COUNSEL: J. G. Ross Martyn for the defendant.

J. H. G. Sunnucks for the plaintiff.

 

SOLICITORS: Hobbs & Durrant, Lowestoft; Lucas & Wyllys, Lowestoft.

 

JUDGES: Lord Denning M.R., Roskill and Lawton L.JJ.

 

DATES: 1976 Oct. 27, 28

 

 

[*440] LORD DENNING M.R. Old Mr. Jones was a scrap merchant who carried on business at Kingston-upon-Thames. He had two sons with him as partners in the business. He did reasonably well. Like other scrap merchants, he conducted all his dealings in pound notes; and his accounts did not reflect the true state of the business. He owned three or four houses in Kingston. He lived in one himself, and each of his two sons lived in one of the houses too. His first wife died, and he married his second wife, the plaintiff, on April 10, 1964. He made a will on October 25, 1964, soon after marrying her. By this will he eave his new wife, Alice, his share in the partnership business. He gave his son George the house in which George was living and his son Frederick, the defendant, the house in which Frederick was living. He then gave the remainder of his property whatsoever and whensoever to his new wife. So he made fair provision for his new wife and for his sons.

 

In 1967 or thereabouts there was a compulsory purchase order. The local authority took over his properties. The scrap business was given up. Old Mr. Jones then went up to Blundeston in Suffolk. He bought a house there called St. Albans where he lived with his new wife. He was then concerned about his son Frederick who had been left behind at Kingston. He wanted Frederick with his wife and children to come up to Blundeston. He found a house at Blundeston called Philmona which was suitable for them. Frederick and his wife went up to see it. They liked it very much. So the father bought it for £4,000. Frederick gave up a job which he had in Kingston; and he went with his wife to live in Philmona in Blundeston. Frederick made two payments of £500 each to his father, making £1,000 in all towards the cost of Philmona, but the house was taken in the father’s name and remained in his name. The son believed that the father had given it to him; and the judge accepted his evidence about it. The judge said:

 

“But there is a ring of truth about the account of the transactions he had with his father. His father did intend a gift of Philmona to him, lock, stock and barrel.”

 

The son said that he gave his father the first £500. The judge said:

 

“His father did not resist the payment of £500 to him. When the defendant said ‘What about the money for the property,’ his father replied ‘It’s your place.’ The father also said ‘This is because I owe you a lot.’”

 

Then the son paid the father the second £500: and the father then said of Philmona, “As far as I am concerned, it’s yours.” When Frederick or his wife from time to time asked about the property the father said: “I don’t know what you are worrying about. Alice knows.” Frederick had always trusted his father and never asked for a receipt. There were two other witnesses who supported the view that the father had said to Frederick that it was to be his house. At all events, on those assurances Frederick and his wife and family went into the house. They did not pay any rent to the father, but the father said that they must pay the rates, and they did so.

 

Things went on in that way from 1968 until February 1972 when old Mr. Jones died. Thereupon the stepmother, the new Mrs. Jones, claimed that Philmona was hers. She took out letters of administration with the will annexed and by an assent dated August 18, 1972, got Philmona vested in [*441] her. She had also the house in which she had lived with old Mr. Jones whilst he was alive; and, I believe, other property also. When she had got Philmona vested in her name, she said that Frederick ought to pay her rent. When he did not pay any rent to her she gave him notice to quit and took proceedings for possession in the county court.

 

After hearing the evidence, the judge found that £1,000 had been given by the son to the father when the house was acquired. As the house cost £4,000 altogether, the judge thought that the son in effect contributed £1,000 towards the £4,000. On that account, so far as any equitable interest in the property was concerned, he held that it was to be one-quarter for the son and three-quarters for the father. The judge made a declaration accordingly, but he also went on to say that he was not going to order the son out of possession. He said:

 

“I am not disposed to make an order for possession, because it would be inequitable to do so. I find that the plaintiff has a three-quarter share in the value of Philmona and the defendant has a quarter share.”

