Stallion v Albert Stallion Holdings (Great Britain) Ltd & Anor [2009] EWHC 1950 (Ch)

[2009] EWHC 1950 (Ch)

Case No HC08C01752

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 29 July 2009

Before

SARAH ASPLIN QC

(Sitting as a Deputy High Court Judge)

Between

PORNTIP STALLIONClaimant

Bernard O’Sullivan (instructed by Fisher Meredith) for Claimants

Mark Woodland for First Defendant pursuant to CPR 39.6 and Myriam Stacey (instructed by Myers Fletcher & Gordon) for the Second Defendant

Hearing Hearing dates: 15,16,17,18 and 19 June 2009

Judgment

MISS SARAH ASPLIN QC:

[1]The claimant, Porntip Stallion, who is also known as Suchit Saeliim is of Thai nationality. She is 56 years of age and first came to England with Albert Stallion, in 1984 in order to assist him with his business, conducted through his companies Albert Stallion Limited and Magiboards Limited. She married Albert Stallion in June 1989 and she has lived at premises known as 75 The Cut, Waterloo, London SE1 8LL, (“the Cut”) since at least 1991. She was divorced from her husband in 1995 in order to enable him to marry the second defendant, Lilibeth Stallion, a Filipina, and bring her to England. He married the second defendant in the Philippines in January 1996. Albert Stallion died in April 2004, leaving the entirety of his estate to the second defendant who was also his executrix. For convenience, after their first introduction, I shall refer to all those involved by their first names.

[2]Porntip seeks a declaration that she is entitled to a life interest in all but the ground floor of the Cut with an exclusive right to occupy those premises. She no longer pursues a claim for the rents and profits from the ground floor of the Cut which throughout the relevant period has been a betting shop and at present, is leased to Tote Bookmakers Limited. Portnip also no longer pursues any claim based upon an express trust. However, she does seek an order for possession against Lilibeth, who is also resident at the Cut, together with damages for trespass.

[3]In essence, Porntip claims to have the benefit of a proprietary estoppel against the first defendant, Albert Stallion Holdings (Great Britain) Limited, (“ASH”), the freehold owner of the Cut on the basis that she acted to her detriment in June 1994 when she agreed not to contest her divorce from Albert on the grounds of two years separation and in lieu of an order for ancillary relief, accepted and relied on a promise that she would have a right to live at and have the sole use of the Cut for life rent free, as well as a five year contract of employment with a salary of £15,000 per annum and a fully serviced car.

[4]The claim was also pleaded on the basis that the facts gave rise to a constructive trust but this was not actively pursued at the hearing.

[5]The precise terms and extent of the promise and all other elements of the alleged proprietary estoppel are in dispute. The defendants reserve their position as to whether there was any authority to make the alleged representations on behalf of Churchill Webster Manufacturing Limited, the company which owned the freehold of the Cut at the relevant time in 1994. They also dispute whether in any event, the conscience of ASH, the present freeholder, is affected. Even if such an equity had arisen they contend that it has either been satisfied in the period since 1994, or it would be disproportionate now for it to be satisfied in the manner claimed.

[6]ASH by way of counterclaim seeks a declaration that Porntip has no interest in the Cut or alternatively, that such interest as she may have will be satisfied by the payment of £55,000 pursuant to clause 3 of a document which became known as the 29 June Agreement to which I shall refer. ASH also seeks possession of the Cut from Porntip and mesne profits from 19 February 2007 until delivery up. By way of Reply and Defence to Counterclaim, Porntip reiterates reliance upon the 30 June Agreement, but in the alternative, contends that if the court holds that the general intention was that Albert be entitled to determined Porntip’s interest in the Cut by payment of a sum, it should be a sum equivalent to 40-45% of the value of the Cut. The Witnesses

[7]To the extent that the issues in this case turn on credibility, I should state my impressions of the principal witnesses. Porntip gave evidence with the assistance of a translator to whom she referred many of the questions put to her. This was despite the fact that she has lived in England since 1989, assisted Albert in his business, acted as a translator for him and carried out relatively detailed instructions sent by fax in English. Overall, I was satisfied that she has an adequate grasp of English as long as it was straightforward.

[8]She answered in detail and without the assistance of the interpreter in relation to matters which assisted her case but was otherwise hesitant, slow, reliant on the interpreter and sometimes evasive. On numerous occasions her evidence in cross examination was corrected by reference to her own statement or to documents. Having taken all of these matters into careful consideration, I did not find her to be an entirely reliable witness. Where her evidence differs from that of others, I prefer their evidence.

[9]Lilibeth did not seek to embellish her evidence and for example, proffered in cross examination that Albert and Porntip had often had arguments during which Porntip had referred to Albert’s promise that she could live at the Cut rent free for life. Overall, I found her to be a reliable witness and I accept her evidence.

[10]Mahmood Bhogadia is a chartered accountant and business consultant. In the early 1990s, he was a partner in the Haines Watts, a firm of chartered accountants in Wolverhampton which was engaged to advise the Albert Stallion Group of companies which was originally Albert Stallion Limited and Magiboards Limited. He became Albert’s financial adviser both personally and in relation to his business affairs with which he was very closely involved. He gave his evidence in a measured way.

[11]However, I take into account that he parted with Albert and his companies on bad terms, the companies owing Haines Watts a considerable sum in fees. Mahmood ceased to be a partner at Haines Watts and began to work on his own at about the same time. In cross-examination he stated that he felt that he had been “taken for a ride”. He also alleged in cross examination that he and Albert had parted company when he raised an issue relating to money laundering, something which is not contained in his witness statement or evidenced by any of the documentation before the court.

[12]In addition, his memory was at times, inconsistent. He stated, for example, that he could not recall the circumstances in which his 1999 affidavit was drafted and claimed not to recall studying the 1991 tenancy agreement upon which he comments in the affidavit and to which it was exhibited. Overall, therefore, I did not find him to be an entirely reliable witness.

[13]Rose Guthrie was a friend of Albert’s and is now a close friend of Porntip. Her evidence in cross examination was at times inconsistent and proved to be inaccurate by reference to the documents and at times, her witness statement. In addition, she stated that on the night of 29 June 1994, Albert had made reference to the provision he had made for Annette on their divorce, said that he would give the Cut to Porntip and that he intended to retire to the Philippines. She also said that she was aware that evening that Mahmood was coming the following day to discuss the terms of the divorce. None of these details are in her witness statement and I do not accept them. She also gave inconsistent evidence about her attendance at solicitors’ offices with Porntip when advice was sought in relation to this matter. I also take account of the fact that she is living at the Cut at present and has no other home. Overall, having weighed these matters carefully, I did not find her to be an entirely reliable witness and where her evidence differs from that of others, I prefer their evidence.

[14]I accept the evidence of Diane Trigg. I find her to be a truthful and reliable witness who gave her evidence in a measured, thoughtful and careful manner.

[15]I think it would be fair to say that there was little doubt as to where the loyalties of Malcolm Sisley, Julie Horton and Mark Woodland lay. They are all employed by ASH. Mark Woodland succeeded Mahmood as Albert’s financial adviser and since his death has become a friend of Lilibeth, director of ASH and trustee of the Magi Trust to which I shall refer. At times, I found their evidence to be less than impartial. However, it is not central to the main issues in dispute.

[16]The witness statements of David Smyth, a friend and business associate of Albert’s and Olga Mascerenhas, his personal assistant, were admitted as hearsay evidence under Civil Evidence Act 1995 and therefore, they were not tendered in cross examination. Inevitably, this limits the weight which I can attribute to the contents of their statements and any significance which might otherwise be attached to matters which they do not cover. This is all the more so in the case of David Smyth. His statement is dated 6 July 2007. However, the hearsay notice dated 23 September 2008 states that he was suffering from “damage to the brain which rendered him incapable of speech”. There is no indication or other evidence before me as to when the injury may have been incurred and the effect that it may have had upon the accuracy and reliability of the statement. Relevant background

[17]The Cut is a four storey terraced property with a cellar. As I have already mentioned, there is a betting shop on the ground floor which is the subject of a lease to the Tote Bookmakers Limited, at a present rent of £21,000 per annum. The remaining floors now form residential accommodation which are occupied by Porntip and a number of her guests including Rose and by Lilibeth, her daughter and new husband. There are three or four bedrooms, a kitchen and a lounge.

