Herbert v Doyle & Anor

This is an adjourned application for permission to appeal, with appeal to follow if permission is granted, from the order dated 27 November 2008 of Mr Mark Herbert QC sitting as a deputy judge of the Chancery Division.

The appellant, Mr Herbert, brought these proceedings to obtain an order requiring the respondents, Mr Doyle and Mr Talati, to convey to him three freehold car parking spaces, referred to as “the green parking spaces”. Mr Doyle and Mr Talati disputed Mr Herbert's claim, and counterclaimed on the basis that there had been other arrangements between the parties relating to the same property.

The principal points in issue in this application for permission concern the judge’s conclusion (to which I refer below as “the judge’s constructive trust holding”) that the parties had come to an agreement, made orally, which created a constructive trust over their respective parts of the property. The agreement, which I will call the agreement of April 2003, involved (among other matters) the exchange of parking spaces and the grant by Mr Herbert to Mr Doyle and Mr Talati of extensions to an existing lease to cover two areas known as a compressor house and the staff room extension.

The proceedings became factually, legally and procedurally complex. There were no less than three judgments given by the judge, together with a subsequent hearing (said to be a “mention”) to settle the terms of the order of 27 November 2008 culminating in a further ruling by him on 19 December 2008 (“the December ruling”) which gave rise to subsequent submissions by letter and email to the judge on which he adjudicated on 23 December 2008. Not surprisingly, the judge having refused permission to appeal, this Court has explored avenues for a more cost-effective resolution of the matters in dispute. On 27 October 2009, Mummery LJ adjourned it to enable the parties to see if they could come to some agreement. Unfortunately these hopes were not realised and on the second occasion Mummery LJ adjourned the application to come before the full Court.

In his judgment on 29 October 2009, Mummery LJ recorded in his judgment that the crux of the matter was then limited to only one of the parking spaces, namely a space known as F2, which the judge had determined should be exchanged for a space, known as D1, which the respondents had shown was too narrow :

However, even this dispute has opened up the original basis of the judge’s order in favour of the respondents. Accordingly the legal issue raised by the application now is largely whether the judge’s constructive trust holding was, following the decision of the House of Lords in Cobbe v Yeoman’s Row Management Ltd at [2008] 1 WLR 1752, delivered shortly before his judgment handed down on 4 August 2008 (“judgment (1)”), “Cobbe-compliant”, that is, in accordance with the law of constructive trust as explained in that decision. Mr Doyle and Mr Talati had to show that there was a constructive trust for the purposes of section 2(5) of the Law Reform (Miscellaneous Provisions) Act 1989 (“the 1989 Act”), because otherwise the agreement of April 2003 would have fallen foul of the requirement imposed by section 2(1) of the 1989 Act that dispositions of interest in land be in writing.

Section 2 of the 1989 Act in material part provides:

I shall have more to say about the decision of the House of Lords in Cobbe later in this judgment, but significantly it emphasised that the terms of an oral agreement giving rise to the constructive trust had to achieve a certain level of certainty, or completeness, to fall within section 2(5).

The December ruling principally concerned the terms of the lease for the compressor house and staff room extension, and the question whether a small strip of land (“the strip”) between the surgery and three of the parking spaces previously transferred to the respondents should be retransferred to Mr Herbert if he performed his part under the agreement of April 2003. In the course of this appeal, an application was made to amend the grounds of appeal to raise new grounds about these matters.

The litigation has been extremely costly for these neighbours. The respondents claim that they had incurred costs of £313,418.36 in respect of the costs of the action down to 23 December 2008. Mr Herbert has acted from time to time in person, but informs us that he has incurred costs of some £50,000 (excluding the costs of this appeal). The judge’s costs orders are also the subject of the application for permission to appeal. We have not been given any figure for the value of the property in issue but it seems most unlikely that this expenditure is justified by reference to that value. We have not been given details of how the costs have been incurred, but the factual and legal complexity of the case must regrettably have had a part to play in this. All this could have been saved if a written agreement had been made in the first place or at least if the parties had made their arrangements subject to contract. As I said in Kinane v Mackie-Conteh[2005] WTLR 345, the policy of section 2(1) of the 1989 Act is “to protect the public by preventing parties from being bound by a contract for the disposition of an interest in land unless it has been fully documented in writing.” It needs to be repeated loud and clear that that is the rule which Parliament had laid down in section 2 of the 1989 Act, and that that is a rule admitting of few exceptions under section 2.

