Law Report: Widow can remain in house for life as possession appeal fails: Matharu v Matharu. Court of Appeal (Lord Justice Dillon, Lord Justice Hirst and Lord Justice Roch) - 6 May 1994

The plaintiff was not entitled to a possession order to evict his widowed daughter-in-law from property owned by him because, on the basis of the doctrine of proprietary estoppel, the daughter-in-law, who was encouraged to believe that the property belonged to her husband who had carried out improvements and alterations to the house, had a licence to remain in the property for her life.

The Court of Appeal (Lord Justice Dillon dissenting) allowed an appeal by the plaintiff, Channan Singh Matharu, to the extent of refusing the defendant, Mrs Kamaljit Matharu, his daughter-in- law, a beneficial interest in a property and granting her a licence to remain in the property for life.

The plaintiff bought the property in 1968 with a mortgage. The defendant married the plaintiff's son in 1971, and they lived with the plaintiff and his wife in another house owned by the plaintiff. The defendant started matrimonial proceedings in the late 1970s against the son when he left her to live with another woman at the property.

The son left the other woman and persuaded the defendant to withdraw the proceedings and they lived together in the property, which the defendant thought was owned by the son. He made improvements and alterations to the property and paid the mortgage installments.

In 1990 the marriage broke down again. In 1991 the son died. The plaintiff and his wife let their own house and went to live in Canada, but found the climate there unsuitable. On their return to England in 1992 they demanded possession of the property from the defendant.

Judge Burkett Baker QC dismissed the claim for possession. He held that the defendant had a beneficial interest as a result of the expenditure on the house but was unable to quantify the interest and declared the property was held on trust for sale.

John Bryant (Jennings Son & Ash, Ilford) for the plaintiff; Nicholas Chapman (Gill & Co, Ilford) for the defendant.

LORD JUSTICE ROCH said that the judge found that there was a proprietary estoppel of which the defendant was entitled to take advantage. The basis of proprietary estoppel was the interposition of equity to mitigate the rigours of strict law. It would prevent a person from insisting on his strict legal rights when it would be inequitable for him to do so having regard to the dealings which had taken place between the parties.

The elements which had to be established by the person claiming the equity were that: 1 That person had made a mistake as to his or her legal rights. 2 That person had expended some money or done some act on the faith of that mistaken belief. 3 The possessor of the legal right must know of the existence of his legal right which was inconsistent with the equity, if it existed. 4 The possessor of the legal right must know of the other person's mistaken belief. 5 The possessor of the legal right must have encourage the other person in the expenditure or in doing other acts, either directly or by abstaining from asserting his legal right.

The defendant was able to satisfy each of those requirements. The defendant had an equity which defeated the plaintiff's claim for possession. The plaintiff created and encouraged the defendant's mistaken understanding of the basis on which she and her husband occupied the property and her belief that it was her husband's property.

However his Lordship disagreed with the judge's finding that the defendant had a beneficial interest in the property owing to the proprietary estoppel. What had been created was a licence for the defendant to remain in the house for her life or such shorter period as she might decide. To give effect to the equity the claim for possession would be refused on terms that the defendant be responsible for outgoings on the property and keep the premises in good decorative repair.

LORD JUSTICE HIRST agreed with Lord Justice Roch.

LORD JUSTICE DILLON, dissenting, said that the mere fact that no steps were taken to evict the defendant until 1992 did not give rise to any equity or right or legitimate expectation in the defendant that she would be allowed to live in the property for the rest of her life. His Lordship found it repugnant that the plaintiff should be seeking to evict his widowed daughter-in-law and grandchildren but that was not enough per se to render the plaintiff's conduct so unconscionable in the eyes of equity as to entitle the court to refuse him possession. A possession order should be made.