At first instance Mr Recorder Cameron found that Ms Liden acquired an interest in the property known as Willow Beck (“Willow Beck”), as a result of a proprietary estoppel.
Requirements of a proprietary estoppel
Proprietary estoppel can be difficult to define. The Judge referred to Snell on Equity (32nd edition) which states: “There is no definition of proprietary estoppel which is both comprehensive and uncontroversial”. However, it is generally accepted that the main elements of proprietary estoppel are:
- A land owner induces, encourages or allows a person to believe that he has or will enjoy some right or benefit over the owner’s property;
- In reliance upon this belief, the person acts to his detriment to the knowledge of the owner; and
- The owner then seeks to take unconscionable advantage of the person by denying him the right or benefit which he expected to receive.
Facts of the case
Mr Burton met Ms Liden when he was working in Sweden. At the time he was married, but separated. Mr Burton and Ms Liden began a relationship and rented a property together in Sweden from 1995 to 2001.
Mr Burton owned Willow Beck jointly with his wife. When he divorced in 2002 the Property was transferred into his sole name. As part of the divorce settlement he was required to pay his wife the sum of £37,500. He funded this by way of a mortgage. It should be noted that there was an earlier mortgage and later an advance for business purposes. At the time of the trial the remaining mortgage was in the region of £98,000 and the property was on the market for £435,000.
Mr Burton and Ms Liden returned to the UK and from 2001 until 2013 Ms Liden lived with Mr Burton in Willow Beck. Ms Liden’s position was that she paid Mr Burton £500 per month as a contribution towards running and maintaining Willow Beck.
There was a great deal of disparity between the oral evidence of the parties. Ultimately the Court preferred Ms Liden’s evidence which was:
- Her income was from a Swedish pension;
- During his divorce proceedings Mr Burton was concerned that he may not be able to afford to keep Willow Beck and Ms Liden agreed to help out. The initial discussion about this was before they left Sweden;
- Mr Burton represented to Ms Liden that the Property was expensive to run and that they could only afford to live there if she made some contribution;
- Against this backdrop Ms Liden made payments of £500 per month, which was roughly half of her pension;
- At the outset Ms Liden was unaware of the mortgage. She enquired of Mr Burton how the money was spent and he described it as rent and other outgoings. When Ms Liden challenged the word “rent” Mr Burton referred to it as money “towards the house”;
- In 2002 Ms Liden found out about the mortgage and Mr Burton again agreed that it was “towards the house”.
The Judge also accepted and found it to be relevant that Mr Burton told Ms Liden on a number of occasions that they would be together for the future, that Willow Beck was their home and that he would look after her forever. It was clear from Ms Liden’s evidence that she relied upon Mr Burton’s assurances and she would not have made the payments otherwise.
Ultimately the Judge found that:
- Mr Burton had induced, encouraged or at the very least allowed Ms Liden to believe she was acquiring an interest in the Property;
- Ms Liden’s monthly payments were made in reliance upon Mr Burton’s assurances;
- it would be unconscionable for Mr Burton to deny Ms Liden an interest in the Property;
- A sum of £33,552 was a fair reflection of Ms Liden’s contributions. This sum was arrived at on the basis of £200 per month of the £500 that Ms Liden was paying and resulted in a principle sum of £28,800 together with interest of £4,752.
Mr Burton appealed this decision arguing that there was insufficient evidence for a finding of proprietary estoppel. He was given permission to appeal on the understanding that he was not entitled to challenge the Judge’s factual findings. This meant that the issues for consideration were whether the Judge:
- wrongly applied the law to the established facts; and/or
- incorrectly exercised his discretion when giving effect to the equity.
The appeal failed. The Judge found that the first instance Judge had not erred in concluding that it was reasonable for Ms Liden to believe that her payments were made in return for an interest in the house that they were and would in the future be sharing. The assurances made by Mr Burton were sufficiently clear to find a proprietary estoppel and £200 a month over many years was a substantial enough sum of money to amount to a detriment. It was also found that the return given by the Judge to Ms Liden for her contribution was “well within” the finding that he was entitled to make.
Cases of proprietary estoppel often come to light when the landowner passes away. For example X asked Y to give up a successful career in order to care for them. X reassures Y that if they do so X’s property will be bequeathed to Y. X then passes away leaving the property to someone else in their will.