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IN THE HIGH COURT OF JUSTICE
BIRMINGHAM DISTRICT REGISTRY
IN THE ESTATE OF EDITH MAY McGUINNESS (DECEASED)
||Birmingham Civil Justice Centre
The Priory Courts, 33 Bull Street
Birmingham, B4 6DS
B e f o r e :
MR JUSTICE NEWEY
|| MR DAVID JAMES McGUINNESS
||- and -
||MRS DENISE MARIE PREECE
(in her capacity as personal representative and beneficiary of the above named deceased)
LIAM PHILIP PREECE
- and -
F. McGUINNESS & SONS LIMITED
Mr Angus Burden (instructed by Grindeys LLP) for the Claimant
Mr William Hunter (instructed by Beswicks Solicitors LLP) for the Defendants
Hearing dates: 14, 15 & 18-21 April 2016
HTML VERSION OF JUDGMENT
Crown Copyright ©
Mr Justice Newey :
- This case principally concerns the ownership of some 11 acres of land in Wolstanton, Newcastle-under-Lyme, Staffordshire. The land lies just to the east of the A500 road and the Crewe to Derby railway line and to the west of the Trent & Mersey Canal. The bulk of the property is also to the west of a stream called Fowlea Brook, but it includes a higher area of about 1.6 acres on the other side of the stream which is known as "top yard". For ease of reference in these proceedings, the property has been divided into parts referred to as "Plot 1", "Plot 2", "Plot 3" and "Plot 4". Plot 3 comprises top yard. Plots 1, 2 and 4, which comprise respectively some 0.5, 0.8 and 7.3 acres, have been collectively referred to as the "bottom ground". The whole of the property ("the Yard") was estimated to be worth between £2.8 million and £3 million in 2012, although an offer of £12 million seems to have been made for it at some stage.
- It is common ground that, at law, Plots 1, 2 and 4 are owned by the first defendant, Mrs Denise Preece ("Denise"). However, the claimant, Mr David McGuinness ("David"), says that he is the owner of Plot 3 and also that he is entitled to assert proprietary estoppel or constructive trust claims in respect of the Yard.
- There are further disputes as to several less valuable items. One of these is a small piece of undeveloped land in Whitfield Road, Norton in the Moors, Stoke. The others comprise a grandfather clock and a Morris lorry dating from the 1920s. The clock and lorry were valued for probate in 2013 at, respectively, £2,000 and £10,000.
- David and Denise are both children of Mr Frederick McGuinness ("Fred") and his wife Edith ("Edith"). For convenience, and without any disrespect, I shall refer to Fred, Edith and their children by their Christian names in this judgment.
- Fred and Edith were born in, respectively, 1923 and 1926. Their first child, David, was born in 1945. Two more sons followed: Frederick ("Freddie"), born in 1947, and Kevin, born in 1950. Denise is somewhat younger, having been born in 1962.
- When, it seems, in his 20s, Fred started up in business in the scrap trade with a horse and cart. At first, David explained in evidence, his father also had a job as a miner. Mr Bob Cotton, who was a rag and bone man (or "tatter") and knew the McGuinness family well, commented that Fred's business was originally focused on collecting rags and scrap metal but blossomed when Fred took up car-breaking.
- By the time Denise was growing up, Fred and Edith were far better off than they had been when David, Freddie and Kevin were small. Denise herself said in cross-examination that the world David, Freddie and Kevin were born into was quite different to the one she encountered. It is symptomatic that, as she explained, she was taken to school in a Rolls Royce.
- Fred used Plot 1 for his business from at any rate the 1950s. It seems that he initially rented it. In any case, he purchased it on 17 July 1957 for £900. Roughly four years later, on 25 August 1961, he enlarged the premises with the acquisition of Plot 2 for £600. In the meantime, he and Edith had acquired the Whitfield Road land. They bought it for £170 on 30 December 1959.
- David testified to having had some involvement with the purchase of Plot 2. As he himself said, however, his role will have been "really limited to helping out", for example by relaying messages to or from the family solicitor, a Mr Dougie Shone of (at this point) Norris & Mellor.
- In time, Plot 3 also came to be treated as part of the Yard. It is David's case that he and one of his grandfathers (his father's father, Mr James, or "Jim", McGuinness) bought it together in about 1962 or 1963. This is disputed by Denise, who contends that Fred purchased the plot or, alternatively, that Fred acquired title by adverse possession. I shall have to return to this topic later in this judgment.
- Fred's business featured in an article in the Times in August 1964. The article explained that "a combination of hard work and an eye for future prospects has enabled Mr McGuinness to develop rapidly" and that his "depot now stretches for over half-a-mile and seven wagons are constantly at work for him". It also said that David (who was described as one of his father's "right-hand men") and Freddie were both working for their father.
- David will not yet have been 20 years old. It is evident, however, that he was already very familiar with the business and the premises it used. Between the ages of about 8 and 24, he often stayed with Mr Jim McGuinness, his grandfather, at the Yard: in a caravan, a trailer or a building there. Even when nominally still at school, he often preferred to work at the Yard than to go to school. Once he had reached the age of 15, he left school and started to work at the Yard full-time.
- David said in evidence that he had also begun to earn money on his own account from a very young age. He explained in his witness statement:
"I started earning money myself from about 10 years of age and at about age 12 or 13 [D]ad bought me a Manchester flat-back 2 wheeled cart with cane shafts…. From then on I could go tatting on my own and, truth be told, at times I could earn as much in a day as some people might earn in a week."
