Peter Martin Conway v Stephen Conway & Anor [2025] EWHC 33314 (Ch)

[2025] EWHC 33314 (Ch)

Ref. CH-2024-BHM-000020

IN THE HIGH COURT

Venue BUSINESS AND PROPERTY COURTS IN BIRMINGHAM

CHANCERY APPEALS

ON APPEAL FROM THE ORDER OF HIS HONOUR JUDGE MITHANI KC DATED 31 MAY 2024 IN THE COUNTY COURT IN NUNEATON

Case No JOONU318

33 Bull Street

Venue Birmingham

Before THE HONOURABLE MR JUSTICE MICHAEL GREEN

IN THE MATTER OF

PETER MARTIN CONWAY (Appellant/Claimant)

-v-

(1) STEPHEN CONWAY

(2) AMBER MEEK (Respondents/Defendants)

MR C STOCKS appeared on behalf of the Appellant/Claimant

MR S CLEGG appeared on behalf of the Respondents/Defendants

JUDGMENT

10 th OCTOBER 2025

(AS APPROVED)

__________________

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Between

Peter Martin ConwayAppellant

Stephen Conway & AnorRespondent

Date 2025-10-10

Introduction

[1]This is an appeal from the decision of His Honour Judge Mithani KC (“the Judge”) dated 31st May 2024 sitting in the Nuneaton County Court. I gave permission to appeal as long ago as 30th October 2024. It is unfortunate that it has taken so long for this appeal to be listed.

[2]I had the benefit of written and oral submissions from Mr Cameron Stocks on behalf of the appellant, Mr Peter Conway, who was the claimant below; and from Mr Simon Clegg on behalf of the respondents, Mr Stephen Conway, the appellant’s cousin, and his wife, Mrs Amber Meek, who were the defendants below.

[3]There are three grounds of appeal but it does seem to me to come down to a relatively short but interesting and difficult point of law, namely the intersection between s.2 of the Law of Property (Miscellaneous Provisions) Act 1989 (“s.2”) whereby contracts for the sale or other disposition of an interest in land must be in writing and the doctrine of proprietary estoppel. The point has been considered at the highest level but there remains doubt as to the way that both principles can work in the same space, namely where the effect of the proprietary estoppel claim succeeding is the enforcement of an oral contract for the sale of an interest in land that Parliament has deemed void and unenforceable.

[4]There is no dispute that the Judge did precisely that and, by way of a remedy for the equity that the respondents had established on the facts, the Judge effectively made an order for specific performance of the oral contract for the sale of an interest in land. He said in terms in para.125 of his judgment:

“I am clear that this must be in the form of enabling the defendants to enforce the terms of the oral agreement by an order for specific performance”

. Whether he was able so to enforce such a contract for the sale of an interest in land is a matter of law and I have to decide whether that was a remedy available to him in the circumstances of this case.

Background Facts

[5]The relevant facts can be shortly stated, and I take this largely from the Judge’s judgment.

[6]The appellant is the registered freehold proprietor of Church Farm, Hospital Lane, Bedworth CV12 OJZ which is registered at HM Land Registry under title WK346385. Church Farm comprises over 20 acres of land and buildings including a property known as “The Barn”.

[7]It is common ground that discussions took place in or around March 2019 in relation to the respondent’s purchase of The Barn from the appellant for the sum of £150,000 and for its conversion into residential accommodation for the respondents and their children, pursuant to a planning permission originally obtained in 2006. However, the parties did not agree as to the terms of the agreement that was reached or even as to the parties to the initial discussions. It was the appellant’s position that the initial discussions were held between the appellant and the first respondent alone and that the agreement included the following terms.(1) The payment of the £150,000, which was below market value to reflect the works required to renovate The Barn.

(2) Payment of the £150,000 would be deferred at the respondents’ request while renovation works were ongoing, as the respondents did not have the capital to purchase The Barn and carry out renovation work simultaneously. In the interim, it was agreed that the respondents would pay the appellant the sum of £600 per calendar month.

(3) That there was to be a call option for the appellant to purchase The Barn back from the respondents, in the event that such land was required to be included for a sale to a third party to develop Church Farm (“the buy-back option”). In the event that the buy-back option was exercised, the appellant would have to pay market value for The Barn, and an additional ten per cent by way of compensation.

[8]The respondents’ position was that the agreement was for the purchase of the farm for £150,000, but with no buy-back option in favour of the appellant. They said that the boundaries of The Barn and land sold with it were as delineated in a plan that was annexed to the particulars of claim. They also maintained that the access to The Barn would be given to them by way of a gate situated on the south-west of Hospital Lane and across land comprised in Church Farm.

[9]Much of the evidence at the trial was directed at whether there was the buy-back option, as contended for by the appellant, and in relation to the access rights. It is right to point out that the Judge largely founded on the facts in favour of the respondents, disbelieving much of the appellant’s evidence. The respondents said that they relied on the agreement that was entered into for their purchase of The Barn and that they commenced building and renovation works to The Barn in about March or April 2019.

[10]The Judge found the works to have been extensive and this is not really disputed by the appellant. They claimed a sum of £231,685.20 was spent on works to renovate The Barn, including paying the appellant £100 a day for his services, although this was not found to be proved by the Judge. The appellant did not agree those values, but this is the detriment that was alleged to have been suffered by the respondents in reliance on the agreement to purchase The Barn.

