Before: The Hon. Mr. Justice Higgins
 
 

B E T W E E N

JUDGMENT
 
DATED: 12 January 1990

Mr. Justice Higgins:

In this action, which is brought against the defendants as personal representatives of Mrs Martha Jane McGucken deceased, the mother both of the plaintiff and of the first-named defendant, the plaintiff has claimed that by virtue of the equity of proprietary estoppel he is entitled to the lands in folio Nos 10062 and 10063, County Tyrone, and part of the lands in Folio No 31128, County Tyrone, and he seeks an Order declaring that he is entitled to be registered as owner in fee simple of these lands and that the defendants hold the lands in trust for him or alternatively that he is entitled to a lien on the lands to the extent of expenditure incurred by him on repairs and improvements to the lands.

Martha Jane McGucken and her husband, James McGucken, had eight children, of whom the plaintiff, now aged 50 years, was the youngest child. They lived at Coolreaghs, just outside Cookstown, in a farmhouse situate on the lands in folio No 31138, which adjoin the lands in Folio Nos 10062 and 10063. James McGucken, who had been the registered owner in fee simple of these lands had transferred his interest in the lands to his wife in 1947. James McGucken had a licensed hotel and a funeral undertaking business in Cookstown and both he and his wife spent most of their time running the hotel. Save for the plaintiff and the first-named defendant, each of the children of the family ended in a profession or in business.

After the plaintiff left school in 1955, when he was aged sixteen years, he went to the Art College in Belfast, which he left without any qualification after about a year. He then returned home to Cookstown and lived with his parents, working about the house, on the farm and in the hotel. He received no wages, but only pocket money. At that time the lands in Folio Nos 10062 and 10063 comprised just over 33½ acres.

Until then the farm had been neglected. According to the plaintiff he was told by his parents in 1957 or 1958 that, if he stayed on the farm and worked it, it would be his one day and that, if any part of the lands was sold as building plots he would receive the proceeds of sale; however, at a later stage, when his parents were speaking of retiring to Donegal, while they repeated that he was to have the farm, they said he would get half the proceeds of the sale of building plots, and he accepted that as a fair enough arrangement. Shortly after the first conversation the plaintiff's mother went with him to the Ulster Bank, Cookstown, where he opened a bank account, which his mother guaranteed. From then onwards the plaintiff worked the farm and improved it. He was not charged any rent; he paid the outgoings and retained the profits; he did repairs and expended money on improvements such as drainage, levelling of land, tree felling and hedge cutting as well as on the construction of new yards and farm buildings in the vicinity of the dwelling house. These yards and buildings were built partly on Folio No 10062 and partly on Folio No 31128.

The plaintiff in his Reply to Notice for Particulars gave details of his expenditure and I have calculated that between 1957 and 1974 (inclusive of both years) his outlay on buildings, yards and other improvements was £5,278: the bulk of this expenditure was in the period up to 1969. The plaintiff accepted that he had received government grants for liming the lands and for new buildings, which in the case of buildings amounted to one third of the expenditure.

The plaintiff's mother kept the hotel accounts; when the plaintiff started to work the farm, it was she who kept the farm accounts; until sometime in the 1970's she accompanied the plaintiff to the Ulster Bank for a yearly interview with the bank manager about the plaintiff's bank account.

The defendants have accepted that the plaintiff worked hard on the farm and that out of the farm income he expended money on making improvements and constructing yards and buildings and they did not challenge the amounts, which he claimed to have expended.

In 1961 the plaintiff's father bought him a farm at Lough Fea Road, Cookstown, for £5,000 and, although after his marriage on 9th September 1964 the plaintiff went to live there, he continued to work the home farm and to expend money on it.

Both parents executed their wills on 18th Janaury 1968 in the offices of their solicitors, Messrs JB & RH Twigg & Son, Cookstown. In his will the plaintiff's father made provision for his wife and children, other than the plaintiff; in her will his mother left her "farm at Collreaghs registered in Folio Numbers 10062 and 10063, County Tyrone" to the plaintiff and her "dwelling house and out-offices -- registered on Folio Number 31128" with the contents to her husband for his life and after his death to the first-named defendant.

Towards the end of 1968 his father provided £8,600 for the purchase of another farm for the plaintiff and that farm was registered in the plaintiff's name on 11th March 1969, only five days before his father's death.

