News – TOTAL *169 Brightlingsea Haven Ltd v Morris

*169 Brightlingsea Haven Ltd v Morris
Queen’s Bench Division
30 October 2008
[2008] EWHC 1928 (QB)
[2009] 2 P. & C.R. 11
Jack J. :
October 30, 2008 1
Caravan sites; Caravans; Constructive trusts; Harassment; Mobile homes; Occupation; Periodic tenancies; Proprietary estoppel; Statutory interpretation
H1 Landlord and tenant—Lease of lodge in caravan park—Covenant not to occupy during “closed period”—Application for injunction—Proprietary estoppels—Constructive trusts— Law of Property (Miscellaneous Provisions) Act 1989 s.2(1) —Whether lodges were “caravans”— Caravan Sites and Control of Development Act 1960 s.29(1) — Caravan Act 1968 s.13(1)
H2 The first claimant, B, was the tenant of a caravan park under a lease granted by the freeholder, Brightlingsea Town Council. The park housed both caravans and mobile homes. Under the terms of the lease, B covenanted not to allow the caravans or mobile homes to be occupied at certain times of the year (“the closed period”). The first site licence for the park issued under s.3 of the Caravan Sites and Control of Development Act 1960 was issued to the second claimant H. Both H and B were controlled by the same person. The site licence contained a condition that only approved caravans as defined in s.29(1) of 1960 Act and s.13(1) of the Caravan Act 1968 were permitted on the site, and also provided for a “closed period” (albeit more generous than that in the lease). The current site licence issued to B contained the same conditions. When planning permission had been granted for change of use from amenity land to seasonal caravan park, it was a condition that caravans should only be occupied on the dates which were later set out in the site licences, the reason stated being to ensure that the caravans remained in holiday use. The defendants argued that they bought their lodges on the strength of promises that they would be granted leases of their sites by B until the end of B’s lease and that, although they could not sleep in the lodges during the closed period, they could use them during the day. Known to B, the defendants were selling their homes to buy the lodges and, if they used bed and breakfast accommodation during the closed period, they would need somewhere to go during the day. None of the defendants had legal advice in the purchase of their lodges, nor did they see the terms of the lease. B sought an injunction to prevent the defendants occupying their lodges during the day in the closed period. Since the dispute between the parties arose, the defendants had also used their lodges overnight in the closed period. The defendants sought a declaration as to their *170 rights. The defendants raised as preliminary matters (i) that the lodges were not “caravans” within the meaning of the legislation (under s.9(1) of the 1960 Act it was a criminal offence for an occupier not to comply with any condition attached to a site licence) and (ii) despite the closed period, the site was a “protected site” as defined by the 1968 Act rather than a holiday site.
H3 Held, refusing the application for an injunction and giving judgment for the defendants, subject to further submissions on the relief to be granted, that (i) the lodges were “caravans” within the meaning of the Acts; (ii) the terms of both the site licence and planning permission fell within s.1(2)(b) of the 1968 Caravan Act and so the site was not a “protected site”; (iii) equities and estoppels apart, the defendants had quarterly tenancies with no security of tenure and subject to a term that the lodges should not be occupied overnight during the closed period; (iv) the defendants were entitled to rely on the creation and operation of constructive trusts through proprietary estoppels and so avoid the effect of s.2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 as a bar to any assertion that they were contractually entitled to leases. The circumstances fitted with the principle stated in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd ([1982] Q.B. 133) for the creation of proprietary estoppels. The defendants had purchased their lodges in the expectation created and encouraged by B that B would grant them a lease in the terms agreed; (v) the present case fell squarely within the principle stated by Lord Kingsdown in Ramsden v Dyson [(1886) L.R. H.L. 129] and it was open to the court to hold that B was a constructive trustee and s.2(1) of the 1989 Act was no bar to the defendants’ claims; (vi) the lodges were “caravans” as defined by law. They were composed of not more than two sections and, when assembled, were physically capable of being moved by road from one place to another.
H4 Application for an injunction by the claimants, Brightlingsea Haven Ltd and Hammerton Leisure Ltd, owners of Brightlingsea Leisure Village caravan park, to prevent the defendants, Jacqueline Morris, Stephen Foster and Richard Clark, occupying lodges on the said caravan park during “closed” periods in accordance with the terms of a lease dated May 9, 2000. The defendants sought a declaration of their rights. The facts are stated in the judgment.
H5 Cases referred to:
(1) Atkinson (Valuation Officer) v Foster [1996] R.A. 246 .
(2) Babbage v North Norfolk DC [1990] 1 E.G.L.R. 202 CA
(3) Bankers Trust Co v Namdar [1995] N.P.C. 139 Ch D
(4) Byrne v Secretary of State for the Environment (1997) 74 P. & C.R. 420 QBD
(5) Carter v Secretary of State for the Environment [1994] 1 W.L.R. 1212 CA
(6) Chalmers v Pardoe [1963] 1 W.L.R. 677 PC
(7) Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55; [2008] 1 W.L.R. 1752
(8) Crabb v Arun DC [1976] Ch. 179; (1975) 32 P. & C.R. 70 CA
(9) Gissing v Gissing [1971] A.C. 886; (1970) 21 P. & C.R. 702 HL *171
(10) Grant v Edwards [1986] Ch. 638 CA
(11) Godden v Merthyr Tydfil Housing Association [1997] N.P.C. 1; (1997) 74 P. & C.R. D1 CA
(12) Howard v Charlton [2002] EWCA Civ 1086; [2003] 1 P. & C.R. 21
(13) Jaggard v Sawyer [1995] 1 W.L.R. 269 CA
(14) Kinane v Mackie-Conteh [2005] EWCA Civ 45; [2005] P. & C.R. DG3
(15) Kok Hoong v Leong Cheong Kwent Mines [1964] A.C. 993 PC
(16) Lloyds Bank v Rossett [1991] 1 A.C. 107; (1990) 60 P. & C.R. 311 HL
(17) McCormick v Grogan (1869–70) L.R. 4 H.L. 82 HL
(18) Mixnam’s Properties Ltd v Chertsey Urban DC [1965] A.C. 735; (1964) 15 P. & C.R. 331 HL
(19) Pallant v Morgan [1953] Ch. 43 Ch D
(20) Paragon Finance Plc v DB Thakerer & Co [1999] 1 All E.R. 400 CA
(21) Plimmer v Mayor of Wellington (1883–84) L.R. 9 App. Cas. 699 PC
(22) Ramsden v Dyson (1886) L.R. 1 H.L. 129 HL
(23) Rochefoucald v Boustead (No.1) [1897] 1 Ch. 196 CA
(24) Selangor Rubber Estates Ltd v Cradock (No.3) [1968] 2 All E.R. 1073 Ch D
(25) Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] Q.B. 133
(26) Tinsley v Milligan [1994] 1 A.C. 340; (1994) 68 P. & C.R. 412 HL
(27) Yaxley v Gotts [2000] Ch. 162; (2000) 79 P. & C.R. 91 CA
H6 Legislation referred to:
(1) Caravan Act 1968 ss.1, 5, 7 and 13
(2) Caravan Sites and Control of Development Act 1960 ss.3, 5, 9, 12, 13 and 29
(3) Land Charges Act 1925
(4) Law of Property (Miscellaneous Provisions) Act 1989 s.2
(5) Magistrates’ Courts Act 1980
(6) Misrepresentation Act 1967 s.2
(7) Mobile Homes Act 1983 ss.2 and 5
(8) Protection from Harassment Act 1997 ss.1, 2 and 3
(9) Public Health Act 1936 s.269
H7 Representation
Anthony Tanney , instructed by Ellisons Solicitors, for the claimants.
Stephen Cole , instructed by Shelter Legal Services, for the first and second defendants.
David Schmitz , pro bono, for the third defendant.
APPROVED JUDGMENT
JACK J.:
Introduction
1 Brightlingsea lies at the mouth of the Colne estuary in Essex and is one of the Cinque Ports. Haven Village, or Brightlingsea Leisure Village as it is also called, is a caravan park on the edge of the town. The park contains both caravans in the *172 colloquial sense and lodges, a lodge being what is often called a mobile home—though the mobility is very limited. Both may come within the definition of “caravan” in law. The impression given to a visitor is of a grassy area within a low earthen sea wall containing 40 or 50 chalets or lodges, some finished in wood, some rendered. There are also a number of large caravans. All of these are permanently sited on the park. There is a site office and a small house for the warden. A tarmac drive leads round from a parking area at the entrance. This case concerns rights between the park owners and the three defendants in respect of their lodges. The outcome will affect a number of other lodge owners.
2 The first claimant, Brightlingsea Haven Ltd, “BHL”, is the tenant of the park under a lease granted by the freeholder, Brightlingsea Town Council. The lease is dated May 9, 2000 and is for a term of 30 years commencing on November 9, 1989 and so expiring in 2019. The commencement date is the date of an agreement between the same parties for the grant of the lease. It is unclear how soon after November 1989 BHL took possession of the site. Nor is it clear why the execution of a lease was so delayed. Schedule 5 of the lease contains a number of covenants by BHL. The relevant covenants are:
by cl.7(a), to observe, inter alia, any consents and licences issued under Act of Parliament;
by cl.10(a), to comply with the Planning Acts and all consents issued thereunder;
by cl.11(b), not to use the park “otherwise than as a Static Seasonal Caravan Park”;
by cl.12(a) to “comply with the ‘standards to be imposed as a condition of Licence’ by virtue of the Caravan Sites & Control of Development Act 1960 ”;
by cl.12(b), not to allow caravans or mobile homes on the park to be occupied, except for storage, other than between March 1 and October 31, 12 noon on Fridays to 12 noon on Mondays at other times, and 10 days over Christmas and New Year;
by cl.13(b), not to underlet nor part with possession save by way of a standard licence for each caravan.
3 The first site licence for the park issued under s.3 of the Caravan Sites and Control of Development Act 1960 , “the 1960 Act”, is dated September 29, 1993. It was issued to the second claimant, Hammerton Leisure Ltd, “HLL”, by Tendring DC. That was an error, because the “occupier” of the park was and is BHL. No complaint has ever been made by Tendring. Both companies are controlled by Mr Stephen Hammerton and his family. Mr Hammerton is managing director of each. Among the conditions of the licence were conditions, first, that only approved caravans as defined in s.29(1) of the 1960 Act and in s.13(1) of the Caravan Act 1968 , “the 1968 Act”, were permitted on site, and, secondly, that caravans might be occupied only between March 1 to November 30, and over any weekend, and over 10 days at Christmas. The November date was more generous than the lease by a month. The current site licence was issued to BHL on *173 May 4, 2007. It contains the same conditions. I will refer to the dates during which “caravans” may not be occupied as “the closed period”.
4 Planning permission had been granted on September 28, 1989 by Tendring DC on the application of Brightlingsea Town Council, for change of use from “amenity land to seasonal caravan park”. It was a condition of the permission as varied on appeal by a determination dated January 4, 1995 that caravans should only be occupied on the dates which were later set out in the site licences. The reason stated for the condition was to ensure that the caravans remained in holiday use. The success of the appeal must provide the explanation for the divergence between the lease and the site licence as to dates of permissible occupation.
