Greasley v Cooke

The parties and the household

The defendant, Miss Doris Cooke, went in 1938, at the age of 16, as a maidservant to the house of a widower, Mr Arthur Greasley, a butcher, whose house and shop were at 32 George Street, Riddings, Derbyshire. She was paid 10s. a week. Arthur Greasley had three sons, Kenneth, Hedley and Howard, and a daughter, Clarice, all of whom were then teenagers. Arthur Greasley died in 1948, and the defendant stayed on.

The defendant's position in the family

When the defendant was in her twenties one of the sons, Kenneth, formed an attachment for her, and from 1946 onwards she and Kenneth lived together as husband and wife. Kenneth ran the butcher's shop and the defendant ran the household. Hedley and Howard each left and married; Howard had three children and Hedley had none. Clarice, the daughter, remained in the house and was very ill mentally. She was looked after by Kenneth and the defendant, and particularly by the defendant. The defendant received no payment for her services after Arthur Greasley's death in 1948, and she looked after the family for nearly 30 years until 1975, by which time she was left alone in the house. Kenneth told her, at some time and probably more than once after his father's death, that he would do the right thing by her, and Hedley told her that she had no need to worry and would be looked after.

The title to the house

Before any of the sons were married or had left, Arthur Greasley made a will leaving the house to two of his sons, Howard and Kenneth, in equal shares. Howard died without making a will, and his half-share passed on his intestacy to his children. Kenneth and Clarice died in 1975, and Kenneth left his half-share to Hedley. The title was accordingly vested in Hedley and the children of Howard.

The dispute

After Kenneth's death in 1975 the plaintiffs gave the defendant notice to quit and brought proceedings to turn her out of the house, contending that she had no title, that she was not a tenant, that she paid no rent and that she had no status in the house at all. By her defence the defendant pleaded that she had received no payment for her services after Arthur Greasley's death and that she reasonably believed and was encouraged by members of the family to believe, that she could regard the property as her home for the rest of her life and accordingly did not ask for any payment. She counterclaimed for a declaration that she was entitled to occupy the house rent free for the rest of her life. By the time of the appeal she was 62 years old and the house was her home.

The proceedings in the county court

The case took an unusual course. The plaintiffs, Hedley and Howard's daughters, instructed a solicitor, who at the hearing withdrew the claim for possession. Counsel for the defendant pressed the counterclaim, and the judge required the defendant to prove it. She was called and gave short evidence about her time in the house, the wages she had been paid by Arthur Greasley, the absence of payment thereafter, her care of the house, Kenneth and Clarice, and the assurances given by Kenneth and Hedley. The plaintiffs' solicitor did not cross-examine and asked no questions. Counsel for the defendant referred the judge to Pascoe v Turner and to Snell's Principles of Equity. The judge reserved his decision and afterwards rejected the counterclaim.

The judge's findings and reasoning

The judge found, although he observed that the evidence was not very strong, that the defendant believed, because of what was said to her by Kenneth and Hedley, that she would be allowed to live at and remain in the house as long as she wished. He held that, to succeed, she had to prove that she acted to her detriment as a result of her belief and that the owners of the house encouraged her in her actions or stood by knowing that her actions were because of her belief. He observed that in Inwards v Baker and Pascoe v Turner it was the expenditure of money on the property which raised the equity, and that there was no question of any expenditure of money in this case. He accepted that the defendant had looked after Kenneth and the mentally ill Clarice, and that the latter was an unpleasant and hard task, but he was satisfied that she had done so because she was living with Kenneth as his wife, and he found no evidence that she had acted in any way to her detriment as a result of the belief induced in her mind by the words or conduct of Kenneth or Hedley.

The appeal

The defendant appealed. If the counterclaim failed she would have no right to remain in the house, the plaintiffs could bring a fresh action to evict her, which their counsel told the court was their intention, and the issue would be res judicata. The plaintiffs sought to raise further points on the appeal, but the court held that only the points considered by the county court judge could be raised. The argument turned on the burden of proof of reliance and detriment, and on whether expenditure of money or other detriment was a necessary element.

Outcome

The appeal was allowed and a declaration was made in the terms sought by the counterclaim, that the defendant was entitled to occupy 32 George Street, Riddings, rent free so long as she wished to stay there.

Lord Denning M.R.

Lord Denning M.R. held that the judge had erred on the burden of proof. Relying on Reynell v Sprye, Smith v Chadwick and Brikom Investments Ltd v Carr, he said that where a representation was calculated to influence the judgment of a reasonable man the presumption was that he was so influenced, and that no one could say what the defendant would have done had the assurances not been given. The burden lay on the plaintiffs to prove that she had not relied on the assurances, and they had not done so. He further held that expenditure of money was not a necessary element of proprietary estoppel; it was sufficient that the party to whom the assurance was given acted on the faith of it in circumstances making it unjust and inequitable for the party making the assurance to go back on it. The assurances raised an equity in the defendant's favour, and it was for the court to decide how that equity should be satisfied; here, by allowing her to stay in the house as long as she wished.

Waller L.J.

Waller L.J. agreed. He observed that the judge had had to decide a difficult question in the absence of argument from the plaintiffs, which probably explained his error on the onus of proof, but that the judge had plainly placed the onus on the defendant. Quoting Lord Cranworth L.J. in Reynell v Sprye and Jessel M.R. in Smith v Chadwick, he held that where a statement was of such a nature as would tend to induce a course of conduct, the inference was that the party acted on it unless it was shown that he did not. Hedley's assurance that she had no need to worry indicated the possibility of worry in her mind, and the defendant's continuing to live with Kenneth and to look after the mentally ill Clarice showed conduct which the assurances tended to induce. It would be wrong to speculate what she would have done had the inducements not existed.

Dunn L.J.

Dunn L.J. agreed, adding that the circumstances were very exceptional, the plaintiffs having withdrawn their claim for possession and taken no part in defending the counterclaim. He said that there was no doubt that for proprietary estoppel to arise the person claiming must have incurred expenditure or otherwise have prejudiced himself or acted to his detriment, and that the only question before the court was the burden of proof of the detriment, on which the judge had fallen into error for the reasons given by Waller L.J.