THE MASTER Of THE ROLLS: We need not trouble you, Mr Verney. In this case old Mr Baker, if I may so describe the father, in 1931 was the owner of a little over six acres of land at Dunsmore in Buckinghamshire. His son, Jack Baker, was living in those parts and was thinking of erecting a bungalow. He had his eye on a piece of land but the price was rather too much for him. So the father said to him: "Why not put the bungalow on my land and make the bungalow a little bigger". That is what the son did. He did put the bungalow on his father's land. He built it with his own labour with the help of one or two men, and he got the materials. He bore a good deal of the expense himself but his father helped him with it, and he paid his father back some of it. Roughly he spent himself the sum of 150 out of a total of 300 expended. When it was finished, he went into the bungalow; and he has lived there ever since from 1931 down to date. His father visited him there from time to time.
In 1951 the father died. The only will he left was one he made as far back as 1922 before this land was bought or the bungalow was built. He appointed as executrix Miss Inwards, who had been living with him for many many years as his wife and by whom he had two children. He left nearly all his property to her and her two children by him. He left his son, Jack Baker, 400. Miss Inwards appointed her two children as trustees of the will with her. The trustees under the will did not take any steps to get Jack Baker out of the bungalow. In fact they visited him there from time to time. They all seem to have been quite friendly. But in the year 1963 they took proceedings to get Jack Baker out. Miss Inwards died during these proceedings. Her two children continue the proceedings as the trustees of the father's will.
The plaintiffs say that at the most Jack Baker had a licence to be in the bungalow but it had been revoked and he had no right to stay. The Judge has held in their favour. He was referred to the case of Errington v. Errington in 1952, 1 King's Bench, p.290, but the Judge held that that decision only protected a contractual licensee. He thought that, in order to be protected, the licensee must have a contract or promise by which he is entitled to be there. The Judge said:
"I can find no promise made by the father to the son that he should remain in the property at all - no contractual arrangement between them. True the father said that the son could live in the property, expressly or impliedly, but there is no evidence that this was arrived at as the result of a contract or promise - merely an arrangement made casually because of the relationship which existed and knowledge that the son wished to erect a bungalow for residence".
Thereupon, the Judge, with much reluctance, thought the case was not within Errington's case and said the son must go.
The son appeals to this Court. We have had the advantage of cases which were not cited to the County Court Judge, cases in the last century, notably -Dillwyn v. Llewelyn, (1862) 4 De Gex, Fisher and Jones, p.517, and Plimmer v. The Mayor etc. of Wellington, in 1884, 9 Appeal Cases, p.699. This latter was a decision of the Privy Council which expressly affirmed and approved the statement of the law made by Lord Kingsdown in the case of Ramsden v. Dyson, Law Reports, 1 House of Lords, p.129. It is quite plain from those authorities that if the owner of land requests another, or indeed allows another, to expend money on the land under an expectation created or encouraged by the landlord that he will be able to remain there, that raises an equity in the licensee such as to entitle him to stay. He has a licence coupled with an equity. Mr Goodhart urged before us that the licensee could not stay indefinitely. The principle only applied, he said, when there was an expectation of some precise legal term. But it seems to me, from Plimmer's case in particular (at pp.713-4), that the equity arising from the expenditure on land does not fail "merely on the ground that the interest to be secured has not been expressly indicated.....the Court must look at the circumstances in each case to decide in what way the equity can be satisfied".
So in this case, even though there is no binding contract to grant any particular interest to the licensee, nevertheless the Court can look at the circumstances and see whether there is an equity arising out of the expenditure of money. All that is necessary is that the licensee should, at the request or with the encouragement of the landlord, have spent the money in the expectation of being allowed to stay there. If so, the Court will not allow that expectation to be defeated where it would be inequitable so to do. In this case it is quite plain that the father allowed an expectation to be created in the son's mind that this bungalow was to be his home. It was to be his home for his life or, at all events, his home as long as he wished it to remain his home. It seems to me, in the light of that equity, the father could not in 1932 have turned to his son and said: "You are to go. It is my land and my house". Nor could he at any time thereafter so long as the son wanted it as his home.
Mr Goodhart put the case of a purchaser. He" suggested that the father could sell the land to a purchaser who could get the son out. But I think that any purchaser, who took with notice, would clearly be bound by the equity. So here too the present plaintiffs, the successors in title of the father, are clearly themselves bound by this equity. It is an equity well recognised in law. It arises from the expenditure of money by a person in actual occupation of land when he is led to believe that, as the result of that expenditure, he will be allowed to remain there. It is for the Court to say in what way the equity can be satisfied. I am quite clear in this case it can be satisfied by holding that the defendant can remain there as long as he desires to as his home.
I would allow the appeal accordingly and enter judgment for the defendant.
LORD JUSTICE DANCKWERTS: I agree and I will add only a few words.
It seems to me the claim of the appellant in respect of this property is amply covered by the cases of Errington v. Errington. 1952, 1 King's Bench, p.290, Dillwyn v. Llewelyn, 1862, 4 De Gex, Fisher and Jones, p.515, and Plimmer v. Mayor etc. of Wellington, 9 Appeal Cases, p.699. Further, it seems to me to be supported by the observations of Lord Kingsdown in Ramsden v. Dyson, Law Reports, 1 House of Lords, p.129. It is true in that case Lord Kingsdown reached a result on the facts of the case which differed from that reached by the other members of the House of Lords, but Lord Kings down's observations which are relevant in the present case have received support since that case was decided, and, in particular, I would like to refer to the observations in the Judgment of the Privy Council at p.713 of the report of Plimmer v. Mayor etc. of Wellington. It is said there:
"Their Lordships consider that this case falls within the principles stated by Lord Kingsdown as to expectations created or encouraged by the landlord, with the addition that in this case the landlord did more than encourage the expenditure for he took the initiative in requesting it".
There are the same circumstances in the present case. The appellant was induced to give up his project of building a bungalow on land belonging to somebody else other than his father, in which case he would have become the owner or tenant of the land in question and thus have his own home. His father induced him to build on his, the father's, land and expenditure was made by the appellant for the purpose of the erection of the bungalow,
In my view the case comes plainly within the proposition stated in the cases. It is not necessary I think to imply a promise. It seems to me that this is one of the cases of an equity created by estoppel, or equitable estoppel, as it is sometimes called, by which the person who has made the expenditure is induced by the expectation of obtaining protection, and equity protects him so that an injustice may not be perpetrated.
I am clearly of opinion that the appeal should not allowed and judgment should be entered for the defendant.
LORD JUSTICE SALMON: I agree.