Agricultural holdings –– Agricultural tenancy –– Proprietary estoppel –– Whether agricultural tenancy protected by Agricultural Holdings Act 1986 defeasible by proprietary estoppel –– Res judicata –– Injunction –– Whether earlier injunctive and damages proceedings estopping hearing of claim to determine entitlement to possession of land –– Measure of damages
On 1 July 1997 the claimant (B) acquired from W, another developer, 38 acres of agricultural land, with the benefit of a planning permission, for £2.5m. W had earlier, in 1993, made an agreement with the defendant (C) granting C an agricultural tenancy of that land. On 28 July 1997, with a view to commencing development, B’s contractors entered the land. Only then did B learn of C’s claim to an agricultural tenancy.
On 7 August 1997 C started proceedings against B claiming damages, including aggravated damages, for trespass, plus an injunction restraining B from entering the land and requiring the removal of its materials and equipment. On the following day, C applied for an interlocutory injunction to restrain B from continuing work on the land. By a counterclaim, B sought the rescission of the 1993 agreement. It was common ground that: (i) the agricultural tenancy held by C was protected by the Agricultural Holdings Act 1986; (ii) W had intended to grant to C a Gladstone v Bower ([1960] 2 QB 384) tenancy for the period 1 November 1992 to 31 November 1993; but (iii) C’s delay in signing the agreement meant that by June 1993 less than 12 months of the intended term remained. The county court judge ordered that C recover from B damages for trespass (subsequently agreed at £1,200), not including aggravated damages. However, he found that C had acted in a deceitful manner by avoiding signing the 1993 agreement and by encouraging W to act to its detriment by omitting to take steps to end the tenancy. He accordingly held that C was not entitled to any equitable relief, and he dismissed the claim for an injunction. B’s counterclaim was also dismissed.
Eventually, B served a valid incontestable notice to quit that effectively terminated any tenancy held by C on 10 June 2000. Meanwhile, in October 1997, B commenced the present proceedings, seeking a declaration that it was entitled to occupy the land and proceed with its development. It contended that a proprietary estoppel had arisen in its favour as a result of C’s conduct, and that the county court judge’s order had left it uncertain whether B was entitled to enter the land and continue with its development. C counterclaimed for damages for breach of covenant for quiet enjoyment and for trespass, contending that a tenancy under the 1986 Act could not be defeated by the doctrine of proprietary estoppel.
Held: The claim was allowed and counterclaim dismissed. B’s claim to an equity by way of proprietary estoppel was not barred (res judicata) by the county court proceedings. An issue estoppel arose as a result of the award of damages, but the relevant category of estoppel was that considered in Henderson v Henderson (1843) 3 Hare 100, and certain issues, such as who was entitled to possession of the land, were not determined. Nothing in the 1986 Act prevented B from asserting its claim (based upon proprietary estoppel as a result of C’s conduct), either positively, by claiming the right to use the land during what would otherwise have been the subsistence of the tenancy, or negatively, in denying C’s damages in respect of such user. B was entitled to possession of the land, by reason of the proprietary estoppel, between October 1997 and June 2000. If C had been entitled to damages, he would have been entitled to the rental value of his tenancy between October 1997 until its expiry in June 2000.
The following cases are referred to in this report.
Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd 1982] QB 84; [1981] 3 WLR 565; [1981] 3 All ER 577; [1982] 1 Lloyd’s Rep 27, CA
Arnold v National Westminister Bank plc [1991] 2 AC 93; [1991] 2 WLR 1177; [1991] 3 All ER 41; [1991] 2 EGLR 109; [1991] 30 EG 57
Attorney-General v Blake [2001] 1 AC 268; [2000] 3 WLR 625; [2000] 4 All ER 385, HL
Carr-Saunders v Dick McNeil Associates Ltd [1986] 1 WLR 922; [1986] 2 All ER 888; (1986) 53 P&CR 14; [1986] 2 EGLR 181; 279 EG 1359
Elsden v Pick [1980] 1 WLR 898; [1980] 3 All ER 235; (1980) 40 P&CR 550; [1980] 1 EGLR 4; 254 EG 508, CA
Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630; [1965] 2 WLR 1059; [1965] 2 All ER 4; [1965] 1 Lloyd’s Rep223, CA
Gladstone v Bower [1960] 2 QB 384; [1960] 3 WLR 575; [1960] 3 All ER 353; (1980) 58 LGR 313, CA
Harrow London Borough Council v Donohue [1995] 1 EGLR 257
Henderson v Henderson (1843) 3 Hare 100
Inverugie Investments Ltd v Hackett [1995] 1 WLR 713; [1995] 3 All ER 841; [1996] 1 EGLR 149; [1996] 19 EG 124
Johnson v Gore Wood & Co [2001] 2 WLR 72; [2001] 1 All ER 481
Johnson v Moreton [1980] AC 37; [1978] 3 WLR 538; [1978] 3 All ER 37; (1978) 37 P&CR 243; [1978] 2 EGLR 1; 247 EG 895, HL
Keen v Holland [1984] 1 WLR 251; [1984] 1 All ER 75; (1984) 47 P&CR 639; [1984] 1 EGLR 9; 269 EG 1043, CA
Laurence v Lexcour Holdings Ltd [1978] 1 WLR 1128; [1978] 2 All ER 810
Lawson v Hartley-Brown (1995) 71 P&CR 242
Ministry of Defence v Ashman (1993) 66 P&CR 195; [1993] 2 EGLR 102; [1993] 40 EG 144; (1993) 25 HLR 513
Ministry of Defence v Thompson [1993] 2 EGLR 107; [1993] 40 EG 148; (1993) 25 HLR 552
Penarth Dock Engineering Co Properties Ltd v Pounds [1963] 1 Lloyd’s Rep 359
SCF Finance Co Ltd v Masri (No 3) [1987] QB 1028; [1987] 2 WLR 81; [1987] 1 All ER 194, CA
Short Bros (Plant) Ltd v Edwards [1979] 1 EGLR 5; (1978) 249 EG 539
Solle v Butcher [1950] 1 KB 671; [1949] 2 All ER 1107; (1949) 66 TLR 448
Specialist Group International Ltd v Deakin (No 1) [2001] EWCA Civ 777
Swordheath Properties Ltd v Tabet [1979] 1 WLR 285; [1979] 1 All ER 240; (1978) 37 P&CR 327; [1979] 1 EGLR 58; 249 EG 439, CA
Whitwham v Westminster Brymbo Coal & Coke Co [1896] 2 Ch 538
This was the hearing of a claim by the claimant, JS Bloor (Measham) Ltd, and of a counterclaim by the defendant, Eric Myles Calcott, in proceedings by the claimant for a declaration against the defendant.