Against that, Kevin maintained that there was "absolutely no way that Dad would have allowed David to run a competing business". On balance, I think the likelihood is that David did do some "tatting" for himself, but only in a relatively small way. 50 years on, he has come to believe that his business amounted to more than was in fact the case.
- In time, all three brothers came to work in the business and helped to build it up. They all evidently worked very hard. Freddie, for instance, explained that throughout the 53 years he was involved he would be at the Yard even on Sundays. In practice, he came to focus on car-breaking.
- From some point, Fred suffered ill health. There was somewhat differing evidence as to what impact this had on his role in the business. David spoke of having taken over the running of the Yard on a daily basis. In contrast, Kevin said that, while he and his brothers did the day-to-day running, Fred remained in control until the 1980s. According to Kevin, Fred was not at the Yard all the time, but would have to know about any big decisions. That version of events is supported by evidence given by Freddie, who rejected the idea that David had taken over the running of the business, and by Denise's husband Philip, who worked in the business from 1980 until well after Fred's death and said, "It was Fred's business and he ran it as such". The chances are, as it seems to me, that Kevin's account is substantially accurate.
- Mr Cotton described Fred as a "real character". Fred was not, I gather, on very good terms with his father, but he seems to have been close to David, who spoke of him as "really a man's man" who liked women and to be "out with his mates having a drink and a smoke".
- David married when he was only 16, but the marriage was not a success. He re-married in 1968, to Jean. For a period, David and Jean lived in a caravan at the Yard, but they moved into their present home in Bradwell Lane, Newcastle-under-Lyme in 1972, where they were joined by David's grandfather, Mr Jim McGuinness. Kevin and his wife had lived in a caravan opposite David and Jean's for a period. When Mr Jim McGuinness died in about 1976, he left all his estate to David.
- At some point, Fred and Edith moved to Bradwell Road, where they lived next door to David and Jean.
- Over time, the business spent substantial sums on buildings and machinery. By the early 1970s, the business was acquiring large pieces of machinery such as shearers, bailers and fragmentisers. Fragmentisers will break down and sort cars, cookers, washing machines and the like. They helped the business to secure large contracts and were referred to by David and his brothers as "golden cornflakes".
- In about February 1975, Fred purchased Plot 4 for £68,000. He was registered as HM Land Registry as the property's proprietor.
- Until 1975, the business was carried on in Fred's name. At that stage, however, the third party, F. McGuinness & Sons Limited ("the Company"), was incorporated (on 29 August 1974) and it took over the business from 1 July of the following year. Accounts for the unincorporated business's last complete year of trading, the year ended 31 March 1975, disclose a net profit of £104,349, after deducting (among other things) bonuses totalling £12,000 for David, Freddie and Kevin.
- The Yard was not transferred to the Company. I understand that Mr Harold Hibbert, a chartered accountant with Donald Bates & Co (later to become Bentley Jennison), advised Fred to retain ownership of the land on the basis that it would be safe even if the Company failed.
- Until 1984, Fred and Edith held most of the shares in the Company. The precise details varied somewhat, but at the end of 1983, for example, Fred and Edith both had 4,000 shares while Freddie, Kevin, Denise and David's son Darren each had 500 shares. Fred and Edith were the Company's only directors.
- Fred and Edith retired as directors of the Company on 1 June 1984. All four of their children were appointed as directors on the same day. The children also bought Fred and Edith's shares in the Company at this stage, for £440,000. Fred and Edith executed share transfers in favour of David, Freddie, Kevin and Denise in May 1984 which were registered on 14 January 1985. The four children thus came to hold 2,425 shares in the Company each while Fred and Edith no longer had any. Payment for the shares was initially made by the Company, but the children subsequently took out bank loans to cover the cost.
- None of the Yard was transferred. Mr Arthur Bailey, a chartered accountant who replaced Mr Hibbert as the partner in Bentley Jennison responsible for matters relating to the Company and the McGuinness family, said that he believed this to be for "the same underlying reason as when the land was not transferred at the time the limited company was incorporated and took over the business, and primarily was a way of protecting the land as a family asset should the business suffer".
- Although a director and shareholder of the Company, Denise was not much involved in the business. She herself said that David "pretty much did what he wanted" and that she did not recall any board meetings or seeing minutes of such meetings. For some time, though, she had a part-time job as a wages clerk.
- The Company continued to be very profitable. In 1984-1985, for example, it had a turnover of £6.6 million and paid £367,989 in directors' emoluments as well as recording a profit of £107,000. In 1988-1989, it achieved a profit of £58,000 despite paying as much as £684,000 in directors' emoluments.
- On 19 December 1987, Fred died. His will, which he had made on 12 November 1985, provided for his wife to inherit the entirety of his estate if she survived him, as she in fact did. Had Edith predeceased her husband, the "land at Fowlea Brook" would have been shared between the four children equally and Fred's home, jewellery and residue would have passed to Denise.
- Edith continued to live next door to David and Jean and would stay in their house overnight. It is clear that she got on very well with Jean and that Jean did a great deal for her. Edith's relations with David appear, however, to have been far less good. In contrast, Edith was plainly close to Denise, who visited her on a daily basis.
- In January 1990, Edith was registered as the proprietor of Plot 4.
- By the end of the 1990s, the Company was struggling. As Mr Bailey explained in a letter of 15 May 2002 to Edith:
"the company has continued to lose money heavily and over the last four years the annual trading losses have been as follows:
After noting that David, Freddie and Kevin had "not drawn their net salaries in quite a number of months", Mr Bailey said:
"The business clearly faces a number of difficulties going forward which need to be resolved but in doing so there are a number of general problems which I believe face not just the business itself but the family as a whole. In my view these are:
1. The lack of a proper working relationship between David, Fred and Kevin.
2. A huge uncertainty about the future in particular the land at Fowlea Brook [i.e. the Yard].
3. The business is trying to support too many members of the family when there is clearly insufficient profit to do so.
4. Insufficient profit to allow some of the directors to draw their net salaries. This clearly leads to tensions and difficulties.
