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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Liden v Burton [2016] EWCA Civ 275 (02 March 2016) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2016/275.html Cite as: [2016] EWCA Civ 275, [2016] Fam Law 687, [2017] 1 FLR 310 |
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ON APPEAL FROM LEEDS COMBINED COURT CENTRE
(RECORDER CAMERON)
Strand London, WC2A 2LL |
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B e f o r e :
THE RT HON. LADY JUSTICE SHARP, DBE
and
THE RT HON. LORD JUSTICE HAMBLEN
____________________
LIDEN | Respondent |
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| - and - |
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BURTON | Appellant |
____________________
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Mr Adam Wilson (instructed by Harrington Solicitors) appeared on behalf of the Respondent
____________________
VERSION
OF JUDGMENT (APPROVED)
Crown Copyright ©
LORD JUSTICE HAMBLEN:
Introduction
Liden.
The judge held that Ms
Liden
acquired this interest as a result of a proprietary estoppel.
Burton,
appeals against that decision, contending that there was no proper or sufficient evidential basis for a finding of proprietary estoppel. Permission to appeal was given by Lewison LJ "on the basis that no challenge may be made to the judge's findings of primary fact (although the inclusions and inference that he drew from his findings of primary fact may be challenged)".
Factual background
Burton
was working in Sweden and met Ms
Liden,
who is a Swedish national. At that time Mr
Burton
was married but separated from his wife. Mr
Burton
and Ms
Liden
began a relationship and lived together in a rented property in Sweden from 1995 to 2001. Mr
Burton
returned to the UK in 2001 and resumed living at Willow Beck. He and his wife were joint owners of Willow Beck, having purchased it together in the 1980s.
Liden
followed Mr
Burton
to the UK and lived with him at Willow Beck from 2001 until June 2013 when she left in circumstances of some acrimony. Mr Burrton and his wife divorced in 2002. The divorce involved Mr
Burton
agreeing to an ancillary relief order whereby he would pay his former wife a further sum of £37,500, which liability he discharged by buying a new house for her. In exchange, Willow Beck was transferred into his sole name on 8 November 2002.
Burton
funded the payment of the £37,500 by a mortgage on Willow Beck. There was also an earlier mortgage on the property and on 5 April 2008 all the borrowings were consolidated into a single interest-earning mortgage of £70,005. A further advance of £20,000 for business purposes was taken out by Mr
Burton
in September 2009, and at the time of the trial the outstanding balance was about £98,000. Willow Beck appears to have been worth between £210,000 and £245,000 in 2002 and at the time of the trial was on the market for £435,000.
Burton
and Ms
Liden
gave oral evidence at the trial. Ms
Liden's
evidence, which the judge accepted, was that from 2001 she paid Mr
Burton
£500 per month as a contribution towards the expenses of running and maintaining the property. The judge found that the circumstances in which these payments came to be made gave rise to a proprietary estoppel.
Liden
and Mr
Burton
in respect of the monthly payments which Ms
Liden
said she made. Mr
Burton
denied receiving any such payments. The judge preferred Ms
Liden's
account in respect of the payments and her evidence generally. He found Ms
Liden's
account to be "correct". He made the following primary findings of fact:
(1) MsLiden's
income was from a pension paid by the Swedish authorities on account of her having suffered an injury.
(2) During MrBurton's
divorce proceedings he was concerned that might not be able to afford to keep Willow Beck and Ms
Liden
agreed to help out. This initial conversation was even before they left Sweden
(3) It was represented to MsLiden
that the property was expensive to run and that they could only afford to live there if she made some payments.
(4) On this basis she began the payments of £500 per month, which was half approximately of all her pension.
(5) MsLiden
was initially unaware of the mortgage. When she asked Mr
Burton
how the money was spent he would describe it as rent and other outgoings. She challenged the description of rent and 'he apportioned it in response to that challenge as "£200 towards the house"'.
(6) When she found out about the mortgage in 2002 he again agreed that it was 'towards the house."
Liden
set out in her witness statement at paragraphs 10 to 12, which includes the following:
"10. Michael was unable to afford the outgoings on the house and in particular he struggled with the mortgage payments … I do not know if he had to re-mortgage to pay out his ex-wife, but he made it plain to me that we could only live at the house if I made a financial contribution. He told me it would be too expensive for him otherwise. I agreed to this, and almost from the start I paid him £500 per month from my benefits…
11. I made this contribution because Michael told me on numerous occasions that we would be together for the future, that this would be our home and that he would look after to me forever. He told me 'you have to contribute wherever we live, so why not pay for my house?' He also me that I would be a beneficiary of his will … I would not have made these payments to him if I believed that he would have treated me in this way and would not have made provision for me for the future.
12. On a few occasions I asked Michael how the money that I paid him was spent. He broke it down into 'rent' and other outgoings. I challenged this description, telling him that I was not a tenant and he then said 'it is £200 towards the house though'. I was never a tenant of the property. At first I did not know that there was a mortgage on the house and when I did find out in 2002 I directly tackled him about it. I said 'it is towards the house then, isn't it?' and he agreed."