[18]The property had been owned by Albert’s family for a considerable time and was originally an investment property. However, by the time Porntip came to England in 1984 and certainly by the time she married Albert in 1989, other than the ground floor, an office on the first floor and showroom on the second floor, both occupied by Magiboards Limited, it was used for residential purposes. By May 1994, the freehold title to the Cut was held by Churchill Webster Manufacturing Limited, (formerly known as Albert Stallion Limited), one Albert’s companies of which he was sole director and owned 7999 of the 8000 issued shares.

[19]Porntip was Albert’s third wife. She was married to him for six years from 1989 until 1995 and worked in his business, Magiboards Limited both before and for a period of five years after their divorce in 1995. There was evidence from a number of witnesses which I accept, that Albert had a reputation for being a womaniser and a heavy drinker, although he described as being “on the wagon” from time to time. He also spent a considerable amount of time travelling in the Far East both for business and pleasure. It was not disputed that he was not the kind of man who could necessarily be trusted to keep his word, that he was impulsive and that he treated the assets of the companies of which he was a director and shareholder, as if they were his own. I also accept Mahmood’s evidence given in cross examination, that Albert was not a man to be told what to do. Mahmood described him as the “ultimate decision maker.”

[20]Albert had divorced his second wife Annette in March 1989, not long before marrying Porntip. There was evidence from a number of witnesses, which I accept, that it was known amongst Albert’s friends and business colleagues that as part of the divorce settlement, Annette had retained the matrimonial home in Surrey.

[21]As I have already mentioned, Albert had met Porntip in the Far East where she assisted him in his business by translating for him. She first came to England with him in 1984 and lived at the Cut continuously at least from 1991, having spent variable periods there before that and certainly since the date of her marriage to Albert in 1989.

[22]On 12 March 1991, both Albert and Porntip had signed a tenancy agreement in respect of “the first and second floor flat” at the Cut, the freehold of which was then owned by Albert’s company, A. Stallion Limited. However, it was not suggested that Porntip personally had paid any rent as a result of the agreement, although there are records of rent having been paid.

[23]Albert had become involved with Lilibeth in about 1991 whilst still married to Porntip and spent considerable periods abroad on business and visiting Lilibeth in the Philippines. Albert had an interest in a pig farm there which Lilibeth confirmed in cross examination had been built on land owned by her family. She also stated that Albert had built a house there which is now in her name.

[24]However, the preponderance of the evidence was that Albert had an affection for the Cut which was important to him. It was not disputed that for most if not all of the relevant period, he did not own a permanent home of his own in England. At one stage, Albert or one of his companies, had purchased a house on the Isle of Man which was sold again relatively soon thereafter. For a short period he had also owned a former council house in Telford. For the most part, when he was in England, he lodged in Telford with Olga on a bed and breakfast basis during the week and stayed at the Cut at the weekend.

[25]Porntip worked for Magiboards Limited and was the only employee permanently based at the Cut. It was not disputed that in addition to business meetings, Albert did much of his business and social entertaining there for which Porntip would cook. Although it was accepted that Porntip also cleaned the Cut, there was a conflict of evidence about the basis upon which she did so. There are references to cleaning and payments made to Porntip in a diary kept by Albert which was produced to the court and Malcolm’s evidence was that cleaning was part of Porntip’s duties. Porntip’s evidence was that she cleaned because the Cut was her home and that the entries could be explained because on occasion, she cleaned whiteboards for customers of Magiboard. Although no doubt, there is an element of truth in both, I find that it is more likely than not, given the diary entries, that cleaning was part of Porntip’s duties, but little if anything turns upon it.

[26]The freehold title to the Cut was transferred on 13 March 1991 to Capsicome Limited, a Jersey company. The freehold was transferred or possibly re-transferred to Churchill Webster Manufacturing Limited, of which Albert was a director, on 12 May 1994. 29 June 1994

[27]There was evidence from numerous witnesses that by 1994, having failed to obtain a visa for Lilibeth on a number of occasions, Albert was very eager to bring her to England and to marry her. I accept Rose’s evidence that on the evening of 29 June 1994, Albert dined with her and David at the “Wig and Pen” Club in the Strand and that they were joined by Porntip. Albert explained that he was concerned that the Cut might have to be sold as a result of the poor performance of his businesses and debts due to the Inland Revenue. He also stated that he had had the Cut valued at £126,000. It was unclear whether the valuation applied to the entire premises or just the upper floors.

[28]I also accept Rose’ evidence that on the evening of 29 June 1994, after they had all returned to the Cut and Porntip had left the room, Albert discussed his desire to divorce Porntip in order to marry Lilibeth and bring her into the country. He also expressed a desire to take care of Porntip. I should add that it is not disputed that Porntip was aware of his attachment to Lilibeth, his desire to bring her to England and to marry her. Both Porntip and Rose gave evidence that they believed that Albert would re-marry Porntip having brought Lilibeth into the United Kingdom. In cross examination, Porntip commented that this may have been her dream.

[29]In any event, in the light of what Albert had said, Rose and David were concerned to protect Porntip. Having expressed their concern, Albert withdrew in order to type up a memorandum setting out the terms of a financial settlement which he would be willing to reach with Porntip if she would agree to divorce him. The terms of the memorandum which became known as the 29 June Agreement were as follows:

“DIVORCE SETTLEMENT AGREEMENT BETWEEN ALBERT A. STALLION and PORNTIP STALLION If Porntip Stallion, my present wife consent to a divorce based on the fact that we have been separated for two years, I guarantee I will do the following: 1. Porntip Stallion can continue to live in the property situated at 27 The Cut, Waterloo, London, SE1 8LL rent free for the rest of her life, with no conditions attached. 2. If I require her to leave the property, I will give her 90 days notice and I will provide her with a sum of £55,000 (Fifty-Five Thousand Pounds.) 3. If I die and (if) the property, 75 the Cut, Waterloo, London SE1 8LL has to be sold or the premises are vacated, Porntip Stallion will be entitled to £55,000 (Fifty-Five Thousand Pounds) from my estate. 4. I will provide Porntip Stallion with an employment contract with Magiboards Limited. The contract will entitle her to a salary of £15,000 per annum and the use of a fully serviced car. The employment contract will expire in November 2000. However, items one thru three above are irrevocable. This written agreement is binding on both parties and is irrevocable. Signed and dated this 29th day of June 1994.”

It was signed that evening by Albert and witnessed by Rose and David. Porntip’s name was also typed at the bottom but it was not signed by her that evening or thereafter. Rose had read its contents. David’s witness statement records that he took a photocopy of the 29 June Agreement which he kept and still retained in 2007. BETWEEN ALBERT A. STALLION and PORNTIP STALLION Signed and dated this 29th day of June 1994.”

PORNTIP STALLION

[30]I accept Porntip’s evidence that the first she knew of the 29 June Agreement was the following morning, 30 June 1994, when Albert handed her a folded piece of paper and told her to keep it safe. She showed the folded paper to Rose who was just leaving the Cut in order to go to the airport. Rose mentioned that it must be the document which Albert had produced the previous evening and told Porntip to keep it safe which she did.

[31]It was Porntip’s evidence that although she saw and read the heading, she did not read the contents of the 29 June Agreement at this stage and in fact, did not do so at all until 1998 or 1999 when Albert began to dispute the terms of her service agreement and her right to remain at the Cut. Since she accepted in cross examination that Albert had not required her to keep the document secret, that she regarded it as her “security” and there was evidence that she was capable of reading a document of this nature, albeit slowly, I find it improbable that she did not do so. 30 June 1994

[32]In any event, it is not disputed that later that day, Mahmood attended the Cut in order to speak to Porntip. He told the court that he was often required to do Albert’s “dirty work” as he put it and on this occasion he had come to London in order to ask Porntip to grant Albert a divorce and to explain the arrangements which Albert was willing to put in place.

[33]He stated that he and Albert had visited Albert’s solicitors earlier that week, on 27 June 1994, in order to discuss not only the grounds for divorce and the effect which a divorce might have on Porntip’s right to remain in the United Kingdom, but also the proposed financial arrangements which he had come to explain to Porntip. Although there is documentary evidence to support the fact that Albert was concerned about the effect which a divorce might have upon Porntip’s residence in the United Kingdom, there is nothing to support Mahmood’s evidence that financial arrangements were discussed at the meeting with Lee Crowder, Albert’s solicitors on 27 June 1994 and he does not mention that aspect of the discussion in his witness statement.

[34]Mahmood also says that he was only willing to deliver the bad news of the divorce to Porntip on the basis that she was properly provided for. He stated that although Albert’s finances and those of his companies were insufficiently good to enable him to purchase a house for Porntip, in the way he had for Annette, he would not have been willing to have been involved in requesting the divorce on Albert’s behalf, if the effect of the proposed financial arrangements had been that Porntip was little more than a lodger in a bedsit in what he viewed as her own home.