I shall need to set out the background in some detail. However, to continue my brief overview of this convoluted litigation, in their defence Mr Doyle and Mr Talati contended that Mr Herbert was entitled to a conveyance of the green parking spaces only if he took certain additional steps. In judgment (1), the judge accepted the contentions of Mr Doyle and Mr Talati and made orders accordingly.

Mr Herbert thereupon, in something of volte-face, indicated that he was not then willing to take the additional steps. Mr Doyle and Mr Talati applied to the judge after he had given judgment (1) for permission to amend their claim to assert that Mr Herbert could not deny that they had acquired proprietary interests in land as a result of the parties’ agreement. On 30 September 2008, the judge gave judgment (“judgment (2)”) permitting this amendment.

Following a further hearing, the judge on 27 November 2008 gave judgment (“judgment (3)”) on the newly-pleaded case in favour of Mr Doyle and Mr Talati. Mr Herbert seeks to appeal to this court from the orders made following this judgment. The issues of law raised by this appeal are not without substance, even though the point that divides the parties falls within a very small compass. I have no doubt that, now that all attempts to compromise the appeal have come to nought, permission to appeal should, save as explained below, be granted in this case. This may well be the first case in which this court has had to consider questions as to Cobbe-compliance.

Mr Herbert owns the freehold of a house and large garden, known as Mansfield House, Ringwood, Hampshire. Mr Doyle and Mr Talati own the freehold of an adjacent property, consisting of a dental surgery, together with nine parking spaces. They also leased part of the ground floor in the main house from Mr Herbert. They carried on their practice as dental practitioners from the freehold and leasehold premises, and they and their clients used the parking spaces. Difficulties have arisen between the parties stemming from the fact that Mr Herbert wished to redevelop the former walled garden of Mansfield House and to build mews houses, but to do so he needed (among other matters) to persuade Mr Doyle and Mr Talati to exchange some of their parking spaces for others on his property (“the red parking spaces”).

Mr Herbert obtained the necessary planning permission to redevelop Mansfield House on 8 November 2000, but the respondents pointed out to him that the proposed development would encroach on their parking spaces. There were then negotiations between the parties. In about 2001, Mr Doyle and Mr Talati came to a separate agreement with Mr Herbert to the effect that he would build a compressor house for use in their dental practice on his property and that Mr Herbert agreed to include this property in their lease. The compressor house was duly built. Mr Herbert had not leased it to Mr Doyle and Mr Talati by the date of the trial, but he accepted that Mr Doyle and Mr Talati had the right to have this included in the lease granted to them.

The judge found that the parties had a number of detailed email communications in February 2003. However, contrary to Mr Herbert’s pleaded case, the parties did not then reach an agreement. We are not concerned with the detail of those negotiations since nothing now turns on that detail, but it may be noted that Mr Doyle and Mr Talati contended that those negotiations were all subject to contract.

Matters were brought to a head between the parties shortly thereafter on 14 April 2003 when Mr Herbert started to lay out areas for the building of the mews houses. The parties met hurriedly and made an oral agreement containing nine conditions. The judge specifically found that this agreement was intended to be immediately binding. The critical findings of the judge in judgment (1) were as follows:

Thus the judge rejected the pleaded case of Mr Doyle and Mr Talati that all negotiations were subject to contract and that section 2 of the 1989 Act had not been complied with. He found in effect that Mr Doyle and Mr Talati had given an assurance that they would, for example, not withdraw their agreement to the terms agreed between the parties on 14 April 2003.

The arrangements between the parties were not static after this date. The judge found that in September 2003 the parties agreed after negotiation that Mr Doyle and Mr Talati would not take a lease of the whole of the ground floor flat but rather would take a lease of only one room plus the new extension to Mansfield House which was to link the main building and the surgery and which was known as the staff room extension. The price was £15,000 to include £3,000 for building works which Mr Herbert would do to create the extension.

There was a further variation to the agreement between the parties in November 2003. Mr Doyle imposed, and Mr Herbert accepted, a new term that the dentists would not transfer the green parking spaces until the work to the staff room extension was completed. No question has therefore arisen as to whether, subject to section 2 of the 1989 Act, the agreement of April 2003 was enforceable having regard to the nature of such works. Both sides attempted to secure other variations after this date, but the judge found that these came to nothing.

The judge went on to hold that the agreement between the parties was never in such simple terms as Mr Herbert had alleged in his claim. It was never simply a straight exchange of three red parking spaces for three green ones. He held that if, however, Mr Herbert were willing and able to satisfy the other terms which had been agreed, it would be unconscionable for Mr Doyle and Mr Talati to resile from their agreement by refusing to transfer the green parking spaces to him. The other side of the coin in the judge's judgment was that, if Mr Herbert was not willing and able to satisfy those terms, then it would not be unconscionable for the respondents to retain the green parking spaces unless and until those other terms were satisfied.