[11]Even though the works have effectively been completed, the respondents have not been able to move in because of this dispute. The respondents said that there was a further agreement in late March 2020 that a sum of £500 per month would be paid for 10 months until the transfer took place. That was actually paid by a lump sum of £5,000 in October 2021, plus a sum of £1,500 for the cost of installing a septic tank.

[12]The respondents have not paid the sum of £150,000 in respect of the purchase price of The Barn to the appellant. The parties’ relationship broke down during the process of the parties’ respective solicitors seeking to formalise the oral agreement. They could not reach a binding written agreement because of the appellant’s insistence on the buy-back option being included, which the respondents disputed had ever been agreed. As a result, the appellant demanded that the respondents cease work on The Barn whilst matters were resolved, but the respondents refused to do so.

[13]The appellant’s claim was then issued on 17th June 2022 seeking a declaration that the respondents are not entitled to enter Church Farm, an injunction preventing such access and damages for trespass.

[14]The respondents filed a defence and counterclaim dated 28th July 2022 denying the terms of the agreement and pursuing a counterclaim in proprietary estoppel seeking orders that The Barn be transferred to the respondents and injunctive relief enabling their access to The Barn. The counterclaim does not pursue any alternative relief by way of constructive trust. or unjust enrichment, but the respondents maintained that this could be argued for under the “further or other relief” prayer in the prayer for relief. The Judge accepted that this could be relied upon.

[15]The case was heard from 28th February to 1st March 2024 at the County Court at Nuneaton and on 20th, 22nd to 24th and 31st May 2024 in the County Court at Coventry. Impressively, the Judge delivered his judgment on 31st May 2024 finding, as I have said, in favour of the respondents and dismissing the appellant’s claim.

[16]Following the hand-down of the judgment, the Judge proceeded to grant the order, which required the appellant to take all proper steps to transfer The Barn to the respondents upon the following terms:(1) That the respondents do pay the sum of £150,000 to the appellant’s solicitors to be held to the order of the respondents’ solicitors until such time as a transfer signed by the appellant is provided.

(2) That the appellant shall grant to the respondents an express right of way by foot or vehicle over the area hatched red on a plan attached to the order for the purpose of gaining access and egress to The Barn.

(3) That there be a grant of a right to connect The Barn and thereafter use the septic tank situated in the field to the north of The Barn which septic tank is on the appellant’s land.

(4) That the easements above should be conditional upon the respondents paying a proportionate share according to user of the cost of maintaining the driveway and the septic tank in a good and substantial state of repair and condition.

(5) Any other rights to be implied on the basis of an open contract unless otherwise agreed. In addition, the Court recognised the potential for permission to appeal to be sought and extended the time for filing an appellant’s notice until 4pm on 12th July 2024 as well as staying enforcement of the order until that time. Grounds of Appeal

[17]So with that I turn to the three grounds of appeal, they are as follows:(1) That the Judge erred in law in concluding that the respondents could rely on proprietary estoppel as a means of enforcing by specific performance an oral contract for the sale of land rendered invalid by s.2; in other words that the Judge could not, as he expressly did, grant equitable relief that had the effect of enforcing an oral contract for the sale or other disposition of an interest in land.

(2) That the Judge erred in fact and law in finding that the parties had reached an immediately binding and concluded agreement for all terms necessary to effect a transfer of land and which could be enforced by specific performance. The appellant relies on the fact that it was a pleaded term of the oral agreement that solicitors would be instructed to effect the transfer and the respondents’ evidence was that they would not have paid the purchase price without a signed written agreement. There was therefore not an immediately binding agreement that could be enforced by proprietary estoppel.

(3) The final ground, and very much a subsidiary point, is as to whether the Judge erred in finding that proprietary estoppel could operate by implying terms into the alleged oral agreement by way of the open contract principle.

[18]Before embarking on the main ground of appeal, Ground 1, I should say at the outset that it surprised me that the respondents did not appear to have a fallback position if they were to lose on Ground 1. The effect of losing on Ground 1 is that the transfer of The Barn would be set aside and that would not be a remedy open to the court for the proprietary estoppel claim that had been proved. One would have thought that the alternative fallback position would have been a claim in unjust enrichment or for equitable damages for breach of the agreement or in some way for the respondents to be compensated for the time and money spent on The Barn in reliance on the promise to transfer it for £150,000 and the increase in value that would accrue to the appellant if he is relieved from transferring The Barn.

[19]Mr Stocks said that this was put by the respondents in an all-or-nothing way, that they were not running a case in constructive trust or unjust enrichment, that they had not put in a respondent’s notice and that they would be stuck with an overturned judgment if they lost on Ground 1. Mr Clegg said that it was within my power to remit the matter back to the lower court to determine an alternative claim for compensation for the work done and improvements to The Barn.

[20]While it is certainly true that I have the power to remit under CPR 52.20 and I have all the powers of the court below, although I do not have the evidence to be able to assess the respondents’ alleged losses, I am concerned by the fact that this was not flagged up - even in Mr Clegg’s skeleton argument filed the day before the hearing - and there was no respondent’s notice or any real opportunity for the appellant and the court to consider this potential outcome. Anyway, I will move on to consider Ground 1 and will then decide what to do.

Legal Principles

[21]Even though much authority was cited to me and there is on the face of it perhaps difficulty in defining exactly how s.2 interacts with the doctrine of proprietary estoppel, I will nevertheless run through those authorities and then explain why I think that the answer in this case is clear.

[22]Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (“1989 Act”) provides as follows:

“(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or where contracts are exchanged in each. (2) The terms may be incorporated in a document either by being set out in it or by reference to some other document. (3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the contract. […] (5) Nothing in this section affects the creation or operation of resulting, implied or constructive trusts.”