[35]He says in his witness statement that it was he who had come up with the proposed financial terms which he says he explained to Porntip and that Albert was happy with his suggestion. This is contrary to Mahmood’s own evidence that Albert was not a man to be dictated to and in addition, does not sit easily with his assertion in cross examination that financial arrangements had been discussed at the meeting with solicitors on 27 June.

[36]In my judgment, on the balance of probabilities, it is very unlikely that Albert would have discussed and agreed to financial arrangements on 27 June, in the form alleged by Mahmood, but created and signed a document on 29 June containing arrangements of a different character. Overall, therefore, taking into account all the matters set out at paragraphs 32-35 above, I am unable to accept Mahmood’s evidence that the proposed financial arrangements in the form allegedly determined by Mahmood and described by him to Porntip on 30 June 1994, were discussed on 27 June 1994 and accepted by Albert. 30 June Meeting

[37]Mahmood gave evidence that at the meeting on 30 June 1994, Porntip agreed to a divorce and that the financial arrangements which he explained to Porntip on Albert’s behalf and that of his companies, were in the following terms:(i) that Porntip would have a right to reside at the Cut rent free for life and that she would have sole and exclusive occupation of the property, but for the ground floor betting shop once Magiboards Limited had vacated the office space which it was occupying on the first floor:

(ii) in the light of the financial difficulties being experienced by Albert’s companies, in order to safeguard Porntip’s residence at the Cut, Magiboards Limited would put all its freehold assets “upstream” into a holding company which was ultimately ASH; and

(iii) Porntip would be provided with a five year service contract with Magiboards Limited at a salary of £15,000 per annum and the use of a fully serviced car. (“the 30 June Agreement”). It was not disputed that at that stage, having lost a number of large clients in London, it was proposed that Magiboards Limited re-locate all its activities to Telford or that its business would be sold off in the near future.

[38]Porntip makes no reference in her witness statement to having been promised exclusive possession of the Cut at the meeting on 30 June 1994. Nor does she refer to assets being put “upstream”. She states that she was promised that she could stay at the Cut for the rest of her life, would retain the same job with Magiboards Limited, at a salary of £15,000 per annum for five years and would also have a car. She also states that she was promised permanent health insurance, an aspect which is not mentioned in either 29 June or 30 June Agreement.

[39]Rather surprisingly, Porntip does not appear to have mentioned the existence of the 29 June Agreement at the meeting with Mahmood, despite having been handed the folded paper that very morning. As I have already mentioned, she accepted in cross examination that she had read the heading, “DIVORCE SETTLEMENT AGREEMENT” at that stage. She gave no explanation as to why she did not show it to Mahmood other than that the paper was her “security” and that it was a secret. Given the signatures on it, the fact that she had already discussed it, albeit in passing, with Rose and the fact that Porntip accepted in cross examination that she had not been asked to keep its contents secret, I do not accept that it was a secret or that she considered it to be so.

[40]Neither Mahmood nor Porntip suggested that the 29 June Agreement was mentioned by Albert when he joined them on 30 June, immediately after Mahmood’s meeting with Porntip and it was Mahmood’s evidence that he, Mahmood, knew nothing of the 29 June Agreement until 2007, although there is some doubt cast upon this to which I shall refer.

[41]There is a short written declaration dated 30 June 1994, bearing Porntip’s signature, which confirms that she consented to the divorce and had lived separately from Albert since April 1992. It is not disputed that Albert and Porntip had not be separated for two years in 1994. When cross examined about why she had agreed to the divorce and the financial settlement put forward, Porntip replied that she loved Albert and wanted to help him and that she felt that she had no choice. Divorce Proceedings

[42]Albert was enormously grateful to Porntip for agreeing to the divorce and thereafter, Mahmood acted as the link between Albert’s solicitors, Lee Crowder, Albert and Porntip. A divorce petition was issued on 26th October 1994, based on two years separation. It was later amended to show Albert’s address as 31 Everglade Road, Priorslee, Telford, Shropshire rather than the Cut.

[43]When papers in relation to the divorce arrived from the Birmingham County Court dated 13 March 1995, Porntip turned to Malcolm to assist her in completing them. He gave evidence that he sat down with her to go through the form and wrote the answers for her. She signed the document which is dated 15 March 1995. It records her consent to the decree being granted and in response to the question, “In the event of a decree nisi being granted on the basis of two year’s separation coupled with the respondent’s consent do you intend to apply to the court for it to consider your financial position as it will be after the divorce?” she answered, “No”.

[44]Albert’s affidavit in the divorce proceedings, sworn in the Philippines and dated 29 March 1995, records in response to the question “Since the date given in the answer to Question 4, have you ever lived with the respondent in the same household?” “Yes but not as Husband and Wife. Precise periods are unknown but the Respondent lives in the premises owned by my Company and when I do go to London from time to time I stay at the flat.” The decree nisi was made on 3 July 1995 and the decree absolute on 15 August 1995. Re-structuring

[45]In September 1995, Albert made a new will in contemplation of his marriage to Lilibeth and left his residuary estate to Porntip and Lilibeth in equal shares. His address was stated to be the Cut. At the same time, Mahmood was dealing with the re-structuring of Albert’s companies. Albert Stallion Limited the freehold owner of the Cut was re-named Churchill Webster Manufacturing Limited and ASH was set up as the holding company to which the Cut and other assets were to be transferred at full market value. Title to the Cut was actually transferred to ASH in consideration for £175,000 on 5 September 1995. Albert owned the entire issued share capital of ASH which in turn owned his business Magiboards Limited.

[46]In addition, on 26 October 1995, a trust was set up by Albert, known as the Magi Trust. It was a discretionary trust of which the beneficiaries were Albert, Porntip and Lilibeth. The original trustees were Albert and Mahmood. On 31 October 1995, Albert transferred his entire shareholding in ASH to the Magi Trust.

[47]Under cover of a letter dated 8 November 1995, Mahmood forwarded to Porntip a copy of the final version of the five year service agreement referred to both in the 29 June Agreement and the 30 June Agreement. Mahmood states in the first paragraph of that letter:

“ . .You will no doubt recall that as part of your divorce settlement I promised you that Magiboards will enter into a service agreement with yourself to protect your employment for a guaranteed period of 5 years and beyond to give you a certainty of an income after your divorce from Albert.”

[48]The letter contained no reference to the terms upon which Porntip was intended to occupy the Cut and despite referring both in his witness statement and in cross examination to notes of the 30 June meeting, no contemporaneous documentation which makes reference to Porntip’s residence of the Cut was produced.

[49]After Porntip and Albert’s divorce, Porntip continued to live at the Cut. Albert married Lilibeth in the Philippines in January 1996 and brought her back to the Cut in April of that year. Although there was no dispute that Albert, Lilibeth and Porntip all lived together at the Cut for a short time after their return to England, there was a conflict of evidence as to whether thereafter, Albert and Lillibeth spent most of their time in Telford and would only come to the Cut at the weekend having asked Porntip’s permission or spent periods there with Porntip and came and went as they pleased, albeit mostly at the weekend.

[50]Julie stated that on behalf of Magiboards Limited, she would send Porntip instructions from Telford about who to expect at the Cut and when. Porntip maintained that her permission was always sought, both in relation to Magiboard personnel and Albert and Lilibeth. However, as I have already mentioned, it was not disputed that in addition to Albert and Lilibeth, Malcolm had keys to the Cut and that throughout this period and for a considerable time thereafter, Magiboards Limited continued to maintain an office and a showroom at the Cut.

[51]It was also not disputed that antique furniture belonging to Albert was at the Cut and remained there until after his death in 2004. In addition, after his divorce from Porntip, Lilibeth gave evidence that Albert chose some of the decoration at the Cut and tended a garden roof terrace there from time to time and there were photographs both of the décor and Albert on the terrace. I accept Lilibeth’s evidence in this regard.