The House of Lords handed down their judgments in Cobbe on 30 July 2008between the circulation by the judge of his proposed judgment on 29 July 2008, and the handing down of that judgment on 4 August 2008. Miss Tipples provided the court with a copy of Cobbe and made some submissions on it when she submitted her list of typographical corrections. No further submissions were directed or filed. The judge distinguished Cobbe in the following terms holding in effect that it was not Mr Herbert’s case that the parties had expected their agreement to be committed to writing:

As to the counterclaim, the judge made a finding that, while 3, Mansfield Mews, one of the newly-built mews houses, did not itself encroach on any of the respondents’ parking spaces, one of the parking spaces allocated to that property did encroach on D3 (a parking space belonging to Mr Doyle and Mr Talati) by about 0.5 m along the length of that space. The judge made an order that Mr Herbert pay damages of £5,145 for encroachment by (inter alia) this parking space and in lieu of a mandatory injunction for removal of the encroachment.

On the delivery of judgment, Mr Herbert made it known that he would not be exercising the right which the judge found that he had to obtain a transfer of the green parking spaces on complying with all the other terms of the agreement of April 2003. Mr Doyle and Mr Talati in response indicated that they wished to consider making an application to amend their proceedings. The judge adjourned the case and reserved the costs. As at that point in time, Mr Herbert was unable to sell the mews house the parking space for which had encroached on to one of the respondents’ parking spaces.

On 30 September 2008, Mr Doyle and Mr Talati sought and obtained permission of the judge given in judgment (2), to amend their defence and counterclaim to plead that if they transferred the green parking spaces and paid the sum of £15,000 to Mr Herbert, he would be bound on payment of the sum of £15,000 (1) to transfer to them the red parking spaces and one further freehold parking space (either that referred to in this litigation as F2 or another parking space to be a specified with minimum dimensions) in lieu of a substandard parking space (called “D1” in these proceedings) previously allocated to them by Mr Herbert; (2) to grant a lease to them of a further part of Mansfield House known as the staff room extension, and (3) to grant a lease of the compressor house.

As to costs, the judge made an order that there be no order as to costs save that he ordered that Mr Doyle and Mr Talati should pay the costs of and occasioned by their application to amend. There was no application at that time for permission to appeal from this order.

There was then a trial of the respondents’ claim raised by amendment. The judge gave judgment (3) on this issue. In the course of his judgment he considered with great care the question whether the arrangements between the parties gave rise to a constructive trust, and he concluded that they did. He held:

The judge then turned to the compressor house. The judge found that all the terms for the lease of the compressor house had been agreed. The terms were to be identical to those of the main ground floor premises. He therefore found that the respondents were entitled to the lease by way of constructive trust. Turning to the staff room extension and the parking spaces, the judge likewise found a constructive trust with regard to that extension. He noted a submission that the terms in the existing lease or contributions to maintenance costs would not work. However, he held that there was no concluded agreement to vary these terms and that accordingly it was not possible for the court to rewrite the existing lease to accommodate this point.

Finally the judge turned to the exchange of parking spaces. He held that in principle the criteria for a constructive trust were made out. The only point of difficulty was the whereabouts of the ninth parking space. He found that D1 was inadequate and that the agreement was the nine full-sized spaces, not including D1. If that space was excluded there were five other full-sized spaces in existence. The respondents were content with F2 or another space elsewhere in the car park. Mr Herbert in his evidence had admitted there would be no problem in transferring space F2. The judge rejected the objection that to do so would involve a breach of planning obligations, or that space had already been leased to the tenants at Mansfield House. The judge continued as follows:

The judge’s order of 27 November 2008 therefore contains not only the right of election to which Mr Herbert was entitled under judgment (1) but also a declaration that, conditionally on the transfer to him by the respondents of the green parking spaces and the payment by them of £15,000, Mr Herbert held on constructive trust:

A 999 year lease of the staff room extension in terms of a draft annexed to the order;

The freehold of the red parking spaces (called D7, D8 and D9);

The freehold of parking space F2.

The order further provided that (1) Mr Herbert could substitute all or any of the parking spaces with any other parking space which was reasonably accessible; and (2) the respondents should transfer (a) a small area of land the subject of the encroachment found by the judge, and (b) the freehold of the land on which the parking space for Mansfield Mews would encroach.

