Whittaker v Kinnear

In a possession claim, a pleaded proprietary-estoppel or constructive-trust defence may constitute a genuine dispute on substantial grounds even where the underlying agreement concerns the sale of land and does not comply with Law of Property (Miscellaneous Provisions) Act 1989, section 2. Whether such an equity arose is highly fact-sensitive, particularly where the alleged assurances are absent from the written sale documents. A possession hearing under CPR Part 55 may be treated as analogous to a summary judgment application. If the defence cannot fairly be determined on the documents, the court should give directions for trial rather than decide the merits summarily. The commercial or domestic character of the dealings depends on the nature of the parties’ relationship and dealings, not on the nature of the property.

Mrs Whittaker sold Marks Tey Hall and adjoining land to Mr Kinnear and Mr Nichols. She remained in occupation under a fixed-term agreement described as an assured shorthold tenancy, although the rent was too low for the agreement to fall within the Housing Act 1988. After the mortgagee’s receivers served notices to quit, possession proceedings were brought.

The Colchester County Court held that the pleaded proprietary-estoppel defence was defeated by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and ordered possession. On appeal, Mrs Whittaker also relied on constructive trust, contractual construction and notice arguments. The central issue was whether the pleaded assurances could give rise to proprietary estoppel or a constructive trust despite the written sale contract.

1. Nature of the possession hearing. A hearing under CPR Part 55 may be analogous to a summary judgment application: Forcelux Ltd v Binnie [2010] HLR 20. Where the claim is genuinely disputed on grounds appearing substantial, the proper course is to give case-management directions for trial.
2. Section 2 of the 1989 Act. The observations of Lord Scott in Cobbe v Yeomans Row Management Ltd [2008] 1 WLR 1752 concerning the inability of proprietary estoppel to enforce an agreement declared void by section 2 were expressly obiter. They were not binding. Following Yaxley v Gotts [2000] Ch 162, the court held that proprietary estoppel in a case involving a sale of land had survived the enactment of section 2. Constructive trust was also not excluded as a matter of principle.
3. Factual evaluation. Claims based on proprietary estoppel and constructive trust are highly fact-sensitive. The meaning of assurances, and the reasonableness of reliance, depend on their factual context. The fact that alleged assurances were omitted from the sale documents did not justify summary dismissal, because the pleaded facts had to be assumed potentially true and several explanations remained possible.
4. Commercial dealings. Whether the case is commercial or domestic depends on the nature of the parties’ dealings, rather than the nature of the property. The transaction was properly classified as commercial, but that classification did not resolve the estoppel or constructive-trust issues.
5. Tenancy and notices. After expiry of the fixed term, the tenancy became monthly rather than annual: Alder v Blackman [1953] 1 QB 146. The notices to quit were effective, and the later attempt to renew the tenancy was too late. The appeal nevertheless succeeded on the proprietary-estoppel issue.
6. Disposition. The appeal was allowed, the possession order was set aside, and the case was remitted to the Colchester County Court for directions for trial.

• High Court (Queen’s Bench Division): The appeal from the Colchester County Court was allowed. The possession order was set aside and the case was remitted for directions for trial.
• Colchester County Court: His Honour Judge Lochrane held that the proprietary-estoppel defence was defeated by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and ordered possession.