[23]I should say that Mr Clegg said that the s.2 point had never been pleaded by the appellant, although it is fair to point out that the pleadings in this case did not carefully delineate the causes of action being pursued. In any event, the point was clearly in issue below as the Judge deals with it directly.

[24]The requisite elements of proprietary estoppel, as set out, for instance, in Thorner v. Major

[2009] 1 WLR 776

at para.29, were not in dispute below nor for this purpose are the Judge’s findings that those elements of proprietary estoppel were established on the facts, those being that there was an oral agreement to transfer The Barn for £150,000 and that the respondents relied on that agreement to their detriment and it was unconscionable for the appellant not to comply with the agreement. The only issue that arises is whether the Judge was able to enforce the void agreement by ordering the transfer of The Barn to the respondents.

[25]I think it is helpful, actually, to run through the main cases chronologically. That means starting with Yaxley v. Gotts [2000] (Ch) 162, a decision of the Court of Appeal with judgments given by all three Judges: Beldam, Robert Walker and Clarke LJJ. This was one of the main cases relied upon by the respondents and indeed the Judge. The trial Judge in that case had held that the purchaser of a house had concluded an oral agreement with her builder that he would be granted an interest in the ground floor of the house once converted and after he had done the renovation work and supplied the materials for that work. The Judge held that the builder should be granted a 99-year lease of the ground floor.

[26]On appeal, this decision was upheld largely on the basis of there being a constructive trust within the exception in s.2(5). This was essentially applying the constructive trust cases, such as Lloyds Bank v. Rosset

[1991] AC 107

. The Judge in this case made something of the fact that Beldam LJ had been the chairman of the Law Commission when it had proposed the reforms that became the 1989 Act and so was uniquely qualified to explain the purpose of and policy behind the section. Mr Clegg said that what Beldam LJ held was that not only constructive trusts are within s.2(5) but also the doctrine of proprietary estoppel, even though it was not expressly mentioned. What Beldam LJ said was as follows:

“The general principle that a party cannot rely on an estoppel in the face of a statute depends on the nature of the enactment, the purpose of the provision and the social policy behind it. This was not a provision aimed at prohibiting or outlawing agreements of a specific kind, though it had the effect of making agreements which did not comply with the required formalities void. This by itself is insufficient to raise such a significant public interest that an estoppel would be excluded. The closing words of s.2(5), ‘nothing in this section affects the creation or operation of resulting, implied or constructive trusts’ are not to be read as if they merely qualified the terms of s.2(1). The effect of s.2(1) is that no contract for the sale or other disposition of land can come into existence if the parties fail to put it into writing, but the provision is not to prevent the creation or operation of equitable interests under resulting, implied or constructive trusts if the circumstances would give rise to them. There are circumstances in which it is not possible to infer any agreement, arrangement or understanding that the property is to be shared beneficially but in which nevertheless equity has been prepared to hold that the conduct of an owner in allowing a claimant to expend money or act otherwise to his detriment will be precluded from denying that the claimant has a proprietary interest in the property. In such a case, it could not be said that to give effect to a proprietary estoppel was contrary to the policy of s.2(1) of the Act of 1989, yet it would be a strange policy which denies similar relief to a claimant who had acted on a clear promise or representation that he should have an interest in the property. Moreover, claims based on proprietary estoppel are more likely to arise where the claimant has acted after an informal promise has been made to him. In my view, the provision that nothing in s.2 of the Act of 1989 is to affect the creation or operation of resulting, implied or constructive trusts effectively excludes from the operation of the section cases in which an interest in land might equally well be claimed by relying on constructive trust or proprietary estoppel. That, to my mind, is the case here. There was on the judge’s findings, as I interpret them, a clear promise made by Brownie Gotts to the plaintiff that he would have a beneficial interest in the ground floor of the premises. That promise was known to Alan Gotts when he acquired the property and he permitted the plaintiff to carry out the whole of the work needed to the property and to convert the ground floor in the belief that he had such an interest. It would be unconscionable to allow either Alan or Brownie Gotts to resile from the representations made by Brownie Gotts and adopted by Alan Gotts. For my part I would hold that the plaintiff established facts on which a court of equity would find that Alan Gotts held the property subject to a constructive trust in favour of the plaintiff for an interest in the ground floor and that that interest should be satisfied by the grant of a 99 year lease. I consider the Judge was entitled to reach the same conclusion by finding a proprietary estoppel in favour of the plaintiff.”

[27]However, even though that was Beldam LJ’s view, the decision that was made was that this was a constructive trust within s.2(5) and so the oral agreement could be enforced.

[28]Robert Walker LJ specifically reinterpreted the facts so as to find that there was a constructive trust so bringing it within s.2(5). And Clarke LJ agreed with this.

