House of Lords gives judgment in Yeoman - Row Management Limited v. Cobbe [2008] UKHL 55
The House of Lords has now given judgment allowing the appeal in Yeoman’s Row Management Limited v. Cobbe [2008] UKHL 55. Nicholas Dowding QC appeared for the successful appellant.
This was the first time that the doctrine of proprietary estoppel has been considered by the House of Lords since Ramsden v. Dyson in 1866.
The facts were that an owner of property and a property developer reached an oral agreement in principle, the structure of which was that the developer was to obtain planning permission for the redevelopment of the property, and if planning permission was granted, the owner was to sell the property to the developer for an up-front price of £x. The developer was to develop it in accordance with the planning permission and sell off the completed units, and then when the gross proceeds of sale reached £2x, any further gross proceeds were to be divided equally between them. A number of the terms remained to be agreed, and no draft documentation was ever produced. Both parties knew that there was no binding agreement, but the developer believed that the owner was and regarded herself as bound in honour to enter into a formal contract if planning permission was obtained. The developer spent time and money in obtaining planning permission but the owner subsequently sought to re-negotiate the core financial terms.
Etherton J and the Court of Appeal held that a proprietary estoppel had arisen in favour of the developer, under which he was entitled to one half of the increased value of the property resulting from the grant of planning permission. The House of Lords allowed the owner’s appeal, holding that the developer was not entitled to relief by way of proprietary estoppel or a constructive trust. It held that the developer was only entitled to a quantum meruit payment for his services in obtaining planning permission.
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