The plaintiff testified that he understood that the purchase price of the two farms -- £5,000 and £8,600 -- represented his share of the sale of building sites.

The father died on 16th March 1969. The plaintiff testified that some time after his father's death Mr Twigg, solicitor, came to see the plaintiff and told him in his mother's presence that he had not been mentioned in his father's will because he would be getting the home farm after his mother's day and that he and his mother would share in the sale of building sites. The plaintiff also gave evidence that shortly after, when he was driving his mother to her bank in Dungloe, Co Donegal, she told him that he would be getting the home farm after her day.

Some time after his father's death, his mother asked the plaintiff to make a contribution towards death duties on his father's estate, because she was short of funds; he refused on the ground that he had not benefited under his father's will. It may be that his mother considered that he should contribute because of the expenditure by his father in buying the farm for him shortly before his father's death. According to the plaintiff his mother next wanted to sell nine acres of the farm to a building developer to enable her to pay the death duties, but that the plaintiff asked for a one half share of the sale price; his mother wished to have the entire proceeds of sale and the plaintiff refused to agree. In any event Messrs JB & RH Twigg wrote on 31st December 1971 to the plaintiff on his mother's behalf referring to her altered financial circumstances and asking that the annual letting should be put on a more business-like footing and for payment of an annual rent. (Probably the sale of the nine acre section was not raised until a later stage.) That letter was ignored by the plaintiff and, when a further letter was sent to him on 12th June 1972, Mr E Malachy Doris, solicitor, on the plaintiff's behalf wrote on 26th June 1972 asking for details. Mr Twigg replied that he knew little about the matter except that his "understanding is that your client had the lands hitherto free of charge though possibly he paid the outgoings". Mr Doris on receipt of that letter asked the plaintiff to make a calculation of the amount spent by him on buildings and improvements. Subsequently on 5th July 1972 Mr Doris sent the following letter:

"... I have seen my client. He says he came home about 1957. He was told that the farm was his and to go out and make use of it. He accepted that and went into the farm. Since then he has spent more than £12,000 on the place.

In these circumstances I do not understand why there should be a request for payment now."

The plaintiff's mother then consulted Messrs LR Hastings & Sons, solicitors, Magherafelt. They wrote on 9th October 1972:

"Our client instructs us that for the past 15 years you have been in occupation of her lands with her permission free of rent. Our client's financial position has deteriorated and she has approached you on a number of occasions to pay her something on account of the premises. As you have refused to make any payment at all, our client has no option but to utilise the property to its best advantage for her benefit ...

You are hereby requested to ... yield up possession of our client's land and remove therefrom all of your stock within the next seven days."

Mr Doris responded as follows by letter dated 11th October 1972:

"It is agreed that my client has been in possession of the lands for more than 15 years. It is not agreed that he has been in possession by the permission of his mother. He has been, as you say, in possession of the lands free of rent and he has acquired a title to the lands, or, if they are freehold registered lands, he has acquired a right to make an application to the court to have it declared that he has acquired a title to the lands.

... the position is this: ... my client ... is entitled to the lands. She is not entitled to them and my client will take such steps as may be necessary to assert or defend his rights."

Subsequently Messrs LR Hastings & Sons suggested that to avoid duplication of proceedings the plaintiff should apply to the Land Registry for determination of his claim that he had acquired a possessory title to the lands. Mr Doris on 20th November 1972 replied that the plaintiff intended to bring proceedings to establish his rights and that papers had been sent to counsel to advise and draft proceedings.

The plaintiff did not bring proceedings. But his mother issued a Civil Bill for ejectment on the title against the plaintiff seeking possession of the lands in Folio Nos 10062 and 10063, County Tyrone, which was to be heard at Cookstown County Court commencing on 4th April 1973.

On 5th April 1973 the plaintiff signed an acknowledgement in writing that:

"I do not lay claim to the running of any title by adverse possession to the lands in folios 10062 and 10063, County Tyrone, resulting from my occupation of the said lands."

This acknowledgement was witnessed by Mr James I Doris, solicitor, and Mr William Hastings, solicitor.

The case then was adjourned and by agreement the plaintiff continued to occupy the farm and thereafter he paid his mother £400 per year.

The proceedings again came before the same court at the Trinity Sittings in 1975, when the plaintiff agreed to a decree against him for possession of the farm subject to the following conditions:

(1) that he was to deliver up on 1st December 1975 the nine acres of land, which his mother wished to sell; and

(2) that he was to deliver up on 1st November 1976 the remainder of the farm and was to be allowed to remove two hen houses, his property, which he had erected on the lands.

