Stephens & Anor v Grills

Neutral Citation Number: [2010] EWHC 3795 (Ch) IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION ON APPEAL FROM A REFERENCE TO THE ADJUDICATOR TO H. M. LAND REGISTRY Case Number : 9BS91146 BRISTOL DISTRICT REGISTRY Date : 20th January 2010 BEFORE: MR JUSTICE KITCHIN BETWEEN: - - - - - - - - - - - - - - - - - - (1) James Allan Stephens (2) Judy Carolyn Stephens - and - Appellants/Original Respondents (1) Phyllis Grills (2) Julianne Grills (Deceased) Respondents/Original Applicants - - - - - - - - - - - - - - - - - - Transcribed from the official tape recording by MENDIP MEDIA GROUP Chinon Court, Lower Moor Way, Tiverton, Devon EX16 6SS Telephone : 01884 259580 Fax : 01884 250235 Email: ttp@mendipmediagroup.com - - - - - - - - - - - - - - - - - - Mr Troup appeared on behalf of the Appellants Mr Antell appeared on behalf of the First Respondent - - - - - - - - - - - - - - - - - - J U D G M E N T Approved Judgment MR JUSTICE KITCHIN: Case Number: 9BS91146 1. This is an appeal by Mr and Mrs Stephens against the decision of Mr Hansen sitting as Deputy Adjudicator to HM Land Registry (“the Adjudicator”) dated 11 August 2009 made upon an application dated 10 October 2007 by Phyllis Grills and her daughter, Julianne Grills, to be registered as proprietors of a small parcel of land (“the Disputed land”). The Adjudicator allowed the application and rejected the objection of Mr and Mrs Stephens. 2. The relevant background facts are not in dispute and are helpfully set out in the skeleton argument of Mr Troup who appears on behalf of Mr and Mrs Stephens. 3. Mr and Mrs Stephens are the owners of Tregays Farm, St Winnow, Lostwithiel, PL22 0LG which is registered at HM Land Registry under title number CL230917. They purchased Tregays Farm for £1.35 million on 18 September 2006 and were registered as proprietors on 31 October 2006. 4. 5. 6. 7. Phyllis and Julianne Grills were, and Phyllis Grills remains, the registered proprietors of a neighbouring property situated to the north of Tregays Farm known as Lynwood, Redlake, Lostwithiel, PL22 0ND which is registered at HM Land Registry under title number CL207920. Phyllis Grills transferred Lynwood to herself and Julianne as beneficial joint tenants by a transfer dated 28 July 2004. They were registered as proprietors on 11 August 2004. The two properties are separated by a road. The Disputed Land forms part of Tregays Farm, lies immediately to the south of the road opposite Lynwood and is a small grassed area, enclosed by a hedge and measuring approximately 70 yards long and 20 yards wide at its widest point. The unchallenged finding of the Adjudicator is that by the beginning of 1950, at the latest, the predecessors in title of Phyllis and Julianne Grills had dispossessed the paper owner of the Disputed Land and gone into ordinary possession of the land themselves. Their (and their successors’) possession thereafter was single, exclusive and continuous up to 10 October 2007. They had used the Disputed Land as an occupying owner and no-one else had done so. Further, throughout that period Phyllis and Julianne Grills and their predecessors in title had an intention to occupy and use the Disputed Land as their own and use it as if they were its true owners. There were plain outward manifestations of their intention from various acts of possession including cultivation, enclosure and controlling access which made their intention clear to the world at large. 8. The possession of the Disputed Land by Phyllis and Julianne Grills and their predecessors in title was not at any time by permission of the true owner for the time being of the Disputed Land. Transcribed by Mendip Media Group 01884 259580 Approved Judgment Case Number: 9BS91146 9. The Adjudicator also records in paragraph 53 of his decision that when, at the hearing before him, it was suggested to Phyllis Grills that her father had asked for permission to use the Disputed Land, she replied “No you’ve got that wrong, as far as I know we’ve never had permission. I think I would have known of any such conversation.” When pressed by Mr Troup, Phyllis Grills replied, “You don’t ask permission to use something you thought was yours. We never ever thought the land belonged to anyone else.” Nor, the Adjudicator continued, did she accept the characterisation of her father as a deferential ex employee who would have sought permission as a matter of course. Although this evidence primarily related to what her father did or did not do, the Adjudicator found Phyllis Grills entirely convincing. 