Keith Rowley QC (instructed by Needham & James) appeared for the claimant; Sam Aaron (instructed by M&S Solicitors) represented the defendant.
Giving judgment, HART J said:
1. This action has an unusual history, and raises points of some interest on the law of issue estoppel and on the measure of damages for trespass.
2. The claimant (Bloor) is a property development company. On 1 July 1997 it completed a contract to purchase, for £2.5m, some 38 acres of land situated at Brookfield Way, Lutterworth, Leicestershire, from Wheatcroft & Sons Ltd (Wheatcroft), another developer. The land was agricultural land, but had the benefit of a planning permission, and Bloor had already entered into agreements with adjoining owners for the comprehensive development of the site, as well as a section 106 agreement with, inter alia, Harborough District Council and Leicestershire County Council. Its purchase of the land from Wheatcroft was with vacant possession.
3. Bloor’s contractors went onto the site on 28 July 1997. It then emerged that the defendant in these proceedings (Mr Calcott) was claiming a tenancy of the land. It was implicit in that claim that the tenancy, if there was one, would be protected under the provisions of the Agricultural Holdings Act 1986. Mr Calcott almost immediately (on 7 August 1997) started proceedings in Burton-upon-Trent County Court, to which Bloor was made the defendant, claiming damages (including aggravated damages) for trespass, and an injunction restraining Bloor from entering onto the land and requiring Bloor to remove its materials and equipment therefrom. On the following day, Mr Calcott issued an application, returnable on 21 August 1997, for an interlocutory injunction to restrain Bloor from continuing work on the land pending trial. On 13 August 1997 Mr Calcott applied ex parte to the court and obtained injunctive relief pending the inter partes hearing on 21 August. That hearing duly commenced before Judge Pugsley, who, appreciating that the one-hour estimate was inadequate, directed that, instead, the trial of the action should take place before him in the following week after the August bank holiday weekend.
4. The trial of the action thus took place on 26, 27 and 28 August, the closing submissions of Mr Calcott’s counsel (Mr John West) not then having been completed. Further argument took place on 17 September, when judgment was reserved. Judgment was delivered on 3 October 1997.
5. It was, or became, common ground during the course of the hearing that the effect of an agreement dated 11 June 1993 (the 1993 agreement) made between Wheatcroft and Mr Calcott had been to make him an annual tenant of the land. That was a consequence of the application of the provisions of the Agricultural Holdings Act 1986. The 1993 agreement had purported to grant Mr Calcott a tenancy for a 13-month term from 1 November 1992, expiring on 31 November 1993. Had the 1993 agreement been entered into at or before the commencement of the term, it would have fallen outside the provisions of the 1986 Act: see Gladstone v Bower [1960] 2 QB 384. Granted, as it was, in June 1993, a tenancy for less than a year was created, with the result that it fell within section 2(2)(a) of the 1986 Act: see Keen v Holland [1984] 1 WLR 251*. In the proceedings, Bloor claimed rescission of the agreement on the ground that it had been entered into under a mutual misapprehension as to its effect. By its pleading, Bloor claimed that rescission should be on terms providing compensation for Mr Calcott’s loss of profit. To Mr Calcott’s claim for injunctive relief, Bloor pleaded that common law damages for trespass were an adequate remedy, and that an injunction should be refused on the ground of Mr Calcott “not coming to equity with clean hands and having delayed in asserting a tenancy as long as possible”.
* Editor’s note: Also reported at [1984] 1 EGLR 9
6. The order made by Judge Pugsley was as follows:
1. The Plaintiff do recover against the Defendant damages for trespass not including aggravated damages to be assessed by the District Judge.
It was common ground that this order related to the loss suffered by Mr Calcott from the damage to his crops resulting from Bloor’s contractors’ entry on the land on 28 July 1997. Although no mention is made of the point in the judgment, it is clear that Bloor’s counsel conceded that Mr Calcott was entitled to this relief on the basis that the tenancy was admitted and was not (as a result of the judgment) liable to rescission. These damages were subsequently agreed at £1,200.