[52]With regard to permission for Magiboard personnel to attend or stay at the Cut, I accept Julie’s evidence that Porntip’s permission was not required. There was no documentary evidence to support such requests for permission or any responses to them and no suggestion that permission had ever been refused. There was also no documentary evidence to corroborate Porntip’s assertion that after the divorce, Albert and Lilibeth had also sought her permission to stay at the Cut. I find that such a contention is inconsistent with the fact that Albert and Lilibeth retained keys to the Cut. In addition, it is inconsistent with the way in which Porntip herself described her living arrangements in the documents she produced or which were produced on her behalf in 2001, 2004 and 2006, to which I shall refer. Overall, therefore, I am unable to accept that after the divorce, Albert and Lilibeth were required to obtain Porntip’s permission if they wished to stay at the Cut. I find that they came and went freely. This finding is also supported by the facts and matters to which I refer below at paragraph 56. The Magi Trust meeting

[53]On 26 May 1996, Albert, Lilibeth, Porntip, Mahmood and his wife had lunch at the Cut and afterwards, there was a meeting at which Mahmood gave a flip chart presentation to Lilibeth and Porntip in order to explain the re-organisation of Albert’s businesses and the role of the Magi Trust. On this occasion, Albert was also present. Once again, despite the fact that Mahmood stated that he had made notes for the purposes of the meeting, no documentary evidence of what was discussed was produced to the court.

[54]It was Mahmood’s evidence that at that meeting he not only explained the trust and its ownership of ASH which in turn owned the Cut, but also made it plain to Lilibeth that Porntip was entitled to exclusive occupation of the Cut, as soon as the Magiboards Limited office was removed, rent free for the rest of her life. His evidence is supported by that of Porntip. However, Lilibeth has no recollection of this and stated that only the trust arrangements were discussed. The trust documentation contains no reference to any rights of occupation over the Cut, a major asset of ASH, the shares of which were transferred to the Magi Trust.

[55]Despite Lilibeth’s evidence that the basis of Porntip’s occupation of the Cut was not mentioned at the Magi Trust meeting, she did accept in cross examination that on many occasions and particularly during arguments, she heard Porntip remind Albert that he had promised that she could stay at the Cut rent free for life. Lilibeth stated that when questioned by her, Albert had said merely that it was better if there were someone on the premises to take care of it for them. She also stated that Albert had never mentioned the 29 June Agreement or any right of Porntip to exclusive possession, to her.

[56]On 31 January 1997, Albert sent a memorandum to Porntip requesting that she share the expense of rates, electricity, gas and water at the Cut equally with himself, Lilibeth and ASH. He also suggested that the three of them run a “kitty” in respect of food and domestic items. Porntip agreed to both requests although it was not suggested that the arrangement in relation to utilities was ever pursued.

[57]In response to a letter from Albert requesting that Mahmood put the details of his meeting with Porntip and Lilibeth in writing, (assumed by all to be a reference to the Magi Trust meeting), Mahmood responded by a letter dated 13 February 1997 to Albert in which he mentioned that he had extensive notes of the meeting. As I have mentioned, these can no longer be found. The letter sets out the details of the Magi Trust but makes no reference to any right of Porntip’s to live at the Cut whether with exclusive possession or otherwise.

[58]This was explained by Mahmood in cross examination on the basis that having received Albert’s letter, he had spoken to him on the telephone and that he had confirmed that he only required a record of the Magi Trust details. There is no reference to this telephone call in his witness statement. I find it improbable that the telephone conversation took place or that it would have been considered appropriate particularly by a professional person, not to record details in relation to Porntip’s occupation of the Cut had they been set out at the Magi Trust meeting. This is all the more so in the light of the potentially inconsistent nature of the trust and the purported life interest. Therefore, I am unable to accept Mahmood’s evidence and that of Porntip in this regard and prefer that of Lilibeth when she says that Porntip’s occupation of the Cut was not mentioned at the Magi Trust meeting.

[59]In 1998, shortly after Mahmood had ceased to be involved with Albert’s business affairs, he was also replaced as trustee of the Magi Trust, by Lilibeth. In the Deed of Removal, Albert’s address is stated to be the Cut. The present trustees are Mark Woodland and Charles Pallister, a partner of Charles Russell LLP. The Disputes

[60]At various times between 1998 and 2001, Albert had disputes with Porntip both in relation to her occupation of the Cut and her service agreement. In 1998, Porntip sought the advice of Diane Trigg in relation to her service contract and in March 1999, she was in negotiations with Albert in relation to both issues.

[61]In cross examination, Porntip stated that as a result of the dispute with Albert, it was at this time in about 1998, that she first read the contents of the 29 June Agreement having been reminded of its existence by Rose. As I have already mentioned, as there is evidence that Porntip was able to understand quite detailed written instructions and considered the 29 June Agreement to be her “security”, on the balance of probabilities, I find it very unlikely that she had not read it before this time. This conclusion is supported by the conflict of evidence given by Rose as to the date when she first reminded Porntip of the existence of the 29 June Agreement, to which I refer at paragraph 85.

[62]In any event, Albert sent a fax to his solicitors on 17 March 1999, in which he noted:

“I have had a quiet word with Suchit this morning and find her demands both irritating and excessive. She is prepared to accept the £20,000 lump sum to terminate her employment agreement but is not prepared to move without compensation to either buy her a small flat or a deposit on a small house. . . .”

I should add that there was evidence, at least in the form of research compiled by Rose, from the Evening Standard at the relevant time, to show that £55,000 was sufficient to purchase a small flat.

[63]On 6 April 1999, with the assistance of a friend, Porntip wrote a letter to Albert in which she stated that she was “disappointed that [you] have decided to pull out of negotiations mid stream.” She went on to describe her position at the Cut in the following way:

“I would also reiterate my position that the occupation of the Flat at 75 The Cut was part of my divorce settlement. I have consulted my solicitors who have been in touch with Mahmood Bhogadia to obtain an affidavit regarding the settlement. Unless I have written confirmation of my right occupy the flat I shall have no choice except to let the judge decide. ”

She makes no reference to exclusive occupation or to the 29 June Agreement for that matter. I find the content of the letter to be inconsistent with the view that Porntip avoided confrontation and would not have asserted her right to exclusive possession if she had been promised it.

[64]In August 1999, Albert tried once again, to re-negotiate the terms of Porntip’s occupation of the Cut. By a letter dated 26 August from his solicitors and those of ASH, reference was made to the 1991 tenancy agreement and proposals were put forward in the following form:

“ . . . Notwithstanding our Client’s legal entitlement to claim rent, as mentioned above, our client instructs that it is prepared to consider your continued residence at the flat under a new form of arrangement which form our instructions will more accurately reflect your current usage of these premises. Our Client proposes that you continue to reside in the flat having exclusive possession of your bedroom. Our Client proposes that you have shared use of the bathroom on the lower floor and the facility to use the shower in the bathroom on the top level to the flat. Furthermore, our Client is prepared to allow you to have the shared use of the kitchen and the office together with equipment contained in the office which we will more particularly schedule at a later stage. . .”

There was no suggestion in evidence that the proposed sharing arrangements gave rise to a response from Porntip that she was entitled to exclusive possession of the entirety of the Cut as Albert ought to have been aware, or that the arrangements did not reflect the manner in which the Cut was being occupied at that stage.

[65]In the meantime, Mahmood had found solicitors, Dass Jakhu, for Porntip and attended a meeting with her at their offices in Birmingham. On 19 October 1999, Albert wrote to his solicitors enclosing various documents relating to Porntip which were considered relevant to the dispute relating to her residence of the Cut. In that letter, he commented as follows:

“The bad note is that Mahmood Bhogadia is still in the U.K. . . .”

[66]Dass Jakhu wrote to FitzHugh Gates on 22 October 1999, stating that they were instructed that as a result of a divorce settlement reached on 30 [July] 1994, Porntip could live rent free at the Cut for the rest of her life. Once again, no reference was made to exclusive possession or for that matter, to the 29 June Agreement.

[67]In addition, Mahmood swore an affidavit dated 26 October 1999, in which he described the terms which he says he had set out to Porntip at the meeting he had with her at the Cut on 30 June 1994. He recorded his recollection that the terms in relation to occupation of the Cut which were agreed on 30 June 1994 were that Porntip be entitled to live there “rent free for the rest of her life”. He made no reference at all to exclusive occupation. In fact, on the contrary, he also stated expressly that:

“Since 1994, when the Settlement was made Porntip has lived at the Property with Mr Stallion and the present Mrs Stallion.”

He made no reference to the 29 June Agreement. However, the words used in the affidavit are similar in some respects to those contained in the 29 June Agreement, including the phrase, “use of a fully serviced car”. Given that the same phrase is also used by Mahmood in relation to what he says was the content of the 30 June Agreement, I attach little weight to this matter. However, in cross examination, Mahmood maintained that he had not seen the 29 June Agreement at that stage and went as far as to suggest that the affidavit had been drafted by counsel without his instructions. I do not accept his evidence in this regard and in the light of his implausible response in cross examination, infer that it was more likely than not that he had knowledge of the 29 June Agreement at that stage. Notice to Quit

[68]A notice to quit was served on Porntip on 25 April 2000 and there was correspondence from Fitzhugh Gates about an assured shorthold tenancy of parts of the Cut. In response, Porntip sought the help of Diane Trigg and showed her the 29 June Agreement. On Porntip’s behalf, Diane wrote an undated response to a letter from Fitzhugh Gates of 17 May 2001. It points out that Porntip had no wish to sign a tenancy agreement and that:

“When I agreed a divorce with Mr Albert Stallion it was on the basis that I would have a job and continue to live rent free in my home at 75 The Cut for as long as I wished.”

