Proprietary estoppel — Property bought as family home — Part of purchase price provided by plaintiff — Right to live in granny room for life — Arrangement terminated — Plaintiff claiming equity in property — Action to reclaim whole of contribution to purchase price — High Court ordering defendants to pay plaintiff full contribution plus interest — Court of Appeal holding that judge’s order oppressive — Case remitted to judge to decide extent of equity
The plaintiff was 75 years old and in a frail state of health. The defendants are his son and his wife. In 1987 the plaintiff was the tenant of a council house in Finchley, London. At that time the defendants and their children were living in rented accommodation in Bath. The plaintiff had intimated to his son that under his will the son stood to receive about £20,000. An arrangement was entered into whereby the defendants would purchase a house known as 32 Rowley Road, St Marychurch, Torquay, part of the purchase price (£33,950 in total) being provided by the plaintiff from his savings. In return the plaintiff was to have a `granny room’ rent free for the rest of his life.
The arrangement came to an end in 1988 when there was a disagreement between the parties which made it impossible for them to continue living in the same house. The plaintiff was eventually provided with council accommodation where he had security of tenure for life. He did not have to pay rent since he had been granted housing benefit by the council.
The plaintiff brought an action in the High Court to recover his money. The judge held that the plaintiff had established a right to relief in equity to compensate him for the loss of his expectation that during his lifetime he would be able to live in the property. It was ordered that the defendants should pay him the sum of £33,950 with interest. The defendants appealed.
Held The appeal was allowed.
1. The court had to look at the circumstances in each case to decide in what way the equity could be satisfied and in this case the only way in which the equity could be satisfied was by a payment of money by the defendants to the plaintiff. The court should not award the plaintiff a greater interest in law than was envisaged by the parties: see Dodsworth v Dodsworth (1973) 228 EG 1115; Crabb v Arun District Council [1976] Ch 179.
2. In the present case the greatest interest in the property envisaged by the parties for the plaintiff was the right, living as part of the family, to occupy the granny room rent free for the rest of his life.
3. In deciding how that equity should be satisfied so as to do justice to the plaintiff the court had to take into account the circumstances of the defendants so as not to produce an order which would be oppressive to the defendants; see Dodsworth.
4. The judge’s order was oppressive to the defendants since they could only satisfy the order by selling the property when it was the original intention of all three parties that it should be bought as a family home albeit with a granny room to be occupied rent free by the plaintiff for life. Therefore it had to be set side.
5. The plaintiff had only been provided with accommodation at the public expense because he had parted with his savings to buy the disputed property. Had he retained the savings he would not have been entitled to housing benefit.
6. The case was remitted back to the judge as there was insufficient evidence for the court to decide the extent of the plaintiff’s equity.
Wayne Clark (instructed by Woolcombe Beer Watts, of Torquay) appeared for the plaintiff; Richard Buswell (instructed by Hooper & Wollen, of Torquay) appeared for the defendants.