After the delivery of judgment (3) there were submissions as to costs, and the judge gave a ruling. So far as material, he rejected Mr Herbert’s submission that he should pay only 75% of the costs. The judge held that the respondents had won on essentially all the issues and that accordingly (in effect) Mr Herbert should pay all the respondents’ costs (other than those the subject of the order on 4 August 2008 and those specifically relating to a point which the respondents had taken, but abandoned in March 2007) of the action and the counterclaim. The judge rejected the respondents’ application for indemnity costs. The judge ordered an interim payment of £125,000, to be paid within 14 days.

On 19 December 2008, the parties returned to the judge for a further hearing on the form of the order. We do not have transcript of that hearing. However, it was followed by an exchange of correspondence between the parties and the judge, which we have seen. In that correspondence Miss Tipples argued that in calculating the parking spaces to be transferred to Mr Herbert no account should be taken of the strip, which was below the level of the parking spaces and which was currently used by them for the storage. The judge received submissions from Mr Herbert, who also raised three minor conveyancing matters on the terms of the leases. In an email dated 23 December 2008, the judge ruled in favour of the respondents.

There are numerous grounds of appeal. This application can conveniently be dealt with under three headings: (A) Application for permission to appeal against judgment (2) on permission to amend; (B) Application for permission to appeal against judgment (1) and (3) principally on the grounds of Cobbe-compliance; and (C) Application for permission to appeal against the judgment (3) on costs.

I can deal with this briefly. If this discloses a good ground of appeal, it disposes of ground (B) above also.

However, the judge’s decision to permit the amendment after judgment was a case management decision, in which an appellate court would in any event be most reluctant to interfere unless it was plainly wrong.

Mr Timothy Becker, for Mr Herbert, submits that the judge made no error in stating the legal principles but used his discretion improperly. He allowed an amendment as a “panacea” for the problem that had arisen as a result of Mr Herbert’s volte-face. Put another way, the judge should not have permitted an amendment because an earlier judgment has caused the parties to reappraise their position. It was, on Mr Becker’s submission, the respondents who had committed a volte-face. But, as Jackson LJ pointed out in the hearing, this does not amount to an error of law. I would add that whether it is one or two volte-faces does make it clearly wrong to refuse the amendment. The proceedings were not concluded when the judge gave judgment on 4 August 2008, and until proceedings are concluded by the sealing of an order Mr Herbert could not set up an estoppel based on a prior order of the court.

There is also the important additional factor that Mr Herbert did not formulate any notice or ground of appeal against this decision until after judgment (3). By that time, there had been a trial of the issue for which permission to amend had been given, and time for appealing (subject to any extension granted by the court) had expired.

In all the circumstances, there is no prospect of success on appeal on ground (A), and the application for permission to appeal against the judge’s permission to amend and the application to extend time for this purpose must be refused.

It further follows there is no prospect of success of an appeal against the judge’s costs orders following judgment (2).

Mr Becker accepts that the elements of a constructive trust are those explained by Lord Bridge of Harwich said in Lloyds Bank Plc. v. Rosset [1991] 1 AC 107, 132:

It is common ground that if, as the judge held, there is a constructive trust in this case, it is not a “joint venture” case where parties agree that one of them should acquire property for their joint benefit, as, for example, in Pallant v Morgan[1953] Ch 43.

The overarching submission of Mr Becker, while not challenging the judge’s findings of fact, is that there were no sufficient facts to make the agreement as found by him Cobbe-compliant so as to fall within section 2(5) of the 1989 Act. On his submission, there needed to be clarity as to how under the parties arrangements the interests in property were conferred.

I therefore next consider what Cobbe decided. In Cobbe, Mr Cobbe, a property developer, wished to develop land owned by Yeoman’s Row Management Ltd (“YRML”) of which Mrs Lisle-Mainwaring was the sole director. The problem was stated in the first paragraph of the speech of Lord Scott, with whom the majority of the House agreed:

Lord Scott first considered the requirements for proprietary estoppel. Lord Scott held that:

He also held that section 2(5) of the 1989 Act did not apply to proprietary estoppel ([29]). Lord Scott then turned to constructive trust. After considering in some detail the cases which had considered constructive trust in the context of a joint venture, Lord Scott concluded:

Lord Scott then turned to personal remedies, with which we are not concerned.

Lord Walker, with whom (together with Lord Scott) Lord Brown agreed, gave the only other judgment with reasons. He too agreed that the appeal should be allowed but he would have done so on the basis of proprietary estoppel alone, and he did not consider constructive trust. He took the view that Mr Cobbe could not obtain any further assistance from the doctrine of constructive trust. By this, I understand Lord Walker to be saying that the principle which he found determinative against Mr Cobbe with respect to proprietary estoppel would likewise have prevented him from relying on the doctrine of constructive trust.