2. The Plaintiff’s claim for an injunction be dismissed.
7. It is clear from the judgment that the judge had acceded to Bloor’s case that Mr Calcott had disentitled himself, by his conduct, from obtaining equitable relief. Given a very important concession made before me on behalf of Mr Calcott, it is unnecessary to rehearse in detail the conduct found by the judge. The degree of the unconscionability of that conduct can be gauged, however, from the tone of the judge’s final remarks on this issue:
I accept that the plaintiff did not acquire the tenancy through fraud, but he maintained and nurtured it with a web of deceit. At various points if he had signed the leases as promised, the landlord would have had the protection of a Gladstone v Bower lease. Because of that deceit the landlord acted to his detriment in not taking the steps which he would otherwise have taken to bring the tenancy to an end and selling the land with vacant possession to the defendant. The defendant carries the immediate burden of that deceit. In my view, it would be an affront to common sense and an infringement of Lord Diplock’s dictum to grant the plaintiff the equitable relief of an injunction when he would thereby be gaining by his own dishonesty.
Mr West’s argument that his client has an unassailable right to possession and therefore it would be idle to refuse an injunction impresses only by its audacity. There is a stream of authority, to which I have not been referred by him, which shows that a party can be denied relief when he has misled a party and lulled them into a false sense of security. If the plaintiff did bring an action for possession, there would no doubt be arguments as to proprietary estoppel and the extent to which the issue of res judicata applies and the extent to which any mandatory injunction could lie in view of the plaintiff’s misconduct. This argument was raised very late in the day in Mr West’s final speech.
To grant this plaintiff the injunction sought would be offensive to common sense, offensive to every moral instinct and offensive to the fundamental principles of equitable jurisdiction.
3. The Defendant’s counterclaim for rescission be dismissed.
8. The judge, in his judgment, had rejected the submission that a mistake as to the legal effect of a document was within the doctrine of Solle v Butcher [1950] 1 KB 671 and Laurence v Lexcour Holdings Ltd [1978] 2 All ER 810.
4. Declaration on the counter-claim that the anniversary of the Plaintiff’s tenancy is on 30 November.
9. The significance of this issue was that Bloor had, on 21 August 1997, taken advantage of Mr Calcott’s attendance in court to serve on him what was believed to be an incontestable notice to quit “at the expiration of the year of your tenancy which shall expire next after the end of 12 months from the date of service of this notice”. Bloor needed to know whether this would be 30 November 1998 or, as Mr Calcott contended, 10 June 1999. In the event, the significance of this issue evaporated. Following arbitration, both that notice and a subsequent one served in July 1998 were held to be invalid. It is, however, common ground that a further notice dated 7 June 1999 was finally effective to terminate any tenancy Mr Calcott had from 10 June 2000.
10. Mr Calcott applied to the Court of Appeal for permission to appeal, both in relation to the refusal of an injunction and in relation to the anniversary date. Permission was granted in relation to the latter point, and the appeal upon that point was subsequently successful. Permission was, however, refused upon the former point. The suggested grounds of appeal were that the judge had been wrong to ignore the distinction drawn in Harrow London Borough Council v Donohue [1995] 1 EGLR 257 between acts of mere trespass (where damages might be substituted
11. Permission was refused by the Court of Appeal on 28 October 1997. In the meantime, these proceedings had, on 21 October 1997, been commenced by Bloor. They sought a declaration that Bloor was entitled to occupy the land and proceed with its development without interference from the defendant, and, second, a declaration that any tenancy of the land that Mr Calcott might have was unenforceable against Bloor. Those claims were made on the basis that Mr Calcott’s conduct had, under the doctrine of proprietary estoppel, given rise to an equity in Bloor’s favour, entitling it to those declarations or, alternatively, other relief of equivalent effect.
12. These proceedings recognised that Judge Pugsley’s judgment and order had not conclusively settled the question of who was entitled to go onto the land following his order. It was clear that Mr Calcott could not invoke the court’s assistance to protect his rights of exclusive occupation. It was unclear, however, where that left the parties. Although Judge Pugsley had been invited (by Bloor’s counsel Mr Paul de la Piquerie) to make an award of damages in lieu of an injunction, he had declined to do so. Such an award would have had the practical consequence of shutting out any claim in the future by Mr Calcott for damages for trespass or breach of the covenant for quiet enjoyment. The judge, however, made it quite clear in post-judgment argument that he was not taking that course. The relevant exchanges were as follows:
Mr de la Piquerie: and that there be an assessment of the damages suffered by the plaintiff in lieu? If of course that is the position…
Judge Pugsley: Well, gentleman, my judgment is on the narrow basis that I am denying an injunction.
Mr de la Piquerie: Yes. That was how I understood it.
Judge Pugsley: I am denying an injunction.
Mr de la Piquerie: Full stop.
Judge Pugsley: Full stop. I have not been asked to assess damages –– either damages now or necessarily damages in the future.
Mr de la Piquerie: Yes.
Judge Pugsley: Mine is on the narrow basis that at this stage, as formulated on this pleaded case, for the reasons I have given I am not allowing your claim for rescission. I am not allowing the plaintiff’s claim for an injunction.
Mr de la Piquerie: That is how I read it.
Judge Pugsley: Now, what happens in the future is another matter.
Mr de la Piquerie: Yes.