The agreement was incorporated in a written document signed by the plaintiff, and his signature was witnessed by Mr James Ballentine, solicitor, who then was acting for the plaintiff.

Accordingly a decree for possession of the lands was made by the court against the plaintiff.

As a result the plaintiff gave up possession of nine acres of the land on 1st December 1975 and of the rest on 1st November 1976, when he had removed and re-erected the hen houses at a cost to the plaintiff of £2,334.

The mother sold the nine acre section of the farm and the new owner was registered on 9th December 1976. The plaintiff received no part of the proceeds of that sale.

According to the plaintiff's evidence, he was told by the barrister, who represented him at the County Court, to send full particulars of his expenditure to Mr Ballentine so that he could take action about it. But no steps were taken by or on behalf of the plaintiff, prior to the commencement of these proceedings, to recover that expenditure or any part of it.

On 13th June 1977 the mother made another will revoking her former will; in it she made no provision for the plaintiff, but gave her lands, out offices and dwelling house to the first-named defendant. In a codicil to that will made on 26th September 1980 she left £5 to the plaintiff. The provisions of her last will dated 3rd October 1980 were similar to those in her 1977 will as amended by the 1980 codicil.

The plaintiff's mother died on 23rd June 1981. The plaintiff commenced these proceedings by issue of a writ of summons on 27th June 1983. In the formulation of his claim the plaintiff has relied on the equity of proprietary estoppel. Mr Donaldson QC, who appeared with Mr Lewis for the plaintiff, referred me to Snell's Principles of Equity, 28th Ed, in which this equity is discussed and I respectfully adopt the following passages from that book commencing at p558 as correctly stating the law on the subject:

"The equity is based on estoppel in that one (A) is encouraged to act to his detriment by the representations or encouragement of another (O) so that it would be unconscionable for O to insist on his strict legal rights ...

For the equity to arise in favour of A against O the following four conditions must be satisfied:

(a) Detriment 'There is 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' per Dunn LJ in Greasley v. Cooke [1980] 3 All ER 7l0, 7l5.

(b) Expectation or belief A must have acted in the belief either that he already owned a sufficient interest in the property to justify the expenditure or that he would obtain such an interest.

(c) Encouragement A's belief must have been encouraged by O or his agent or predecessor in title ... Once it is shown that O gave assurances or other encouragement to A, and A suffers detriment, it will readily be inferred that the detriment was suffered as a result of the encouragement: the burden of proof is on O to show that A's conduct was not induced by the assurances.

(d) No bar to the equity No equity will arise if to enforce the right claimed would contravene some statute, or prevent the exercise of a statutory discretion or prevent or excuse the performance of a statutory duty ...

The extent of the equity is to have made good, so far as may fairly be done between the parties, the expectations of A which O has encouraged. A's expectation or belief is the maximum extent of the equity ... In its search for 'the minimum equity to do justice' to A and shaping it to the facts of the case 'equity is displayed at its most flexible'", see Lord Denning MR in Crabb v. Arum DC [1975] 3 All ER 865 at 872 and Scarman LJ (as he then was) at 880".

A more recent example of the operation of proprietary estoppel is to be found in the case of Re Basham, deceased [1987] 1 All ER 406, to which Mr Donaldson referred me.

Mr Donaldson contended that all four of those conditions had been satisfied in that:

(a) the plaintiff had been actively encouraged by both his parents to commit himself to working the farm and he was told by them that it would be his and that it would be left to him on his mother's death;

(b) encouraged by what he had been told by his parents he believed that he would have the use of the farm thenceforward and that he would succeed to the ownership of it on his mother's death;

(c) he was given possession and use of the farm and received all the profits;

(d) he had spent money on construction work and other improvements on the farm;

(e) in incurring this expenditure he had acted to his detriment; and

(f) there is no bar to the exercise of the equity.

Many of those facts were not in dispute. The plaintiff did work the lands and spent money on their improvement out of the profits earned from the use of the lands. He did receive all of the profits and paid no rent to either of his parents until 1973. As a result of what his parents had said at some time or times, the plaintiff did have expectations about succeeding to the property on his mother's death. What was questioned was the nature of the arrangements between the plaintiff and his parents whereby he used the land and the extent, if any, to which he suffered detriment by the expenditure, which he incurred.

