Russell & Ors v Finn

LORD JUSTICE DYSON: The first and second claimants are the joint owners of Brook House, Brook Lane, Alderley Edge, Cheshire ("the Brook House land"), title to which is registered under Title Number CH 131736. Access to the Brook House land is along Brook Avenue which runs east to west from its junction with the public highway known as Brook Lane to the house on the Brook House land which is known as "Brook House".

The defendant is the owner of (a) The Coach House, Brook Lane, Alderley Edge, Cheshire ("the Coach House land"), title to which is registered under Title Number CH 178777; and (b) the field behind and adjacent to the Coach House land, title to which is registered under Title Number CH 299815. Part of this field (which I shall refer to as "the northern field") lies to the east of the Coach House land and abuts upon the northern edge of Brook Avenue. The Coach House land is adjacent to, and to the north of, the Brook House land.

By a conveyance dated 30 November 1973 ("the 1973 conveyance") George William Hoyland purchased a plot of land which comprised approximately 16 acres. The plot included the Brook House land, the Coach House land, the northern field and Brook Avenue.

By conveyance dated 11 October 1978 ("the 11 October 1978 conveyance"), Mr Hoyland sold the Coach House land to his mother, Muriel Kaye ("Mrs Kaye"). By its terms, he also granted:

By a conveyance dated 12 October 1978 ("the 12 October conveyance"), Mr Hoyland sold to a Mr and Mrs Nugent two plots of land, namely (a) Brook House, shown edged red on the plan attached to the conveyance, and (b) Brook Avenue, shown edged blue on the plan attached to the conveyance. The Coach House Right of Way was excepted and reserved out of both of the plots and parcels of land referred to and conveyed by this conveyance. Further, by clause 3, Mr and Mrs Nugent granted to Mr Hoyland (and his successors in title):

By a conveyance dated 15 April 1981, Mr Hoyland re-purchased the Coach House land. The defendant purchased this land from Mr Hoyland in November 1986. By this time the Coach House itself was in a seriously dilapidated condition. It had been badly damaged by a fire in 1983. By a conveyance dated 11 October 1988, Mr Hoyland sold the northern field to the defendant.

In November 1995, Mr David Russell purchased inter alia the Brook House land. In the summer of 2001, Mr Russell settled the land on trust for the benefit of the David Russell No 1 and No 2 settlements. The Trustees of these settlements are the claimants in these proceedings.

There is no dispute that the defendant has at all material times had the benefit of a right of way over Brook Avenue between the points marked "X" and "Y" marked on the plan which was attached to the particulars of claim served in the current proceedings. "X" marks the junction of Brook Avenue with Brook Lane. "Y" marks the position where at all material times there were two stone pillars, which served as gateposts supporting large iron gates at the entrance to the Brook House land. The roadway continues past the entrance to the Brook House land at point "Y". One branch of it passes in front of the south side of the Coach House. The other branch runs southeast and round to the south side of Brook House. I shall refer to the section of roadway passing beyond "Y" as "the driveway". One of the issues between the parties is whether the Coach House Right of Way includes the branch of the driveway leading to the Coach House.

I should refer at this stage to the conveyance dated 10 October 1921 ("the 1921 conveyance") by which inter alia the Brook House land and part of the Coach House land were conveyed together with a right of way over "the roadway called Brook Avenue shown on the said plan". The plan referred to in the 1921 conveyance shows Brook Avenue coloured brown running east to west from Brook Lane to point "Y", and then continuing straight ahead along the north side of the Coach House and stopping just past the western end of the Coach House. This plan does not, therefore, show Brook Avenue as continuing into the curtilage of the Brook House land. Nevertheless, the plan clearly shows the driveway by parallel dotted lines running from point "Y" straight ahead to the south side of the Coach House, with a fork off to the left which runs southeast and then round to the south side of Brook House.

Before I come to the issues in more detail, I need to outline the events which gave rise to these proceedings. Following his acquisition of the Brook House land, David Russell carried out various improvements to Brook House and works to Brook Avenue and the driveway ("the Phase I landscaping works"). These works included the erection of a cobbled stone wall running along the driveway opposite the south side of the Coach House, and the planting of additional evergreen bushes on the land between point "Y" and the south side of the Coach House. It was common ground that the effect of these works was to render vehicular access to the south side of the Coach House from the driveway impossible. There was an issue as to when the Phase I landscaping works were carried out. It was the claimants' case that the works were carried out in 1997, and the defendant's case that they were not carried out until 1999. In Spring 2001, the claimants carried out further works to the driveway and the adjoining land ("the Phase II landscaping works"). These works included a re-alignment of the driveway and the creation of a garden bed between the altered line of the driveway and the south side of the Coach House. It was common ground that, as a result of the Phase II landscaping works, it remained impossible for the defendant to gain access from the driveway to the south side of the Coach House.

On 27 August 2001, the defendant arranged for all the shrubs and bushes which had been planted on the garden bed to be cut down, and for such other works to be carried out as would enable him to gain vehicular access from the site of the re-aligned driveway across the garden bed to the south side of the Coach House.

