc was purchased in June 1991 in the name of Mr Brooker for £360,000. £260,000 was paid on or before completion, and the balance of £100,000 was payable to the vendors in December 1991, extended by agreement to March 1992. The balance was paid from the loan to Mrs van Laethem from Mortgage Funding Corporation plc against the security of Basildon House, and Mr Brooker granted a legal charge over Caradoc to Mrs van Laethem.[20]In the ensuing years a great deal of work was done on clearing and planting the grounds. Planning permission for the restoration was granted in February 1995, and, following considerable works of restoration, parts of Caradoc Court became habitable in 1996 (according to Mrs van Laethem) or in 1998 (according to Mr Brooker). The Development Land[21]The previous owners of Caradoc had entered into a section 52 agreement with South Herefordshire District Council, which envisaged the construction of fivecottages in the grounds. The agreement required (inter alia) that Caradoc Court be restored as a “going concern” before the last of the cottages could be sold. But this plan was inconsistent with Mr Brooker’s plan to restore Caradoc Court as a private residence, since under the planning permission then envisaged the cottages would be built close by the main house.[22]In 1993 Mr Brooker decided to move the location of the proposed development to a larger site in the grounds further from the main house. This site is what is called in this judgment the Development Land. In December 1993 the mortgage in favour of Mrs van Laethem over Caradoc was discharged as to the Development Land, and the Development Land was transferred into the name of what is now called Caradoc Estates Ltd.[23]In February 1995 Mr Brooker, Caradoc Estates Ltdand Mrs van Laethem (as mortgagee) entered into a section 106 agreement with South Herefordshire District Council. The agreement envisaged planning permission for the restoration of Caradoc Court and for the construction of six houses on the Development Land. But construction of the houses could not begin until the completion to an agreed extent of the restoration of Caradoc Court. Planning permission was granted for the development later that month. The Garden House[24]The Garden House was a project from 1994/5 to 1997 by Mrs van Laethem and Mr Brooker to build and sell a house to be built on the Old Kitchen Garden, a plot in the grounds of Sulgrave Court, the home of Mr Brooker’s parents. By then Mr Brooker was the registered owner of Sulgrave Court, which his parents had transferred to him. Planning permission had been sought and obtained to build a new house on the plot. Mrs van Laethem was to fund it and Mr Brooker was to build it.[25]The plot for the Garden House was registered in Mrs van Laethem’s name in March 1996, and it was built by Mr Brooker through Ravens Oak Ltd and an external builder. It was sold in February 1997 (with completion in April 1997) for £250,000 (with a retention by the purchasers of £25,000 to cover works still outstanding). Sulgrave Court[26]Mr Brooker’s parents had purchased Sulgrave Court, a substantial house in the village of Sulgrave, Northamptonshire, in 1985. From 1988 it was owned jointly by Mr Brooker and his parents. Mr Brooker was registered as sole proprietor in January 1991, before his parents’ deaths, and in February 1998 he sold it for £720,000. After payment of mortgages, the net balance was about £368,000. Oakleigh[27]Oakleigh is a large detached Victorian country house near Caradoc, with a number of traditional outbuildings, a modern stable yard, and a caravan site, standing in about 4 acres. It was bought in 1999 in Mrs van Laethem’s name for £225,000 out of the proceeds of sale of Sulgrave Court. Mrs van Laethem says that it was bought as a further joint venture. Mr Brooker says that the property (apart from the proposed development site) was bought by him for Mrs van Laethem in settlement of all her actual or potential claims against him or Caradoc Estates Ltd.[28]In March 2001 a planning application was made for the re-siting of the housing scheme for 6 houses on the Development Land to the caravan site at Oakleigh, but this was subsequently refused.[29]In May 2002 £100,000 was borrowed against the security of Oakleigh from The Mortgage Business plc. In July 2003 Oakleigh was sold for £390,000. The mortgage of £101,523 was repaid and Mrs van Laethem has retained £280,540. V Issues on the pleadings[30]In this section I set out the main pleaded issues. Although there is a separate defence by Caradoc Estates Ltd, by the time of the trial it was not suggested that it stood in any position different from Mr Brooker.[31]Mrs van Laethem claims that from 1987 she and Mr Brooker lived together at Basildon House. After the sale of Basildon House in 1994 the couple lived both at Sulgrave Court and stayed at Caradoc Court in the mobile home. From the time that the central proportion of Caradoc Court became habitable in August 1996 it became the parties’ residence. Mr Brooker denies that they cohabited at Basildon House. He retained his primary residence at Sulgrave Court, although he admits that he did stay at Basildon House for some periods of time. He denies that they cohabited at Caradoc Court before 1998. The bedrooms were not habitable until the late summer of 1996, and they did not cohabit there until 1998 when Sulgrave Court was sold.[32]Mrs van Laethem claims that in or about 1987 they discussed marriage and became engaged, and from 1987 their financial interests were interdependent. Mr Brooker denies they were ever engaged. They only ever discussed marriage in the most general terms and that at the time in question their relationship was troubled. He denies that their financial interests were interdependent. It was because of his doubts about the relationship that he resolved to, and did, keep the parties’ financial interests and arrangements entirely separate. In reply, she says they were engaged, and that Mr Brooker made enquiries as to whether they could be married in church. In later years Mr Brooker told her that it was more tax efficient not to formalise their engagement, whilst reassuring her that she would be “the most secure person in the world”. They were financially dependent upon each other, and she gave him access to her capital, her income and her house.[33]Mrs van Laethem claims that Mr Brooker led her to believe that she was a shareholder in Ravens Oak Ltd and Caradoc Estates Ltd. He accepts that she was a shareholder in Ravens Oak Ltd, but denies she was a shareholder in Caradoc Estates Ltd and that he led her to any belief to the contrary.[34]She claims (and he denies) that at his request, and in the belief that she had an interest in Ravens Oak Ltd or Caradoc Estates Ltd, she committed about £17,000 to the businesses CEL, Ravens Oak Ltd and Caradoc Estates Ltd. He says that any sums paid to Ravens Oak Ltd were investments made by her in the knowledge that she owned a share in it. She says that she assisted in the businesses without receiving direct payment, and he says that she provided some occasional casual assistance to CEL, but was not involved in the affairs of CEL or Caradoc Estates Ltd.[35]In reply, she says that it was her belief, consequent upon representations made by Mr Brooker, that she was a shareholder in Caradoc Estates Ltd, which owned a percentage of shares in Ravens Oak Ltd. On this premise she committed time, energy and funds to the various companies in the belief that her contribution was to the mutual benefit of the parties.

Caradoc Court and the Development Land

[36]Mrs van Laethem says that she and Mr Brooker determined to buy a property together. After an extensive search, Caradoc Court was chosen as a restoration project so as to provide an historic family home. In addition, there was a potential for development on land near the house. Mr Brooker admits that it had the potential for development on land near the house, and that Mrs van Laethem was closely involved in his own deliberations concerning his acquisition of a property.[37]Mrs van Laethem says that the purchase price of £360,000 included £100,000 raised by her against the security of Basildon House, and her initial contribution was registered as a charge. Her contribution was as an investment in the creation of the joint home for the couple, and towards the fruition of the developmental potential of the land. It was not intended by either her or by him to be confined to a mortgage. The charge did not reflect the intention of the parties. The contribution was the first tranche of a series of payments. It was understood between the parties that their respective contributions to the various property enterprises would create equal shares in the properties.[38]In her further information, she says that her contribution to the purchase price was agreed at the date of purchase of Caradoc. The provision of the charge was at the suggestion of Mr Richard Carr (the solicitor acting on the purchase), and she never agreed that it represented the extent of her interest. The constructive trust arose at the earliest in 1991 when she agreed to provide the funds, and at the latest in March 1992 when she provided the funds. At trial she contended for an alternative later date of November 1993 (without objection).[39]Mr Brooker says that he was able to negotiate an extension of the term of the Hill Samuel mortgage, due to be repaid on December 8, 1991, but was unable to secure alternative funds. Mrs van Laethem then offered to provide her property, Basildon House, as security upon which £100,000 could be raised through the Mortgage Funding Corporation plc. The terms upon which they agreed to the provision of such security were evidenced by the legal charge. He employed the moneys raised by the loan to redeem the Hill Samuel mortgage and executed the charge. The agreement evidenced a clear understanding that her loan was to be fully secured. Such an agreement was inconsistent with her acquiring any legal or beneficial interest in the property.[40]Mrs van Laethem says that it was their intention to restore the house and thereafter develop the land. In pursuance of this project, Mr Brooker split the title. Her beneficial entitlement attaches to both titles, and Caradoc Estates Ltd’s title to the Development Land is subject to the constructive trust and/or proprietary estoppel in her favour. Mr Brooker represented to her that she was to be the joint legal owner of the Development Land by reason of a 50% shareholding in the company. In her further information, she says that there was a verbal agreement (comprised in a number of conversations over the years) that she would be entitled to share in the profit from the sale of the Development Land.[41]Mr Brooker says that she consented to the split and released the Development Land from the charge. She did not acquire any legal or beneficial interest in Caradoc Court, the Development Land or Caradoc Estates Ltd.[42]Mr Brooker says that Mrs van Laethem encouraged him to buy a property for renovation. All of the properties investigated, including Caradoc, were uninhabitable and none were suitable to be a family home. The intention in acquiring it was not initially to create a family home but to generate a long term investment return for Mr Brooker, hence the purchase of a property with scope for development. Ultimately the bringing to fruition of the investment would enable the property to be restored as a family home. The final decision on which property to purchase was that of Mr Brooker’s father, as he would be providing the necessary finance through borrowings secured on Sulgrave Court. At the relevant time Caradoc Estates Ltd had significant assets apart from the building land of approximately £60,000 largely in the form of plant and equipment. Mr Brooker and his father would not have agreed, and did not agree, to Mrs van Laethem having an equal interest in Caradoc Estates Ltd in any event, as it would give her an equal interest in both the Development Land and the pre-existing assets in return for a loan of a considerable lesser value.[43]In the defence as originally served Mr Brooker said that the £100,000 advanced by Mrs van Laethem was advanced on an express agreement between them that in providing 50% of the cost of the Development Land, Mrs van Laethem was acquiring a 50% interest in the profits, if any, of the Development Land alone; all costs of development would be borne equally, and she would contribute a fixed sum of £50,000 towards the renovation of Caradoc Court in order to satisfy, and/or allow renegotiation of, the section 106 agreement to allow the development to go ahead. In the amended defence the relevant part is deleted and replaced by a plea that Mrs van Laethem advanced a proposal in November/December 1993 whereby she might participate in the development of the Development Land and acquire an interest in Caradoc Estates Ltd, but the terms upon which any such proposal could be taken forward were never agreed, and accordingly she did not acquire any interest in the Development Land, or in Caradoc Estates Ltd. He split the title so as to facilitate the eventual development in a tax efficient manner and to separate out the development business. At all relevant times, until the death of his parents, his intention was to do only sufficient building work on the house to permit renegotiation of the section 106 agreement. It is denied that she is entitled to assert any beneficial entitlement in respect of the Development Land. Contributions and detriment Physical Labour[44]Mrs van Laethem says that from 1991 to 1996 she spent almost every weekend working on Caradoc, which was uninhabitable until August 1996. Although Mr Brooker did much of the physical work himself, he relied upon her assistance throughout the period. She worked to restore the 3 acres of gardens, carrying out the manual labour to create drives, borders, rose gardens and paths, recruiting amateur help and paying for professional assistance. She did the ordering, purchase, collection, and planting of most of the plants, trees and shrubs in the garden.[45]Mr Brooker denies that she participated in any significant way in the reconstruction of the house. He denies that she spent almost every weekend working on Caradoc Court, although he did so, as the house was uninhabitable. He denies that she did any significant manual labour, which was done initially by himself and Mr Bruce Teuten. Other amateur and professional help was subsequently organised and paid for by him. He denies she did the ordering etc. of the plants etc. It was done by himself, his parents, Mrs van Laethem and outside help in conjunction with each other. He denies that Mrs van Laethem paid for any significant quantity of plants herself. Financial[46]Mrs van Laethem says that from the proceeds of Basildon House and her savings, sums were applied directly to the renovation of Caradoc Court, including £15,000 for oak timber framing; £6,500 on a road roller and tractor mower; and £5,000 for a mobile home for the couple to live in while Caradoc Court was being renovated. Mr Brooker says that he paid £15,000 for the oak timber framing out of his share of the profits arising on the sale of Garden House in 1997. He accepts that she lent £6,500 to Caradoc Estates Ltd for the purchase of a road roller in or around 1996, which was repaid to her from the proceeds of sale of railway memorabilia in 1997. He accepts that a payment of £5,000 for the mobile home was made by her, but not as a home for them, rather it was simply convenient for weekend accommodation on an ad hoc basis.[47]She says (and he does not admit) that with the remaining funds from the sale of Basildon House it was agreed between them that the sum of approximately £88,000 should be applied to the construction of the Garden House, the primary purpose of which was to secure a profit to plough back into Caradoc Court. Mr Brooker denies that there was any purpose of using any profit to renovate Caradoc Court. They initially agreed that she would purchase the Old Kitchen Garden on a deferred basis, i.e. she would pay £75,000 for the site upon completion of construction of the proposed house. In 1996 they subsequently expressly agreed that they would simply develop the Garden House as a joint venture, funded equally with any profit to be shared equally. It was his intention to primarily use his share of any profits to relieve indebtedness. Neither the £75,000 nor any other sum was therefore paid by Mrs van Laethem.[48]She says that of the net proceeds of sale of the Garden House, £25,000 was held by the purchasers on retention; £66,379 was applied to the payment of the Yorkshire Bank overdraft, and the remainder was used to feed a joint bank account with Yorkshire Bank, and applied to(a) the continuing building works at Caradoc;(b) servicing the outstanding mortgages on Sulgrave Court, and(c) their income needs. Mr Brooker puts her to proof of this, and states that the net proceeds were paid into an account in her sole name, and she is put to strict proof of how it was subsequently applied.[49]She says that in August 1996 the central portion had been made habitable, and they moved into Caradoc Court; and the equipping of the interior was predominantly paid for and orchestrated by her, for example, purchase of carpets, curtains, lighting and kitchen equipment. He denies this, saying that the only portion of Caradoc Court habitable at the time were the upstairs bedrooms, and they did not cohabit at the property, Mr Brooker retaining his primary residence at Sulgrave Court. They did not occupy Caradoc Court until February 1998. He puts her to proof that the equipping of the interior was done predominantly at her expense.[50]She says that in 1998 it was agreed that Mrs Hollis would come and live at Caradoc Court and contribute to the cost of the restoration of the East Wing, and the project was completed in 2001. Between 1999 and her death in 2002, Mrs Hollis made a capital contribution of £60,000 to £70,000 to the cost of renovation. Mr Brooker admits that Mrs Hollis came to live in the East Wing at an agreed reduced rent of £500 per calendar month in exchange for a contribution to renovation costs. She did not pay the rent, and Mr Brooker puts Mrs van Laethem to proof that Mrs Hollis contributed the capital sums mentioned. In reply, Mrs van Laethem says that because Mrs Hollis had to live in the mobile home, £500 was not a reduced rent; and that Mrs Hollis also paid a significant portion of the bills during the time she lived in the mobile home and in the house.