Blackburn v Southwell

Proprietary estoppel – Unmarried couple – Appellant purchasing house in sole name – Respondent giving up secure tenancy of house to live in property with appellant – Relationship breaking down – Whether proprietary estoppel arising in favour of respondent – Whether appellant making assurances on which respondent relying in giving up secure tenancy – Whether unconscionable for appellant to resile from assurances without putting respondent in similar position to that she was in before giving up tenancy – Appeal dismissed In 2002, the appellant and the respondent set up home as a couple, together with the respondent’s two daughters from her previous marriage, in a house that was purchased in the appellant’s sole name. Part of the purchase price funded by the appellant and the rest by a repayment mortgage, the liabilities under which were also discharged by the appellant alone. At that time, the respondent was 40 years old and had limited means. The appellant was 41 and earned considerably more than the respondent. When the parties moved in together, the respondent gave up her secure tenancy of a house in Manchester, and on which she had spent between £15,000 and £20,000 in fitting out and furnishing. She later completed a three-year degree course in speech and language therapy, taking out a loan do so but also receiving support from her family and the appellant. When the relationship broke down in 2012, the respondent claimed that the appellant held the property for both of them in equal shares. In the court below, she was found to be entitled to an enforceable equity by way of proprietary estoppel, by reason of assurances that the appellant had made to the effect that she would always have a secure home, and on which she had relied to her detriment by giving up her secure tenancy and moving in with the appellant. The judge valued the respondent’s equity at £28,500 and ordered the appellant to pay that amount to the respondent. The appellant appealed. He argued that the judge had failed to make sufficient findings as to the precise nature of the appellant’s assurances and what was meant by providing the respondent with a secure home; he submitted that it was inconceivable that he would have promised to provide the respondent with a home regardless of whether their relationship continued to subsist. He further contended that any detriment that the respondent had initially incurred had dissipated over the course of the relationship and that the judge had erred in finding that it was unconscionable for the appellant to deny to the respondent the right or benefit that she expected to receive. Held: The appeal was dismissed. (1) The judge had been entitled to find that the assurances given by the appellant were sufficiently clear and unequivocal to found a claim based on proprietary estoppel. On his findings, the appellant had assured the respondent that she would always have a home and would be secure in the property, and had done so in the belief that he was providing the respondent with a home for life. He had led the respondent to believe that she would have the same sort of security as a wife, in terms of accommodation at the house, and income. Those findings were inconsistent with any notion that the assurance was of accommodation for only so long as the relationship should subsist. The thrust of the judge’s findings was that the respondent would have an entitlement which would be recognised in the event of breakdown of the relationship, just as the contribution of a wife to the assets of a marriage would be recognised in the event of marital breakdown. The fact that the appellant had avoided giving any assurance of equal ownership of the property did not mean that he could not give an assurance as to the respondent’s security of rights of occupation in the house that they were in effect buying together; two were not inconsistent. Accordingly, the appellant’s assurances were of a sufficiently clear and unequivocal nature to be capable of founding a proprietary estoppel: Thorner v Major [2009] UKHL 18; [2009] 1 WLR 776; [2009] 2 EGLR 111 and Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 13 applied (2) In considering the issue of detrimental reliance by the respondent, it was necessary also to have regard to the benefits that had accrued to the respondent as a consequence of the relationship. However, the judge had been entitled to find that the benefits flowed in both directions. While the respondent had benefited from rent-free accommodation for herself and for her two daughters, and assistance that had enabled her successfully to complete a three-year degree course which enhanced her earning ability, the appellant had also benefited from the assistance and support of the respondent in the successful pursuit of his career, which had resulted in his own earnings increasing over the course of the relationship. Furthermore, while the respondent was living in the house and shouldering the majority of the housekeeping activities albeit making no financial contribution, the property had increased in value from £240,000 to £320,000. The fact that the respondent had been relieved of her liability to pay rent in Manchester, and had lived rent-free in the property, was simply an inherent element in her decision to rely on the appellant’s assurance of security. Although there might be cases where circumstances that seemed likely to give rise to an equity might fail to do so when viewed in the light of the continuum of the relationship, as evaluated at the point at which the promisor sought to renege on his assurance, the instant case was not one of them. Where the detriment to the promise was not exclusively financial, its evaluation was not an exercise in mere financial accounting. In a case where there were a range of activities and mutual support, which were incapable of financial quantification, the judge had been entitled to concentrate on the causal link between the assurance relied on by the respondent and the detriment asserted.  The various asserted benefits, flowing in both directions, were the incidents of the relationship while it successfully subsisted rather than direct consequences of reliance on the promise as to security. (3) In those circumstances, the judge had been entitled to find that it was unconscionable for the appellant to resile from his promise and to refuse to put the respondent back in much the same position as she was in before she gave up her own house. Unconscionability was not a watertight element in the estoppel but rather a feature that permeated all of its elements. The court was concerned with a broad inquiry as to whether repudiation of an assurance was unconscionable in all circumstances: Gillett v Holt [2001] Ch 210 applied. Given the judge’s explicit findings as to the nature of the appellant’s promise, on the strength of which the respondent gave up her secure home in which she had invested and invested what little else she had in a home to which she had no legal title, it was the detrimental reliance that made the promise irrevocable and led to the conclusion, at the end of a broad inquiry, that repudiation of the assurance was unconscionable. Ashley Wynne (instructed by Harrison Clark Rickerbys Ltd, of Worcester) appeared for the appellant; Cheryl Jones (instructed by QualitySolicitors Parkinson Wright, of Worcester) appeared for the respondent. Sally Dobson, barrister Click to read transcript: Blackburn v Southwell