Defendant successfully tendering for tenancy of farm – Defendant going into occupation – No signed written agreement – Claimant bringing possession proceedings – Judge granting claimant summary judgment – Defendant appealing – Whether proprietary estoppel or constructive trust – Appeal dismissed
H owned a farm, which he decided to let for a period of ten years. The defendant was successful in his tender for the tenancy. Solicitors were appointed on each side and a contract of tenancy was drafted. H permitted the defendant to go into occupation of the farm and take over care of the flock. The defendant thereafter looked after the flock and a sum was agreed between the parties as representing a fair valuation of the flock.
In November 1995 the defendant sent his signed part of the agreement to H’s solicitors. In response to a request from H’s solicitor, the defendant sent a cheque, which included an amount for six months’ rent in advance. H died before signing his part of the contract.
The claimant was H’s sister and administratrix. She brought possession proceedings against the defendant. The defendant contended that, as a result of his negotiations with H, he had taken over responsibility of the flock, carried out work on the farm and paid the first installment of rent. As a consequence a proprietary estoppel had arisen, and the claimant was thereby estopped from claiming possession.
At a county court hearing it was accepted by the defendant that the agreement was governed by section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. It was common ground that a contract that did not conform with section 2(1), was void. The judge found that the negotiations were all carried out “subject to contract” and, as both parties had not signed a single tenancy agreement, there was no contract between them.
Consequently, the judge exercised his powers under CPR 24.2 (a)(ii) and granted summary judgment in favour of the claimant on the ground that the defendant had no real prospect of successfully defending the claim. The defendant appealed. Relying upon Yaxley v Gotts [1999] EGCS 92, it was submitted that an agreement, although void and unenforceable under section 2(1), was still enforceable on the basis of a constructive trust under section 2(5) of the 1989 Act. In addition, the defendant submitted that H’s solicitor had concluded the contract on H’s behalf.
Held: The appeal was dismissed.
The circumstances of the instant case did not give rise to a proprietary estoppel in favour of the defendant, let alone one that would also create a constructive trust for his benefit: Yaxley distinguished. The requirement to take over and care for the flock was made known to the defendant before he ever entered into negotiations for the tenancy. (That was an ordinary incident of the granting of a tenancy of a Welsh hill farm.) The defendant was always aware that the entire negotiation was being carried on “subject to contract”. There was no evidence that H had ever given his solicitor special authority to conclude the contract on his behalf.
David Phillips QC and Richard Griffiths (instructed by David Prosser & Co, of Bridgend) appeared for the appellant; Martin Rodger (instructed by G Huw Lewis, of Neath) appeared for the respondent.
Sarah Addenbrooke, barrister
