Powell & Anor v Benney (Representative of the Estate of the Late Ronald Hobday)

Permission to appeal may properly be granted where the lower court’s reasons are materially obscure on whether it found a proprietary estoppel or constructive trust, and on the weight given to the claimant’s expectation. In assessing a possible equitable remedy, the value of detriment, expenditure and work may be relevant alongside the value of the disappointed expectation. A modest award may justify appellate scrutiny where it bears little apparent relation to the value of the property and the lower court’s reasoning is unclear.

Following a three-day trial, His Honour Judge Levy QC awarded the claimants £20,000 in proceedings concerning promises that two houses would be left to them after the owner’s death. The claimants contended that their expenditure, work and reliance on those promises supported a proprietary estoppel or constructive trust. The judge’s reasoning on the legal basis of the award and the significance of the claimants’ expectation was unclear.

The claimants renewed their application for permission to appeal. The central questions were whether there was a reasonable prospect of success on those grounds and whether execution of the order, including the proposed sale of the houses, should be stayed pending appeal.

1. Permission to appeal. The application was granted. There was a reasonable prospect of success because the first-instance judgment was obscure as to whether the judge had found a proprietary estoppel or constructive trust, and as to whether sufficient weight had been given to the claimants’ clearly expressed expectation that the properties would pass to them.
2. Equitable assessment. The judgment under appeal appeared to calculate the award by reference to expenditure and work, with an additional sum for disappointment, but the resulting £20,000 was only a small proportion of the value of the houses, even allowing for subsidence. The Court of Appeal considered that the appellate grounds concerning both the legal basis of the award and the weight given to expectation value had a reasonable prospect of success.
3. In discussing Jennings v Rice [2002] EWCA 159, the court noted that the equitable award in a proprietary estoppel or constructive trust case may reflect both the value of detriment-reliance and the value of the expectation, so far as necessary to produce an equitable and proportionate result. The judgment did not finally determine the merits of that issue.
4. Stay and mediation. A stay was granted, without hearing the respondent, on execution of the order requiring the immediate sale of the houses and on recovery of the costs awarded to the respondent. The respondent retained an opportunity to make submissions against the stay. The court also directed the Civil Appeal Office to write to the parties about mediation and warned the claimants of the potential costs of proceeding.

• Court of Appeal (Civil Division): On 9 May 2007, the renewed application for permission to appeal was granted, together with a stay of the sale of the houses and recovery of costs.
• Central London County Court: His Honour Judge Levy QC, after a three-day trial and judgment dated 9 August 2006, awarded the claimants £20,000. The judgment’s reasoning was the subject of the proposed appeal.