The plaintiff's credibility is crucial to the proof of his case. I formed an unfavourable impression of him as a witness. I am satisfied that some of his testimony was untruthful and I am not persuaded that any part of the rest of his testimony, which was challenged, can be relied upon as accurate.

The plaintiff testified that under an arrangement with his parents he was entitled to a one-half share of the proceeds of the sale of sites on the farm. If that was so, I would have expected it to have been raised in correspondence by his solicitor, when the dispute with his mother arose in 1972. It was not referred to in that correspondence. At the time of the previous proceedings the plaintiff was aware that his mother wished to sell 9 acres of the farm for building sites. Yet he consented to her getting possession of that section of the farm for building sites. Yet he consented to her getting possession of that section of the farm on 1st December 1975 without apparently making any stipulation as to payment of his alleged share of the proceeds of sale. His mother sold that section of land and, although he received no part of the proceeds, the plaintiff made no claim to recover his alleged share. The plaintiff said in evidence that the sum of £13,600, which was spent by his father in purchasing two farms for the plaintiff, represented the plaintiff's share of the proceeds of sites, which had been sold or were about to be sold. I have examined the Land Certificates, which record the portions sold; no sites were sold between 1957 and 1961, when the first farm was purchased, and I have no doubt that the total of the prices paid for all sites sold before the end of 1969 was a great deal less than his father's outlay on the purchase of the farms. I do not believe that there ever was an arrangement whereby the plaintiff was to receive a share of the proceeds of sales.

I cannot understand why it should have been necessary for Mr Twigg to come out after the father's death to explain the family arrangements to the plaintiff. A short time before he died, the plaintiff's father had bought the second farm for the plaintiff and I consider it likely that there then would have been some discussion between him and one or other or both of his parents about their future intentions and that then or earlier the plaintiff would have been aware that, if he was to succeed to the farm, it would be on his mother's death, since the farm was in her name. I am not persuaded that Mr Twigg had such a conversation with the plaintiff. I do not believe that Mr Twigg ever told the plaintiff that he would receive a share of the sale price of building plots.

The fact that the plaintiff has told lies about the reason why his father had purchased two farms for him has caused me to ask myself what was the true reason for these purchases and what, if any, arrangement was associated with their purchase. No satisfactory explanation was given by the plaintiff. It could be, for example, that the purchases were in acknowledgement of the work done and money expended on the home farm by the plaintiff.

I am not persuaded that the plaintiff was truthful in his evidence about discussions with his parents concerning his use of the home farm and his entitlement to it. While the plaintiff had expectations that he would succeed to that farm, which were based on what his parents had said to him, I do not accept that there were any arrangements of the kind described by the plaintiff.

The plaintiff lacked academic qualifications and appears to have been without prospects of employment, when he was first permitted to use the home farm without charge. His parents were themselves both business people and I think it likely that they wanted the plaintiff to be fully occupied and to have some income. The plaintiff continued to reside with his parents until his marriage. His mother kept the farm accounts and kept an eye on his banking transactions, which she had guaranteed. The plaintiff worked the farm and received the profits, out of which he paid for the improvements. Did the plaintiff suffer detriment as the result of his expenditure on improvements?

Mr Donaldson's contention was that, since the plaintiff had paid for the improvements out of money received by him, he clearly was acting to his own detriment in making those payments. But I think that a broader view must be taken of what was happening. While the profits from the farm could not have been earned without the plaintiff's efforts, they were dependent also upon the farm being available rent free to the plaintiff and upon the assistance of his mother. In part at least the improvements must have increased the annual profitability of the farm, which was beneficial to the plaintiff. It is apparent that with the income from the farm, which the plaintiff retained after paying for the improvements, he was a net beneficiary and that as a result he prospered over the years. I am not persuaded that the plaintiff has shown that in expending money on making improvements he acted to his detriment, particularly since I do not know what in fact were the arrangements with his parents, because the plaintiff was untruthful in his evidence on this subject. It may be, as I stated earlier, that the farms were bought for the plaintiff in compensation for his expenditure of time and money on the home farm.

In my judgment the plaintiff has failed to establish his entitlement to the equity of proprietary estoppel and in particular has failed to prove that he had acted to his detriment.