It is accordingly instructive to consider what Lord Walker said about proprietary estoppel. He noted at [68] that:

He found that the parties in Cobbe well knew that neither party knew that they were legally bound by their agreement:

He examined a number of leading cases and continued:

Lord Walker noted that Mr Cobbe was expecting to get a contract ([87]). He considered that the matters remaining to be agreed between the parties were not trivial. He concluded:

It was not unconscionable for Mrs Lisle-Mainwaring to insist on her legal rights ([92]).

Until recently little distinction has been drawn between constructive trust and proprietary estoppel. In Yaxley v Gotts [2000] Ch 162 at 176, Robert Walker LJ, with whom Clarke LJ agreed, held that:

However, as the judge noted, more recently Lord Walker has drawn attention to need to keep the two doctrines separate. In Stack v. Dowden[2007] 2 AC 432, he held:

The distinction between proprietary estoppel and constructive trust must therefore be kept in mind, but it appears from Cobbe that, in some situations at least, both doctrines have a requirement for completeness of agreement with respect to an interest in property. Certainty as to that interest in those situations is a common component. A relevant situation would be where the transaction is commercial in nature. In my judgment, the transaction in the present case should be treated as commercial in nature since the parties were dealing at arm's length, and they had ready access to the services of lawyers had they wished to use them.

In my judgment, there is a common thread running through the speeches of Lord Scott and Lord Walker. Applying what Lord Walker said in relation to proprietary estoppel also to constructive trust, that common thread is that, if the parties intend to make a formal agreement setting out the terms on which one or more of the parties is to acquire an interest in property, or, if further terms for that acquisition remain to be agreed between them so that the interest in property is not clearly identified, or if the parties did not expect their agreement to be immediately binding, neither party can rely on constructive trust as a means of enforcing their original agreement. In other words, at least in those situations, if their agreement (which does not comply with section 2(1)) is incomplete, they cannot utilise the doctrine of proprietary estoppel or the doctrine of constructive trust to make their agreement binding on the other party by virtue of section 2(5) of the 1989 Act.

This interpretation of Cobbe is consistent with the observations of Lord Neuberger in Thorner v Major [2009] UKHL 18, which was decided after judgment (3). In that case, Lord Neuberger observed:

The relevant issues in this case are whether there was only an agreement to enter into a further formal agreement or whether there were matters remaining to be agreed which meant that the interests in property to be acquired were not defined with sufficient clarity or whether the parties did not expect their agreement to be legally binding. There is no need to consider in this case whether any outstanding matter was only of a trivial nature as we are not concerned with any such matter.

Mr Becker submits that the agreement of April 2003 did not have sufficient certainty to amount to a constructive trust and that in effect there were matters outstanding to be agreed. The parties were acting at their own risk, and had sufficient experience to know that they were acting at their own risk. Their agreement was incomplete and subject to contract. He submits that there was no relevant shared use of property in this case as all the aspects in issue were property owned by Mr Herbert.

Mr Becker expanded his submissions and applied for permission to appeal in respect of the December ruling on the basis that the respondents in drafting the order of 27 November 2008 “had failed to correctly draft the terms relating to the proposed lease relating to the staff room extension and the compressor house”. He did not give further detail until his reply. As to this, while he accepts that the agreement between the parties as to the compressor house was sufficiently clear to be an interest in land, he submits that much more working out was required for the staff room extension and that there was no lease ready to be executed; the judge erred in approving the terms proposed by the respondents as to contribution and with no right of way. In other words, the order which the judge approved in his December ruling failed correctly to set out the terms of the lease as respects the compressor house and staff room extension. Mr Becker submits that the leases annexed to the order did not carry out the judge’s intention that they should track the terms of the existing leases. Mr Becker sought to refer in support of his submissions to the expert evidence of Mr Nigel Taylor, a solicitor, which was not before the judge below. No application as such was made to adduce this statement on appeal. It is difficult to see why the points taken in this evidence were not available to be taken in the submissions made to the judge in December 2008. We were not taken to the terms of the proposed leases to demonstrate that the judge had failed properly to resolve points raised with him on their terms. There is accordingly nothing to suggest that the judge was not entitled to make the order that he did. I would accordingly refuse the present application for permission to appeal in respect of drafting points.

Mr Becker further submits (in the additional grounds of appeal referred to briefly in his skeleton argument but only produced in the course of the hearing) with respect to the strip that the judge should have ordered that Mr Doyle and Mr Talati transfer the strip to Mr Herbert if he exercised his right under the order to substitute another parking space for the spaces abutting the strip.

