Written during my final year at university, this 12,000 word research project explores the potential for judicial bias when adjudicating fiduciary breaches across four countries including Australia, Canada, United Kingdom and the United States of America.
Having kept this frankly illuminating piece to myself for the last three years, I thought perhaps it was time to share it with those interested or curious enough to view it, while for the record I was delighted to receive a first-class grade for my earnest efforts.
As discussed in Crest Nicholson, it is imperative for disputing parties to recognise that the wording of documents, and the terms implied behind them, are not to be misconstrued to the detriment of those seeking justice (as is demonstrated in this brief matter).
When a small business owner found himself in a position to expand upon his success as a retail outlet, he began negotiations with a new bank that had shown an interest in helping him secure an additional property with a view to opening a second store. As there were complex requirements within the proposed arrangement, there needed to be a number of component contracts that would collectively form a single binding contract.
These came in a number of different forms, including several small charges against the properties held under title by the appellant, a guarantee of indemnity for a supplier the appellant had chosen for his new store, anda re-financing of an existing loan with his current bank, which due to its significant size formed the footing of the agreement, because without it the bank had no means by which to achieve a workable profit.
As part of the pre-contract process, the bank sent a letter that conveyed its agreement to proceed with the package contract, on the proviso that the appellant also agreed to submit to the terms contained within the letter and the actions he was required to undertake prior to their commencement.
The appellant duly signed and returned the letter to display his compliance with those terms, but unfortunately for reasons not outlined within the appeal hearing, the bank was unable to proceed with the loan refinancing, and therefore the proposed arrangement could not be realised.
It was this unexpected withdrawal that promoted the appellant to cite that his business had subsequently suffered pecuniary losses through the inability to expand, and that the banks unwillingness to endorse his guarantee to the potential supplier constituted a clear breach of contract.
When given broad and considered thought in the Court of Appeal, it was reiterated that while the bank and the appellant had drawn up a multi-layered agreement to contract, no breach could be found without the complete participation of all the arrangements, for without them functioning as a whole, no such contract could be seen to exist; while the bank’s letter merely outlined that they needed the appellant’s agreement to the terms contained within, and that his acceptance did not by extension, form a binding arrangement.
Furthermore, while the bank’s cessation to undertake business with the appellant had left him dissatisfied, there could be no causal link between a failure of the contract to become manifest, and any obstruction of commercial expansion under his own efforts, thus the court dismissed the appeal, while holding that:
“[T]he law decides whether a contract has come into existence by looking objectively at what each party said to the other, not at their subjective intentions or understandings.”
When two first-time homebuyers rely upon a financial donation from family members, the equality of shared ownership can become displaced, despite individual perceptions of common intention and the partnership of marriage.
When two young newlyweds entered into a mortgage of their family home, it was not without a significant cash contribution from the groom’s parents. This gift was bestowed upon the couple after the bride’s parents had covered the costs of the wedding, and therefore implied equal investment into their committed relationship. At the time of conveyance, the deeds fell under sole title in favour of the groom, and no assumptions were otherwise made than it was their home, and that both parties were joint occupants and thus entitled to equal benefits.
A few years after the purchase, the nature of the mortgage altered, and was now liable under the terms of an acquiring bank, at which point the wife was asked to sign away any beneficial interest she held in favour of the new mortgagee. Her agreement to this request was given (albeit under visible duress) so that the husband could continue to run his business, while the family (now with three children) could remain in secure occupation.
After re-mortgaging the property a number of years later, the wife took the opportunity to have her name included within the title, and thus became a legal tenant-in-common. When the business began to fail and the mortgage fell into unrecoverable default, the bank sought to repossess, at which point the wife challenged the order on grounds that any relinquishing of interest had not been of her volition, rather that her now estranged husband’s undue influence led her to act against her will and under marital obligation.
In the first hearing, the judge found in favour of the wife on the grounds described, before going further to explain that while her collective time and monies invested into the home during the course of their marriage could not translate into an equal half-share of the property, it did result in a six percent stake hold, arising from her half-share entitlement of the cash gifted by the groom’s parents at the point of purchase; and therefore under those circumstances, any repossession order could not stand.
When challenged by the bank and the wife in the Court of Appeal, the principle of shared equity was given greater consideration, along with the equitable maxim ‘equality is equity‘, which on this occasion was not relied upon. Instead, it was agreed that the wife’s actions first dismissed as non-contributory, were embraced as wholly acceptable, despite no verbal agreements between the couple as to whether or not the home was equally divisible to begin with.
As can be traced back through the historic case law surrounding easements, there has been much dispute as to exactly what constitutes such a privilege; and so in Re Ellenborough Park, a generosity of scope was favourably agreed upon and the principle further refined.
When the considerate nature of the original owner of Ellenborough Park (itself no more than an expansive parcel of land) bestowed conditional rights upon the future freeholders of property encircling it, those privileges allowed exclusive enjoyment of the space and fresh air afforded them, yet the vendor had no idea how many years later, that same kindness of spirit would be challenged by those succeeding him.
