Kay v Mills

Summary judgment and strike-out are inappropriate where a pleaded agreement or proprietary-estoppel case gives the defendant a real, though not necessarily probable, prospect of success and the issue requires trial.

A later claim is not automatically an abuse merely because it could have been raised earlier. The court must assess all the circumstances on a broad, merits-based footing. Where earlier proceedings decided that a defendant had no beneficial interest but did not adjudicate a separate right to occupy, a later claim based on that right may proceed if it is consistent with the earlier position. Earlier events may remain relevant to interpreting assurances.

The claimant, Mr Kay, sought possession of a property registered in his and his daughter Mrs Mills's joint names. He relied on a trust deed under which the property was held for him alone. Mrs Mills's original defence and counterclaim asserted a beneficial interest and a right for her family to remain in the property.

In earlier charging-order proceedings, Mrs Mills had denied having any beneficial interest. The High Court struck out her defence and counterclaim, ordered possession, and treated the proposed case as an abuse of process. On appeal, she conceded that she had no beneficial interest at the time of the earlier proceedings and sought permission to amend her pleading to rely on an agreement and proprietary estoppel concerning continued occupation. The central issues were whether that case had a real prospect of success and whether it was abusive to advance it later.

1. Appeal allowed. The order under appeal was set aside. Permission was given to amend the defence and counterclaim. There was no order as to the costs of the appeal or of the application and hearing below.
2. The application engaged Civil Procedure Rules 3.4 and 24.2. Summary judgment requires the court to consider whether the defendant has no real prospect of successfully defending the claim or issue and whether there is any other compelling reason for a trial. A real prospect must be more than fanciful or merely arguable, but it need not be probable.
3. A pleaded agreement or proprietary-estoppel case asserting a right to remain in property can disclose a real prospect of defending possession proceedings. Proprietary estoppel may arise where an owner leads or allows an expectation of a right, the claimant acts detrimentally in reliance on it, and refusal would be unconscionable. The court has a wide discretion as to the relief giving effect to the equity. The merits were therefore matters for trial.
4. Applying the broad, merits-based approach in Johnson v Gore Wood [2002] 2 AC 1, it was not abusive to advance a claim which had not been adjudicated and which the earlier court had not needed to determine. The proposed right to remain was consistent with the concession that Mrs Mills had no beneficial interest. No explanation was required as a condition of pursuing the amended case, and the public interest in finality did not bar it.
5. Vervaeke v Smith [1983] AC 145 was distinguishable. That case concerned recognition of a foreign decree obtained after, and because, an earlier fraudulent claim had failed. The present claim was neither inconsistent with the earlier position nor the subject of the earlier adjudication. Evidence of arrangements and expenditure before the earlier proceedings could also be relevant to interpreting the alleged assurances.

• Court of Appeal (Civil Division): allowed the appeal, set aside the order under appeal, granted permission to amend, and made no order as to the relevant costs.
• High Court of Justice, Chancery Division, Leeds District Registry: by order dated 8 April 2005, struck out the defence and counterclaim, ordered Mrs Mills to deliver up possession, and awarded costs on the application.