Analysis
This was the hearing of an application for strike out of a Part 20 claim or alternatively summary judgment in favour of the defendants where the underlying proceedings related to two separate trusts: a settlement of land and other assets created on 18 February 1967 by Charles (the settlement) and a will dated 15 March 1998 of Charles’s son, John, who died on 20 December 2004 (the will fund).
The claimant in the underlying proceedings had sought declaratory relief regarding the construction of a March 2007 deed, alternatively rectification of it, whereby the trustees of the will fund had purported to exercise a power of appointment such that, subject to the trusts declared by the will in favour of the Part 20 claimant, S, they should henceforth hold the will fund and its income for the claimant absolutely.
S defended the underlying claim and counterclaimed. One aspect of the counterclaim was a claim based in proprietary estoppel against the current settlement trustees that S was entitled to the freehold interest in a property (the property), which was one of the settlement assets, or alternatively to the right to live there rent free until the death of the survivor of himself and his wife. The estoppel was said to arise as a consequence of representations made by J, one of the trustees (of which there were then three, J, M and D), in October 1994 that S and his family would be the beneficiaries of the two estates after John and his wife died and by J and M, two of the trustees (of which there were then three, J, M and P) in October 1995 that S should pay for additions to the property himself on the basis that he would be the next beneficiary of it in any event. S claimed these were such that those who were the settlement trustees at the time and those who were the current trustees were estopped from exercising any power of appointment conferred on them by the settlement so as to reduce or cut down his entitlement.
The current settlement trustees claimed first that the proprietary estoppel claim against them should be struck out on the ground that the statement of case disclosed no reasonable cause for bringing the claim and, second, that the court should order summary judgment because S had no real prospect of succeeding on the claim and there was no other compelling reason why the case should be disposed of at a trial. They claimed that the pleaded case was defective and must fail for two separate reasons. First, that under trust law, unless provided to the contrary in the trust, trustees must act unanimously (the unanimity principle). Therefore, if a representation by them was to found an estoppel, it must have been made by or on behalf of all of them. They argued that the pleadings did not sufficiently allege that any representation or assurance was made by or on behalf of all of them. Second, that under trust law trustees cannot fetter the exercise at a future date of a discretion possessed by them as trustees so that any covenants, undertakings, policies or premature or irrevocable views entered into or expressed by them concerning the future exercise by them of their fiduciary powers were void and unenforceable as a fetter on their discretion (the non-fettering principle). Accordingly, no estoppel based on representation or promise concerning the settlement trustees’ intention as to the future exercise of their dispositive powers could arise.
An application by S to amend his statement of case had also been made but was deferred to be heard at a later date.
Held:
- 1) The court did not agree that where estoppel was in issue it was sufficient merely that the claimant asserting the estoppel believed that the person with whom he was dealing had the authority needed and that it was sufficient that the agent had the appearance of authority with nothing to suggest to the claimant that he did not. Elementary fairness required that before a person could be bound by the acts of another purporting to act on his behalf, that other must have his authority to bind him in the matter. Whether he had would depend on the usual principles of agency. This applied in the field of estoppel as it did in other contexts. In the language of estoppel, there was nothing unconscionable in a person denying what another had come to believe and acted upon to his detriment if that person had not, either himself or through his agents, allowed the other to reach that belief.
- 2) Accordingly it was not sufficient simply to plead that J ‘appeared’ to be speaking on behalf of all three trustees. The pleading must go further. It must set out, in respect of each trustee at the time of the representation which was said to ground the estoppel, what facts and matters were relied upon (whether at the time the representation was made or subsequently) for saying that those trustees were bound by the representations in questions. In respect of the 1994 representation S’s pleadings just did so in the case of D, but only in the reply, and failed to do so in the case of M. In respect of the October 1995 representation, they failed to do so in the case of P. The pleadings failed to set out how J had the authority of his co-trustees and therefore unless an appropriate amendment was made to the pleaded case, the claim would fail.
3) The non-fettering principle did not operate to defeat S’s equity if the ingredients of the estoppel which he asserted were otherwise established. The principle was confined to invalidating what would otherwise be a commitment on the part of the donee to exercise (or not to exercise) the power in question in a given way in the future. This should not prevent the court from granting relief to a person claiming an estoppel. The relief in such a case might either be to accord to him an interest in the land in question commensurate with the expectation which the representation made to him had engendered or, as a minimum, be such as to ensure that he suffered no detriment as a consequence of having reasonably relied on the representation. The effect of doing so would not be (or need not be) to compel the trustees to exercise their power in some given way in the future but merely to disable them from exercising their power in respect of the asset in question, and then only to the extent that the court had declared that the asset was to be applied in satisfaction of the equity which the claimant had established. Consequently, the Part 20 claim would not be struck out and summary judgment would not be granted in respect of it on the challenge founding the non-fettering principle.
JUDGMENT SIR WILLIAM BLACKBURNE: Introduction [1] These proceedings relate to two separate trusts. The first in time is a settlement created by Charles Wakefield Christie-Miller on 18 February 1967. That settlement (the 1967 settlement) is of land and other assets at Swyncombe (the settlement fund) in Oxfordshire. By clause 2(i) the trustees are to hold …Continue reading "Fielden v Christie-Miller & ors [2015] EWHC 87 (Ch)"