Claimant purchasing land for development – Defendant making assertion of statutorily protected agricultural tenancy – Claimant relying upon doctrine of proprietary estoppel – Whether application of doctrine precluded by orders made at earlier hearing and/or by terms of Agricultural Holdings Act 1986
In July 1997 the claimant (B) acquired, for £2.5m, some 38 acres of land. The purchase was with vacant possession and with the benefit of planning permission for a comprehensive development. Some four weeks later, at which time B’s contractors entered the site, the defendant (C) asserted that the land was the subject of a yearly agricultural tenancy, arising from an agreement made with B’s vendor in June 1993. C brought a county court action claiming damages for trespass and an injunction requiring the removal of B’s equipment and materials from the site. On 3 October 1997 the county court awarded damages of £1,200 for crop damage, but refused the injunction on the discretionary ground that C had lulled B into a false sense of security. On 21 October 1997 B commenced the present action claiming that any tenancy that C might have had was unenforceable as C’s conduct had given rise to equity in B’s favour, under the doctrine of proprietary estoppel.
At the trial, C conceded that the doctrine would ordinarily have applied for the reasons alleged, but contended that B was disabled from invoking the doctrine because: (i) all relevant matters had been disposed of in the earlier action; (ii) an estoppel could not be asserted in the face of the Agricultural Holdings Act 1986, which, as judicially interpreted, struck down agreements that purported to allow the parties to contract out of the Act.
Held: Judgment was given for the claimant.
1. Applying the principles laid down by May LJ in Specialist Group International Ltd v Deakin [2001] EWCA Civ 777, the matters pleaded and ruled upon in the earlier action were too narrow to create an issue estoppel, as they did not ask the question of whether C had sufficient possession to claim damages in respect of any period of time after the harvesting of the crop. Nor would it be an abuse of the process of the court to determine the claim now raised by B, as the need for such a determination had been dictated by the decision at the earlier hearing to exclude it from the scope of the order. There was, accordingly, no case for finding what had come to be known as a Henderson estoppel: see per Lords Millet and Bingham in Johnson v Gore Wood & Co [2001] 2 WLR 72.
2. C derived no assistance from the 1986 Act. Given that it had never been doubted that an agricultural tenant could effectively surrender his tenancy, either by instrument or by operation of law, there was no reason, in principle, why the landlord should not be able to invoke the doctrine of proprietary estoppel. The ability to determine the tenancy by consensual surrender had to include the ability to create an equity in favour of the landlord by acts falling short of surrender. There was no question of the parties having entered into a contract to exclude the protection of the Act: Johnson v Moreton [1978] 2 EGLR 1 and Keen v Holland [1984] 1 EGLR 9 distinguished.
Keith Rowley QC (instructed by Needham & James, of Birmingham) appeared for the claimant; Sam Aaron (instructed by M&S Solicitors, of Leicester) appeared for the defendant.
Alan Cooklin, barrister