Once again, no reference was made to exclusive occupation. The same is true of a letter of 13 July 2001 with which Diane Trigg also assisted. However, that letter did contain express reference to the 29 June Agreement. The relevant parts are as follows:

“ . . I am very surprised to learn that your client does not recollect the guarantees he made if I consented to a divorce. . . . .. His offer of a five year employment contract and right for me to live at 75 The Cut, Waterloo, rent free for the rest of my life was known and witnessed by a least three people. Your client will presumably be able to furnish you with a copy of a witnessed Divorce Settlement Agreement signed and dated 29th June 1994 which irrevocably states I have the right to live rent free at the above said address for the rest of my life. It further states that if I am required to leave the property Mr Stallion or his estate will provide me with the sum of £55,000. Mr Stallion will no doubt also recall that Mr Mahmood Bhogadia was asked to arbitrate a divorce settlement and the three of us met on 30th [July] 1994 and agreed I would be provided with a five year employment contract and I could live at the above said address rent free for the rest of my life. . .”

[69]Diane said in cross examination that she had read the draft letters which she had prepared to Porntip and that she was satisfied that Porntip understood them. When Porntip was cross examined about the failure to include a reference to exclusive possession in the letters, she replied on numerous occasions that it was not “in her mind.” I find it extremely unlikely that she would not have mentioned it, if she had considered it to have been part of what she had been promised.

[70]When questioned about her reliance upon the 29 June Agreement and the discrepancies between it and the 30 June Agreement and in particular, the reference to £55,000 she was silent but as I have already mentioned, she also responded that the document was her security, “just in case.” Diane stated that as she understood it, Porntip had considered the terms in the 29 June Agreement to be the minimum to which she was entitled.

[71]In 2002, Rose went with Porntip to seek advice from solicitors and typed up a statement for Porntip to use on that occasion. She also attended the offices of Fisher Meredith with Porntip when they were instructed later. As I have already mentioned, she also corrected her evidence about her presence when instructions were taken and I prefer her final response on this matter in cross examination, that in fact, she had been present when both Payne Hicks Beech and Fisher Meredith took instructions from Porntip about this matter.

[72]Albert died on 14 April 2004, and having executed a new will, left the entirety of his estate to Lilibeth. On his death certificate both his usual address and that of Lilibeth was recorded as the Cut. After Albert’s death

[73]Although Lilibeth returned to the Philippines for a few months after Albert’s death and thereafter, for another substantial period, for the most part, she continued to live at the Cut with Porntip. At some stage, she also brought her new husband to live there and after her daughter was born, she too lived at the Cut.

[74]In August 2004, Porntip lodged a unilateral notice against the Cut at H.M.Land Registry in which she noted her interest as “An occupant with a life interest to occupy the said property ‘ and said that she “wishes to continue to live at the address as promised by her ex-husband.” In the application for the notice which was signed by Porntip, it was also recorded that: “5. Mr Stallion’s married his present wife, Lilibeth, who comes for the Philippines and brought her to live in London approximately a year after our divorce, which time we all continued to live under the same roof at 75 The Cut 6.On 12 April 2004 Mr Stallion died. Since the date of his death I have continued to live at 75 The Cut together with Mr Stallion’s widow, Mrs Lilibeth Stallion. 7. I wish to continue to live at the address, as promised by my former husband. . . “

[75]Furthermore, in an application for funding for possible litigation against Albert’s estate under Inheritance (Provision for Family and Dependants) Act 1975, dated 21 May 2004, Porntip had recorded that Lilibeth lived at the Cut “under the same roof but separately from me” and under four separate sections described the basis of her occupation of the Cut in the following ways:

“My only settlement on the divorce was a promise I could live here rent free for my entire life.” “My agreement to give him a divorce was a promise to let me live there rent free for the rest of my life or provide me with other accommodation if it was sold . . .” “ . .I believed him – He said I was in his will and he had provided everything that I could live rent free for the rest of my life at 75 The Cut.” and “ For the rest of my life and he would always provide me with accommodation”

. Porntip gave evidence that Rose completed these sections for her and that she had told Rose what to write. I should also mention at this stage, that there is no other evidence that Porntip was ever promised alternative accommodation and this is not pleaded as a representation made, although Mr O’Sullivan does suggest in his skeleton that it might be a manner in which the equity which he alleges arises could be satisfied. I have already mentioned that it is also suggested that £55,000 was sufficient to purchase a small flat in 1994.

[76]Porntip did not complain about Lilibeth’s occupation of the Cut, nor that of her husband and child. In fact, it appears from the documentation completed by her or on her behalf in May and August 2004, referred to above, that she accepted it. When cross examined about this she said that it was not in her nature to seek confrontation. However, as I have already found, the style of her correspondence, for example, that of 6 April 1999, does not support such a contention. Having taken all these matters into consideration, I find that after Albert’s death, Lilibeth and from time to time, her guests, lived with Porntip at the Cut without seeking or needing Porntip’s permission.

[77]In a letter from her then solicitors to those instructed on Lilibeth’s behalf, dated 18 August 2004, Porntip’s position was described in the following manner:

“ . . Mr Stallion’s promise to her as a result of which she was persuaded not to defend divorce proceedings brought by Mr Stallion on the erroneous basis that the parties had been living apart for two years (when they had not). We are instructed that our client, who as you are aware comes from Thailand, had no understanding of the divorce proceedings and simply did what she was requested by her late husband, who assured her at the time of the divorce proceedings that as long as she co-operated, she would continue to be employed by a subsidiary company, Magiboards Limited until her contract expired in November 2000 and that, most importantly, she could continue to live, rent free, in the property that had been their matrimonial home at 75 The Cut for as long as she wished to do so. Accordingly, she remained in the employment of Magiboards until November 2000 and she has continued to this date to reside at The Cut, where the late Mr Stallion and Mrs Lilibeth Stallion also lived. Our client seeks a lump sum out of Mr Stallion’s Estate to enable her to purchase a flat outright in a decent area of London. She will not be prepared to vacate the property at The Cut until proper arrangements are made for her alternative accommodation . . .”

[78]In 2005, ASH sold the business of Magiboards Limited. As a result of the sale, Lilibeth’s contract of employment was transferred to ASH. The terms of her employment were confirmed in an undated letter from Mark Woodland acting under a power of attorney. They include rent free accommodation at the Cut. In this regard, the letter records:

“You have historically resided at 75 The Cut, Waterloo, London SE1 8LL which has been an element of your overall remuneration . . . ”

[79]Since that time, the only assets of ASH have been cash, investments and the Cut. Around 2005, it was also determined that ASH wished to redevelop the Cut by turning the upper storeys into flats.

[80]Mark Woodland was appointed as a trustee of the Magi Trust on 31 March 2006. On the same date, he became secretary and co-director with Lilibeth of ASH. Lilibeth subsequently resigned as a trustee of the Magi Trust and was replaced by Charles Pallister, a solicitor.

[81]Mark, Lilibeth, Malcolm and Julie are in receipt of salaries from ASH. Neither Porntip nor Lilibeth have ever received sums from the Magi Trust in their capacity as beneficiaries. In this regard, I should emphasise that these proceedings are not concerned with any questions in relation to the administration of the Magi Trust or the fiduciary duties of its trustees.

[82]When challenged in 2006 about the basis of her occupancy of the Cut, by Charles Russell LLP, acting for ASH, Porntip’s solicitors Fisher Meredith relied upon the 29 June Agreement. Their letter of 5 December 2006 stated as follows:

“ . . .Although we are newly instructed in this matter we do find it surprising that you make no reference to the “divorce settlement” agreement between the late Mr Stallion and our client whereby he agreed that she could unconditionally continue to live at the Property for the rest of her life. This agreement as signed and dated 29 June 1994 and was duly witnessed. . . . . . . She [Porntip] does however continue to rely on the written and unconditional promise of her late former husband . . .”