Judge Pugsley: There is clearly at the moment a claim as to what has happened up to this point.
I have already quoted the passage in the judgment where the judge had adverted to the probability that, in a subsequent action by Mr Calcott for possession: “there would no doubt be arguments as to proprietary estoppel and the extent to which the issue of res judicata applies”.
13. The lack of clarity as to the parties’ strict rights following Judge Pugsley’s judgment proved not to be a matter of mere academic concern. On 21 October 1997 Mr Calcott began a campaign on-site, seeking physically to obstruct Bloor’s contractors with a tractor and plough. This succeeded in holding up works for a week, and culminated in his fencing off and putting sheep on the land. Bloor applied for, and obtained, in these proceedings, an interim injunction the terms of which enabled Bloor’s development thereafter to proceed (order of Jacob J, 6 November 1997).
14. Mr Calcott has counterclaimed in these proceedings for damages for breach of the covenant for quiet enjoyment and for trespass, arising out of Bloor’s incursions on the land from 14 October 1997 onwards. By an order dated 9 October 2000, Master Bowman directed that there should be tried before me:
all issues arising in [these proceedings] including the proper basis for assessing any damages payable by Bloor to Mr Calcott in the event that Mr Calcott succeeds on his counterclaim save that the assessment of such damages (if any) shall be held over to an inquiry.
Issues
15. The issues raised by the pleadings are:
1. Is any claim by Bloor to an equity by way of proprietary estoppel barred by the judgment in the county court action (the res judicata point)?
2. If not, is such an equity incompatible with the provisions of the Agricultural Holdings Act 1986 (the AHA 1986 point)?
3. If the answer to (2) is negative, is Bloor entitled to the equity claimed?
4. Alternatively, did Judge Pugsley’s judgment itself extinguish Mr Calcott’s right to possession?
5. If Bloor is not entitled to the equity claimed, to what measure of damage is Mr Calcott entitled?
16. The third issue has happily, if belatedly, disappeared as a result of a concession made by Mr Sam Aaron, counsel now appearing for Mr Calcott. He accepts that Mr Calcott’s “deceitful and exploitative” conduct would, but for the effect of the judgment below, and/or the provisions of the 1986 Act, entitle Bloor to the relief claimed. It is unnecessary for me, therefore, to rehearse the details of that conduct, save to emphasise that its hallmark was the concealment of his claim to a tenancy until the moment at which its assertion could be calculated to extract the maximum ransom for his surrender of those rights.
Res judicata point
17. The principle that no one should be vexed by the same suit twice has generated what, in the modern law, can be seen as three distinct rules. They have recently been summarised by May LJ in Specialist Group International Ltd v Deakin (No 1) [2001] EWCA Civ 777 in the following terms:
23. If a claim has been explicitly determined in previous concluded proceedings between the same parties, that claim cannot be raised again, other than on an appeal, unless there is fraud or collusion. If a necessary element of a claim has been explicitly determined in previous concluded proceedings between the same parties, that issue cannot be raised again, if, as is likely but not inevitable, it would be an abuse to raise that issue again. This may also extend to an implicitly necessary element of the previous determination. The previous determination may include a settlement. If a claim or issue has not been determined in previous concluded proceedings between the same parties, there may nevertheless be circumstances in which, as a matter of public and private interest on a broad merits-based procedural judgment, it would be an abuse for a party to raise that claim or issue. Such circumstances may, depending on the facts, exist where the litigant could and should have raised the matter in question in earlier concluded proceedings. There may in particular cases be other elements of abuse, including oppression of another party; but abuse of process is a concept which defies precise definition in the abstract. The court will only stop a claim as an abuse after most careful consideration.
24. The main sources of this summary are Arnold v NatWest Bank plc [1991] 2 AC 93 at 104-107 and Johnson v Gore Wood & Co [2001] 2 WLR 72 at 90 and 118.
18. The first of those rules is often referred to as cause of action estoppel, the second as issue estoppel, and the third as Henderson v Henderson estoppel.
19. The decision in Arnold v National Westminster Bank plc [1991] 2 AC 93* referred to by May LJ exploded the view that issue estoppel stood on the same ground as cause of action estoppel in causing an absolute bar to relitigation in the absence of fraud or collusion. That case held that “special circumstances” might exist that would prevent issue estoppel from operating as a bar, the special circumstances there in point being “that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised
* Editor’s note: Also reported at [1991] 2 EGLR 109
20. The decision in Johnson v Gore Wood & Co [2001] 2 WLR 72 dealt with the ambit of Henderson v Henderson estoppel. I draw attention in particular to the message in Lord Millett’s speech at p118C, where he said:
It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen’s right of access to the court conferred by the common law and guaranteed by article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (1953). While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression. In Brisbane City Council v Attorney General for Queensland [1979] AC 411, 425 Lord Wilberforce, giving the advice of the Judicial Committee of the Privy Council, explained that the true basis of the rule in Henderson v Henderson 3 Hare 100 is abuse of process and observed that it “ought only to be applied when the facts are such as to amount to an abuse: otherwise there is a danger of a party being shut out from bringing forward a genuine subject of litigation”. There is, therefore, only one question to be considered in the present case: whether it was oppressive or otherwise an abuse of the process of the court for Mr Johnson to bring his own proceedings against the firm when he could have brought them as part of or at the same time as the company’s action. This question must be determined as at the time when Mr Johnson brought the present proceedings and in the light of everything that had then happened. There is, of course, no doubt that Mr Johnson could have brought his action as part of or at the same time as the company’s action. But it does not at all follow that he should have done so or that his failure to do so renders the present action oppressive to the firm or an abuse of the process of the court.
