Fielden v Christie-Miller and others

Civil practice and procedure – Settlement – Proprietary estoppel – Summary judgment – Dispute arising over meaning and effect of deed of appointment of trustees under settlement – Claimant and first defendant being purported beneficiaries under two settlement trusts – Disputes arising over meaning and effect of deed of appointment of settlement trustees – Claimant issuing proceedings against first defendant and defendant trustees – Claimant applying for declaratory relief as to correct interpretation of deed of appointment or rectification – First defendant counterclaiming for declarations of entitlement to absolute interest in trust fund relying on principle of proprietory estoppel – Defendants seeking summary judgment or strike out of claim – Whether defendants entitled to summary judgment – Applications dismissed A settlement was created in 1967, comprising land and other assets. The trustees were empowered to exercise a power of appointment in favour of the first defendant and the claimant. In 2005, the 1967 settlement trustees resolved to grant the claimant a life interest in the settlement fund and, subject to that, to hold the fund primarily for his issue. Adjoined the property within the settlement fund were land and assets, which were subject to trusts established by a will. By a deed of appointment, the will trustees purported to exercise a power of appointment by which, subject to trusts declared by the will in favour of the first defendant, they were to hold the will fund and its income for the claimant absolutely. The claimant issued proceedings against the first defendant and former and present trustees of the will trusts, seeking declaratory relief concerning the true construction of the deed of appointment; or alternatively rectification of it. The relief was designed to establish that the deed was effective to provide, or should be rectified so as to provide, that the income of the appointed fund was to be held for the first defendant for life and that subject thereto, capital and income were to be held for the claimant absolutely. The proceedings were brought against the first defendant, the former will trustees, in office when the deed of appointment was executed (the second to fourth defendants) and the current will trustees (the fifth to eighth defendants). The first defendant defended the claim and counterclaimed for declarations that he became and remained entitled to an absolute interest in the will fund and that it was not open to the then will trustees (the second to fourth defendants to his Part 20 claim) or the current will trustees (the fifth to eighth defendants to his claim) to reduce or cut down that interest. He relied on the principle of proprietary estoppel to contend that he was entitled to a freehold interest in a farmhouse which was one of the assets of the settlement fund, which he had occupied since 1996, or, alternatively to the right to live there rent free until the death of the survivor of himself and his wife. The first defendant relied on an alleged representation by one of the settlement trustees to that effect. The trustees applied to strike out the part 20 claim against them, contending that the statement of case disclosed no reasonable cause for bringing the claim and that the court should order summary judgment under CPR 24.2 because the first defendant had no real prospect of succeeding on it and there was no other compelling reason why the case should be disposed of at a trial. They contended that the statement of case did not sufficiently allege that any representation or assurance had been made by or on behalf of all the trustees; and any covenants etc entered into or expressed by them concerning the future exercise of their fiduciary powers were void and unenforceable as a fetter on their discretion. Held: The applications were dismissed. (1) Elementary fairness required that, before a person could be bound by the acts of another purporting to act on his behalf, that other had to have his authority to bind him in the matter. Whether he had would depend on the usual principles of agency. That applied as much in the field of estoppel as it did in other contexts. In the language of estoppel, there was nothing unconscionable in a person denying what another had come to believe and acted upon to his detriment if that person had not, either himself or through his agents, allowed the other to reach that belief. It was not, therefore, sufficient simply to have pleaded that one trustee appeared to be speaking on behalf of all three trustees. The pleading had to go further. It had to set out, in respect of each trustee at the time of the representation which was said to ground the estoppel, what facts and matters were relied upon for saying that that trustee was bound by the representation in question. In the present case, the issue was whether the one trustee had had the authority of his co-trustees and, on the pleaded case, he had not: Attorney-General to Prince of Wales v Collom [1916] 2 KB 193, Crabb v Arun District Council [1976] 1 Ch 179, Gillett v Holt [2001] Ch 210 and Pleming v Hampton [2004] EWCA Civ 446 considered. 2) The non-fettering principle did not operate to defeat the first defendant’s equity if the ingredients of the estoppel which he asserted were otherwise established. The principle was confined to invalidating what would otherwise be a commitment on the part of the donee to exercise, or not to exercise, the power in question in a given way in the future. That should not prevent the court from granting relief to a person claiming an estoppel if he had otherwise established the necessary ingredients. In the result, the court was unwilling to strike out the part 20 claim, or give the trustees summary judgment in respect of it, on the challenge founded upon the non-fettering principle. In an area of developing jurisprudence, the court would be slow to strike out a claim since decisions on novel points of law should be based on actual findings and not assumptions of fact. Accordingly, it was better that the issue, and the extent to which it was affected by the developing jurisprudence in the area of proprietary estoppel, be fully argued in the light of the facts found at the trial: Three Rivers District Council v Bank of England [2003] 2 AC 1 applied; Bexley London Borough Council v Maison Maurice Ltd [2006] EWHC 3192 (Ch); [2007] 1 EGLR 19 considered. Giles Goodfellow QC and Mark West (instructed by Wilsons LLP) appeared for the first defendant/[part 20 claimant and tenth part 20 defendant; Richard Wilson and Harry Martin (instructed by Boodle Hatfield LLP) appeared for the third, fourth, ninth and 10th part 20 defendants. Eileen O’Grady, barrister     Click here to download the transcript of Fielden v Christie-Miller and others