Possession claim — Use of site by family company — Circumstances of relocation to site — Whether proprietary estoppel preventing termination of use — Basis for continued use — Claim dismissed
The claimant and the first defendant were brothers and equal shareholders in the second defendant haulage company. The company operated from a yard comprising land in the shared ownership of the claimant and the first defendant and part of a site owned solely by the claimant. The business had begun as a family partnership. It had originally been located on land owned by the parties’ family but had relocated on the suggestion of the local planning authority, which had obtained a court order restricting the scale of the operations at the original site. Upon relocating, the family members entered into an agreement under section 52 of the Town and Country Planning Act 1971, pursuant to which they carried out development works to improve the new site at a cost of £38,000, including the laying of hardstanding and the construction of a new entrance from the claimant’s land.
The brothers subsequently became estranged. The claimant wished to wind up the company and redevelop the haulage yard for residential use, but the first defendant wanted the company to stay in business. The claimant served notice on the company requiring it to deliver up possession of his part of the yard within the year. The defendants disputed the claimant’s right to possession, and the latter sought a declaration that the company’s right to occupy would end on expiry of the notice period. The defendants contended that the claimant was estopped from terminating the company’s use of the land.
Held: The claim was allowed.
The circumstances in which the company had come to have the use of the claimant’s land gave rise to a proprietary estoppel in its favour. The claimant’s willingness to provide the new access, and to allow his land to be used as part of the new yard, underlay the collective decision by the family to move to the new premises. Access from the highway was fundamental to the relocation, and no alternative access had been available. Although there had been no specific agreement at the time as to the basis upon which the company was to use the claimant’s land, he had made it available and had failed to indicate that its use would be merely temporary. It would have been unconscionable if, having permitted the company to commit itself to the relocation and to expend the necessary funds the claimant had suddenly insisted upon terminating the company’s use, relying upon the absence of any written agreement.
However, the parties could not have imagined that the right of occupation would be perpetual. The right would terminate if the company ceased to carry on the haulage business, or ceased to operate from the yard, or could no longer realistically provide a living for both brothers, provided that the claimant did not precipitate such a state of affairs by, for instance, exercising his shareholder and director rights to deadlock the continued functioning of the company. On the other hand, the mere fact that the claimant ceased to work for the company would not provide grounds for the company losing its use of the land. In the circumstances of the case, the equity created by the relocation was satisfied by the company continuing to have the use of the access, and possession would be granted in favour of the claimant in respect of the remainder of his land.
Kenneth Munro (instructed by Hewitsons, of Cambridge) appeared for the claimant; Amanda Michaels (instructed by Dawbarns Pearson, of Wisbech) appeared for the defendants.
Sally Dobson, barrister