[29]The next case chronologically is Cobbe v. Yeoman’s Row Management Limited

[2008] UKHL 55

. This was a case in the House of Lords and I point out that Robert Walker LJ had become Lord Walker in the meantime and he gave one of the judgments in Cobbe. Also, Yaxley v Gotts was cited, but was not referred to in either Lord Walker’s judgment or in the main judgment of Lord Scott. In a seminal passage, Lord Scott addressed the relationship between s.2 and proprietary estoppel. Paragraph 29 says as follows (emphasis added):

“Section 2 of the 1989 Act declares to be void any agreement for the acquisition of an interest in land that does not comply with the requisite formalities prescribed by the section. Subsection (5) expressly makes an exception for resulting, implied or constructive trusts. These may validly come into existence without compliance with the prescribed formalities. Proprietary estoppel does not have the benefit of this exception. The question arises, therefore, whether a complete agreement for the acquisition of an interest in land that does not comply with the s.2 prescribed formalities, but would be specifically enforceable if it did, can become enforceable via the route of proprietary estoppel. It is not necessary in the present case to answer this question, for the oral agreement in principle was not a complete agreement and, for that reason, would not have been specifically enforceable so long as it remained incomplete. My present view, however, is that proprietary estoppel cannot be prayed in aid in order to render enforceable an agreement that statute has declared to be void. The proposition that an owner of land can be estopped from asserting that an agreement is void for want of compliance with the requirements of the section is, in my opinion, unacceptable. The assertion is no more than the statute provides. Equity can surely not contradict the statute.”

[30]I also emphasise those last four sentences. It is accepted that these comments were obiter, but Lords Hoffmann, Brown and Mance sitting with Lord Scott in the House of Lords agreed with his speech and it has been influential, at least on some Judges, coming as it does from the House of Lords.

[31]The next in time is the first instance decision of Whittaker v. Kinnear

[2011] EWHC 1479

QB, a decision of Bean J (as he then was). This was the second case relied upon by Mr Clegg and the Judge as it is more on the Yaxley line of allowing proprietary estoppel claims to proceed despite s.2 than what might be called the Cobbe approach. However, it is important to bear in mind the context of Whittaker and what was actually decided. These were possession proceedings brought by receivers appointed over a property. Mrs Whittaker had sold two pieces of land to Mr Kinnear but remained in occupation of the house and garden. She claimed to have sold the land to Mr Kinnear at an undervalue on the basis that Mr Kinnear assured her that she could remain living there as long as she wanted. Mr Kinnear then defaulted on his mortgage and receivers were appointed and they were seeking to get possession of the house and garden from Mrs Whittaker. She relied on proprietary estoppel by way of defence to the possession claim.

[32]On the summary possession action, the trial Judge ordered possession on the basis that s.2 meant that she could not rely on proprietary estoppel. Bean J allowed the appeal. He did not grant her an interest in the property. He simply decided, in effect, that she had an arguable defence and sent the case back to be determined after a full trial. Bean J said that Lord Scott’s comments in Cobbe were obiter and so not binding on him. He then went on to deal with Yaxley as follows. In para.29, he said:

“One of the members of the court in Yaxley v Gotts was Beldam LJ. He had been Chairman of the Law Commission at the time of its working paper and report on Formalities for Contracts for Sales of Land on which the 1989 Act was based. Like Hengham CJCP who in oral argument on a point of statutory interpretation in a case in 1307 (Aumeye v Anon YB 33-35 Edw 1 82) said to counsel ‘do not gloss the statute, for we know it better than you: we made it’, he was in a good position to say what the Commission had in mind. He said: ‘In the present case the policy behind the Commission’s proposals was as clearly stated as its intention that the proposals should not affect the power of the Court to give effect in equity to the principles of proprietary estoppel and constructive trusts. Even if the use to be made of the Commission’s report is to be confined to identifying the defect in the law which the proposals were intended to correct, in a case such as the present it is unrealistic to divorce the defect in the law from the policy adopted to correct it. The Commission’s report makes it clear that in proposing legislation to exclude the uncertainty and complexities introduced into unregistered conveyancing by the doctrine of part performance, it did not intend to affect the availability of the equitable remedies to which it referred.’ ‘In the present case the policy behind the Commission’s proposals was as clearly stated as its intention that the proposals should not affect the power of the Court to give effect in equity to the principles of proprietary estoppel and constructive trusts. Even if the use to be made of the Commission’s report is to be confined to identifying the defect in the law which the proposals were intended to correct, in a case such as the present it is unrealistic to divorce the defect in the law from the policy adopted to correct it. The Commission’s report makes it clear that in proposing legislation to exclude the uncertainty and complexities introduced into unregistered conveyancing by the doctrine of part performance, it did not intend to affect the availability of the equitable remedies to which it referred.’ Then in para.30, Bean Jsaid: “I therefore accept the submission that, notwithstanding Lord Scott’s dicta in Cobbe, proprietary estoppel in a case involving a sale of land has survived the enactment of s.2 of the 1989 Act.”

[33]But there is no dispute that s.2 does not operate as an absolute bar to a proprietary estoppel claim. The only issue is the circumstances in which s.2 might bar such a claim.

[34]Back on the Cobbe line of authorities, Lewison LJ in the case of Dudley Muslim Association v. Dudley MBC

[2015] EWCA Civ 1123

at para.33 questioned whether Yaxley v. Gotts was still good law after Cobbe. He said at para.33:

“In Yaxley v Gotts [2000] Ch 162 this court held that a claim based on proprietary estoppel could be maintained despite s.2(1) because such a claim fell within the exception in s.2(5). Whether that is still the law may be doubtful, because of the observations of Lord Scott in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, [2008] 1 WLR 1752 at [29]. Although those observations were obiter, Lords Hoffmann, Brown and Mance agreed with Lord Scott’s speech. I will assume, for the purposes of argument, that a claim in proprietary estoppel is capable of outflanking s.2. But that is because it falls within an express exception which is itself part of s.2. Where a defence is raised based on promissory estoppel there is no question of a constructive trust of land arising. And in the circumstances of this case, where the DMA already own the land, there is no relevant property which is capable of being held on trust for the DMA. Unless a case falls within s.2 (5), to admit a defence based on promissory estoppel would be effectively to repeal the section by judicial legislation: compare Actionstrength Ltd v International Glass Engineering [2003] UKHL 17, [2003] 2 AC 541.”