[51]She says that from 1991 until the cessation of the relationship, the finances of the couple had been subject to the need to finance the joint project of restoration, and all of their respective funds were applied to this end. Mr Brooker denies this, and says that at all relevant times he sought to ensure that their respective moneys were carefully accounted for and any and all loans repaid in full.[52]Mr Brooker says that Oakleigh was purchased in Mrs van Laethem’s sole name in pursuance of an agreement between them to satisfy all her actual or potential claims against him or Caradoc Estates Ltd and upon the basis, advanced as true by her to him that she was entitled to £100,000 initially advanced by her and (wrongly) alleged by her to be in respect of her acquisition of an interest in Caradoc Estates Ltd and the Development Land and a further sum of approximately £100,000 owed by him in respect of capital advanced to, or used for the benefit of, Mr Brooker. In 2002 it became apparent that an adjustment would be necessary and the parties agreed that the purchase of Oakleigh was to be considered as having been in full and final settlement of all money then owed by him to her. But she retained the charge, and having received Oakleigh free of any encumbrance in full and final satisfaction the charge represented an asset in excess of her entitlement. Mrs van Laethem initially proposed selling Oakleigh and paying to him £100,000 to balance the charge, but she then decided to raise a mortgage against Oakleigh of an equivalent sum to that secured in her favour on Caradoc Court but retain her charge over Caradoc Court, and the sum thus raised by Mrs van Laethem was paid to Mr Brooker. That agreement provided him with additional working capital, but secured her interest in Oakleigh, and provided her with the value of assets that it had been intended she should receive in 1999.[53]In reply, Mrs van Laethem says that they agreed to invest together in Oakleigh. She sought the purchase of Oakleigh in her sole name, in the absence of her name on the legal title to Caradoc Court. She did not agree that the purchase of Oakleigh was in full recompense for her contribution to Caradoc Court or the Development Land. Mr Brooker acquiesced in the purchase in her name, indicating that it was tax efficient.[54]She asserts that it was understood by them both, that in committing their entire resources to the Caradoc Court project, they would each have an equal beneficial interest in both Caradoc Court and the Development Land. Caradoc Estates Ltd’s interest in the Development Land is subject to a constructive trust in her favour. This is denied. He says that her interest has never exceeded that of a mortgagee, and her interest in the Development Land lapsed upon the separation of the land from the main estate and her release of her interest.[55]In reply, she says that her capital contribution was £557,000:(i) £100,000 advance in 1992;(ii) £26,000 capital from the net proceeds of sale of Basildon House;(iii) £218,000 from the net proceeds of sale of the Garden House;(iv) £60,000-£70,000 and a further £18,000 from Mrs Hollis;(v) £100,000 from a mortgage on Oakleigh;(vi) £17,000 residue of divorce lump sum; and(vii) approximately £8,000 from the demutualisation of the Halifax Building Society. She also gave Mr Brooker access to her limited income.[56]Consequent upon their engagement, she relies upon section 37 of the Matrimonial Property and Proceedings Act 1970. He denies they were ever engaged. Counterclaim[57]Mr Brooker’s counterclaim is as follows. Paragraphs 1 to 13 of the defence are repeated. These include the pleas that the net proceeds of the Garden House were paid into an account in Mrs van Laethem’s sole name and she is put to strict proof of it (para 6B(d)); that Oakleigh was purchased in Mrs van Laethem’s sole name in pursuance of an agreement between them to satisfy all her claims and upon the basis, advanced by her to be true, that she was owed £100,000 in respect of the 1992 loan and £100,000 owed in respect of capital advanced to or used to the benefit of Mr Brooker (para 7A).[58]The counterclaim pleads that before the agreement was made relating to Oakleigh by which Mr Brooker would purchase Oakleigh in Mrs van Laethem’s sole name in full and final settlement, and in order to induce him to enter into it, she warranted and represented that she was owed £100,000 in addition to the £100,000 initially advanced to facilitate the redemption of the Hill Samuel mortgage. The basis of her claim that he owed her a further £100,000 was that she had applied the whole of the proceeds of Basildon House and subsequently the Garden House to or for his benefit. She had in fact retained the entire net proceeds of the Garden House and had not applied them to his benefit, and she had given him no credit for his share of the Garden House proceeds. As a result he agreed to pay her £86,310.85 more than he would otherwise have done and seeks a declaration that he is entitled to rescind the agreement and to the £86,310.85 or such other sum as is found due upon the taking of an account.[59]He also asserts that if she is entitled to any or all of the relief sought, he is entitled to a 50% beneficial interest in the net sale proceeds of Oakleigh and of the Garden House by virtue of the parties’ express agreement, and his original contribution. He also seeks equitable accounting since he has continued to expend considerable sums, including money inherited from both of his parents, on the development of Caradoc Court.[60]Mrs van Laethem’s defence to the counterclaim is that(a) there was no agreement that the purchase of Oakleigh in her name was to be in settlement of her claims;(b) she made no representations as alleged;(c) she did not retain any of the proceeds of the Garden House, which were all utilised in the renovation of Caradoc Court. It is her case that they embarked on a number of property ventures, including Caradoc and agreed that their respective contributions to Caradoc entitled them to a 50% interest therein. VI Legal principles Constructive trust[61]The relevant principles can be summarised as follows. A trust arises in connection with the acquisition by one party of a legal title to property whenever that party has so conducted himself that it would be inequitable to allow him to deny to the other party a beneficial interest in the property acquired. This will be so where(i) there was a common intention that both parties should have a beneficial interest and(ii) the claimant has acted to his detriment in the belief that by so acting he was acquiring a beneficial interest: Gissing v Gissing [1971] AC 886, 905; Eves v Eves [1975] 1 WLR 1338, 1341; Grant v Edwards [1986] Ch 638 at 646-7, 651; Lloyds Bank v Rosset [1991] 1 AC 107, 132. The relevant intention of each party is the intention reasonably understood by the other party to be manifested by that party’s words or conduct, notwithstanding that he did not consciously formulate that intention, or even acted with some different intention which he did not communicate: Gissing v Gissing [1971] AC 886, 906.[62]The first question is whether, independently of any inference to be drawn from the conduct of the parties, there has at any time prior to the acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially: Lloyds Bank v Rosset [1991] 1 AC 107, 132; and, among other decisions, Hyett v Stanley [2003] EWCA Civ 942, [2004] 1 FLR 394, 397; Oxley v Hiscock [2004] EWCA Civ 546, [2004] 2 FLR 669, 706.[63]Express common intention must be founded on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been: Lloyds Bank v Rosset [1991] 1 AC 107, 132, repeated in many subsequent decisions. A common intention by the parties that a house is to be renovated as a “joint venture” does not throw any light on their intentions with respect to the beneficial ownership of the property: ibid, at 130. Excuses[64]Where the man puts forward some excuse for the property not being placed in joint names, then(a) it may be direct evidence of a common intention that the woman is to have a beneficial interest or(b) it may found an estoppel, or a combination of the two. In Eves v Eves [1975] 1 WLR 1338 and Grant v Edwards [1986] Ch 638 the legal owner offered an “excuse” as to why the other person was not registered as joint owner. In Eves v Eves, the defendant had told the plaintiff that he had intended to put the property in joint names, but that it was not possible to do so until she was 21. In fact, he never intended to do so, but always determined to have it in his own name. In Grant v Edwards, the defendant told his partner that her name was not going on to the title because (he said) it would prejudice her matrimonial proceedings.[65]In Eves v Eves Lord Denning MR, at 1342, used some language which reflects proprietary estoppel, but treated the excuse as being evidence of an objective common intention:
“The man never intended to put it in joint names but always determined to have it in his own name. It seems to me that he should be judged by what he told her – by what he led her to believe – and not by his own intent which he kept to himself. Lord Diplock made this clear in Gissing vGissing [1971] A.C. 886, 906.”
Brightman J, at 1344, said of the defendant’s answer that it was an excuse:
“It seems to me that this answer raises a clear inference that there was an understanding between them that she was intended to have some sort of proprietary interest in the house: otherwise no excuse would have been needed.”
[66]In Grant v Edwards, Nourse LJ at 649 viewed the excuse as demonstrating an understanding between the parties:
“ … [T]hese facts appear to me to raise a clear inference that there was an understanding between the plaintiff and the defendant, or a common intention, that the plaintiff was to have some sort of proprietary interest in the house; otherwise no excuse for not putting her name onto the title would have been needed.”
Mustill LJ saw the excuse in terms which almost amounted to proprietary estoppel: “… the nature of the excuse which he gave must have led the plaintiff to believe that she would in the future have her name on the title, and this in turn would justify her in concluding that she had from the outset some kind of right to the house” (at 653). Nourse LJ’s approach was cited with approval by Lord Bridge in Lloyds Bank v Rosset at 133.[67]As the Law Commission, Sharing Homes: A Discussion Paper (Law Com No 278, 2002) points out (para 2.68) in neither Eves v Eves nor Grant v Edwards was there a true “common intention,” in that the man did not really wish to share the property beneficially with the woman, but a constructive trust was nevertheless imposed, apparently to ensure that the woman obtained the share which the man led her to believe she could have had. The Discussion Paper cites Gardner (1993) 109 LQR 263, 265:
“the fact that the men’s statements were excuses ... does not mean that the men were thereby acknowledging an agreement whereby the woman would have a share.”
In my judgment this accords with commonsense, and if the matter were free from authority, I would have preferred a proprietary estoppel approach in “excuse” cases.[68]Where the evidence is that the matter was not discussed at all, an affirmative answer may be inferred from the fact that each had made a financial contribution: Lloyds Bank v Rosset [1991] 1 AC 107, 132-3; Grant v Edwards [1986] Ch 638, at 655; Oxley v Hiscock [2004] EWCA Civ 546, [2004] 2 FLR 669, 706. In the absence of a proved or inferred bargain or intention, the making of subsequent indirect contributions, for instance in the shape of a contribution to general household expenses, is not sufficient to found an interest: Grant v Edwards [1986] Ch 638, 653.[69]Exceptionally the agreement, arrangement or understanding may be arrived at after the date of the original acquisition: Lloyds Bank v Rosset [1991] 1 AC 107, at 132; Gissing v Gissing, [1971] AC at 901; Grant v Edwards [1986] Ch 638, at 651-2,per Mustill LJ; Stokes v Anderson [1991] 1 FLR 391, 398.But in Banner Homes v Luff Developments Ltd [20020] EWCA Civ 18, [2002] 2 All ER 117, 138,Chadwick LJ said that where the arrangement or understanding is reached in relation to property already owned by one of the parties, he may (if the arrangement is of sufficient certainty to be enforced specifically) thereby constitute himself trustee on the basis that “equity looks on that as done which ought to be done”; or an equity may arise under the principles developed in the proprietary estoppel cases. That decision was followed by Lewison J in Kilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd [2004] EWHC 2547 (Ch).[70]In Cobbe v Yeomans Row Management Ltd [2005] EWHC 266 (Ch),Etherton J held that there was no reason in principle why a constructive trust should not be as equally available as a remedial instrument in a “post-acquisition” case as in a “pre-acquisition” case in order to prevent injustice from the defendant's unconscionable conduct in circumstances where the facts are capable of giving rise to a proprietary estoppel. Chadwick LJ’s reference in Banner Homes v Luff Developments Ltd to a post-acquisition arrangement or understanding being of sufficient certainty to be enforced specifically was obiter, and it was clear that he was not ruling out the possibility of a constructive trust in other “post-acquisition” cases.[71]Once an express common intention has been established, it will only be necessary for the claimant to show that she acted to her detriment or significantly altered her position in reliance on the agreement so that she would thereby acquire an interest: Gissing v Gissing [1971] AC 886,905; Grant v Edwards [1986] Ch 638, 647; Lloyds Bank v Rosset [1991] 1 AC 107, 132. What is required is for her to do something to facilitate the acquisition of the property, either by way of direct financial contribution or some other material sacrifice by way of contribution to or economy in the general family expenditure: Gissing v Gissing [1971] AC 886, 908-909. The detriment need not necessarily consist of the expenditure of money or some other quantifiable financial detriment: Grant v Edwards [1986] Ch 638, at 648; Eves v Eves [1975] 1 WLR 1338, at 1342.[72]The second question is the extent of the respective beneficial interests. Where the existence of some beneficial interest in the claimant has been shown, prima facie the interest of the claimant will be that which the parties intended: Grant v Edwards [1986] Ch 638, at 657. In many such cases the answer will be provided by evidence of what the parties said and did, but if there is no evidence of any discussion as to the amount the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property: Midland Bank v Cooke [1995] 2 FLR 915, 926; Oxley v Hiscock [2004] EWCA Civ 546,[2004] 2 FLR 669, 706. Proprietary Estoppel[73]The fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine. The court must look at the matter in the round: Gillett v Holt [2001] Ch 210, 225, per Robert Walker LJ. There must be a sufficient link between the promises relied upon and the conduct which constitutes the detriment; the promises relied upon do not have to be the sole inducement for the conduct: it is sufficient if they are an inducement; and once it has been established that promises were made, and that there has been conduct by the plaintiff of such a nature that inducement may be inferred then the burden of proof shifts to the defendants to establish that he did not rely on the promises: ibid 226-227. It is the woman’s detrimental reliance on the promise or assurance which makes it irrevocable: ibid 229.[74]Detriment 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 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 - the essential test of unconscionability: Gillett v Holt at 232.[75]In satisfying the equity, the aim is to “look at the circumstances in each case to decide in what way the equity can be satisfied”. The court approaches this task in a cautious way in order to achieve what Scarman LJ in Crabb v Arun District Council [1976] Ch 179, at 198-9, called “the minimum equity to do justice to the plaintiff.”[76]The court must also do justice to the defendant: Jennings v Rice [2002] EWCA Civ 159, para 48, per Robert Walker LJ. The equity arises not from the claimant’s expectations alone, but from the combination of expectations, detrimental reliance, and the unconscionableness of allowing the defendant to go back on the assurances: Jennings v Rice, para 49. The task of the court is to do justice. The most essential requirement is that there must be proportionality between the expectation and the detriment: ibid,para 36, per Aldous LJ. The essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result, and a disproportionate remedy cannot be the right way of going about that: ibid, para 56, per Robert Walker LJ.[77]In Jennings v Rice, at paras 45-47, Robert Walker LJ said that sometimes the assurances, and the reliance, have a consensual character falling not far short of an enforceable contract, and in such cases proprietary estoppel may become indistinguishable from a constructive trust: Yaxley v Gotts [2000] Ch 162. In a case of that sort both the expectations and the detriment will have been defined with reasonable clarity. But if the claimant’s expectations are uncertain, as will be the case with many honest claimants, then their specific vindication cannot be the appropriate test. A similar problem arises if the court is not satisfied that the high level of the expectation is fairly derived from the assurances, which may have justified only a lower level of expectation. In such cases the court may still take the expectations as a starting point, but no more.

Relationship between constructive trust and proprietary estoppel

[78]Sir Nicolas Browne-Wilkinson V-C said in Grant v Edwards [1986] Ch 638, 656:
“As to the link between common intention and detriment, useful guidance may in the future be obtained from the principles underlying the law of proprietary estoppel which in my judgment are closely akin to those laid down in Gissing v Gissing. In both, the claimant must to the knowledge of the legal owner have acted in the belief that the claimant has or will obtain an interest in the property. In both, the claimant must have acted to his or detriment in reliance on such belief. The two principles have been developed separately without cross fertilisation between them: but they rest on the same foundation and have on all other matters reached the same conclusions.”
Nourse LJ said in Stokes v Anderson [1991] 1 FLR 391, 399:
“It is possible that the House of Lords will one day decide to solve the problems presented by these types of case by assimilating the two principles. But they have not yet been assimilated and we must continue to regard cases such as the present as being governed by the principles of Gissing v Gissing.”