I consider that this additional point discloses no real prospect of success on appeal. In his December ruling the judge was not writing new terms that the parties had not agreed into the agreement of April 2003 but was merely working out what the parties had agreed as to the grant of extensions to the existing lease. The fact that the strip had been transferred to Mr Doyle and Mr Talati by Mr Herbert originally does not mean that it was agreed that it should be handed back under the terms of the order to implement the parties’ rights in respect of their subsequent dealings. We were not shown any legal basis on which the judge should not have made this order. There is moreover no current exercise of the right of substitution (the right expired on 27 May 2009 and no application has been made for an extension of this time limit). I would refuse permission to appeal in respect of this point.

I now return to the main argument that the judge’s constructive trust holding was not Cobbe-compliant. Miss Amanda Tipples, for the respondents, submits that the arrangements found by the judge were intended to be immediately binding and were for the sharing of the use and ownership of the property between them. She relies on Yaxley v Gotts where there was a complete agreement between the parties that if Mr Yaxley performed work on the property, he would have a lease of the ground floor flat. This court found that there was a constructive trust. By contrast, in Cobbe, the parties had only reached an agreement in principle and there was no sufficient certainty as to the terms on which the developer was to be rewarded. She also relies on Kinnane v Mackie-Conteh [2005] EWCA Civ 45, which is also a case where an agreement which did not comply with section 2(1) of the 1989 Act was nonetheless found to satisfy the requirements of section 2(5). Neuberger LJ (as he then was) also held at [51]:

Miss Tipples submits that the present case is distinguishable from Cobbe as the agreement of April 2003 was a complete agreement and not an agreement in principle. The agreement was not subject to contract, and indeed Mr Herbert had himself sought to sue on it. The judge found that the respondents were to be entitled to a lease of the compressor house on the same terms as the existing lease, and thus that the relevant interest in property was identifiable. So also in relation to the staff room extension the judge found that the respondents were again entitled to occupy it on the same terms as the existing lease so that there was no uncertainty there. Accordingly, the interests in land in the present case were ascertainable.

I now turn to my conclusions taking first the question whether the agreement of April 2003 satisfied the requirements for a constructive trust as explained in Cobbe, that is, whether the agreement of April 2003 was caught by any of the elements of what I have called above “the common thread” in that case.

The dispute is limited to the staff room extension, the compressor house, parking space F2 and the strip. There is also no doubt, on the findings made by the judge, that the respondents relied to their detriment on Mr Herbert’s assurance since the effect of their acceptance of his assurance was that Mr Herbert proceeded to build Mansfield Mews with an allocated parking space partly on one of their parking spaces. Likewise, on the judge's findings the agreement of April 2003 was not subject to contract. This is on the face of it a surprising conclusion because the parties had previously anticipated a formal agreement to be drawn up by their solicitors, and I shall need to say more about this point below.

In my judgment, there is no doubt as to the identification of the extent of the respondents’ interest in the staff room extension or the compressor house. The judge resolved various issues about the terms of the lease adversely to Mr Herbert, and it has not been shown that the terms approved by the order did not in fact conform to the terms of the lease which was already in existence.

The strongest points advanced on behalf of Mr Herbert's case are, as I see it, as follows: (1) that the parties had not agreed precisely which parking spaces would be exchanged and it was therefore not open to the judge to fill the gap by selecting F2, even though the election allowed Mr Herbert to substitute some other space; and (2) that the agreement of April 2003 was not fixed: it was subsequently varied by agreement; and (3) that there was no agreement about the strip or the detailed terms of the lease which gave rise to dispute in December 2008. I will take these points in turn.

As to the ninth parking space, while the parties’ agreement is silent on the point, it would appear by implication that the ninth parking space was to be identified by Mr Herbert. He failed to do this and the judge took the view that the court was entitled to identify that place. He did so in terms that would allow Mr Herbert the option of substituting another parking space of proper dimensions. The judge does not, however, identify in paragraph 48 of judgment (3) or elsewhere the basis on which he considered that the court had jurisdiction to make the selection which Mr Herbert had failed to make. In my judgment, there was a leap in the judge's reasoning at this point. This court must therefore be satisfied that his conclusion was correct in law.

My analysis of the legal situation is as follows. The relevant question is whether, subject to section 2 of the 1989 Act, there was a valid contract. In my judgment, the failure of Mr Herbert to make a selection of the ninth parking space did not in the circumstances of this case mean that there was no valid contract in this sense. The parties agreed by implication that Mr Herbert would choose which parking space would be transferred to the respondents as the ninth parking space, but that was not the limit of the implication to be made. By necessary implication also, the choice had to be made in a reasonable time.