5. The pension fund is inadequate at this time to enable any of the older directors to retire with any comfort."
- It was about this time that Denise's husband was told that he was being made redundant. In about 2003, Denise's role as wages clerk was also brought to an end. Edith, I gather, was enraged. Denise said in cross-examination that she, too, felt that she had been mistreated.
- In 2004-2005, the Company once again made a large profit (of nearly £600,000). This, however, arose in part from the sale of a fragmentiser, and in 2005-2006 and 2006-2007 there were losses. A profit was achieved in 2007-2008, but losses followed: of £186,000 in 2008-2009, £255,000 in 2009-2010, £177,000 in 2010-2011, £146,000 in 2011-2012 and £33,000 in 2012-2013. The Company had to contend with the implications of, for example, the closure of steel works.
- In 2009, some land that the Company owned in Cellarhead, Staffordshire was transferred to the four children by way of dividend.
- The Company's accounts consistently recorded payments of "rent" to Edith. Edith was paid £20,800 a year on this basis.
- In 2004, Edith transferred her home to Denise, but she continued living there on a rent-free basis. In 2011, when she far from well, Edith moved in with Denise and her family.
- David and his brothers tried to persuade their mother to transfer the Yard to themselves and Denise. From time to time, Mr Bailey went to see Edith at the brothers' request. He pointed out to her, he explained in evidence, that there were inheritance tax reasons for transferring the land without delay. Edith, however, was not persuaded and stressed that Fred had advised her to keep hold of the land as her security. Denise referred in evidence to Edith being badgered by David. David rejected this, but Kevin spoke in cross-examination of he and his brothers having pushed their mother a little bit. They wanted, he said, some kind of closure to know where they were going in life. As time went on, he explained, he did not know what was going to happen.
- In August 2012, Freddie and Kevin offered their mother £2 million for the Yard. Kevin explained that they were concerned about the inheritance tax implications of her continuing to own the land and that he could not afford to pay any more. Edith refused to sell.
- At the time of her husband's death, Edith's will provided for her estate to pass to her husband if he survived her and otherwise for her "land at Fowlea Brook" to be shared between her four children equally and her home, jewellery and residue to pass to Denise. On 21 April 1997, Edith made a new will under which Denise was to be entitled to a 40% share in the Fowlea Brook land, Freddie a 30% share and the other two children a 15% share each; Denise was also to take the residue. Later that same year, on 21 November, Edith once again replaced her will, this time making one that stated that the estate was to be held on discretionary trusts for, broadly, Denise and her family; a letter of wishes explained that the trustees of the will were to "regard Denise as the chief and main beneficiary". On 2 May 2012, Edith made her final will. This provided for everything bar a gift to charity to pass to Denise.
- Shortly before this, on 5 March 2012, Edith had written a letter to explain her testamentary dispositions. She said this in it:
"Denise would be twenty four when my husband Fred passed away, I depended on Denise to look after me and take me where ever I wished to go, and helped me seven days a week and she still does.
I feel that both myself and Denise were both [mistreated]. [W]e were never involved with the running of the Company all though Denise was a twenty five cent shareholder and I myself own the ground to which I had rent of £400.00 per week which was never increased. Over the years my daughter was asked not to go to the office any more and her income was [stopped] in the end. No bonuses and her pension was a [pittance] to the three sons.
F McGuinness & Sons was a thriving business at the time Fred passed away and I have stood by and watched it go to nothing from greed. So at this point I feel my last wishes are that my daughter to be able to try and enjoy the rest of her life."
- Edith died on 3 March 2013 leaving an estate valued for probate at a net figure of £3,112,305. Denise was granted probate.
- A couple of weeks before her death, Edith made a statement in support of an application to the Land Registry to be registered as the proprietor of Plots 2 and 3; the title deeds, she said, had been lost or destroyed. Following Edith's death, Denise, as her mother's personal representative, in effect adopted her mother's evidence and also sought to have herself registered as the proprietor of Plot 1. However, David's solicitors, Grindeys, wrote to the Land Registry on his behalf on 14 January 2014 to object to the applications. Reliance was placed on, among other things, a statutory declaration of 20 December 2013 in which David claimed to be the owner of Plot 3. On 30 July 2014, the matter was referred to the First-tier Tribunal. Statements of case were subsequently filed by both Denise and David, but the First-tier Tribunal proceedings were stayed in October 2014 pending the outcome of the present claim, which had been issued the previous month.
- In 2015, Denise decided to transfer the Whitfield Road land to her son Liam, who is the second defendant. At the time of the transfer, the land was almost completely covered in overgrown vegetation and mature trees.
- The Company has ceased trading and is now thought to be insolvent.
- The issues that arise from the parties' contentions can be conveniently considered under the following headings:
i) The acquisition of Plot 3;
ii) The ownership of the Yard generally;
iii) The Whitfield Road land;
iv) The grandfather clock;
v) The Morris lorry; and
vi) The counterclaim against the Company.
The acquisition of Plot 3
- As I have said, it is David's case that he and his grandfather bought Plot 3 together in about 1962 or 1963. In the alternative, he contends that he acquired title to Plot 3 by adverse possession.
