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England and Wales Court of Appeal (Civil Division) Decisions
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Cite as:  Ch 179,  3 All ER 865,  EWCA Civ 7
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COURT OF APPEAL.
Appeal by plaintiff from judgment
of the Vice Chancellor, Sir John Pennycuick,
on 29th January, 1974'
B e f o r e :
LORD JUSTICE LAWTON
LORD JUSTICE SCARMAN.
| VICTOR CRABB
|ARUN DISTRICT COUNCIL (formerly CHICHESTER RURAL DISTRICT COUNCIL)
Mr. GAVIN LIGHTMAN (instructed by Messrs. Doyle Devonshire Box & Co.) appeared on behalf of the Respondent Defendants.
OF THE VICE CHANCELLOR, SIR JOHN PENNYCUICK,
ON 29TH JANUARY, 1974'
ROYAL COURTS OF JUSTICE.
DATE: WEDNESDAY, 23RD JULY, 1975.
THE MASTER OF THE ROLLS (LORD DENNING)
LORD JUSTICE LAWTON
LORD JUSTICE SCARMAN.
HTML VERSION OF JUDGMENT
Crown Copyright ©
THE MASTER OF THE ROLLS: This case cannot be properly understood without a map: but I will try to explain it as best I can.
Near Bognor Regis there is a village called Pagham. There is a road there called Hook Lane running East and West. On the south side of that road there is an area of land called Windmill Park. In 1946 a Mr. Alford bought 5½ acres of it. It formed a big square field with its north side next to the road. Now you must imagine that big field divided into two parts by a line running from north to south, with two acres on the eastern side of the line and 3 1/2 acres on the western side: and the two acres divided by a line horizontally into two halves, the front portion (1 acre) being next to the road and the back portion (1 acre) with no access to the road. Mr. Alford developed the two acres and left the other 3½ acres undeveloped. On these two acres Mr. Alford put two industrial buildings. On the front portion (edged green on the map) he erected offices and showrooms. On the back portion (edged red on the map) he erected a building for the manufacture of caravans. And he made a road on these two acres connecting the back portion to the front.
In 1962 Mr. Alford died. His executors decided to develop the remaining 3½ acres on the western side of the field. They obtained planning permission to erect dwelling houses on it. Under this proposal there was to be a new estate road made to give access from Hook Lane to the new housing estate. It was to be made on the 3½ acres but was to run alongside the boundary line between the 3½ acres and the 2 acres. It was to be called Mill Park Road. This road was to be to the advantage also of the buildings on the 2-acre portion, because they could have access onto the near road. The proposal at that time was, however, that there should be only one access from the 2 acres on to the new road. This was to be at a point marked "A" in the front portion (edged green), about half-way up from Hook Lane. It was thought at that time that one access would be sufficient because the whole of the two acres were in one occupation. The vehicles from the back portion (where caravans were made) could go along their own existing road to the front portion (where the offices and showrooms were), and then out at point A. This was to be the only access to the 2 acres. The previous access (from a side lane) was to be closed.
Planning permission was given for this development. But the executors of Mr. Alford did not carry it out themselves. They sold the two acres to a Mr. Crabb: and they sold the 3½ acres to the Chichester Rural District Council. The conveyances are of importance. By a conveyance dated 1st September, 1965, the executors of Mr. Alford sold the whole of the two acres with the two industrial buildings to Mr. Crabb: and in the conveyance they agreed to erect a fence 5ft. 6ins. high along the boundary line (save for the access gap at point A). They also granted him a right of access at point A to the proposed new road and a right of way along it to Hook Lane. By a conveyance dated 8th December, 1966, the executors of Mr. Alford sold the 3½ acres to the Chichester Rural District Council, but they expressly reserved the right (which they had already granted to Mr. Crabb) for the owner of the 2 acres to have access at point A to the proposed new road and a right of way along it to Hook Lane. In the same deed the Chichester Rural District Council agreed to erect the fence 5ft. 6ins. high along the boundary line (save for the access gap at point A).
So on the conveyances the owners and occupiers of the 2 acres had a right of access along at one point, namely, point A (halfway up the front portion). It was shown on the map as a gap about 20 feet wide: and from that point they had a right of way along the proposed new estate road, to get to Hook Lane. The Chichester Rural District Council were to erect a close-boarded fence 5ft. 6ins. high along the whole boundary between the two acres and the 3§ acres, except for the 20 feet gap at point A.
In I967 Mr. Crabb had a new idea about his two acres. He thought it would be desirable to split up the two portions and sell them separately for separate use. The front portion (with the offices and showrooms) was clearly separated from the back portion (with the manufacturing). But, if they were split up, he would need another access. The access at point A would serve the front portion. But he would need another access at another point (to be called point B) so as to serve the back portion, together with a right of way along the new estate road from point B to Hook Lane.
Now by this time Mr. Crabb had engaged as his architect Mr. Alford, who was the son of the original owner of the land. On 22nd June, 1967, Mr. Alford, as architect for Mr. Crabb, wrote this letter to the Engineer of the Chichester Council:-
"For the attention of Mr. Stonier: Dear Sir ....
It would appear that Mr. Crabb may require two entrances off the new road, one to each of his two buildings. If you could let me know when you hope to get this fence line out I would be glad of the opportunity of meeting a representative of your Department on the site so that these matters can be finally settled and the line of the fence agreed."