Mr Thompson for the defendants also made a forceful submission that the basis of the plaintiff's claim is res judicata and that by reason of the principle of issue estoppel the plaintiff cannot rely on the equity of proprietary estoppel in these proceedings.

It is now clear that there are two species of estoppel per rem judicatam namely: (i) cause of action estoppel; and (ii) issue estoppel. The particular type of estoppel relied on by the defendants is issue estoppel. The classic modern statement of the nature of issue estoppel is to be found in a passage from the judgment of Diplock LJ (as he then was) in Mills v. Cooper [1967] 2 All ER l00 at l04, approved subsequently by the House of Lords in DPP v. Humphreys [1976] 2 All ER 497. Diplock LJ said:

"This doctrine [namely of issue estoppel], so far as it affects civil proceedings, may be stated thus: a party to civil proceedings is not entitled to make, as against the other party, an assertion, whether of fact or of the legal consequences of facts, the correctness of which is an essential element in his cause of action or defence, if the same assertion was an essential element in his previous cause of action or defence in previous civil proceedings between the same parties or their predecessors in title and was found by a court of competent jurisdiction in such previous civil proceedings to be incorrect, unless further material which is relevant to the correctness or incorrectness of the assertion and could not by reasonable diligence have been adduced by that party in the previous proceedings has since become available to him."

This doctrine applies even though the decision on the first occasion, said to give rise to the estoppel, had resulted from a mistaken appreciation of the underlying facts, or from an incorrect view of the underlying law, as is apparent from what Coleridge J said in R v. Hartington Middle Quarter (Inhabitants) (1855) 4E & B 780 at 794, 119 ER 288 at 293, when delivering the judgment of the court:

"The question then is, whether the judgment concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide, and which was actually decided, as the groundwork of the decision itself, though not then directly the point at issue. And we think it does conclude to that extent. It is unnecessary now to rely on the judgment having been in rem; for it was a judgment between the same parties: the matters which are cardinal in the present litigation cannot now be disputed, without asserting that the decision upon them in the former case was erroneous. But this they cannot do directly; they have passed their time, and neglected the lawful mode; they cannot now shew by adducing new evidence that the Court was misled as to the facts, nor by new argument or authority that it drew a wrong conclusion in law. In the case of Regina v. Wye ((1838) 7 Ad & El 761, 112 ER 656), a case sometimes misunderstood, this principle was very clearly affirmed, in accordance with prior decisions. If, then, the former decision cannot be impeached, and these facts are so cardinal to it that without them it cannot stand, on principle, when these facts are again in question between the same parties, they must be considered as having been conclusively determined."

To establish an issue estoppel there must have been a final judgment between the same parties or their privies, litigating in the same capacity in the same issue, and the estoppel must be pleaded, see Murphy's A Practical Approach to Evidence, 3rd Ed, p313. The operation of issue estoppel, therefore, is subject to the following five requirements being met:

1. Finality of judgment.

2. Identity of parties.

3. Identity of capacity.

4. Identity of issue.

5. Pleading of estoppel.

The principle of issue estoppel applies in general to all civil litigation, even to arbitrators, see Fidelitas Shipping Co Ltd v. V/O Exportchleb [1966] 1 QB 630. The judicial decision said to create the estoppel must be final. In this context the word "final" indicates that the judgment is one which leaves nothing to be judicially determined or ascertained thereafter, in order to render it effective and capable of execution, and is absolute, complete and certain, and which is not lawfully subject to any subsequent revision by the tribunal which pronounced it, see Spencer-Bower and Turner on Res Judicata, 2nd Ed, at 132. A judgment given on consent can create such an estoppel, as will be seen from the judgment of Brightman LJ (as he then was) in Khan v. Goleccha International [1980] 2 All ER 259. Brightman LJ referred to the acceptance on appeal by Counsel for the plaintiff borrower that the transaction was not a lending of money and to the dismissal of the appeal on that ground and after asking,

"Does that admission and the consent order so made give rise to estoppel, particularly to the brand of estoppel sometimes called issue estoppel?"

he said at 264g:

"First, for the general principle (Ord v. Ord [1923] 2 KB 432 at 439 per Lush J; I need not narrate the facts):

'The words "res judicata" explain themselves. If the res -- the thing actually or directly in dispute -- has been already adjudicated upon, of course by a competent Court, it cannot be litigated again. There is a wider principle, to which I will refer in a moment, often treated as covered by the plea of res judicata, that prevents a litigant from relying on a claim or defence which he had an opportunity of putting before the Court in the earlier proceedings and which he chose not to put forward ...'