21. Mr Aaron’s primary submission was that this was a case of issue estoppel rather than Henderson v Henderson estoppel, and that there were no special circumstances to prevent it operating. He relied upon the order in Mr Calcott’s favour for damages for trespass. Relying upon Diplock LJ’s definition of an “issue” for this purpose as being a decision “as to the legal consequences of particular facts, constituting a necessary step in determining what are the legal rights and duties of the parties resulting from the totality of facts” (see Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 at p641), he submitted that, in this case, it had been a necessary condition of that award of damages that the court should find, or that it should be conceded, that there was a valid tenancy, and that, as a legal consequence, Mr Calcott was entitled to damages if there was an act of trespass. Since the parties in the previous action were the same as in this one, the same issue arose, the court was one of competent jurisdiction, and the judgment in the case was a final one, he submitted that all the requirements of the doctrine were fulfilled. It followed, he submitted, that the question of Mr Calcott’s entitlement to damages in this action was the subject of an issue estoppel, and that no special circumstance of the kind illustrated by Arnold existed to prevent it operating. It was not a cause of action estoppel only because Mr Calcott’s present claim was in relation to a separate later act of trespass.
22. Mr Rowley’s principal riposte to this line of argument was that it made little difference to the result at which I should arrive whether I regarded the question as being an issue estoppel or Henderson v Henderson estoppel. In submitting that it should be viewed as the latter, he relied upon the decision of the Court of Appeal in SCF Finance Co Ltd v Masri (No 3) [1987] QB 1028 as showing that, where the judicial disposal of a matter had been by consent, the question of whether relitigation should be permitted depended upon the application of the test in Johnson v Gore Wood rather than (if different) the search for a special circumstance in the Arnold sense. While the language of the Court of Appeal in that case is consistent with the former test having been applied, the point relied upon by Mr Rowley did not there arise for direct decision. For myself, I see no reason why a judgment based upon admissions made in relation to particular issues should have more limited consequences than a judgment made after a trial of those issues. Nor is there any basis in the authorities that have been cited to me for such a distinction.
23. Mr Rowley also submitted that the conditions for an issue estoppel were not fulfilled, since the existence, or otherwise, of a proprietary estoppel was not a necessary step in determining Mr Calcott’s trespass claim before Judge Pugsley. As to this, I accept that it was not for Mr Calcott to disprove the existence of any estoppel interest in order to make good his claim to damages for trespass. To found a claim for trespass, all that Mr Calcott had to show was that he was in possession of the land. In fact, he pleaded that possession by reference to a tenancy, which tenancy was admitted by Bloor. It seems to me that it was necessarily implicit in Mr Calcott’s successful claim for damages to his growing crop that he had possession by virtue of a tenancy, and that, in relation to the damages alleged, Bloor could not assert a better title.
24. There was, therefore, in my judgment, an issue estoppel arising as a result of the award of damages in Mr Calcott’s favour. It was, however, of a much narrower nature than that now asserted on his behalf. It goes only to the question of whether Mr Calcott’s possession quoad Bloor had the quality to enable him to claim damages against Bloor in respect of the crop damage caused by Bloor’s contractors in July 1997. It does not, in my judgment, go to the question of whether his possession, or, having been dispossessed, his right to possession after that date had that quality. To put the point in another way, had the issue of the proprietary estoppel been raised in the county court proceedings, it would have been logically possible for the judge to have held that Mr Calcott was entitled to damages in respect of damage to the crop, but was not entitled to assert his tenancy so as to claim either possession or damages in respect of any period after the crop had in fact been harvested (which appears, in fact, to have taken place before the trial of the action). As a matter of logic, that would have been a possible disposition of the case. Where the elements of a proprietary estoppel are present, the court has a wide discretion as to the nature of the remedy to be granted in order to satisfy the resulting equity. The court could therefore have held that the equity raised was sufficient to estop Mr Calcott from asserting his tenancy, or possession, for any purpose other than the immediate damage to the crops that, as a result of his own efforts (in this case honest efforts), were growing on the land.
25. Accordingly, in my judgment, the estoppel here to be considered is Henderson v Henderson estoppel. As such, it calls for the application of what Lord Bingham of Cornhill in Johnson v Gore Wood described at p90D as:
a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing, or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not.
26. In the present case, there is no doubt that the issue of whether Mr Calcott’s rights under the tenancy were such as to entitle him, in the future, to possession of the land or damages for dispossession, or whether his conduct disentitled him from obtaining either remedy, could have been raised in the county court proceedings. With the benefit of hindsight, it is difficult to see why it was not raised. Before me, Mr Aaron speculated that it was because Bloor’s then counsel had assumed that a proprietary estoppel argument would be bound to fail in the light of the provisions of the Agricultural Holdings Act 1986.
