Son entitled by virtue of contributions to equitable interest in one-quarter of house purchased by father–House occupied by son and family–House vests in step-mother after father’s death–Claim by her that son shall pay three-quarters of a fair rent, failing which the house should be sold–Held that son and step-mother were tenants in common and one tenant in common cannot demand rent from another–Also held that step-mother was estopped from defeating by sale son’s reasonable expectation of living in house as his home
This was an
appeal by Frederick William Jones from a decision of Deputy Judge
Sebag-Montefiore at Lowestoft County Court on October 24 1975, in favour of an
application by Mr Jones’s stepmother, Alice Eva Jones, that he should pay rent
in respect of a house at Blundeston, Suffolk, in which he had a one-quarter
equitable interest or, in default, that the house be sold.
J G
Ross-Martyn (instructed by Mears, Hobbs & Durrant, of Lowestoft) appeared
for the appellant, and J H G Sunnucks (instructed by Lucas & Wyllys, of
Lowestoft) represented the respondent.
Giving
judgment, LORD DENNING MR said that old Mr Jones was a scrap merchant who
carried on business at Kingston upon Thames. His two sons were partners in the
business. He did reasonably well. Like other merchants he conducted his
business in pound notes and his accounts did not reflect the true state of the
business. He owned three or four houses in Kingston. He lived in one himself
and each of his sons lived in one, too. His first wife died and he married his
second, Alice, in April 1964. He made a will on October 25 1964 under which he
gave his new wife his share in the partnership business. He gave his son George
the house in which George was living, and his son Frederick the house in which
Frederick was living. He gave the remainder of his property to his new wife. So
he made fair provision for his new wife and for his sons. About 1967 there was
a compulsory purchase order and the local authority took over all his
properties. The scrap business was given up. Old Mr Jones then went up to
Blundeston in Suffolk and bought a house, ‘St Alban’s,’ in which he lived with
his new wife. He was then concerned about his son Frederick who had been left
behind at Kingston. He wanted Frederick, with his wife and children, to go up
to Blundeston. He found a house there, ‘Philomena,’ which was suitable for
them, and Frederick and his wife went up to see it. They liked it very much, so
the father bought it for £4,000. Frederick gave up his job at Kingston and went
with his wife to live at Blundeston. Frederick made two payments of £500 each
to his father towards the cost. But the house was taken in the father’s name
and remained in his name. The son believed that the father had given it to him
and the judge accepted his evidence about that. The judge had said, ‘. . . But
there is a ring of truth about the account of the transaction he had with his
father. His father did not intend a gift of ‘Philomena’ to him lock, stock and
barrel.’
The son said
that he gave his father the first £500. The trial judge said, ‘His father did
not resist the payment of £500 to him.’
When Frederick said ‘What about the money for the property?’ his father
replied ‘It is your place.’ He also said
‘This is because I owe you a lot.’ The
son then paid the father a second £500 and the father then said of the house
‘So far as I am concerned, it is yours.’
When Frederick or his wife asked from time to time about the property
the father said ‘I don’t know what you are worrying
trusted his father and never asked for a receipt. There were two other
witnesses who supported the view that the father had said to the son that it
was to be the son’s house. At all events on this assurance the son and his wife
and family went into the house. They had not paid any rent to the father, but
the father said they must pay the rates, and they did so. Things went on in
that way from 1968 until February 1972, when old Mr Jones died. Thereupon the
stepmother claimed that the house, ‘Philomena,’ was hers. She took out letters
of administration with the will annexed and by an assent dated August 18 1972
got the house, ‘Philomena,’ vested in her. She also had the house, ‘St
Alban’s,’ in which she had lived with old Mr Jones when he was alive, and other
property. When she had ‘Philomena’ vested in her she said that the son,
Frederick, ought to pay her rent. When he did not do so she gave him notice to
quit and took proceedings for possession in the county court.
