Supreme Court
Action No. 9 of 1981
G.C.R Moe
3rd September, 1981

Mr. Glenn Godfrey for the Plaintiffs
Mr. M.C.E. Young for the Defendants

Equity - First Defendant expending money, time and effort towards construction of house under an expectation that he would become co-owner - First Defendant thereby becoming entitled to a licence to stay on premises coupled with an equity.

J U D G M E N T

The plaintiff in these proceedings are the daughters of one Orma Kelly now deceased. The first defendant lived with the said Orma Kelly in a common law union from around the year 1960. On the 28th December, 1971 Mrs. Kelly obtained from the Government of Belize a lease for 75 years of Lot No. 5382 on 13th Street, Kings Park, Belize City, one condition of which was that "the leasee shall construct a building of a minimum value of $6,000.00 on the lot within 12 months of the date of the lease". In order to build this house, Mrs. Kelly obtained from Reconstruction and Development Corporation in 1972 two loans of $4,000.00 and $700.00. The house was built and finished in 1972.

Thereafter Mrs. Kelly, her children including the plaintiffs, the first defendant and some of his children lived in the lower flat of the house. The upper flat was rented at a rental of $40.00 per month. The first defendant moved out of the house sometime in 1977 and Mrs. Kelly died in January, 1978. The plaintiffs moved out of the lower flat in March, 1978 and the defendants moved in the said day. The plaintiffs moved into the upper flat in October, 1978 and on 15th September, 1979 the plaintiffs obtained letters of administration in respect of the estate of Mrs. Kelly. Clause 6 of the lease specifically states that "lessee" include the administrators of the lessee. On 29th October, 1979 the plaintiffs assigned the said lot No. 5382 to themselves for the remainder of the term of the lease to hold it upon trust for themselves and the other children of Mrs. Kelly. The plaintiffs have demanded since 1979 both orally and through letter from an attorney-at-law that the defendant's vacate the lower flat of the house. The defendants refuse to give up possession.

The plaintiffs by these proceedings now claim (1) possession of the lower flat of the house in which the defendants now live, (2) damages and (3) mesne profits. On the other hand the first defendant alleged (i) the premises referred to is the property of the Government of Belize and was leased to Mrs. Kelly; (ii) that he has expended money, time and labour for the erection of the house on the under- standing with Mrs. Kelly that the premises would be owned jointly by them upon her acquisition of title from the Government of Belize.

He therefore says that the successors on title of Mrs. Kelly are estopped from recovering the premises from him.

The first plaintiff in her evidence maintained that the first defendant did no work on the construction of the house. That he made arrangements with the contractor but did no help with the building of the house. He did not contribute any money for the building of the house and he didn't give any money towards the payment of the loan. The defendant's evidence was that he paid $35.00 for the plan of the house, used to check the building of the house, bought the lumber for and built and bath and toilet, built the cupboards to the house, and after Mrs. Kelly's death, he made payments towards the loan until the Corporation told him not to pay anymore. This evidence of the defendant I easily accepted. I also accepted the evidence of the builder Mr. Eric Rhaburn that the defendant made the payments to him for his skill and labour and that of his helpers. This added great weight to the evidence that the defendant was in charge of the matter of having the house constructed.

The defendant also said that he used to give Mrs. Kelly money to help pay the loan after construction of the house right until she died. The evidence, particularly the receipts from the Reconstruction and Development Corporation, show that payment of the loan was at about $60.00 per month paid invariably at the end of the month. The defendant said that he used to give Mrs. Kelly $65.00 per week out of his wages of $100.00 per week and then when the time came to pay the loan he gave her money to help pay the loan. According to him he gave $40.00 for this purpose. I found it difficult to accept that he paid out in the amounts as he said. It was clear from the evidence that Mrs. Kelly got money from various sources. Not only did the defendant give her money, two of her daughters gave her money and one of the defendant's sons also gave. She also obtained money for washing and rental for the upper flat. On the basis of the defendant's assertions, Mrs. Kelly would have been collecting a total of $140.00 per week. Jennifer's evidence suggest the total would have been $120.00 at one time and later $135.00. According to Jennifer's evidence it took about $75.00 per week to run the house which amount appeared reasonable and on that basis there would have been a balance of $60 - $65.00 per week out of which Mrs. Kelly would have in all probability saved each week toward the loan payment. Assuming that Mrs. Kelly out of the extra $60 - $65.00 per week spent a portion on other things and taking into account that she got from Jerome, the defendant's son $15.00 at the end of month (i.e. around the time for the loan payment), it appeared to me that Mrs. Kelly, if she got from the defendant towards the loan payment would not have required as much as $40.00 from him. I was however satisfied that the defendant contributed to some extent towards repayment of the loan from Reconstruction and Development Corporation. Doing the best I can I estimate that the defendant's contribution was about $25.00 per payment. The amount so contributed is money spent towards the cost of the house.