See also Hyett v Stanley [2003] EWCA Civ 942, [2004] 1 FLR 394, 404, per Sir Martin Nourse.[79]But matters have moved on since those decisions. In Oxley v Hiscock [2004] EWCA Civ 546, [2004] 2 FLR 669, 704-5, paras 65 to 66, Chadwick LJ said:
“If these problems are to be solved by an analysis based on constructive trust, which requires the imputation of some common intention at the time of acquisition, then, as Nourse LJ observed in Stokes v Anderson [1991] 1 FLR 391 (at 399F), ‘the court must supply the common intention by reference to that which all the material circumstances have shown to be fair’. That is, I think, what Waite LJ had in mind when he referred, in Midland Bank plc v Cooke and Another [1995] 2 FLR 915, 927G, to ‘equity’s assistance in formulating a fair presumed basis for the sharing of the beneficial title’ in a case where the parties ‘had been honest enough to admit they never gave ownership a thought’. Once it is recognised that what the court is doing, in cases of this nature, is to supply or impute a common intention as to the parties’ respective shares (in circumstances in which there was, in fact, no common intention) on the basis of that which, in the light of all the material circumstances (including the acts and conduct of the parties after the acquisition) is shown to be fair, it seems to me very difficult to avoid the conclusion that an analysis in terms of proprietary estoppel will, necessarily, lead to the same result; and that it may be more satisfactory to accept that there is no difference, in cases of this nature, between constructive trust and proprietary estoppel”
[80]He concluded (at 707, para 71) that “The time has come to accept that there is no difference in outcome, in cases of this nature, whether the true analysis lies in constructive trust or in proprietary estoppel.”[81]The whole course of dealing “includes the arrangements which they make from time to time in order to meet the outgoings (for example, mortgage contributions, council tax and utilities, repairs, insurance and housekeeping) which have to be met if they are to live in the property as their home.” Oxley v Hiscock [2004] EWCA Civ 546, [2004] 2 FLR 669 at 706. See also Stokes v Anderson [1991] 1 FLR 391, 401.[82]In Jennings v Rice [2002] EWCA Civ 159, paras 51-52, Robert Walker LJ set out (in a proprietary estoppel case) a non-exhaustive list of factors which it might be appropriate for the court to take into account, including expenditure on improvements to another person’s house. But he said that it would be unwise to attempt any comprehensive enumeration of the factors relevant to the exercise of the court's discretion, or to suggest any hierarchy of factors. They include the conduct of the parties, the need for a clean break, alterations in the benefactor’s assets and circumstances, especially where the benefactor’s assurances have been given, and the claimant’s detriment has been suffered, over a long period of years; the likely effect of taxation; and (to a limited degree) the other claims (legal or moral) on the benefactor. No doubt there are many other factors which it may be right for the court to take into account in particular factual situations. There must be proportionality between remedy and detriment. VII The principal arguments Mrs van Laethem’s case[83]There is a vast discrepancy infinancial sophistication between the two parties. Mrs van Laethem was more likely to rely upon verbal assurances and trust Mr Brooker, who appeared to have some experience of finance and concern for her. The existence of the relationship makes it more likely that Mrs van Laethem held a reasonable belief that she was to secure a share in a property which she had contributed to at the outset and continued to do in terms of labour and money thereafter.[84]The existence of an engagement is material in that it provides a presumption as to the intention of the contributing party to share in the benefit conferred by reason of a capital injection: Law Reform (Miscellaneous Provisions) Act 1970, section 2(1); Matrimonial Proceedings and Property Act 1970, section 37. There was an agreement to marry, which still existed at the date of purchase of Caradoc. The agreement gives rise to a presumption that her contribution to the purchase and her physical endeavours were to give her a beneficial interest, which interest can be enhanced by her subsequent contributions.[85]Examples of Mr Brooker’s conduct which either induced or allowed Mrs van Laethem to believe that she was to have a share in Caradoc Court and the Development Land include the facts that: he accepted Mrs van Laethem’s equity and risk of loss of Basildon House; from 1993 he expressly disavowed the charge in relation to their dealings; Mrs van Laethem had no reason to suppose that her further capital injection via sale of Basildon House in 1994-1997, and the Garden House funds, was accepted only on a loan basis and not as a contribution to the property.[86]Mr Brooker needed the assistance of Mrs van Laethem to complete the purchase and to bring the project to fruition. Mrs van Laethem injected substantial funds into that project at its inception and expected to have to plough in all her equity in Basildon House, to fund subsequent development. Mr Brooker readily accepted that capital injection, and told her that they could better order their tax affairs if she were not on the title deeds, that she would share as to 50% of the Development Land, and that she would be the “most secure person in the world”.[87]Mrs van Laethem has suffered real detriment based upon a belief that she was to acquire a share in fruits of the project. She took no job external to the project, no pension provision was made, she committed all her funds and she encouraged Mrs Hollis to expend funds to her detriment as sole beneficiary. Mr Brooker[88]To establish a constructive trust Mrs van Laethem must prove a common intention or agreement and a detrimental reliance which is consequential upon it. There was in fact no such agreement. There is no action by Mrs van Laethem which is so unequivocally related to the acquisition of an interest that it can evidence an agreement or constitute the material from which such an agreement or common intention can be inferred.[89]The only matter to which Mrs van Laethem can point in 1992 is the provision subject to Mr Brooker’s indemnities of her property as security. This is not evidence of the acquisition of an interest in the circumstances (in fact the reverse). No subsequent agreement for the acquisition of a share is alleged and there is no evidence of a sufficiently cogent act to justify the inference of an agreement or intention to change the established beneficial interest of Mr Brooker in Caradoc.[90]If and to the extent that Mrs van Laethem now suggests a constructive trust arises in 1993 the evidence demonstrates there is no possible basis for this. In 1993 nothing was invested by Mrs van Laethem. She has not contended that she agreed to the release of the Development Land to Caradoc Estates Ltd on the basis of an agreement or promise that she would have an interest in the land. In fact she has said that there were abortive discussions which came to nothing and nothing was agreed.[91]Throughout the history of the matter it is clear that both parties have separated out their finances and interests in a manner inconsistent with a joint venture involving shared beneficial interests: the charge taken by Mrs van Laethem over Caradoc; the independent dealings with Mr Carr that Mrs van Laethem had over e.g. Oakleigh; the separate bank accounts for all capital funds. In particular, reliance is placed on Mrs van Laethem’s 1987 Will, which appointed Mr Brooker as her executor, but gave everything to her daughters and nothing to Mr Brooker (apart from a choice of a photograph of her, a “hound” painting and a “fox” pin), and which demonstrates a clear intention to preserve her assets separately from Mr Brooker and for the benefit of her children.[92]Accordingly, there is:(a) no evidence of any express agreement to share the beneficial interest in Caradoc Court or the Development Land;(b) no evidence of any action on the part of Mrs van Laethem either at the time of the acquisition (1991) or subsequently which is sufficiently significant and referable to the acquisition of an interest from which such an agreement or common intention could be inferred;(c) a pleaded disavowal of any agreement or common intention or other basis for a constructive trust thereafter;(d) no evidence of any reliance by Mrs van Laethem to her detriment upon which a constructive trust or a proprietary estoppel could be based (but she does not get even that far until she proves the common intention);(e) no evidence which supports an intention to share the beneficial interest equally.[93]If, which is denied, there was an agreement that Mrs van Laethem should have a beneficial interest, then there was no agreement as to what share she should have. The court would therefore have to assess an interest on what is fair.[94]There was a significant imbalance between Mr Brooker’s contribution as against Mrs van Laethem’s. Mr Brooker provided (by himself or his family) £260,000 towards the purchase price of Caradoc, and since he remains liable to Mrs van Laethem for the loan secured on Caradoc he in effect contributed the totality of the purchase price. His further contributions were:(1) In 1997 a sale of railway memorabilia in the ownership of Caradoc Estates Ltd but assembled by Mr Brooker and/or his family fetched £14,776.82 net. From this Mrs van Laethem was repaid £6,500 she had loaned the company for a roller in 1996, but it is unclear what happened to the balance of the proceeds of the sale which she managed.(2) Mr Brooker contributed the plot in 1996 on which the Garden House was built and a substantial contribution in the form of his labour and undoubted (and unchallenged) skills. This led to the generation of £218,000 net in 1997.(3) The provision of the plot enabled the Yorkshire Bank mortgage to be taken and joint funds of over £12,000 net eventuated (after indebtedness of the companies was reduced).(4) On the sale of the Garden House the total net proceeds passed to Mrs van Laethem and how she dealt with them is unclear. Some of the monies did find their way into the Yorkshire Bank joint account and thus towards living and building costs. At the very least the proceeds of the Garden House were beneficially jointly owned and Mr Brooker did not receive his share.(5) On the sale of Sulgrave Court Mr Brooker realised at least £355,000 net, some of which went into some other projects such as the Brackley Unit but which in turn returned funds to his accounts with profit to be applied to Caradoc. He contributed £1,000 pm to the joint account until at least the purchase of Oakleigh which he bought outright.(6) In 1998 Mr Brooker negotiated a grant of a right of way over land at Caradoc which netted another £10,000.(7) In 1999 he bought Oakleigh for Mrs van Laethem, which she chose to sell but re-invested in the property market and has not therefore lost (or has not needed to lose) her place in the market.(8) In 2000 there was an arson attack at Brackley and Mr Brooker received £18,000 in insurance credited to his Lloyds Bank account in September 2000.(9) Mr Brooker was contributing his labour and skill (which is far more significant than Mrs van Laethem’s contribution) and has continued to do so since the period of cohabitation ended in 1999. Some measure of the value of his continuing work is reflected by the increase in value of Caradoc Court from £700,000 in 2003 (Humberts’ valuation) to £1,150,000 in January 2005 (the expert’s report of Mr Hextall for these proceedings).[95]In terms of her financial contribution Mrs van Laethem was never in a position to and did not contribute more than she had. All that she had was £96,665 on the sale of Basildon and the £100,000 charge. The reality is she contributed nothing. Mr Brooker paid the interest and repayments on the mortgage on Basildon House and after sale of Basildon House the £100,000 remained and remains secured on Caradoc. The one exception to that may be argued to be the contribution to the cost of the works on the East Wing which Mrs Hollis is said to have made. However, the evidence for this contribution (alleged by Mrs van Laethem to be some £60-70,000 between 1999 and 2002) is wholly missing.[96]If Mrs van Laethem seeks to pursue a claim under a proprietary estoppel she must plead and prove:(1) Encouragement or inducement of a belief in an interest; but none has been pleaded or proved; rather Mrs van Laethem insists Mr Brooker always denied her interest.(2) Detrimental reliance: Mrs van Laethem cannot rely on a belief that she has stated that Mr Brooker denied. Mrs van Laethem has sought to engender herself an unreasonable and unilateral belief.(3) Unconscionability: it is neither pleaded nor proved.[97]If any estoppel is made out, the nature of the interest acquired must be considered in assessing how to satisfy the equity. There is no evidence of Mrs van Laethem believing she had an interest in Caradoc Court itself (or any basis upon which she could so believe) and her aspiration seems to have centred on an interest in the Development Land. She has, however, received Oakleigh which was then worth more than half the current net value of the Development Land so that any equity she has (which is denied) has already been met.[98]In assessing the existence of any reliance or detriment and the extent of any equity that arises, the court must consider the benefits that accrued to Mrs van Laethem from the transaction and set them off against the conduct she contends amounts to detrimental reliance. She would have been unable to enter into the Garden House project but for Mr Brooker providing the plot of land and his skills and labour. This was therefore no detrimental reliance but a simple joint venture from which she received at least her full share of benefit. Thereafter she enjoyed rent free accommodation for a period that is in issue but at least from 1998, and her own living and personal expenses were met from the joint accounts. After she sold Basildon House she would have needed somewhere to live and once she left her mother’s home she would have had to pay for this. In the event she has had rent free accommodation for at least 7 years. She has had the benefit of a property and re-invested in the property market.[99]An order for sale is resisted. If a trust is found it would have been created by Mr Brooker whose intention was clearly to remain in the property which was his life’s work and the property is certainly now held as a home for him and his wife and son. His son’s interests and welfare must be taken into account: Trusts of Land and Appointment of Trustees Act 1996, section 15(1)(c). Mrs van Laethem had a home in Somerset (since sold), she has security in the form of a charge over Caradoc and she has an inheritance from her mother. Mr Brooker does not have these benefits but he has obligations to his young family. In the circumstances any interest to which Mrs van Laethem may be entitled over and beyond what she has already had (from Oakleigh), or now has (the charge) can and should be met by securing the balance by way of a further charge over the property to be discharged by Mr Brooker and/or Caradoc Estates Ltd on terms. VIII Conclusions A. General[100]In this necessarily lengthy section, I shall set out in some detail the facts, the contentions, including my conclusions on some of the less central issues, and finally my conclusions on the central issues.[101]This is not the usual case involving a property dispute between unmarried couples. Although Mrs van Laethem emphasised that Caradoc was originally envisaged as a home, the size of the property and its development potential for the building of houses in its grounds made it from the outset an investment vehicle as well as a potential home. Even Mrs van Laethem accepted that they did not live there before 1996. Both parties are agreed that the Garden House project was a joint venture for construction and sale, and the Garden House was in Mrs van Laethem’s name. Oakleigh was also in her name, and her case is that it was another joint venture.I should add that there was much discussion about capital gains tax and the principal residence exemption in relation to the transactions in this case, but it may be that on proper analysis Mr Brooker and Mrs van Laethem were involved in a taxable trade. It is not necessary to express a view on that for the purposes of this judgment.[102]I accept the point made for Mr Brooker that where the parties are not purchasing the property to live in together as man and wife (as here) the task of finding a common intention to share the beneficial interest by inference from the circumstances is more difficult. B. The relationship[103]This dispute, like other cases involving disputes over property between unmarried couples, has much in common with a matrimonial dispute. In particular, the evidence on both sides contains a great deal of contentious personal material about the relationship between the parties. I was shown a number of emotional letters and e-mails from Mrs van Laethem, and each party has made personal accusations against the other, particularly about violence in the relationship. I am satisfied that I do not have to decide more than what is in any event plain, namely that the relationship was at times a difficult and stormy one, and I will not rehearse the allegations in this judgment. The personal material is of little relevance, except in relation to(a) Mrs van Laethem’s claim that they were engaged to be married, which would have the effect that they are to be treated as husband and wife in respect of the acquisition of property during the engagement: Matrimonial Property and Proceedings Act 1970, section 37; Law Reform (Miscellaneous Provisions) Act 1970, section 2(1); and(b) Mr Brooker’s claim that following a row in 1987 he determined to keep his financial affairs separate from hers.[104]Mrs van Laethem says that she and Mr Brooker lived together from 1987 (with a few weeks’ separation), and that there was talk of marriage (which Mr Brooker accepted in the witness box had taken place at the beginning of the relationship), and the exchange of a ring. Although there was no formal engagement to marry, they were engaged.[105]Mrs van Laethem’s account is that their relationship was crystallised by their buying together an antique ring, costing £550, at Charlbury Antiques Fair. They had talked of marriage before that date, and she believed that they both understood they were intending to marry. They never called it an engagement ring, but it was something that they bought together to mark their relationship. She believed that Mr Brooker paid for the ring, and he had paid for it to be sent away to be altered at his expense. In cross-examination she accepted that she was not sure whether they had paid for it jointly or whether he had paid for it alone. She had been through a formal engagement before, and being somewhat older by that time, she did not want to talk about a formal engagement. Mr Brooker was very keen to marry in a church and wrote to a vicar at Haworth in Yorkshire because he understood that the vicar there was known to be relaxed about marring divorcees in church. During the early period they talked a lot about getting married and Mr Brooker seemed to be very keen to go ahead with it. But he was worried about the financial situation if they married immediately, because her maintenance would stop. He was very keen on marrying her and she genuinely wanted to marry him. Mrs van Laethem says that in 1987 they had to postpone any possibility of marriage because her father had had a stroke and died in June of that year. She also had a custody battle in the High Court, and she was preoccupied with those matters. As a result they put back any thought of marriage.[106]Mr Brooker says that given the seriousness and the duration of the break, there was no talk of engagement or marriage during 1987/1988. The ring was no more than a replacement for the one she no longer wanted from Mr Beeston, it had nothing to do with Mr Brooker and signified nothing between them. In oral evidence he said that he did not recall writing to a vicar about marriage, or having the ring altered.[107]There is also a dispute about whether they lived together. Mrs van Laethem says that between 1987 and 1994 she and Mr Brooker lived together as man and wife at Basildon House. After it was sold in July 1994, she bought a mobile home for their joint use at Caradoc Court, until there were habitable bedrooms in 1996, from which time they lived together at Caradoc Court. In oral evidence she said that they stayed with her mother once a week, and at Sulgrave Court one or two nights a week. She accepted that Mr Brooker left his furniture at Sulgrave Court. She also accepted that the transfer of the Garden House and the Yorkshire Bank mortgage in 1996 showed her address as her mother’s house.[108]Mr Brooker says that although they stayed together on occasion, he never lived at Basildon House, and she never lived at Sulgrave Court. He says that after Basildon House was sold, Mrs van Laethem lived with her mother in Warmington; and that the mobile home was simply a place to stay at weekends while they were working at Caradoc Court, and it was never a joint home. They only began to cohabit as a couple when they removed all their possessions to the few habitable rooms at Caradoc Court in 1998 (not 1996).[109]Mrs Hamel-Findhammer’s evidence was that when she visited Sulgrave Court in 1993, Mr Brooker and Mrs van Laethem were staying at Basildon House or at Caradoc Court, but when she visited in May 1996 they were living at Caradoc Court most of the time in the mobile home. Mr Teuten’s evidence was that when Basildon House was sold, Mrs van Laethem and Mr Brooker lived at Sulgrave Court, and when Sulgrave Court was sold, with Mrs Hollis, and subsequently in the mobile home at Caradoc Court. Mrs Allan’s evidence was that Mr Brooker and Mrs Van Laethem used to spend the week at Basildon House and every weekend at Caradoc Court. After a couple of years they bought a mobile home and then made the decision to move permanently to Caradoc Court.[110]Mr Brooker says that within months of the beginning of their relationship, a serious row broke out between them. Mrs van Laethem considered that he should demand further remuneration from the family business, CEL. The breakdown was serious and he wanted to end the relationship. Mrs van Laethem was determined to save the relationship and after some months persuaded him to try again. He says that the break in trust he suffered left him determined to keep their monetary affairs separate, and to ensure they remained so until he became confident enough to reconsider a closer involvement.[111]He relies on a letter dated December 21, 1986 which Mrs van Laethem wrote to him following an argument between them. She said:
“If you are willing I would love to try to pick up the pieces and to return to that happiness we once had? … I know we also have another problem which seems to have upset you greatly and one we have talked about, that is money, but if the business is really doing well and you get the Roger saga sorted out hopefully you will see a bit of light through the trees quite quickly.”