 

He added: “The proper arrangement would be for the defendant to pay some rent.” That was the end of the first action which was in 1973. The order was that the stepmother was not entitled to possession, and the judge declared that she had a 75 per cent. equity in the property and Frederick had a 25 per cent. interest.

 

After that decision, the stepmother brought another action. In this action she wanted some payment in the nature of rent, which had never been fixed. She said that a fair and reasonable rent for the whole house would be £10 a week, and she wanted three-quarters of it which would be £7.50 a week. She wanted that to be paid, and if it was not paid, she asked that Philmona should be sold.

 

The judge on this second hearing came to the conclusion that he was bound by the previous case to the three-quarters/one-quarter division. He decided that the only thing he could do was to ask the rent officer to fix a fair rent and to order Frederick to pay a rent of 75 per cent. of that fair rent and to pay the arrears right back to the time of the assent on August 18, 1972. If Frederick did not pay those amounts, then Philmona was to be sold and Frederick was to vacate.

 

Now there is an appeal to us. It does raise some interesting points. First of all, whatever doubts one might have about the first decision of the judge - whether it was really right to hold that the stepmother had a three-quarter or any beneficial interest, nevertheless, we ought not to disturb the decision by the judge at the first hearing. It was not appealed against and there is no appeal before us now upon it. So we must hold that the stepmother has a three-quarters propriety interest in Philmona and Frederick has a one-quarter proprietary interest. But the question is whether Frederick can be compelled to pay rent to her; or whether she can turn him out.

 

First the claim for rent. It is quite plain that these two people were in equity tenants in common having a three-quarter and one-quarter share respectively. One was in occupation of the house. The other not. Now the common law said clearly that one tenant in common is not entitled to rent from another tenant in common, even though that other occupies the whole. That appears from M’Mahon v. Burchell (1846) 2 Ph. 127, 134-135 per Lord Cottenham L.C., and Henderson v. Eason (1851) 17 Q.B. 701, [*442] 720. Of course if one of the tenants let the premises at a rent to a stranger and received the rent, there would have to be an account, but the mere fact that one tenant was in possession and the other out of possession did not give the one that is out any claim for rent. It did not do so in the old days of legal tenants in common. Nor does it in modern times of equitable tenants in common. In Bull v. Bull [1955] 1 Q.B. 234, 239, I said:

 

“. . . the son, although he is the legal owner of the house, has no right to turn his mother out. She has an equitable interest which entitles her to remain in the house as tenant in common with him until the house is sold.”

 

As between tenants in common, they are both equally entitled to occupation and one cannot claim rent from the other. Of coarse, if there was an ouster, that would be another matter: or if there was a letting to a stranger for rent that would be different, but there can be no claim for rent by one tenant in common against the other whether at law or in equity.

 

Second, the order for sale. Here comes into play the doctrine of proprietary estoppel. It has been considered by this court in Inwards v. Baker [1965] 2 Q.B. 29 and Crabb v. Arun District Council [1976] Ch. 179. It is quite plain that the principles of those cases apply here.

 

Old Mr. Jones’ conduct was such as to lead his son Frederick reasonably to believe that he could stay there and regard Philmona as his home for the rest of his life. On the basis of that reasonable expectation, the son gave up his work at Kingston-upon-Thames and moved to Blundeston. He paid the £1,000 too in the same expectation. He did work on the house as well. It was all because he had been led to believe that his father would never turn him out of the house: it would be his family’s home for the rest of his life. He and the rest of the family thought that the father would alter his will or make over the house to the son. The father did not do it, but nevertheless he led the son to believe that he could stay there for the rest of his life. On those two cases it is clear that old Mr. Jones would be estopped from turning the son out. After his death, the plaintiff is equally estopped from turning the defendant out.

