Evan John Tegwyn Davies and Another v Elizabeth Eirian Davies
| Jurisdiction | England & Wales |
| Judge | Lord Justice Floyd,Lord Justice Underhill,Lord Justice Richards |
| Judgment Date | 07 May 2014 |
| Neutral Citation | [2014] EWCA Civ 568 |
| Docket Number | Case No: A3 2013 2707 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 May 2014 |
[2014] EWCA Civ 568
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
CARDIFF DISTRICT REGISTRY
HHJ MILWYN JARMAN QC
[2013] EWHC 2623 (Ch)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Richards
Lord Justice Underhill
and
Lord Justice Floyd
Case No: A3 2013 2707
Timothy Fancourt QC and Elizabeth Fitzgerald (instructed by Michelmores LLP) for the Appellants
Leslie Blohm QC (instructed by Hugh James) for the Respondent
Hearing date: 4 March 2014
Introduction
This appeal arises in connection with a claim by the respondent, Eirian Davies, to be entitled to an interest in her parents' pedigree dairy farm called Henllan in West Wales, or other equitable relief, based on the doctrine of proprietary estoppel. The parents, Tegwyn and Mary Davies, seek to evict Eirian and her family from Henllan, where she is presently living in the farmhouse. As the judge did, I will use the Davies' first names to refer to them, for convenience and without intending them any lack of respect.
After a three-day trial on preliminary issues before HHJ Jarman QC sitting as a High Court Judge in Cardiff, it was held that, as a result of Eirian's detrimental reliance on representations made by one or both of Tegwyn and Mary, it would be unconscionable for them to deny her an equity in Henllan and/or the farming business carried on there. By his order dated 22 October 2013, the judge granted a declaration that Eirian had established an entitlement to "a beneficial interest in the farm and/or the farming business". The order provided that the nature and extent of that interest were to be determined at a subsequent hearing.
Tegwyn and Mary appeal from that judgment with the permission of Lewison LJ. The core issue in the appeal is whether the judge was right to find that there was any substantial detriment incurred by Eirian in reliance on representations made by Tegwyn and Mary. There are also issues about whether Eirian relied on the representations. Mr Timothy Fancourt QC and Ms Elizabeth Fitzgerald presented the case for Tegwyn and Mary. Mr Leslie Blohm QC presented the case for Eirian. We have been greatly assisted by their clear and economical submissions.
The facts and the judge's conclusions
Henllan was purchased by Tegwyn and Mary in 1972. It comprises a farmhouse, an attached cottage, outbuildings and 182 acres of land. It is farmed together with another nearby farm owned by them, Caeremlyn, which they had bought in 1961 and where Eirian and her two sisters were born. Eirian was born in 1968. Henllan and Caeremlyn were together referred to by the judge as "the farm", and I will continue so to refer to them.
By 1989 Eirian was the only sister left at the farm, her sisters having departed to follow other paths. Eirian had a passionate interest in pedigree milking cows which was the main business of the farm, and it was by this stage clear that she was the only possible candidate to take over the farm. In the period up to 1989, when she was 21, she was not paid for working on the farm. She was provided with board and lodging and money for clothes and leisure. When she asked about money, her mother, who held the family purse strings, responded that she should not "kill the goose that lays the golden egg". Her father said to Eirian that the farm and the business would be hers one day.
The judge held that in this period of four years or so between leaving school and 1989 the benefits Eirian received were substantial, but something less than full recompense for her work on the farm which involved long hours on most days.
In 1989, at the age of 21, in the first of many fallings-out with her parents over what they regarded as her unsuitable choice of partners, Eirian left the farm to live with her fiancé, Paul, and stopped working there. She married Paul in 1990. Eirian and her parents reconciled their differences shortly before the wedding, and she returned to work on the farm. There was some dispute before us as to the period during which Eirian was not working on the farm, Eirian contending that it was for a very short period only. It is clear (paragraph 36 of the judgment) that the judge held she was not working at the farm for about two years. I was not persuaded that there was any basis on which we could depart from that finding.