27. Mr Keith Rowley QC, on behalf of Bloor, submitted that it was no abuse of process for this claim now to be litigated. He relied upon the following matters as explaining why the point had not been ventilated in the county court proceedings and justifying its now being raised. First, those proceedings had been commenced and tried at quite unusual speed, reducing Bloor’s opportunity fully or properly to prepare for them. Second, the full extent of Mr Calcott’s deceit only emerged in the course of the hearing. Third, the assertion on Mr Calcott’s behalf that even if the judge refused an injunction, Mr Calcott would still have an
28. With hindsight, it is possible to take the view that the judge was over-critical of the tactics employed (with how much deliberation it is hard to say) by Mr West. His client had a simple claim, and it was up to Bloor to find an answer to it. However, the judge had the benefit of watching the arguments as they developed, and I hesitate to describe his criticisms as unfair. The point can also be made that, in his final submissions, Bloor’s counsel, Mr de la Piquerie, positively invited the judge to consider an award of damages in lieu of an injunction. No doubt that was on the basis (consistently with Mr Calcott’s pleading, and consistently with the terms offered by Bloor for rescission) that such damages would be assessed on the basis of losses suffered by Mr Calcott from being deprived of his tenancy. However that may be, it is clear that the judge refused the invitation (and was not pressed by Mr West to accept it), and refused it on the basis that there was an outstanding issue between the parties that could be resolved only in future proceedings. That was undoubtedly the case. The judgment produced a situation in which Mr Calcott could not restrain Bloor from entering the land, and doubts existed as to whether Mr Calcott was himself entitled to use the land. As Jacob J put it in his interlocutory judgment:
It can hardly be right that we have here a lawless position in which the farmer may not get the land owner off the land by injunction and the land owner cannot get the farmer off by injunction. If that were the position it would invite trouble and indeed I am told there has been some already. Would it be right, for example, if the developers here were to decide to send their diggers through the electric fence and drive the sheep off the land that the farmer would be entitled to try to stop them by using his tractors? If each is entitled to possession of the land, because neither can get an injunction against the other, the law would have come to a pretty strange pass. I do not think it has.
29. In my judgment, so far from being an abuse of process now to raise the issue, the need for that issue now to be resolved has been dictated by the decision of the judge in the earlier proceedings deliberately to exclude it from the scope of the order made by him. Accordingly, I reject the submission that the effect of those proceedings, and the order made thereon, has been to debar Bloor from seeking the relief that it now seeks.
AHA point
30. It was submitted on behalf of Mr Calcott that the statutory protection afforded by sections 2 and 25 of the 1986 Act cannot be defeated by an alleged estoppel. The submission was that the yearly tenancy enjoyed by Mr Calcott could be determined only by a notice to quit given in terms of section 25, and that the tenant could not give up his rights under such a notice in advance of such a notice being served. Reliance for these propositions was placed upon Johnson v Moreton [1980] AC 37* at pp50-51, 52G-53A and 58H-60A. Since, so the argument ran, the protection of the Act could not be given up by express agreement, the right to statutory protection could not be lost because of an estoppel. That was said to be demonstrated by the decision of the Court of Appeal in Keen v Holland.
* Editor’s note: Also reported at [1978] 2 EGLR 1
31. Johnson v Moreton was a case in which the tenant had, in the tenancy agreement itself, purported to contract “not in any event to serve a counter-notice under Section 24(1)” of the 1948 Act. There are passages in the speech of Lord Salmon, especially at p51, that suggest that the only time at which a tenant, by his own act, can destroy the protection given to him by the Act is when he himself has first received a notice to quit from the landlord. It is clear, however, that the subject matter before the House was a case in which the relevant agreement had been made at the time of the tenancy. If effective according to its terms, its effect would be to allow the parties to such a tenancy to contract out of the Act. The principle of public policy that strikes down such an agreement does not, in my judgment, necessarily apply with the same force to the voluntary acts of a tenant who is already in possession with the full protection of the Act. It has never, for example, been doubted that such a tenant may effectively surrender his tenancy, either by instrument or by operation of law. I interpose that the question of whether such an existing tenant may agree to surrender his tenancy at a future date has never been expressly decided, and is the subject of conflicting indications in the Court of Appeal: cf Elsden v Pick [1980] 3 All ER 235* and Short Bros (Plant) Ltd v Edwards (1978) 249 EG 539†.
* Editor’s note: Also reported at [1980] 1 EGLR 4; (1980) 254 EG 508
† Editor’s note: Also reported at [1979] 1 EGLR 5
32. If an existing tenant of an agricultural tenancy may surrender his tenancy with immediate effect by conduct inconsistent with the continued subsistence of the tenancy, it is difficult, in principle, to see why his landlord should not be able, in appropriate circumstances, to invoke the doctrine of proprietary estoppel against him, so as to prevent him from being able, thereafter, to assert his tenancy, or some incident of it. The tenant’s ability to determine the tenancy by consensual surrender must include the ability, by acts falling short of a surrender, to create an equity in favour of the landlord. Mr Aaron conceded that if his submissions were correct, the consequence would be that a third party could never acquire any interest in the land by proprietary estoppel effective against the tenant as a result of acts by the tenant. It is impossible to see the basis in principle for such a rule.