- Mr Angus Burden, who appeared for David, recognised that, as he would have been no more than 18 years of age at the time and the age of majority was still 21, David could not have held a legal estate in land in 1962 or 1963. He submitted, though, that there was no legal obstacle to David acquiring a beneficial interest in Plot 3.
- According to David, a Mr Leigh, who was one of the owners of a local pottery business, telephoned to say that he could see horses in his field and that David had better come to see him. When, David said, he visited the pottery works, Mr Leigh asked him whether he was interested in buying the field and he agreed there and then to do so. On his return to the Yard, his grandfather said (so David recounted) "Let's get it bought" and put together the purchase price from his own money and money he was looking after for David. Subsequently, David explained, he returned to the pottery works and paid Mr Leigh, who gave him a receipt and told him to see his (David's) solicitor to sort things out. David said that he passed the receipt on to Mr Shone and never really gave the matter another thought: he just assumed that everything would be sorted out from there. The purchase price is put at £900.
- As for adverse possession, David has placed particular reliance on fencing. He stated in his witness statement:
"At the time that I bought top yard there were some concrete posts around the edge with three wires running through them acting as a fence but it was in some disrepair. I took these out and put in a wire netting fence around the edge and also installed a gate with a lock on it at the entrance from Pidduck Street."
- In contrast, it is Denise's case that her father bought Plot 3 or, failing that, that he acquired title to it by adverse possession. With regard to the former possibility, no conveyance of Plot 3 has come to light. It is, moreover, apparent that Edith misunderstood the position when she sought registration as the proprietor of Plots 2 and 3. She said in her statement in support of her application that she recollected that Fred had acquired Plots 2 and 3 only a couple of years after he had acquired Plot 1. It is now clear, however, that Fred did not buy Plot 2 until four years after he had bought Plot 1 and, more importantly, that the conveyance of Plot 2 did not encompass Plot 3.
- Mr William Hunter, who appeared for the defendants, relied in support of Denise's case on a cheque stub numbered 600148 and dated 17 August 1961. Some of the manuscript on this is in black ink and the remainder in blue ink. The blue words appear to have been written by Edith, but it is not known who is responsible for the black handwriting. The date is in black, as are the figure (viz. £300) and the words, "to current a/c from loan a/c". The blue writing comprises "Land at Fowlea Brook", "Deposit £350", "A/W" (which may well refer to the firm of solicitors Abberley & Walker) and, at the bottom, "Out". It is also noteworthy that the next cheque stub, likewise dated 17 August 1961, seems to relate to the purchase of Plot 2.
- Mr Hunter argued that it can be seen from cheque stub 600148 that Fred paid a deposit of £350 for "Land at Fowlea Brook" on or shortly after 17 August 1961 and that the land in question was probably Plot 3. I am not convinced, however, that the cheque stub lends any real support to Denise's case. The black script, which presumably predates the blue, seemingly does no more than record a £300 payment "to current a/c from loan a/c". It is not evident when Edith added the black writing or what the significance was of the references to, say, Abberley & Walker (if "A/W" referred to them), "Deposit £350" or "Land at Fowlea Brook". As for the last of these, "LAND AT FOWLEY BROOK" has been written on the front cover of the cheque book even though many of the cheque stubs clearly did not involve payment for land; perhaps, therefore, the point was that the cheque book was used for the purposes of the business carried on at the Fowlea Brook land. Last but not least, £350 would have been a remarkably large sum to pay by way of deposit in connection with a purchase of Plot 3. During submissions, Mr Hunter accepted that the contention that the £350 represented a deposit for Plot 3 was "rather weird". Mr Burden suggested that the "Deposit £350" might have done no more than record a deposit into an account.
- Mr Hunter also drew my attention to the accounts for the business for the year ended 5 April 1968. The balance sheet included in the accounts attributes a figure of £2,033 to "Yard – Longport at cost". Mr Hunter pointed out that the £2,033 exceeds the sum of the purchase prices of Plots 1 and 2 (£900 and £600) by £533 and submitted that I could infer that Fred had paid the difference (viz. £533) for Plot 3. To my mind, however, the excess over £1,500 is more likely to reflect the cost of improvements to the Yard. As I have said, it is apparent that substantial sums were spent on buildings and machinery.
- Mr Hunter sought support for Denise's case, too, in valuation reports that Henry Steele & Son prepared between 1974 and 1976 (for Lloyds Bank) and in 1988 (for probate purposes). Each of these, Mr Hunter argued, proceeded on the basis that the land that Fred owned extended to Plot 3. On the other hand, they do not contain anything to explain how Fred was thought to have acquired Plot 3 and other materials cast doubt on whether any documentary evidence was available to substantiate ownership. The Company can be seen, for example, to have granted legal charges in favour of Lloyds Bank in 1975 over other parts of the Yard, but not Plot 3.
- In the result, I have not been persuaded that Fred bought Plot 3. It by no means follows, however, that David or his grandfather did so. In fact, while David's case is supported by Mr Cotton's evidence, it faces serious difficulties. In the first place, there is no conveyance or other contemporary documentation evidencing a purchase of Plot 3. Secondly, Freddie and Kevin both dispute that David or his grandfather acquired Plot 3. Freddie maintained in evidence that his father was the only one who had access to £900 in the early 1960s and that David did not speak to him (Freddie) of having bought Plot 3, Kevin that it is "extremely unlikely that either David or [his] grandfather had £900 in cash to buy and land" and that he always understood the land to belong to his father. Thirdly, since David can have been no more than 18 years old during the relevant period, it is unlikely that Mr Shone would have taken instructions from him or that the owner of a pottery business would have thought it appropriate to do a deal with him. Fourthly, various documents for which David can be said to bear responsibility have assumed that Plot 3 did not belong to him personally. Thus, Edith was described as the "landowner" of the whole of the Yard in applications for waste disposal licences of the 1990s and David's solicitors wrote in 2013 of the land occupied by the Company having been "purchased out of monies provided by the business" and being "held by the late Mr and Mrs McGuinness". Fifthly, David did not mention the role that he now says that his grandfather played until, it seems, the second half of 2014. It did not feature in, for instance, the statutory declaration that David made on 20 December 2013.