[112]Mrs van Laethem said that she could not remember these events, but accepted that money was an issue over which they had argued.[113]Mr Brooker says that their relationship ended in 1999. By the summer of 1998 he realised that his feelings were no stronger than they were at the time of their original break-up in 1987. He tried without success to discuss his concerns with Mrs van Laethem, and he withdrew into himself knowing whatever relationship they had shared was at an end. They increasingly began to live separate lives. During 1999 he used the internet to search out possible business opportunities in the United States, and in March 2000 he visited the United States to follow up various contacts he had made. The trip proved unsuccessful but did provide an introduction to Mrs Anna Chismar (who later became his wife), with whom he began to correspond.[114]Mrs van Laethem’s account was that their relationship was especially strong from 1992, when she suffered from breast cancer, but when in 1995 she started taking the drug tamoxifen to treat the cancer their relationship began to suffer. She was tired, overwrought and they had monumental debts. Mr Brooker had to deal with the death of both his parents and they had a lot of worries of all sorts. She had to cope with radiotherapy and chemotherapy, as well as taking very strong drugs. In 1999 Mr Brooker had commenced correspondence with a female friend in the United States, with whom he had made contact via the internet. He then met Mrs Chismar through the internet after his very first visit to the United States in 2000. Mrs van Laethem says that she had thought that when they were going through a bad patch it was just a temporary blip because there had been no serious bad feelings between them. When he went to meet Mrs Chismar she knew that their relationship was strained, mainly because of lack of money.[115]When Mr Brooker first went to America in 2000, under the advice of family and friends, she went to a London solicitor, who suggested that she should speak to Mr Brooker about her position in relation to Caradoc. She told him she was worried, and he said that she was very secure and it was her home as much as it was his. She asked him about the woman to whom he was writing, and he said that it was not what she thought it was.[116]Mr Brooker became engaged to Mrs Chismar in June 2002. Their son James was born on April 23, 2003. Mrs Chismar came to live in Caradoc in October 2003 and she and Mr Brooker were married on March 11, 2004. Mrs van Laethem has still not vacated the part of Caradoc Court in which she was staying.[117]The only extraneous material which is said to shed any light on whether there was an engagement is a registered envelope dated February 25, 1987 addressed to Mr Brooker, and what is said to be its contents, a note or slip referring to a sapphire and diamond ring.[118]My conclusion on this aspect of the case is that even if there was talk of marriage in the early period, there is no evidence of an engagement, and I do not think that at any material time (that is, from 1991 onwards, when property was first acquired) Mrs van Laethem and Mr Brooker could be said to have been engaged to be married. There is an element of wishful thinking in Mrs van Laethem’s account.[119]I accept that Caradoc Court did not become habitable until 1998. It is plain that Mrs van Laethem and Mr Brooker were closely associated and spent much time in each other’s company and stayed with each other most of the time, at Basildon House first and then in the mobile home, and from 1998 at Caradoc Court. But I accept that Mr Brooker probably thought of Sulgrave Court as his home until Caradoc Court was habitable in 1998. Mr Brooker had stayed at her home, but he never took his possessions or papers there (which Mrs van Laethem accepts) and he denies he took many clothes there. Mr Brooker spent much of his time at Sulgrave Court because that was where his businesses and workshops were.[120]It is clear that there had been a substantial deterioration in the relationship by 1999, and on any view the intimate relationship was over by 2000.[121]I do not consider that the letter of December 21, 1986 which Mrs van Laethem wrote to Mr Brooker following an argument between them, is of assistance. It does indicate that they had had arguments about money, which Mrs van Laethem accepted. It was suggested that this letter supported Mr Brooker’s evidence that he had determined from this period to keep their financial affairs separate, but there is nothing in it to suggest that, and the whole history of their relationship at least until May 2002 shows that if he ever had such an intention, he did not carry it through.[122]I accept that in some respects Mrs van Laethem looked after her own interests, and that of her daughters, but the finances of Mrs van Laethem and Mr Brooker were on any view intertwined by their joint development of the Garden House and by what in my judgment became the joint venture in the Development Land and in Oakleigh. They ran a joint account with the Yorkshire Bank from February 1997 until about 2004. I reject Mr Brooker’s evidence that the row in 1987 was key to understanding why their finances were separately defined, and how their dealings thereafter were conducted in a businesslike way. C. The acquisition of Caradoc, the restoration of Caradoc Court, sale of Basildon House, and the Garden House joint venture[123]I deal with these together because of the importance of the ultimate use of the proceeds of sale of Basildon House in the restoration of Caradoc Court. 1988-1991[124]Mrs van Laethem says that by 1988 she wanted Mr Brooker to buy a cottage to renovate on a speculative basis, and they looked together for a suitable property. She bid on their behalf at two auctions but they failed to secure anything. One of the properties was at Wardington, near Banbury, and the other was near Blakesley, Northamptonshire.[125]She says that by spring 1989 they had already decided to look around in the Cotswolds to try to find a period house to make a family home for them, possibly requiring some restoration. When they were at Stroud, Mr Brooker said that since they were fairly close to Ross-on-Wye they should go and see a property which he described as a “dream house”. She knew what he was referring to, because he had repeatedly told her ever since she had met him that in 1984 his parents had attempted to purchase what he regarded as a wonderful property in Herefordshire. They had made an offer, but it had not been accepted, and it had been bought by somebody else. When they visited they found that it was no more than a burnt out ruin.[126]In 1990 they stopped looking at properties because there had been a property slump. It was difficult for them because there was never any money. They had talked about having a child and it was about that time that she became pregnant, but she lost the baby after a few weeks. The alleged agreement in 1991 and the mortgage in 1992[127]Mrs van Laethem says in her witness statement that their intention was to buy a new home in their joint names. They agreed between them that they wanted to go ahead and make an offer to buy Caradoc. They had to raise the total sum of £360,000, and it was clear that it was a project which would take all their limited capital and commitment. They assumed that, in order to acquire it, she would have to sell Basildon House and put in cash to make up the purchase price. Mr Brooker wanted it to be held in his own name but as “our home.” He required that it should be put into his name alone because she still owned property and he argued that she would have to pay capital gains tax because she was retaining Basildon House to raise a mortgage. He told her that as she would be retaining her property for a period, an eventual capital gains tax bill would be saved if Caradoc was his property alone. Mrs van Laethem says that she did not accept without question that Caradoc was to go into Mr Brooker’s name alone. She felt it was hers as much as his. She relied upon the fact that, by putting the property into his name, there would be a saving of capital gains tax on the eventual sale of Basildon House, and possibly any other properties which they might buy. He raised the argument about tax repeatedly, and she gave into him.[128]Mrs van Laethem says thatMr Carr raised the issue of whether or not the property should go into joint names, and Mr Brooker said “We have already discussed it; I am not happy with it, we have agreed it anyway” or words to similar effect, but Mr Carr suggested that she should have a charge over Caradoc for her £100,000 contribution. She also recalls that he also asked her if she did want to share in the property. As ever, she looked to Mr Brooker for his view, and he emphatically declined, and so she acquiesced, as in most other things in their relationship. She always gave into Mr Brooker because he was the dominant person in the relationship. Whilst he refused to put her name on the title deeds, he assured her that her contribution to the purchase price gave her security for the future.[129]Mr Brooker says that when Caradoc was purchased in 1991, Mrs van Laethem made no contribution to the purchase price and there was no intention or expectation that she would. According to Mr Brooker, the £100,000 balance was to be funded from a project which he was to undertake with Mr Leonard Rayner, and from a further loan to be arranged by Mr Brooker’s father. But the venture, and his father’s attempts to obtain a loan, came to nothing, and the vendors pressed for payment. Mr Brooker says that Mrs van Laethem “only as a last resort, very kindly offered Basildon House as security for me to obtain a loan.” She was, by providing Basildon House as security, merely the conduit for the money that Mr Brooker was in effect raising himself, while giving her the security of the charge on Caradoc and indemnifying Mrs van Laethem in respect of the charge on Basildon House, for which he was paying. Her interest was no more than that of a mortgagee. The mortgage was so set about with protective provisions (the covenants, indemnity and parallel charge over Caradoc) as to demonstrate conclusively that it was not a joint venture. Her position was wholly inconsistent with any agreement that she had then acquired or thereby acquired any beneficial interest in his property. In cross-examination Mr Brooker said the charge was drawn up at his insistence because Mrs van Laethem did not want to make an investment.[130]Mrs van Laethem says that the charge is not a true picture of the agreement reached between herself and Mr Brooker when she provided £100,000 for Mr Brooker to complete the purchase. The more accurate description of the charge is a mere receipt for Mrs van Laethem’s contribution to the acquisition of Caradoc. She understood what was happening, but she never actually asked for the charge. Purchase of Caradoc[131]Caradoc was put on the market by the mortgagees (Hill Samuel) or receivers appointed by them. In June 1991 Caradoc was purchased for £360,000 by Mr Brooker (on Mr Brooker’s case) or by Mr Brooker and Mrs van Laethem (on Mrs van Laethem’s case). Caradoc was registered in Mr Brooker’s name.[132]£260,000 was paid on or before completion, of which £200,000 was raised on the security of Sulgrave Court, and the balance of £100,000 was payable to the vendors on December 8, 1991.[133]Hill Samuel granted an extension of time for provision of the balance of the purchase price until March 1992.[134]Mr Brooker wrote to Mr Carr on November 29, 1991 to say:
“ … The wording of the Hill Samuel agreement suggested that it may be possible to take up and continue the loan agreement for, we hope, 4 more months which will allow for a final resolution of affairs.”
[135]On January 29, 1992Mr Carr wrote to Mr Brooker following his recent discussion with him and Mrs van Laethem, and he confirmed that:
“… having regard to the fact that the proposed £100,000 borrowing on Penny’s property is to be utilised for the repayment of your Hill Samuel borrowing, to protect Penny she should be given a corresponding mortgage over Caradoc. I prepared a mortgage deed and enclose a copy of it for your information. Once Penny’s new mortgage offer has been issued I can complete the necessary blanks in the enclosed. I am sending a copy of this letter to Penny for her information.”