The claimants started proceedings on 14 September 2001. They sought a declaration that the defendant's right of way along Brook Avenue was limited to the line between points "X" and "Y", and an injunction restraining him from entering on to the land where the landscaping works had been carried out. By his defence and Part 20 claim, the defendant claimed a declaration that the Coach House Right of Way extended as far as the south side of the Coach House. Alternatively, he claimed a declaration that he had acquired the benefit of such a right of way by prescription. Finally, he claimed an order that the claimants should carry out works of re-instatement to restore the position to that which had existed prior to the landscaping works.

After a trial which lasted four days, His Honour Judge George gave an ex tempore judgment on 7 June 2002. It is sufficient at this stage to record that he held that upon the true construction of the conveyance dated 11 October 1978 the Coach House Right of Way did not give the defendant a right of way over the driveway. He granted the claimants a declaration -

In the fence on the north side of Brook Avenue just to the west of point "Y" there was at all material times a wooden gate. This led into the northern field. There was another gate a short distance to the west of the first gate just inside the curtilage of the Coach House land. One of the questions that was explored at the trial was whether, as at 11 October 1978, there was an access route from Brook Avenue via these gates to the Coach House. I shall refer to this route as "the northern route" without in any way prejudicing the answer to the question.

Mr Hoyland was the only witness who gave evidence which bore directly on this question. He lived at Brook House from 1976 until 1978. He was allowed by Mrs Kaye to live in a caravan in the field directly behind the Coach House between 1978 and 1983. The caravan is shown on the aerial photograph that was taken in about 1980. In about 1983, he moved the caravan to a position in the northern field close to Brook Avenue and just to the east of the gate that led from Brook Avenue into the field. Mr Hoyland's evidence included the following:

It was suggested to Mr Hoyland in cross-examination that the first position of the caravan was "on a piece of track". The evidence continued (at page 43 C as follows):

He was then asked about the northern route. He had said in his witness statement:

During his re-examination Mr Hoyland gave further evidence about the northern route. He said that it was "all grass", and that there were "extraordinary weeds anything up to 10 feet tall." He would not have liked to have driven a car over the route. At page 63 D he said:

As I have said, no other witness gave direct evidence as to the position before 11 October 1978. But I need to refer to some passages from the evidence of Mr Hill on which Mr Berkley QC relies. Mr Hill was employed by Mr Russell in 1995 to carry out building work at Brook House. He gave evidence about what he saw in 1995. He said that between the two gates on the northern route (page 47 B to C of his evidence):

I can now come to the judgment. Having set out the conveyancing history in some detail, the judge turned to the question of the true construction of the conveyance of 11 October 1978 and the extent of the right of way granted by it. In approaching this question, the judge directed himself in accordance with the judgment Sir John Pennycuick in St Edmundsbury v Clark [1975] 1 WLR 468, 477 D:

The judge decided that the words of the grant were not so unambiguous that he should not seek assistance from the surrounding circumstances as to the meaning, in particular, of the words "Brook Avenue". He identified the following material surrounding circumstances. First, the nature of the transaction, namely "the division into separate ownership of two parts of the house and buildings, with the sale of Brook House as a separate parcel".

Secondly, the fact that the plan referred to in the 11 October 1978 conveyance excluded the corner of the rectangle by the gateway to the Brook House land from the Coach House land that was conveyed to Mrs Kaye. In relation to this, the judge said at page 22 B of the judgment:

Thirdly, the judge said it was a relevant surrounding circumstance that Brook House was being sold as a residence, and that the prospects of planning permission being granted for the development of the Coach House as a dwelling were "somewhat doubtful".

Fourthly, Brook Avenue was laid out as an access road to the various dwelling houses leading off from side to side. At page 24 E he said:

He summarised his conclusion on the construction issue at page 26 F as follows:

He addressed the argument advanced on behalf of the defendant that this construction meant that there would be no access to the Coach House land at all. Two points had been raised. The first was that the northern route ran for a short distance over land which was outside the Coach House land, and which as at 11 October 1978 was retained by Mr Hoyland. The judge acknowledged the force of this point, but said (page 25 B):

The second point made on behalf of the defendant was that the northern route was in any event not physically usable as a means of access to the Coach House. In relation to this point it is necessary to examine how the judge dealt with the evidence of Mr Hoyland and Mr Hill, to which I have already referred. He made his findings about Mr Hoyland in a passage starting at page 19 D:

As for Mr Hill, the judge said that he accepted his evidence. Moreover he inferred "from the evidence" that the position described by Mr Hill as in 1995 was also the position in 1978.

These findings enabled the judge to express his conclusions in relation to the availability of the northern route as a means of access to the Coach House in the following terms at page 27B:

Although I am not dealing with the issue of lost modern grant at this stage, it is relevant to record that, in the course of reaching his conclusions on this issue, the judge found that the defendant used the driveway within the curtilage of the Brook House land and the Coach House land after 11 October 1978 and that his use (page 33 A - C) -

I should also record that the judge went on to find that this use was interrupted in March 1998 by the Phase I landscaping works, so that the defendant failed to establish the necessary 20 years' uninterrupted use for the purposes of his prescriptive claim.

As I explain later, the extent to which the driveway was used as a means of access to the Coach House before 11 October 1978 was an important surrounding circumstance which provided part of the objective factual background against which the construction issue fell to be determined.