5 The defendants’ case is that they bought their lodges from HLL (or in the case of the second defendant from the original purchaser from HLL) on the strength of promises that they would be granted leases of their sites by BHL until the end of BHL’s lease from Brightlingsea as it might be extended, and that, although they could not sleep in the lodges during the closed period, they could use them during the day in that period. They were selling their homes in order to buy their lodges, which was known to BHL. Those promises, they submit, give them rights in equity against BHL, which should be met by the grant of leases on those terms. The matter of day time occupation in the closed period is of great importance because if they use bed and breakfast accommodation during the closed period they must have somewhere to go during the day, and the position may not be much different if they lodge with a relative or friend. BHL’s case is that they have only periodic tenancies, terminable on notice, with a term that they cannot use them for occupation during the closed period either by day or night. The determination of the defendants’ rights is of importance not only to the parties but to other lodge owners who occupy their lodges as their homes. The defendants seek primarily a declaration as to their rights. BHL seeks an injunction preventing them from occupying their lodges during the day in the closed period.
6 If the defendants are correct as to the rights they can assert against BHL, the assertion of those rights would appear to put BHL in breach of its lease, the site licence and the terms of the planning permission. That creates difficulties which go beyond the determination of the rights themselves.
7 The underlying cause of the problems is the manner in which Mr Hammerton chose to deal with the rights between BHL and the lodge owners. Although no evidence was called to establish this directly, it appears from the evidence that I heard that it is usual for a licence agreement relating to use of the site (or pitch) to be signed by the park owner and by the lodge purchaser prior to or at the same time as a lodge is purchased. The National Caravan Council and the British Holiday & Home Parks Association have jointly promoted a form of licence since the mid 1990s. If this course had been adopted, the purchasers of lodges would have seen the intended terms on which they were to hold their sites before they committed themselves, including any term that occupation during the closed period was prohibited. There would have been no breach of the head lease by subletting, and there should have been no problems. For either the purchasers would not have purchased, or they would have purchased knowing where they stood. However, in July 1990 Mr Hammerton had procured from *174 BHL’s solicitors, Ellisons, a form of lease to be used at Haven Village. It provided for the tenant to hold his site for a term of years (the term was left blank by Ellisons), at a variable rent with covenants only to use the lodge as a domestic holiday lodge, and during December to February to use it only at weekends and for 10 days over Christmas and the New Year. It was Mr Hammerton’s practice to provide a copy of such a lease to a purchaser some time after the purchase of the lodge and the purchaser had moved in. It was not seen by the purchaser until then: in particular it was not shown to a purchaser prior to purchase. The “lease” delivered to the purchaser would be signed on behalf of BHL prior to delivery. Mr Hammerton did not think it necessary to get it signed by the tenant. It is not surprising that it is not sought to rely on these “leases” in these actions. I will record here that none of the defendants had solicitors acting for them in connection with the purchases of their lodges and the arrangements relating to their sites. Nor did they have legal advice. That was also the case in relation to the other residents of Haven Village who gave evidence. I deduce that because they were not buying houses or flats they saw no need. They were, of course, unwise not to ask to see the terms of the lease which they were told they would get. None of the defendants or witnesses did so. They did not do so because they trusted what they were told and because of a lack of commercial sophistication.
8 In addition to the matters I have referred to there are issues as to the rent which BHL is entitled to charge, and there are claims against BHL for damages for harassment under s.3 of the Protection from Harassment Act 1997 .
9 The claimants have been represented by Mr Anthony Tanney instructed by Ellisons. The first and second defendants, Mrs Morris and Mr Foster, have been represented by Mr Stephen Cottle on the instruction of Shelter Legal Services. The third defendant, Mr Richard Clark, died on September 29, 2008. He was aged 71 and had suffered from mesothelioma. Written submissions were made on his behalf by Mr David Schmitz acting pro bono, which adopted and added to those of Mr Cottle. Mr Schmitz also prepared for Mr Clark a third witness statement. Subsequently Mr Schmitz like other counsel also provided written submissions in September 2008 as to the effect of the decision of the House of Lords in Cobbe v Yeoman’s Row Management Ltd [2008] 1 W.L.R. 1752 . The opinions were delivered on July 30, 2008. That was after the conclusion of the trial on July 16, 2008. I am grateful to Mr Schmitz for his help. By reason of his poor health Mr Clark did not attend the trial in London. He gave evidence in Colchester together with other of the defendants’ witnesses who could not get to London. I also then gave him the opportunity to address me about the case, which he did briefly in trenchant terms. In these circumstances I can refer to the submissions of Mr Cottle as being those of all three defendants.
Two preliminary matters
10 Two points have been raised on behalf of the defendants, which relate to the statutory regime governing the defendants’ lodges. One submission is that the defendants’ lodges are not “caravans” within the meaning of the legislation. *175 The other is that despite the existence of the closed period the site is a “protected site” as defined by the 1968 Act.
11 The issue as to whether or the lodges are “caravans” is raised by the defendants in an attempt to avoid the problem that may be caused to them by s.9(1) of the 1960 Act. Section 9(1) makes it a criminal offence for an occupier of land to fail to comply with any condition attached to a site licence. The offence is punishable on summary conviction by a fine not exceeding level 4 on the standard scale—£2,500. The conditions of the site licence have been broken by the occupation by the defendants during the closed period both by day and, following the dispute as to day occupation, by night. BHL say that the enforcement of a right to daytime occupation in the closed period would involve further criminal offences, and therefore, the right should not be enforced. The defendants thus see it as advantageous to argue that their lodges are not caravans as defined by the Acts. They would then be moveable dwellings requiring a licence under s.269 of the Public Health Act 1936 , which, it is submitted, Tendring would be bound to grant. It is also submitted that in these circumstances planning permission would cease to be a problem. So the point appeared to be raised reluctantly in order to defeat the suggestion of illegality, and it was submitted also that it might not be necessary to determine it at this stage. Nonetheless the point was fully covered in the evidence and in submissions. It is relevant to the other issues and it is important that the parties know where they stand on it. I must determine it. I am satisfied that the lodges are “caravans” within the Acts. I will give my reasons at the end of the judgment.
12 I turn to the question of whether Haven Village is a ‘protected site’. Part I of the 1968 Act makes a distinction between holiday sites and ‘protected sites’ as defined by s.1(2) of the 1968 Act. Section 1(2) provides that:
“… a protected site is any land in respect of which a site licence is required under Part 1 of [the 1960 Act] …not being land in respect of which the relevant planning permission or site licence –
(a) is expressed to be granted for holiday use only; or
(b) is otherwise so expressed or subject to such conditions that there are times of the year when no caravan may be stationed on the land for human habitation.”
The Act provides protection from eviction and harassment. The Mobile Homes Act 1983 , “the 1983 Act”, provides for the occupier of a mobile home on a protected site to have an agreement to station the home on the site in terms set out in Sch.1 to the Act, which gives considerable security of tenure. By s.5(i) “mobile home” has the same meaning as “caravan” in the 1960 Act. The question is whether the terms of either the planning permission or the site licence for Haven Village fall within either (a) or (b) of s.1(2) .
13 Mr Tanney submitted for the claimants that the condition of the site licence that caravans might only be occupied in the specified periods fell within s.1(2)(b) . Mr Cottle submitted that the subsection was to be construed as referring to provisions which required caravans for human habitation not to be on the land, that is, to be removed. I consider that it is to be construed as referring to a *176 provision that, at times, caravans shall not be stationed on the land for, meaning “for the purpose of”, human habitation at those times. They may be stationed on the land at those times for other purposes, one obvious purpose being to await habitation outside those times. That is the natural meaning of the words. Further, as caravans are by definition in s.29(1) of the 1960 Act and in s.13(1) “designed or adapted for human habitation”, the reference to human habitation is unnecessary if Mr Cottle’s construction is correct. Thirdly, Mr Cottle’s construction means that no such provision could be imposed in a site licence because it would be for an impermissible purpose according to the decision of the Court of Appeal in Babbage v North Norfolk DC [1990] 1 E.G.L.R. 202 .
14 In Babbage the court considered the proper exercise of the power to insert conditions in site licences given by s.5 of the 1960 Act. The site licence contained two relevant conditions. One required that no caravan should be occupied between November 1 and March 19. The second required that all caravans should be removed prior to November 1 and none placed before March 20. Section 5(1) permits conditions:
“(a) for restricting the occasions on which caravans are stationed on the land for the purposes of human habitation,…
…
(d) for securing the taking of any steps for preserving or enhancing the amenity of the land, including the planting and replanting thereof with trees and bushes.”
The court applied previous authority to hold that s.5 did not permit conditions which were imposed for purely planning reasons. It held that the condition requiring removal could not be justified under either s.5(1)(a) or (d) . It was imposed as a planning consideration. The condition as to occupation was not in issue on the appeal.
15 Mr Tanney submitted that condition 3 of the planning permission relating to the times when caravans might be occupied also fell within s.1(2)(b) . For the same reasons I accept that to be correct. The terms of both the site licence and planning permission therefore fall within s.1(2) (b) and so the park is not a “protected site”.
Were promises made to the defendants and in what terms?
16 Mrs Marion Pollard was the manager of the park between May 1991 and January 2004. She was succeeded by Mr Colin Myson. The defendants’ rights in connection with their lodges depend on what Mrs Pollard said to the first and third defendants, Mrs Morris and Mr Clark, when they were considering buying their lodges, and on what Mr Myson said to the second defendant when he was considering buying his. It is accepted that Mrs Pollard and Mr Myson had authority to speak on behalf of BHL if they said what they are alleged to have said: no questions arise as to their authority.
17 I will begin with the events relating to Mrs Morris, taking those which relate specifically to her and then also taking the more general history forward in so far *177 as is necessary. I will then return to cover the events relating specifically to Mr Foster, and then those relating to Mr Davis.
18 Mrs Morris worked between June 2001 and July 2004 as town clerk at Brightlingsea. It was a part time job of three hours a day, Monday to Friday. She first became aware of Haven Village through her work, and she met Mrs Pollard. In January 2002 she was looking for somewhere to live with her partner, Mr Garry Roberts. They went to see Mrs Pollard. She showed them two lodges, one stucco and one wood. They preferred the wooden one, which was No.52. It had a wide wooden veranda and a good view over the salt marsh. She said that Mrs Pollard told them that during the closed period they could not sleep there at night but could have unrestricted access to the lodge during the day. She needed to be able to work there in the afternoons, and Mr Roberts needed to be able to come home from work, shower and change, with the ability to leave quite late. They also needed to be able to keep their pets there all year round, namely a cat and a rabbit belonging to her, and Mr Roberts’ dog. Mrs Pollard, she said, told her that all this was acceptable. She was told what the quarterly ground rent included and that increases would be modest. They could have a year rent free. She says that they asked how long they could live there and were told that they would eventually be entitled to a 30-year lease for although the existing lease with Brightlingsea was only for another 17 years, it would be renewed. Mrs Morris signed a “caravan order form” for the lodge sited at No.52 on February 11, 2002, agreeing to purchase the lodge from HLL. Her signature acknowledged receipt of the Park Rules, by which she agreed to abide. The price was £47,995. She paid a deposit of £500. She had read the Rules. They made no reference to the closed period. She may have been shown a sales sheet. This confirmed the closed period. It said nothing about day time occupation, and she said that she relied on what Mrs Pollard had told her. On April 18, 2002 Mrs Morris paid to HLL a further £36,495 from the sale of her house. The balance was covered by a hire purchase agreement. Following this, Mrs Morris and Mr Roberts moved into No.52 as their home. Mr Roberts was in the process of divorce and had not then sold his house. The balance was paid off on April 22, 2003 following the sale. During the closed period 2002/3 Mrs Morris and Mr Roberts used their lodge when they wanted to during the day, and Mrs Pollard knew it.