10. Before Mr and Mrs Stephens purchased Tregays Farm, the then owner of the farm, Mr Weaver, wrote to Phyllis Grills a letter dated 7 February 2006 (“the 2006 Letter”) in the following terms. “Dear Mrs Grills, When we first came to Tregays, your late husband asked if he could continue using the piece of ground on the opposite side of the road to Lynwood as a garden. This was agreed to by my late father. We are now in the process of selling the farm and the purchasers are happy to continue with this arrangement. If you wish for this arrangement to continue, I would be most grateful if you would sign and return one copy of this letter. Yours etc” 11. Phyllis Grills signed a copy of the 2006 Letter and returned it to Mr Weaver. Mr Weaver then passed the letter to Mr and Mrs Stephens who thereafter proceeded with their purchase. 12. As I have mentioned, on 10 October 2007 Phyllis and Julianne Grills applied to HM Land Registry under paragraph 18 of Schedule 12 to the Land Registration Act 2002 to be registered as proprietors of the Disputed Land based on adverse possession. Mr and Mrs Stephens objected to that application and the case was referred to the Adjudicator in January 2008. 13. Julianne Grills died on 23 April 2008. 14. The hearing before the Adjudicator took place at Liskeard Magistrates Court on 28 and 29 May 2009. He decided four main issues: a) factual possession; Transcribed by Mendip Media Group 01884 259580 Approved Judgment Case Number: 9BS91146 intention to possess; b) c) whether Phyllis and Julianne Grills and their predecessors in title had occupied the Disputed Land with permission; d) whether Phyllis and Julianne Grills were estopped from claiming adverse possession by virtue of the 2006 Letter. 15. By his decision in writing handed down on 11 August 2009 the Adjudicator held in Phyllis Grills’ favour on every issue. On this appeal, Mr and Mrs Stephens only challenge the Adjudicator’s finding on the fourth and final issue. The appeal is brought with the permission of HH Judge McCahill QC. 16. The Adjudicator considered the issue of estoppel in paragraphs 65 to 80 of his decision. At the outset he accepted there was no reason in principle why a paper title owner should not defeat an adverse possession claim by relying on an estoppel. He continued by noting that the 2006 Letter was apparently written by Mr Weaver and was addressed to Phyllis Grills and that its style and content were relatively informal with nothing on the face of the letter to suggest any input from a lawyer. The Adjudicator also recorded the common ground that the 2006 Letter was read by Phyllis Grills and a copy counter-signed and returned to Mr Weaver. 17. The 2006 Letter did not say in terms that Mr Weaver intended to pass it on to his prospective purchasers, nor did it identify Mr and Mrs Stephens. 18. As for Phyllis Grills, I think it is tolerably clear from paragraph 73 of his decision that the Adjudicator accepted her evidence that she thought was being neighbourly by signing the letter and had no idea that by doing so she was suggesting that the land did not belong to her. He recorded that in cross examination she said “I would never have signed anything handing something over on a plate which we thought we owned.” Further she did not seek any formal legal advice on the content of the letter and the letter did not invite her to take such advice. 19. As for Mr Weaver, the Adjudicator observed at paragraph 74 of his decision that initially he said that the 2006 Letter was drafted by him. He then appeared to concede that there had been input from solicitors but was rather vague and, to the Adjudicator’s mind, somewhat evasive both as to whether solicitors were involved and, if so, as to the extent of their involvement. He said he could not remember whether his solicitors had seen the letter before it was sent. He then apparently said “They could have seen it but they were my words.” He accepted that he knew that Phyllis Grills was an elderly woman. He also said he sent it to her alone because he thought she owned Lynwood. 