In pursuance of that letter there was a meeting on 26th July, 1967, which was attended by Mr. Crabb and his architect, Mr. Alford, and by a representative of the Council. There is no written note of what took place. Both Mr. Crabb and his architect, Mr. Alford, gave evidence about the meeting. But unfortunately the Council gave no evidence about it. The Council undoubtedly had a representative there: but we do not know who it was. The Engineer, Mr. Stonier, said that he himself was not: present. The only other person who might have represented the Council was a Mr. Queen. He was in Canada and not available to give evidence. But there is no doubt that they agreed the line of the fence which was to separate Mr. Crabb's land from the Council's land. There is also no doubt that there was an agreement in principle that Mr. Crabb should have, not only the access at point A, but also an additional access at point B, so as to give access from the back portion of his land on to the new estate road. Mr. Crabb said that the Council's representative made a firm commitment for a second access at B; but the Judge said that Mr. Crabb was rather over sanguine. The Judge preferred the evidence of Mr. Alford who was rather more cautious. Mr. Alford said:
"I thought we had got final agreement in that there was to be access at point B, but I saw further processes beyond the meeting."
He foresaw, no doubt, that there might have to be a document drawn up between the solicitors. Later on, in his evidence, Mr. Alford was asked whether there was to be any payment for this additional access. He said:
"The normal anticipation at that time would be that some consideration would be demanded."
But the Council's representative did not ask for any payment. Mr. Alford said:
"My strong feeling is we would not be asked to pay that consideration when talking to the plaintiffs in 1967."
Summing up the evidence, as accepted by the Judge, the result of the meeting on 22nd July, 1967, was that there was an agreement in principle that Mr. Crabb should have an additional access at point B to the land, because it was envisaged that he would sell his two acres of land in two portions: the front portion with access at point A to the new road, and the back portion, with access at point B, to the new road. But the Judge found there was no definite assurance to that effect: and, even if there had been, it would not have been binding in the absence of either writing or consideration. In order to be binding, there would have to be the legal processes foreseen by Mr. Alford.
As it happened, no legal processes were gone through. The Chichester Rural District Council made no formal grant to Mr. Crabb of any access at point B or any easement over the new road. But, nevertheless, the parties acted in the belief that he had or would be granted such a right. During the winter of 1967 the Council erected a fence along the line of the agreed boundary, but they left gaps at point A with access to the front portion of Mr. Crabb's land and at point B with access to the back portion. These two gaps were used by lorries which went in and out at points A and B as if they were exits and entrances. It was creating such a mess and disturbance of Mr. Crabb's land that there was a meeting on the site on 31st January, 1968, at which the Council agreed that they would undertake a tidying-up operation: and they did so.
On 6th February, 1968, there was an important development. The Council gave orders for gates to be constructed at points A and B, and they were in fact constructed. We have before us the contractors' account dated 30th March, 1968. The contractors erected a fence 5ft. 6ins. high all the way along the boundary: but they put gates in the fence at points A and 3. At point A they erected a pair of oak close-boarded gates 18ft. 0ins. wide, 5ft. 6ins. high, complete with posts and fittings, at a cost of £117.5s.6d. At point B they erected a similar pair 12ft. 3ins. wide and 5ft. 6ins, high, at a cost of £76.6s.Od. The gateposts were set firmly in concrete at points A and B, and were clearly intended to be permanent.
Some months later, in the autumn of 1968, Mr. Crabb agreed to sell the front portion of his land to a purchaser and assigned to the purchaser the right of access at point A. But, here is the important matter. In the coneyance of the front portion of 4th October, 1965, Mr. Crabb did not reserve any right for himself (as the owner of the back portion) to go over the front portion so as to get out at point A. Mr. Crabb thought that he already had a right of access at point B (where gates had already been erected) and so he did not need to reserve any right to get to point A. The Judge found that
"... Mr. Crabb believed that he had an assurance by the Council that he would have access at point B from the Council's land and was content to rely on that assurance. He did not reserve any right of access across the front portion .... He would not have been prepared to proceed with the sale of the front portion to the purchaser without reserving access over it if he had not believed that he would have access at point B over the Council's land."
But then, in January 1969, there was a new development. Mr. Crabb put a padlock on the inside of the grate at point B. The Council were incensed by this. But they did not say a word to Mr. Crabb. They went on to his land. They took down the gates at point B. They pulled them out of the concrete. They took them away and filled the gap with extra posts and a close-boarded fence to march the existing fence. In short, they shut up the access at point B. The Judge said:
"The Council gave no notice to Mr. Crabb of its intention to take this step: it seems to me that it was-a discourteous and high-handed act."
It is that action, depriving Mr. Crabb of his access, which has led to all the trouble. Mr. Crabb sought to settle the matter by agreement. The Council did not object to his having access at Point B and an easement to serve the back portion of the land, but the Council wanted £3,000 for it. This was more than Mr. Crabb was willing to pay. So no agreement was reached. In consequence this back portion of land has been rendered sterile. Mr. Crabb has been unable to sell it or make use of it because it has no outlet anywhere.
