11 OCT 2016
Oral agreements and interests in land: a walk in the park!
Can you give away an interest in land in the course of a discussion? In Ely v Robson  EWCA Civ 774, Ms Robson argued that you could not: an oral agreement would not be compliant with s 2 (1) Law of Property (Miscellaneous Provisions) Act 1989 (the '1989 Act').
Following the parties' separation, Mr Ely had issued possession proceedings and Ms Robson a TLATA claim, in both cases with respect to the family home, which was in Mr Ely’s sole name. In 2007 they had settled this first round of litigation during the course of a discussion in Poole Park, subsequently informing the court that the trial could be vacated.
In round two of the litigation, the Court of Appeal considered the compliance of the oral agreement with s 2 (1) of the 1989 Act, and whether the agreement was sufficiently certain or complete for equitable principles of proprietary estoppel or constructive trusts to be engaged.
In the December issue of Family Law I have written a longer article about this. My Family Law article examines the legal issues in this case, concentrating on the requirements for formalities, and on the authorities upon which Ms Robson relied. You can subscribe to Family Law here. In the meantime, here is a run-down of the key issues in Ely v Robson and some commentary on the state of the law.
Ely v Robson: the preliminary issue – a binding settlement?
The first instance judge in round two tried as a preliminary issue the dispute as to whether a binding settlement had been reached. He accepted Mr Ely’s contention that in 2007 the parties had agreed a compromise such that Mr Ely would hold the property on trust for himself for life, with a remainder of 80% to his estate and 20% to Ms Robson. The agreement accounted for the fact that the parties had also been accommodating Ms Robson’s aunt (Ms Ellis) and her mother (Mrs Robson). Ms Robson would have a right to occupy the property for so long as Ms Ellis and Mrs Robson were alive, and Mr Ely would have power to sell the property thereafter. He would relinquish any claim to an interest in two other of Ms Robson’s properties, towards one of which he claimed to have made contributions at the time of purchase.
The agreement had been written up in Mr Ely’s solicitor’s letter of 14 August 2007, although that letter explained that counsel’s advice was being sought on drafting, and that simplification of the agreement was sought so as to minimise tax liabilities. Both parties had signed Ms Robson’s solicitor’s letter to the court asking for the trial to be vacated, and relisted thereafter, permitting time for negotiation of correct written terms of settlement.
Ms Robson’s solicitors wrote to the court in January 2008 indicating that the case had settled.
Decision in the County Court at Swindon
The trial of a preliminary issue was on Mr Ely’s subsequent claim for a declaration and an order for sale.
The lower court concluded that Ms Robson would have replied to the content of the 14 August 2007 letter had it not reflected the parties’ agreement, and that her solicitors would never have signed the subsequent joint letter to the court asking for the trial to be vacated if her case that: -
a) she had always made clear to Mr Ely that the parties’ shares were equal; but
b) negotiations had got nowhere,
were true. Any outstanding matters were purely a question of ‘mechanics’: the agreement was unambiguous, both parties intended it to be taken seriously and intended Mr Ely to act upon it. Mr Ely acted on the agreement to his detriment in not pursuing the claim and a proprietary estoppel had arisen (§ 24).
Court of Appeal: the problem with the proprietary estoppel analysis
The Court of Appeal was dubious of the reference by the judge to proprietary estoppel because Mr Ely had always disputed that Ms Robson had a share in the property. Nonetheless, Mr Ely’s counsel submitted that the judge’s conclusions would also have supported the imposition of a constructive trust, and the Court of Appeal was prepared to treat the matter as if prior to the oral agreement Mr Ely had held the property on trust for both parties (§ 30).
Ms Robson’s grounds of appeal
Alongside her s 2 (1) arguments, Ms Robson prayed in aid on her appeal the decision of the House of Lords in Cobbe v Yeoman’s Row Management Limited  UKHL 55, and of the Court of Appeal in Herbert v Doyle  EWCA Civ 1095. She deployed the judgment in Cobbe in support of her contention that the terms of the agreement were uncertain and incomplete, and that the parties did not expect it to be binding. Furthermore, the court should have analysed the 'whole course of dealing' between the parties, including their subsequent behaviour (as stipulated at § 51 of Jones v Kernott  UKSC 53), and it had not done so.
Article continues below...