I turn straight to the wider principle ([1923] 2 KB 432 at 443):

'The maxim Nemo debet bis vexari prevents a litigant who has had an opportunity of proving a fact in support of his claim or defence and chosen not to rely on it from afterwards putting it before another tribunal. To do that would be unduly to harass his opponent, and if he endeavoured to do so he would be met by the objection that the judgment in the former action precluded him from raising that contention. It is not that it has been already decided, or that the record deals with it. The new fact has not been decided; it has never been in fact submitted to the tribunal and it is not really dealt with by the record. But it is, by reason of the principle I have stated, treated as if it has been.'"

And at 266b he stated:

"In my view, that admission by the plaintiff, given in court and founding the judgment on consent, was just as efficacious for the purpose of issue estoppel as a judicial decision by the court after argument founding a similar judgment. The only sensible approach of the law, in my view, is to treat an issue as laid at rest, not only if it is embodied in the terms of the judgment, or implicit in the judgment because it is embodied in the spoken decision, but also if it is embodied in an admission made in the face of the court or implicit in a consent order."

In fact, as the Court of Appeal found in that case, this concession was wrongly made. As to that Bridge LJ (as he then was) stated at 268d:

"In the event what happened was that Mr Khan, through his counsel, quite specifically and categorically chose to withdraw that issue from the consideration of the court on the basis that, in relation to that issue, he was bound to accept defeat and acknowledge that the case against him was unanswerable. If the selfsame issue were now allowed to be raised and litigated in those proceedings, I ask myself, would it not be a case of the company being vexed a second time in relation to an issue which it was open to Mr Khan to have had determined in the previous proceedings? To that question, to my mind, there really can only be one answer. Of course it is quite immaterial that, as the judgment of Brightman LJ establishes (and with this I entirely agree), the concession was in fact quite wrongly made. On the facts I would have found, as Brightman LJ has found, that there was a loan. The fact that the concession was wrongly made is neither here nor there. It was made. It founds issue estoppel. It follows that Mr Khan in the present proceedings is estopped from contending that there was a loan to him to which the provisions of the 1927 Act can have any application."

In SCF Finance Co Ltd v. Masri (No 3) [1987] 1 All ER 194 the appellant, Mrs Masri, had consented to an order being made against her, but through her counsel expressly reserved the very issue which was to have been tried. Ralph Gibson LJ at 209e said:

"The principle of the decision of this court in Khan's case is, in our judgment, applicable to this case: a litigant who has had an opportunity of proving a fact in support of his claim or defence and has chosen not to rely on it is not permitted afterwards to put it before another tribunal. In this case Mrs Masri had her opportunity to establish the case on which her application was based; and she chose not to establish her alleged ownership of the dollar account. Her counsel on her instructions acknowledged that her application must be dismissed. His attempt to reserve the issue was, in our judgment, ineffective."

When at Cookstown County Court in 1975 the plaintiff in the present proceedings consented to a decree against him in the ejectment proceedings, he was bound by what was a final and conclusive judgment of that Court.

Estoppel will only arise when the parties to the instant proceedings are identical (apart from privity) with those in the previous proceedings. The previous proceedings were between the plaintiff's mother and the plaintiff; the present proceedings are between the plaintiff and his mother's personal representatives, who are her privies in law, see Shaw v. Sloan [1982] 11 NIJB 1 and Halsbury's Laws of England, 4th Ed, Vol 16, para 1543.

Even where the parties are ostensibly identical, no estoppel will arise if any party litigates in a capacity distinct from that in which he litigated in the previous proceedings. This does not arise in the present case.

The matter in dispute concerning which issue estoppel is raised must be identical in both proceedings, although it is not necessary that it should be the only point in issue in either or that the cause of action should be the same.

Mr Donaldson, quite rightly, pointed to difficulties in ascertaining the issues of fact and law in the previous proceedings. Because those proceeding were in the County Court, there were no pleadings, save for the Civil Bill; because the decree was made with the plaintiff's consent, no evidence was heard and no judgment was delivered by the County Court judge.