19 Mrs Morris said that she did not at the purchase stage see a copy of the site licence. In 2003 in her capacity as town clerk she wrote to HLL asking for a copy of it. One was sent to her. She could not now say if she read it. She put it on the file. On November 18, 2003 Tendring wrote to Mrs Pollard asking that a copy of the licence should be displayed outside the park office as well as one being available in it. This was repeated on January 16, 2004 and on August 31, 2007. I find that a copy was put up on the office wall, but was not in a prominent position where it could be read easily.
20 In the first months of 2003 Mrs Youngs who occupied No.51 at Haven Village was pursuing a number of complaints with BHL and seeking the assistance of the British Holiday and Home Parks Association. She was not concerned with the closed period. She had heard from the Association that a lodge should not be *178 purchased without a signed licence agreement for the occupation of the lodge. Mrs Pollard had told her that this was unnecessary. It appears to have been a consequence of Mrs Youngs’ activity that on July 23, 2003 leases signed by BHL were delivered to a number of lodge owners including to Mrs Morris. It was put through her letter box with no explanation. On the same day Mr Hammerton wrote on behalf of HLL saying that the site was not a permanent residential site and in order to comply with site licence conditions owners must have a permanent residential address elsewhere. It asked for the address. This letter went to all owners. Mrs Morris saw that the lease contradicted what she had been told by Mrs Pollard. As a result of further concern a meeting was arranged by Mr and Mrs Youngs with Mr Fox, the Tendring officer who dealt with site licences. It was held on July 31, 2003 and was attended by Councillor Ruffell and about eight residents. Mrs Morris attended. She took a back seat because of her position as both town clerk and a resident. She made some manuscript notes. They include:
“Lease issued is a) not worth paper written on as not signed by both parties b) is in breach of Head Lease, absolutely barred from issuing leases.
Period of occupancy: tricky one. Head lease says may be used for storage only. Site licence says must not be occupied. Grey area. Cabins not sold on condition furniture storage only. Access allowed during day.”
21 On September 8, 2003 Mr Hammerton wrote to Brightlingsea (for the attention of Mrs Morris) saying that the park was not residential and he wished to enforce the rules of occupancy, hence the request for permanent addresses. He also said “it has been our constant endeavour to enforce the winter closure condition. Whilst we have not prevented owners from visiting their units during the period of closure, we have made it clear that occupation is not permitted.” Because of her position Mrs Morris did not reply to the letter herself, but she made a note in answer to it. That included: “While tenants know this is not a residential park, some cabins (at least 5 of which I am aware) were sold to us on the grounds that we could have access during the day, during ‘closed’ times, as long as we did not sleep there. … There is no way I would have bought a cabin on the Park if this had not been the case.” Following this Mr Hammerton instructed Ellisons to prepare a draft licence to be entered into between BHL and lodge owners. This was to be approved by Brightlingsea. On February 9, 2004 Mr Hammerton wrote to Brightlingsea raising the question of an extension to the lease. In June 2004 Brightlingsea decided that a new 30-year lease should be drawn up. It appears that both these matters have been pushed into abeyance by the present dispute.
22 On December 13, 2004 Mr Hammerton wrote a circular letter stating that no occupation was permitted in the closed period, day or night, that any owner would be reported to Brightlingsea and the services disconnected. This was ignored by most if not all of the owners it affected. On February 22, 2005 he wrote to Mrs Morris threatening to terminate her agreement. In the autumn of 2005 a residents association was formed to protect the interests of its members. A number of the members decided that as BHL was seeking to prevent access during the day in the closed period, they would not only continue to use their *179 lodges during the day but would also sleep there at night. On November 14 Tendring wrote a strong letter to Mr Hammerton about occupation all the year round in breach of the site licence. In December 2005 on Mr Hammerton’s instructions, water and electricity were turned off on occasions in order to prevent occupation. On November 2, 2006 and October 24, 2007 Tendring wrote to Mr Hammerton about breaches of planning permission by occupation during the closed period.
23 Proceedings were issued in three separate actions in the Colchester County Court on April 10, 2006. The actions have not been consolidated, but have been heard together for both directions and trial. The trial has been adjourned on two occasions. On July 3, 2007 and after the trial had been adjourned for the second time the actions were transferred to the High Court in London.
24 Unlike Mrs Morris and Mr Clark, Mr Foster did not buy his lodge from HLL: he bought it from an existing owner, Mr Davis. There was some conflict between Mr Davis and Mr Foster as to their conversations. I have no doubt that Mr Davis believed what he was telling me, but I have concluded that Mr Foster has the better recollection. Apart from the impression each made, Mr Foster’s evidence fits better with the sequence of events as I find them to have been.
25 Before they moved to Haven Village, Mr Foster and his wife were living on his boat which was moored at a marina in Walton–on–the-Naze. They had sold their flat in Chadwell Heath a year before and were tired of living on the boat. They had friends who had a boat at the same marina and had a lodge at Haven Village. The friends slept on their boat in the closed period. In October 2004 Mr and Mrs Foster went to Haven Village and asked Mr Myson if anything was available. He showed them three lodges which were for sale. He said nothing about the closed period. They saw their friends. They went back to see Mr Myson, and told him they wanted to buy No.50. Mr Foster told Mr Myson that they were living on a boat, and Mr Myson said that they could come back every day in the closed period provided they did not sleep there. This was after the problem of the closed period had arisen between Tendring, BHL and other residents. Nonetheless I am satisfied that Mr Myson said this. Mr Myson said that they would be given a lease for 15 years, and that a new lease was being applied for, which would be added on. He was told that the ground rent was payable quarterly. Nothing was said about increases. Mr Myson gave him single a sheet from the village brochure on which Mr Myson had written the prices of three lodges in manuscript. Mr Foster then telephoned Mr Davis, the owner of number 50, who was in Spain, and offered £73,000 against an asking price of £75,500, which Mr Davis accepted. Mr Foster paid a deposit of £3,000 at the end of September by leaving a cheque made out to Mr Davis with Mr Myson. It was not cashed until October 14. On a date after October 14 Mr Foster went to see Mr Davis at Haven Village to discuss what Mr Davis was leaving in the lodge. They had some further conversation. Mr Davis referred to the village not being residential, and Mr Foster stated that he had his boat and could stay on that in the closed period. There was no reference to whether the lodge could be used in the day time during the closed period. Mr Davis had never needed to occupy his lodge in the closed period, either day or night, and I do not think that daytime occupation was an issue which was in his mind. Mr Davis told *180 Mr Foster that he would need to get a lease from Mr Myson. On November 3 Mr Foster again saw Mr Davis at the lodge and paid the balance. It was a very brief meeting. On November 4 Mr Davis wrote to Mr Myson with a cheque for the commission that HLL charged on the transfer of the lodge, namely £2159.06 including vat. It appears that about this time Mr Davis signed a BHL form headed “Transfer of ownership registration”, covering the transfer of his lodge to Mr Foster. The date on which he signed is illegible. Mr Foster signed it on November 12. Mr Foster thereby agreed to accept the Park Rules. The transfer was to take effect on November 3. It does not appear that there was any further discussion between Mr Myson and Mr Foster as to leases. When asked in cross-examination whether he expected the lease to be transferred or a new one to be issued, Mr Myson answered that that was not his concern, that he just had to get the transfer form (which I have referred to) signed. Mr and Mrs Foster moved into the lodge. Rent was demanded by BHL and was paid. During the closed period 2004/5 they only used the lodge at weekends. Mr Foster was working in London during the day, and he and his wife were using the boat. In October 2005 he received a circular letter from Mr Hammerton saying that no day time visits were permitted in the closed period, and that the rent was increasing from £525 to £595 per quarter—an increase of 13.3 per cent. Following this the Residents Association was formed and he became chairman.
26 The third defendant, Mr Clark, used to live in Nelson Street in Brightlingsea. In March 2002 he went with his wife to Haven Village and was shown round by Mrs Pollard. He told her that he could not buy a lodge until he had sold his house. She told him that they could not sleep at the park for the 42 nights of the closure period. She said a lot of people used bed and breakfast accommodation. According to Mr Clark, and I accept, she said, that people could come back during the day. Mrs Pollard’s phrase—“We are like the Windmill, we never close”, stuck in his mind. There was no reference by Mrs Pollard to the size of increases in the rent. Mr Clark’s lodge was ordered in May 2002. By the order form which he signed he agreed to abide by the Park Rules. He moved in at the end of August.
27 The closure period was initially less of a problem to Mr and Mrs Clark because at this time they went each year to Malta for January and February. There was however nonetheless the period before Christmas. They stayed with their daughter and went back to the lodge during the day. That position changed when a residence order was made in August 2004 that their grandson, now aged 15, should live with them: they had to give up Malta. They have since then lived in their lodge all the year round.
28 Mr Clark received a lease from BHL. He did not read it. He got the letter of December 13, 2004. He said that the next day Mr Street knocked on his door and told him to ignore it because it was a mistake. Mr Street was the Park Warden. Because Mr Clark was not present or represented when Mr Street gave evidence he was not asked about this. I think it unlikely that Mr Street said that the letter was a mistake, but he may well have said something to reassure Mr Clark.
29 In addition to the three defendants I heard evidence from a number of other occupants of the park. Mrs French sold her flat and moved into the park in early 2000. She was told by Mrs Pollard that so long as she did not sleep overnight *181 she could use her lodge during the closed period. Mrs Dennis came to view the park with her husband on March 29, 2003. They told Mrs Pollard they would be selling their home to move in. Mrs Pollard said that that would be fine, many people had done it, some went away for the closed period, others used bed and breakfast accommodation and came back to their lodges during the day. Mr Graham bought his lodge in August 2000. He used to go abroad in January but in December was working and in the closure period he and his wife stayed in bed and breakfast accommodation. During the day she used the lodge and he would use it in the evening to shower and change and have a meal. Mrs Pollard had told them they could use the lodge during the day provided they left at a reasonable time. Ms Miller moved into her lodge on June 13, 2005, having sold a house to do so. Mr Myson told her that in the closed period she could come back during the day but could not sleep there. She needed to be able to come back. Mr Leatherdale sold his house and on August 15, 2002 purchased a lodge. Mrs Pollard told him and his wife that they could occupy the lodge all the year round during the day but for 42 nights could not sleep there. Ms Cook talked to Mr Myson in July 2005 and moved into her lodge the following September. Mr Myson had told her that she could have daily access to her lodge provided she did not stay overnight for the 42 nights. She had sold a flat in Colchester to buy the lodge. Mr Cruickshank bought his lodge in August 2002. He and his wife had sold their house. They had been shown round the park by Mrs Pollard, who had said that they could have all the year round access to the lodge during the day but could not sleep there on the 42 nights of the closed period. Mr Cruickshank joked with Mrs Pollard that he would still be able to watch Coronation Street and have his tea before leaving. Mrs England has lived at 6 Haven Village since 1996. Mrs Pollard told her and her husband that during the closed period they should not come back much before 08.00 and should leave before 20.00. Mr and Mrs Youngs purchased in July 2002. Although they had other difficulties with BHL, the closure period was no problem to them. They had not been told by Mrs Pollard that they could come back during the day. Mrs Youngs apart, all of these witnesses said that they would not have bought their lodges if it had not been for what they were told about coming back during the day in the closed period. I record that I was told that there were further witnesses available to the defendants but those called were judged to be sufficient. The relevance of the evidence of these witnesses as to what was said to them is that it makes the evidence of the defendants as to what they were told by Mrs Pollard and Mr Myson the more credible. It gives them powerful support.