If Mr Herbert failed to make the choice, the question arises whether there is by necessary implication a further term that the ninth parking space is such space as the court shall determine to be that intended by the parties to be selected in order to make their agreement fully effective. (I need not consider whether the respondents were entitled to take any steps themselves in this regard as they have not asserted any such right). In my judgment, that question must be answered affirmatively. There is nothing to suggest that the agreement of April 2003 should only take effect if Mr Herbert took the step of identifying the ninth space. That would have given him a unilateral right of veto. The agreement of April 2003 would have been unworkable in practice if the court could not step in to make the limited choice between the remaining parking spaces so as to identify the ninth space.

As to the fact that the parties continued to negotiate after April 2003 and subsequently agreed variations, and have subsequently disagreed about what the judge has found they did agree, these matters do not of themselves undermine the judge’s finding of a complete agreement as at April 2003. The question is whether the respective property interests of the parties were sufficiently certain at the time that they were agreed and remained sufficiently certain notwithstanding the parties’ further dealings together. This was primarily a question of fact, and in my judgment in the light of the judge’s findings of fact Mr Herbert is not able to show that the agreement even as varied lacked the necessary element of certainty. The variations did not make the agreement uncertain but simply altered its content for the purposes of its future operation.

I reject Mr Becker’s submissions that there was no sufficient agreement for the shared use of property. Each party to the agreement obtained an interest in property as a result of it. There is no requirement for their interest to be a joint interest or an interest intended to be enjoyed jointly. Moreover, on the judge’s findings of fact referred to above, there is no doubt but that the parties’ agreement was not subject to contract.

As to the strip, the judge excluded this from Mr Herbert’s right of election to substitute parking spaces: in my judgment, this does not throw any doubt on the identifiability of the subject matter of the parties’ agreement since it did not form part of the parking spaces and on the judge’s findings there was no agreement between the parties that the position (whatever it was) in relation to the current use and ownership of the strip was to change. It does not therefore matter for the purposes of section 2(5) that Mr Herbert contends that he should have a right of way over the strip and that that dispute is outstanding.

Miss Tipples submits that the position in Yaxley was similar to the present case. In that case, the court did not conclude that there was no constructive trust because the terms of the arrangement involved the grant of the lease which had not been drafted and agreed at the time of the oral agreement giving rise to the constructive trust. The difficulty about that submission, however, is that it appears that no-one took any point in this court on the judge’s decision that the grant of a 99 year lease was appropriate in that case. Yaxley is in any event, however, distinguishable from the present case because here the judge found that the parties agreed the terms for the leases of the compressor house and staff room extension by reference to the terms of the existing lease. In Yaxley there was a completely new lease, which may well make it more difficult to establish that there was sufficient clarity as to the interest to be acquired.

In his skeleton argument, Mr Becker submitted that the works to the internal aspect of the staff room extension and the installation of electric gates were not sufficiently certain to give rise to a constructive trust. However, these matters were not pursued on the hearing of this application. Likewise objection was taken in the grounds of appeal to the admission at trial of hearsay evidence but that ground was also not pursued. Mr Becker also submits that no detriment to the respondents was shown, as they had sought and obtained a rolled-up award of damages for the encroachment and in lieu of an injunction. However, the answer to that point is that the respondents suffered detriment by the encroachment found by the judge, and they subsequently elected to abandon their right to the award of damages. None of the judge’s orders as drawn contains any order for the payment of those damages. I would refuse permission on all the grounds referred to in this paragraph.

Mr Becker further submits that the judge was influenced by what he considered to be unconscionable conduct on the part of Mr Herbert. In my judgment, this is not borne out by an examination of the judge’s judgment. The judge was most careful to apply the reasoning in Cobbe. I would refuse permission to appeal on this ground.

Finally, Mr Becker submits in his skeleton argument that the judge’s finding that the agreement of 14 April 2003 was not subject to contract and not binding in honour only was against the weight of the evidence. He refers to the long history of the matter, and previous communications between them, in which the parties recognised that there would have to be an agreement between them drawn up by solicitors. Mr Doyle and Mr Talati had experience in property transactions and Mr Doyle at least knew about the requirements of section 2 of the 1989 Act. Mr Becker submits that against this background it is inconceivable that the agreement of April 2003 should be immediately binding. Moreover, he submits that the fact that the parties varied the agreement suggests that the agreement of April 2003 was not binding. The position taken by the respondents in their defence was originally there was no binding agreement. As I have said, the judge’s finding is at first sight surprising. All Mr Becker’s points were, however, before the judge and there is nothing to suggest that the judge’s findings of fact about the agreement 14 April 2003 were clearly wrong. Accordingly, while I would grant permission in respect of these matters, I would dismiss the appeal.

