Yaxley v Gotts

Yaxley v Gotts
Yaxley v Gotts
Court	Court of Appeal
Full case name	Yaxley (respondent) v Gotts and another (appellants)
Decided	24 June 1999
Citation(s)	[1999] EWCA Civ 3006; [1999] 2 FLR 941; [2000] 1 All ER 711; (2000) 32 HLR 547; [1999] 3 WLR 1217; [1999] 2 EGLR 181; [2000] Ch 162; [1999] EG 92; [1999] Fam Law 700; (2000) 79 P & CR 91
Transcript(s)	Court-approved transcript of appeal judgment
Case history
Prior action(s)	Appellants also lost in High Court sitting in the County Court before HHJ Downes.
Subsequent action(s)	none.
Case opinions
Decision by	Clarke LJ ; Beldam LJ ; Walker LJ
Keywords
	Contract, sale of land (grant of lease), section 2(5) Law of Property (Miscellaneous Provisions) Act 1989; fraud or unconscionable conduct; specific performance

Last updated April 09, 2023

Yaxley v Gotts [1999] is an English contract law case with specific relevance to formalities in land law. The case deals with whether section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 which requires that contracts be in writing prevents an oral contract from taking effect where otherwise an interest would arise by proprietary estoppel, i.e. whether the provision in subsection 5 on resulting, implied or constructive trusts covers also proprietary estoppel.^[1]

Facts

Yaxley was a self-employed builder who attempted to persuade Gotts to lend him money for the purchase of a building. Gotts instead bought the building but agreed Yaxley could have the bottom floor in return for renovating the other flats and managing the building. After performing the work at his own cost and time. Yaxley argued that an oral agreement between himself and Mr. Gotts was to reward him with ownership of the ground floor of the building. Gotts failed to convey the title deeds in the name of Yaxley. Yaxley sued Gotts.^[2]

Whilst the plaintiff was working on the top two floors between January and March 1992, he was doing so in the mistaken belief that Brownie Gotts was the owner of the property; Alan Gotts, the owner, knowing of this mistaken belief, allowed the plaintiff to continue to carry out the work on his property knowing that his father had represented that the plaintiff would have the ground floor.^[2]

Judgment

The judge in the case took (found credible) most of the evidence of Yaxley, not that which conflicted from the defendants.^[3] In the end, the Judge found an oral contract between the plaintiff and defendants existed. This entitled the plaintiff to ownership in the form of a 99 year lease on the portion of the structure per the agreement.^[4]^[2]

Appeal

The Gotts' (father and son) appealed. The Court of Appeal dismissed their appeal alleging that the claimant was entitled only to a portion of interest in the lease.^[2]

It would not be possible to imply an agreement between the plaintiff and Alan from these facts but they would give rise to a claim of proprietary estoppel. When, from April to September 1992 the plaintiff was working on the ground floor, he by then knew that Alan was the owner but neither Alan nor Brownie had said that the promise made by Brownie was withdrawn. There was a continuing representation of which Alan Gotts was aware that if the plaintiff did the work of converting the ground floor it would be his "forever".
Again it would be difficult to imply a contract between Alan and the plaintiff from these facts but they would support a case of proprietary estoppel. It would be unconscionable for Alan to deny the plaintiff an interest in the property.
[...]
For my part I cannot see that there is any reason to qualify the plain words of Section 2(5). They were included to preserve the equitable remedies to which the Commission had referred. I do not think it inherent in a social policy of simplifying conveyancing by requiring the certainty of a written document that unconscionable conduct or equitable fraud should be allowed to prevail.
In my view the provision that nothing in Section 2 of the 1989 Act is to affect the creation or operation of resulting, implied or constructive trusts effectively excludes from the operation of the section cases in which an interest in land might equally well be claimed by relying on constructive trust or proprietary estoppel. — Clarke LJ^[2]

Related Research Articles

Estoppel is a judicial device in common law legal systems whereby a court may prevent or "estop" a person from making assertions or from going back on his or her word; the person being sanctioned is "estopped". Estoppel may prevent someone from bringing a particular claim. Legal doctrines of estoppel are based in both common law and equity. It is also a concept in international law.

Central London Property Trust Ltd v High Trees House Ltd [1947] KB 130 is a famous English contract law decision in the High Court. It reaffirmed and extended the doctrine of promissory estoppel in contract law in England and Wales. However, the most significant part of the judgment is obiter dicta as it relates to hypothetical facts; that is, the landlord did not seek repayment of the full wartime rent.

Estoppel in English law is a doctrine that may be used in certain situations to prevent a person from relying upon certain rights, or upon a set of facts which is different from an earlier set of facts.

<span class="mw-page-title-main">Unconscionability</span> Doctrine in contract law

Unconscionability is a doctrine in contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that they are contrary to good conscience. Typically, an unconscionable contract is held to be unenforceable because no reasonable or informed person would otherwise agree to it. The perpetrator of the conduct is not allowed to benefit, because the consideration offered is lacking, or is so obviously inadequate, that to enforce the contract would be unfair to the party seeking to escape the contract.

<span class="mw-page-title-main">Constructive trust</span>

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<span class="mw-page-title-main">Good faith (law)</span>

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Cobbe v Yeoman's Row Management Ltd[2008] UKHL 55 is a House of Lords case in English land law and relates to proprietary estoppel in the multi-property developer context. The court of final appeal awarded the project manager £150,000 on a quantum meruit basis for unjust enrichment because Yeoman's Row had received the benefit of his services without paying for that. The court refused to find or acknowledge a binding contract, prior arrangement with a third party or promise, overturning a £2m award on the basis of a possible lien arising from a promise over the property. The court found a non-binding agreement in principle, entirely subject to the owner's final say to take into account for example their view of the market; this was the basis on the facts on which the parties were proceeding.

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Jennings v Rice is an English land law case concerning proprietary estoppel.

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FHR European Ventures LLP v Cedar Capital Partners LLC[2014] UKSC 45 is a landmark decision of the United Kingdom Supreme Court which holds that a bribe or secret commission accepted by an agent is held on trust for his principal. In so ruling, the Court partially overruled Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd in favour of The Attorney General for Hong Kong v Reid (UKPC), a ruling from the Judicial Committee of the Privy Council on appeal from New Zealand.

Thorner v Major [2009] UKHL 18 is an English land law case, concerning proprietary estoppel.

References

↑ http://www.propertyweek.com/story.asp?storycode=2006007 ^{[ dead link ]}
1 2 3 4 5 HTML Version of the Judgment bailii.org (approved before release by review of the panel)
↑ "Judgement in yaxley v gotts" . Retrieved 22 June 2012.
↑ "Tuesday Law Report: Remedy although agreement was void" . The Independent. London. 6 July 1999. Archived from the original on 7 May 2022. Retrieved 22 June 2012.

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[1] ttp://www.propertyweek.com/story.asp?storycode=2006007 ^{[ dead link ]}

[courtofappeal-2] 1 2 3 4 5 HTML Version of the Judgment bailii.org (approved before release by review of the panel)

[3] "Judgement in yaxley v gotts" . Retrieved 22 June 2012.

[4] "Tuesday Law Report: Remedy although agreement was void" . The Independent. London. 6 July 1999. Archived from the original on 7 May 2022. Retrieved 22 June 2012.

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