30 The evidence of Mrs Pollard was that she did not tell prospective purchasers that they could occupy their lodges during the day in the closed period but did tell them that they could come back briefly for specific purposes such as feeding an animal or checking the lodge or doing some work to it. Mr Myson’s evidence was to the same effect. In the early years the park was slow in filling, and it would have filled much more quickly if there had been no restrictions on occupation. Mrs Pollard was very aware of this. She knew that when people were selling their houses to come to the park there was a problem over the closed period, and I have concluded that she gave such potential customers such assurances *182 as were necessary in the individual circumstances to reassure them. If that meant telling them that they could use their lodges during the day, she would do so. Mr Myson took over from her, and there was a period of three weeks of overlap while he learnt the job. It appears that he continued her approach. Mr Hammerton said that it was his policy to turn a blind eye to occupiers visiting their lodges during the closed period “as necessary for maintenance, taking deliveries and the like”. As I have said, no question arises as to the authority of Mrs Pollard and Mr Myson to act on behalf of BHL, and as Mr Hammerton did not deal with the defendants when they were buying their lodges his position is irrelevant to the questions which arise. However, the probability must be that he was aware that lodges were being used in a way which went at least some distance beyond the limits of his stated policy. This did not matter until problems arose with the local authorities.
31 I find that Mrs Morris and Mr Clark bought their lodges from HLL on the basis of promises made on behalf of BHL that:
(a) they would become tenants of their lodges under leases;
(b) they would have security of tenure until the termination of the lease held by BHL from Brightlingsea, and any extension of that lease or further lease;
(c) they could occupy their lodges during the day in the closed period but not overnight;
(d) rent was to be paid quarterly; it would not be fixed but might increase each year.
32 I am not satisfied that anything which Mrs Pollard said is to be taken as a binding promise that the BHL’s lease from Brightlingsea would be extended. For, however optimistic she was about it, a moments’ reflection would have shown that it was not something that could be guaranteed. I do not consider that what was said by Mrs Pollard to Mrs Morris about rent increases being modest can amount to any form of promise as to the future. It was a statement of general expectation.
33 I find that promises in the terms of (a)–(d) above were similarly made to Mr Foster, and that on the basis of them he bought Mr Davis’s lodge thus earning HLL a commission.
Estoppels and equities apart, on what terms do the defendants occupy their sites?
34 It is the case of BHL that the first and third defendants hold their sites under quarterly tenancies with BHL. Subject to the effect of any estoppels or equities, this was agreed on behalf of the first defendant. I should record that BHL stated that nonetheless it would give the defendants security of tenure to the end of the existing lease provided there was no use made of the lodge during the closed period.
35 It was asserted on behalf of BHL that the second defendant, Mr Foster, has no rights against BHL but only against Mr Davis. The basis is that what was envisaged was a transfer of Mr Davis’s lease to Mr Foster, which has not occurred. In *183 my view that is not supported by the evidence. Mr Myson told Mr Foster he would get a lease. Mr Davis told Mr Foster that he should get his lease from BHL. Mr Foster did not think that he was getting a transfer of Mr Davis’s lease. BHL has demanded rent from Mr Foster, and Mr Foster has paid rent to BHL. All this points to Mr Foster being in the same position as the other two defendants, namely that, subject to the effect of any estoppels and equities, he has a quarterly tenancy from BHL. In my judgment that is the position.
36 It was asserted on behalf of BHL that it was a term of the tenancies that the lodges should not be used during the night in the closed period and should not be used in the day time save for limited purposes in accordance with Mr Hammerton’s policy to which I have referred. That was based on what it was submitted that Mrs Pollard and Mr Myson had said as to the terms of occupation. The burden is here on BHL to establish the term. I am satisfied that not only is the term not made out, but the contrary is established as I have stated above.
37 The position before taking account of any estoppels or equities is that BHL may determine the tenancies by notice in the usual way; the defendants have no security of tenure; it is a term of the tenancies that the lodge shall not be occupied overnight during the closed period; there is no other term as to occupation.
38 The position as to the amount of the rent that might be charged was ultimately a matter of agreement. It was accepted that the rent was not fixed but might go up, or down, as was appropriate bearing in mind the matters that were included in it. So when the insurance of the lodges themselves rather than the contents ceased to be included this was to be reflected in a lower rent unless there were other elements in the rent which had increased to neutralise the reduction which would otherwise be appropriate. There was no disagreement as to what the rent covered. It was agreed that increases and decreases in the rent must be reasonable and must reflect the changes in the underlying elements. It was agreed that the defendants were entitled to an account of the appropriate rents from the start of their respective tenancies. The first step will be for BHL to set out how it justifies the increases that have been charged. It is strongly to be hoped that once that is done each side will be in a position to take a realistic view of the prospects of respectively attacking or defending the figures, and that an agreement can be reached. For the sums at stake are unlikely to merit the costs of pursuing the issues through the court process. If the court process is necessary, the appropriate tribunal is a master of the Queen’s Bench Division. He would give directions as to how the matter was to be taken forward.
Estoppels and equities.
39 During the course of submissions made at the trial and subsequently I have been referred to a large number of authorities. Were I to review them all I would find myself engaged in something approaching a monograph on the law of proprietary estoppel and constructive trusts. I do not think that that is necessary or appropriate. The approach I intend to adopt is to see whether the defendants’ situations appear to fall within the relevant principle and then to consider the various matters raised on behalf of the claimants as preventing them from doing so.
*184
40 BHL rely on s.2 of the Law of Property (Miscellaneous Provisions) Act 1989 as a bar to any assertion that the defendants are contractually entitled to leases. The relevant parts of the section provide:
(1) A contract for the sale or other disposition in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each.
(2), (3), (4) …,
(5) … and nothing in this section affects the creation or operation of resulting, implied or constructive trusts.
The defendants submit that they are entitled to rely on the creation and operation of constructive trusts through proprietary estoppel to avoid the effect of s.2(1) . The defendants also submit that, even if they cannot rely on constructive trusts. It is open to them to rely on promissory or proprietary estoppel to avoid the effect of s.2(1) .
41 In Cobbe v Yeoman’s Row Management Ltd [2008] 1 W.L.R. 1752 Lord Scott stated at [18]:
“Oliver J (as he then was) stated the requirements of proprietary estoppel in a ‘common expectation’ class of case in a well-known and often cited passage in Taylors Fashions Ltd v Liverpool Victoria Trustees Co. Ltd [1982] QB 133 at 144
‘If A under an expectation created or encouraged by B that A shall have a certain interest in land, thereafter, on the faith of such expectation and with the knowledge of B and without objection by him, acts to his detriment in connection with such land, a Court of Equity will compel B to give effect to such expectation.’
Note the reference to ‘a certain interest in land’. Taylors Fashions was a case where the ‘certain interest’ was an option to renew a lease. There was no lack of certainty; the terms of the new lease were spelled out in the option and the lessees’ expectation was that on the exercise of the option the new lease would be granted. The problem was that the option had not been registered under the Land Charges Act 1925 and the question was whether the freeholders, successors in title to the original lessor who had granted the option, could be estopped from denying the right of the lessees to exercise the option.”
The same citation is made in Snells Equity at the start of the section on proprietary estoppel : 31st edn, para.10—16.
42 The circumstances here fit within the principle stated in Taylors Fashions in the following way. The lodge owners purchased their lodges from HLL in the expectation created and encouraged by BHL, HLL’s sister company, that BHL would grant them a lease in the terms which I have held to have been agreed. There is here certainty in all respects. Therefore, submit the defendants, a *185 constructive trust will be imposed on BHL whereby in each case BHL as long lease holder is made a trustee of a beneficial interest in relation to the defendant’s plot and in favour of the defendant for a period of years in the terms I have set out.
43 In para.19 of his written closing submissions Mr Tanney accepted that, if I found the facts as I have, “an equity by estoppel would arise to that effect”. It is well first to consider what is meant in these circumstances by “an equity”. It is, I think, no more than the recognition of a situation in which the court can consider granting equitable relief because it would be equitable to do so. He went on to submit that such an equity could not be satisfied by the grant of an interest until 2019, because in the absence of a constructive trust s.2(1) would take effect. He submitted that there could be no constructive trusts here. Mr Tanney cited three authorities.
44 The first was Yaxley v Gotts [2000] Ch. 162 . This case was also relied on by Mr Cottle and Mr Schmitz. There the second defendant agreed orally to give the claimant, a builder, the ground floor of a house which he was proposing to purchase if the claimant converted the house into flats. The house was purchased by the second defendant’s son, the first defendant, and he adopted the agreement. The claimant performed his part of the bargain but the first defendant refused to grant the claimant any interest in the property. It was held that the agreement was enforceable by a constructive trust whereby the claimant had an interest in the property. The Court of Appeal upheld the judge’s order that a lease should be granted in favour of the claimant. In the course of his judgment Robert Walker L.J. stated at 174–177:
“I have no hesitation in agreeing with what I take to be the views of Peter Gibson L.J., Neill L.J., and Morritt L.J., that the doctrine of estoppel may operate to modify (and sometimes perhaps even counteract) the effect of section 2 of the Act of 1989. The circumstances in which section 2 has to be complied with are so various, and the scope of the doctrine of estoppel is so flexible, that any general assertion of section 2 as a ‘no-go area’ for estoppel would be unsustainable. Nevertheless the impact of the public policy principle to which Sir John Balcombe drew attention in Godden v. Merthyr Tydfil Housing Association does call for serious consideration. It is not concerned with illegality (some confusion may have arisen from the inadequate report or note shown to this court in Bankers Trust Co. v. Namdar ) but with what Viscount Radcliffe in Kok Hoong v. Leong Cheong Kwent Miknes Ltd. [1964] A.C. 993 , 1016, called a principle of general social policy.
‘to ask whether the law that confronts the estoppel can be seen to represent a social policy to which the court must give effect in the interests of the public generally or some section of the public, despite any rules of evidence as between themselves that the parties may have created by their conduct or otherwise.’
In this case that principle must of course be applied consistently with the terms in which s. 2 of the 1989 Act has been enacted, including the saving *186 at the end of s. 2(5). Parliament’s requirement that any contract for the disposition of an interest in land must be made in a particular documentary form, and will otherwise be void, does not have such an obviously social aim as statutory provisions relating to contracts by or with moneylenders, infants, or protected tenants. Nevertheless it can be seen as embodying Parliament’s conclusion in the general public interest, that the need for certainty as to the formation of contracts of this type must in general outweigh the disappointment of those who make informal bargains in ignorance of the statutory requirement. If an estoppel would have the effect of enforcing a void contract and subverting Parliament’s purpose it may have to yield to the statutory law which confronts it, except so far as the statute’s saving for a constructive trust provides a means of reconciliation of the apparent conflict.