[35]The Judge in this case also referred to Mohammed and Ari Properties Ltd

[2016] EWHC 1698 (Ch)

, a decision of Master Matthews (as he then was). Master Matthews quoted from a lecture given by Lord Neuberger to the London Common Law and Commercial Bar Association on 9th June 2009 in which Lord Neuberger said as follows:

“I suggest that s.2 has nothing to do with the matter. In cases such as those in Crabbe v. Arran District Council and Thorner v. Major, the estoppel rests on the finding that it would be inequitable for the defendant to insist on his strict legal rights where there is the super added fact that the claimant with the conscious encouragement of the defendant has acted in the belief that there is a valid contract. I suggest that s.2 offers no bar to a claim based in equity.”

[36]Master Matthews in Mohammed then suggested that Lord Neuberger was pulling in a very different direction to Lord Scott and said that he preferred Lord Neuberger’s approach, perhaps a bold move given that Lord Scott was delivering a judgment in the House of Lords whereas Lord Neuberger was speaking extra-judicially. But in any event, I do not believe that there is such a stark difference because no one is saying that s.2 provides an absolute bar on the contractual proprietary estoppel claims involving the sale of land.

[37]In Howe v. Gossop

[2021] EWHC 637 (Ch)

, Snowden J (as he then was) attempted to reconcile the authorities. He said from paragraph 48:

“48. …Section 2 is aimed at problems in the formation of contracts for sale of land, whereas the purpose of an estoppel is to remedy unconscionability in the assertion of strict legal rights. Accordingly, there is considerable doubt that Section 2 is intended to affect the operation of proprietary estoppel at all, but even if it did, s.2 could only operate as a bar to the grant of equitable relief if and to the extent that such relief had the effect of enforcing, or otherwise giving effect to, the terms of a contract for the sale or other disposition of an interest in land that the statute renders invalid and unenforceable. 49. So, for example, in Cobbe the claimant was in effect attempting to use proprietary estoppel to obtain an order enforcing the terms of an unwritten contract under which he would acquire an interest in the land owned by the defendant. That was why, in paragraph [29] of his speech, Lord Scott focused directly on the question of whether a claimant could use an estoppel as a means of enforcing such a contract notwithstanding the clear statutory policy invalidating it. 50. Where, however, the alleged proprietary estoppel is not raised in order to enforce the terms of a contract for sale or other disposition of an interest in land, there is no equivalent reason why s.2 should operate as a bar to the grant of equitable relief…”

Then later in his judgment, Snowden J said at para.64:

“64. Pulling those threads together, I consider, first, that the passage upon which Mr. Cameron relied in paragraph 15-020 of Megarry & Wade is directed (as were the judgments in Cobbe and Herbert v. Doyle) at a case in which the claimant is seeking to use estoppel to obtain an order enforcing a contract for sale of an interest in land that does not comply with s.2. I do not consider that it is intended to undermine the broader point to which I have referred, namely that s.2 does not inhibit the grant of equitable relief on the basis of a proprietary estoppel provided that such relief does not amount to enforcing a non-compliant contract.”

[38]I agree with Snowden J’s analysis. It is important to focus on the remedy that is being sought to vindicate the equity that has been established by way of proprietary estoppel. If it is effectively enforcing an oral agreement that is invalid because of s.2, then s.2 prevents that being done. But if it is by some lesser relief then it may be that s.2 does not prevent reliance on a void oral agreement that establishes a proprietary estoppel. Snowden J reasoned that s.2 does not prevent the grant of equitable relief via proprietary estoppel, so long as that relief does not amount to enforcement of an invalid contract.

[39]This point was picked up and elegantly explained by Mr Hugh Sims KC, sitting as a Deputy High Court Judge, in the case of Thandi v. Saggu

[2023] EWHC 2631 (Ch)

. He said as follows:

“[137] I see no reason why simply because the parties intended a contract, which then failed through non-compliance under s.2(1), this should preclude a party from inviting the court to grant equitable relief to prevent any unconscionability. I conclude this is so even if the assurance or promise is contained in an agreement rendered "non-contractual" by s.2(1). In that scenario the party relying on an estoppel is not circumventing s.2(1). They are simply being put back into a non-contractual position. Like any other claimant they have to prove the requisite elements of a proprietary estoppel. They are no better off. But equally I see no reason why they should be worse off. My understanding is that this was essentially the point Lord Neuberger made, extra-judicially, in The Stuffing of Minerva’s Owl? Taxonomy and Taxidermy in Equity [2009] CLJ 537 at 546.” 40. (I interject to say that this is the same speech of Lord Neuberger that Master Matthews referred to and indeed was relied upon by Mr Clegg in his submissions.) But continuing the quote from Mr Sims’ judgment: “…There should be no problem using proprietary estoppel even when dealing with a contract that is void by virtue of s.2(1) of the 1989 Act, provided that the estoppel is aimed at doing the ‘minimum equity’ necessary to prevent an injustice. Whilst it may be said to be impermissible to allow the proprietary estoppel to fulfil expectations that this might undermine the 1989 Act, there can be no objection to estoppel operating to reverse any detriment as a result of the invalid contract…” [139] There may be greater problems in a ‘contractually related’ case where the relief sought and granted is the same as enforcing a contract which was rendered invalid by s.2(1), at least as the law is currently articulated. There is difficulty in concluding an ‘expectation’ performance remedy should be granted where a constructive trust cannot be found in the light of the reasoning and conclusions of Lewison LJ in Dudley Metropolitan Borough Council v Dudley Muslim Association [2016] 1 P&CR 10 at [33] (with whom Treacy and Gloster LJJ agreed). I view this as an essential part of the reasoning of Lewison LJ where the relief sought is tantamount to enforcement of an agreement found to be invalid under s.2(1).”