The starting point is that the driveway had been used as a means of gaining access for some time before 11 October 1978. That was the clear evidence of Mr Hoyland. The judge did not reject it, still less did he give any reasons for rejecting it. Mr Berkley submits that the judge impliedly rejected the evidence at page 19 G of his judgment, where he said that he accepted Mr Hoyland's evidence "only to the extent which appears below". What appeared "below" was the judge's acceptance of Mr Hoyland's evidence as to use of the driveway for access to the Coach House after 12 October 1978. And yet, at page 19 D, the judge had said that he found Mr Hoyland "helpful as regards the position up to about 1986". I confess that I find the sentence starting -

In any event, there was no proper basis for rejecting the evidence of Mr Hoyland that the driveway had been used as a means of gaining access to the Coach House before 11 October 1978. There was no evidence to contrary effect, and no basis for saying his evidence was inherently incredible. Quite the reverse. It seems to me inherently unlikely (to put it no higher) that, when gaining access to the Coach House in Brook Avenue, Mr Hoyland would have eschewed the obvious route along the driveway and chosen in preference the difficult, and at times impassable, northern route.

Mr Berkley makes the point that the judge had reservations about Mr Hoyland as a witness. Whether or not that is right, the judge did not reject Mr Hoyland as a wholly unreliable witness. On the contrary, he said in terms that he found Mr Hoyland "helpful as regards the position up to about 1986", and he accepted his evidence in relation to access to the Coach House in the period after 12 October.

It is true that the judge accepted the evidence of Mr Hill about the northern route in 1995, and he said that he inferred that the position was no different in 1978. Mr Berkley submits that this shows that the judge was preferring the evidence of Mr Hill to that of Mr Hoyland, and that he was entitled to do so. But in my judgment this argument cannot avail the claimants. First, the judge did not say that he was rejecting the clear evidence of Mr Hoyland for this or indeed any other reason. Secondly, Mr Hill could only speak of the situation in 1995. The judge wholly failed to explain why he felt able to infer that the position had been the same 18 years earlier. Thirdly, even if the position had been the same in 1978, that would only lead to the conclusion that the northern route was an available, albeit far less suitable, means of access to the Coach House than the driveway. It would not lead to the conclusion that Mr Hoyland was wrong when he said that the driveway was regularly used as the means of gaining access to the Coach House. And finally, an implied finding that in the period before 11 October 1978, the northern route had been used to the exclusion of the driveway as a means of access to the Coach House sits very unhappily with the judge's finding that the defendant continued to use the driveway continuously between October 1978 and March 1998 when (as he found) the Phase I landscaping works were completed.

Apart from the fact that the judge did not reject the evidence of Mr Hoyland and had no grounds for doing so, the plan annexed to the 11 October 1978 conveyance provided ample support for it. As I have already said, the plan shows the driveway running from point "Y" ahead to the Coach House as well as round to the south side of Brook House.

In my judgment, the judge's conclusion is unsustainable. The simplest solution would have been to apply Section 62 of the Law of Property Act 1925 which provides so far as material:

The use of the driveway as a means of access to the Coach House was a right or advantage appertaining to the Coach House land or reputed to appertain to it, and I can find nothing expressed in the 11 October 1978 conveyance which indicates an intention that Section 62 (1) should not apply. But the Section 62 point was not taken at any time during these proceedings until it was put to Mr Chaisty QC by the Vice-Chancellor during the course of argument on the appeal. Mr Berkley objected to the point being taken at such a late stage, particularly since the claimants might at the trial have sought further evidence in relation to it. In those circumstances, I do not consider it would be fair to the claimants to decide this appeal on the basis of Section 62.

I return therefore to the reasons given by the judge for his conclusion. In my judgment, the surrounding circumstances on which he relied do not justify the conclusion that he reached. I do not see how the fact that Mr Hoyland was splitting the Brook House land from the Coach House land indicates one way or the other whether it was intended by the 11 October 1978 conveyance to grant a right of way to the Coach House over the driveway, and the judge failed to explain how it did. The same goes for the point that the corner of the rectangle was excluded from the Coach House land, and Brook House land was being sold as a residence, whereas the prospects of planning permission for the development of the Coach House as a dwelling were somewhat doubtful. Mr Berkley placed particular emphasis on the significance of the exclusion of the corner of the rectangle from the land conveyed to Mr Kaye. But, in my view, that sheds no light on the question whether the Coach House Right of Way did or did not include the section of the driveway within the excluded corner.

The main point which seems to have influenced the judge was the fact that the plan attached to the 11 October 1978 conveyance was the same plan as had been annexed to the 1921 conveyance, and the words "Brook Avenue" were used in both conveyances. It will be recalled that the plan annexed to the 1921 conveyance showed Brook Avenue coloured brown continuing in a westerly direction from the vicinity of point "Y" in a straight line along the north side of the Coach House. But, in my judgment, the use of the 1921 plan did not have the significance which the judge attributed to it. First, Brook Avenue is not coloured on the plan annexed to the 11 October 1978 conveyance. Secondly, this plan shows the parallel dotted lines marking the limits of the driveway leading to the Coach House and Brook House beyond point "Y". Thirdly, even without the evidence of Mr Hoyland (which was inadmissible on this point), one could have inferred that the 1921 plan might have been used for no other reason than that it was a clear and sufficiently comprehensive plan for its purpose. In my judgment, there was no justification for elevating the words "Brook Avenue" to what the judge called a "dictionary definition" provided by 1921 conveyance.