Goff & Jones , The Law of Restitution , 5th ed. (1998), p. 580, a textbook of high authority, reaches the tentative conclusion that
‘even if the purchaser can demonstrate that the vendor’s conduct was so unconscionable that it would be inequitable for him to rely on the absence of writing, to order the conveyance of, or to declare him trustee of, the property is an inappropriate remedy in that it frustrates the policy underlying section 2(1) of the Act of 1989,’
In inquiring whether the parliamentary purpose is frustrated it is necessary to note that wide range of relief which may be granted where a claim to proprietary estoppel is established. Just how wide that range is, appears for instance, from Snell’s Equity , 29th ed. (1990) p. 577. The general aim is to ‘look at the circumstances in each case to decide in what way the equity can be satisfied’ ( per Sir Arthur Hobhouse in Plimmer v. Mayor of Wellington (1884) 9 App. Cas 699 , 714) and to achieve ‘the minimum equity to do justice to the plaintiff’ ( per Scarman L.J. in Crabb v. Arun District Council [1976] Ch. 179 , 198). Sometimes the equity is given effect to simply by dismissing an adverse claim. But in other cases more positive action is needed, extending (as Snell notes at p. 578, with numerous examples) both to giving the claimant an equitable lien on the disputed property for his expenditure, and to the positive conferment of title on the claimant. That is the sort of relief referred to in the Law Commission’s report (Law Com. No. 164, pp. 18-20 para. 5.5) as going to the extent of an order for land to be transferred.
…
Proprietary estoppel and constructive trusts
At a high level of generality, there is much common ground between the doctrines of proprietary estoppel and part performance. All are concerned with equity’s intervention to provide relief against unconscionable conduct, whether as between neighbouring landowners, or vendor and purchaser, or relatives who make informal arrangements for sharing a home, or a fiduciary and the beneficiary or client to whom he owes a fiduciary obligation. …
*187
The overlap between estoppel and the constructive trust was less fully covered in counsel’s submissions but seems to me to be of central importance to the determination of this appeal. Plainly there are large areas where the two concepts do not overlap: when a landowner stands by while his neighbour mistakenly builds on the former’s land the situation is far removed (except for the element of unconscionable conduct) from that of a fiduciary who derives an improper advantage from his client. But in the area of a joint enterprise for the acquisition of land (which may be, but is not necessarily, the matrimonial home) the two concepts coincide. Lord Diplock’s very well known statement in Gissing v. Gissing [1971] A.C. 886 at 905 brings this out:
‘A resulting, implied or constructive trust – and it is unnecessary for present purposes to distinguish between these three classes of trust – is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land.’
Similarly Lord Bridge of Harwich said in Lloyds Bank Plc. v. Rosset [1991] 1 A.C. 107 , 132:
‘The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, or arrangement to share in this sense can only, I think be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting the claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel.’
It is unnecessary to trace the vicissitudes in the development of the constructive trust between these two landmark authorities, except to note the important observations made by Sir Nicolas Browne-Wilkinson V-C in Grant v. Edwards [1986] Ch. 638 , 656, where he said:
‘I suggest that in other cases of this kind, useful guidance may in the future be obtained from the principles underlying the law of proprietary estoppel which in my judgment are closely akin to those laid down in *188 Gissing v. Gissing [1971] A.C. 886 . In both, the claimant must to the knowledge of the legal owner have acted in the belief that the claimant has or will obtain an interest in the property. In both, the claimant must have acted to his or her detriment in reliance on such belief. In both, equity acts on the conscience of the legal owner to prevent him from acting in an unconscionable manner by defeating the common intention. The two principles have been developed separately without cross-fertilisation between them: but they rest on the same foundation and have on all other matters reached the same conclusions.’
In this case the judge did not make any finding as to the existence of a constructive trust. He was not asked to do so, because it was not then seen as an issue in the case. But on the findings of fact which the judge did make it was not disputed that a proprietary estoppel arose, and that the appropriate remedy was the grant to Mr. Yaxley, in satisfaction of his equitable entitlement, of a long leasehold interest, rent free, of the ground floor of the property. Those findings do in my judgment equally provide the basis for the conclusion that Mr. Yaxley was entitled to such an interest under a constructive trust. The oral bargain which the judge found to have been made between Mr. Yaxley and Mr. Brownie Gotts, and to have been adopted by Mr. Alan Gotts, was definite enough to meet the test stated by Lord Bridge in Lloyds Bank Plc. v. Rosset [1991] 1 A.C. 107 , 132.”
The conclusion was that the legal interest in the house was subject to a constructive trust under which the beneficial interest was a term interest, rent free, in the ground floor. That was to be given effect to by ordering the grant of an appropriate lease. The parallel with the present case is sufficiently plain, and the defendants can rely on it.
45 Kinane v Mackie-Conteh [2005] EWCA Civ 45 was concerned with an agreement to give a charge over a property to support a loan made in connection with a commercial obligation related to a letter of credit. The property had been acquired previously by the defendant and there was no connection between its acquisition, the loan and the charge. It was accepted that the agreement for the charge did not comply with s.2 of the 1989 Act, but a constructive trust was relied upon. In the course of delivering the leading judgment in the Court of Appeal Arden L.J. reviewed Yaxley v Gotts . She later stated in [32] and [33] of her judgment:
“32. As I see it, the policy of section 2(1) of the 1989 Act is to protect the public by preventing parties from being bound by a contract for the disposition of an interest in land unless it has been fully documented in writing. However, in section 2(5) Parliament has acknowledged that under section 2(1) there is a risk that one party will seek to take advantage of the sanction provided by that subsection when it is unconscionable for him so to do. To that extent, section 2(5) plays a role similar to that of part performance, although it operates more flexibly than that doctrine. Unconscionability on the part of the party seeking to rely on subsection (1) is the touchstone *189 giving rise to a constructive trust. It will arise where a party led another party to believe that he would obtain an interest in property to another and then stands by while that other party acts to his detriment in reliance on that promise. The knowledge of the disadvantaged party is of less significance. Here Mr Mackie-Conteh induced Mr Kinane to make the loan before the formal documentation was executed. Even though the venture was abortive, Mr Mackie-Conteh benefited therefrom to the extent that he did not have to find another lender to get to the stage where FMBC could produce a letter of credit. The risk of the letter of credit at that stage not meeting the seller’s requirements was one which, under the parties’ agreement, Mr Mackie-Conteh and not Mr Kinane, had implicitly agreed to bear.
33. In proprietary estoppel, the court awards a remedy appropriate to satisfy the expectations that the defendant has indeed. This need not be an interest in land. However, in my judgment, that is the appropriate remedy in this case and neither counsel has suggested otherwise.”
Neuberger L.J. stated:
“39 In these circumstances, it appears to me that the only real question in the present case is whether, in the light of the facts found by the judge, it can be said that a ‘constructive trust’, within the meaning of section 2(5) of the 1989 Act, was created.
40. When considering that question, one must, I think, avoid regarding the subsection as an automatically available statutory escape route from the rigours of section 2(1) of the 1989 Act, simply because fairness appears to demand it. A provision such as section 2 of the 1989 Act was enacted for policy reasons which, no doubt, appeared sensible to the legislature. Accordingly, just as with section 4 of the 1677 Act, the Court should not allow its desire to avoid what might appear a rather harsh result in a particular case to undermine the statutory policy.
41. Accordingly, when considering whether section 2(5) is engaged, the court should consider whether, on the particular facts, it can fairly be said that a resulting, implied or constructive trust has been created. It would be contrary to legal principle, and inconsistent with the statutory purpose, if the court were to hold that a particular set of facts fell within section 2(5) if, as a matter of extra-statutory law, the facts could not properly be said to give rise to ‘the creation or operation of [a] resulting implied or constructive trust’. In other words, in my view, it would be wrong to give an artificially wide (or indeed an artificially narrow) meaning to the words of section 2(5) of the 1989 Act.
46. …. For the purposes of this appeal, I am content to assume, in favour of Mr Mackie-Conteh, that it would not be open to Mr Kinane to avoid the consequences of Section 2(1) of the 1989 Act if he could only establish a proprietary estoppel, and not a trust.
49. However, I am persuaded that the reasoning, and the authorities cited, in Yaxley do lead to the conclusion that a constructive trust was created in the present case.
*190
51. As I see it, at least for present purposes, the essential difference between a proprietary estoppel which does not also give rise to a constructive trust, and one that does, is the element of agreement, or at least expression of common understanding, exchanged between the parties, as to the existence, or intended existence, of a proprietary interest, in the latter type of case. That requirement is plainly satisfied in the present instance, and accordingly it seems to me that Section 2(5) can properly be invoked by Mr Kinane.”
46 The third case which Mr Tanney cited was Yeoman’s Row . The decision of the Court of Appeal had not then been overturned by the House of Lords. In Yeoman’s Row the parties had reached a broad but incomplete agreement (not complying in any event with s.2 ) that if Mr Cobbe obtained planning permission for the redevelopment of Yeoman’s Row’s land, Yeoman’s Row would sell the land to Mr Cobbe at a price, he would carry out the redevelopment and there would be a division of the ultimate proceeds. Mr Cobbe obtained planning permission but Yeoman’s Row were prepared only to proceed on terms which were substantially less advantageous to Mr Cobbe than had been agreed. Lord Scott gave the leading judgment with which all save Lord Walker agreed. Lord Scott divided his judgment into three sections: proprietary estoppel; constructive trust and non-proprietary remedies. The separation of the first two subjects is in contrast with the many authorities where there has been held to be areas of overlap between the two. Thus it is stated in Gray and Gray’s Elements of Land Law , 4th edn para.10.177:
“An extremely close relationship exists between proprietary estoppel and the constructive trust and the convergence of the concept is today so marked that the doctrines are, in many respects, indistinguishable. The component elements of proprietary estoppel are overwhelmingly similar to those of constructive trust.”
Lord Scott held that there would be no proprietary estoppel because Yeoman’s Row could not be banned from asserting that an agreement which was incomplete was not binding: Mr Cobbe always knew that Yeoman’s Row was not bound. That is a considerable simplification of a substantial part of his opinion, but in my view that is what it comes to.
47 At the end of this section Lord Scott stated:
“29. There is one further point regarding proprietary estoppel to which I should refer. Section 2 of the 1989 Act declares to be void any agreement for the acquisition of an interest in land that does not comply with requisite formalities prescribed by the section. Subsection (5) expressly makes an exception for resulting, implied or constructive trusts. These may validly come into existence without compliance with the prescribed formalities. Proprietary estoppel does not have the benefit of this exception. The question arises, therefore, whether a complete agreement for the acquisition of an interest in land that does not comply with the section 2 prescribed formalities, but would be specifically enforceable if it did, can become enforceable via the route of proprietary estoppel. It is not necessary in the *191 present case to answer this question, for the second agreement was not a complete agreement and, for that reason, would not have been specifically enforceable so long as it remained incomplete. My present view, however, is that proprietary estoppel cannot be prayed in aid in order to render enforceable an agreement that statute has declared to be void. The proposition that an owner of land can be estopped from asserting that an agreement is void for want of compliance with requirements of section 2 is, in my opinion, unacceptable. The assertion is no more than the statute provides. Equity can surely not contradict the statute. As I have said, however, statute provides an express exception for constructive trusts. So to Mr Cobbe’s constructive trust claim I must now turn.”