[40]Finally, we come to the most recent case of Pathway to Relief v. Ali

[2024] EWHC 1284 (Ch)

, a decision of Zacaroli J (as he then was) sitting here in Birmingham. This came after the trial and judgment in this case so is not referred to in it, but it is instructive and on point.

[41]It concerned members of the Kurdish community in Birmingham who were trying to acquire a hotel in Birmingham and to convert it into a community centre and prayer hall. An oral agreement was alleged, a deposit of £50,000 was paid and the keys to the hotel were handed over. But then the parties fell out, the keys were handed back and the community were excluded from the hotel. One of the claims being put forward was for specific performance of the transfer of the hotel to the claimant and/or proprietary estoppel and/or constructive trust. The s.2 point was raised and Zacaroli J discussed the interaction of that with those causes of action.

[42]Zacaroli J identified two main problems with the claim: First, and based on Cobbe and other cases, the claimant had to prove that they had an expectation of acquiring an interest in land and not merely an expectation that a formal contract would be entered into, pursuant to which they would, after payment of the full purchase price, acquire the hotel. Mr Stocks said that this was a similar problem to this case because it was part of the alleged oral agreement that a formal agreement would need to be negotiated and finalised before any interest could be transferred.

[43]The second problem was s.2 in an “essentially contractual proprietary estoppel claim”. Zacaroli J went through the authorities I have been through, but including Herbert v. Doyle

2010 EWCA Civ 1095

, in which Arden LJ said as follows:

“In my judgment, there is a common thread running through the speeches of Lord Scott and Lord Walker. Applying what Lord Walker said in relation to proprietary estoppel also to constructive trust, that common thread is that if the parties intend to make a formal agreement setting out the terms on which one or more of the parties is to acquire an interest in property, or if further terms for that acquisition remain to be agreed between them so that the interest in property is not clearly identified, or if the parties did not expect their agreement to be immediately binding, neither party can rely on constructive trust as a means of enforcing their original agreement. In other words, at least in those situations, if their agreement (which does not comply with s.2(1)) is incomplete, they cannot utilise the doctrine of proprietary estoppel or the doctrine of constructive trust to make their agreement binding on the other party by virtue of s.2(5) of the 1989 Act.”

[44]Zacaroli J also quoted from the judgment of Falk J (as she then was) in Sahota v. Prior

[2019] EWHC 1418 (Ch)

where she dismissed an appeal that asserted that the trial Judge had wrongly allowed a proprietary estoppel claim to succeed, contrary to s.2. At paragraph 26, Falk J had said:

“The dictum relied on at para. 29 [of Cobbe] is to the effect that proprietary estoppel is not to be used to make an agreement enforceable which the statute has declared to be void. That is, of course, right, but, in my view, that is not what [the claimants] are seeking to do. They are not trying to enforce a contract for the sale or other disposition of land. What they are trying to assert is that [the defendant] is prevented from recovering possession of their home from them during their lifetime, because of an assurance on which they relied when they transferred the property and subsequently did work on it.”

[45]That, in my respectful view, is the correct way of looking at this question, by focusing on the relief sought. In that case it was resisting the claim for possession as it was in Whittaker, Bean J’s case, and Howe v Gossop, Snowden J’s case. Zacaroli J considered that his case was on the other side of the line, namely an essentially contractual case that fell squarely within s.2, meaning that the contract could not be enforced. At paragraph 59 of his judgment, he said as follows:

“The claim in this case is, on the contrary, essentially contractual. As Mr Swirsky (who appeared for the defendants) submitted, what the claimants really want is the benefit of the agreement they reached on 31 March 2021, that is, the benefit of a contractual right which gives them up to 18 months to raise the funds so as to purchase the Hotel for £1.65 million. That is clearly, in my judgment, an attempt to rely upon proprietary estoppel in order to enforce the terms of an ineffective oral agreement. Moreover, in contrast to the position in Howe v. Gossop, where the price for the acquisition of the land had been paid, the contract which the Community expected to be given was (save only to the extent of the part payment of the deposit) wholly executory.”

[46]Finally, the textbooks have sought to examine this issue. In Snell’s Equity, 35th Edition at 12-048, the learned authors say as follows:

“Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 provides that contracts for the sale or other disposition of an interest in land must satisfy certain formal requirements, although s.2(5) contains an express saving for constructive trusts. There has been some uncertainty as to the impact of this section on promise-based proprietary estoppel claims. Two principled views are possible: First, it could be said that s.2 imposes a prima facie bar on such claims, and therefore they can be made, if at all, only by means of a constructive trust. Secondly, it could be said that no proprietary estoppel claim is caught by s.2, as the section regulates the requirements of a contract for the sale or other disposition of an interest in land and a proprietary estoppel claim, even if promise-based, is distinct from a contractual claim. The latter view now has more support in the case law, and, it is submitted, it is the better view as a matter of principle. In particular, it should be remembered that s.2, on its express wording, does not purport to deny all legal effects to a promise, or to render an agreement void, it clearly applies only to contractual claims. It might be argued that the policy behind the statute is more extensive, but it has been accepted that the statute does not deny all legal effects to informal agreements, and also that it has no impact on an acquiescence-based claim: ‘It would be a strange policy which denies similar relief to a claimant who had acted on a clear promise or representation that he should have an interest in property’ (see Yaxley). Moreover, there are no examples in the case law of an otherwise valid proprietary estoppel claim failing simply because of the effect of s.2.”