A letter from Fisher Meredith to Mark Woodland of 12 December 2006 was in similar form. A copy of the 29 June Agreement was enclosed with a letter of 12 January 2007 from Fisher Meredith to Charles Russell LLP and the first paragraph stated:

“We thank you for your letter of 11 January and now enclose as you requested a copy of the divorce settlement agreement signed by the last [late] Mr Albert Stallion and negotiated on his behalf by Mr Bhogadia his then accountant. We understand that Mrs Lilibeth Stallion is aware of this document and has honoured it.”

[83]As a result, by a letter of 19 February 2007 from Charles Russell LLP, ASH served a notice to quit upon Porntip confirming that it would make payment of £55,000 pursuant to clause 2 of the 29 June Agreement. Porntip’s solicitors’ response, in a letter dated 21 February 2007, was in the following form: “ . . . . We cannot accept this as a valid notice to determine occupation and cannot acknowledge receipt on behalf of our client. We say this because coincidentally it came to our notice only yesterday that the copy of the divorce settlement agreement forwarded to you by us on 12 January, as you requested, is apparently not after all the final version. . . . On the contrary, it appears that the final settlement allowed for our client to be the life tenant of 75 The Cut, with an initial service contract with Magi Boards and subject to the ground floor tenancy. . . “

[84]On 14 March 2007, Fisher Meredith wrote to Charles Russell LLP on Porntip’s behalf, explaining their change of approach: “ . .. . .What has come to light, however, as we have already heralded, is that the document dated 29 June 1994 signed by Mr Stallion was not the final agreement. You will have seen that it was never signed by our client and she was unaware of it at the time. It does not represent the full settlement, the terms of which have now come to light. This is because it was conceived, brokered, finalised and implemented by Mr Mahmood Bhogadia, former accountant and company adviser to the late Mr Albert Stallion and he has confirmed to us that the settlement includes sole and exclusive occupation of 75 The Cut for our client for life, there were no terms on which she might be evicted and therefore the issue of the £55,000 or any other sum payable on eviction does not arise. As a result we have of course asked Mr Bhogadia to give us a full statement as to the sequence of events and the details surrounding the settlement, which he has now done and his sworn affidavit evidence will shortly be finalised. . . “

[85]At this stage, Rose swore an affidavit dated 19 March 2007 setting out her recollection of the events of 29 June 1994 and her involvement thereafter. She states that she did not remember about the 29 June Agreement until 2004 and it was at that stage that she made Porntip go through the files and see if she could find it. This is contrary to Porntip’s evidence in cross examination when she stated that she had first read the 29 June Agreement in 1998 when Rose had reminded her of it. It is also contrary to the evidence in this regard in both Porntip and Rose’s witness statements. I therefore disregard it.

[86]Mahmood also swore an affidavit dated 20 March 2007 in which he makes reference to 30 June Agreement and states that he made it clear that Porntip had a right to exclusive rent free occupation of the Cut for life and that he had no knowledge of the £55,000 figure contained in the 29 June Agreement. As I have already mentioned at paragraph 67, I do not accept his evidence that he did not know of the 29 June Agreement at this stage. Relevant principles of Law

[87]There is no dispute between the parties about the legal principles which should be applied in cases of proprietary estoppel. I was referred to extracts from Megarry & Wade, “The Law of Real Property” 6th edition, paragraphs 13-001 – 13-037; Gray & Gray, “Elements of Land Law” 4th edition in particular at paragraphs 9.2.8 -9.2.10, 9.2.38 – 9.2.44, 9.2.47 and Snell’s Equity 29th and 31st editions at paragraphs 10-01 -10-24, together with numerous cases.

[88]I was also referred to Thorner v Major

[2009] 1 WLR 776

and in particular, the speech of Lord Scott of Foscote at 781D where he considers the three main elements for proprietary estoppel in the following way:

“Lord Walker in para 29 of his opinion, identified the three main elements requisite for a claim based on proprietary estoppel as, first, a representation made or assurance given to the claimant; second, reliance by the claimant on the representation or assurance; and third, some detriment incurred by the claimant as a consequence of that reliance. These elements would, I think, always be necessary but might, in a particular case, not be sufficient. Thus, for example, the representation or assurance would need to have been sufficiently clear and unequivocal; the reliance by the claimant would need to have been reasonable in all the circumstances; and the detriment would need to have been sufficiently substantial to justify the intervention of equity.”

[89]In relation to the element of detriment and its connection with reliance, Walker LJ had observed in Gillett v Holt

[2001] Ch 210

at 232D-F:

“The overwhelming weight of authority shows that detriment is required. But the authorities also show that it is not a narrow or technical concept. The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances. . . . . . There must be sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded – that is again, the essential test of unconscionability. The detriment alleged must be pleaded and proved.”

[90]Balcombe LJ also considered the nature of reliance in Wayling v Jones 13 P&CR 170 at 173 and observed:

“(1) There must be a sufficient link between the promises relied upon and the conduct which constitutes the detriment . . .(2) the promises relied upon do not have to be the sole inducement for the conduct: it is sufficient if they are an inducement . . .(3) 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.”

[91]The role of unconscionability was considered by Lord Walker in Yeoman’s Row Management Limited & Another v Cobbe

[2008] UKHL 55

, at para 92, in the following manner:

“ . . it is being used (as in my opinion it should always be used) as an objective value judgment on behaviour (regardless of the state of mind of the individual in question). As such it does in my opinion play a very important part in the doctrine of equitable estoppel, in unifying and confirming, as it were, the other elements. If the other elements appear to be present but the result does not shock the conscience of the court, the analysis needs to be looked at again.”

[92]If all of these elements are sufficiently proved on the balance of probabilities, the Court must consider what is necessary in order to satisfy the equity which has arisen. When considering that exercise in Gillett v Holt, Walker LJ observed at 237A-B that:

“The court’s aim is, having identified the maximum [extent of the equity,] to form a view as to what is the minimum required to satisfy it and do justice between the parties.” 93. Later, in Jennings v Rice [2003] 1 P& CR 100, he observed at paragraph 48 that: “ . . .reference to the minimum [in such a context] does not require the court to be constitutionally parsimonious, but it does implicitly recognise that the court must also do justice to the defendant.”

He also went on at paragraphs 50 and 51 of his judgment in Jennings to explain the manner in which the Court should seek to satisfy such an equity:

“ . . . . . if the claimant’s expectations are uncertain, or extravagant, or out of all proportion to the detriment which the claimant has suffered, the court can and should recognise that the client’s equity should be satisfied in another (and generally more limited) way. But that does not mean that the court should in such a case abandon expectations completely, and look to the detriment suffered by the claimant as defining the appropriate measure of relief. Indeed in many cases, the detriment may be even more difficult to quantify, in financial terms than the claimant’s expectations. . . .Moreover the claimant may not be motivated solely by reliance on the benefactor’s assurances, and may receive some countervailing benefits (such as free bed and board). In such circumstances the court has to exercise a wide judgmental discretion.”

[93]In the same case, Aldous LJ who gave the leading judgment, had observed at para 36:

“The value of [such an] equity will depend upon all the circumstances including the expectation and the detriment. 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.”

[94]In this regard, I was also referred to Sledmore v Dalby 72 P&CR 196, a case in which the Court of Appeal overturned the decision of the Recorder in the county court that the minimum equity to do justice was an non-assignable, non-transmissible personal licence to occupy the house for as long as the defendant wished to. In that case, Roch LJ observed at 204 that the Recorder had failed to assess and balance the need for the house of the respondent and the appellant as owner. He also observed that it was necessary to determine whether as eighteen years had elapsed since the representations were made, it was “ . . . . .still inequitable to allow the respondent’s expectation to be defeated . . .” He concluded that it was no longer inequitable to do so given that the respondent had lived for over eighteen years rent free in the property and that he now made little use of it.

[95]Finally, I was also referred to a number of authorities and extracts from Rayden on Divorce and Family Matters 18th ed, in relation to financial provision on divorce and section 30 Family Law Act 1996, (as amended) which concerns a spouse’s rights in relation to the matrimonial home. The parties’ final positions

[96]Mr O’Sullivan on behalf of Porntip contends therefore, that the representation made to her was in the form of the 30 June Agreement, upon which she reasonably relied and as a result, she suffered substantial detriment because she gave up the status and entitlements of a wife and the certainty, security and finality of an order for ancillary relief and instead, relied on an oral promise.

[97]Mr O’Sullivan highlights Porntip’s evidence that in the years after the divorce settlement all those who stayed at the Cut, including Albert, would seek her permission in order to do so. He also says that after Albert’s death, Porntip did not ask first Lilibeth and on her return from the Philippines, Lilibeth and her new husband to leave the Cut because she did not like confrontation.