33. As already noted, Mr Aaron relied upon Keen as authority for the proposition that the tenant cannot be estopped from relying upon the Act. In that case (as in the present), the parties had deliberately entered into agreements believed by them both to be outside the protection of the Act. In fact, the agreements were within the Act. The landlord argued that the common intention of the parties that the agreements should have effect as agreements that fell outside the Act (which, had the agreements been for different terms, would have been lawful) gave rise to an estoppel by convention of the type applied in Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84. The Court of Appeal rejected that argument on the basis that the parties could not do, by means of an estoppel, that which Johnson v Moreton showed that they could not do by contract. The estoppel relied upon in that case was an estoppel by convention, alleged to arise as a result of the common intention of the parties as at the date of each agreement. It is readily intelligible why the Court of Appeal should have regarded such a creature as indistinguishable, from the point of view of policy, from an express agreement entered into at the commencement of the tenancy that the Act should not apply. In my judgment, the case decided nothing about the possible application of the doctrine of proprietary estoppel as a result of conduct by an existing tenant of an agricultural holding. I conclude that nothing in the Agricultural Holdings Act 1986 prevents Bloor from asserting its present claims, either positively, by claiming the right to use the land during what would otherwise have been the subsistence of the tenancy, or negatively, in denying Mr Calcott damages in respect of such user.
Bloor’s alternative claim
34. Bloor’s alternative claim was that the effect of Judge Pugsley’s refusal to grant an injunction was itself to extinguish Mr Calcott’s rights of exclusive occupation under the tenancy, and thus to preclude his claim to damages for interference with those rights. Given the conclusions at which I have arrived on the earlier issues, this claim does not require my decision. If, however, Mr Calcott is entitled to rely upon the order as conclusively determining both the points actually decided and all those that might have been raised, it would be necessary to interpret the order in order to discover its meaning in relation to the latter. There are only two possible interpretations. One is that the judge was saying: “I am refusing you an injunction and it follows that, if you are dispossessed by Bloor, you will of course be entitled to an order for possession and damages for trespass”. The other is that he was saying: “I am refusing you an injunction, and it follows that, if you are dispossessed by Bloor, you will not be entitled to an order for possession or damages”. A third interpretation, under which the judge was shutting the door on a future action by Mr Calcott for possession, but leaving open the possibility of his claiming damages for future trespass, is not logically available: the right to claim damages for trespass is dependent upon the right to possession. The first of the two possible interpretations involves a practical absurdity. The second would be a possible result only if the judge had decided that the tenancy had somehow been extinguished, and the only route to that result would have been by an application of the doctrine of proprietary estoppel. Had it been necessary to decide the point, I should have inclined to the view that the judge had, by implication, decided the issue of proprietary estoppel in Bloor’s favour. As it is, consideration of the dilemma produced if the issue is regarded as res judicata simply reinforces my view that it should not be.
Mr Calcott’s measure of damages
35. This question arises only if I am wrong in the conclusions reached so far. Mr Calcott’s claim was pleaded as follows:
28. By way of damages the Defendant is entitled to receive the value of the benefit which the Plaintiff will obtain from having evicted him, or alternatively such as a lessor in the position of the Plaintiff might reasonably have been expected to pay him to secure a surrender of his tenancy. The Defendant is not presently in a position to quantify the said damages.
29. Alternatively the Defendant is entitled to recover as damages a sum equivalent to the profits he could reasonably have expected to make from farming the land for the proper duration of his tenancy if he had not been evicted.
This was understandably interpreted by Bloor as a claim on three different possible bases, namely: (1) the benefit obtained by Bloor from the eviction; (2) the sums that Bloor might have been expected to pay for a surrender; and (3) the loss of profit.
36. However, Mr Aaron made it clear in the course of argument that he meant the same thing by measures (1) and (2), and that the measure that he sought was, in fact, (2). I interpose that, as a matter of theoretical analysis, measure (1) is plainly framed in restitutionary terms, whereas measure (3) is plainly framed in terms of compensation for loss. Measure (2) can, however, be viewed either on a restitutionary basis or on a compensatory basis. It has the former flavour if it is seen as simply a proxy for measure (1), ie simply as a convenient method of valuing the benefit in measure (1). This is, in effect, how Mr Aaron invited me to view it. The distinction is, however, an important one, with a number of practical implications. The price that Bloor might have been expected to pay to secure a surrender of the tenancy is not necessarily the same as the benefit enjoyed by Bloor as a result of the unlawful eviction. In order to ascertain the former, one has to hypothesise a particular negotiation taking place at a particular time between parties having limited information available to them. In order to ascertain the latter, a wide-ranging inquiry might need to be made into the actual profitability of the development. I mention these points because of the procedural tactics that appear to be being employed on Mr Calcott’s behalf in relation to the inquiry as to damages, in particular his application for wide-ranging disclosure in relation to Bloor’s development (an application forestalled by the master’s direction that I should first rule upon the question of the proper measure of damages).
37. It was submitted on Mr Calcott’s behalf that a claimant in a trespass case is entitled at common law to damages based either upon the loss he has suffered or (at his election) by reference to “the price a reasonable person would pay for the right of user”. He relied upon Whitwham v Westminster Brymbo Coal & Coke Co [1896] 2 Ch 538, Penarth Dock Engineering Co Properties Ltd v Pounds [1963] 1 Lloyd’s Rep 359, Ministry of Defence v Ashman (1993) 25 HLR 513 and Ministry of Defence v Thompson (1993) 25 HLR 552* for this proposition
* Editor’s note: Also reported at [1993] 2 EGLR 107
38. Ashman and Thompson were both cases in which the wife of a licensee of residential premises remained in occupation following termination of the licence. In each case, the owner (the Ministry of Defence) sought mesne profits on the basis of the open market rental value of the premises. In each case, the judge at first instance had awarded a different, lesser, measure, based upon the lower concessionary rental that had been enjoyed under the licence. In each case, the Court of Appeal rejected the claim of the Ministry of Defence. It did so, however, on the basis that, on the facts, the open market rental value of the premises was not the correct measure of the value of the benefit received by the particular trespasser. In Thompson, Hoffmann LJ summarised the position (so far as relevant to this case) as follows, at p554:
The principles in Ashman may, in my judgment, be summarised as follows: first, an owner of land which is occupied without his consent may elect whether to claim damages for the loss which he has been caused or restitution of the value of the benefit which the defendant has received.
