The Gazette 1985

GAZETTE

JULY/AUGUST

198

Llewellyn

was referred to in argument, and could have

been considered to support Martin's claim,

but there is

no reference to this case in the judgment of Kenny J. It is

unfortunate also that Kenny J. did not have the benefit of

the subsequent English cases in which the doctrine of

proprietary estoppel has been applied.

What Kenny J. failed to achieve through proprietary

estoppel he was, however, able to achieve by a different

route. Basing himself upon the principle of promissory

estoppel enunciated by Denning J. in

Central

London

Property Trust, Ltd.

-v-

High Trees House, Ltd.,

he held:

"that the plaintiff (Martin's father) cannot •

withdraw the permission which he gave for the

erection of the house on the lands at Adamstown

and cannot now assert a title to the site on which the

house stands or to the house".

Kenny J. gave no analysis of the nature of the principle

of proprietary estoppel justifying this radical extension of

the

High Trees

principle even though at the time it would

probably have been considered to be limited to cases

involving the modification of an existing contractual

relationship.

His reliance upon this line of authority

posed a difficulty. It was accepted that the principle of

promissory estoppel may be used "as a shield, but not as a

word",

that it may provide a defence, but can create no

cause of action.

As a result Kenny J. felt obliged to

confess:

"While the estoppel created by the plaintiffs

conduct prevents him from asserting a title to the

site, it does not give Martin a right to require the

plaintiff to transfer the site to him: if I had jurisdic-

tion to make such an order I would do so, but I do

not think I have . . . If this case goes further, I hope

that it will be held that I was wrong in deciding that I

had no power to order the plaintiff to transfer the

site to Martin".

Once again, however, Kenny J. found an ingenious

solution. He declared that neither the plaintiff nor any

person claiming through him could successfully assert a

title to the land on which the house was built in any

proceedings and at the expiration of twelve years Martin

would be able to claim title by adverse possession.

Thus

was justice achieved, but once again, only upon a

questionable footing, for it is difficult to see how Martin's

possession, being possession under what the court held to

be an irrevocable licence, could be considered adverse.

It is against this background that

McMahon

-v-

Kerry

County Council

fell to be decided.

McMahon -v- Kerry County Council

In 1964, a plot of land was transferred by Kerry County

Council to the McMahons for the purpose of building and

establishing a school. The plans for the school were

abandoned by 1965. When the McMahons visited the site

again in 1968, they found some of the County Council's

employees preparing to build on the site. The McMahons

complained and the work stopped. But the McMahons

did not take any steps to "supervise, protect or guard"

the property and it remained unfenced and undistin-

guishable from the surrounding land. Nothing was done

with the site for several years until the County Council

started in August 1972 to build two houses on it. During

the month of December of the following year, the

McMahons discovered this development and some time

later commenced proceedings in the High Court to claim

possession of the site and the houses.

The McMahons based their claim upon the simple

proposition that they were the owners of the land. They

had no knowledge of the building development until

December 1973 and thus could not be said to have

acquiesced, and in the absence of acquiescence their rights

as registered owners, they alleged, were absolute and

could not be interfered with. Alternatively, they

submitted that some servant or agent of the Local

Authority knew at the time of the commencement of the

building work that the land on which they were working

belonged to the McMahons, and such knowledge should

be imputed to the County Council.

The County Council, who had rented the houses to

"needy persons", (at least by the time of the hearing),

submitted that the court should exercise its equitable

jurisdiction and refuse the order for possession. Counsel

for the Council contended that there is "a general

equitable principle which restrains the court in granting a

decree for possession where with the knowledge of the

building of premises on it an owner stands by acting this

mala fide

whilst the person who has gone into occupation

and has built the premises acts by way of a

bona fide

mistake".

While he conceded that this was not the

position, given the facts of the instant case, he submitted

that it was nonethless a principle which should be

extended to cover the case before the court.

This submission was accepted by Finlay P. He took as

his starting point the statement of Lord Cranworth L.C.

Ramsden

-v-

Dyson.

"If a stranger begins to build on my land supposing

it to be his own and I perceiving his mistake abstain

from setting him right and leave him to persevere in

his error a Court of Equity will not allow me

afterwards to assert my title to the land on which he

had expended money on the supposition that the

land was his own. It considers that when I saw the

mistake into which he had fallen it was my duty to

be active and to state my adverse title and that it

would be dishonest of me to remain willfully passive

on such an occasion in order afterwards to profit by

the mistake which I might have prevented.

But it will be observed that to raise such an equity

two things are required: first, that the person

expending the money supposes himself to be

building on his own land; and secondly, that the real

owner at the time of the expenditure knows that the

land belongs to him and not to the person

expending the money in the belief that he is the

owner. For if a stranger builds on my land knowing

it to be mine, there is no principle or equity which

would prevent my claiming the land with the benefit

of all the expenditure made on it. There would be

nothing in my conduct, active or passive, making it

inequitable in me to assert my legal rights".

Finlay P. was satisfied that the

McMahon

case did not

fall into either of the categories outlined in the passage

quoted. The McMahons did not knowingly stand idly by

while the local authority began to build on the land

believing it to be its own. Nor did the Council build on the

land knowing that they were not owners of it. The passage

180