In June 1971 Mr. Crabb brought this action claiming a right of access at point B and a right of way along the estate road. He had no such right by any deed or conveyance or written agreement. So, in strict law, on the conveyance, the Council were entitled to their land, subject only to an easement at point A, but none at point B. To overcome this strict law, Mr. Crabb claimed a right of access at B on the ground of equitable estoppel, promissory or proprietary. The Judge held that he could not avail himself of any estoppel. He said:
"In the absence of a definite assurance by the representative of the Council, no question of estoppel can arise, and that really concludes the action."
Mr. Crabb appeals to this Court.
When Mr. Millett, Q.C., for Mr. Crabb said that he put his case on an estoppel, it shook me a little: because it is commonly supposed that estoppel is not itself a cause of action. But that is because there are estoppels and estoppels. Some do give rise to a cause of action. Some do not. In the species of estoppel called proprietary estoppel, it does give rise to a cause of action. We had occasion to consider it a month ago in Moorgate Mercantile v. Twitchings (since reported in 1975 3 W.L.R. 286) where I said that the effect of estoppel on the true owner may be that
"his own title to the property, be it land or goods, had been held to be limited or extinguished, and new rights and interests have been created therein. And this operates by reason of his conduct -what he has led the other to believe - even though he never intended it."
The new rights and interests, so created by estoppel, in or over land, will be protected by the Courts and in this way give rise to a cause of action. This was pointed out in Spencer Bower and Turner on estoppel by Representation, Second Edition (1966) at pages 279 to 282.
The basis of this proprietary estoppel - as indeed of promissory estoppel - is the interposition of equity. Equity comes in, true to form, to mitigate the rigours of strict law. The early cases did not speak of it as "estoppel". They spoke of it as "raising an equity". If I may expand that, Lord Cairns said: "It is the first principle upon which all Courts of Equity proceed", that it will prevent a person from insisting on his strict legal rights - whether arising under a contract, or on his title deeds, or by statute - when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties, see Hughes v. Metropolitan Railway (1877) 2 A.C. at page 448. What then are the dealings which will preclude him from insisting on his strict legal rights? -If he makes a binding contract that he will not insist on the strict legal position, a Court of Equity will hold him to his contract. Short of a binding contract, if he makes a promise that he will not insist upon his strict legal rights - then, even though that promise may be unenforceable in point of law for want of consideration or want of writing - then, if he makes the premise knowing or intending that the other will act upon it, and he does act upon it, then again a Court of Equity will not allow him to go back on that promise, see Central London Property Trust v. High Trees House (1947) K.B. 130: Richards (Charles) v. Oppenhaim (1950) K.B. 616, 623. Short of an actual promise, if he, by his words or conduct, so behaves as to lead another to believe that he will not insist on his strict legal rights - knowing or intending that the other will act on that belief - and he does so act, that again will raise an equity in favour of the other: and it is for a Court of Equity to say in what way the equity may be satisfied. The oases show that this equity does not depend on agreement but on words or conduct. In Bamsden v. Dyson (1866) L.R. 1 H.L. at page 170 Lord Kingsdown spoke of a verbal agreement "or what amounts to the same thing, an expectation, created or encouraged." In Birmingham & District Land Co. v. The London & North Western Railway (1888) 40 Ch. D. at page 277, Lord Justice Cotton said that
".... what passed did not make a new agreement but what took place .... raised an equity against him."
And it was the Privy Council who said that
".... the Court must look at the circumstances in each case to decide in what way the equity can be satisfied"
giving instances, see Plimmer v. City of Wellington Corporation (1884) 9 A.C. at pages 713-4.
Recent cases afford illustrations of the principle. In Inwards v. Baker (1965) 2 QB 29, it was held that, despite the legal title being in the plaintiffs, the son had an equity to remain in the bungalow "as long as he desired to use it as his home." Mr. Justice Danckwerts said (at page 38):
"Equity protects him so that an injustice may not be perpetrated."
In E.H. Ives Investment Ltd. v. High (1967) 2 QB 379, it was held that Mr. High and his successors had an equity which could only be satisfied by allowing him to have a right of access over the yard, "so long as the block of flats has its foundations on his land." In Siew Soon Hah v. Wang Tong Hong (1973) A.C. 837, the Privy Council held that there was an "equity or equitable estoppel protecting the defendant in his occupation for 30 years". In Bank Negara Indonesia v.Philip Foallm 1973 2 Malaya Law Journal the Privy Council held that, despite the fact that he had no protection under the Rent Acts, he had an equity to remain "so long as he continued to practise his profession."
The question then is: were the circumstances here such as to raise an equity in favour of Mr. Crabb? True the Council on the deeds had the title to their land, free of any access at point B. But they led Mr. Crabb to believe that he had or would be granted a right of access at point B. At the meeting of 26th July, 1967, Mr. Alford and Mr. Crabb told the Council's representative that Mr. Crabb intended to split the two acres into two portions and wanted to have an access at point B for the back portion: and the Council's representative agreed that he should have this access. I do not think the Council can avoid responsibility by saying that their representative had no authority to agree this.. They entrusted him with the task of setting out the line of the fence and the gates: and they must be answerable for his conduct in the course of it, see Attorney-General to the Prince of Wales v. Collom (1916) 2 K.B. at page 207: Moorgate Mercantile v. Twitchings (1973) 3 W.L.R. at page 298 A-B.