I am sending a copy of this letter to Penny for her information.”[136]In the witness box Mrs van Laethem was unable to help with any further evidence on what happened at the meeting.[137]On March 5, 1992Mrs van Laethem borrowed £100,000 from Mortgage Funding Corporation plc against the security of Basildon House, and on the same day Mr Brooker granted a legal charge over Caradoc to Mrs van Laethem. Mr Brooker was to indemnify Mrs van Laethem against all liabilities which she incurred under the mortgage to Mortgage Funding Corporation plc. Provided Mr Brooker kept up to date with the payment of interest and capital under that mortgage, he was to be under no obligation to pay interest to Mrs van Laethem on the loan. If he failed to indemnify her then the amount secured under the mortgage over Caradoc was to be increased to include the arrears due at any time under the simultaneous mortgage. Sale of Basildon House[138]Basildon House was put on the market by Mrs van Laethem in late 1992 or early 1993, and she sold it on July 15, 1994 for £205,000. After redemption of the mortgage in favour of Mortgage Funding Corporation plc and fees there was a balance of £96,665 due to her. Mrs van Laethem says that its value today would be at least £750,000.[139]Mrs van Laethem says that she had always expected to sell Basildon House, because it was not a period house, and because she had never intended to stay there for many years. Mrs van Laethem derived a modest income by letting part of the house to two or three students, for about £500 per month in all. Mr Brooker says that she had no choice but to sell it, once there was no income available from letting it to students.[140]On July 26, 1994 £36,665.16 and £60,000 were paid into her two Halifax plc “Liquid Gold” accounts. It is not possible on the available documents to trace what happened to these sums afterwards. According to Mrs van Laethem, the £96,000 was expended in the following way: £15,000 was spent on oak timber; £4,000 on a road roller; £2,500 on a tractor; and £5,000 on a mobile home. The balance, together with £8,000 received on the demutualisation of the Halifax, was spent on the Garden House and Caradoc Court projects, approximately £80,000.Mr Brooker says that he paid for the oak timber out of his share of the profit on the sale. He accepts that Mrs van Laethem lent £6,500 for the purchase of a road roller, but says it was repaid from the proceeds of sale of the railway memorabilia. Mrs van Laethem accepts that the money fro the purchase of the roller was repaid, and says that the balance of the proceeds of sale was used to buy a Volkswagen and to fund building work. The Garden House[141]The Garden House was a joint project from 1994/5 to 1997 by Mrs van Laethem and Mr Brooker to build and sell a house to be built on the Old Kitchen Garden, a plot in the grounds of Sulgrave Court By about 1991 Mr Brooker was the registered owner of Sulgrave Court, which his parents had transferred to him. Planning permission had been sought and obtained to build a new house on the plot. Mrs van Laethem was to fund it and Mr Brooker was to build it.[142]The plot for the Garden House was registered in Mrs van Laethem’s name in March 1996, and the Garden House was built by Mr Brooker through Ravens Oak Ltd and an external builder. Destination of the proceeds of sale[143]The Garden House was sold in February 1997 (with completion in April 1997) for £250,000 (with a retention by the purchasers of £25,000 to cover works still outstanding). Mrs van Laethem’s case is that she did not retain any funds on the sale of the Garden House for her personal benefit. It was perceived as a method of making a profit, which would and did go to Caradoc Court. All the funds found their way to Caradoc Court and the benefit of the project, either from the joint account or her own account, when Mr Brooker requested funds for materials etc. the funds were advanced.[144]Mr Brooker does not accept that the funds from the Garden House (after payment of a Yorkshire Bank mortgage in the amount of about £66,000) were applied to Caradoc Court and/or to the parties’ joint benefit, and this belief forms the basis of his counterclaim.[145]For Mr Brooker it was accepted that £123,848 of the original price was credited to the joint account prior to September 1997, and from September 1997 to July 1998 £61,100 was so credited. But there is a shortfall on the difference between what arrived in the sole account and what arrived in the joint account of £33,142. The total debits from the sole account are £277,394.93 which is £92,447 more than appears as a credit in the joint account. Even if £51,318.85 credited to the sole account from an undisclosed source on September 9, 1997 is deducted from this, there is still an unexplained £41,128.08 drawn from the sole account for which Mrs van Laethem has no explanation. The work was funded from the joint account, Mr Brooker’s Lloyds Bank accounts, and to a limited extent the joint Halifax plc account, none of which accounts for the missing Garden House money. At the time the Garden House project was being sold, his mother was terminally ill. He trusted Mrs van Laethem to deal with the sale alone and never questioned her concerning it, or of her disbursement of the proceeds. He did receive some of the money which was spent on materials (oak), some labour etc, but he did not receive a fraction of the total to which he was entitled.[146]Mr Sharp QC argues for Mr Brooker that Mrs van Laethem has put forward various new and contradictory theories for the discrepancy:(a) the monies had been applied to redeem the Britannia mortgage (now accepted as in error);(b) the monies may have gone to a money market account, but there is no evidence of these monies being received;(c) the monies went into the joint account, but it is clear that by no means all did so;(d) the monies may have gone to a previously unconsidered (and undisclosed) Yorkshire Bank account;(e) the monies may have gone to pay the debts of CEL.[147]The documents are incomplete but the relevant matters are these:(1) Lloyds Bank had a charge over Sulgrave Court, and indicated in February 1996 that it would release the charge over the plot in the grounds of Sulgrave Court where the Garden House was to be built if £20,000 was paid into the account of CEL, and the ultimate sales proceeds of the property were used to reduce the overall exposure of the bank. Additional finance was to be raised by a mortgage with the Yorkshire Bank;(2) in March 1996 the Yorkshire Bank agreed to advance £60,000 on the security of the Garden House property;(3) following execution of the charge the Yorkshire Bank advanced £33,000. £20,000 was used to reduce CEL’s indebtedness to Lloyds Bank secured on Sulgrave Court, and the balance of about £13,000 credited to the Halifax plc account in the joint names of Mrs van Laethem and Mr Brooker. A further sum of about £27,000 was advanced by the Yorkshire Bank;(4) the Garden House was sold in February 1997 for £250,000 (with a retention by the purchasers of £25,000 to cover works still outstanding), and a deposit of £25,000 was paid;(5) the transactions relating to the £25,000 deposit: on February 3, 1997 the £25,000 deposit was paid by Mr Carr (pursuant to his undertaking) to Yorkshire Bank to a suspense account in the name of Mrs van Laethem, and then transferred to her Halifax plc account 00190440 on February 19, 1997. The Halifax account shows a withdrawal in cash of that amount on February 25, 1997. The Yorkshire Bank account in their joint names shows a credit of that amount on February 25, 1997, and a transfer out (also of £25,000) on February 24, 1997;(6) completion took place on April 23, 1997, less a retention of £25,000 (for work still to be done);(7) the balance of £193,106 was sent to Mrs van Laethem’s Yorkshire Bank account. The only relevant records which the Yorkshire Bank has been able to provide are statements of the joint account from April 1997, and a few incomplete microfiche entries in relation to Mrs van Laethem’s account from April 1997 to July 1998. There is a significant correlation between monies going out of her account and into the joint account;(8) £66,400 was required to redeem the Yorkshire Bank charge when completion of the sale of the Garden House took place in April 1997. On April 24, 1997 £66,400 was paid into the joint account to redeem the mortgage;(9) on November 13, 1997 Mr Carr sent a cheque for £24,983.67 to Mrs van Laethem representing the payment by the purchasers of the retention monies, which she paid into her account at the Yorkshire Bank on November 26, 1997;(10) a schedule prepared by Miss Street (counsel for Mrs van Laethem) shows about £185,000 being transferred to the joint account;(11) it is possible to correlate transfers from Mrs van Laethem’s account to the joint account between 1997 and Spring 1998 of (a) the £66,400 for the Yorkshire Bank mortgage and (b) individual payments aggregating approximately £120,000. The only source for these funds was Mrs van Laethem.[148]Mr Brooker accepts that a substantial part of the proceeds of Basildon House went into the Garden House. But it is argued that Mrs van Laethem failed to prove her case that the proceeds of the Garden House went into Caradoc Court, and that there is a shortfall of £41,000. I am satisfied on the evidence that on the balance of probabilities the bulk of the funds received on the sale of the Garden House, after repayment of the Yorkshire Bank debt, was expended on Caradoc Court or on living expenses, and there is nothing sinister in the fact that it is not possible to trace the apparent shortfall of £41,000 through the joint account. Their financial affairs were not conducted in an efficient way, to say the least, and I do not believe that Mrs van Laethem used the opportunity to squirrel away funds for own benefit. D. The Development Land and Oakleigh[149]It is not possible to understand the discussions about the Development Land without seeing it in context in relation to Oakleigh. The Development Land: introduction[150]Mrs van Laethem says that at the time of purchase of Caradoc there was some discussion about the potential for development, and the project was not viable without the prospect of selling the Development Land at some stage in order to fund the work.[151]Her case is that at the latest in 1993 she and Mr Brooker expressly discussed and agreed that they would each receive 50% of the Development Land. This could not be achieved for a number of years as work needed to be done to the property before the Planning Authority would contemplate any development. The issues of precise percentages and shareholdings in relation to the Development Land were raised as Mr Brooker advised Mrs van Laethem that it was necessary to have the Development Land owned by a company. It is clear from Mr Brooker’s conduct that he always believed Mrs van Laethem to have a 50% share in the Development Land, in particular in the negotiations with potential purchasers in joint names and Mr Brooker’s e-mails in 2003.[152]Mr Brooker’s account in his witness statement of the 1993 transfer is that Mrs van Laethem was initially reluctant to invest in the creation of the Development Land. A meeting was arranged in November 1993, when she set strict terms upon which she would convert the personal loan into an investment in a future building project. The agreement she proposed would include the release of her charge over Caradoc but would be conditional upon a 50% shareholding in Caradoc Estates Ltd. She expressly stipulated that a deed be drawn up ensuring that Mr Brooker repurchase the land at the invested price in the event that planning should fail or, at her discretion, if the reconstruction of Caradoc Court took longer than 5 years to complete, thus ensuring she could reclaim her £100,000. Before she made any contribution towards the site, he would also have to fund, entirely at his own expense, all the planning and professional fees associated with the planning application.[153]Mr Brooker says that when he sent these details to Mr Carr, Mr Carr strongly advised him, both in writing and personally, against accepting such an arrangement, warning that he would most likely not be able to honour the commitment, particularly if planning application were unsuccessful. In addition, his father was reluctant to transfer a shareholding in Caradoc Estates Ltd to Mrs van Laethem because it had other significant assets, in the region of £60,000 at the time. As a result, matters were left as they were. Mrs van Laethem merely released the land identified as suitable for the proposed enabling scheme without attaching any preconditions and retained her charge over Caradoc Court. Oakleigh and the sale of Sulgrave Court[154]As I have said, Oakleigh is a large detached Victorian country house in need of refurbishment, with a number of traditional outbuildings, a modern stable yard, and a caravan site, standing in about 4 acres.[155]Mr Brooker’s parents had purchased Sulgrave Court, a substantial house in the village of Sulgrave, Northamptonshire, in 1985. Mr Brooker came to own Sulgrave Court outright in about 1991, before his parents’ deaths, and in February 1998 he sold it for £720,000 (less a retention of £10,000). £154,000 was due to Britannia Building Society and about £170,000 to Lloyds Bank. The balance due on completion was £367,758.09.[156]Mr Brooker used the proceeds to pay for Oakleigh (£225,000), a property in Brackley for his business (£42,000), and about £50,000 towards the purchase of a property in the United States. The property in Brackley was bought to house Mr Brooker’s joinery business, and he spent about £20,000 to make it suitable for his business. In 2000 there was an arson attack on Brackley, and Mr Brooker received £18,000 from insurers in September, 2000. Brackley was sold on July 6, 2000 for £53,000 net.[157]Oakleigh was bought in Mrs van Laethem’s name. Mrs van Laethem says that Oakleigh was purchased in order that Mr Brooker could move the development site from the Development Land at Caradoc. Because she kept repeating that she now had no property in her name, and no money either, she insisted that the next property should be in her name, and Mr Brooker agreed with this. Mr Brooker took the lead in the purchase. There was no talk of it being in settlement of her claims. The property was meant to be an investment for them together and not some form of recompense or return payment for her. Its purchase was integral to Caradoc, because they hoped to move the section 106 agreement to it. Oakleigh was a very good speculative investment, but went into her name for her security.[158]Mr Brooker says that Oakleigh was purchased in 1999 for Mrs van Laethem in full and final settlement and placed in her name in settlement of the money she said he owed her. But it was bought for Mrs van Laethem on what has been revealed by her particulars of claim as a false representation of his indebtedness to her. It would enable him to get out of debt, and to maintain the status quo between the parties. It would also enable him to relocate the development, which was to be hived off to a company. The plan behind the purchase of Oakleigh was the relocation of the development site there. It provided him with an opportunity to repay Mrs van Laethem’s capital; and she had the option of taking Oakleigh (less the development site) or sharing Oakleigh and the planning gain. Development Land: the 1993 documents[159]Documents which were produced by Mr Brooker on the eve of the trial show that in December 1993 she and Mr Brooker were discussing a possible agreement under which she would invest in the development in exchange for a 50% shareholding in Caradoc Estates Ltd on terms that meant (in effect) that if the development did not go ahead because any condition relating to the restoration of Caradoc Court was not fulfilled, her investment would be repaid. Her investment was to be what was described as the release of her charge over Caradoc, i.e. £100,000. That charge was not in fact released, except as regards the Development Land.[160]On December 1, 1993 Mr Brooker wrote to Mr Carr to say that he had now had a chance to discuss the matter with Mr Blencowe (Mr Brooker’s accountant) and Mrs van Laethem, and that “she has agreed to participate in the development on the following terms.(a) Penelope will become a director of the Great Central Company and in exchange for a 50% shareholding will invest in order to advance the project.(b) She has, however, insisted that a document be drawn up in her favour guaranteeing that should I fail to reconstruct sufficient of the main house then, after say, five years, she can insist that I repay the Great Central Company.”[161]Mr Carr was asked to draw up the relevant documents to confirm the sale.[162]On December 13, 1993 Mr Carr wrote to Mr Brooker enclosing a deed transferring the Development Land to Caradoc Estates Ltd (then called Great Central Railway Company (Southern Division) Ltd). Mr Carr said:
“I understand it [is] proposed that you will shortly transfer to [Mrs van Laethem] a 50% shareholding in Great Central Railway Company (Southern Division) Limited, and that Penny has agreed to release her existing charge from the land comprised in the enclosed Transfer Deed. In view of the complexity and potential conflict of interests between you and Penny, I do not feel that I am in a position to advise Penny regarding this matter as well as yourself, and I would suggest that she obtains independent legal advice. In particular I confirm that I expressed to you my concern at the vulnerable position that Great Central Railway Company (Southern Division) Limited would be in if planning permission was not obtained or if planning permission was obtained with conditions on it which you did not comply with within the five year period. … I have also prepared a Form 53 to be signed by Penny to release her existing mortgage from the property to be transferred. I enclose this and would be grateful if you would have this signed by Penny in the usual way.”
[163]What is being envisaged in this letter is that in effect for a 50% interest in the Development Land or in Caradoc Estates Ltd Mrs van Laethem would convert her £100,000 security over Caradoc into an equity investment. Basildon House was already on the market. The plan was for her to pay off the Mortgage Funding Corporation plc charge on Basildon House and release the charge which she had over Caradoc.[164]It is common ground that Mrs van Laethem did not take separate advice, and that no written agreement was ever entered into.[165]In December 1993 (by a deed of release backdated to November 20, 1993) the mortgage in favour of Mrs van Laethem over Caradoc was discharged as to the Development Land to enable the Development Land to be transferred to Caradoc Estates Ltd free of incumbrances. Development Land and Oakleigh: later developments[166]On February 8, 1995, Mr Brooker, Caradoc Estates Ltd and Mrs van Laethem (as mortgagee) entered into a section 106 agreement with South Herefordshire District Council relating to the restoration of Caradoc Court and the construction of 6 houses on the Development Land. The effect was that construction of the six houses could not be commenced until the restoration of Caradoc Court was completed to the extent agreed. On February 24, 1995 planning permission was granted for the development.[167]On March 19, 1998 Caradoc Estates Ltd assumed its present name. Mrs van Laethem was appointed secretary on July 23, 1998.[168]On March 10, 1999 Mr Brooker wrote to Mr Carr about the Oakleigh property, in which he said:
“We are buying this privately and for an agreed sum of £225,000”
. It was envisaged that a portion of the property designated for development would be transferred to Caradoc Estates Ltd for £25,000. Mrs van Laethem would become the title holder of the house and remaining land at Oakleigh.[169]Until immediately prior to completion on May 18, 1999, Mr Carr corresponded only with Mr Brooker, and not with Mrs van Laethem, in connection with the purchase of Oakleigh in Mrs van Laethem’s name. On June 1, 1999 Mrs van Laethem wrote to Mr Carr thanking him for acting for her on the purchase of Oakleigh. She said that Mr Brooker and she were very pleased with it. She had signed the deed as requested.[170]In September 1999 Oakleigh was let to a Mrs Gillian Jones on a six month tenancy at a rental of £9,000 pa, and the tenancy agreement (and a horse-grazing agreement) was entered into by Mr Brooker and Mrs van Laethem as “Mr and Mrs Brooker.” In addition, the caravan site yielded £6,000 pa. The rentals were paid into their joint account with Halifax plc. The correspondence from the agents, Bruton Knowles, in 1999 and 2000 was addressed to Mr and Mrs Brooker at Caradoc Court, as was correspondence in 2001 from another firm of estate agents, Jonathan Preece, who wrote to “Mr and Mrs Brooker” on June 27, 2001 following a visit to Oakleigh.[171]On August 21, 2000 Mr Cliff Davies (of Beaumont Savage Ltd), who was acting as financial adviser to Mrs van Laethem and her mother, wrote to Mrs van Laethem about Caradoc Estates Ltd:
“From this you will see that while you are company secretary you are not a director, and the shareholders are Kim and the executor(s) of his father’s estate (that I assume is also Kim). I think that this only serves to underscore what you already suspected but it does confirm that you potentially have no ‘interest’ in the building plots and hence reinforces my belief that you would be well advised to consult a solicitor.”
[172]On November 21, 2000 Mr Brooker sent an e-mail to Alex Beeston, in which he said:
“The plan behind the purchase of Oakleigh was the relocation of the enabling planning here. I have always viewed your mother’s capital as strictly her own, therefore it provided me with an opportunity to pay her back. A similar scheme was tried for the ‘Garden house’ but that was not so successful. She has options either for an entire settlement based on Oakleigh alone, or to share Oakleigh and participate in the planning gain which will nett potentially £250,000 for her, in addition to her share of Oakleigh. … I have conducted my relationship with your mother in a careful and honest way: we have shared resources and I have been careful to replace these and to build security for her quite independent of myself. A policy I have followed over the years.”
[173]Property development companies expressed interest in buying the Development Land. On August 7, 2001 Prowting Homes wrote to Mrs van Laethem and Mr Brooker (as “Mr and Mrs J H Brooker”) to confirm their interest in purchasing the Development Land, and offered £500,000 for it.[174]On March 19, 2001 a planning application was made for the re-siting of the housing scheme for 6 houses on the Development Land to the caravan site at Oakleigh, but this was subsequently refused.[175]On October 4, 2001 Michael d Bailey & Associates (property consultants) wrote to Mr Brooker confirming that they were happy to proceed with the sale of the Development Land to their clients, Thornton Baker Homes, at an agreed figure of £550,000. The Harper Group also expressed an interest in the property, and the site plans and planning permission were sent to them in mid-October, 2001. In mid-December 2001 the Harper Group offered £600,000, subject to contract. In his expert valuation for this case Mr Hextall refers to a subsequent offer by another developer of £610,000.[176]On November 11, 2001 Mr Brooker wrote to Mr Carr saying:
“I have spoken to Penny and to spare any confusions I have asked her to write a letter to you dealing with the issues of money and chargeholding. I will endorse and sign that letter to show my agreement with it. As the division of funds will not become an issue until funds are available to be divided, I have told her there is no pressing need until the exact details of the sale become clear: for example, some monies may be held in Escrow for the guarantees of the provision within the 106 agreement.”