- In all the circumstances, I have not been persuaded that David, his grandfather or Fred bought Plot 3. The chances are, I think, that Plot 3, which was adjacent to Plot 2 and apparently unused, came to be treated as part of the Yard without any purchase having been effected. If that is right, title will in all likelihood have passed by the mid-1970s by adverse possession. As Mr Hunter observed, there is photographic evidence indicating that scrap was being stored on Plot 3 as early as 1962. In cross-examination, Kevin spoke of Plot 3 being used by the early 1960s, albeit to a limited extent, as a dumping ground. There is also evidence of fencing work being undertaken. A 1974 valuation report noted that Plot 3 was "effectively enclosed on three sides by concrete posts with cranked heads carrying barbed wire and chain link fencing, and on the fourth side by Fowlea Brook itself". Moreover, David and Kevin both referred to fencing having been erected.
- There remains the question of who will have acquired title by adverse possession. The answer, I think, must be Fred. Plot 3 was evidently used by the business of which he was the owner, and Kevin was insistent that it was he (Fred) who organised and paid for fencing work. Mr Burden recognised that it would be difficult for David to sustain an adverse possession claim unless I had concluded that he had agreed to buy Plot 3 but found the transaction to have suffered from a technical defect.
- In short, David has not made out his claim to Plot 3. I am inclined, however, to acquit him of having given deliberately untruthful evidence on the subject. It is not uncommon for witnesses to come to believe in events that never in fact occurred, especially when trying to work out what happened as long as 50 years ago.
The ownership of the Yard generally
- David invokes both proprietary estoppel and constructive trust principles to claim an interest in the Yard. In broad terms, he maintains that the Yard was promised to him and his siblings and that it is unconscionable for him now to be denied a quarter share in it. In opening, Mr Burden's primary case was that David was entitled to such an interest on the basis of proprietary estoppel. By the end of the trial, he was inclined to suggest that a constructive trust analysis might be more appropriate.
- Mr Burden relied on the strand of proprietary estoppel described in this way in Snell's Equity, 23rd ed., at paragraph 12-036:
"It applies, it is submitted, where A makes a promise that B has or will acquire a right in relation to A's property and B, reasonably believing that A's promise was seriously intended as a promise on which B could rely, adopts a particular course of conduct in reliance on A's promise. If, as a result of that course of conduct, B would then suffer a detriment were A to be wholly free to renege on that promise, A comes under a liability to ensure that B suffers no such detriment."
- Thorner v Major  UKHL 18,  1 WLR 776 was a case of this kind. There, Lord Walker noted (at paragraph 29) that proprietary estoppel depends on three main elements:
"a representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance".
- The appeal to the House of Lords was focused on the first of these elements and raised the question of whether a representation must be "clear and unequivocal". Lord Scott endorsed such a requirement (at paragraph 18) and Lord Neuberger said that he was not seeking to cast doubt on it (paragraph 84), while observing that it was to be taken as subject to several qualifications, as to one of which he said (in paragraph 85):
"it would be quite wrong to be unrealistically rigorous when applying the 'clear and unambiguous' test. The court should not search for ambiguity or uncertainty, but should assess the question of clarity and certainty practically and sensibly, as well as contextually."
- For his part, Lord Walker said (at paragraph 56):
"I would prefer to say (while conscious that it is a thoroughly question-begging formulation) that to establish a proprietary estoppel the relevant assurance must be clear enough. What amounts to sufficient clarity, in a case of this sort, is hugely dependent on context. I respectfully concur in the way Hoffmann LJ put it in Walton v Walton  CA Transcript No 479 (in which the mother's 'stock phrase' to her son, who had worked for low wages on her farm since he left school at 15, was 'You can't have more money and a farm one day'). Hoffmann LJ stated, at para 16:
'The promise must be unambiguous and must appear to have been intended to be taken seriously. Taken in its context, it must have been a promise which one might reasonably expect to be relied upon by the person to whom it was made.'"
Lord Hoffmann himself said in Thorner v Major (at paragraph 5):
"It was enough that the meaning … conveyed would reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon."
Lord Rodger, echoing Lord Walker, said (at paragraph 26) that he would "hold that it is sufficient if what Peter [i.e. the alleged promisor] said was 'clear enough'". He went on:
"What matters, however, is that what Peter said should have been clear enough for David [i.e. the claimant], whom he was addressing and who had years of experience in interpreting what he said and did, to form a reasonable view that Peter was giving him an assurance that he was to inherit the farm and that he could rely on it."
- Turning to constructive trusts, Mr Burden relied on the principle that a trust can arise (to quote from Megarry & Wade, "The Law of Real Property", 8th ed., at paragraph 11-023):
"Where a party has acted to his or her detriment in reliance upon a common intention that he or she will acquire an interest in a property, (or an enlarged share in property already co-owned.)"
In this connection, I was referred to the following passage from the speech of Lord Bridge in Lloyds Bank plc v Rosset  1 AC 107 (at 132):
"The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel."
Mr Burden stressed the reference to an agreement or understanding being reached "exceptionally at some later date" than acquisition.