The Judge found that there was "no definite assurance" by the Council's representative, and "no firm commitment", but only an "agreement in principle", meaning I suppose that, as Mr. Alford said, there were "some further processes" to be gone through before it would become binding. But if there were any such processes in the mind of the parties, the subsequent conduct of the Council was such as to dispense with them. The Council actually put up the gates at point B at considerable expense. That certainly led Mr. Crabb to believe that they agreed that he should have the right of access through point B without more ado.
The Judge also said that, to establish this equity or estoppel, the Council must have known that Mr. Crabb was selling the front portion without reserving a right of access for the back portion. I do not think this was necessary. The Council knew that Mr. Crabb intended to sell the two portions separately and that he would need an access at point B as well as point A. Seeing that they knew of his intention - and they did nothing to disabuse him but rather confirmed it by erecting gates at point B - it was their conduct which led him to act as he did: and this raises an equity in his favour against them.
In the circumstances it seems to me inequitable that the Council should insist on their strict title as they did: and to take the highhanded action of pulling down the gates without a word of warning: and to demand of Mr. Crabb £3,000 as the price for the easement. If he had moved at once for an injunction in aid of his equity - to prevent them removing the gates - I think he should have been granted it. But he did not do so. He tried to negotiate terms, but these failing, the action has come for trial. And we have the question: In what way now should the equity be satisfied?
Here equity is displayed at its most flexible, see Snail's Equity, 27th edition, page 568, and the illustrations there given. If the matter had been finally settled in 1967, I should have thought that, although nothing was said at the meeting in July 1967, nevertheless it would be quite reasonable for the Council to ask Mr. Crabb to pay something for the access at point B, perhaps - and I am guessing - some hundreds of pounds. But, as Mr. Millett pointed out in the course of the argument, because of the Council's conduct, the back land has been landlocked. It has been sterile and rendered useless for five or six years: and Mr. Crabb has been unable to deal with it during that time. This loss to him can be taken into account. And at the present time, it seems to me that, in order to satisfy the equity, Mr. Crabb should have the right of access at point B free of charge without paying anything for it.
I would, therefore, hold that Mr. Crabb, as the owner of the back portion, has a right of access at point B over the verge on on to Mill Park Road and a right of way along that road to Hook Lane without paying compensation. I would allow the appeal and declare that he has an easement, accordingly.
LORD JUSTICE LAWTON: In my Judgment this appeal turns upon the answer to one question; At the meeting on 26th July 1967 between Mr. Crabb and his architect, Mr. Alford, on one side, and the representative of the Council, on the other, did the parties agree that Mr. Crabb should have access on to the road at point B? The learned Judge decided that although there had been what he called an agreement in principle, there had been no firm undertaking. He then said in the course of his judgment:
"In the absence of a definite assurance by the representative of the Council, no question of estoppel can arise"....
If he was justified in his finding on the evidence, I would agree. Mr. Millett pointed out in the course of his submissions that his first task would be to satisfy this Court that the learned Judge was wrong in coming to the conclusion that he did. At the trial the defendants by their Counsel suggested that there had been no such agreement as was alleged about the right of access at point B. Mr. Crabb gave evidence to the contrary effect. He was definite that there had been such an agreement and he must I think be taken to have believed there was because his subsequent behaviour in selling without reserving any right of way across it would have been gross folly if he had not believed that he had been given a right of access at point B. The architect, Mr. Alford, gave evidence firmly to the same effect in examination-in-chief. In cross-examination it was suggested to him that the arrangement about which he was testifying was unusual. He made various answers accepting in part that an arrangement of this kind without documents and the intervention of solicitors would be unusual. For me the problem has been whether, looking at his evidence as a whole, he resiled from the position which Mr. Crabb had taken up and he himself had taken up in his examination-in-chief. In my judgment, taking the evidence as a whole, he did not. He was sure all the way through that, however informal the arrangement might have been, however much it would require to be formalised by solicitors, nevertheless there had been a clear undertaking by the Council's representative that there would be granted to Mr. Crabb access at point B. So I can start my judgment by saying that I am of the opinion that the learned Judge was wrong in his assessment of the evidence.
The next problem is: what are the legal consequences of finding as I do that there had been a firm undertaking by the Council that access would be granted at point B? This necessitates considering principles of equity and applying them to the facts of this case. Before doing so I have reminded myself of what Lord Justice Harman said in Campbell Discounty Co. Ltd. v Bridge (1961) 1 Q.B. 44.5 at page 459:
"Equitable principles are, I think, perhaps rather too often bandied about in common law courts as though the Chancellor still had only the length of his own foot to measure when coming to a conclusion. Since the time of Lord Eldon the system of equity for good or evil has been a very precise one, and equitable jurisdiction Is exercised only on well-known principles."
I start with a firm agreement between Mr. Crabb, on one side, and the Council representative on the other to the effect I have already indicated. From then onwards there can be no doubt whatsoever that Mr. Crabb believed that he had got a firm undertaking from the Council and he acted as if he had. In so doing he prejudiced his own position greatly by selling off the front portion of his land and failing to retain a right of way over it. It is also clear on the evidence and was so found by the Judge, that when the agreement was made the Council knew that Mr. Crabb wanted access at point B because he intended to sell off part of his land.
What did the Council believe had happened on 26th July 1967?