The paragraph does not sit easily with those cases where it has been held that a proprietary estoppel may be given effect to by a constructive trust.
48 Under the heading of constructive trust Lord Scott considered first the creation of constructive trusts arising from joint ventures relating to property, typically land, as exemplified in Pallant v Morgan [1953] Ch. 43 . There two men agreed that, if one did not bid for a property at auction and the other proceeded, they would divide it between them. It was held that the one held the property for himself and the other jointly. Lord Scott made plain in [31] that he did not regard these cases as having anything to do with proprietary estoppel: they were recognitions of constructive trusts arising from failed joint ventures. He then considered a number of cases supporting the proposition that a constructive trust will not come into being in a joint venture case where the property was already held by the owner when the venture came into being. In [37] he concluded that the unconscionable behaviour of Yeoman’s Row was not enough to justify Mr Cobbe’s claim to be awarded a beneficial interest. His reasons were that Yeoman’s Row had already owned the property; that the agreement was known by both parties to be unenforceable; that an unenforceable promise to perform an unenforceable agreement could give no greater advantage than an unenforceable agreement; that Mr Cobbe’s expectation of an enforceable contract was dependent on Yeoman’s Row’s decisions as to the incomplete agreement; and that Mr Cobbe never expected to acquire an interest save under an enforceable agreement.
49 Lord Walker gave the only other substantive opinion in Yeoman’s Row . Lord Brown agreed with it and also with that of Lord Scott. Lord Walker began by stating that while equitable estoppel (the term he used) was a flexible doctrine it must be applied in accordance with principle rather that in the exercise of a judicial discretion guided by who appeared to have right on his side in the particular situation. Lord Scott had also made this point. Lord Walker then cited para.10.189 of Gray which postulates three categories of circumstance in which proprietary estoppels may arise : (1) imperfect gifts, (2) cases of “common expectation, and (3) cases of unilateral mistake”. The present case falls, if it falls anywhere, within the second category. Lord Walker examined the “great case” of Ramsden v Dyson (1866) L.R. 1 H.L. 129 . He said that passages in the case were too well known to need repetition. Gray and Gray state in para.10.195: *192
“10.195 The classic exposition of the ‘common expectation basis of proprietary estoppel occurs in the dissenting speech of Lord Kingsdown in Ramsden v Dyson . Here Lord Kingsdown stated that
If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to be same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation.”
I refer to [41] above, where a very similar formulation is cited.
50 Having reviewed the authorities Lord Walker concluded in [63] that the critical issue was whether “there was, on the judge’s findings, a common expectation of the type capable of raising an equitable estoppel”. In [68] he contrasted cases in the domestic and commercial contexts saying that in a commercial context the claimant is typically a business person with access to legal advice who expects to get a contract . In the present case the situation is closer to the domestic.
51 In [81] Lord Walker held that conscious reliance on honour alone—which was Mr Cobbe’s position—could not give rise to an estoppel. In [93] he stated that Mr Cobbe could not “obtain any further assistance from the doctrine of the constructive trust”. He did not think that it was necessary or appropriate to consider the issue as to s.2 of the 1989 Act. Lord Walker did not refer to the line of cases considered by Lord Scott relating to joint venture cases and property acquired before the venture came into being.
52 That Lord Walker made only a brief reference to the doctrine of constructive trusts seems to me explicable in this way. If Mr Cobbe could not make out the basis for an equitable or proprietary estoppel, neither could there be any foundation for treating Yeoman’s Row as a constructive trustee.
53 In addition to Yeoman’s Row and the cases there cited Mr Tanney relied on the judgement of Millett L.J. in Paragon Finance Plc v DB Thakerar & Co [1999] 1 All E.R. 400 at 408a–409g to support his contention that there could be no constructive trust here because BHL were already leaseholders before any agreements were reached with the defendants. The case was brought by mortgage lenders against solicitors who had acted both for them and the borrowers. The solicitors had failed to inform the lenders that the borrowers were sub-buyers at inflated prices. The lenders commenced proceedings alleging breach of contract, negligence and breach of fiduciary duty. More than six years after the last transaction they sought to amend their claim to allege, inter alia, fraudulent breach of trust and intentional breach of fiduciary duty. It was held that claims based on allegations of fraud and dishonesty did not involve substantially the same facts as a claim based on allegations of negligence, and so leave to amend was refused. The lenders’ case was that the mortgage monies had been obtained by the solicitors dishonestly and so they held the money subject to a *193 constructive trust to return it immediately. In the course of his leading judgment in the Court of Appeal Millet L.J. stated at 408 and 409:
“Regrettably, however, the expressions ‘constructive trust’ and ‘constructive trustee’ have been used by equity lawyers to describe two entirely different situations. The first covers those cases already mentioned, where the defendant, though not expressly appointed as trustee, has assumed the duties of a trustee by a lawful transaction which was independent of and preceded the breach of trust and is not impeached by the plaintiff. The second covers those cases where the trust obligation arises as a direct consequence of the unlawful transaction which is impeached by the plaintiff.
A constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of property (usually but not necessarily the legal estate) to assert his own beneficial interest in the property and deny the beneficial interest of another. In the first class of case, however, the constructive trustee really is a trustee. He does not receive the trust property in his own right but by a transaction by which both parties intend to create a trust from the outset and which is not impugned by the plaintiff. His possession of the property is coloured from the first by the trust and confidence by means of which he obtained it, and his subsequent appropriation of the property to his own use is a breach of that trust. Well-known examples of such a constructive trust are McCormick v Grogan (1869) LR 4 HL 82 (a case of secret trust) and Rochefoucald v Boustead [1897] 1 Ch 196 (where the defendant agreed to buy property for the plaintiff but the trust was imperfectly recorded). Pallant v Morgan [1952] 2 All ER 951, [1953] Ch 43 (where the defendant sought to keep for himself property which the plaintiff trusted him to buy for both parties) is another. In these cases the plaintiff does not impugn the transaction by which the defendant obtained control of a property. He alleges that the circumstances in which the defendant obtained control make it unconscionable for him thereafter to assert a beneficial interest in the property.
The second class of case is different. It arises when the defendant is implicated in a fraud. Equity has always given relief against fraud by making any person sufficiently implicated in the fraud accountable in equity. In such a case he is traditionally though I think unfortunately described as a constructive trustee and said to be ‘liable to account as constructive trustee’. Such a person is not in fact a trustee at all, even though he may be liable to account as if he were. He never assumes the position of a trustee, and if he receives the trust property at all it is adversely to the plaintiff by an unlawful transaction which is impugned by the plaintiff. In such a case the expressions ‘constructive trust’ and ‘constructive trustee’ are misleading, for there is no trust and usually no possibility of a proprietary remedy; they are ‘nothing more that a formula for equitable relief’: Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 2 All ER 1073 at 1097, [1968] 1 WLR 1555 *194 at 1582 per Ungoed-Thomas J.”
54 Lord Walker’s analysis of equitable estoppel contained no reference to constructive trusts. Nor for instance is there any such reference in the speech of Lord Kingsdown in Ramsden v Dyson . The development of the modern doctrine is stated by Gray and Gray in para.10.215 as follows:
“10.215 This trend towards proprietary recognition was heavily reinforced by the view that, in most cases, the inchoate equity of estoppel already contains, in embryonic form the proprietary interest later awarded by the court in perfection of the equity. English courts developed the theory that the estoppel claimant’s interest in property ‘predates any order of the court.’ The court order merely operates, by virtue of some doctrine of relation back (or even on the footing that ‘equity looks on as done that which ought to be done’) to vindicate some earlier, anticipatory prototype of the entitlement now ordered in favour of the claimant. It thus became steadily more apparent that proprietary estoppel generates anticipatory beneficial rights behind a trust, constructed by the court which then provides the basis for the court’s subsequent order of either specific performance or compensatory damages for breach. All of which returns the argument full circle to the point that proprietary estoppel and constructive trust are intricately inter-related doctrines.”
55 In my judgment the present case falls squarely within the principle stated by Lord Kingsdown in Ramsden v Dyson and Oliver J. in Taylor Fashions Ltd . I consider that it is open to the court to hold that BHL is a constructive trustee in the manner I have stated. I do not consider that the fact that BHL already owned its leasehold is a bar to that. This is not a joint venture case which is what Lord Scott was considering. Nor, in my view, is Mr Tanney’s reliance on the passage cited from Paragon Finance appropriate. Millett L.J. was there considering a wholly different situation to the present. In these circumstances s.2(1) of the 1989 Act is no bar to the defendants’ claims.
Remedy: discretion, illegality and clean hands
56 There is no difficulty in giving the defendants the security of tenure which they require. For, if it is a real difficulty, the covenant in the lease with Brightlingsea not to underlet can be avoided by an appropriately drafted licence or other agreement falling short of a lease. The problem is daytime occupation in the closed period.
57 I was not addressed in any detail as to the form of relief which might be granted to the defendants to satisfy the rights which I have found they have. It was suggested by Mr Cottle that all that was required at this point were declarations. But declarations that the defendants were entitled to a lease or licence on the terms they seek would prejudge issue of how the court’s discretion should be exercised in the circumstances. The defendants’ rights could be protected in two ways. One way would be to make a mandatory order for the grant of leases *195 or licences. The other would be by way of injunction preventing BHL from terminating the defendants’ rights to occupy their sites either (1) simply by notice during the period of BHL’s existing lease with Brightlingsea as extended or renewed, or (2) on the ground of daytime occupation during the closed period. If it is inappropriate in the circumstances to exercise the court’s discretion in either way, it might be open to the defendants to claim damages in lieu of those orders. I refer to Jaggard v Sawyer [1995] 1 W.L.R. 269 . I was not addressed directly as to that. Mr Tanney suggested in closing that the defendants might either be given the opportunity to require BHL to buy their lodges at the prevailing rate and to pay their removal costs; alternatively that they should be awarded damages on the basis of the differences in the values of their lodge with daytime occupation in the closed period and without. Mr Cottle made no submissions in response to that.
58 Mr Tanney submitted that it would be wrong to satisfy the defendants’ equities by ordering the grant of leases in the terms claimed by them because in particular it would put BHL in breach of the site licence and the criminal law. Section 9(1) of the 1960 makes it an offence punishable by a fine for the occupier of a site, here BHL, to fail to comply with a condition attached to the site licence. If the occupier is convicted of so failing on two or more previous occasions, the licence may be revoked. Mr Tanney submitted that the grant of leases permitting daytime occupation in the closed period would put BHL in breach of the section. It was submitted by Mr Schmitz for the third defendant, his submission being adopted by Mr Cottle, that any offence or offences contrary to s.9 were committed when the defendants were permitted to take possession of their sites without it being made a term of their occupation that the closed period was excluded. By s.127 of the Magistrates Courts Act 1980 there is a bar on magistrates dealing with an offence unless the information was laid “within 6 months from the time when the offence was committed, or the matter of complaint arose”. (It was suggested by Lord Upjohn in Mixnam’s Properties Ltd v Chertsey Urban DC [1965] A.C. 735 at 764 that the occupier of a caravan site had a remedy under s.12 of the 1960 Act against a licensee/tenant of a pitch where a breach of site condition occurred. However s.12 applies only to situations where there has been an offence contrary to s.1 —use of land as a caravan site without a site licence.)