In his skeleton argument for this appeal Mr Becker also sought to rely on certain letters from the respondents which he submitted showed that the parties knew that their agreement was incomplete. However, those letters were not before the judge, and, as there was no sufficient explanation for their not having been produced at trial and for them to be admitted now, it is too late for them to be produced on this appeal, even if (which there was not) an application had been made for them to be so adduced.

Accordingly, I would, in so far as I would give permission to appeal, dismiss the appeal on ground (B).

Mr Becker submits that the judge should have awarded the costs of the November hearing to Mr Herbert. The judge on his submission failed to consider the possibility of an issues-based order to reflect Mr Herbert’s success.

This submission again has no prospect of success on appeal. It is quite clear that the judge considered the measure of Mr Herbert’s success and considered that there was none meriting an award of costs save in relation to a point that the respondents had abandoned in March and the costs of, or occasioned by, the amendment in September 2008.

For the reasons given above, I would, save as indicated above, refuse the applications for permission to appeal, to amend the grounds of appeal and for an extension of time. I would also dismiss the appeal on the grounds for which I would give permission and direct a minute of order to be agreed by counsel.

I agree with both judgments.

I agree with the judgment given by Lady Justice Arden and with her conclusions on each of the points which have been argued in this case. As she correctly states, these proceedings were factually, legally and procedurally complex. Lady Justice Arden has now unravelled the many tangled strands in a way which I have found completely persuasive. I do not wish to add to her judgment save in relation to one point which might be thought to involve a question of general principle. The point I wish to deal with is whether the agreement made between the parties in relation to the location of the 9 parking spaces satisfied whatever is the relevant test for certainty, or completeness of agreement, for the purposes of the law of constructive trusts.

The agreement made between the parties in relation to the parking spaces (originally 10 but later reduced to 9 by agreement) was the subject of the judge’s finding at [52] (a)(iv) of judgment (1), set out by My Lady at [17] of her judgment. In order to consider whether that agreement satisfied the relevant test as to certainty or as to completeness, it is helpful to start by considering whether, if that agreement had complied with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 so that it could potentially be contractually binding, it would have satisfied the test as to certainty in the law of contract. Lady Justice Arden has carried out this exercise at [70] – [72] of her judgment. I agree with her reasoning that:

the ninth parking space was to be identified by Mr Herbert;

Mr Herbert’s choice had to be made within a reasonable time;

if Mr Herbert failed to make the necessary choice within a reasonable time, then the court had power to select the ninth parking space;

in exercising its power, the court would apply the objective criteria which the parties had agreed, namely, that the nine spaces should be “reasonably accessible parking spaces on the site, so far as possible adjacent to Mansfield House”.

In my judgment, an agreement which complied with section 2 of the 1989 Act, which contained the express terms found by the judge in this case and which contained the implied terms identified by Lady Justice Arden would satisfy the test as to certainty in the law of contract.

The question as to what the law of constructive trusts requires as to certainty of terms, or completeness of agreement, was considered by Lord Scott in Cobbe v Yeoman’s Row Management Ltd[2008] 1 WLR 1752 at [18] – [28]. Lord Scott referred on a number of occasions to “a certain interest in land” and he also referred to the need to have “clarity as to the interest in the property in question” (for the latter reference, see [28]). At [23], when discussing the case of Laird v Birkenhead Railway Co (1859) Johns 500, he referred to the possibility that the court could fill in some gaps in the expression of the parties’ agreement. He contrasted that case with the case of Cobbe where the agreement was inchoate only and so could not be made complete by implication or by the filling in of gaps.

In Thorner v Major[2009] 1 WLR 776 at [93] – [94] Lord Neuberger of Abbotsbury explained why the question of certainty was so important in Cobbe. The difficulty in Cobbe as there explained was that the degree of consensus between the parties did not even amount to an agreement to agree.

Having considered the way in which the requirement for certainty or completeness is described in Cobbe and Thorner v Major, I find that there is nothing there which suggests that the test for certainty or completeness is more strict than is the test for certainty in the law of contract. It is not necessary in this case to consider the possibility that the test in the law of constructive trusts might be less strict than in the law of contract. On the facts of the present case, given that the agreement in the present case meets the test as to certainty and completeness in the law of contract, it follows in my judgment that it also meets the test as to certainty and completeness in the law as to constructive trusts.