[177]On November 16, 2001 Mr Carr replied to say that he noted what Mr Brooker had said concerning Mrs van Laethem’s entitlement and said he would advise him once he had heard from her.[178]It seems that no such letter was actually written by Mrs van Laethem. There are three letters or draft letters written by Mrs van Laethem dating from this period, but they do not appear on Mr Carr’s file, and appear to be drafts which were never sent.[179]October 30, 2001 is the date of a handwritten letter from Mrs van Laethem to Mr Carr (but which was not sent), which was originally relied on in the unamended defence as evidencing an agreement that the £100,000 was advanced by Mrs van Laethem in 1992 on an express agreement that (inter alia) in providing 50% of the cost of the Development Land, Mrs van Laethem was acquiring a 50% interest in the profits (if any) of the Development Land. The letter says:
“Kim and I have always agreed that when the land owned by Caradoc Estates Ltd [in] which we have both 50% percent shares was sold, it should be split equally between us, with both of us contributing £50,000 each towards the completion of the house to satisfy the 106 agreement. Kim says he will be writing to you to inform you of our bank details etc nearer the contract date.”
[180]There is also a handwritten draft letter from Mrs van Laethem to Mr Carr, in which she says that Mr Brooker had suggested that it was appropriate for her charge over Caradoc to be lifted, and asking him to do that on her behalf. She says that Mr Brooker had also mentioned that she now owed him moneys on Oakleigh, and so a charge should be placed in his favour on that property.[181]Another draft of the same letter says that Mr Brooker had suggested that her charge should be lifted over Caradoc at the time of the sale of the land, and a further charge should be put on Oakleigh.[182]On February 15, 2002Mr Cliff Davies wrote to Mrs van Laethem about raising money (£50,000 or £100,000) on Oakleigh in particular to raise capital “to satisfy Kim’s requirement for cash to sustain the work on Caradoc.” He advised that capital raising against Oakleigh was probably the best way forward provided the opportunity was taken to secure her position once and for all. He advised Mrs van Laethem to ask her solicitor to propose an agreement whereby in return for releasing say £50,000 immediately (with a remaining £50,000 being generated when the plots were sold), Mr Brooker would recognise her sole ownership of Oakleigh and a 50% interest in the plots. This would not mean that she would waive any interest in Caradoc Court, but would ensure that she had a “bottom line” and might even force a situation where Mr Brooker formally recognised that she had a 50% interest in everything.[183]From January 2002 Mr Carr corresponded with Mrs van Laethem about a sale of Oakleigh to a Mr and Mrs Miller for £325,000 subject to contract, but on March 11, 2002 he wrote to the proposed purchasers to say that “his client” had decided not to proceed with the sale. On March 2002, she wrote to Mr Carr to thank him for his help, and to say that she had decided not to sell it, and perhaps develop the barn.[184]On March 29, 2002 Paul Smith Associates wrote to “Mr and Mrs Brooker” about the proposed barn conversion at Oakleigh, and referring to re-presenting the scheme for re-locating the site of the existing permission to erect 6 dwellings.[185]On April 6, 2002 Mrs van Laethem wrote to Mr Carr to say that she was taking out a mortgage for £100,000 on Oakleigh (other than the barn). On May 1, 2002 £100,000 was borrowed against the security of Oakleigh from The Mortgage Business plc. Mrs van Laethem says that £83,000 of that sum was paid to Mr Brooker to enable him to carry out work on Caradoc Court, and that the balance was used to repay loans made by Mrs Hollis to fund work on Caradoc Court. She says that by this time Mr Brooker had borrowed £18,000 from Mrs Hollis. Mr Brooker’s case is that the amount borrowed from Mrs Hollis was £15,000.[186]Mrs van Laethem’s account is substantially justified by the bank statements, which show:(1) £99,482 was paid into the Halifax plc joint account on May 2, 2002;(2) a cheque for £83,055 was drawn in favour of Mr Brooker which was debited to the account on May 13, 2002, and paid into his Lloyds TSB account;(3) most of the balance is accounted for by a transfer of £2,000 on May 8, 2002, and a cheque for £10,000 debited on May 10, 2002, which is probably the £10,000 which was credited to the joint account of Mrs van Laethem and Mrs Hollis with C&G on May 8, 2002 (Mrs Hollis having died a few weeks before).[187]Mr Paul Martin, who worked for Humberts (the estate agents acting on the sale) from November or December 2002 until April 2003 gave evidence in his witness statement that during a meeting with Mr Brooker and Mrs van Laethem in January 2003Mr Brooker said, when Mrs van Laethem was out of the room, that they should wait for Mrs van Laethem's return, as she would be the beneficiary of the sale of the Development Land. In cross-examination, Mr Martin said that Mr Brooker had said that when the Development Land was sold, Mrs van Laethem was to be the sole beneficiary.[188]On July 22, 2003 Mrs van Laethem sent an email to Mr Brooker stating that if he would put her name jointly with him on the deeds of Caradoc and Caradoc Estates Ltd, those were the only two points that they had bad upsets about in the past, and she was sure they could sort things out and find a middle road out of this ghastly mess. Mr Brooker replied by email on the same day:
“It is not really possible to simply include you on the deeds at this stage, without first discussing one or two practical issues. For one thing, how would you see the project at Caradoc advance? What restrictions would be imposed if, for example, I wanted to sell before completion? If Caradoc is to be sold now and I am to cooperate, then I must be assured it is for the optimum possible amount whereas, from what you’ve told me, the current values for the site are not very attractive. … From your [e-]mail and from your solicitor’s letter this morning, the choice seems to be to include you on the deeds or to lose Caradoc. Though you say you ‘love’ the place, you are not even proposing any solution whereby you become the sole owner. Indeed, this was expressly ruled out in a previous letter from your solicitor. Up until now, I have based my view of any division, very much upon the principals [sic]we discussed at the outset. For example, 50% of the building land was always yours regardless of the actual circumstances. But then, the 50% was based upon the best realisable value. Harper showed that a sale was not necessarily the best way to achieve this. You then favoured the development solution which, of course, would be even more lucrative [sic]. Your true share was never in doubt and I would be pleased to verify this in a deed… or in whatever way you wished as part of a solution to our current problems. … As I stated in my last letter to your solicitor, the principal [sic] of 50% is also withdrawn pending the advice I might receive; which may be for a lesser amount.”
[189]On July 25, 2003 Oakleigh was sold for £390,000. The mortgage of £101,523 was repaid and Mrs van Laethem retained £280,540. Mrs van Laethem used some of the money to buy, together with her daughter, Knowle Bungalow in Minehead, for £225,000 in July 2003, each paying half. It was sold shortly before this trial. E. Alleged contributions by Mrs Hollis[190]In September 1999 Mrs Hollis sold her house in Warmington and moved to Caradoc Court. The East Wing was not yet habitable and Mrs Hollis lived in the mobile home until 2001, when she moved into the East Wing.[191]Mrs Hollis moved into a nursing home in late 2001 or early 2002, and she died on April 27, 2002. Mrs van Laethem’s evidence was that she and her sister received £60,000 each from their mother’s estate, and that Mrs van Laethem’s two daughters received £10,000 each.[192]Mrs van Laethem and Mrs Hollis had a joint account at Cheltenham & Gloucester plc (“C&G”). Mrs van Laethem’s case[193]In 1997 or 1998 she and Mr Brooker agreed that Mrs Hollis would move to Caradoc Court, and that she would contribute to the cost of building the East Wing which Mr Brooker estimated at £30,000. She contributed £60 – 70,000 usually in instalments of £5,000 - £10,000 in the belief that she was contributing capital on the understanding that Mrs van Laethem had an interest in the property.[194]According to Mrs van Laethem, Mrs Hollis released capital of £225,000 from her house sale and she advanced a lump sum of £25,000 immediately to renovate the East Wing. Mrs van Laethem says that an analysis of the C&G account reveals that from 2000 to 2002 the withdrawals on that account exceeded £44,000 (exclusive of sums for obvious personal use). In oral evidence Mrs van Laethem explained that many of the sums were transferred to her account as it was not possible to withdraw cash from Mrs Hollis’ account and cash was required for many of the payments in relation to Caradoc Court (e.g. labour).[195]Mrs Hollis also made a loan to Mr Brooker of £15,000. Mrs van Laethem gave evidence that the £15,000 was to develop a flat over the garage for a carer (which did not in fact happen), and was later increased to £18,000. The original plan was for there to be a flat in the East Wing for a carer, but it was taken by Mrs Hamel-Findhammer’s daughter, Julia.[196]Thereafter, her remaining funds dwindled, as she paid substantial sums in relation to the property. Mrs Hollis’ contribution improved the property and fed the household, such contributions should count as benefits accruing from her side, just as Mr Brooker relies on his inheritance as being his injection of funds. The couple had no money in 1999, when Mrs Hollis came to live with them. In addition to Mrs Hollis’ initial capital injection, she provided further funds and effectively maintained the entire family while Mrs van Laethem also cared for her.[197]Mrs Hollis’s contribution is also evidence of Mrs van Laethem’s detrimental reliance upon the belief that she had an equitable interest in the property. It also evidences the unconscionable conduct of Mr Brooker in that if he intended to deny Mrs van Laethem an interest in the property and consider their relationship as terminated, he should not have relieved Mrs van Laethem’s elderly and frail mother of such significant sums of money. Mr Brooker’s case[198]Mrs Hollis did not have any resources from which to make capital contributions to the East Wing until her house was sold in September 1999. The work on the East Wing started well before that. By the spring of 2000 when payments were made from her account for a plasterer plainly the work had nearly finished. The delay until her occupation was due to delay in delivery of the tank for the central heating system.[199]She had many drains on her resources: her own living expenses, heating, clothing etc. She had her property to maintain until it was sold. She bought furniture (e.g. a grandfather clock, carpets etc.), she effected her own contents insurance and had storage charges, she had expenses such as furniture removal, carers, and solicitors.[200]She agreed that she would contribute 50% of the expense of the work on the East Wing which she would inhabit, but this was in return for what was expected to be a long stay, and the alternative was to expend her capital in nursing home fees. She would have the benefit of the occupation of the premises, the benefit of the proximity of her daughter, the benefit of family care, and pleasant surroundings. There was a very satisfactory quid pro quo for her investment which was in any event only to be for a proportion of the cost. Her financial adviser, Mr Davies, put it at only £25,000 in August 2000. Certainly there appears to have been a clear ceiling to her capital contribution by September 2001 when the money advanced for the carer’s flat over the garage was treated expressly as a loan. Mrs van Laethem accepted in cross-examination that this IOU indicated “a commercial exercise which does not point to acquiring an interest in Caradoc”. In addition she would pay a reduced rent.[201]It is clear that Mrs Hollis’ estate was not eroded by any great amount. The value of her assets was, after allowing for a £25,000 contribution to the costs of building work, estimated at £177,000 in 2000. After meeting her own costs of living for two years, buying furniture etc, paying for carers, paying for a nursing home for several months prior to her death, paying the costs of the administration of the estate etc, Mrs van Laethem’s evidence was that the distribution to her and her sister and her two daughters was some £140,000. There is no room for £60-70,000 of capital contributions.[202]There is no claim by Mrs Hollis’ estate for an interest. The estate apparently devolved on at least four persons and Mrs van Laethem has no sole claim over it. The evidence from Mrs van Laethem as to the nature and extent of any payments made by Mrs Hollis is wholly unsatisfactory and contradictory. There is no evidence at all as to what Mrs Hollis’ intentions, understanding or motivations were in making any payments she made and there is no proof of what payments were made, when or to whom. In the circumstances Mrs van Laethem cannot rely upon any aspect of the payments said to have been made by Mrs Hollis to support her claim. Documents[203]In August 2000 Mr Cliff Davies produced an investment income appraisal report for Mrs Hollis and Mrs van Laethem. The report indicated that the proceeds from the sale of her house in Warmington were £220,000, and that the costs of adapting Mrs Hollis’ apartment at Caradoc Court would be about £25,000. On August 21, 2000 Mr Davies wrote to Mrs van Laethem:
“I also enclose the letter discussed in respect of your mother’s capital and, while I am doing this in part to protect my own position, I still consider it essential that you ‘ring fence’ your mother’s position as a matter of priority.”
[204]On November 21, 2000 Mr Brooker sent an e-mail to Alex Beeston, in which he pointed out that Mrs Hollis could not stay in Warmington on account of her dwindling capital. The idea of her living at Caradoc Court originated because it would be easier for Mrs van Laethem to look after her and also to release moneys so that she could fund her own additional care. He calculated that the rental on the service wing would be beyond the income she could expect from her investments and since the purpose was to ease her comfort, it would be pointless to take the benefit in rental. Mrs Hollis therefore suggested that she contribute 50% towards the cost in exchange for a much reduced rental during her lifetime. Since the amount paid in total for construction over the time she had been staying there waiting for completion was less than the sum she would have expended on a reasonable care home for the same period, he believed the solution was fair and made sense all round.[205]On September 5, 2001 Mr Brooker signed an IOU in favour of Mrs Hollis (written out by Mrs van Laethem) stating that £5,000 had been lent to him by Mrs Hollis on September 5, 2001 to be repaid in full by November 5, 2001 or earlier.[206]The evidence of the bank statements is incomplete. They show:(1) The joint C&G account in the name of Mrs Hollis and Mrs van Laethem shows two payments direct to Mr Brooker of £2,000 in February and May 2000, and one of £1,070 on September 7, 2001.(2) There are substantial payments from the joint C&G account to accounts in the name of Mrs van Laethem and her daughter. Mrs van Laethem says that much of this money was used by her for direct payments to workmen.(3) Part of the proceeds of the loan taken out on the security of Oakleigh is accounted for by a transfer of £2,000 on May 8, 2002, and a cheque for £10,000 debited on May 10, 2002. A cheque for £10,000 was credited to the joint account of Mrs van Laethem and Mrs Hollis with C&G on May 8, 2002. This is probably the repayment of Mrs Hollis’ loan (or part of it).(4) A schedule by Miss Street purports to show about £44,000 going from the C&G account to funds for Caradoc Court, but the items include payments to carers and for personal items such as a clock and another items perhaps for Mrs van Laethem’s business.(5) As Mrs van Laethem accepted, the regular payments of £5,000 - £10,000 which she alleges could not be traced in the accounts. She also accepted that Mrs Hollis moved to a nursing home 4 months before she died, and there would have been fees and living expenses.[207]Mr Brooker is not putting a positive case since he accepts that some money clearly went into Caradoc Court from Mrs Hollis. On his behalf it is argued that once payments for Mrs Hollis’ own benefit were removed (£14,733.38) the sums paid from the C&G account reduced to £29,422.71 and of this £15,915 went direct to Mrs van Laethem and her daughters’ account. The remainder (£13,507.71) may be that which potentially benefited Mr Brooker, but over 25 months this seems to be the equivalent of rent (about £540 per month). The evidence is consistent with the basis of Mrs Hollis’ contribution outlined by Mr Brooker to Alex Beeston in his email of November 21, 2000.[208]In cross-examination Mr Brooker accepted that in this period sums were coming in to pay for the restoration. He also accepted that he was then told that the source was Mrs Hollis. When asked where he now thought they had come from, he replied that he did not know, and that the only conclusion he could draw was that the funds came from the Garden House, which meant that Mrs van Laethem had not been straight with him over money. I do not accept Mr Brooker’s explanation, which is in my judgment simply designed to deny the obvious and to bolster his case against Mrs van Laethm.[209]In my judgment the available evidence shows that Mrs Hollis made some capital contribution, over and above the loans and rent, through payments from the joint C&G account. But in my judgment Mrs van Laethem has exaggerated the contribution made by Mrs Hollis. I would estimate the relevant contribution as being in the region of £25,000, which is probably close to half the capital cost of restoring the East Wing. F. Overall conclusions Credibility[210]This is a case which (like others of its sort) depends to a large extent on credibility. There is a stark conflict of evidence. In my judgment Mrs van Laethem was an essentially credible witness. Her recollection was often unreliable, and there were several mistakes in her written evidence about which she was evasive under cross-examination. Most of the mistakes were not material to the essential issues, and I do not think that they cast doubt on the essentials of her evidence.[211]I accept that many of the criticisms of Mrs van Laethem’s evidence made by Mr Sharp QCare justified. It is plain that her witness statement was prepared without any reference to documents and was incomplete, and also inaccurate in many respects. It was necessary for her to be examined at length in chief, but that process revealed that her recollection was poor and she had an inadequate knowledge of the documents. Her recollection in the witness box of the financial details (in particular about the funding of CEL, and CEL’s payments to Mr Brooker) and the shareholdings in the companies was poor. She also had very unclear recollections of the destination of the proceeds of various of the mortgages. I am also satisfied that she deliberately exaggerated the contribution made by Mrs Hollis.[212]I also accept that she had a distorted picture of the strength of her relationship with Mr Brooker, and that she was unwilling to accept until very late in the day that it was over.[213]She was plainly unsophisticated in finance, property dealings, and company matters. I accept that she sought to protect her own interests in the discussions in 1993 concerning her proposed acquisition of a 50% interest in Caradoc Estates Ltd, when she stipulated that Mr Brooker (at Mrs van Laethem’s option) repay the investment if he failed to complete the work at Caradoc Court and satisfy the section 106 agreement. But I do not see her playing any significant role in any of the other property arrangements. In my judgment, she is likely to have relied on assurances from Mr Brooker.[214]Mr Brooker is plainly more intelligent than Mrs van Laethem. He was also more financially sophisticated. He knew something about inheritance tax and capital gains tax. He was professionally advised by Mr Carr.[215]The Garden House project shows that Mr Brooker was not only fully aware that legal title was not the same as ownership, but was also prepared to use the distinction for his own benefit. First, the Garden House was in Mrs van Laethem’s name, but it is common ground that it was owned jointly, and that it was put into her name for capital gains tax reasons.[216]Secondly, on August 27, 1997 Mr Carr wrote to the Planning Enforcement Officer, South Northamptonshire Council, on behalf of Mr Brooker and Ravens Oak Ltd, to say that he was unsure as to why the notices had been sent to his clients since the planning enforcement officer had already been advised that Mr Brooker was the owner of Sulgrave Court, and not the Garden House. Mr Carr said:
“Some considerable time ago Mr Brooker sold off to Mrs Van Laethem the former Kitchen Garden at Sulgrave Court and since that time he has had no interest in the property. He is not willing or able to transfer to Mrs Van Laethem any additional land above that which was sold off before the construction of the Garden House commenced. Please note that Ravens Oak Limited also have no interest in the property and never have had any interest, apart from the fact that they were employed as a Contractor to carry out construction work. In the circumstances the Notices that you have served are clearly misconceived and we would be grateful if you would confirm that they are withdrawn immediately and confirm that you will pay our reasonable legal fees for dealing with this matter. Please note that Mrs Van Laethem does not reside at Sulgrave Court.”
