Cyril Archibold Capron v Government of the Turks and Caicos Islands and another (Turks and Caicos Islands)

An agreement to enter a future development agreement is not binding merely because a public authority has approved a proposal in principle. The decisive question is whether the parties intended immediate legal effect. Unresolved fundamental terms, required constitutional approvals and an unagreed price may show that no concluded contract exists. Proprietary estoppel requires a clear representation giving rise to a reasonable belief in entitlement to a certain interest in land, reliance and detriment. Unconscionable conduct cannot replace those elements. A successful defendant ordinarily receives its costs unless it caused the litigation, occasioned unnecessary expense, or committed a wrongful act in the transaction. Administrative delay or incompetence, without one of those features, does not justify departing from that rule.

The appellant and proposed partners negotiated with the Government of the Turks and Caicos Islands for a mixed-use development on Crown land. The Executive Council approved the proposal in principle and indicated that a development agreement and conditional purchase lease would be prepared, but material terms remained unresolved and the proposed site later changed.

Martin J dismissed the appellant’s contractual and proprietary-estoppel claims but ordered the respondents to pay his costs. The Court of Appeal dismissed the merits appeal, allowed the respondents’ costs appeal and substituted no order as to costs. The Privy Council considered enforceability, proprietary estoppel, further discovery and evidence, and costs.

1. Appeal and contract. The Board advised that the appeal be dismissed and the Court of Appeal’s decision affirmed. A contract to execute a future document may be binding, and uncertainty about facts or points of detail is not necessarily fatal. The critical question is the parties’ intention when the agreement was made. The principles illustrated by Morton v Morton [1942] 1 All E.R. 273, Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503 and Neilson v Stewart (1991) SLT 523 did not assist the appellant.
2. No concluded agreement. The proposed development agreement left unresolved what would be built, the phasing and timing of construction, the precise land and the price. Executive Council still had to consider whether to recommend the scheme, and the Governor had to approve it. The partners’ subsequent correspondence also showed that negotiations continued and that they did not regard the Government as contractually bound.
3. Proprietary estoppel. The Board applied Yeoman's Row Management Ltd v Cobbe [2008] UKHL 55. The appellant could not identify a certain interest in land to which he reasonably believed himself entitled. His expectation was only that a contract, whose terms remained unsettled, might be concluded later. That defect was fatal. The doctrine must be applied in a disciplined and principled way. Unconscionability is an objective assessment which supports and confirms the other elements; it cannot stand alone or cure the absence of a clear expectation of entitlement.
4. Further evidence. Additional discovery and affidavits directed to alleged unconscionable conduct could not cure the fundamental failure in the estoppel claim.
5. Costs. The general rule in Ritter v Godfrey [1920] 2 KB 47 is that a wholly successful defendant should receive its costs unless it caused the litigation, occasioned unnecessary litigation or expense, or committed a wrongful act in the transaction. The criticised conduct of government departments did not fall within those categories. The Court of Appeal was therefore correct to reverse the trial judge’s costs order and make no order as to costs.

1. Privy Council: On 21 January 2010, the appeal was dismissed and the decision of the Court of Appeal affirmed: [2010] UKPC 2.
2. Court of Appeal of the Turks and Caicos Islands: On 10 April 2008, the appellant’s appeal was dismissed. The respondents’ appeal on costs was allowed and no order as to costs was substituted.
3. Supreme Court of the Turks and Caicos Islands: Martin J dismissed the appellant’s claim on 24 October 2007 but ordered the respondents to pay the appellant’s costs on an indemnity basis.