Throwing deeds on the table
- David and Jean each gave evidence about an evening when, as they said, Fred came round to their house and threw onto the table a packet of envelopes containing deeds. The packet contained, so they explained, deeds relating to both their home and the Yard. According to David, Fred said, "Here, get these in your name," but was told by David that he could not do that and that "it belongs to the four of us". David and Jean said that, after having a drink, Fred left with the deeds.
- Mr Hunter challenged David and Jean on whether this incident actually took place. I am willing to accept that it did, but I do not think it can sustain a proprietary estoppel or constructive trust claim. The remark that Fred apparently made would suggest that his intention at the time was that David should become the sole owner of the Yard, but that proposition was promptly rejected by David and he does not argue for such a result in these proceedings. Even, therefore, if Fred could be said to have given a "clear enough" assurance to found a proprietary estoppel claim, it is plain that David did not rely on it. Equally, there can be no question of the evidence about the incident showing Fred and David to have arrived at an "agreement, arrangement or understanding" for constructive trust purposes.
- In his closing submissions, Mr Burden rightly acknowledged that this incident lent little support to his case. He spoke of Fred's apparent intentions having been overtaken by later events.
The sale of the Company
- I next need to consider events that are said to have occurred in the context of the sale of the Company to David, Freddie, Kevin and Denise.
- David gave this account in his witness statement:
"I remember one day dad coming to see me and my brothers at the yard and saying 'it's coming to the stage lads, I want to get out of the job, so get your heads together and get me and your mum sorted out, I want to sell the lot heap stock and barrel so get sorted out and take the lot, then do what you want to do'. We had some discussions between us and ultimately a price was agreed between us all to buy mum and dad's shares, although we took advice and were guided by Harold Hibbert on what we should do and how we should do it. The purchase of the company was to include the ground, heap stock and barrel as dad put it.
Eventually when it came to the time that the four of us bought the shares there was a meeting at the office for quite a few hours to get all of the paperwork sorted. Me, Freddie, Kevin and dad were there along with Dougie Shone, Harold Hibbert and I remember a woman being there taking notes. It was agreed for the same reasons as before the land would continue to be kept outside of the company because I can remember asking at one point during the meeting 'what are we doing about the ground?'. Harold said 'we will leave it as it is at the moment and then we will get it sorted out later' and dad also said 'we'll get that sorted another time'. I remember at the end of the meeting when everything had been signed up dad saying, 'Right that's it, job done, I'm off'. Dad was paid one cheque then, I think for half, and a while after I remember him coming to the yard a few weeks later to see me and asked 'Can I have the rest of the money Dave', so I gave him another cheque. I remember that the accountants were not happy about this as the money was from the company and it caused tax problems. The four of us had to get loans from the bank to pay money back into the company to get it all sorted out.
As far as I'm concerned it was always understood that when the four of us bought the shares in the company we also bought the ground the understanding being that it would be sorted out and transferred to the four of us at a later date."
- The "meeting at the office" is dated as having occurred in "about January 1985" in the particulars of claim. However, Mr Burden recognised that it might have taken place slightly earlier. David is most likely, I think, to have been referring to an occasion in 1984 when share transfers were executed.
- During cross-examination, David described it as "unacceptable" to suggest that there had been no mention at the relevant meeting of sorting out the Yard later. He also explained that he regarded the Company as himself and his siblings and that the difference between the Company on the one hand and the four children on the other did not really mean anything to him. So far as he was concerned, the Yard was going to either the four children or the Company.
- Freddie and Kevin each said this in witness statements that they made in 2014 in the First-tier Tribunal proceedings:
"I thought that the Site [i.e. the Yard] was included in the share purchase although I knew that the Site belonged to our father and not the Company because we paid rent to occupy it. However, I now accept that this was not the case and my belief was based on an expectation of our mother and father treating us equally."
In his witness statement in the present proceedings, Kevin said:
"I … recall several meetings with my brothers, Harold Hibbert, the Accountant and Dougie Shone, the Solicitor prior to the share purchase…. Whilst I do not remember the precise words that were used, I recall that the Fowlea Brook Land was discussed but nothing was done with it. It was left as it was."
- During his oral evidence, Kevin confirmed that his father had said words to the effect of those quoted in the first sentence of the passage from David's witness statement set out in paragraph 69 above. He said that he had understood Fred to be referring to the Yard as well as the Company because they went together. He did not remember it being said that the Yard would be sorted out later (or even, in fact, any mention of the Yard) at the meeting at which the transfer of the Company was concluded. He and his brothers had, however, all thought that their purchase of the Company had brought with it the Yard.
- For his part, Freddie said in cross-examination that he and his brothers had taken it for granted when the Company was bought that the Yard was included. He explained that he had not himself heard Fred say that he wanted to sell "the lot heap stock and barrel", but had been told by his brothers that their father wanted to retire and was going to sell the Company. He did not know whether David had asked what was going to be done with the Yard, but he and his brothers had all seen the Company and the Yard as one. He "more or less" felt that the Yard had been promised to the four children, especially given the contents of Fred's will, and thought it terrible when he discovered the terms of Edith's will. He had come, however, to accept what his mother had done.
- It is apparent from the brothers' evidence that all three initially believed that Fred had passed on the Yard when he had sold the Company. It is harder to be definitive as to quite who was understood to have become entitled to the Yard. The difficulty stems from the fact that, as I have indicated, David at least tended to equate the Company and its shareholders. On the other hand, David referred in his witness statement to the Yard continuing to be kept out of the Company. That being so, I think it is fair to proceed on the basis that he thought that he and his siblings had acquired the Yard personally.