[98]Given that Albert held 7999 of the 8000 issued shares in the company in which the freehold title to the Cut was vested and was its sole director, it is said that there can be little question but that both he and his appointed adviser Mahmood, had authority to make the representations relied upon.

[99]He does not pursue her claim for rent from the ground floor or that her occupation of the Cut was intended to be free of expenses.

[100]He submits that in the circumstances it would be unconscionable to allow Albert’s estate to renege on the promises made and that the equity that arises should be satisfied by directing ASH to pay Porntip a sum assessed by reference to what it would be reasonable for her to spend on buying and equipping a home and that further directions would be necessary in order to determine the appropriate sum.

[101]Even if her occupation of the Cut is governed by the 29 June Agreement, he submits that she can only be required to leave the premises on payment of £55,000 under clause 3, if the property “has to be sold or the premises vacated” and there is no evidence of any necessity to sell the Cut or that it be vacated, merely that ASH would like to redevelop it. In her Reply she contends that if Albert and his successors are held to be entitled to terminate her right to occupy the Cut, it should be on payment of 40 to 45% of the present value of the premises and not upon payment of the £55,000 mentioned in the 29 June Agreement.

[102]ASH on the other hand, represented by Mr Woodland acting in his capacity as an employee and director of ASH, permission having been granted pursuant to CPR 39.6, contends that the only representations ever made were those contained in the 29 June Agreement, that no mention is made in that agreement of exclusive possession and that ASH is entitled to seek possession on tendering £55,000 which he says has been offered pursuant to clause 3 of the 29 June Agreement. ASH also seeks mesne profits from Porntip since a notice to quit was served on 19 February 2007. I should mention that in fact, the letter of 19 February 2007 makes reference to clause 2 rather than clause 3 of the 29 June Agreement.

[103]Mr Woodland also submitted that it was relevant to take into account the position of ASH. Cash reserves of £300,000 appears in its most recent statutory accounts. However, he submitted that after the costs of the proceedings had been met, there would be approximately £30,000 left. He also submitted that the present value of the Cut, or at least the upper storeys of the premises is worth approximately £725,000 - £1 million and he estimated that the total value of the benefit of the 30 June Agreement, were Porntip to live at the Cut rent free for forty years, would be £2,375,000.

[104]Miss Stacey on behalf of Lilibeth disputes that any of the necessary requirements for proprietary estoppel are met. She submits that the burden is on Porntip to show that the representations made to her were other than those contained in the 29 June Agreement and that the evidence, on the balance of probabilities, does not support there having been any other representations made.

[105]Miss Stacey goes on to contend that in any event, the 30 June Agreement was unclear and it would have been unreasonable in the circumstances, including the mercurial nature of Albert, for Porntip to have relied upon it. Furthermore, she draws attention to the subsequent pattern of occupation of the Cut and Porntip’s own explanation of the promises made in numerous documents as evidence of lack of reliance.

[106]She contends that sufficient causal link between the alleged representation and Porntip’s agreement to a divorce without application for ancillary relief has not been established. Rather, Miss Stacey points to Porntip’s evidence that she agreed to the divorce because she loved Albert and felt she had no choice.

[107]In relation to detriment, Miss Stacey submits that it is necessary to judge whether detriment has been suffered at the moment at which the person who made the representation seeks to go back on it and that the detriment must be pleaded and proved. In this regard, she refers to Gillett v Holt at 232F. She contends that neither detriment as a result of the divorce or the failure to secure an order for ancillary relief has been either pleaded or proved.

[108]She submits that in the light of the fact that Porntip has lived at the Cut rent and expenses free for fifteen years and had the benefit of a five year service contract and a car, there is nothing to “shock the conscience of the Court” in the words of Lord Walker of Gestingthorpe in Yeoman’s Row Management Limited v Cobbe

[2008] UKHL 55

at [92] in allowing ASH now to rely upon its strict legal rights.

[109]Lastly, Miss Stacey contends that any equity which may have arisen has already been satisfied and that the claims made by Porntip are out of all proportion. In this regard, she draws attention to the fact that the position of third parties, including Lilibeth must be taken into account and that although any equity could be binding upon ASH, its conscience must be affected and it only acquired the Cut after the event. Conclusions and Analysis (i) What was the representation/promise?

[110]Having regard to the authorities to which I have been referred, I now turn to an analysis of the facts in the light of the relevant law. First, what was the representation made? It will be apparent from the findings of fact which I have already set out, that in my judgment, on the balance of probabilities, the evidence does not support there having been a representation to Porntip in the form of the 30 June Agreement. The essential element of that purported representation was a right to exclusive occupation of the Cut, rent free for life with no conditions attached.

[111]In fact, Porntip did not suggest unequivocally that she was entitled to exclusive possession of the Cut for life with no circumstances in which she could be asked to leave, until after the notice to quit was served in February 2007 and the sum of £55,000 was proffered. At that point, her solicitors ceased to seek to rely upon the 29 June Agreement and for the first time, made reference to the 30 June Agreement. Before that time she made no reference to exclusive possession and on numerous occasions in correspondence, both written on her behalf by Diane Trigg in 2001 and by her solicitors in 2006, expressly relied on the 29 June Agreement. The relevant facts and my findings are at paragraphs 38, 58, 63, 64, 66, 67, 68, 74, 75, 76, 77 and 82.

[112]Furthermore, the actual pattern of occupation of the Cut both after the divorce and before Albert’s death and after his death, does not support the contention that Porntip was entitled to exclusive possession, an essential plank of the 30 June Agreement. My findings in relation to the manner in which the Cut was occupied and the fact that Porntip’s permission for occupation whether by Albert and Lilibeth, Lilibeth alone or the Magiboard personnel, was unnecessary, set out at paragraphs 49-52, 64, 67 and 73. I reject the purported explanation that Porntip did not like confrontation for the reasons set out at paragraph 76.

[113]In particular, it is difficult to see how a contention that there was a right to exclusive possession can survive the memorandum relating to shared expenses referred to at paragraph 67 and Porntip’s own account of the occupation of the Cut, set out in the unilateral notice lodged in August 2004 to which I refer at paragraph 85.

[114]In this regard, I also repeat my finding at paragraphs 57 and 58 that a right to exclusive possession on behalf of Portnip was not mentioned at the Magi Trust meeting in 1996. In my judgment, it is improbable that a professional person would have failed to record such an important aspect of the discussion if it had taken place and therefore, I prefer Lilibeth’s evidence that exclusive possession was not mentioned.

[115]I also take account of the fact that it was Porntip’s evidence that she first read the 29 June Agreement in 1998 or 1999. However, if she read it only at that stage, she offered no explanation as to why she did not raise the discrepancies between that document and her version of the representations made on 30 June at that stage, but went on relying on it in correspondence for nine years thereafter. She did so despite having discussed her divorce arrangements including the 29 June Agreement both with Rose and with Diane.

[116]In addition, the terms of the alleged 30 June representations are also inconsistent with the fact that Albert’s businesses were not prospering in 1994 although I place less weight on this factor, given that the Cut was “moved up stream” to ASH and the Magi Trust was put in place.

[117]Lastly, with regard to the 30 June Agreement, I take account of the fact that there is no documentary evidence to support it at all and not even Porntip was relying on it until after 2007 when the offer of £55,000 had been made. In fact, Mahmood himself made no reference to it in his affidavit in 1999, made with the dispute in relation to occupation of the Cut in mind. Conversely, he made express reference to Porntip living together with Albert and Lilibeth in the Cut, which is wholly inconsistent with it.

[118]Neither was I satisfied on the balance of probabilities that the purported terms of the 30 June Agreement had been insisted upon by Mahmood and discussed and agreed by Albert prior to Mahmood’s visit to Porntip on that date. The evidence provides no basis for Mahmood’s assertion that he was in a position to insist upon the nature of the financial provision to be made, which I find improbable. I refer to these matters and my findings at paragraphs 35 and 36.

[119]It follows from this that even if Mahmood had made a promise to Porntip on 30 June 1994 in the form of the 30 June Agreement, having considered the evidence carefully, I am not satisfied on the balance of probabilities, that Mahmood would have been authorised to make such a promise on behalf of Albert or his companies.

[120]I should add that given the evidence that Albert treated the property of his companies as his own, the fact that Mahmood met with Porntip with Albert’s knowledge and consent and the fact that Albert re-structured his business affairs immediately after the divorce with knowledge of Porntip’s occupation of the Cut and the fact that he became a trustee of the Magi trust to which the entire issued shareholding of ASH was transferred, I find to the extent that is necessary, that Mahmood had authority to make representations both on behalf of Albert and Albert Stallion Limited, albeit not in the form of the 30 June Agreement, and that I find that the conscience of ASH would also be affected.