20. Against this background, the Adjudicator made four key findings. First, he held the 2006 Letter was not sufficiently clear in its terms to found an estoppel. He put it this way, at paragraphs 75 to 77 of his decision. “75. I have formed the clear view that the 2006 letter was not a Transcribed by Mendip Media Group 01884 259580 Approved Judgment Case Number: 9BS91146 straightforward letter designed to find out if the Applicants had or asserted any rights to possession of the Disputed Land. If so, it could and should have been drafted in clear and unequivocal terms. Its style and content were, in my opinion, such as to create a trap for the unwary Mrs Grills. Whether this was by design or by accident I need not decide. There was simply nothing to flag up to Mrs Grills that the letter was potentially important and required careful consideration 76. Turning, then, to the content of the letter, the difficulty I have with the 2006 letter is that the language of the letter disguises, to an extent, the real question that needed to be asked, namely whether the Applicants claimed any interest in the Disputed Land and if so, on what basis. As a result, both the question, insofar as the 2006 letter asked a question, and the answer were equivocal and/or ambiguous. In my view, there is nothing in the letter which amounts to a representation by Mrs Grills that she was giving up any accrued proprietary rights in the Disputed Land or acknowledging that she had none. It is clear from Mrs Grills’ evidence that, insofar as she paid any real attention to the letter and its contents in her distracted state, she thought she was being asked to confirm that she intended to remain in possession of the Disputed Land. In my view, that was a reasonable interpretation to put on the letter in the circumstances. 77. Accordingly, my findings on the Respondents’ plea of estoppel are as follows. The first question is whether the Respondents can spell out of the 2006 letter a sufficiently clear representation by the Applicants that they were mere licensees of the Disputed Land. In my view they cannot. The countersigned letter did not contain any clear representation by the Applicants to the effect that the Applicants accepted that they were mere licensees and/or that they would not rely on their strict legal rights. Although I am prepared to accept that it should be treated as having been sent by Mrs Grills for and on behalf of both Applicants, the telling point, in my view, is that the letter was simply not sufficiently clear in its terms to found an estoppel. Mr Stephens himself appeared to accept in evidence that it was “open to interpretation” and I agree that it was.” 21. Second, the Adjudicator addressed the intention of Phyllis Grills. He held at paragraph 78 of his decision that if, contrary to his finding, the 2006 Letter did contain a representation by Phyllis Grills, it was certainly not one which was made with the intention or even the knowledge that Mr Weaver or Mr and Mrs Stephens might alter their position and place reliance upon it or that it might affect the legal relationship between Phyllis and Julianne Grills on the one hand and Mr Weaver or Mr and Mrs Stephens on the other. 22. Third, the Adjudicator held that Mr and Mrs Stephens did not act to their detriment or alter their position in reliance to the 2006 Letter. As he said at paragraph 79 of his judgment: Transcribed by Mendip Media Group 01884 259580 Approved Judgment Case Number: 9BS91146 “79. In fact, I do not actually accept that the Respondents did act to their detriment or alter their position in reliance on the 2006 letter. To support their case on reliance, the Respondents produced a memorandum from their conveyancing solicitors dated 3 July 2006 which records the fact that the Respondents’ conveyancing solicitors had formed the view that the 2006 letter “would prevent the owners of [Lynwood] from claiming possessory title”. This is said to provide clear evidence of reliance. I am not persuaded by that argument. Mrs Stephens said that Tregays Farm was the best farm in the area. The Respondents were clearly very keen to purchase Tregays Farm. I am of the view that the Respondents would have proceeded with the purchase even if Mrs Grills had failed or refused to countersign the 2006 letter. After all, the Disputed Land comprises an area of 0.223 acres. The Respondents were buying approximately 280 acres. I do not believe that the Disputed Land was a strategically important part of Tregays Farm. Even if, therefore, the Respondents had known there was a dispute as to the ownership of the Disputed Land, I do not accept that they would not have proceeded or would have attempted to renegotiate the price in relation to a parcel of land that comprised significantly less than 1% of what they were buying. Even if, contrary to my finding above, the Respondents did rely on the 2006 letter and can be treated as a representee, they did not, in my view, suffer any material prejudice or detriment by doing so.” 23. Fourth, the Adjudicator held in paragraph 80 of his decision that it was not inequitable or unconscionable for Julianne and Phyllis Grills to insist on their strict legal rights: “80. Finally, I do not consider it to be inequitable or unconscionable for the Applicants to insist on their strict legal rights. I have set out above my concerns about the letter and shall not repeat them. In my view, it was incumbent on Mr Weaver, or more sensibly, his solicitors or those of the Respondents to write a clear letter to clarify the position in relation to the Disputed Land. A clear letter would have elicited a clear response. The modus operandi adopted by Mr Weaver was, in my view, ill-advised and resulted in an equivocal letter and an equivocal response. There is no factual basis for any form of estoppel.” 