Please note that Mrs Van Laethem does not reside at Sulgrave Court.”[217]Mrs Hamel-Findhammer’s evidence was that Mr Brooker had no real friends or acquaintances in England and no neighbours that he liked. He had never had a normal job, always did what he liked, and never learned to take any responsibility. My impression of Mr Brooker in the witness box accords with her evidence that he was a weak and selfish man, lacking character. My impression also accords with that of Alex Beeston, whose evidence was that Mr Brooker told him that he was not very good at interacting with people, and was more comfortable with his own company. I consider that Mr Brooker is a weak, selfish and ungenerous man, who was prepared to take advantage of Mrs van Laethem, and put her off with just the kind of assurances which she alleges.[218]I did not find his evidence credible on key points. In particular I am satisfied that he lied about the reason he wrote his e-mail in 2003 telling Mrs van Laethem that she had a 50% interest in the Development Land, when he said that he was trying to tempt Mrs van Laethem into negotiations with him, and he did that by going along with her claims. Richard Carr[219]One striking omission from the list of witnesses was Mr Richard Carr, who had been Mr Brooker’s solicitor for some years before the crucial events, and whom Mrs van Laethem had also known for some years through her former husband. Mr Carr made no witness statement, and was called by neither party.[220]When documents from his files were called for, there was apparently no difficulty in contacting him, and no question of privilege arose (and presumably could not, since in important respects he acted for both parties). I was assured that I had all relevant documents from his papers, although there were no attendance notes (with the possible exception of a Report Sheet in 1996, probably meant to be provided to the Yorkshire Bank, confirming that Mrs van Laethem had been advised about, and had understood, the mortgage on the Garden House).[221]Mr Carr acted for Mr Brooker on the purchase of Caradoc. He also acted for Mr Brooker and also (it seems) for Mrs van Laethem on the grant of the charge to Mrs van Laethem. He might have given evidence about the entirely contradictory accounts of Mrs van Laethem and Mr Brooker.[222]Mr Carr also acted for Mr Brooker on the transfer of the Development Land to Caradoc Estates Ltd, but informed Mr Brooker that he could not advise Mrs van Laethem on the acquisition by her of a 50% interest. He could have given evidence on whether the terms were then or subsequently agreed.[223]Mr Carr acted on the acquisition of the Garden House in Mrs van Laethem’s name, and also on its sale. He also wrote on behalf of Mr Brooker to the Planning Enforcement Officer, South Northamptonshire Council to say that enforcement notices should not have been sent to Mr Brooker and Ravens Oak Ltd, because the property was owned by Mr Brooker. He could have given evidence on Mr Brooker’s knowledge of the distinction between legal and beneficial ownership.[224]He acted on the acquisition and sale of Oakleigh, and was consulted by Mrs van Laethem on the mortgage for £100,000 on Oakleigh to The Mortgage Business plc. He might have given evidence on the diametrically opposing contentions of Mr Brooker and Mrs van Laethem about the circumstances and purpose of the acquisition. Caradoc/Caradoc Court[225]Mrs van Laethem says that the following assurances were given:(1) When they first saw Caradoc, Mr Brooker said he wanted it to be held in his own name, but as their home, because she still owned a property and she would have to pay capital gains tax, which would be saved if Caradoc was his property alone; and he would say “It is better for us to keep our houses separate, because you could be liable for capital gains tax”.(2) He raised the argument about tax repeatedly, and he would always parry her requests for transfer into their joint names with words such as “One day” or “We’ll see about it” or “Don’t worry, you are the most secure person in the world”.(3) When Mr Carr raised the issue of whether the property should go into joint names, Mr Brooker said “We have already discussed it; I am not happy with it, we have agreed it anyway” (and Mr Carr suggested that she should have a charge for her contribution).(4) Mr Brooker assured her that her contribution to the purchase price gave her security for the future.(5) She is sure that she continued to ask Mr Brooker to put the property into their joint names after she had contributed the £100,000, and he remained resistant, but never seemed to rule it out permanently, always making a promise that it would happen eventually.(6) When Mr Brooker first went to America in 2000, under the advice of family and friends, she went to a London solicitor, who suggested that she should speak to him about her position in relation to Caradoc. She told him she was worried, and he said “Don’t worry, I promise you are very secure. This is your home as much as it is mine, and it always will be” and “You are the most secure woman in the world”.(7) When her mother asked him why Mrs van Laethem’s name was not on the deeds, he would always say “Well, if we are not married we can always manage these things better to make money”.[226]I am satisfied that Mr Brooker never intended that Mrs van Laethem should share in the ownership of Caradoc Court itself. I consider that he is an ungenerous and selfish person. I am also satisfied that Mrs van Laethem led herself to believe (and communicated that belief to Mr Brooker) that Caradoc Court would be their joint home, and Mr Brooker did not disabuse her of that assumption, and I believe her account that she raised from the outset in 1991/1992 the question why her name was not on the title, and I believe that she was giving truthful evidence that Mr Brooker assured her on several occasions that she could not be on the title because of capital gains tax reasons. That does not of itself answer the question whether they agreed that she would have a proprietary interest or whether Mr Brooker led her to believe that she would have such an interest.[227]There are no documents prior to the mortgage in March 1992 which suggest that Mrs van Laethem was to have a proprietary interest. The only document which might have such an indication is Mr Brooker’s letter to Mr Carr of November 29, 1991 in which he said:
“ … The wording of the Hill Samuel agreement suggested that it may be possible to take up and continue the loan agreement for, we hope, 4 more months which will allow for a final resolution of affairs.”
This document was not relied upon by Mrs van Laethem, no doubt because the use of the expression “we hope” is not an indication of an intention that Mrs van Laethem was to have a proprietary interest.[228]The only contemporaneous document which throws any light on whether the use of the loan/mortgage device negatives an intention for Mrs van Laethem to have a proprietary interest is Mr Carr’s letter of January 29, 1992, to Mr Brooker following Mr Carr’s discussion with him and Mrs van Laethem, and in which he confirmed that:
“… having regard to the fact that the proposed £100,000 borrowing on Penny’s property is to be utilised for the repayment of your Hill Samuel borrowing, to protect Penny she should be given a corresponding mortgage over Caradoc. I prepared a mortgage deed and enclose a copy of it for your information. Once Penny’s new mortgage offer has been issued I can complete the necessary blanks in the enclosed. I am sending a copy of this letter to Penny for her information.”
I am sending a copy of this letter to Penny for her information.”[229]I do not consider that this letter shows conclusively that Mrs van Laethem was not making an equity investment in the property. All that Mr Carr is saying is that because her money is being used to pay off Hill Samuel, she should have a corresponding mortgage. I accept the contention for Mr Brooker that several of Mrs van Laethem’s answers in cross-examination proceeded on the assumption that her financial contribution only became relevant when Mr Brooker could not raise the balance of the purchase price from other sources. This is consistent with the documents and with the way in which Caradoc was bought.[230]It is plain that Mrs van Laethem should have been separately advised. She was in middle age, and mortgaging her only property against the security of a ruin, in circumstances where Mr Brooker’s ability to service the loan was at best uncertain. But that does not of itself lead to a conclusion that she had, or was assured she would have, a proprietary interest.[231]Although I accept that Mr Brooker always resisted Mrs van Laethem’s claim to be on the title of Caradoc (and that was “the bone of contention” to which she referred in evidence), I am satisfied that throughouthe encouraged or induced her to believe that was only for tax reasons. I do not consider that her recollection of the several times he gave her assurances about her interest was untruthful or wishful thinking.[232]As I have indicated (paras 64-67) the weight of authority puts the “excuse” cases (especially Eves v Eves and Grant v Edwards) into the category of constructive trust rather than proprietary estoppel. As I indicated, I share the reservation of the Law Commission, and would have preferred the approach of Mustill LJ in Grant v Edwards which adopts the proprietary estoppel route. But the recent cases (Oxley v Hiscock and Jennings v Rice) show that classification does not normally make a difference in cases where shares have not been agreed. There is no basis, in relation to Caradoc as a whole, or to Caradoc Court in particular, for attributing any intention to agree shares.[233]I have no doubt that Mrs van Laethem acted to her detriment by relying on the assurances, in particular by charging Basildon House, and later by investing her share of the proceeds of Basildon House and of the Garden House in the restoration of Caradoc Court. In mortgaging Basildon House, Mrs van Laethem was placing herself at substantial and very real risk, since there was no obvious source of funds for Mr Brooker to service the loan. I accept that Basildon House would have been sold at some stage in any event, but I accept Mrs van Laethem’s contention that her sale of Basildon House in 1994 (at the age of about 53), and investment of the proceeds in the Garden House, are indicative of the fact that she thought she would ultimately have a home in which she would share an interest with Mr Brooker. Mrs van Laethem would not otherwise have rendered herself virtually homeless, trading in her home and all her capital.[234]Mrs van Laethem devoted a huge amount of time by her physical contribution to the restoration of the grounds. That is not explicable solely by reference to her attachment to Mr Brooker. As I indicate below, I also accept that all the funds released from Basildon House went ultimately after the Garden House project towards Caradoc Court and their joint living expenses, allowing Mr Brooker to service the mortgages on Sulgrave Court. The unconscionable behaviour of Mr Brooker required for proprietary estoppel is his denial of her interest. Development Land[235]The issue is whether there was an agreement to share the Development Land, or the profits from the Development Land, or the shares in Caradoc Estates Ltd (although it was not suggested that anything turns upon the different ways in which it was put) or whether Mr Brooker led Mrs van Laethem to believe that she had an interest. Although the accounts were not explored in evidence, the Development Land is not included in the accounts of Caradoc Estates Ltd. By September 2001 Humberts were recommending (in a letter addressed to “Mr and Mrs Brooker”) a guide price of £500,000 for the proposed sale of the Development Land. The accounts of Caradoc Estates Ltd for each of the years ended December 31, 1996 to December 31, 2002 do not show any freehold property. The only item in the balance sheet relating to property is an item of £14,320 for improvements to leasehold property (1996 accounts) which was by the time of the 2002 accounts written down to £11,859.[236]The 1993 documents have to be read in context. The correspondence in December 1993 between Mr Brooker and Mr Carr shows that what was then envisaged was that Mrs van Laethem would give up her charge over Caradoc in return for a 50% share in Caradoc Estates Ltd. Mrs van Laethem was then contemplating the sale of Basildon House. If she did so, then she would have to pay off the £100,000 owed to Mortgage Funding Corporation plc.[237]What was being discussed in these two documents was a proposal by Mr Brooker to Mrs van Laethem by which her interest would in effect be converted into an equity interest in the Development Land. She was also requiring in effect the return of her money if the development did not take place. Mr Carr told Mr Brooker that Mrs van Laethem would have to be separately advised, although it is apparent that she did not take separate advice at any time.[238]It is common ground that no written agreement was ever entered into. But in July 22, 2003 Mr Brooker said in an email “… 50% of the building land was always yours regardless of the actual circumstances.”[239]Mrs van Laethem’s oral evidence on this aspect was confused and confusing. The main series of questions in relation to the Development Land for Mrs van Laethem in the witness box related to the 1993 correspondence with Mr Carr which Mr Brooker had produced on the eve of the trial. In examination in chief she was asked about Mr Brooker’s evidence that there were discussions about the Development Land, that they did not get any further than discussions, and that he did not finally agree. She said that that was correct. It was then put to her that Mr Brooker’s case was that there was no final agreement so that he did not ever agree that she should have a share in the Development Land. She said that that was not true, and that he always said that she should have a 50% share in the Development Land.[240]By the time the letters in 2001 were written, she thought that the Development Land was their joint project and that she was a 50% shareholder. Between 1993 and Mr Brooker’s email of July 2003 she understood her interest in the Development Land to be a 50% share.[241]In cross-examination it was put to her that Mr Davies’ letter of February 15, 2002 was predicated on the basis that there was no agreement between her and Mr Brooker as to any share in either Caradoc Court or the Development Land. Her reply was that she had discovered that through the letter. It was put to her that Mr Davies was giving advice about how to raise money and he was saying that she could use the money which Mr Brooker needed as a lever to get him to agree to her having an interest in Caradoc. She agreed with that, and it was then put to her that she needed a lever since there was no agreement. It was put to her that the letter from Mr Davies of August 21, 2000 also showed that by then she knew perfectly well that she had no interest in the Development Land. Her answer was that she knew she had not but did not believe that she had not. She hoped that Mr Brooker would accept that she had, and that was when she took advice. She was referred to the statement by Mr Davies in his letter that “It does confirm that you potentially have no ‘interest’ in the building plots”. She was asked what she understood by the expression, and she said that she had no hold on the building plots. But she did speak to Mr Brooker afterwards and he promised her that everything would be all right. It was put to her that it meant she was not entitled to anything, and she agreed. She accepted that it had always been a bone of contention, and that she had always known that Mr Brooker did not accept that she had any interest in the Development Land. She said that that was not true. She accepted that he had never agreed to her being on the title deeds. It was put to her that she had accepted that there had never been an agreement in 1993, and therefore she had always known that she had no shareholding in Caradoc Estates Ltd. She refused to accept that.[242]When it was put to her that she had insisted in 1993 that she would only invest on terms which the company was advised not to accept, she said she did not remember. She accepted that she did not have a shareholding before 1993. She said she did not remember the 1993 correspondence. She again accepted that the agreement came to nothing and she did not buy the 50%. She accepted that by 2001 there had never been any point when the two of them were agreed about the nature and extent of interest which she had. She said that was because of Mr Brooker’s attitude, not hers. But she accepted that it took two to have an agreement.[243]In re-examination she again said that she thought she still had a 50% share in the Development Land.[244]Mrs van Laethem’s thinking and evidence was muddled, but I am satisfied that she did not mean to agree that she had no interest in the Development Land. Throughout Mrs van Laethem’s evidence there was a confusion about the significance she attached to having property in her name and about what she meant by “having an interest”. Thus she said in cross-examination that Oakleigh was purchased in her name and she saw it as her property: but she also said that it was a joint project and was put in her name because she had put so much money in. She also accepted that the Garden House was a joint project even though it was in her name. The overall thrust of her evidence was that they had agreed that she should have an interest in the Development Land. I am satisfied that when she said that she did not have an interest what she meant was that her name was not on the title, and when she said there was no agreement, she meant that there had been no formal agreement.[245]I turn to Mr Brooker’s evidence. The main issue for Mr Brooker in oral evidence was his e-mail in July 2003 in which he told Mrs van Laethem that “50% of the building land was always yours regardless of the actual circumstances.” His evidence in cross-examination was that the e-mail had to be read in context. Mrs van Laethem’s solicitors had already made a claim on her behalf. He was trying to tempt Mrs van Laethem into negotiations with him, and he did that by going along with her claims to an extent. He accepted that he was saying something he did not believe to be true. I did not believe his evidence. It is entirely unbelievable and out of character that he wrote the e-mail in 2003 because, without the benefit of advice, he was going along with her claims and was trying to tempt her into negotiation with him, rather than simply having recourse to law.[246]I also reject Mr Brooker’s oral evidence that the only reason he ever thought that Mrs van Laethem had an interest in the land was because she had represented to him that she held 50% of the shares in Caradoc Estates Ltd. I accept the argument for Mrs van Laethem that Mr Brooker was the only person who could have transferred the shares.[247]I am satisfied that, notwithstanding that no written agreement was entered into in late 1993, Mrs van Laethem and Mr Brooker subsequently proceeded as if there had been an agreement, or Mr Brooker led Mrs van Laethem to believe that it had been agreed, and that was a factor in her contribution to the Caradoc Court project.[248]As I have said, I do not think that it is possible to separate consideration of the Development Land from Oakleigh, since the correspondence on Oakleigh only makes sense if it is borne in mind that it was intended to transfer the development site from the Development Land to Oakleigh. The 1993 documents have to be read in context. Mrs van Laethem was then contemplating the sale of Basildon House. If she did so, then she would have to pay off the £100,000 owed to Mortgage Funding Corporation plc. What was being discussed in these two documents was a proposal by Mr Brooker to Mrs van Laethem by which her interest would in effect be converted into an equity interest in the Development Land.[249]There are a number of documents apart from Mr Brooker’s e-mail which support Mrs van Laethem’s case that both parties were treating her as having an interest in the Development Land. As I have said, on August 7, 2001 Prowting Homes wrote to Mrs van Laethem and Mr Brooker (as “Mr and Mrs J H Brooker”) to confirm their interest in purchasing the Development Land, and offered £500,000 for it. There is no evidence as to who told them that Mr Brooker and Mrs van Laethem might be joint vendors, but it is most unlikely to have been Mrs van Laethem.[250]I have no reason to doubt the evidence of Mr Paul Martin, who worked for Humberts (the estate agents acting on the sale) from November or December 2002 until April 2003, that in January 2003 Mr Brooker told him that Mrs van Laethem would be the beneficiary of the sale of the Development Land.[251]Several documents already quoted in relation to Oakleigh or the Development Land also proceed on the basis that Mrs van Laethem had agreed to exchange her loan interest in Caradoc for an equity interest in the Development Land. I repeat them here. On November 11, 2001 Mr Brooker wrote to Mr Carr saying:
“I have spoken to Penny and to spare any confusions I have asked her to write a letter to you dealing with the issues of money and chargeholding. I will endorse and sign that letter to show my agreement with it. As the division of funds will not become an issue until funds are available to be divided, I have told her there is no pressing need until the exact details of the sale become clear: for example, some monies may be held in Escrow for the guarantees of the provision within the 106 agreement.”