After hearing
the evidence the judge found that £1,000 had been given by the son to the
father when the house was acquired. As the house cost £4,000 altogether, the
judge thought that the son in effect contributed £1,000 towards the £4,000. On
that account, so far as any equitable interest in the property was concerned,
he held that it was to be one-quarter for the son and three-quarters for the
stepmother. The judge made a declaration accordingly, but he also went on to
say that he was not going to order the son out of possession. He said, ‘I am
not disposed to make an order for possession, because it would be inequitable
to do so. I find that the plaintiff, the stepmother, has a three-quarters share
in the value of ‘Philomena,’ and the defendant (Frederick) a one-quarter share.’ He added ‘A proper arrangement would be for
the defendant to pay some rent.’ That
was the end of the first action, which was in 1973. After that decision the
stepmother brought another action. In it she wanted some payment in the nature
of rent, which had never been fixed. She said that a fair and reasonable rent
for the whole house would be £10 a week, and she wanted three-quarters of
it–£7.50 a week. If it was not paid, she asked that the house be sold. The
judge, at that second hearing, came to the conclusion that he was bound by the
previous case of the three-quarters to one-quarter division. He decided that
the only thing he could do was to ask the rent officer to fix a fair rent, and
he ordered the son to pay a rent of 75 per cent of that figure, with arrears
right back to the time of the assent on August 18 1972. If Frederick did not
pay this amount, then the house was to be sold and Frederick evicted.
The appeal
raised some interesting points. First of all, whatever doubts one might have
about the first decision of the judge, whether it was really right to hold that
the stepmother had a three-quarters interest, or whether she had any beneficial
interest, the court should nevertheless not disturb the decision of the judge
at the first hearing. It was not appealed against, and no appeal was now open.
So the court must hold that the stepmother had a three-quarters proprietary
interest in the house ‘Philomena,’ and Frederick a one-quarter interest. But
the question was whether the son could be compelled to pay rent to her, or
whether she could turn him out of the house if he did not.
Regarding the
claim for rent, it was quite plain that these two people were in equity tenants
in common, having a three-quarters to one-quarter share respectively. One was
in occupation of the house, the other was not. The common law had stated
clearly that one tenant in common was not entitled to rent from another tenant
in common, even though that other occupied the whole. That appeared from McMahon
v Burchell (1846) 2 Ph 127. Of course, if one of the tenants let any
premises at a rent to a stranger and received the rent, there would have to be
an account. But the mere fact that one tenant was in possession and the other
out of possession did not give the one who was out any claim for rent. It did
not do so in the old days of legal tenants in common. Nor did it in modern
times of equitable tenants in common. In Bull v Bull [1955] 1 QB
234 he (his Lordship) had said at p 239, ‘. . . The son, although he is the
legal owner of the house, has no right to turn his mother out. She has an
equitable interest which entitles her to remain in the house as a tenant in
common with him until the house is sold.’
As between tenants in common, they were both equally entitled to
occupation and one could not claim rent from the other. Of course, if there was
an ouster, that would be another matter. Or if there was a letting to a
stranger for rent, that would be different. But there could be no claim for
rent by one tenant in common against the other, whether at law or in equity.
The second
point was the order for sale. Here came into play the doctrine of proprietary
estoppel. It had been considered by the Appeal Court in the cases of Inwards
v Baker [1965] 2 QB 29 and Crabb v Arun District Council
[1975] 3 WLR 847. It was quite plain that the principles of these cases applied
here. Old Mr Jone’s conduct was such as to leave the son Frederick reasonably
to believe that he could stay there and regard ‘Philomena’ as his home for the
rest of his life. On the basis of that reasonable expectation the son gave up
his work at Kingston upon Thames and moved to Blundeston. He paid the £1,000,
too, in the same expectation. He did work on the house as well. It was all
because he had been led to believe that his father would never turn him out of
the house. It would be his family’s home for the rest of his life. He and the
rest of the family thought that the father would alter his will or give over
the house to the son. The father did not do so, but nevertheless he led the son
to believe that he could stay there for the rest of his life. On the two cases
it was clear that old Mr Jones would be estopped from turning the son out.
After his death his widow, the stepmother, was equally estopped from turning
him out. Similarly she was not entitled to order the property to be sold, nor
any payment to be made by the son to her pending sale. Even though there was an
implied trust for sale, nevertheless the courts would not allow it to be used
so as to defeat the purposes contemplated by the purchase. That appeared from Bedson
v Bedson [1965] 2 QB 666: see his Lordship’s judgment at p 679 and
Russell LJ at p 697-8. No order for the sale of the property should be made
because that would defeat the very purpose of the acquisition–that the son
would be able to live there for his life and remain in it as his home.
The two
doctrines went hand in hand to show that no order should be made so as to
disturb the son in his possession of the house. Nor should he be made to pay
anything for staying there. The ultimate result of the case was that the son
had a proprietary interest of a one-quarter share in the house. He was able to
stay there for his life by virtue of his interest in it, and the stepmother was
estopped from turning him out. Nor could it be sold without his consent. The
appeal should be allowed and an order made accordingly.
ROSKILL and
LAWTON LJJ agreed.