Although the judge formulated the correct approach by directing himself in accordance with St Edmundsbury v Clark, I consider that he did not apply it correctly in this case. In particular, there are two fundamental flaws in his approach. First, he left out of account the most obvious relevant surrounding circumstance, namely that the driveway had been used as the means of access to the Coach House in the period up to 11 October 1978. That was obviously relevant because it was plainly of importance to determine whether, when the parties agreed the terms of the 1978 conveyance, they intended to change the status quo in relation to access to the Coach House land. There is nothing in the language of the conveyance to indicate that they intended to do so. The most obvious inference from the facts is that when the parties agreed to the grant of the right of way over Brook Avenue, they were agreeing to the same right of way as had been enjoyed by the owner in the period before 11 October 1978.

The second difficulty with the judge's reasoning is that he imputed to the parties the intention to grant the new owner of the Coach House land a right of way over land which (a) was very difficult to traverse, (b) had rarely, if ever, been used as the means of access between the Coach House and Brook Avenue, and (c) was over a strip of land which was not owned by the new owner. Unless driven to do so by the express words of the 1978 conveyance or by necessary implication, I would not be willing to conclude that such an intention should be imputed. There are no express words which compel that conclusion, nor is it required by necessary implication.

I would therefore allow the appeal and hold that the right of way granted by the 1978 conveyance extended along the driveway to the Coach House and that it did not terminate at point marked "Y". In these circumstances, it is unnecessary to consider whether the judge reached the right decision on the lost modern grant issue. In the result, if my Lord and my Lady agree, the order made by the judge will be discharged, and an appropriate declaration granted to reflect the terms of the judgment.

LADY JUSTICE HALE: I agree.

THE VICE-CHANCELLOR: I also agree.

MR CHAISTY: In those circumstances, as regards the precise wording of the order, I take you briefly to the appeal notice in the appeal bundle behind tab 1, effectively the penultimate page. At paragraph 2 what is being asked for there perhaps is not entirely appropriate. What is asked for is -

THE VICE-CHANCELLOR: I did not hear that last bit.

MR CHAISTY: Across the middle of the page on the right there are three boxes with different hatching, and then a blank spot. One comes down Brook Avenue, goes through point 1 and then continues in a straight line through the green colouring, and we can mark at a point at the bottom there - perhaps point Z - to reflect the side of the Coach House to which you have referred so we can incorporate that. I propose an order be drawn to reflect that, so it will say from Brook Lane through point 1 to point Z, point Z being that which I have suggested. The second paragraph of the relief sought will be therefore for reinstatement of the driveway to its former position before the landscaping works between points Y and Z. That should be clarified by paragraph 2. At point number 4 we would ask - for a future policing of the position - that there be an order restraining the claimants from further interfering with the right of way. That is the substantive relief for which I would ask.

I move on to costs. In relation to costs, I would ask for costs of the appeal and below and for those costs to include, for the avoidance of doubt when I say "below", the costs of the assessment hearing. After the decision of His Honour Judge George he directed that in the light of the claimants' success the claimants should be entitled to damages for the action of my client in seeking - effectively self-help - to restore the position, and a damages claim was being pursued so some costs have been incurred in relation to that.

The next point on costs is that my client has already paid, by way of an interim payment in relation to costs, having been ordered to do so, £35,000 to the claimants. We would ask for an order for that money to be repaid together with interest.

THE VICE-CHANCELLOR: Interest at what rate?

MR CHAISTY: I would ask for 8 per cent. We have also paid, by way of a damages figure, £6,000.

THE VICE-CHANCELLOR: You are asking for repayment of that with interest.

MR CHAISTY: Yes. The final relief I would ask for is that clearly if you are with me in relation to an order that I have the costs of the appeal and of below there will have to be a detailed assessment, but I would ask for an interim payment in relation to those costs. I do not have detailed schedules. But I am sure it will come as no surprise, however regrettable it may be to your Lordships, that the costs are not insubstantial. I understand that the costs of the trial and the appeal are in excess of £120,000. As you will have noted, an interim payment was made at the trial stage only of £35,000.

THE VICE-CHANCELLOR: Your costs were not paid.

MR CHAISTY: No, the costs we were ordered to pay by way of an interim payment of the claimants' costs was £35,000.

LORD JUSTICE DYSON: £120,000.

MR CHAISTY: I am instructed that my costs are in the region of or in excess of £120,000. In those circumstances I would ask for an interim payment. Clearly that is a matter for your Lordships. I am instructed to ask for a figure of £75,000 at this stage. That completes all the points of relief for which I would ask.

MR BERKLEY: Can I get one formality out of the way? On specific instructions I am asked to ask your Lordships to consider granting leave to appeal the decision. Insofar as it may be necessary to state grounds at this stage, I would say two things. One is that .....

THE VICE-CHANCELLOR: It is more normal to deal with the order before asking for leave to appeal, but if you wish to pursue it at this stage you may.

MR BERKLEY: I am happy to leave that until we have dealt with the form of the order.