The facts speak for themselves. In 1968 the Council started to put up the fence between their own land and Mr. Crabb's land, as they were bound to do under the conveyance by which Mr. Crabb had transferred the land. When they did put up that fence they left gaps for gates at points A and B. Clearly they intended to provide a point of access at B. This could only have been done because they knew their representative had given an undertaking that Mr. Crabb could have access at point B. On 6th February 1968 they ordered gates for point B at a cost of £76: they were laying out the ratepayers' money to provide gates. Why should they have done that unless they had entered into an agreement to do if? It was suggested at the trial that they were laying out the ratepayers money in anticipation that at some future time Mr. Crabb would approach them for the purpose of entering into an agreement with regard to the provision of access. That would not have been sensible. Had there been doubt about what had been decided on 26th July 1967, I should have expected them to have written to Mr. Crabb asking whether he wanted them to erect gates and how much he would be willing to pay for the gates and a grant of access. They did not write: they made no enquiries. They erected the gates. If they were behaving responsibly, the inference is that they put the gates where they did because they knew that there had been an undertaking that they would put them there. After the gates had been erected at point B Mr. Crabb altered his position in a way which proved disastrous for him in the short term. Then the Council behaved in a manner which the learned Judge described in restrained terms as high handed and discourteous. I am surprised that a local authority should have behaved in the way this local authority did. They had gone back on the firm undertaking which they had given through their representative to Mr. Crabb on 26th July 1967; and they had so behaved without a word of warning, explanation of apology. Since then they have asked Mr. Grabb to pay a very substantial sum of money - close on £4,000 - in order to provide him with that which their representative had undertaken to provide on 26th July 1967.
I ask myself whether any principle of equity applies. I am grateful to Mr. Lightman for having drawn our attention this morning to the case of Ramsden v. Dyson. If there had been any doubt in my mind about the application of principles of equity to the facts as I have recounted them, that case has dissipated it. As was pointed out to Mr. Lightman in the course of the argument, if one changes the parties in a passage in the speech of Lord Cranworth, Lord Chancellor, at page 142 into the names of the parties in this case, one has a case for the intervention of equity which Lord Cranworth regarded with favour. The passage to which I refer is in these terms: ...
"if I had come to the conclusion that Thornton, when he erected his building in I837, did so in the belief that he had against Sir John an absolute right to the lease he claims, and that Sir John knew that he was proceeding on that mistaken notion, and did not interfere to set him right, I should have been much disposed to say that he was entitled to the relief he sought."
Mr. Lightman's answer was that Mr. Crabb had not got an absolute right to have the gates put up. For the reasons I have stated, I am of the opinion that he had in the sense that he had been given a firm undertaking. The Council, knowing that Mr. Crabb intended to sell part of this land, stood by when he did so and without a word of warning, allowed him to surround himself with a useless piece of land from which there was no access. I would allow this appeal and grant relief in the terms indicated by the Master of the Rolls.
In conclusion I should add this: as the result of the Council resiling from their undertaking, this piece of land which is designated for light industry has stood useless. It might well have been profitable not only in the interests of Mr. Crabb but in the interests of other people living nearby. In an area where employment for the young is not always easy to find, we have the spectacle of this piece of land next door to a housing estate being rendered useless at a time when it could have been of value to the community. For that the Council is solely to blame.
In the circumstances I agree with the Master of the Rolls that they should not be paid anything for the right of way which they should have granted as long ago as 1967.
LORD JUSTICE SCARMAN: I agree that the appeal should be allowed.
The plaintiff and the defendant are adjoining landowners. The plaintiff asserts that he has a right of way over the defendants land giving access from his land to the public highway. Without this access his land is in fact landlocked, but, for reasons which clearly appear from the narration of the facts already given by my Lords, the plaintiff cannot claim a right of way by necessity. The plaintiff has no grant. He has the benefit of no enforceable contract. He has no prescriptive right. His case has to be that the defendants are estopped by their conduct from denying him a right of access over their land to the public highway. If the plaintiff has any right, it is an equity arising out of the conduct and relationship of the parties. In such a case I think it is now well settled law that the Court, having analysed and assessed the conduct and relationship of the parties, has to answer three questions. First, is there an equity established? Secondly, what is the extent of the equity, if one is established? And, thirdly, what is the relief appropriate to satisfy the equity? See:- The Duke of Beaufort v. Patrick (1853) 17 Beavan 60; Plimmer v. Wellington Corporation (1884) 9 A.C. 699; and Inwards v. Baker (1965) 2 QB 29, a decision of this Court, and particularly the observations of the tester of the Rolls at page 37. Such therefore I believe to be the nature of the inquiry that the Courts have to conduct in a case of this sort. In pursuit of that inquiry I do not find helpful the distinction between promissory and proprietary estoppel. This distinction may indeed be valuable to those who have to teach or expound the law; but I do not think that, in solving the particular problem raised by a particular case, putting the law into categories is of the slightest assistance. Nor do I think it necessary in a case such as this to inquire minutely into the law of agency. These defendants could, of course, only act through agents; but, as I have already made clear, from the very nature of the case, there would be no question of grant, no question of legally enforceable contract. We are in the realm of equity; and within that realm we find that equity, to its eternal credit, has developed an immensely flexible, yet perfectly clear, doctrine: see Investment v. High (1967) 2 QB 379, per Lord Justice Danckwerts at page 399. The approach of equity, when there is a question of agency in a field such as this, must I think be a very simple one. It will merely be that, within reasonable limits, those to whom a defendant entrusts the conduct of negotiations must be treated as having the authority, which, within the course of the negotiations, they purport to exercise. I put it in that way in the light of the comments of the tester of the Rolls in Moorgate Mercantile Co. v. Twitchings, an unreported decision of 18th June - comments which were themselves made upon a judgment to the same effect in Attorney-General to the Prince of Wales v. Collom (1916) 2 K.B. 193 at page 203. I would add only one reservation to this broad proposition. It is as follows:- the defendant, if he thinks that an agent has exceeded his instructions, can always so inform the plaintiff before the plaintiff acts to his detriment in reliance upon what the agent has said or done. If a defendant has done so, the plaintiff cannot then establish the equity: for the defendant will have intervened to prevent him acting to his detriment. Nothing of that sort happened in this case. After the meeting in July 1967, to which both my Lords have referred, the plaintiff was left to form his own conclusions as to the intentions of the defendants.