For almost 100 years, the owners of the chosen properties had enjoyed uninterrupted peaceful use, until the second world war brought with it, the temporary military occupation of both the park and the homes built around it. After returning the houses back to their current owners (along with suitable compensation for their use), it was decided by the trustees of Ellenborough Park, that continued access to the gardens would no longer be accepted, and that under the terms of the original conveyance, no such easements had ever been put into effect.
Under the general terms prescribed by common law, there are a number of criteria that need to be met for an easement to exist. These critical elements include the principles that those assigned the granting of an easement must take it on the understanding that use of such a covenant relies upon utility and benefit from the right, and that benefit of the easement must derive from the granting of such a right. Because Ellenborough Park was cosmetically different from most commonly prescribed easements, it was argued that the mere capacity to wander around freely upon a large plot of land (albeit subject to expressly detailed maintenance contributions) amounted to no more than a ‘jus spatiandi’, which is a phrase typically assigned to public parks and recreational areas requiring little more than careful observation of the rules associated with their use.
In the first hearing, the judge found in favour of the defendants, and so when further considered under appeal, an in-depth examination of the founding conveyance revealed very succinct terminology as to support and endorse the intentions of the estate owner, in that he had not only established by definition the presence of easements to the freeholders, but that such consideration had been expressly granted by way of the deed’s construction. This decision has since proven instrumental to the variances in the physical representation of easements, and the reinterpretation of covenants provided for by way of grant.
The notorious ambiguity of estoppel is explored here through the unexpected end of a lifelong working relationship built upon trust, duty and a faith of spirit, and as is so often found in matters such as these, a man’s word is not always his bond.
After investing the best part of forty years into a farming alliance that created an almost familial structure, the arrival of a divisive party witnessed the destructive end of a mutually prosperous and seemingly concrete friendship. When a younger man forged a meaningful relationship with an older farmer, the two men became almost father and son, with the former relying upon, and often following the wisdom of the latter, in accordance with domestic arrangements, career aspirations and even parenting decisions; all while sustaining and enriching the estate’s financial footing through the course of his duties.
This interdependence became the foundation of a commercial enterprise that by definition became more complex, and so required increased investment from both the employer’s paid advisers and the younger man’s wife as a co-contributor. During the many years spent together, there had been a significant number of verbal declarations as to the intentions of the elder man when it came time to choose a successor to his sprawling estates, and it was these quasi-promises, along with multiple wills, that coloured the appellant’s choice-making and calculated reluctance to set aside the type of financial provisions one might ordinarily expect.
The mechanics of the business and associated friendship continued to flourish, until the arrival of a trained solicitor, who for one reason of another, began making spurious claims that the appellant and his wife were defrauding the business, and that legal intervention was ultimately necessary. This course of action and influential advice also led to the couple’s removal from the existing will, whereupon sole beneficial rights instead passed to the now co-defendant.
After an exhaustive cross-examination in the original hearing, the deciding judge awarded against the appellant, despite his claim of proprietary estoppel following the removal of his presence in the will, and inherent reliance upon the goodwill of the defendant during the passage of time.
At appeal, the fluid and therefore often misinterpreted principle of estoppel, was held to close scrutiny, along with the previous findings of the judge; whereupon it became clear that while a degree of effort had been put into the relevance of estoppel, the obvious right to claim had been lost to principles attributable to succession law. Through the delicate use of equity, the Court then agreed that (i) there was ample evidence to show a detriment under continued reliance, and (ii) that in order for a clean break to exist, there needed to be a reversal of fortune on the part of the co-defendant, and a ‘coming good’ on the word of the older man.
Under the breadth of property ownership, does the principle of occupier’s rights supersede the entitlement of an authentic finder, or is the common law more complex than first appears?
While waiting to catch a flight, a qualified guest of an airport lounge discovered an abandoned men’s gold bracelet on the seating area floor. By virtue of his own honesty, the respondent handed the jewellery to a member of staff, on the proviso that should the original owner not be found, the airline was to forward the item to his home address as was provided.
After waiting almost a year, the appellants instead took it upon themselves to sell the bracelet, while directly profiting from the sale. Upon discovery, the respondent immediately sued for loss incurred from the deceit and conversion of assets. In the first hearing, the judge awarded in favour of the passenger, whereupon the airline appealed and the matter was given greater thought.
When assessing the imputation that occupiers of land are privy to greater powers of ownership to lost property, the distinctions were drawn in order to clarify where the exceptions to those assumptions lay. In common law, it has been largely agreed through the progression of case law, that in many familiar circumstances, the rights to ownership of property construed as abandoned or lost, would fall to the landowner. However, in this case the airline took no steps to draw notice to that right when considering the frequency and nature of transient visitors to their lounge. In contrast, the only provisions made for matters involving lost property entailed procedural guides for staff members and no more.
After careful evaluation of the two prevailing rights, and when comparing to the honest intentions of the passenger to an abject failure of the airline to express their position when handling lost property, the Appeal Court held that it would be unreasonable to deny the respondent his fundamental rights to ownership of property honestly acquired in the absence of the original owner.