Armitage Holdings Inc v Delahunty

Proprietary estoppel requires detrimental reliance on the expected right or benefit. Past services which explain a landowner’s generosity do not, without more, prevent revocation of a gratuitous licence. A claim for reasonable remuneration under an informal building contract requires reliable evidence of the work done, its reasonable value and payments already made. The court cannot simply assess a figure or order an inquiry where the necessary underlying evidence is absent. Corporate personality remains distinct from that of directors, shareholders and controllers. The corporate veil cannot be pierced merely because justice appears to require it; there must be use of the company as a device or façade to conceal or avoid personal liability.

Armitage Holdings Inc sought possession of a flat occupied by Peter Delahunty. Mr Delahunty defended the possession claim and brought Part 20 claims against Armitage, the deceased Donald Garrett’s personal representatives and Blackfriars Land Ltd.

He alleged a long-standing joint venture or business relationship with Mr Garrett, unpaid building work, an agreement for £600,000 and several flats, a permanent right to occupy the flat, and liability for dishonoured company cheques. The central issues were whether those arrangements were proved, whether the occupation was protected by proprietary estoppel, and whether Mr Garrett’s estate could be made liable for company obligations.

1. Possession. The occupation of the flat was permissive and gratuitous, not a tenancy. The contemporaneous evidence showed that the managing agent was not to pursue tenancy forms. A gratuitous licence is ordinarily revocable, and Armitage had revoked it.
2. Proprietary estoppel. Although the principles could apply defensively, Mr Delahunty had to establish detrimental reliance on the continued existence of the licence. His evidence showed past work which might explain the grant of the accommodation, but did not show reliance on a continuing right to occupy. The proposed reliance on later maintenance work had not been identified or proved as the relevant detriment.
3. Unpaid work and the alleged £600,000 agreement. Any unpaid work was undertaken under informal contracts providing for reasonable remuneration. Mr Delahunty failed to prove reliably the work done, its reasonable value or the payments made. The court could not select an arbitrary award or order an inquiry. The alleged agreement for £600,000 and five flats was also not established on the balance of probabilities.
4. Cheques and corporate liability. Most of the Blackfriars cheques were satisfied by later payments or replacement cheques. One £20,000 cheque remained unpaid. The claim concerning the Atlantic Imports cheque failed because it was an advance payment and there was no basis for personal liability. The principles in Saloman v Saloman & Co Ltd [1897] AC 22, Adams v Cape Industries Plc [1990] Ch 433 and Trustor AB v Smallbone [2001] 1 WLR 1177 did not permit liability merely because Mr Garrett controlled companies or signed their cheques.
5. Judgment was given for Armitage for possession, all Part 20 claims against the estate were dismissed, and judgment was given for Mr Delahunty against Blackfriars for £20,000 with interest. Costs were adjourned.

First-instance decision. No appellate history is stated in the judgment.