As far as the form of the order is concerned, it is helpful to put this matter into context because although this may be a case that has involved, it would appear, a great deal of costs and certainly argument, this is essentially a dispute between neighbours. And courts, even your Lordships' court, must have some regard to what is the position on the ground between the immediate parties to the litigation. Rather than impose upon the unsuccessful party the right of way - by reference to dotted lines on this plan - unilaterally, bearing in mind this whole dispute relates to a relatively small area, and the parties have litigated it, I would submit that the better course would be to indicate that the court is going to grant a declaration much in the way in which the learned judge did in the court below on the basis that the parties will endeavour to agree the plan to be attached to the declaration, and only in the event that agreement cannot be reached would it be necessary for the matter to come back for determination. That would be a better course than to find that because of the mere fact there are dotted lines on one plan that then becomes the definitive right of way having regard to the history of this matter.

THE VICE-CHANCELLOR: I could well understand that were it not an agreed plan produced by each party's surveyors. In those circumstances can one not take the dotted lines as accurate?

MR BERKLEY: I understand that there may well be contention. In any event, the dotted lines do not take you precisely to the point you need to arrive at. I am also concerned that given the plan - subject to your Lordships considering the application for permission to appeal - on the basis that we have now reached finality in relation to this matter, that it would be sensible to allow the parties an opportunity to come to a definitive position in relation to what is now the consequence of this court's determination of the appeal.

THE VICE-CHANCELLOR: In other words, to appeal.

MR BERKLEY: Yes, because there has been discussion. That is another thing to which I want to come in relation to the question of costs. It would just be .....

THE VICE CHANCELLOR: Can we deal with this in sequence? First of all, the question of declaration; you say it should not be by reference to this plan but to some future plan to be agreed between the parties.

MR BERKLEY: Yes.

THE VICE-CHANCELLOR: Do you object to the declaration in any other sense?

MR BERKLEY: I will take instructions, but I would suspect not. (Pause) No. I think that whilst the question of the injunction is a matter for the court .....

THE VICE-CHANCELLOR: We are still dealing with the declaration.

MR BERKLEY: Yes. So far as the declaration is concerned, I cannot .....

THE VICE-CHANCELLOR: The second point is the order for reinstatement. Do you object to that?

MR CHAISTY: Again, subject to the parties being given the opportunity to arrive at terms that are acceptable .....

THE VICE-CHANCELLOR: They have that anyway, even when we have made the order. We are concerned with making the order. What the parties do by way of settlement is a matter for them. Do you object to an order for reinstatement?

MR BERKLEY: No.

THE VICE-CHANCELLOR: What about time for reinstatement? (Pause)

MR BERKLEY: Again, it is a matter that should be capable of agreement.

THE VICE-CHANCELLOR: May be it will be, but we have to make an order. Do you object to an order and, if so, what period do you wish to comply?

MR BERKLEY: An outside date should be three months.

THE VICE-CHANCELLOR: Then there is the injunction to restrain further interference.

MR BERKLEY: Subject to my Lords considering it necessary, I would submit that if the rest of the orders are complied with, bearing in mind the fact that these parties are going to continue to be adjoining landowners, it is not necessary to grant to one party a perpetual injunction that may be simply a recipe for further litigation or conflict when none is necessary. In the event of a specific event occurring, there are remedies that could be pursued. Can I take instructions on the three months? (Pause) The three month period, I suggest, would obviously run from the date upon which the parties have determined what it is in fact the layout of the landscaping will be. The position, as you know, is that, unlike Mr Finn who is the successful person at this stage, it is Mr Russell who lives at this property. There is a farcical element when we come to costs.

THE VICE-CHANCELLOR: We come to that now. You say the injunction is not necessary.

MR BERKLEY: I say it is not necessary.

THE VICE-CHANCELLOR: Costs?

MR BERKLEY: On the question of costs the court, when assessing costs, should have regard to matters set out in CPR 44.4 (sic) [44.3] with which the court is familiar. That includes questions of conduct and questions of considerations of any admissible offers that have taken place in the course of the proceedings.

To put the matter into context, the court will know that legal proceedings arose because Mr Finn exercised what Mr Chaisty referred to as self-help. He did so because he felt he was entitled to use Mr Russell's land if he wanted to get to the Coach House, which is a building that is an eyesore within what is a very high value residential area. The landscaping works were works of improvement to the amenity, both in terms of the view and general state of the locale and were, at least in part, intended to screen the Coach House area.

Mr Finn has, in part at least, succeeded because of what he relies upon was the state of affairs in 1978 at the date of the grant. That may be perfectly reasonable in terms of legal argument and in terms of the issues going to the surrounding circumstances affecting construction of the express grant. But it is difficult to know - having regard to the fact that Mr Finn is in fact the owner of the land now that comprises the field, and bearing in mind the correspondence to which I will take the court - what the purpose was in Mr Finn either exercising self-help in the way that he did or in dealing with this matter in a way which has led, on what Mr Chaisty tells the court, to what has been an outlay of £120,000 worth of costs. In the modern context of costs and in the modern context of doctrines of proportionality and the court trying to recognise that this is a neighbours dispute effectively, the courts should be discouraging rather than encouraging this sort of state of affairs occurring which benefits people like myself and Mr Chaisty but has no social value at all, bearing in mind the fact that Mr Finn has a perfectly easy alternative means of getting to his property.

The position is highlighted by what had happened in relation to offers to compromise.