I come now to consider the first of the three questions which I think in a case such as this the Court have to consider. What is needed to establish an equity'? In the course of an interesting addition of his submissions this morning, Mr. Lightman cited Ramsden v. Dyson (1866) 1 English and Irish Appeal 129 at page 142, to support his proposition that in order to establish an equity by estoppel there must be a belief by the plaintiff in the existence of a right created or encouraged by the words or actions of the defendant. With respect, I do not think that that is today a correct statement of the law. I think the law has developed so that today it is to be considered as correctly stated by Lord Kingsdown in his dissenting speech in Ramsden v. Dyson. Like my Lord, the Master of the Rolls, I think that the point of dissent in Bamsden v. Dyson was not on the law but on the facts. Lord Kingsdown's speech, in so far as it dealt with propositions of law, has been often considered , and recently followed, by this Court in Inwards v. Baker. So what is the effect of looking to Lord Kingsdown's speech for a statement of the law? It is that the passage in his speech at the bottom of page 170 of the report has to be considered an accurate statement of the law. There Lord Kingsdown said:
"The rule of law applicable to the case appears to me to be this: If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord" (my underlining) " that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such premise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation."
That statement of the law is put into the language of landlord and tenant because it was a landlord and tenant situation with which Lord Kingsdown was concerned; but it has been accepted as of general application; While Ramsden v. Dyson may properly be considered as the modern starting-point of the law of equitable estoppel, it was analysed and spelt out in a judgment of Mr. Justice Fry in 1880: Willmott v. Barber 15 Ch. D. 96, a decision to which the Vice Chancellor referred in his judgment. I agree with the Vice Chancellor in thinking that the passage from Mr. Justice Pry's judgment from page 105 of the report is a valuable guide as to the matters of fact which have to be established in order that a plaintiff may establish this particular equity. Moreover, Mr. Lightsman for the defendants sought to make a submission in reliance upon the judgment. Mr. Justice Fry, at page 105, said as follows:-
"It has been said that the acquiescence which will deprive a man of his legal rights must amount to fraud, and in my view that is an abbreviated statement of a very true proposition. A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights. What, then, are the elements or requisites necessary to constitute fraud of that description? In the first Place the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintiff must have expended some money or must have done- some act (not necessarily upon the defendant's land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. If he does not know of it he is in the same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff's mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly," –
If I may digress, this is the important element as far as this appeal is concerned, -
"the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right."
Mr. Lightman, in the course of an interesting and vigorous submission, drew the attention of the Court to the necessity of finding something akin to fraud before the equity sought by the plaintiff could be established. "Fraud" was a word often in the mouths of those robust Judges who adorned the bench in the 19th century. It is less often in the mouths of the more wary judicial spirits today who sit upon the bench. But it is clear that whether one uses the word "fraud" or not, the plaintiff has to establish as a fact that the defendant, by setting up his right, is taking advantage of him in a way which is unconscionable, unequitable or unjust. It is to be observed from the passage that I have quoted from the judgment of Mr. Justice Fry, that the fraud or injustice alleged does not take place during the course of negotiation, but only when the defendant decides to refuse to allow the plaintiff to set up his claim against the defendants' undoubted right. The fraud, if it be such, arises after the event, when the defendant seeks by relying on his right to defeat the expectation which he by his conduct encouraged the plaintiff to have. There need not be anything fraudulent or unjust in the conduct of the actual negotiations - the conduct of the transaction by the defendants.