24. On this appeal, Mr Troup submits that the Adjudicator fell into error in making each of these four findings. I shall address them in turn but would observe at the outset that Mr and Mrs Stephens must prevail on at least the findings relating to clarity, reliance and detriment and unconscionability if they are to succeed on the appeal. 25. It is common ground that, following the decision of the House of Lords in Thorner v Major [2009] UKHL 18; [2009] 1 WLR 776, in order to establish a proprietary estoppel the representation must be sufficiently clear and that this depends on the context in which it is made. Mr Troup submits that there are two critical features of the context in which the letter was signed and returned by Phyllis Grills to which I should pay particular regard. Transcribed by Mendip Media Group 01884 259580 Approved Judgment Case Number: 9BS91146 26. The first is that she did so in the context of a proposed sale of Tregays Farm by Mr Weaver. This, I accept, is evident from the terms of the letter, “We are now in the process of selling the farm”. 27. The second is that the Grills family had occupied the Disputed Land for many years without any documentation having been executed to regularise that occupation, thereby leaving the basis of the occupation unclear. Hence, the submission continues, when the 2006 Letter is read in context, it is clear or at least sufficiently clear that in signing and returning the letter Phyllis Grills was representing that she and her daughter were mere licensees of the Disputed Land. 28. I am unable to accept this further submission, at least without considerable qualification. While it is true to say that no document had been executed to regularise the occupation by the Grills family of the Disputed Land, members of the family had manifested their intention to occupy and use the land as their own and they had used it as if they were its true owners. These acts of possession and evidence of intention were, as the Adjudicator found, clear and unequivocal. 29. Turning to the terms of the 2006 Letter itself, Mr Troup submits that the first paragraph refers to an agreement reached between Mr Weaver’s father and Mr Grills, Phyllis Grills’ deceased husband, to the effect that Mr Grills could continue to use the Disputed Land as a garden. This, he continues, clearly constituted the grant of an express permission. The second paragraph goes on to refer to the proposed sale and states that “The purchaser is happy to continue with this arrangement.” This was, in effect, an offer made by Mr Weaver on behalf of the purchaser of Tregays Farm to allow Phyllis and Julianne Grills to continue to use the Disputed Land with permission. So, the submission continues, it would therefore be clear to the reasonable recipient of the letter that any response was likely to be communicated to the purchasers. The third paragraph then invites Phyllis Grills to sign and return the letter “if you wish for this arrangement to continue”. Thus the letter made it clear that the significance of counter-signing and returning it would be to constitute the acceptance by Phyllis and Julianne Grills of the purchaser’s offer to permit them to remain in occupation of the Disputed Land. Further, Mr Troup submits, the context reinforces this interpretation of the 2006 Letter. Where a property is partly occupied by a third party any purchaser of that property would be keen to discover the basis of that occupation before it commits to the purchase. The 2006 Letter, interpreted as contended for by Mr Troup, would give comfort to any purchaser that Phyllis Grills and her family had no rights over the Disputed Land over and above those of a mere licence which could easily be revoked. 