- On the other hand, I have not been persuaded that the brothers' beliefs can be attributed to an assurance of sufficient clarity given by Fred (or Mr Hibbert on his behalf) during the sale of the Company. The chances are that the brothers assumed that they (and Denise) were acquiring the Yard because they saw the Company and the Yard as going together rather than because of anything particular that Fred or Mr Hibbert said. The likelihood is, I think, that Fred referred to selling "heap stock and barrel", but he evidently had in mind the entirety of his and Edith's interests in the Company rather than those interests and the Yard. That he did not intend to transfer the Yard with the Company is apparent both from the fact that he did not do so and from the evidence that he consistently advised Edith to retain the Yard which, plainly, she would not have been in a position to do had it already been passed to the children or the Company. Of course, Fred's subjective intentions are not of themselves determinative, but I do not think he would have referred in terms to transferring the Yard or that an inherently imprecise reference to selling "heap stock and barrel" can constitute a "clear enough" assurance that (contrary to Fred's true wishes) the Yard was being passed on. The scope of what Fred and Edith were transferring would reasonably have been understood as being fixed by the contemporary documents rather than such expressions.
- It is, as it seems to me, also fair to infer that Mr Hibbert would have known that Fred was not proposing to hand over the Yard with the Company and, hence, that he would have been unlikely to say anything to any of the brothers that was inconsistent with that. While, therefore, there was probably reference to the Yard during one or more meetings relating to the sale of the Company, I think it unlikely that Mr Hibbert said anything that would reasonably have been understood as an assurance that Fred and Edith's children would receive the Yard. If Mr Hibbert and Fred spoke of "sorting out" the position in relation to the Yard, they will have meant that arrangements would need to be sorted out as between the Company on the one hand and Fred and Edith on the other. There is, in my view, no question of anything said by Mr Hibbert, either taken on its own or in conjunction with remarks made by Fred, amounting to a "clear enough" assurance that the Yard would be transferred.
- Even supposing, however, that Fred can be said to have given an assurance that the Yard would be passed to his children, it has not been established that David relied on such an assurance to his detriment. David said in cross-examination that he would have set up business on his own if he had known what was going to happen later. In the mid-1980s, however, David would have had good reason to think that the Yard would come to himself and his siblings sooner or later regardless of any assurance in that respect from his father: after all, Fred and Edith made wills providing for such an outcome in 1985. Further, David must have realised quite quickly that the Yard had not been transferred with the Company (since it was paying "rent" for it), yet he chose to remain with the Company. In any case, the Company's accounts for the years to 30 June 1984 and 30 June 1985 each show it to have had a net asset value in excess of the purchase price that David, Freddie, Kevin and Denise paid for it and David rapidly recovered more than his share of the cost of the purchase. For example, he appears to have received remuneration of £69,292 in 1983-1984, £94,725 in 1984-1985, £38,365 in 1985-1986, £25,225 in 1986-1987, £85,763 in 1987-1988 and as much as £201,385 in 1988-1989. In cross-examination, David accepted that he and his siblings had all done very well out of their acquisition of shares in the Company.
- Mr Hunter argued that events relating to the sale of the Company should be analysed on ordinary contractual principles and that, approaching matters in that way, the absence of writing evidencing an agreement for the sale of the Yard has to be fatal to David's claim. While Mr Hunter's submissions on this point are by no means without force, I do not need to arrive at any conclusions on them. Even assuming in David's favour that the contractual context does not prevent him from invoking proprietary estoppel and constructive trust principles, I do not think he has made out his case in this respect. I have not been persuaded that any relevant assurance was given to David in the context of the sale; that any agreement, arrangement or understanding as regards the Yard was reached at this stage; or that David relied to his detriment on any such assurance if one was in fact given.
- David said this in his witness statement:
"I remember one particular occasion when I started a pension fund for me and my brothers and sister. I thought it was the best thing for all of us. One day when we were in the office and dad had found out we were starting a pension he said to me 'what for? You've got the ground, you've got the business, what do you need a pension for? I've never had a pension. Your pension is this lot here, what you've built up the ground and everything'."
- As Mr Hunter pointed out, it is difficult to square this evidence with the documents. They first record pension costs of any significance in 1988-1989. That suggests that David would not have "started a pension fund for [himself] and [his] brothers and sister" before mid-1988, by which time Fred had died. Mr Burden submitted that the conversation would have happened not long before Fred's death, at a time when David had initiated a pension arrangement but no contributions had yet been made.
- It is quite possible that, at some stage, Fred spoke of pensions being unnecessary. I do not, however, accept that anything he may have said on the subject constituted a "clear enough" assurance that David and his siblings were to have the Yard. Moreover, there is no real evidence of David acting to his detriment on any such assurance. Were Mr Burden correct about when any conversation took place, David would hardly have had time to act on any assurance before his father died.
Getting "your deeds back"
- David's witness statement included this:
"Whilst the land was kept out of the company in case things went wrong as the land was just a part of the business at times dad would sign security documents over the land if the company needed it in order to borrow money. I can recall on at least one occasion when the land had been put up for security and it had been paid off dad saying 'right you need to go and get your deeds back' and either me or my brothers would go and get the deeds from the bank."
- Kevin commented in these terms in his witness statement in the present proceedings:
"Whilst I cannot recall precisely when; I was aware that my Dad had used the Fowlea Brook Land as security for a loan which had then been repaid. I had read an article in a newspaper about banks relying on these securities after the loan had been repaid but where a borrower had other loans from that bank leaving the land vulnerable. I was concerned about this. I mentioned this to my Dad who asked us to get the deeds back. I cannot recall the specific words that he used and I would not have paid much notice to them. I do not think that my Dad meant that they were our deeds in the sense of them being mine, David's, Freddie's and Denise's."