I derive assistance in deciding what to do in such a situation from Carl-Zeiss-Stiftung v. Rayner & Keeler Ltd [1966] 2 All ER 536, in which Lord Upjohn in his speech at 572G stated:

"The broader principle of res judicata is founded on the twin principles so frequently expressed in Latin that there should an end to litigation and justice demands that the same party shall not be harassed twice for the same cause. It goes beyond the mere record; it is part of the law of evidence for, to see whether it applies, the facts and reasons given by the judge, his judgment, the pleadings, the evidence and even the history of the matter may be taken into account."

And Lord Wilberforce at 584c said:

"From this it follows that it is permissible to look not merely at the record of the judgment relied on, but at the reasons for it, the pleadings, the evidence and if necessary other material to show what was the issue decided."

Unquestionably to ascertain the issues in the previous proceedings, particularly the essential elements in the defence to these proceedings, I am entitled to look at the Civil Bill, the acknowledgement signed by the present plaintiff, the consent signed by the parties and the decree. But in my opinion I am also permitted to consider the correspondence relevant to those proceedings and evidence given at the present hearing concerning the earlier proceedings and concerning the events leading up to and following them.

The earlier proceedings were brought by Mrs McGucken to recover possession of the farm being worked by the plaintiff. If his case in this Court and the evidence given in support of it were true, the plaintiff could have resisted his mother's claim to possession by making precisely the same case by way of defence, ie by contending that he was entitled to continue in occupation of the farm by virtue of proprietary estoppel. It is apparent that all the facts on which he has based his case in this Court were then known to the plaintiff and that the evidence called before me was then available to him. If the plaintiff is to be believed, his respective solicitors in the earlier proceedings should have been aware of those facts and I would have expected solicitors as experienced as Mr Doris and Mr Ballentine to have been alert to the principle of issue estoppel as a possible defence to the claim for possession. But that defence does not appear to have been raised expressly and I do not know if the plaintiff's lawyers did realise that issue estoppel was a possible defence to his mother's claim. However, that is a state of affairs covered by the statement of Wigram V-C in Henderson v. Henderson (1843) 3 Hare 100 at 115, 67 ER 313 at 319:

"... where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matters which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."

Although Henderson v. Henderson was an example of cause of action estoppel, the principle expressed by Wigram V-C was applied to issue estoppel by the Privy Council in Hoystead v. Commissioner of Taxation [1926] AC 155 and the English Court of Appeal in Fidelitas Shipping Co Ltd v. V/O Exportchleb [1966] 1 QB 630.

Subsequently, however, in Carl-Zeiss-Stiftung v. Rayner and Keeler Ltd (No 2) [1969] 2 Ch 276, reservations were expressed about the application to issue estoppel of rules evolved for cause of action estoppel.

Thus Lord Reid in his speech at 553 said:

"There may well be a difference between a case where an issue was in fact decided in the earlier case, and a case where it was not in fact decided because the earlier judgment went by default or was founded on an assumption. Indeed I think that some confusion has been introduced by applying to issue estoppel without modification rules which have been evolved to deal with cause of action estoppel, such as the oft-quoted passage from the judgment of Wigram V-C, in Henderson v. Henderson. It is unnecessary, however, to pursue that matter, because in the present case the issues with regard to which the respondents plead estoppel were fully litigated in the West German court ...

The difficulty which I see about issue estoppel is a practical one. Suppose the first case is one of trifling importance but it involves for one party proof of facts which would be expensive and troublesome; and that party can see the possibility that the same point may arise if his opponent later raises a much more important claim. What is he to do? The second case may never be brought. Must he go to great trouble and expense to forestall a possible plea of issue estoppel if the second case is brought? This does not arise in cause of action estoppel: if the cause of action is important, he will incur the expense; if it is not, he will take the chance of winning on some other point. It seems to me that there is room for a good deal more thought before we settle the limits of issue estoppel; but I have no doubt that issue estoppel does exist in the law of England, and if it does it would apply in the present case if the earlier judgment had been a final judgment of an English court."

Lord Uphon at 573 stated:

"Recently in Thoday v. Thoday [1964] 1 All ER 34l and in Fidelitas Shipping Co v. V/O Exportchleb the Court of Appeal applied to issue estoppel the full breadth of the observations of Wigram V-C in the Henderson case. While in this case it is not necessary to decide whether that is right, because for the reasons given in the answer to the first question that I posed for myself it does not arise, I should be reluctant to support that view. As my noble and learned friend Lord Reid, has already pointed out there may be many reasons why a litigant in the earlier litigation has not pressed or may even for good reasons have abandoned a particular issue. It may be most unjust to hold him precluded from raising that issue in subsequent litigation. All estoppels are not odious but must be applied so as to work justice and not injustice, and I think that the principle of issue estoppel must be applied to the circumstances of the subsequent case with this overriding consideration in mind."