30. Again I am unable to accept these submissions. In context, I am unable to read the 2006 Letter as a sufficiently clear representation by Phyllis Grills that she and her family occupied the Disputed Land as mere licensees and that she was giving up all and any accrued proprietary rights. As the Adjudicator observed in his decision, there was nothing in the letter to warn Phyllis Grills that she was being invited to Transcribed by Mendip Media Group 01884 259580 Approved Judgment Case Number: 9BS91146 acknowledge and accept that she and her daughter were mere licensees of the land and nothing to indicate to Phyllis Grills that she was being asked to consider or acknowledge the legal basis of her occupation at all. I believe a reasonable recipient, whether Mr Weaver or a purchaser aware of the context and that Phyllis Grills was an elderly woman, would have concluded that she was doing no more than confirming that she wished to maintain the status quo. In short, Phyllis Grills was simply being asked to confirm she intended to remain in possession and she duly did so. I agree with the Adjudicator, there is nothing in the letter which amounts to a representation by Phyllis Grills that she was giving up any accrued property rights. Accordingly I believe the Adjudicator was right to reach the conclusion he did. 31. Mr Troup also submits the Adjudicator was wrong to dismiss the estoppel claim on the basis that Phyllis Grills had no intention or knowledge that Mr Weaver or Mr and Mrs Stephens would rely on the statement. In Thorner Lord Neuberger said at [78]: “78 Although Lloyd LJ also expressed himself, at para 72, by reference to what Peter intended when he made the statements in question, it seems to me, and I understood Mr Andrew Simmonds QC, who appeared for the defendants, to accept, that, if the statements were reasonably understood by David to have the effect which the deputy judge found, namely an assurance, and David reasonably acted on that understanding to his detriment, then what Peter intended is not really germane. That is supported by a consistent line of authority—see for instance per Lord Denning MR in Crabb v Arun District Council [1976] Ch 179 , 187 f , 188 c (citing his earlier observations in Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225 , 242; see also Sidney Bolsom Investment Trust Ltd v E Karmios & Co (London) Ltd [1956] 1 QB 529 , 540–541, quoted by Lord Walker at para 50 of his opinion), and per Oliver J in Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd (Note) [1982] QB 133 , 151 h –152 a . It may be that there could be exceptional cases where, even though a person reasonably relied on a statement, it might be wrong to conclude that the statement-maker was estopped, because he could not reasonably have expected the person so to rely. However, such cases would be rare, and, in the light of the facts found by the deputy judge, it has not been, and could not be, suggested that this was such a case.” 32. Similarly, Lord Hoffmann said at [5]: “5 At that point, it seems to me, the Court of Appeal departed from their previously objective examination of the meaning which Peter's words and acts would reasonably have conveyed and required proof of his subjective understanding of the effect which those words would have upon David. In my opinion it did not matter whether Peter knew of any specific alternatives which David might be contemplating. It was enough that the meaning he conveyed would reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon. If David did then rely upon it to his detriment, the necessary element of the estoppel is in my opinion established. It is not necessary that Peter should have known or Transcribed by Mendip Media Group 01884 259580 Approved Judgment Case Number: 9BS91146 foreseen the particular act of reliance.” 33. I think it is clear from these passages that, save in exceptional cases, the test is an objective one and it follows that the subjective intention and knowledge of Phyllis Grills are not irrelevant. I conclude that this particular criticism of the decision of the Adjudicator is therefore justified. 