Later in 1990 Tegwyn and Mary purchased another, smaller farm called Glascoed. The majority of Glascoed was farmed as part of the farm, but some 20 acres were sold to Eirian and her husband Paul. Eirian raised her own livestock on her land at Glascoed. She continued to work on the farm, milking and doing other work. She was paid for the milking work which she did at the rate of £15 per day, but not for veterinary work, foot trimming, insemination work or general farming. Tegwyn did some work on Glascoed for Eirian, which the judge held did not significantly affect the benefits Eirian was receiving.
Commencing in 1997 discussions took place between Tegwyn, Mary and Eirian with a view to bringing Eirian into their farming partnership. Eirian signed a partnership agreement in March 1998 in the expectation that her parents would promptly sign it as well. Upon signing she believed that she became a partner and that she would have a long term future in the business. In the event Tegwyn and Mary did not sign the agreement, either then or subsequently. At the time, an investigation was being carried out seeking to recover sums of money from farmers, including Tegwyn and Mary, who supplied milk under an agreement with Elm Dairies. Tegwyn and Mary decided not to sign the partnership agreement before the Elm Dairy investigation was concluded. The investigation was not concluded until 2005.
In 1998 Eirian and Paul sold Glascoed and moved back into Henllan farmhouse which they occupied rent free with their first daughter. When Eirian moved back to Henllan she was, the judge found, still under the impression that her parents had signed the partnership agreement. She did not find out until 2001 that they had not signed it.
Whilst Eirian and Paul were living at Henllan from 1998, they made improvements to the farmhouse. For some, but not all of these improvements they were reimbursed by Tegwyn and Mary. There was a dispute about the value of the improvements for which they were not repaid and which the judge resolved by saying that it was of the order of £3,000.
In 2001, following another argument with her parents, Eirian and her family moved out of Henllan into a house in nearby Ludchurch. Her parents let out the farmhouse, but paid some of the monies received to Eirian.
In the autumn of 2001 Tegwyn and Mary gave instructions to their solicitor in connection with their wills, stating that it was their intention that Eirian should take over the farm in due course, but she was not to have the property outright so long as she remained married to Paul. At that stage they said there was no possibility of her returning to work on the farm. Eventually they signed wills in 2002, at this stage leaving their estate to all three daughters in equal shares.
Nevertheless Eirian did return to work on the farm part time in late 2005 or early 2006. In June 2006 she separated from Paul and they were finally divorced in October 2007. She continued to live at Ludchurch, now with her two daughters. She took other part time jobs in order to be able to afford to do so.
In 2007 there was yet another argument, provoked by the fact that Eirian had started a relationship with another man. Eirian stopped working on the farm and continued working elsewhere. Also in that year she started working as a technician for a company called Genus which specialised in livestock reproduction services.
Tegwyn repeatedly asked Eirian to return to the farm. She eventually agreed and returned to work there. On Boxing Day 2007 she moved back to live in the farmhouse. Tegwyn told her on this occasion that Henllan would be her home, rent free, for life. The judge found that Tegwyn was aware that some encouragement of this nature would be needed to persuade Eirian to come back to Henllan. She gradually did more work on the farm and, in due course, less for Genus.
On 16 July 2008 there was a meeting between Tegwyn, Mary, Eirian and the family solicitor and accountant to discuss a proposal to issue 49% of the shares in the farming company to Eirian and to appoint her a director. No agreement was reached at the meeting on the salary to be paid to Eirian, although this was later agreed and paid at £1500 per month, after disclosure of Eirian's outgoings. Eirian resigned her job at Genus and went back to full time work on the farm. Although the documents were not signed, the parties behaved as if they had been.
Because Paul was pursuing financial claims against Eirian in respect of their former marriage, it was agreed that the shares would not be allotted to Eirian. Instead her parents would sign draft wills leaving a portion of the farm to Eirian together with the shares in the company. The judge accepted Eirian's evidence that in 2009 she was shown a draft will leaving her the land and buildings and a share in the company with a gift over to her daughter. However Tegwyn and Mary continued to make changes to their draft wills, culminating in a proposal to place the farm into a trust with the residue to be split between the daughters in equal shares.
Also in 2009 representations were made...
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