I then turned to determine the basis on which the defendant expended the money, time and labour such as I found him to have expended in connection with the building of the house. Were these things expended on an expectation? On this aspect of the matter, the defendant said "Before we went to the house, Orma gave me the understanding that she would join me and she for the house when she fix up the papers." Under cross-examination he admitted that Mrs. Kelly never owned the property and would not have owned it until the land was bought from the Government and paid for and the loan from Reconstruction and Development Corporation fully repaid but he maintained that "Mrs. Kelly said that she will get this thing straightened out in both our names". "An arrangement was reached between me and Mrs. Kelly".

The defendant did not state specifically that at a particular point in time the understanding was given or the arrangement reached. I was however satisfied that he had an expectation to be part owner in the house. Further, from the evidence I concluded that there was not simply wishful thinking on the part of the defendant but an expectation created by the conduct of the deceased Mrs. Kelly. This is borne out by the evidence that Mrs. Kelly had the assistance of the defendant in obtaining the lease of the land; she had his assistance in obtaining the loans of $4,000.00 and $700.00 for the purpose of building the house; she put the arrangements for the building and completion of the house in the hands of the defendant. Further, when the house was completed and they moved into it, the defendant disposed of his house by giving it to one of his sons. I concluded that the defendant's expectation arose from the time he assisted Mrs. Kelly in obtaining the lease of land from Government and found that he expended money, time and labour on the said expectation.

What then is the defendant's legal status in relation to the house? It was submitted for the defendant that he is entitled in equity, to remain in the house on the ground that he has a licence coupled with an interest for the matter falls within the principle expressed by Lord Denning in Inwards and Others v. Baker (1965) 1 A.E.R. 446. In that case the Master of Rolls said at pp 448 - 449 "it is quite plain ………that if the owner of land requests another, or indeed allows another, to expend money on the land under an expectation created or encouraged by the landlord that he will be able to remain there, that raises an equity, in the license such as to entitle him to stay. He has a licence coupled with an equity". For the plaintiffs it was contended that if the defendants evidence is accepted, his expectation was that when the papers were fixed up he would get a share in the house. This would not fall under the principle of Inwards v. Baker (supra) under which the expectation must be one of a right to occupy. Consequently while the defendant may be entitled to own later, he would not have a present right to occupy. I do not think that the plaintiffs submission is of any avail. Following the approach suggested by the plaintiff the finding would be that there was an undertaking to convey the house to the defendant jointly with Mrs. Kelly which created for the defendant an immediate equitable interest in the house. Following the principle set out in the decided cases I am content to hold that this is one of those cases where an equity is created by estoppel by which the person who has made expenditure is induced to do so by the expectation of obtaining protection and equity protects him so than an injustice may not be perpetrated.

The question now is how to give effect or protection to the equity. Should the defendant remain on the premises? As Romelly M.R. said in the Umty Joint Stock Mutual Banking Case, (1858) 25 Beav 79 "the Court must look at the circumstances in each case to decide in what way the equity can be satisfied." Effect on protection then is to be given to the equity in whatever is the most appropriate way. I have avoided the alternative of allowing the defendant to remain on the premises, for from the evidence this seems very much like forcing to live at the same place persons who can't get on together. I was guided by the advice which Sir Terence Donovan tendered in Chalmers v. Pardoe (1963) 3 A.E.R..552. At page 555 he said "There can be no doubt on the authorities that where an owner of land has invited or expressly encouraged another to expend money on part of his land on the faith of an assurance or promise that that part of the land will be made over to the person expending his money, a court of equity will prima facie require the owner by appropriate conveyance to fulfil his obligation; and when, for example for reasons of title, no such conveyance can effectively be made, a court of equity may declare that the person who has expended the money is entitled to an equitable charge or lieu for the amount so expended." In this case the following are the items of expenditure by the defendant for which I think he is to be compensated. First $35.00 for the plan to the house. Then there is $30.00 for the materials with which he built the bath and toilet. Thirdly there is $25.00 per payment of the loan. I calculate on the basis of the amount of repayments in evidence before me. There were 56 repayments and at $25.00 per payment, the defendant's contribution comes to $1400.00. The total figure of which he is to be compensated is $1465.00.

The plaintiffs will have an order for possession of the lower flat of the premises at 10, Thirteenth Street, Kings Park, and on the principle laid down in Chalmers v. Pardoe (supra) the first defendant will have a declaration that when he gives up possession he will be entitled to payment to him from the estate of Orma Kelly the sum of $1465.00 with interest at 6% from delivery up of possession until payment.

Judgment accordingly. No order as to costs.

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