34. Mr Troup submits that the only people who were in a position to give evidence on the issue of detrimental reliance were Mr and Mrs Stephens themselves. The clear evidence contained in their witness statements was that, absent the 2006 Letter being signed and returned by Phyllis Grills, they would have either not proceeded with the purchase of Tregays Farm or would have at least sought to renegotiate the purchase price. This, Mr Troup contends, was supported by a memorandum from their conveyancing solicitors dated 3 July 2006 advising them that the letter “would prevent the owners of Lynwood from claiming possessory title”. He continues that the fundamental difficulty with the Adjudicator’s approach is that it ignores the purpose of the 2006 Letter which was evidently to confirm the basis of Phyllis and Julianne Grills’ occupation of the Disputed Land and to avoid any adverse possession claim being made against Mr and Mrs Stephens after their purchase of the farm. If, he says, Mr and Mrs Stephens would have purchased the farm in any event, then it is difficult to understand why the 2006 Letter was sent in the first place. Moreover it is difficult to understand why Mr and Mrs Stephens’ own solicitor went to the trouble of specifically advising them whether the 2006 Letter would defeat an adverse possession claim. 35. The Adjudicator was evidently not impressed by the evidence given by Mr and Mrs Stephens at the hearing. Mr Antell, who has appeared on behalf of Phyllis Grills, has told me that they were invited in cross examination to explain what was so important about the small piece of Disputed Land that it would, as they claimed, have affected their decision to buy what they regarded as “the best farm in the area”. They were pressed upon this and the only reason they could give was that it was convenient for the farm boundary to follow the road boundary. Mr Troup accepts that to the best of his recollection this is a reasonable record of the evidence they gave. 36. In the light of his assessment of the evidence the Adjudicator found that Mr and Mrs Stephens did indeed regard Tregays farm as the best farm in the area, that they were very keen to purchase it and that the Disputed Land was not a strategically important part of it. The Adjudicator concluded that Mr and Mrs Stephens would have proceeded with the purchase even if Phyllis Grills had failed or refused to counter- sign the 2006 Letter. Further, the Adjudicator was not able accept that if Mr and Mrs Stephens had known that there was a dispute as to the ownership of the Disputed Land they would not have proceeded or would have attempted to re-negotiate the price. These were findings he was plainly entitled to reach on the evidence he heard. 37. In all these circumstances I have reached the conclusion that the findings by the Transcribed by Mendip Media Group 01884 259580 Approved Judgment Case Number: 9BS91146 Adjudicator that Mr and Mrs Stephens did not act to their detriment or alter their position in their reliance on the 2006 Letter and that they have not suffered any material prejudice or detriment were reasonable and are not findings with which this court should interfere. 38. As I have explained, the Adjudicator found it was not unconscionable for Phyllis and Julianne Grills to rely on their strict legal rights. Mr Troup submits that this finding was based upon his earlier finding that the 2006 Letter was unclear and that his finding on the issue of unconscionability is therefore inextricably bound-up with that earlier finding. He submits that the reality is that Phyllis Grills’ conduct in counter- signing and returning the 2006 Letter led Mr and Mrs Stephens to believe that Phyllis and Julianne Grills were mere licensees and it is unconscionable for Phyllis Grills and Julianne’s estate to resile now from that representation. 39. 40. In assessing this submission I believe the following points are material. First, Phyllis Grills was an elderly woman in 2006. Second, I entirely agree with the Adjudicator that the 2006 Letter was not a straightforward letter designed to find out if Phyllis and Julianne Grills asserted any rights of possession of the Disputed Land. In my judgement his characterisation of the style and content of the letter as a trap for the unwary is an entirely fair and reasonable one. I agree with him there was simply nothing to flag up to Phyllis Grills that the letter was potentially important and required careful consideration. Third, I agree with the Adjudicator that the letter is far from clear for the reasons that I have given. In all these circumstances I consider the Adjudicator was entitled to find that it was not unconscionable for Phyllis and Julianne Grills to rely on their strict legal rights. For my part I would also add a further reason. The first complete paragraph of the letter is not, in my judgment, an accurate reflection of the facts. Possession by the Grills’ family of the disputed land was never with the permission of the true owner for the time being of the land. Mr Weaver’s evidence to the contrary was, as the Adjudicator found, unconvincing. 41. For all these reasons this appeal must be dismissed. Transcribed by Mendip Media Group 01884 259580