But the authorities show that from the outset the doctrine of issue estoppel has been expressed to be subject to exceptions, as is apparent from the passages quoted earlier from the judgement of Wigram V-C in Henderson v. Henderson (1843) 3 Hare 100 and the judgment of Diplock LJ in Mills v. Cooper [1967] 2 QB 459. This enabled Browne-Wilkinson V-C in Arnold v. National Westminster Bank [1988] 3 All ER 977 to say at 981D:

"It is therefore clearly established (and counsel for the landlords accepts) that there can be exceptional circumstances which prevent an issue estoppel from arising. In my judgment it is equally clear that in order for such special circumstances to exist it must be shown earlier that the first decision is impeachable on the usual grounds (that is to say fraud, collusion, etc) or that the first relevant new material, not available at the time of the first decision, has since become available."

And at 982D:

"Res judicata, whether cause of action estoppel or issue estoppel, is based on the fundamental principle that it is unjust for a man to be vexed twice with litigation on the same subject matter coupled with the public interest in seeing an end to litigation. So far as cause of action estoppel is concerned, the rule is absolute: you cannot sue twice for the same relief based on the same cause of action even if new facts or law have subsequently come to light. But it is clear that the rule as to issue estoppel is different as the authorities which I have quoted demonstrate; there are circumstances in issue estoppel where the injustice of not allowing the matter to be relitigated outweighs the hardship to the successful party in the first action in having to relitigate the point.

The rules applicable to issue estoppel and the proper exceptions to it are in course of development: see Carl-Zeiss-Stiftung v. Rayner & Keeler Ltd (No 2) at 554. The authorities show that the exception applying to 'special circumstances' is designed to ensure that where justice requires the non-application of issue estoppel, it shall not apply: see Yat Tung Investment Co Ltd v. Dao Heng Bank Ltd [1975] AC 581 at 590. In the Carl-Zeiss case at 573 Lord Upjohn said:

"All estoppels are not odious but must be applied so as to work justice and not injustice, and I think that the principle of issue estoppel must be applied to the circumstances of the subsequent case with this overriding consideration in mind."

This exposition of exceptions to issue estoppel appears to meet the difficulties raised both by Lord Reid and Lord Upjohn and I see no reason why the full breadth of the observations by Wigram V-C in Henderson v. Henderson (1843) 3 Hare 100 should not apply to issue estoppel.

The plaintiff had a fair opportunity of raising the defence of proprietary estoppel in the previous proceedings and in consenting to a decree against him failed to raise that defence, whether by choice, by negligence, by inadvertence or by accident. Although I have neither been referred to nor discovered any legal authority on all fours with it, I am satisfied that the principle of issue estoppel applies to the present case.

In paragraphs 19 and 20 of the defence the decree of the County Court dated 29th October 1975 was recited and it was pleaded that the issues raised by the plaintiff in his Statement of Claim were res judicata.

In conclusion I hold that the County Court decree against the present plaintiff, to which he consented, imports an adverse decision against him on the issue of proprietary estoppel, which by the exercise of reasonable diligence he could and should have raised as a defence in the proceedings to which the decree related and which he omitted or neglected to raise in these proceedings, and consequently, since this is not a case in which the justice to the parties requires the non-application of the principle of issue estoppel, that the plaintiff is precluded by the principle of issue estoppel from bringing forward the issue of proprietary estoppel in the present proceedings.

Mr Donaldson towards the end of his submission suggested that, should the defence of issue estoppel succeed, the plaintiff still was entitled to recover his expenditure on improvements. But the plaintiff's entitlement to any relief is dependent upon him being able to take advantage of the equity of proprietary estoppel; in my opinion he cannot recover anything, because he is precluded from relying on that equity (and in any event he has not established that he is entitled to rely on it).

Accordingly I hold that the plaintiff's case has failed because --

(a) he has not proved that he is entitled to the benefit of the equity of proprietary estoppel; and

(b) furthermore he is estopped from relying on the issue of proprietary estoppel in these proceedings.