The Gazette 1985

JULY/AUGUST

198

GAZETTE

Llewellyn 17 was referred to in argument, and could have been considered to support Martin's claim, 18 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. 19 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., 10 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". 21 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. 22 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", 23 that it may provide a defence, but can create no cause of action. 24 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". 25 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. 26 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. 27 It is against this background that McMahon -v- Kerry 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" 29 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 County Council 28 fell to be decided. McMahon -v- Kerry County Council

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". 30 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. in Ramsden -v- Dyson. 1] "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

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