59 In my view the application of s.9 of the 1960 Act to the present circumstances is a matter of difficulty. I was informed that Tendring are holding over consideration of prosecution until the outcome of these proceedings. I was not referred to any authority, and really heard no contrary argument from Mr Tanney, save that he submitted his clients were at risk. I do not think that I should attempt to predict the outcome of a prosecution in these circumstances.
60 I was referred to two authorities which I should mention on this part of the case. The first was Chalmers v Pardoe [1963] 1 W.L.R. 677, a decision of the Privy Council on appeal from Fiji. It was a provision of the Native Land Trust Ordinance that a lessee under the Ordinance should not deal with the land without consent, and any dealing without consent should be null and void. The appellant built himself a house on land held by his friend, the respondent, as assignee of a *196 lease from the Native Land Trust Board. The two fell out. The appellant claimed an equitable charge or lien on the land for the sum he had expended. It was held that “unless there is some special circumstance which precludes it, equity would intervene to prevent Pardoe from going back on his word and taking the buildings for nothing”. It was further held, however, that there had been a “dealing” in the land between the two men, and there having been no consent, the dealing was unlawful and equity could not aid the appellant, Chalmers. This was a case where the two parties involved themselves in a dealing in land which they knew, or could be taken to have known, was unlawful, because no consent had been obtained. That is not the present case.
61 Tinsley v Milligan [1994] 1 A.C. 340 was cited by Mr Cottle. There two women formed a joint business venture in lodging houses. Using funds from the business they purchased a house in the name of the claimant but on the basis they were joint beneficial owners. The purpose of that arrangement was to enable a benefit fraud. Later they fell out, the fraud was disclosed and the plaintiff brought proceedings to get possession of the house. It was held by a majority of three to two in the House of Lords that the illegality was no bar to the defendant’s claim to an interest in the house because she did not need to set the illegal purpose to establish her claim. The analogy which Mr Cottle drew on behalf of the defendants was that the problems which face BHL as regards site licence, planning permission and lease, are no part of the defendants’ claims.
62 I accept that there is no illegality in the present case which stands as an absolute bar to the defendants’ claims to relief in equity. But I also accept that the problems to which I have referred are relevant to how the court’s discretion in giving relief should be exercised.
63 Mr Tanney submitted that the defendants were not entitled to relief because they did not come to the court “with clean hands”. That was because they have deliberately used their lodges overnight in the closed period since the dispute arose in October 2005. This was the decision of a number of residents made on the basis that if BHL was going to try and stop them using their lodges in the daytime, as they thought illegitimately, they would not abide by the rule as to not staying overnight. The first and second defendants offered an undertaking to the court that they would not occupy their lodges overnight in the closed period, subject to liberty to apply under s.2(2) of the Mobile Homes Act 1983 . The third defendant, Mr Clark, did not offer an undertaking. I did not raise the matter with him. His lodge is his only home, and the severity of his illness prevented him considering alternative accommodation in the closed period. In these circumstances I do not consider that the defendants’ past conduct should stand as a bar to relief.
64 I have concluded it is not appropriate at this point in time to determine what relief the defendants should obtain. That is because a solution to the problems posed in particular by the site licence may come about through the decisions of Tendring, and, to a lesser extent Brightlingsea. There is the recent application for a variation of the planning permission. If that succeeds, it is possible that this will lead to the problems disappearing. Let me make it wholly plain that I am not expressing any view whether it should succeed or not: that is not my function and *197 I am in no position to form any view of the planning issues which arise. What I am saying is that I should not decide how my discretion to give the defendants’ relief should be exercised until the outcome of that application is known, and perhaps also until the further attitude of the local authorities is known. I will then hear full submissions on this part of the case, which have not so far been made.
Misrepresentation
65 As an alternative to their primary claims the defendants claim damages for misrepresentation. The alleged misrepresentations which are relied on are the statements of Mrs Pollard and Mr Myson as to the leases the defendants would receive. These were promises as to the future. They are not representations of fact which can give rise to a claim for damages under s.2 of the Misrepresentation Act 1967 . It is not alleged that Mrs Pollard and Mr Myson did not give honest and accurate statements of what their intentions were at the time.
Harassment
66 The harassment of the defendants is alleged to have consisted essentially of two types of conduct: first, the writing of letters to the defendants by Mr Hammerton from December 2004 which were described as of a threatening nature; second, the acts of turning off water and electricity and the provision of bollards to prevent vehicular access, all during the closed period.
67 Section 2 of the Harassment Act 1997 gives a civil remedy for the breach of s.1(1) of the Act, which may include damages for anxiety. By s.1 :
(1) A person must not pursue a course of conduct –
(a) which amounts to harassment of another, and
(b) which he knows or ought to know amounts to harassment of the other.
(1A) A person must not pursue a course of conduct –
(a) which involves harassment of two or more persons, and
(b) which he knows or ought to know involves harassment of those persons, and
(c) by which he intends to persuade any person (whether or not one of those mentioned above) –
(i) not to do something that he is entitled or required to do, or
(ii) to do something that he is not under any obligation to do.
(2) For the purposes of this section, the person whose course of conduct is in question ought to know that it amounts to or involves harassment of another if a reasonable person in possession of the same information would think the course of conduct amounted to or involved harassment of the other.
(3) Subsection (1) or (1A) does not apply to a course of conduct if the person who pursued it shows –
a. that it was pursued for the purpose of preventing or detecting crime, *198
b. that it was pursued under any enactment or rule of law or to comply with any condition or requirement imposed by any person under any enactment, or
c. that in the particular circumstances the pursuit of the course of conduct was reasonable.
By s.(2) references to harassing “include alarming the person or causing the person distress”. Section 7(3) provides that “a ‘course of conduct’ in relation to a single person (see section 1(1) ), conduct on at least two occasions in relation to that person, …”. There is no further definition of harassment provided by the Act.
68 I am satisfied that the acts in question were all instigated by Mr Hammerton because he considered that the defendants were acting in breach of their agreements not only by occupying their lodges during the day during the closed period but also during the night. That was in breach of the site licence. He was under pressure from Tendring to secure compliance, and he was acting as he did in order to secure compliance with the conditions of the site licence. That falls within s.1(3).b . There is no requirement in s.1(3).b that the conduct need be reasonable. I make that observation, but I do not mean to suggest that Mr Hammerton’s conduct was unreasonable. This finding obviates the need to make further assessment of Mr Hammerton’s conduct in the context of the Act. I should have been in some difficulty in doing that first because the claim was presented on the basis that the facts were essentially agreed, and Mr Hammerton was cross-examined but briefly on this topic. I do not complain about that: it was important to keep a check on the costs of the action. Secondly, the application of the Act’s provisions to circumstances such as the present is far from straight-forward. The claims for damages for harassment fail.
Are the lodges “caravans” as defined by law?
69 “Caravan” is defined by s.29(1) of the 1960 Act as meaning:
“Any structure designed or adapted for human habitation which is capable of being moved from one place to another (whether by being towed, or by being transported on a motor vehicle or trailer) and any motor vehicle so designed or adapted, but does not include –
(a) any rolling stock which is for the time being on rails forming part of a railway system, or
(b) any tent.”
70 Section 13 of the 1968 Act adds to the definition in the following way:
“13 Twin-unit caravans
(1) A structure designed or adapted for human habitation which –
(a) is composed of not more than two sections separately constructed and designed to be assembled on a site by means of bolts, clamps or other devices; and *199
(b) is, when assembled, physically capable of being moved by road from one place to another (whether by being towed, or by being transported on a motor vehicle or trailer).
shall not be treated as not being (or as not having been) a caravan within the meaning of Part 1 of the Caravan Sites and Control of Development Act 1960 by reason only that it cannot lawfully be so moved on a highway when assembled.
(2) For the purposes of Part I of the Caravan sites and Control of Development Act 1960 , the expression “caravan” shall not include a structure designed or adapted for human habitation which falls within paragraphs (a) and (b) of the forgoing subsection if its dimensions when assembled exceed any of the following limits, namely –
(a) length (exclusive of any drawbar): [65.1516] feet ([20] metres);
(b) width: [22.309] feet (16.8] metres);
(c) overall height of living accommodation (measured internally from the floor at the lowest level to the ceiling at the highest level): [10.006] feet ([3.05] metres).
(3) ….
(4) ….”
The question is whether the lodges fall within this definition. The figures in square brackets were substituted by Order in 2006 : SI 2006/2374, art.2(a) .
71 It is necessary to give some further description of the lodges. They are brought to site in two sections. Each section has three walls and an open side which will be at the centre line of the assembled lodge. Each section sits on a metal chassis with wheels under its centre and a towing jig and wheel at the front. The jig and front wheel are designed to be detached and stored under the assembled lodge. The main wheels remain in place but off the ground. Timber frame box floor sections are bolted to the chassis. Each section is winched onto a transporter and delivered to site. On site the sections are manoeuvred on their wheels using skids—boards or sheeting—under the wheels as necessary. When they are placed side by side the two sections form the lodge, their slopping roofs peaking at the join. The two chasses are bolted together along their length. The outer sides of the chasses are then raised on tripods until the two roof ridges meet at the top. It is primarily this inward pressure which keeps the two sections or halves together above the level of the chasses. Timber or concrete blocks are positioned beneath the chasses for additional support and to assist with levelling. Externally a ridge piece is fitted to cover the join of the two roofs, and the gable ends are sealed. Guttering and down pipes and also flue pipes—chimney pipes, are fitted. Internally the line between the two adjacent beams which run along the line of the ridge—one in each section, is covered by a board. Floor coverings which were fitted in the factory and removed for transport are replaced. Services are connected. Each of the defendants’ lodges has a veranda or decking running around it on the same level as the lodge floor. These verandas could be free-standing but are in each case *200 fixed with nails or screws, in one case utilising joist hangers. I saw these fixings. There are steps which give access.
72 The claimants assert that the lodges are caravans within the expanded definition in s.13 . They say that the lodges are made in not more than two sections, that they are when assembled physically capable of being moved by road from one place to another, even if not lawfully, and are within the dimension limits set out in s.13(2) . The defendants’ case is that the lodges are made of more than two sections because, for example, the ridge pieces and the floor coverings are separate sections. It was submitted that the verandas were part of the lodges. It was submitted that the lodges are not physically capable of being moved as required by the section. It is the defendants’ case that they are outside the dimensions permitted by the section because the eaves should be included.
73 I should record that there is nothing unusual about the defendants’ lodges. They are standard products made by a well-known manufacturer and are believed by “the trade” to come within the definition. It may well be that there will be consternation within the trade and on caravan sites if they are not caravans within the Act. But that is irrelevant to my decision.
74 I was referred to the following authorities on this part of the case. In Carter v Secretary of State for the Environment [1994] 1 W.L.R. 1212 the decision was that a “Park Home” which consisted of four prefabricated sections and could only be moved after being dismantled was not a caravan.