- The likelihood, as it seems to me, is that Fred spoke of getting "the" deeds back, not of getting "your" deeds back. In any event, I do not think that whatever Fred said will have amounted to a relevant assurance for proprietary estoppel purposes or an "agreement, arrangement or understanding" such as could found a constructive trust. Still less has it been shown that David relied on such an assurance, agreement, arrangement or understanding to his detriment.
General advice and encouragement
- David referred, too, to general advice and encouragement. For instance, he said in his witness statement:
"[D]ad would give us his advice and would also encourage us all to work hard and develop the business. He would often say things like 'come on lads, lets get this done, its all for your benefit' and 'all of this is for you' things like that. He would say things like this on too many occasions to remember every one, it was just a regular thing, that what we were doing was for the benefit of us all."
- Mr Burden accepted in argument that he could not suggest that such evidence could of itself sustain his proprietary estoppel or constructive trust arguments. He was right to do so. They do not show a relevant assurance, agreement, arrangement or understanding.
- I do not consider David to have proved either proprietary estoppel or a constructive trust. Fred doubtless expected that his children would inherit the Yard sooner or later from himself or Edith. The 1985 wills so provided. However, neither individually nor taken as a whole do the incidents on which David has relied seem to me to have involved a "clear enough" assurance that he and his siblings were to have the Yard or an "agreement, arrangement or understanding" to that effect. To echo Lord Hoffmann in Thorner v Major, nothing that was said by Fred or on his behalf would reasonably have been understood as intended to be taken seriously as an assurance that David could rely on. In any event, it is not apparent that David relied to his detriment on any assurance that may have been given. In the circumstances, I have not been persuaded that repudiation of any assurance would be unconscionable.
The Whitfield Road land
- The conclusions that I have arrived at thus far mean that I can take the Whitfield Road land shortly.
- It has been David's case that the proprietary estoppel or constructive trust for which he has contended encompasses the Whitfield Road land. In the event, I have decided that the proprietary estoppel and constructive trust claims have not been made out. That is sufficient to dispose of the case as regards the Whitfield Road land. Even, however, if I had held David to have a valid proprietary estoppel or constructive trust claim in respect of the Yard, I would not have accepted that it extended to the Whitfield Road land, which it quite distinct from the Yard. Unlike the Yard, from which it is five or six miles distant, it was never used by the Company or the predecessor business and was owned by Fred and Edith jointly rather than Fred alone.
The grandfather clock
- David has claimed to have been given a grandfather clock by his father. He explained in evidence that he was offered the clock when his parents were moving into 2 Bradwell Lane. He said this on the subject in his witness statement:
"We took the clock into No.2 and whilst it would fit it could not be completely assembled as there is a top part to it, that wouldn't fit on. Because of this dad decided he didn't want to keep it any more and asked me if I wanted to have it. I said yes ok I would have it from him and said that I would leave it there for the time being while we were still moving other things. I then never got around to moving it to my house although on occasion dad would say to me 'Dave, are you having that clock?' and I would tell him that I was…. When dad died in 1987 I didn't think that it was right to go and take the clock from mum's house after dad had died, so I left things as they were. It was only after mum died that I thought that it was time that I had the clock that dad had given to me all those years ago, but Denise would not let me take it."
- As, however, Pearson LJ explained in In re Cole  Ch 175 (at 191):
"oral words of gift, or even written words of gift not embodied in a deed or will, are not sufficient to make an effective gift unless there has been or is delivery of possession to the donee. The basic idea is that there must be giving and taking, and if the donor retains possession he has not yet given and the donee has not yet taken…."
- Mr Hunter argued that, on the basis that David's account is accurate, there was never any delivery to him of the grandfather clock and, hence, that title to it cannot have passed. I agree. The claim to the clock must, accordingly, fail.
The Morris lorry
- David's final claim concerns the Morris lorry. His case in this respect is that he bought it in about 1959 when it was in a very bad way and later had it renovated by a Mr Peter Harding. For a time, David said, it was taken to shows, but it was then left at his parents' house for safekeeping.
- David's account receives support from evidence given by Mr Harding and Mr Cotton. Mr Harding confirmed that he did up the lorry at David's request and said that David spoke of the lorry belonging to him and having bought it. Mr Harding noted that his payment records feature "KM", referring presumably to Kevin, but said that he suspected that "this would be because David couldn't make it for some reason". "Certainly," he said, "all my dealings concerning what was to be done with the lorry were with David." For his part, Mr Cotton said that he remembered the day that David bought the lorry and that he helped him store it.
- Kevin said that, as far as he was concerned, the lorry was purchased by Fred and has never belonged to David. In the light, however, of the evidence given by Mr Harding, Mr Cotton and David himself, I accept that it was David who bought the lorry. I shall therefore make an order for the delivery up of the lorry.
The counterclaim against the Company
- Denise has counterclaimed for an order that the Company pay mesne profits. The Company having filed no defence, District Judge Ingram made an order on 29 June 2015 for the Company to pay Denise an amount to be decided by the Court. Mr Hunter told me that, following judgment, he would ask me to order the payment of a specified sum. That seems to me appropriate.
- David has established title to the Morris lorry. That apart, despite Mr Burden's measured and well-constructed submissions, the claim fails and I shall grant declaratory relief along the lines of that sought by the defendants in their counterclaim.
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