26 July 2016
An appeal of a decision under TOLATA 1996 involving an estoppel argument based on a settlement agreement between the parties.
Facts
- Mr Ely and Ms Robson were in a relationship and had two children together. In 1987 Mr Ely purchased the family home, which was registered in his sole name; Ms Robson made no financial contribution towards the purchase price. The parties lived at the property with their two daughters and, for a time, Mr Ely’s three sons. In addition, Ms Robson’s elderly aunt moved into the property and her elderly mother would sometimes come to stay.
- Upon separation in 2007, Ms Robson claimed that the parties held the beneficial interest in the family home in equal shares, by reason of their common intention.
- In advance of the final hearing, the first instance judge found that the parties met in Poole Park for the purpose of negotiations (in the absence of their solicitors). Mr Ely contended that a settlement agreement had been reached (which was embodied in a letter sent by his solicitors to Ms Robson’s solicitors in August 2007).
- The essence of the compromise was that Mr Ely would hold the property on trust for himself for life, with a remainder of 80% to his heirs and 20% to Ms Robson.
- Ms Robson would have the right to occupy the property for as long as her aunt and mother were alive. Mr Ely would be entitled to sell the property when Ms Robson was no longer entitled to occupy the same and he would not pursue any claim in two other properties owned by Ms Robson.
- Ms Robson disputed that any such agreement had been reached on the basis that she would have accepted nothing less than an equal share in the beneficial interest of 6 Torbay Road and that the parties appreciated any such agreement would need to made in writing and subject to legal advice.
- Subsequently, Ms Robson’s aunt and mother died and Mr Ely sought orders for declaratory relief and for sale of the property. He claimed that an agreement had been reached on the terms set out in the letter of 14 August 2007.
- Mr Ely also claimed that, in allowing Ms Robson to remain in the property, he had relied upon her representations that she would abide by the terms of their agreement. Accordingly, if the agreement lacked the necessary formalities, its terms nevertheless took effect by reason of a constructive trust or proprietary estoppel.
- The judge at first instance found in favour of Mr Ely; Ms Robson appealed the decision.
Held
- The Court of Appeal dismissed Ms Robson’s appeal and found that Mr Ely held the property on constructive trust for the parties in 80:20 shares.
- The trial judge was entitled to find that the parties intended their oral agreement to be binding; that they both understood and intended that it should be acted upon; and that all that remained to be done was to put in place the ‘necessary mechanics’ to bring about their stated objectives.
- The judge’s finding that Mr Ely relied upon the oral agreement by not pursuing his claim in relation to Ms Robson’s other properties, and by allowing her to continue to reside at 6 Torbay Road, were unassailable.
