The Court of Appeal is considering whether the remedy of proprietary estoppel is available to a tenant who relies on a landlord’s oral agreement to lease, which is void under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.
The case centres on a claim by Keith Yaxley that he was the owner of the ground-floor flat in a three-storey building in Vicarage Road, Cromer, Norfolk. The freehold of the building was bought by Alan Gotts in 1991 for £65,000.
Yaxley said Gotts agreed to grant him a long lease of the ground-floor flat in return for managing and refurbishing the building at his own expense.
Relying on the agreement, Yaxley completed the refurbishment of the first and second floors by March 1992 and let the flats to tenants. He converted the ground-floor flat into two; treating them as his property under the terms of the agreement he then put tenants in. The conversion work included knocking down an existing wall, erecting partitioning, installing new kitchens and bathrooms and carrying out extensive plumbing and electrical work to each flat.
Gotts refused to acknowledge Yaxleys title to the ground-floor flat and early in 1995 excluded him from the property. Yaxley commenced court proceedings.
In September 1997 Downes J ruled in the Norwich County Court that Yaxley was entitled to ownership of the ground-floor flat and to the rent from the lettings from August 1992. He ordered Gotts to execute a 99 year lease in favour of Yaxley or pay him a sum equivalent to the value of such a lease.
On appeal, Gotts’ counsel George Laurence QC argued that the judge should have held that the oral agreement was void, because section 2 of the 1989 Act provides that a contract for sale or other disposition of an interest in land can only be made in writing. He maintained that the doctrine of proprietary estoppel could not operate to give effect to an agreement rendered void by section 2 of the LPA. The judge should have held that Yaxley was only entitled to payment for the work that he had carried out refurbishing and managing the properties.
The hearing continues.
Yaxley v Gotts and another, Court of Appeal (Beldam, Robert Walker & Clarke LJJ), 27 May 1999
George Laurence QC and Louise Davies (instructed by Bircham & Co) appeared for the appellant; Anthony Allston (instructed by Hansell Stevenson, of Norwich) appeared for the respondent.
PLS News 2/6/99