Secondly, the fact that the owner if he had obtained possession would have let the premises at a concessionary rent, or even would not have let them at all, is irrelevant to the calculation of the benefit for the purposes of a restitutionary claim. What matters is the benefit the defendant has received.
39. Hoffmann LJ’s identification of the principle at work as “restitutionary” was not uncontroversial. In Ashman, Lloyd LJ had dissented from the view that a claim for mesne profits was restitutionary in nature, although in a later case he opined that it contained some elements of a restitutionary claim: see Inverugie Investments Ltd v Hackett [1995] 1 WLR 713* at p718. However that may be, the principle stated by Hoffmann LJ was in no sense a revolutionary one. It did no more than reflect the approach of the Court of Appeal in the earlier cases cited by Mr Aaron, and conveniently encapsulated in the judgment of Megaw LJ in Swordheath Properties Ltd v Tabet [1979] 1 WLR 285† at p288, when he said:
It appears to me to be clear, both as a matter of principle and of authority, that in a case of this sort the plaintiff, when he has established that the defendant has remained on as a trespasser in residential property, is entitled, without bringing evidence that he could or would have let the property to someone else in the absence of the trespassing defendant, to have as damages for the trespass the value of the property as it would fairly be calculated; and, in the absence of anything special in the particular case it would be the ordinary letting value of the property, that would determine the amount of damages.
For convenience, I will label the two alternative measures contended for as “the benefit” and “the loss” measures.
* Editor’s note: Also reported at [1996] 1 EGLR 149; [1996] 19 EG 124
† Editor’s note: Also reported at [1979] 1 EGLR 58
40. Mr Aaron further submitted that, in the present case, I should therefore simply declare that Mr Calcott was entitled to elect either to have damages assessed on the basis of the benefit of Bloor (scilicet the price that Bloor would have had to pay for a surrender) or on the basis of Mr Calcott’s loss of profit during the period up to 9 June 2000 (which the parties had agreed was £19,635). This appears to have been an attempt to have a second possible bite at the disclosure application that the master’s order had been designed to obviate. In the circumstances in which the master had directed that I should try the issue of “the proper basis for assessing any damages payable by Bloor to Mr Calcott in the
41. Mr Rowley submitted that there was no general principle that, in a trespass case, a claimant was entitled to make an election between the benefit and the loss measures. Reminding me of Lord Nicholls’ comprehensive review of the authorities on damages in Attorney-General v Blake [2001] 1 AC 268, he urged that the question of the proper measure of damages in a trespass case could not be arrived at by the application of mechanical formulae, and that the cases where damages had been awarded on the “benefit” principle were exceptions to the general rule that loss was the correct measure, each of which could be explained by its own special circumstances.
42. He suggested that the principal criterion for classifying the cases where recovery on the “benefit” basis had been allowed was that these were all cases where no loss had been shown. He pointed out that Lord Nicholls himself had described Whitwham and Penarth as “no loss” cases, and submitted that Lawson v Hartley-Brown (1995) 71 P&CR 242 could be similarly analysed. Cases where a claimant had recovered on a “benefit” basis, despite having suffered quantifiable loss, were, he submitted, confined to cases where damages had been awarded in lieu of an injunction as opposed to at common law. He gave Carr-Saunders v Dick McNeil Associates Ltd [1986] 1 WLR 922* as an example of this kind of case. He further submitted that, in so far as Ashman and Thompson established some new or different principle, the principle was that of unjust enrichment, and did not apply in circumstances where a claimant was in a position to assert his claim to damages only by reason of his own deceitful and unconscionable behaviour.
* Editor’s note: Also reported at [1986] 2 EGLR 181
43. In my judgment, I am bound by Ashman and Thompson to hold that a claimant in a trespass action is able to elect to claim damages either on the basis of the loss suffered by him or on the basis of the value to the defendant of his wrong. So far as this court is concerned, that seems to me to be a brightline rule, which surrender of the tenancy reduced to nil. Mr Calcott had, by his own acts, destroyed whatever bargaining position he might otherwise have had.
44. The result is that there is nothing, in my judgment, to take the case out of the normal rule applicable where the claimant elects to claim damages on the “benefit” principle. That is “the value of the property as it would fairly be calculated”: see per Megaw LJ in Swordheath Properties. The property in question here is Mr Calcott’s agricultural tenancy in the period from October 1997 until its expiry on 9 June 2000. The rental value of that has presumably already been agreed between the parties in their calculation of Mr Calcott’s loss of profits, and will, necessarily, be a lower figure. If, contrary to my findings, Mr Calcott is entitled to any damages at all, that is the figure that he is, in my judgment, entitled to claim on the “benefit” basis.
