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New proprietary estoppel case: Liden v Burton [2016] EWCA Civ 275

This is another case involving a former cohabiting couple in which the doctirne of proprietary estoppel was successfully used by the claimant to obtain a lump sum payment against her ex-partner. The claimant, Miss Liden, was a Swedish national, the defendant, Mr Burton, lived in Notton, near Wakefield. They met in Sweden and moved back to Notton to live in Mr Burton’s house, Willow Beck. Miss Liden paid Mr Burton £500 per month as a contribution towards the expenses of running and maintaining the property. There was an issue about the basis upon which these payments were made. It was found that Miss Liden had typed a document, signed by Mr Burton, which stated “this is to verify that Kristina Liden pays rent of £500 per month. This payment has been madeevery month since 2001.” The judge found the explanation of the use of the word “rent” involved no waiver by Ms Liden of rights she may have in the property. The judge found that “the payments were to enable, based on what Mr Burton had told her, the house to be retained, and when he attempted to describe it as rent she challenged that description and got a no doubt grudging acknowledgment that it was “towards the house”. He also found that the £500 per month payments were made in reliance on these matters and what Mr Burton had said to her. He further found that if Ms Liden had known the true position she would have made no payments towards the house, towards the mortgage and could have invested money elsewhere.

There was a stark conflict of evidence between the parties in respect of the monthly payments which Miss Liden said she made. Mr Burton denied receiving any. The judge preferred Miss Liden’s account in respect of the payments and generally. Mr Burton was found not to be credible.

The judge found that the requirements of proprietary estoppel were established. The minimum equity to doo justice between the parties involved the property being held on trust for Miss Liden, under the terms of which the first £33,522 of equity was held on trust for her. The figure of £33,522 reflected a refund of contributions and was arrived at on the basis that if Ms Liden had known the true position she would have made no payments towards the house and could have invested the money elsehwhere. The sum potentially so available was identified as £200 per month of the £500 she was paying. This resulted in the principal sum of £28,800 to which was to be added interest as 3% on a rolling basis, resulting in a total interst figure of £4,752.

On appeal, it was submitted on behalf of Mr Burton that 1) The assurance that the payments were going “towards the house” is (a) not sufficiently clear and unambiguous, and (b) does not amount to an assurance of beneficial interest; (2) This assurance was given after the payments had commenced and therefore there is no sufficient link for reliance; (3) There can be no basis for an assurance conferring an interest in property once the “rent” document was signed in 2002 and (4) £200 per month is too insubstantial an amount to constitute detriment.

These submissions were rejected.The judge found that from the outset Miss Liden was told that the payments were needed if the house was to be kept and that was the only way they were going to be able to live there. The payments were necessary if the house was “to be retained” for them. At the same time, MrBurton was saying that they would always be together, as borne out by his proposal of engagement.

The Court of Appeal found that against this factual background it was open to the judge to conclue that Miss Liden would reasonably have understood that her necessary payments were in return for an interest in the house. The judge was entitled to conclude that when properly considered in their context the statementsmade by Mr Burton were a sufficiently clear assurance to found a proprietary estoppel. There was therefore no difficulty about reliance.

The Court of Appeal re-iterated that the court has a “wide discretion” when deciding how best to give effect to the equity and upheld the order made.

The case demonstrates that each case will turn on its own specific facts and also the broad range of remedies available to the court when deciding how to best satisfy anyequity that has arisen.