[121]It is not disputed that Porntip was handed the 29 June Agreement on the morning of 30 June 1994. In my judgment her occupation of the Cut thereafter, was consistent with the terms of that agreement. Furthermore, she showed it to Rose and Diane and relied upon it in her own correspondence and in that of her solicitors. When challenged to provide the basis for her occupation of the Cut by Charles Russell LLP on behalf of ASH in 2007, she actually forwarded a copy of it to them. Furthermore, as I have found at paragraph 61, I consider it more likely than not that Porntip had read the 29 June Agreement which she referred to as her “security”, at an early stage. She also actually referred to the sum of £55,000 in the letter of 13 July 2001 referred to at paragraph 68 and on previous occasions had sought a sum to buy a flat, (the evidence such as it is, being that £55,000 would have been enough to do so, at least in 1994).

[122]Accordingly, for all the reasons to which I have referred, on the balance of probabilities, in my judgment, the only representation made to Porntip and in any event, the only one on which she relied, was contained in the 29 June Agreement. (ii) Was the alleged representation created, clear and unequivocal?

[123]In accordance with the passage from Lord Scott’s speech in Thorner v Majors, it is also necessary to consider whether the alleged representation was clear and unequivocal. Until the beginning of the hearing, Porntip had contended that the 30 June Agreement and therefore, the representation made, entitled her to the rent from the lease of the ground floor betting shop. It was conceded by Mr O’Sullivan that there is no foundation for this.

[124]She also contended that the representation related to the entirety of the upper floors, although there was no detail given as to the rooms occupied by Magiboards Limited and the date by which it was required that they vacate the premises. It was not suggested on behalf of Porntip that there was any specific timetable specified or agreed for the cessation of the company’s use of the Cut.

[125]In the light of these matters, had it been necessary, I would have found that the alleged representation contained in the 30 June Agreement was insufficiently clear in relation to the extent of the premises over which Porntip was intended to have exclusive occupation and the date from which it was intended to take effect, to be effective. No such difficulties would arise in relation to the 29 June Agreement on the other hand because it makes no reference to exclusive possession. (iii) reliance

[126]Bearing in mind the observations of Balcombe LJ in Wayling v Jones at 173, to which I referred at paragraph 90, I turn to the element of reliance. Miss Stacey says that there is no reliance in this case in the light of Porntip’s subsequent conduct.

[127]In my judgment, even if the representations contained in the 30 June Agreement were made, the subsequent correspondence and pattern of occupation conduct to which I have referred, is inconsistent with there having been any reliance by Porntip upon the alleged promise. Further support for this conclusion is obtained from the reliance upon the 29 June Agreement, rather the 30 June Agreement, in the letters drafted by Diane Trigg in 2001.

[128]In my judgment, this is not the case in relation to the representations forming the 29 June Agreement. The subsequent conduct is consistent with it having been an inducement to consent to the divorce and not to seek ancillary relief.

[129]In addition, as I have already mentioned, it was accepted that Albert was mercurial in nature and often changed his mind. In such circumstances, were it necessary to do so, I would find that it would not have been reasonable for Porntip to have placed reliance on an oral representation made by a third party on Albert’s behalf about terms to be agreed, especially in the light of the fact that Albert himself had handed her a document headed, “DIVORCE SETTLEMENT AGREEMENT” that very day. This does not apply to the 29 June Agreement which was in writing and was handed to Porntip by Albert himself.

[130]Miss Stacey also relies upon the passage in Walker LJ’s judgment, (as he then was), in Gillett v Holt at 232F and contends that there was an insufficient causal link between the alleged representation contained in the 30 June Agreement and the decision to consent to a divorce and not seek a court order in relation to ancillary relief, because Porntip stated in evidence that she felt she had no choice but to accept the terms on offer.

[131]In my judgment, given Porntip’s subsequent conduct, her reliance upon the 29 June Agreement as “security” and her reference in correspondence dated 6 April 1999, to referring the matter to a judge if necessary, there is sufficient causal link between the representations made and the detriment to which I refer below. This would equally apply to the 30 June Agreement, had I found that it was the source and form of the representations made. (iv) detriment

[132]It is a necessary element of proprietary estoppel that detriment of a substantial nature is suffered as a result of reliance upon the representation. In this regard, I am satisfied that the failure to pursue ancillary relief proceedings was a substantial detriment to Porntip. After all, if she had done so, her rights would not now be in doubt. The fact that there was no evidence before the court as to the range of possible relief which would have been granted had ancillary relief been pursued is irrelevant. In my judgment, at best such details would go to whether Albert and Porntip had made a good or a bad bargain. They do not undermine the conclusion that foregoing the certainty of an order of the court is in itself a substantial detriment. The failure to seek ancillary relief was pleaded and in my judgment, the detriment of having foregone a court order is self evident. Accordingly, I reject Miss Stacey’s submission that the elements were insufficiently pleaded and proved.

(v) unconscionability/looking at the matter in the round

[133]I remind myself of the role played by unconscionability described in the extract from the speech of Lord Walker in Yeoman’s Row Management Limited & Another v Cobbe, referred to at paragraph 91. In cases of this kind, having looked at the factors set out at (i) to (iv) above, the court must stand back and look at the case in the round in order to determine whether in all the circumstances, it would be unconscionable if at this stage, Albert’s estate were allowed to avoid the consequences of the representations made. Such a situation must be sufficient to “shock the conscience.”

[134]I have concluded that such an exercise need not be conducted in relation to the 30 June Agreement. In relation to the 29 June Agreement, I consider that it would be unconscionable were the terms of that agreement not honoured. In this regard, I take account of the rent free accommodation over fifteen years, the need for accommodation of Lilibeth and her family and the position of ASH. (vi). relief

[135]What therefore, is the minimum equity necessary to do justice and to avoid an unconscionable and disproportionate result? It is suggested on behalf of Porntip that rather than the payment of £55,000 in the circumstances envisaged in clause 3 of the 29 June Agreement, which represented 40-45% of the value of the entire property at the Cut in 1994, a sum representing approximately that percentage of the present value should now be awarded or otherwise, Porntip should be awarded a sum which is sufficient to enable her to purchase and equip her own home.

[136]In this regard, I remind myself of the exercise undertaken both in Jennings v Rice and Sledmore v Dalby and take account of the position of others including Lilibeth who also continues to live at the Cut and the benefit which has already been derived from the 29 June Agreement. However, these matters have to be weighed against the detriment suffered in this case. Although there is no evidence before me as to the precise nature of the ancillary relief which was likely to have been granted had Porntip made application, I assume that provision of some kind would have been made for her accommodation and that certainty would have been achieved. In the circumstances, therefore, given that the 29 June Agreement itself provided for Porntip to be entitled to remain in the Cut for life rent free unless specific circumstances arose, I conclude that the equity will not be extinguished until the circumstances envisaged have arisen.

[137]I have a wide discretion in this regard. On balance, in my judgment, the equity is satisfied by a declaration that Porntip is entitled to reside at the Cut rent free for life, albeit not with exclusive possession, if and until the circumstances contained in clause 3 of that Agreement arise.

[138]In this regard, I appreciate that it is an unusual step to create a situation in which the equity requires a claimant to continue to live in premises with the defendant. However, in this case, Porntip and Lilibeth appear to have done so for a considerable time both before and after Albert’s death.

[139]Finally, in the light of the fact that £55,000 has been offered by ASH pursuant to clause 3 of the 29 June Agreement, I should comment upon whether mesne profits are due. In this regard, clause 3 is in the following form: “If I die and (if) the property, 75 the Cut, Waterloo, London SE1 8LL has to be sold or the premises are vacated, Porntip Stallion will be entitled to £55,000 (Fifty-Five Thousand Pounds) from my estate”.

[140]It is not suggested that it is necessary to sell the Cut or that the premises be vacated, merely that Mr Woodland and ASH would like to redevelop it and turn the upper floors into flats. In my judgment, Mr O’Sullivan’s analysis in this regard is correct. It is perfectly sensible to construe the “and” in clause 3 to mean just that. I have heard nothing to the contrary. In the circumstances, although Albert is dead, the circumstances necessary to activate clause 3 have yet to arise and until they do, in my judgment Porntip is entitled to remain at the Cut.

[141]In the circumstances, the question of mesne profits does not arise or orders for possession do not arise. I will hear further argument as to the precise terms of the order.