The Court therefore cannot find an equity established unless it is prepared to go as far as to say that it would be unconscionable and unjust to allow the defendants to set up their.-undoubted rights against the claim being made by the plaintiff. In order to reach a conclusion upon that matter the Court does not have to consider the history of the negotiations under the five headings to which Mr. Justice Fry referred. I need not at this stage weary anyone with an elaborate statement of the facts. I have no doubt upon the facts of this case that the first four elements referred to by Mr. Justice Pry exist. The question before the Judge and now in this Court is whether the fifth element is present: have the defendants, as possessor of the legal right, encouraged the plaintiff in the expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting their legal rights'? The first matter to be considered is the meeting on site of the 26th July 1967. The Vice Chancellor made a finding of fact about the meeting; and for myself I am not prepared to dissent from his finding. But the substance of the finding of fact has to be regarded; not its phrasing. One must not be misled by words or phrases into mis-construing the nature of the finding. The Vice Chancellor found there was no definite assurance given by the defendants representative to the plaintiff and his architect. Like the Master of the Rolls, I do not really know what the phrase "definite assurance" means. If it means that no grant was there and then brought into existence, or that no binding contract was then entered into, I agree with the Vice Chancellor. If it means anything else, it is so imprecise that I disregard it, and I look at the rest of the Vice Chancellor's judgment to find what he did find. He accepted the evidence of Mr. Alford, the plaintiff's architect; he summarised the effect of that evidence; and his summary is of' importance because I think it contains the clue as to his substantial findings of fact. He quotes Mr. Alford as having said in evidence:
"'The precise position'"
- that is the position of the projected point of access, point B -
"'was determined in the light of what I"
- that is the architect speaking -
"'envisaged as future development; the reason for the second entrance was because we were going to treat the green and red land as separate for user; this was made clear to Mr. Stonier and Mr. Stonier'"
- i.e. Mr. Queen -
"'had agreed the gate at B', and he said that Mr. Stonier said nothing to suggest that he had no authority. In cross-examination he"
-that is Mr, Alford –
"agreed that they were simply agreeing on the best position for an entrance and that the next step would be for their own solicitors to tie the matter up with the Council."
At the time he thought there were no problems, but basically they were agreeing the position, and he said - and now the Vice Chancellor quotes Mr. Alford again -
"'I thought we had got final agreement but that it would then be a matter for the solicitors' and he foresaw further proceedings."
Then the Vice Chancellor says:
"I accept the evidence of Mr. Alford, but I think that Mr. Crabb was rather over sanguine in his interpretation of what was said by the Council's representative and did not appreciate the difference between acceptance in principle and a firm commitment."
That was a finding that there was acceptance in principle that there should be access and a right of way over the defendants' land at point B; and I am content to go no further and to base my Judgment on what I believe to be that finding of the Vice Chancellor. Clearly Mr. Crabb and Mr. Alford came away from that meeting in the confident expectation that a right would in due course be accorded to Mr. Crabb. Mr. Alford did foresee "further processes". Of course, there would be further processes. The nature of the legal right to be granted had to be determined. It might be given by way of licence. It might be granted by way of easement. Conditions might be imposed. Payment of a sum of money might be required. But those two men, the plaintiff and his architect, came away from the meeting in the confident expectation that such a right would be granted upon reasonable conditions. What happened? By August - a month or less, after the meeting -posts for a fence were already on the ground, though not erected. There was already an indication at about that time, I think - if not then, certainly soon after - of the presence of a gap at point B, that being the point of access agreed in principle. During the latter months of 1967 nothing relevant transpired in the conduct of the negotiations between the plaintiff and the defendants. I accept Mr. Lightman's submission that relationship as well as conduct is relevant: but during this period their relationship did not develop at all. They remained adjoining landowners, one of whom had agreed in principle at a meeting upon the site that there should be a right of way from point B over his land to the public road. Yet, things were happening. In the later months of 1967 the defendants, who were the local authority, were busy developing on neighbouring land, which the plaintiff predecessor in title had sold them, a council housing estate. Lorries were being used for carting building materials, removing debris and so forth; and these lorries were in fact going upon the land of the plaintiff. Unfortunately materials on the land, the property of the plaintiff, were being pilfered. And so there came a meeting in January 1968, the point of which was to draw the attention of the defendants' officers to the situation which was developing. By the time the meeting took place the fence, which the defendants were obliged under the conveyance of their estate to erect between their land and the plaintiff's land was substantially in position with gaps at point A, the access to the northern land, and at point B, the access in dispute. Nobody on behalf of the defendants gave the slightest indication to the plaintiff and his representatives at that meeting that there was going to be any difficulty or was likely to be any difficulty about access at point B. The confident expectation with which Mr. Crabb and Mr. Alford left the meeting in July remained remarkably undisturbed by the meeting of January 1968. Indeed it was reinforced because there on the ground, plain for all to see, was a fence with gaps which accorded exactly with the agreement in principle reached in the previous July. 10 days later the defendants ordered gates, and by March the gates were installed. I ask myself, as at March 1968:- had these defendants encouraged the plaintiff to think that he had or was going to be given a right? To use the language of Mr. Justice Fry, had they done it directly or had they done it by abstaining from asserting a legal right? Their encouragement of the belief in the mind of the plaintiff and Mr. Alford was both direct and indirect. It was direct because of what they had done on the ground. It was indirect because ever since the July meeting they had abstained from giving the plaintiff or his architect any indication that they were standing on their rights, or had it in mind to go back, as, of course, they were entitled at that stage to go back, upon the agreement in principle reached at that meeting. And so matters proceeded until September 1968. By now, be it observed, over a year had passed since that first meeting when there was agreement in principle. Nothing had been done to disabuse the minds of the plaintiff and Mr. Alford of the expectation reasonably induced by what the defendants engineer then said: and there had been the direct encouragement of the gates. In September 1968 without telling the defendants or giving them any notice, so far as I am aware, the plaintiff entered into a contract to sell the northern piece of land without reservation over that land of any right of way. This was the act which was detrimental to the interests of the plaintiff. He took it in the belief that he had or could enforce a right of way and access at point B in the southern land. One of the points taken by Mr. Lightman is that the defendants had no notice of the sale, and therefore no opportunity to correct what on his case was a false belief in the mind of the plaintiff. Mr. Millett in the course of his submissions conceded that he had not found in the books any case in which the sort of estoppel which we are here considering had arisen when the fact known to the defendants was an intention and not the realisation of that intention. That is, of course, what differentiates this case from one such as E.B. Ives Investment Ltd. v. High (1967)2- Q.B. 379. There the party who was found to be estopped did have notice of what the other party was doing at the time he was doing it. Therefore I think Mr, Lightman rightly invites us to face this question: Does the fact that the defendants had no notice of the sale of the northern land before it was completed destroy the equity? Mr. Lighthouse will concede, as I understand this part of his argument, no more than this: that the plaintiff might have been able to establish an equity if he had referred to the defendants before binding himself to the purchase of the northern land: for that would have given the defendants an opportunity of disabusing the mind of the plaintiff before he acted to his detriment. The point Is worthy of careful consideration. I reject It because in my judgment, in this sort of proceedings, the Court must be careful to avoid generalisation. I can conceive of cases in which it would be absolutely appropriate for a defendant to say:
"But you should not have acted to your detriment until you had had a word with me and I could have put you right."
