An application for a declaration that the claimant was estopped from resiling from a redemption statement which did not include interest on the sum required to discharge charging orders has failed in Brierley v Otuo and others [2022] EWHC 1530 (Ch).
The claimant and first defendant were former partners in a property development business in London. The second defendant was the wife of the first defendant. A series of claims between the parties between 2012 and 2019 were ultimately decided in favour of the claimant and various cost orders were made against the defendants, which were secured by charging orders on their interests in residential properties in Putney.
In 2019, orders for sale of the properties were made, with the proceeds of sale to be applied to pay the expenses of sale, to discharge any prior legal charge and to reduce the defendants’ indebtedness to the claimant, with any surplus to be repaid to them. The parties then agreed terms for a payment to release one of the Putney properties and the claimant was subsequently ordered to provide a redemption statement for all indebtedness due, to provide the defendants with the opportunity to redeem the charges on the other Putney property.
A redemption statement filed and served in October 2021 stated that the total sum to redeem the charges was £246,336.64. A separate sum was stated as interest due of £126,655.64, but this was not included in the total sum to redeem. The claimant refused to respond to a request for information by the first defendant that he was only seeking payment of the figure of £246,336.64, but he repeated the figure in a letter to the court, copied to the first defendant. The first defendant sought to argue that the claimant was estopped from seeking the interest.
An estoppel by convention may arise where parties to a transaction act on an assumed state of facts or law, the assumption being shared by them both or made by one and acquiesced in by the other. The party alleging the estoppel must have relied upon the common assumption in connection with a mutual dealing between the parties and suffered some detriment so that it would be unjust for the party alleged to be estopped, to assert the true position Tinkler v Commissioners for HM Revenue and Customs [2021] UKSC 39.
The claim failed. The sequence of events concerning the redemption figure was sufficient to give rise to the common assumption that the total sum required to redeem the charges was £246,366.64, but the defendants had not relied on that assumption. The first defendant had also relied on his own views as to the likely success of challenges to costs claims still to be determined. The exchange of pleadings in those claims were not mutual dealings on the basis of the common assumption. The defendants were also not able to show detriment: they failed to prove that they would have been able to borrow additional sums to cover the interest payment and their claim that they could not now challenge the interest calculations was incorrect: they had in fact done so.
Louise Clark is a property law consultant and mediator