I have considered carefully my responsibilities in relation to these matters and, as paragraph 44.4 (c) (sic) [44.3 (4) (c)] of the CPR states, the court is entitled to have regard to admissible offers to settle irrespective of whether they are Part 36 offers or not. In my submission, the material I put before the court is material that can properly go to the exercise of the court's discretion on this issue of costs today.

THE VICE-CHANCELLOR: Does Mr Chaisty agree with it?

MR BERKLEY: It is not a matter that Mr Chaisty and I have had an opportunity to discuss.

THE VICE-CHANCELLOR: He should have done. We are not going to rule on this without him having an opportunity to speak.

MR BERKLEY: Certainly. There are party to party correspondence documents.

THE VICE-CHANCELLOR: Which one?

MR BERKLEY: There is a discrete bundle.

THE VICE-CHANCELLOR: He should have an opportunity.

MR BERKLEY: Indeed.

THE VICE-CHANCELLOR: Why could you not have shown them to him before?

MR BERKLEY: I have only just received a copy of them myself. I examined the documents before your Lordships gave judgment. I asked for the copies to be produced in order that I could produce discrete bundles. Those were handed to me while I was addressing the court. Certainly it was not intended .....

THE VICE-CHANCELLOR: You can hand them to Mr Chaisty now, and I will invite you to deal with other points that you have raised while he reads them.

MR BERKLEY: Certainly. (Pause)

THE VICE-CHANCELLOR: Point 5: he wants repayment of £35,000 interim payment of costs and £6,000 repayment of damages, in each case with interest at 8 per cent.

MR BERKLEY: Yes.

THE VICE-CHANCELLOR: Do you object to that?

MR BERKLEY: Subject to the judgment, I can see no objection to that.

THE VICE-CHANCELLOR: So - - - - -

MR BERKLEY: I have no objections. There is one other matter we can deal with while my friend is considering the bundle, that is the question of apportionment. Once again, in my submission the court is entitled, in a modern context, to look at this matter and to consider issues of apportionment.

THE VICE-CHANCELLOR: Can we dealt with the last point he raised which is an interim payment of £75,000?

MR BERKLEY: I submit that that would depend on what view the court takes in relation to the burden and the extent of the costs liability of the unsuccessful respondent to the appeal.

So far as issues are concerned, I accept that the court has determined this appeal in favour of the appellant on the single issue of construction. The single issue of construction was not potentially determinative but, in the context of the trial and in the context of the overall preparation for this appeal, represented only one of the number of issues. There was an application to adduce new evidence and that was intended to feed the prescription argument. That application to adduce new evidence was first formulated as an application for a review, and that review took place before His Honour Judge George when he refused to review his decision and refused to admit the new evidence. The date of that order is 7 August 2002. He made an order on that occasion condemning the appellant in costs.

In my submission, on any view of the matter, that order should stand because even if he had granted the application, the very considerable liberty and largesse being afforded to the appellant to introduce evidence that was within their control and which they were seeking to introduce in order to feed the merits of their prescription claim, those costs consequences would have been visited on them in any event.

As far as this appeal is concerned, obviously it is difficult. I am not asking the court to look at this matter with precise mathematics and arithmetic but the appellant was clearly unhappy with the state of his evidence in relation to the prescription issue.

THE VICE-CHANCELLOR: What are your asking the court to do?

MR BERKLEY: I am asking the court to reflect the fact that the appeal has succeeded on the discrete issue by directing that in relation to the burden of costs there be an apportionment.

THE VICE-CHANCELLOR: What apportionment?

MR BERKLEY: An apportionment to reflect the fact that - - - - -

THE VICE-CHANCELLOR: What apportionment do you say?

MR BERKLEY: I would submit that in the context of this case the construction issue has probably occupied and resulted in not more than one-third of the costs, and one can also take into account - - - - -

THE VICE-CHANCELLOR: What do you say should happen to the other two-thirds?

MR BERKLEY: I would submit that preferably there should be no order in relation to the two-thirds.

THE VICE-CHANCELLOR: So in future cases, notwithstanding the court giving a clear indication that it wishes to hear one of the two alternative issues fully to begin with, counsel will be forced to say no, you must hear both, in order to get his order for costs.

MR BERKLEY: No. That cannot be right as an inflexible rule. The whole reason why costs is this fascinating area of discretion is because each case is specific. This case is specific because in this case we have two elements that might help the court, doing the best it can within its broad discretion because, first, one has the appellant clearly being dissatisfied with the quality of its evidence and seeking to introduce new evidence for which it would have had to pay in terms of costs had we succeeded. Secondly, the supplemental skeleton that my learned friend lodged shortly before this matter came to be heard recognised that the claim for prescription was not going to succeed because of the authority of Maxi and Hogar (?).

Finally, and I say this without any disrespect to my learned friend, these are adversarial proceedings and although in his judgment Lord Justice Dyson was very clear to ensure that the Section 62 Law of Property Act 1925 issue was not the basis on which the matter was determined, the position is that that question, and insofar as it entered into argument at all, only arose as a result of remarks made by my Lord, the Vice-Chancellor.

THE VICE-CHANCELLOR: So what? The matter was not decided on that basis.

MR BERKLEY: It was not decided on that basis.

THE VICE-CHANCELLOR: You objected to us doing it.