But there are cases in which it is far too late for a defendant to get himself out of his pickle by putting upon the plaintiff that sort of duty; and this in my judgment is one of those cases. If immediately following the July meeting the Clerk to the defendant authority had written saying:
"I have had a report of the meeting with the Assistant Engineer and I must inform you that whether or not there is to be an easement or a licence is a matter which can only be decided by the Council."
Had this been done then, the plaintiff would not now establish his equity: in selling the northern land without reservation of a right of way, he would have acted at his own risk. But one has to look at the whole conduct of the parties and the developing relationship between them. By September 1968, 13 months after the initial meeting, the plaintiff must really and reasonably have been attaching importance to the abstention of the defendants from declaring to him in correspondence, or by telephone to his agent, their true position, namely, that there would be no acceptance in principle of a right until the matter had been considered by the authority itself. By that time there had been as well the laying out of the fence and the installing of the gates. It is for those reasons -the passage of time, the abstention and the gate - that I think the defendants cannot rely upon the fact that the plaintiff acted, without referring to the defendants, on his intention - an intention of which they had had notice ever since their agent was informed of it at the meeting in July 1967. I think therefore an equity is established.
I turn now to the other two questions - the extent of the equity and the relief needed to satisfy it. There being no grant, no enforceable contract, no licence, I would analyse the minimum equity to do justice to the plaintiff as a right either to an easement or to a licence upon terms to be agreed. I do not think it is necessary to go further than that. Of course, going that far would support the equitable remedy of injunction which is sought in this action. If there is no agreement as to terms, if agreement fails to be obtained, the Court can, in my judgment, and must, determine in these proceedings upon what terms the plaintiff should be put to enable him to have the benefit of the equitable right which he's held to have. It is interesting that there has been some doubt amongst distinguished lawyers in the past as to whether the Court can so proceed. Lord Kingsdown refers in fact to those doubts in a passage, which I need not quote, at page 171 of his speech in Ramsden v. Dyson. Lord Thurlow clearly thought that the Court did have this power. Other lawyers of that time did not. But there can be no doubt that since Ramsden v. Dyson the Courts have acted upon the basis that they have to determine not only the extent of the equity, but also the conditions necessary to satisfy it, and they have done so in a great number and variety of cases. I need refer only to the interesting collection of cases enumerated in Snell on Equity, 27th edition at pages 567 to 568: paragraph 2(b). In the present case the Court doe3 have to consider what is necessary now in order to satisfy the plaintiff's equity. Had matters taken a different turn, I would without hesitation have said that the plaintiff should be put upon terms to be agreed if possible with the defendants, and, if not agreed, settled by the Court. But, as already mentioned by the Master of the Rolls and my Lord, Lord Justice Lawton, there has been a history of delay, and indeed highhandedness, which it is impossible to disregard. In January 1969 the defendants, for reasons which no doubt they thought good at the time, without consulting the plaintiff, locked up his land. They removed not only the padlocks which he had put on the gates at point B, but the gates themselves. In their place they put a fence - rendering access impossible save by breaking down the fence. I am not disposed to consider whether or not the defendants are to be blamed in moral terms for what they did. I just do not know. But the effect of their action has been to sterilise the plaintiff's land; and for the reasons which I have endeavoured to give, such action was an infringement of an equitable right possessed by the plaintiff. It has involved him in loss, which has not been measured; but, since it amounted to sterilisation of an industrial estate for a very considerable period of time, it must surpass any sort of sum of money which the plaintiff ought reasonably, before it was done, to have paid the authority in order to obtain an enforceable legal right, I think therefore that nothing should now be paid by the plaintiff and that he should receive at the hands of the Court the belated protection of the equity that he has established. Reasonable terms, other than money payment, should be agreed: or, if not agreed, determined by the Court.
For those reasons I also would allow the appeal.
(Appeal allowed with costs. Declaration and injunction as prayed in terms to be settled between Counsel. Liberty to apply.)