That latter point is qualified in a footnote by reference to Zacaroli J’s case of Pathway to Relief v. Ali, that I have just dealt with, and which the authors said failed also on other grounds, including the fact that it was a purely executory contract.

Ground 1

[47]So where does this leave us? Everyone recognises that s.2 is not an absolute bar to a proprietary estoppel claim, even one based on a concluded agreement, but similarly it must be accepted that s.2 has some effect in this context. Parliament has decreed that contracts for the sale or disposition of an interest in land must be in writing and that, if they are not, they cannot be enforced. It seems to me that the position that has been reached on the authorities is to confine the reach of s.2 in relation to proprietary estoppel claims where the relief sought to satisfy the equity is the enforcement of the oral contract that is otherwise void because of s.2. In other words, s.2 has a role to play in determining the appropriate relief to be granted where all elements of proprietary estoppel are established.

[48]Following Lord Briggs’s judgment in Guest v. Guest

[2022] UKSC 27

, the court’s task is to find the “minimum equity to do justice” that is necessary to satisfy the claimant’s equitable rights that have been established by way of proprietary estoppel. But if that is effectively specific performance of the void contract, then that is barred by s.2. The Judge carefully went through the authorities and accepted along the way that “there is some basis for contending that proprietary estoppel is not available to a party where that party seeks to enforce a contract which is void for want of complying with the requirements of s.2” (para.44 of his judgment). But he went on to do precisely that.

[49]After looking at Yaxley, Whitaker and Mohammad,

the Judge concluded at para.56 that:

“I prefer the view that proprietary estoppel may make it possible for an agreement that does not comply with s.2 to be enforced provided, of course, the ingredients necessary to establish that proprietary estoppel are satisfied.”

Then at para.57, he said:

“In my judgment, therefore, provided the facts relied upon by the defendants are made out, they are entitled to equitable relief under the doctrine of proprietary estoppel by the grant of the minimum relief necessary to satisfy the equity arising under it in order to do justice to the defendants.”

While he recognised that relief should be the minimum necessary, he seemed to be saying that it was only necessary to establish the requirements of estoppel and then the court can act as it sees fit in giving effect to the equity by the relief it orders. As I have said, in my view s.2 bars certain relief being granted.

[50]I have already quoted this but after the Judge found all the elements to have been proved, in particular the oral agreement to transfer The Barn for £150,000, he decided that the only relief he could order - that is the minimum relief - would be specific performance of the oral agreement. He said so expressly in paragraph 125 of the judgment and, in my view, thereby fell full square within the prohibition provided by s.2 on such relief being granted. He was not, like in Yaxley, basing that decision on constructive trust and so within the exception in s.2(5). He referred to a possible constructive trust route in paras.58 to 60 of his judgment but said that as the respondents were only pursuing proprietary estoppel and had made no submissions about any other equitable principle or doctrine, he need not say anything further about that; in other words, the respondents had pinned their colours to the mast of proprietary estoppel and it was not for him to reinterpret the facts in favour of a constructive trust. That was also the position in Mr Sims KC’s case of Thandi v. Saggu at para.137.

[51]Mr Clegg did seek to revive that route in his skeleton argument served the day before this hearing. However, constructive trust was never pleaded. It was not argued for at the trial, as the Judge said. It was not raised by way of a respondent’s notice. And it was only brought up again the day before the hearing, the respondents having had the appellant’s skeleton argument for well over a year. Furthermore, I accept Mr Stocks’ point that it is difficult to see how an immediate constructive trust could arise in circumstances where the purchase price had not been paid and where the agreement was that it would not be paid until a formal transfer had been effected. We are not therefore in the territory of the exception in s.2(5).

[52]I entirely understand why the Judge sympathised with the position of the respondents and there is no appeal against the finding that the appellant acted unconscionably in not honouring the agreement. I also take into account the points made in the authorities as to a distinction between oral agreements within a familial relationship and commercially negotiated agreements and contexts such as in Cobbe. But that cannot affect the relatively simple issue of law that it was not open to the Judge on the facts of this case to make an order based on proprietary estoppel that amounted to specific performance of a void and unenforceable oral contract. While that is not a meritorious outcome, it is the effect of s.2 and I am unfortunately bound therefore to allow the appeal on Ground 1. The consequences of that will be explored in a moment.

Ground 2

[53]I need also to deal briefly with the other two grounds, although Ground 3 really does fall away because of my decision on Ground 1. Ground 2 concerns whether there was, as found by the Judge, a concluded agreement immediately binding on the parties that could be enforced by way of proprietary estoppel. Mr Stocks referred to the passage from Arden LJ’s judgment in Herbert v. Doyle at para.57 (which I have already quoted from above). He submitted that the oral agreement was pleaded by the respondents at para.9 of the defence and counterclaim and that one of the terms was:

“In due course, steps would be taken to instruct solicitors to effect a transfer of The Barn from the claimants to the defendants.”