MR BERKLEY: Indeed, I did.

THE VICE-CHANCELLOR: What is the objection?

MR BERKLEY: All I submit is this that the court is entitled when looking at professional costs to consider what would be the proper apportionment having regard to the issues that were before the court.

THE VICE-CHANCELLOR: You say one-third/two-thirds.

MR BERKLEY: Yes. So far as the question of the issue which the court is enjoined to consider as being one of these, one of the factors to be taken into account under Part 44, is admissible offers to settle.

THE VICE-CHANCELLOR: I am going to ask Mr Chaisty if he has had sufficient opportunity to look at the matters you wanted to produce.

MR CHAISTY: The short answer is no. There are some detailed points in them which I think I need probably five minutes for. I am trying to keep one ear on what is being said while at the same time trying to read a letter.

THE VICE-CHANCELLOR: We will certainly give you an opportunity of doing so. You do not know yet whether you object.

MR CHAISTY: No. I do not. My friend pointed out one or two matters about this documentation which I would rather be clear about in my own mind before I make a point.

THE VICE-CHANCELLOR: We will give you until quarter-past.

MR BERKLEY: There is one further matter before your Lordships rise which I put into the pot in relation to costs; it is part of my obligation to do so. It is this: the housekeeping in relation on this appeal on the part of the appellants has been really below the standard that the court would have expected. That has had an effect not only on the court but it has had an effect on the respondents as well. I am firmly of the view that the appeal bundle simply did not comply with the Cas (?) direction. That again is a factor the court can take into account.

THE VICE-CHANCELLOR: You have to make specific submissions. It is not just a question of putting it in the pot, as it were. If you are submitting that costs of producing appeal court bundles must be disallowed you must make that application as such. It is not right to dump it on our laps and expect us to fish out what we think is important.

MR BERKLEY: My Lords, no. I accept that.

THE VICE-CHANCELLOR: I also do not understand why this correspondence was not produced to Mr Chaisty earlier. It was quite plain when we adjourned yesterday what the result was going to be. If you were going to rely on his orders and a whole lot of correspondence you should have taken them all to provide copies in advance.

MR BERKLEY: I agree totally. Unfortunately the facility for providing that only arose shortly before your Lordships gave judgment. The documents were faxed over from Manchester overnight.

THE VICE-CHANCELLOR: We will adjourn.

MR CHAISTY: The position is that while it may be that these letters are strictly or technically admissible - notwithstanding that one of them is headed "without prejudice" and we would not wish to take a technical point on its admissibility because of that label - nonetheless we would oppose any attempts on the part of the respondent to rely on this documentation and to start to put it forward, the principal reason being this that I am instructed what this documentation shows is certain parts of the negotiations which may have taken place between the parties but it does not show the whole picture. In other words, it shows one side's approach; it does not show the other side's approach.

If one is going to start to embark on this type of exercise as my friend wishes to do, which is to rely on this to the advantage of his client to say how reasonable his client has been and how terrible the appellant has been and how resistant to some sort of settlements they have been, one would get a totally false picture. If one starts to do this one has to have all of the correspondence before you. We do not have it with us. We have not come armed for this particular line of argument.

THE VICE-CHANCELLOR: Which is the appropriate rule - 44?

MR BERKLEY: 44.3 (4)(c), and it is reference to the court should have regard to "admissible offer to settle" which is drawn to the court's attention.

MR CHAISTY: I will not make any further points at this stage. If you say you wish to see this and consider it I would have further submissions to make as regards its relevance.

THE VICE-CHANCELLOR: If you tell us on instructions that it is a partial selection of correspondence then I think we are bound to give you an opportunity to find the rest .....

MR CHAISTY: We would be concerned that we are not going to have finality today if my friend is saying that he wants a further opportunity to do this, and we are very concerned about the way in which this has been pulled out of the hat. We would, with respect, resist any attempt by my friend to start to introduce this.

THE VICE-CHANCELLOR: You say we should not look at it at all - - - - -

MR CHAISTY: Quite.

THE VICE-CHANCELLOR: - - - - - because inadequate notice has been given.

MR CHAISTY: Yes, and it is going to add to the costs to come back and discuss this and it is difficult to know when we might revisit it. That is all I have to add.

THE VICE-CHANCELLOR: What do you want to say to that, Mr Berkley?

MR BERKLEY: The only thing that emerges from this - and I think it can be put no higher than this and I have the admissible evidence to support this point to put it into context - is that Mr Finn has to explain, because this is what the relevance of this offer is, as to why it has been necessary to pursue this matter by way of appeal when, if he wanted access to the Coach House by vehicles, he could have got it by agreement. It may be that the terms were never agreed. It may be that it is not a correspondence that is going to suggest differences. The point is why did he need to come to this appeal when, as I understand it, there is not going to be any dispute that there was an offer made that would have resulted in getting vehicle access to the Coach House.

THE VICE-CHANCELLOR: I do not think you can start telling us what is in the correspondence when we do not have anything.