[252]Mrs van Laethem’s draft letter of October 30, 2001 to Mr Carr says:
“Kim and I have always agreed that when the land owned by Caradoc Estates Ltd [in] which we have both 50% percent shares was sold, it should be split equally between us, with both of us contributing £50,000 each towards the completion of the house to satisfy the 106 agreement.”
[253]I believe Mrs van Laethem’s evidence that Oakleigh was to be a joint venture. But since she contributed no capital to it, that does not make sense unless it is borne in mind that Oakleigh was to replace the Development Land. The chargeholding had to be dealt with because both parties knew that Mrs van Laethem still had a charge on Caradoc Court, and knew that it had been agreed that it would be released as part of an arrangement to give Mrs van Laethem an interest in the Development Land, and subsequently in the Oakleigh development if the planning permission were transferred there. I accept the argument for Mrs van Laethem that the October/November 2001 documents reflect a belief by Mr Brooker communicated to Mrs van Laethem that Mrs van Laethem was no longer entitled to a charge on Caradoc Court, since her interest had changed from being a lender to being a part owner of the Development Land.[254]Mr Brooker also pleaded in his original defence that the £100,000 was advanced by Mrs van Laethem in 1992 on an express agreement that (inter alia) in providing 50% of the cost of the Development Land, Mrs van Laethem was acquiring a 50% interest in the profits (if any) of the Development Land, with all costs of development to be borne equally, and with a contribution by her of £50,000 towards the renovation of Caradoc Court in order to satisfy and/or allow renegotiation of the section 106 agreement to allow the development to go ahead.[255]The letter of August 21, 2000 from Mr Cliff Davies was relied on by Mr Brooker as showing that Mrs van Laethem knew that she had no interest on Caradoc Estates Ltd, but I accept her evidence that this letter was written at the time that her relationship with Mr Brooker had deteriorated, and when she had begun to be suspicious of him, and that between 1993 and 2000, when Mr Davies wrote to her, she thought she was a shareholder in Caradoc Estates Ltd. I do not consider, therefore, that this letter shows that Mrs van Laethem knew she had no interest in Caradoc Estates Ltd. What it shows is that she suspected that she had not been given an interest. If anything it indicates that she thought she ought to have had such an interest. Oakleigh settlement counterclaim[256]I have already said that I accept Mrs van Laethem’s evidence that Oakleigh was a joint venture even though it was in her sole name. I am satisfied that Oakleigh was another joint venture originally envisaged to replace the Development Land and that it was not taken by Mrs van Laethem in settlement of claims she may have had. Even though Oakleigh was registered in Mrs van Laethem’s name, the documents do not suggest that she was intended to the sole beneficial owner. Indeed, in my judgment the documents confirm that Oakleigh was a 50-50 joint venture intended to replace the Development Land.[257]Mr Brooker conducted the correspondence with Mr Carr on the acquisition. In cross-examination Mr Brooker accepted that he did not tell Mr Carr that the purpose of the acquisition was to enable him to repay Mrs van Laethem £200,000 which she had represented he owed her. Mr Brooker made no mention at all of any such intention in correspondence with Mr Carr. On the contrary, Mr Brooker’s letter of March 10, 1999 to Mr Carr about the Oakleigh property indicated that both he and Mrs van Laethem were buying Oakleigh, and that Mrs van Laethem would become the title holder of the house and land at Oakleigh (other than the land designated for development, which would go to Caradoc Esates Ltd). Until immediately prior to completion on May 18, 1999, Mr Carr corresponded only with Mr Brooker, and not with Mrs van Laethem, in connection with the purchase. It is not credible that, if Mr Brooker’s account were true, he would not at some stage have informed Mr Carr.[258]It is also significant that, when in September 1999 Oakleigh was let to Mrs Gillian Jones, the tenancy agreement (and a horse-grazing agreement) was entered into by Mr Brooker and Mrs van Laethem as “Mr and Mrs Brooker.” The caravan site rentals were paid into their joint account with Halifax plc. The correspondence from two firms of estate agents between 1999 and 2001 was with “Mr and Mrs Brooker.”[259]Mr Brooker’s e-mail of November 21, 2000 to Alex Beeston does indicate that one of the ideas which he had was to settle with Mrs van Laethem by transferring Oakleigh to her outright, but this was eighteen months after the purchase and it is plain from that e-mail that there had been no such agreement. So also the letter of February 15, 2002 from Mr Cliff Davies to Mrs van Laethem suggests a proposal whereby Mrs van Laethem should have the whole of Oakleigh and a 50% interest in the development (at Oakleigh or on the Development Land), but it also proceeds on the basis that her primary position is that she should have 50% of everything. It is certainly not evidence of an agreement.[260]I dismiss Mr Brooker’s counterclaim. The pleaded counterclaim is that before the agreement was made relating to Oakleigh by which he would purchase Oakleigh in Mrs van Laethem’s sole name in full and final settlement of any claims she might have against him, and in order to induce him to enter into it, she warranted and represented that she was owed £100,000 in addition to the £100,000 initially advanced in 1992. The basis of her claim that he owed her a further £100,000 was that she had applied the whole of the proceeds of Basildon House and subsequently the Garden House to or for his benefit. She had in fact retained the entire net proceeds of the Garden House and had not applied them to his benefit, and she had given him no credit for his share of the Garden House proceeds. By the end of the trial Mr Brooker was contending that there was a shortfall of about £33,000 to £41,000, and that Mrs van Laethem had retained the benefit of £25,000 of the purchase price of Oakleigh which was to be attributed to the development site.[261]For the reasons already given (above, paras 146-151) I am satisfied that allegations in the counterclaim based on failure to account for the Garden House proceeds are not well-founded. I did not believe Mr Brooker’s evidence that he asked Mrs van Laethem how much he owed her, and that he was buying Oakleigh in order to pay off Mrs van Laethem. I am satisfied that(a) there was no agreement as alleged;(b) in any event, there was no misrepresentation;(c) Mrs van Laethem has not withheld the Garden House proceeds. The counterclaim therefore fails. Remedy[262]In the particulars of claim Mrs van Laethem claimed a half share in each of Caradoc Court and the Development Land. By the time of closing submissions she sought equitable relief resulting in her having total gross assets of £750,000, i.e. a payment of £470,000 after taking account of the £280,000 gross proceeds of Oakleigh retained by her. Mr Brooker says that, since Mrs van Laethem has already received £280,000 from the sale of Oakleigh, which is more than a half share in the Development Land (the most she reasonably expected), the minimum equity has already been done. Although his position has been equivocal, on this basis Mrs van Laethem would also be entitled to the return of £100,000.[263]I have already set out in paragraphs 78 to 80 the modern authorities which show that there is no substantial difference in the remedy as between constructive trust and proprietary estoppel. My primary holding is that Mrs van Laethem is entitled to an interest by way of proprietary estoppel in relation to Caradoc Court and by way of constructive trust in relation to the Development Land. My alternative holding is that Mrs van Laethem is entitled to an interest by way of proprietary estoppel in relation to both properties. I do not consider that it makes a difference as regards the remedy. Even on the basis of a common agreement constructive trust in relation to the Development Land, the agreement to share equally should only be a starting point in relation to the relief. Alternatively, even if the agreement to share equally were given full effect that would have the effect of reducing the equitable relief in relation to Caradoc Court.[264]I take into account the following. Mrs van Laethem has put in £100,000, represented by the mortgage to secure a loan which has been paid off by her out of the proceeds of Basildon House. It is now a debt due from Mr Brooker, but it would have been worth much more if it had remained an equity interest in Basildon House or its replacement. Of the balance on the sale of Basildon House, she contributed about £80,000 to the Garden House project, and the remainder largely on joint living expenses. Her share of the Garden House proceeds was substantially applied to the restoration of Caradoc Court. The reality is that the substantial part of what Mrs van Laethem contributed to the venture was Basildon House.[265]In effect, by paying off the loan from the proceeds of Basildon House, and by investing the surplus in the Garden House and much of the profit on the Garden House in Caradoc Court, Mrs van Laethem has invested £205,000 (£96,665 net, after payment of the loan) in 1994house value terms. Basildon House has since been demolished and there is no expert evidence of what its value would now be, although Mrs van Laethem’s own evidence is that it would be worth £750,000, and she was not challenged on that figure. It is not suggested that it was sold at an undervalue. I asked for the parties’ agreement on what a house in that area would now be worth based on the published indices. No agreement was forthcoming, although I was provided with information about the indices. It is wholly unrealistic to imagine a property which sold for £205,000 in July 1994 would be worth less than £600,000 today, and it might have been worth somewhat more.[266]I also take into account the facts that it is likely that Mr Brooker could not have completed the sale of Caradoc without the mortgage on Basildon House; and that the work could not have progressed without the funds received via the sale of Basildon House and their investment in the Garden House.[267]Mr Brooker is obviously an extremely skilled craftsman who did an immense amount of work on Caradoc Court, drawing many plans, shifting earth, digging out drains, constructing manholes, putting in new beams, laying of an enormous amount of flooring. I am also entitled to take into account the facts that Mrs van Laethem devoted the best part of 10 years of her life on the project, particularly in working in the grounds; that she effectively gave up at the age of about 50 the chance of the development of her own business, but I add that I do not regard the loss of a chance of the development of an interior design or antiques business as a very major factor.[268]I have already said that Mrs van Laethem exaggerated the contribution of Mrs Hollis, and I take into account the fact that Mrs van Laethem obtained for Mr Brooker a capital contribution of about £25,000 from Mrs Hollis, without which the East Wing might not have been completed.[269]I accept that not all of Mrs van Laethem’s money went into Caradoc. She invested modest amounts in her antiques businesses. She maintained Alex Beeston and financially assisted her two daughters.[270]I also take account of(a) Mr Brooker’s contribution of £260,000 to the original purchase price;(b) his contribution of the plot on which the Garden House was built, which together with the contribution of his labour and skills, led to a sale of the Garden House for £250,000 in 1997;(c) and his use of most of the proceeds of £355,000 from Sulgrave Court on Oakleigh and the restoration of Caradoc Court.[271]I do not consider that a number of other sums which may have been spent by the parties on Caradoc Court or the joint living expenses should play a significant part in the equation. On Mr Brooker’s side these include:(1) the sale in 1997 of railway memorabilia in the ownership of Caradoc Estates Ltd but assembled by Mr Brooker and/or his family which fetched £14,776;(2) £10,000 from the grant of a right of way in 1998;(3) £2,000 insurance proceeds after a fire at Brackley; and(4) the £53,000 sale proceeds of Brackley. On Mrs van Laethem’s side they include what she says she contributed from her savings or from her divorce settlement or from the £8,000 which she received on the demutualisation of the Halifax Building Society, including £17,000 said to have been paid to keep CEL and Caradoc Estates Ltd going, £15,000 for oak timber framing (which Mr Brooker says he paid for out of the Garden House profits); £6,500 on a road roller and tractor mower (which Mr Brooker says he repaid from the proceeds of the railway memorabilia) and £5,000 for the mobile home.[272]The only significant tax element is the capital gains tax of £58,400 payable by Mrs van Laethem on the sale of Oakleigh, as she did not live at the property prior to its sale. I do not see why the burden of any part of this should be shifted to Mr Brooker. By the time of the sale she was professionally advised, and did not have to sell it. I was told that Mr Brooker’s tax liability would, on certain assumptions, be of a similar order, namely about £54,000. I do not consider that taxation elements should play a significant part in the equation. I have already questioned whether in fact Mrs van Laethem and Mr Brooker might be taxable on the basis that they have been engaged in trade.[273]Taking all these matters into account, I consider that an overall figure of £700,000 is the appropriate figure, whether or not it is properly described as the minimum equity required to do justice.[274]Mrs van Laethem has already received £280,000 from the sale of Oakleigh, and she would have to account for all of that, and her case was predicated on her no longer having a loan/charge over Caradoc Court. The net result would be that she is entitled to a further £420,000.[275]I will hear argument on the form of relief, and in particular whether the sale of the Development Land should be ordered and the sum due be paid from the proceeds, or whether it should be secured by a charge over Caradoc Court and the Development Land to be discharged on terms.