Estoppel and unconscionability

In Joyce v Epsom & Ewell BC [2012] EWCA Civ 1398, the Court of Appeal were faced with a not dissimilar case to the classic Crabb v Arun DC [1976] 1 Ch 179, at least in so far as it was a claim to an easement against a local authority by way of proprietary estoppel.

Mr Joyce’s predecessor in title, a Mr Holborn, lived next door to two properties which Sainsburys included in a planning application to build a store on land to the rear.  Although the essence of the application changed over time, there were some constants: Mr Holborn objected to the planning proposal but proposed the construction of a rear service road to his and other properties; he also offered to buy some of the land (a six foot strip) on which the two properties to be demolished lay so that he could put a garage there to take advantage of the rear access; his desire to buy the strip remained intact; the council effectively assented to that in the section 106 agreement between themselves and Sainsburys; there was then a meeting between Mr Holborn and Sainsburys at which it was agreed to extend his fence line to three metres and that the council had no problem with that; Mr Holborn then constructed a driveway to a garage (which he moved to the end of the three metre strip).

There we have it: the dispute was over the three metre access point off the lane owned by the council. MrJoyce bought the property in 2007 and the council sought to charge him £5,000 for the formal grant of the access.

At trial, the judge found that the council had clearly encouraged and allowed Mr Holborn to believe he would have a right of access; and there was ample evidence of reliance and detriment. This seemed, then, a relatively clear cut case. But, the judge held against Mr Joyce because the council did not know that Mr Holborn was erecting the garage or constructing the driveway. There was also no unconscionability because the council Mr Holborn/Joyce had not been prevented from using the right of way.

Frankly, the appeal was always going to succeed but it is an object lesson about the way unconscionability works in proprietary estoppel (see our notes of Yeoman’s Row v Cobbe and Thorner v Majors). As was submitted to the CA: “The correct question for the judge to have asked himself … in effect came to this: would it have been unconscionable for the Council, having encouraged Mr Holborn to think that he was getting a free right of way, to wait until he acted to his detriment in reliance on that encouragement and then resile by demanding money for the formal grant of the right?  The answer … has to be ‘yes'”.

Davis LJ, first, disagreed with the judge that the council had no knowledge of Mr Holborn’s acts of detriment – the inference from the documents was that they did know it was his intention and that he would have to undertake some works to make good that intention.  Even so, and this is a key point, whether or not the council were aware was not particularly significant as this was a case of encouragement – they knew what he intended to do.  Thus, cases of encouragement are different (another reason why the synthesis of the different types of estoppel into a single formula is problematic – as to which, see Lord Walker’s retraction of his previous position in Cobbe at [53]).  On unconscionability, Davis LJ rightly rejected the judge’s approach – this was as clear an example of unconscionability as possible, in truth, and the fact that they hadn’t stopped him from using the access point was just not relevant; the fact that they were seeking to charge £5,000 was the point.

My view (fwiw) is that, just as exceptionality is a check on a decision in proportionality cases (as Lord Neuberger put it in Scott), unconscionability is a check on proprietary estoppel.  In the normal course of events, if you pass the criteria, it will be unconscionable conduct by the Defendant – this was, I think, the point made by Lord Walker in Cobbe: “If the other elements appear to be present, but the result does not shock the conscience of the court, the analysis needs to be looked at again”; equally, unconscionable conduct, as Lord Scott put it in Cobbe, “does not excuse the claimant from showing that the elements of estoppel are satisfied”.

Mr Joyce got his right, but limited to what was required to access a single dwelling (so a pyrrhic victory, as it appears he wanted to develop the property).

Posted in Housing law - All, Trusts and Estoppel.

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