75 Byrne v Secretary of State for the Environment (1997) 74 P. & C.R. 420 concerned a log cabin which was the subject of an enforcement notice. The issue arose whether the cabin was a caravan in law. It was held by Judge Rich Q.C. sitting as a High Court judge that it was not because it was not assembled on site out of two separately constructed sections. That was sufficient to determine the case. Judge Rich went on to consider whether the cabin could meet the requirement of mobility. He stated at 425:
“The consideration of the mobility test in paragraph 11 [of the Inspector’s decision] clearly has regard to the movability of the structure from the particular site upon which it had been erected. This, Mr Boyle urges upon me, is an error of law, because, he says, what is to be considered is the nature of the structure rather than the circumstances of the structure in regard to the particular place where is has been erected.
I am uncertain what is the true construction of section 13(1)(b) in this respect. It appeared to me, when I read the paragraph at first, that the phrase ‘when assembled’ is a clear indication that its mobility is to be tested by reference to the circumstances where and how it had in fact been assembled.
Mr Boyle submits and submits persuasively, that there is an alternative meaning of ‘when assembled’, namely in its assembled state. He submits further, that since what is to be considered is whether it is capable of being moved by road from one place to another, it is not to be construed as meaning from the particular place where it has in fact been erected. That I find a highly persuasive argument and one which I would readily accept if I did not immediately recognise the source of the expression *201 ‘one place to another’ which is merely a repetition of the phrase which had been found already in the definition of section 29(1) of the 1960 Act.
I remain, therefore, inclined to the view that the proper construction of the paragraph is that which I first gave it, namely that when assembled means when and as assembled in the state where the question of whether or not it is to be deemed to be a caravan falls to be determined. I readily acknowledge that I may be wrong as to that construction of the paragraph, and it is therefore convenient that I should go on to consider, on the assumption that what is to be considered is the structure independent of its position, whether there would be reason to interfere with the Inspector’s decisions.”
76 It was also held by the Lands Tribunal in Atkinson v Foster [1996] R.A. 246 that in considering mobility it was necessary to consider the actual position where the structure was, including access, trees etc.
77 In Howard v Charlton [2002] EWCA Civ 1086 it had been held in the Canterbury County Court that an extension of 3.7m by 1.88m described as a porch and attached to the side of the home had not changed the characterisation of the home as a mobile home (or caravan). It was bolted on and could be unbolted. The Court of Appeal held that the owner of the park was not entitled to recover possession of the site regardless of the correctness of that finding, and so did not need to consider it. In the course of giving the leading judgment Carnwath L.J. stated after referring to s.29 of the 1960 Act :
“It is immediately apparent that something may be a ‘caravan’ for these purposes, even though it bears no relation to what might be regarded as a caravan in ordinary language. In particular it does not need to have wheels; it is enough that it can be transported in a trailer. The definition was further expanded by the Caravan Sites Act 1968 . This, it seems, was intended to remove doubts about the application of the definition of the larger types of caravan, usually referred to as ‘twin unit caravans’, which became popular in the 1960’s”
78 It was suggested by Mr Cottle that I should tend to construe the Act to find that the lodges in question here were not caravans because they are the defendants’ homes and as such were entitled to protection under art.8 of the European Convention for the Protection of Human Rights . I do not think that such an approach would be appropriate. Even if my decision affected only these defendants, I would have considerable doubt whether I should in the circumstances here look with any more favour on one side of the argument than another. But the position is that the decision will affect many others, who may well be better placed if their lodges are caravans as they believe them to be. Article 8 should play no part in my decision.
79 It was submitted on behalf of the defendants that the lodges were not structures composed of not more than two sections by reason of the roof ridges, the floors and the verandas. The expression “roof ridge” is used to refer to the v-shaped piece that is fitted over the join at the ridge formed by the connection of the two roofs when the lodges were assembled on site. I am satisfied that this is *202 not to be treated as a separate section. It is but common sense that there will be small pieces that are required to be added to the assembled sections to complete the structure as a home. They are not “sections” and do not prevent the structure falling within the definition given by s.13.1 . I consider that this covers items such as the roof ridges, guttering, flues and also the floors. By floors I do not refer to the underlying floor structure which is constructed in the factory which sits on the chassis. I refer to the floor which is designed to lie on top of that and to bridge the join between the two halves, which is fitted in the factory, removed and refitted on site. It is made of thin laminate or equivalent, and can readily be removed again. The verandas and any other “add-ons” are of a different nature. The question here is whether they are to be treated as part of the structure to which the section refers. I am satisfied that they are not. They can easily be removed without doing any real damage to the lodge itself. Plainly a free-standing veranda would not fall to be treated as part of the structure. I do not think that a veranda which uses the lodge for support but can easily be detached from it should be treated differently. On the other hand, if what was effectively a separate room was added by being built on to the structure, whether called a porch, a sun lounge, a conservatory or something else, this might well become part of the structure and be a section in itself.
80 The next issue is that of the dimensions. If the eaves are included, the lodges exceed the dimensions stated in s.13(2) . In my view, if one is measuring the width of a structure such as the lodges, it is normal to take the wall measurements and to exclude the roof measurements. Secondly it seems to me to be more likely that Parliament would seek to control the wall measurements for width and length rather than the roof measurements.
81 Section 5(6) of the 1960 Act empowers the specification by the minister of “model standards with respect to the layout of, and the provision of facilities, services and equipment for, caravan sites or particular types of caravan site …”. I was provided with “Model Standards 1989: Holiday Caravan Sites”. Paragraph 2 is supportive of the last two paragraphs in general terms. As Mr Cottle said, it represents no more that the views of the two departments involved, the Department of the Environment and the Welsh Office, and they are not an aid to the construction of the Act.
82 The measurement of the lodges by Mr Michael Snow, a surveyor instructed as a joint expert showed that they met the s.13(2) measurements unless the eaves overhang was to be included, in which case there was an excess of 10cm in each case. In my judgment they comply with s.13(2).
83 Section 13 of the 1968 Act requires that the structure “is, when assembled, physically capable of being moved by road from one place to another (whether by being towed, or by being transported on a motor vehicle or trailer)” : but it need not be capable of being lawfully so moved. The last provision appears to be because of width problems: I refer to Howard v Charlton at [6]. The phrase “from one place to another” also occurs in s.29(1) of the 1960 Act, but s.29(1) does not refer to “by road”. Section 13 provides alternatives, movement by towing, and movement by loading onto a carrier. The two opposing constructions are these: whether the structure must be capable of being moved by road *203 from one place to another, with no specific places or roads in mind, or whether the structure must be capable of being moved from where it is and moved by road to another place.
84 I have concluded that the first construction is the correct one. My main reason is that it is consistent with the purpose of the Act that, if a structure is once a caravan, it should remain a caravan if it is itself unaltered, regardless of where it is. If a lodge meeting the requirements of the section and so a caravan is assembled on a site, it should not cease to be a caravan if it becomes boxed in by other lodges and cannot be got out because lifting apparatus cannot sufficiently approach. Likewise with the growth of trees. Likewise with the change of season making ground alternatively passable or impassable to equipment or the lodge. It is also very possible that the kind of caravan that is towed behind a car might be placed in a position from which for one reason or another it could not be moved, either temporarily, or permanently. It is surely unthinkable that it would then cease to be a caravan as defined in s.29 because “it was not capable of being moved from one place to another”. I therefore decline to follow the view tentatively express by Judge Rich in the Byrne case. In my judgment the test which the structure has to pass is as follows. It must either be physically capable of being towed on a road, or of being carried on a road, not momentarily but enough to say that it is taken from one place to another. It is irrelevant to the test where the structure actually is, and whether it may have difficulty in reaching a road.
85 I do not have to consider whether a lodge which becomes frail through age and immovable for that reason may cease to be a “caravan” because of it. Common sense suggests not. The answer may well be in the phrase in s.13(1) “when assembled”. If it can be moved when assembled, when first assembled, that is sufficient. If that is right, this is a further reason for construing the section as I have. For subsequent events are not relevant.
86 There was evidence as to the mobility of the lodges as follows. Mr Nigel Leek is the sales manager of Cosalt Holiday Homes Limited, the manufacturer of the defendants’ lodges. He gave evidence to this effect. The intention of the company is to design units which meet the statutory definition. Cosalt has been a member of the National Caravan Council and the British Holiday Home Parks Association for many years. The National Caravan Council checks products to see that they comply with the Act. Mrs Morris’s lodge is a standard Lautrec model manufactured by Cosalt. Mr Foster’s is a standard Cezanne, and Mr Clark’s is a standard Matisse. Mr Mark Lally is director general of the National Caravan Council. He stated that the Department of Environment had confirmed in correspondence that it was correct to exclude eaves from size measurements. Mr Martyn Hadfield is production manager of Cosalt. He described in some detail how the chassis under each of the two units was constructed and how the units were assembled. He showed a video recording of an assembled Lautrec model being towed by a tractor in a factory yard in March 2006. This was not done for this case but to demonstrate for general purposes the capability of being towed. The unit was moved quite slowly, was turned and was backed. There were no problems. I accept that a similar exercise could have been carried out with Picasso and Matisse models. Mr Christopher Sawyer is a consultant *204 engineer, who was instructed as a joint expert. He was not required to give evidence, but his report and answers to questions were relied on. It was his opinion that neither the size nor weight of the lodges prevented transportation by road. He understood that the two chasses or understructures were not joined to each other. That is wrong: they are bolted together, and this is an essential part of the assembly of units on site. He considered that the two units would need to be joined by an additional steel structure before a lodge could be put on a trailer. He considered the problems of lifting the lodge from where they are onto a transporter. He considered that Mrs Morris’s lodge and Mr Foster’s lodges could be lifted with difficulty and at risk of ground damage and certain disturbance of neighbouring occupants. He considered that it would not be possible to lift Mr Clark’s lodge by crane because of its distance from the nearest road. He considered whether the lodges could be towed off site if boards were used. He concluded that it would be difficult and some damage to the site might be caused, but it was possible. The verandas and other “add-ons” would need to be removed. He stated that the lodges could not be towed without damage to them, because of the two separate under-structures. This arose from his failure to appreciate that the two chasses were bolted together. It is shown to be wrong in practice by the video of an assembled unit under tow. For the same reason he considered that a beam structure would have to be placed under the lodges before they could be lifted by a crane. Despite the bolting of the two chasses that may be right: but the support need not be as substantial or elaborate as Mr Sawyer anticipated. Mr Sawyer advised as to the work that would have to be done to prepare the lodges for being moved, in particular the items which he considered should be removed. I do not think that this gives rise to any difficulty either as a matter of law or of practicality. He considered the lodges could not be towed on a road on their own wheels at in excess of 6mph.
87 Mr Tanney did not assert that the video of the assembled lodge being towed was a complete answer to the need to establish appropriate mobility. However, on my view as to the correct construction of s.13 it is. It shows that these lodges are physically capable of being moved, albeit slowly, by road from one place to another. Further, Mr Sawyer’s evidence taken with the fact that the chasses are bolted together shows that the lodges could be towed from their present sites, and then towed along the road. It shows that the lodges of Mrs Morris and Mr Foster could be lifted out, and then moved on their own wheels or on a transporter. It shows that Mr Clark’s could not be lifted out. In my judgment it is enough that the lodges are capable of being towed on a road from one place to another. They can also be carried on a transporter. Either is enough. These lodges are caravans within the Acts.
Reporter—David Stott