Agreement to sell property — Purchaser let into occupation — Works carried out to make property fit for human habitation — No completion — Owner claiming repayment of loan and possession — Occupier claiming licence by proprietary estoppel
The plaintiff is the owner of a property in London N15; the defendant is in occupation. The plaintiff purchased the property in 1976 and commenced negotiations in 1978 to sell it to the defendant. There was a contract and a notice to complete was given in January 1981. The defendant failed to complete. Proceedings were started in 1981 both in the county court and in the High Court; these were eventually consolidated and heard by His Honour Judge Hayman in the Westminster County Court (March 3 1987). The plaintiff claimed repayment of a loan of £200, possession of the property and mesne profits for the period of occupation enjoyed by the defendant. The defence was that the defendant had a licence to occupy for life on the basis of proprietary estoppel; the estoppel arose because the plaintiff allowed the defendant to incur expenditure on improvements to the property which the defendant believed he would purchase. However, the defendant made no offer to pay any sums owed to the plaintiff until the close of the evidence in the county court. On the evidence, the county court judge found proprietary estoppel in favour of the defendant and a rent-free licence for life. The plaintiff and defendant appealed.
Held The defendant might have been able to rely on proprietary estoppel had he made any payment, which it was found he had not. But the defendant, as a defaulting purchaser, had forfeited any right to have the property conveyed to him. He was entitled only to an order allowing him to recover the expenses he had incurred on the improvements. The order that the defendant had a licence for life and that the plaintiff was not entitled to possession was set aside. However, the defendant was entitled to the expenses he had incurred on improvements, and on payment to him of 75% of the amount found to be due, plus interest, the plaintiff was entitled to possession of the property.
John Platt Mills QC and Shaukat Ali Khan (instructed by the plaintiff in person) appeared for the plaintiff; and Trevor Faber (instructed by Aaronson Plosker & Co) appeared for the defendant.
