Watt v Dignan & Ors

An estoppel affecting an easement requires representation or encouragement, reliance, detriment and a sufficient causal connection. These matters must be assessed against the case pleaded and the evidence properly called at trial. An appellant cannot materially recast the estoppel on appeal where the respondent lacked fair warning. A right to use facilities carries ancillary rights necessary for its enjoyment, including cleaning and maintenance. Expert valuation evidence based on an unclear or legally mistaken assumption may properly be rejected, particularly where the answer is hesitant and unreasoned.

The respondents owned Units 26A and 29, benefiting from easements to use toilet facilities at Unit 27, owned by the appellant. The facilities were decommissioned and later demolished. The County Court at Manchester rejected arguments that the easements had been abandoned or that the respondents were estopped from enforcing them. It declined to order reinstatement but awarded £34,000 damages in lieu.

On appeal, the appellant advanced a materially different estoppel case, relying on conduct before his purchase of Unit 27 and on that purchase as the relevant detriment. He also challenged the valuation evidence. The issues were whether the pleaded estoppel had been established, whether the new case could be advanced on appeal, and whether the damages award should be reduced.

1. Pleading and appeal. The appeal was dismissed. The appellant’s case on appeal differed materially from the pleaded case. It relied on different conduct, a representation to a different property owner and a different act of detrimental reliance. The respondents had prepared their evidence and submissions on the pleaded case, and a potentially relevant witness had not been cross-examined. The principles stated in Prudential Assurance Co Ltd v HMRC [2016] EWCA Civ 376 required fair warning of the issues. A new issue not foreshadowed in the statement of case required permission and was subject to case-management control.
2. Estoppel. Applying Lester v Woodgate [2010] EWCA Civ 199, the pleaded case required the relevant representation or encouragement, reliance, detriment and causation to be established. The evidence did not establish a completed estoppel before the appellant acquired Unit 27, nor at the time of purchase. By the time demolition began, the respondents had clearly asserted their rights. The Recorder had applied the correct test and had not conflated abandonment with estoppel. His conclusion was unassailable.
3. Damages and valuation. The Recorder was entitled to assess damages by the diminution in value of Units 26A and 29. The expert’s later answers rested on an unclear assumption that no one had the right to maintain the facilities. A dominant owner has ancillary rights necessary to give effect to an easement, including the right to clean and maintain toilet facilities. The hesitant and unreasoned answers did not require an award limited to nominal damages. The award of £34,000 stood. The reasoning in Routestone Ltd v Minories Finance Ltd [1997] 1 EGLR 123 supported that approach.

• Court of Appeal (Civil Division): dismissed the appeal and upheld the County Court’s decision.
• County Court at Manchester (Chancery Business), Mr Recorder Khan: rejected the abandonment and estoppel arguments, declined mandatory reinstatement of the toilet block, and awarded £34,000 damages in lieu.