MR BERKLEY: It is necessary to see the context. The context is that while there may be, and I accept that it is unsatisfactory, but nevertheless looking at it in terms of the only issue that is important which is that the court has to consider if an admissible offer, made without prejudice, and I have before me the documentation of an admissible offer, it is a factor the court can take into account as to why an appeal was pursued when if vehicular access was required to the Coach House vehicular access could have been achieved. My friend may have very good explanations to point to. We consider that this has been a farcical state of affairs, that there has been an appeal in this case when, as I understand it, no commercial purpose can be advanced by Mr Chaisty for the prosecution of this appeal. If he can tell the court why there is a commercial purpose to the prosecution still, no doubt that is a factor that the court can take into account, but there was an offer.

THE VICE-CHANCELLOR: Perhaps it was because a declaration and injunction had been made against him in proceedings your client brought.

MR BERKLEY: Yes.

THE VICE-CHANCELLOR: Is that not a good enough reason? He has a reason therefore (?).

MR BERKLEY: I accept that. In the days of Elgin Data and the days when we looked at the outcome of litigation as being the prominent factor, that would no doubt be determinative of the matter but that in my submission is not necessarily the way the court would look at it under Part 44.

THE VICE-CHANCELLOR: We will have to rule on that. What do you want to say about the interim payment?

MR BERKLEY: Subject to the court determining that the burden of costs falls on the respondents and that you have an indication of there being substantial costs then it is certainly within your Lordships' power to order interim payment. I cannot consent to it, but I have no further representations to make.

THE VICE-CHANCELLOR: You have no argument to address on £75,000.

MR BERKLEY: I would because - - - - -

THE VICE-CHANCELLOR: That is what I was asking you to do.

MR BERKLEY: I would because I have indicated that the portion should be, in my submission, a third.

THE VICE-CHANCELLOR: Assume you are wrong on that.

MR BERKLEY: If this matter goes to detailed assessment the costs judge would have to consider a raft of factors in relation to the liability of the paying party. No schedule (?) of my friend's terms appear. Again, we are in some difficulty because this could have been anticipated by the appellant and a schedule could have been produced so as to show a breakdown or give an estimation of £120,000. To pass that significant liability on to Mr Russell without that sort of material, in my submission, would be unfair. To the extent that it is necessary for the court to make any estimate, that estimate should be as conservative as possible.

THE VICE-CHANCELLOR: Like what?

MR BERKLEY: In my submission, £25,000 would be a more realistic figure.

LADY JUSTICE HALE: Did you not have an interim payment from him of £35,000?

MR BERKLEY: Yes.

LADY JUSTICE HALE: In relation to a first instance appeal?

MR BERKLEY: Yes.

LADY JUSTICE HALE: It has to be more than that.

MR BERKLEY: It is a base line, it is a consideration. As I submit, the costs judge may well have - - that is detailed assessment. A costs judge may well have a lively taxation on his hands judging by the history of this matter.

THE VICE-CHANCELLOR: Do you want to make any other observations?

MR BERKLEY: My Lords, no.

THE VICE-CHANCELLOR: We will retire.

THE VICE-CHANCELLOR: We are not prepared to look at the documents you seek to tender. We think they have been produced too late, and it would not be right to do so at this late stage in this litigation. Mr Chaisty, is there anything further you want to add by way of reply on the other points?

MR CHAISTY: As far as reinstatement is concerned, the three months - we would ask for four weeks. It only took five weeks to complete phase 1; it presumably takes longer to put something in than to take it out, but that is the only thing.

THE VICE-CHANCELLOR: Anything else?

MR CHAISTY: No.

THE VICE-CHANCELLOR: The order we propose to make is a declaration as to the right of way extending from Brook Avenue over the driveway to the Coach House land in accordance with the agreed plan - counsel will know what I am referring to. If it is the agreed view of the parties that that plan is not as precise as it might be then we give liberty to substitute a different plan if the different plan is agreed within 28 days. We make an order for reinstatement in accordance with the declaration we make within 6 weeks of today. We grant an injunction against further interference with the right of way as declared.

The order for costs will be that the Russells pay Mr Finn's costs here and below to be subject to a detailed assessment and not subject to any apportionment. There will be an interim payment in relation to the costs so ordered. I should say before I leave the order for costs that will not include the costs ordered by Judge George on 7 August 2002 but will otherwise include all the costs of the original hearing and this appeal. There will be an interim payment in relation to the costs order of £60,000. We order repayment of the £35,000 costs and the £6,000 damages paid by Mr Finn to the Russells pursuant to the order of Judge George with interest in each case at 8 per cent until repayment. That is all.

MR CHAISTY: Thank you.

MR BERKLEY: I think that you have not fixed a date for the payment of the interim payment of costs.

THE VICE-CHANCELLOR: What is the normal date?

MR BERKLEY: It is usually 14 days.

THE VICE-CHANCELLOR: Repayment within 14 days and payment of the interim payment within 14 days. We come back to your application for permission to appeal.

MR BERKLEY: Yes. I make the application on the basis that your Lordships and your Ladyship failed to consider adequately the fact that the judge, as the finder of fact, was the person best placed to determine the surrounding circumstances and that the reasoned judgment of Lord Justice Dyson, with the utmost respect to him, was wrong in approaching it on the basis that Mr Hoyland's evidence had been accepted or that there was no finding rejecting Mr Hoyland's evidence for reasons that I advanced in the course of my submissions.

THE VICE-CHANCELLOR: We need not call on you, Mr Chaisty. (To Mr Berkley) You can renew your application to their Lordships' House.