 

Similarly, the plaintiff is not entitled to an order for the property to be sold. Nor for any payment to be made by Frederick to her pending sale. Even though there is an implied trust for sale, nevertheless, the courts will not allow it to be used so as to defeat the purposes contemplated by the parties. That appears from Bedson v. Bedson [1965] 2 Q.B. 666: see what I said at p. 679, and per Russell L.J., at pp. 697 and 698. No order for the sale of this property should be made because that would defeat the very purpose of the acquisition, namely that the son Frederick would be able to be there for his life and remain in it as his home.

 

The two doctrines go hand in hand to show that no order should be made so as to disturb the son in his possession of the house: nor should he be made to pay anything for staying there.

 

The ultimate result of the case is that the son has a proprietary interest of a one-quarter share in the house. He is able to stay there for life by virtue of his interest in it, and the plaintiff is estopped from turning him out. Nor can it be sold without his consent. The appeal should be allowed and an order made accordingly. [*443]

 

ROSKILL L.J. I entirely agree. It is very unfortunate that this family litigation cannot be made to stop. The plaintiff in this action was seeking payment of rent, but she also sought the sale of this house at Blundeston, which had previously been declared by the same judge to be held by her and the defendant as tenants in common in unequal shares, the plaintiff owning 75 per cent. and the defendant 25 per cent. Whether on the material before the judge I would have reached the same conclusion is irrelevant. The judge reached that conclusion, and there was no appeal.

 

He also reached certain conclusions of fact which included the fact that the defendant was induced by his now deceased father to move from Kingston to Blundeston on a representation that housing would be made available for him. It seems to me, as it seems to Lord Denning M.R., that the claim for rent is foredoomed to failure if only for the reason that the House of Lords in Kennedy v. De Trafford [1897] A.C. 180 has so held: see the passage at the beginning of the speech of Lord Macnaghten, at p. 190. Lord Macnaghten referred to the judgment of Lord Cottenham L.C. in M’Mahon v. Burchell, 2 Ph. 127, 134-135, where he held the contention that the plaintiff having occupied the house as a tenant in common made him liable for rent to his co-tenant in common quite wrong. Therefore, in my view, that claim for rent fails in limine.

 

As for the rest, Lord Denning M.R. has referred to the decision of this court, consisting of himself, Lawton L.J. and Scarman L.J., in Crabb v. Arun District Council [1976] Ch. 179. I would refer to the three questions, posed by Scarman L.J. at the beginning of his judgment, which the court has to ask in relation to the now well-settled law on estoppel, at p. 193: “First, is there an equity established?” The answer here is unquestionably Yes. “Secondly, what is the extent of the equity, if one is established?” - and the answer, shortly, is that the equity is of a possessory nature entitling the defendant to remain in this house, but it would not, in my judgment, extend to the defendant’s wife. “And, thirdly, what is the relief appropriate to satisfy the equity?” All the members of the court in Crabb v. Arun District Council thought that in some circumstances a court might impose the making of payment of some form or another as a condition of giving effect to the equity, but in the present case it seems to me that it would be wrong to impose as a condition of protecting the equity that the defendant should pay rent to the plaintiff for the following reasons. First, the point of law which I have already mentioned. Secondly, the representation made by the father to the defendant which seems to me to be just as binding upon the plaintiff, who was the administrix of his will, as upon the deceased father. Thirdly, it is plain that the defendant moved into this house thinking that he was going to benefit. With all respect to Mr. Sunnucks’ able argument, I am unable to see why equity should fail to protect the defendant.

 

For those reasons I would allow this appeal and set aside the order for payment of rent, and I would also refuse an order for sale.

 

I would mention one other thing. It was suggested by Mr. Sunnucks hat if we took the view which we do we ought to order a life interest to be created in favour of the defendant. In my judgment, at this stage it would be wrong so to do. This does not seem to have been the subject of argument below, and it seems to me that the defendant’s real case was that he should not pay the rent, and not to seek the creation of a life interest.

 

I would allow the appeal accordingly. [*444]

 

LAWTON L.J. I agree with both the judgments which have been delivered and have nothing to add.

 

Appeal allowed with costs.