This was admitted by the appellant. He then said that the context was important, as The Barn was previously a derelict farm building which was converted by the respondents into a residential dwelling for the first time. Therefore, there were no rights or obligations established, such as rights of way, drainage, support and the corresponding obligations of maintenance and restrictive covenants. All those matters remained to be negotiated and agreed. Furthermore, the respondents knew that normal conveyancing matters would need to be done by solicitors, such as searches and enquiries, that all the correspondence that there had been between the solicitors were subject to contract and that they would not be bound to pay the £150,000 until a formal contract was entered into.

[54]Therefore, Mr Stocks submitted that this was a transactional case in which much more needed to be done and agreed before a formal contract would come into being and be binding. In that respect, it was similar to the difficulty that Zacaroli J identified in the Pathway to Relief v. Ali case, that this was a purely executory contract.

[55]The reason in this case why the negotiations broke down was because the appellant started insisting on the buy-back option two years after the original agreement and after most of the work had been done by the respondents.

[56]But what the appellant is really seeking to do is to set aside the Judge’s factual findings as to the terms of the oral agreement that he found to exist and which formed the basis of establishing the proprietary estoppel claim. In paras.104 to 121 of the judgment, the Judge dealt thoroughly with the parties’ contentions as to the terms agreed in particular whether there was the buy-back option that the appellant was contending for.

[57]For the purposes of proving the requisite elements of proprietary estoppel, it is not necessary to prove that there was a concluded agreement on all relevant terms. In this sort of case, the assurance or representation relied upon is said to be a concluded agreement between the parties and, in my view, the Judge’s findings in that respect cannot be challenged on appeal. In the respondents’ minds, they had a sufficiently clear agreement on the strength of which they spent hundreds of thousands of pounds in renovating The Barn to make it habitable for them to be able to move into. Mr Stocks’ points on this are more relevant, it seems to me, to Ground 1 in that they show that the parties always anticipated that there would be a formal contract at some stage and that that would be the contract that may eventually need to be enforced. It rather proves the point on s.2, but the Judge’s factual findings supporting the existence of the equity in the respondents’ favour should, in my view, stand, and I dismiss Ground 2.

Ground 3

[58]As I say, Ground 3 is now irrelevant. While it may have been a stretch for the Judge to have relied on open contract principles to imply terms into an oral agreement - the formal version of which had not yet been agreed - and I understand that this was a point actually raised by the Judge only during closing submissions, as it has turned out, this would only in any event have applied to para.2(e) of the order made by the Judge. At paras.2(a) to (d) of the order (which I have described at the beginning of this judgment), that set out the terms upon which the transfer should be made, including rights of access and to use the septic tank, all of which the Judge had found to be agreed leaving any other terms to be implied on an open contract basis. What those terms might be could not be identified by Mr Stocks, but it seems likely that they would be of minor importance. I therefore think I need say no more than that.

Disposition

[59]So what order should I make? Mr Stocks says that I simply should allow the appeal and set aside the Judge’s order and because the respondents put their case on an all-or-nothing basis, they are stuck with that and it is just tough that they will have lost all the amount they spent on The Barn and the appellant is therefore entitled to keep the renovated barn for free. That would be a deeply unfortunate and unjust outcome. It is frustrating that the respondents did not put forward any alternative to their primary case based on proprietary estoppel and enforcement of the oral agreement. They did not put in a respondents’ notice, nor was this even mentioned in Mr Clegg’s skeleton argument. It was only after I canvassed the matter during the hearing that this was half-heartedly addressed.

[60]Mr Clegg said that I have power to remit the matter so that an alternative remedy in unjust enrichment or equitable compensation can be determined by reference to valuation evidence and the like. That will of course lead to another trial of sorts with all the time, effort and costs that would be required and a prolongation of these proceedings. He said that in the prayer for relief this alternative claim was made in para.3, which said: “An order that the claimant take all such steps as are necessary to satisfy the equity which has arisen in favour of the defendants” and there is also, of course, the “further or other relief” prayer.

[61]The Judge held in para.126 of his judgment that he would have felt able to award the respondents compensation for unjust enrichment based on the existing prayer for relief and so, given that I have disagreed with the Judge as to the respondents’ preferred form of relief, I think it is open to me to allow the respondents to pursue that alternative remedy based on the equity that the Judge has found to exist and for them to be compensated for the work done and costs incurred in reliance on the oral agreement.

[62]This is far from a perfect outcome, but I believe it is a just one. I cannot accept that the appellant should be able to walk away from this with a completely new and refurbished property without paying anything for it. I take the point that the appellant has now met the case that was put against him and succeeded. There is certainly an argument that the costs wasted by having now to retry the extent of the respondents’ loss, when this could have been done first time round, should be borne by the respondents. I will wait to hear what applications for costs are made and I would hope to be able to deal with such applications in writing as a consequential matter. But this should be borne in mind, in particular, that the evidence on loss should have been taken and heard by the Judge, in my view.

[63]But for now, I direct that the matter be remitted to the County Court for the alternative relief to be determined for the proprietary estoppel found to exist by the Judge and that the amounts that might be due to the respondents to satisfy the equity in their favour.

[64]The findings of the Judge will be binding. It is only his error of law in granting the relief that he did that is set aside.

[65]I would hope that, in the light of this judgment, and the prospect of the further litigation that I have directed, that it would enable the parties to see sense and to come to a reasonable compromise of these proceedings. I know that a previous mediation failed, but that is no reason not to try again so as to avoid the ruinous costs and time and effort of a yet further trial. I appreciate that there is probably little trust between the parties, but it must be obvious that it is in no one’s interest - save perhaps the lawyers - to prolong this damaging litigation.

[66]That is the end of my judgment. --------------- This transcript has been approved by the Judge