Burton
stating that "this is to
verify
that Kristina
Liden
pays rent of £500 per month. This payment has been made every month since 2001". It was found that Ms
Liden
typed the document as being one she wanted in order to acknowledge the payments being made and that its terms had been discussed immediately before it was typed. She denied the payments could properly be described as "rent" and the judge found the explanation of the use of that word to be that these were the terms to which to Mr
Burton
was prepared to sign but that it involved no waiver by Ms
Liden
of rights she may have had in the property.
Burton
ever proposed engagement. The judge found that he had done so and that he had bought an engagement ring for Ms
Liden
in 2003.
Burton
had told her, the house to be retained, and when he attempted to describe it is rent she [Ms
Liden]
challenged that description and got a no doubt grudging acknowledgement that it was 'towards the house'". He also found that the £500 per month payments were made in reliance on these matters and what Mr
Burton
had said to her. He further found that if Ms
Liden
had known the true position she would have made no payments towards the house, towards the mortgage, and could have invested money elsewhere.
The judge's conclusions
Burton
had induced, encouraged or allowed Ms
Liden
to believe she was obtaining an interest in the property, that the monthly payments were made in reliance thereon, and that it would be unconscionable for Mr
Burton
to deny Ms
Liden
an interest in the property.
Liden,
under the terms of which the first £33,522 of equity is held on trust for her.
Liden
had known the true position she would have made no payments towards the house and could have invested the money elsewhere. The sum potentially so available was identified as £200 per month of the £500 she was paying. This resulted in the principal sum of £28,800, to which was to be added interest at three per cent on a rolling basis, resulting in a total interest figure of £4,752.
Proprietary estoppel
"Without attempting to provide any exclusive definition, it is possible to summarize the essential elements of proprietary estoppel as follows:
(i) An equity arises where:
(a) the owner of land induces, encourages or allows the claimant to believe that he has or will enjoy some right or benefit over the owner's property;
(b) in reliance upon this belief, the claimant acted to his detriment to the knowledge of the owner; and
(c) the owner then seeks to take unconscionable advantage of the claimant by denying him the right or benefit which he expected to receive."
v
Major [2009] 1 WLR 776 per Lord Walker at [29], with whose judgment Lord Roger and Lord Neuberger agreed. In that case it was emphasised that whether an assurance is sufficiently clear to found a proprietary estoppel is "hugely dependent on context" - per Lord Walker at [56].
Burton
submits that (1) the assurance must be sufficiently clear and unambiguous; (2) the nature of the terms of any benefit must be certain; (3) there must be a sufficient link between the assurance relied upon and the conduct which constitutes the detriment; and (4) the detriment must be more than insubstantial.
The issues
Issue (1): whether the judge wrongly applied the law to the facts as found.
Burton
it is submitted that:
(1) The assurance that the payments were going "towards the house" is (a) not sufficiently clear and unambiguous, and (b) does not amount to an assurance of beneficial interest;
(2) This assurance was given after the payments had commenced and therefore there is no sufficient link for reliance.
(3) There can be no basis for an assurance conferring an interest in property once the "rent" document was signed in 2002.
(4) £200 per month is too insubstantial an amount to constitute detriment.
Liden
it is submitted that on the basis of the judge's findings he was entitled to conclude that there was sufficient assurance, detriment and reliance to give rise to a proprietary estoppel and that his conclusion cannot be said to be wrong in law.
Liden
on all material matters.
Burton's
case on appeal focuses
very
strongly on the assurance that the payments were going "towards the house". This, however, is to ignore the earlier findings made by the judge.
Liden
was told that the payments were needed if the house was to be kept, and that was the only way they were going to be able to live there. The payments were necessary if the house was "to be retained" for them. Although she did not know the details of Mr
Burton's
mortgage arrangements, she knew that he was an owner of the house and that her payments were needed if the house was to be kept for the benefit of both of them. At the time, Mr
Burton
was saying that they would always be together, as borne out by his proposal of engagement.
Liden
would reasonably have understood that her necessary payments were in return for an interest in the house that they were and would be sharing.
Burton
were a sufficiently clear assurance to found a proprietary estoppel. If that is so, there is no difficulty about reliance. On the judge's findings, this was the basis upon which the payments were being made from the start.
Liden
had known the true position she would not have made those payments. The combination of reliance and detriment leads to and justifies the conclusion of unconscionability.
(2) Whether the judge erred in the exercise of his discretion giving effect to the equity.
Liden
to Mr
Burton
which he considered as being in respect of items for Ms
Liden's
direct benefit. The judge's findings on the rate of return Ms
Liden would receive over the relevant period had she invested the sums for her benefit fall well within findings a trial judge is entitled to make based upon the evidence before him and his own general knowledge. It cannot be said that the judge did more than the minimum required to do justice between the parties. In all the circumstances, no error in the exercise of his discretion has been established.
Conclusion
LADY JUSTICE SHARP:
LORD DYSON:
Order: Application refused