Donington Park Leisure Ltd v Wheatcroft & Son Ltd

This is an application made by Donington Park Leisure Limited ("DPL") under a permission to apply contained in a Tomlin Order dated 26th April 2005 made by Laddie J ("the Tomlin Order"). The Tomlin Order compromised a claim commenced by DPL against Wheatcroft & Son Limited ("WSL") in December 2004 for declaratory and other relief in respect of an oral agreement made between DPL and WSL on 1st December 2003 ("the Agreement"). The material terms and intended effect of the Tomlin Order are set out later in this judgment. The application is for directions pursuant to an order made by the Master on 15th December 2005, such directions to include (a) what documentation is necessary to record and give effect to the Agreement as given effect to in the Tomlin Order and (b) what rights and obligations should be included in such documentation. It is, to say the least, an unusual application.

By a lease made 20th May 1997 ("the Lease") WSL granted to DPL a term of 25 years from 1st January 1997 of the Donington Park motor racing circuit ("the Circuit"). The Circuit forms part of a larger area of land, known as the Donington Park Estate ("the Estate"), of which WSL is the freehold owner.

WSL is a private family company which was formed by Mr. F.B. Wheatcroft ("Tom Wheatcroft") in 1953 to carry on his construction and property development business. Mr. Kevin Wheatcroft ("Kevin Wheatcroft"), Tom's son, is the only other director in addition to Tom Wheatcroft of WSL and is its company secretary.

In 1999, Tom Wheatcroft formed another company, Donington Park Estates Limited ("DPE"), to act as a consultant to him and WSL for the purpose of promoting his and its interests in the Estate. DPE benefits under the Agreement. The directors of this company include, among others, Tom and Kevin Wheatcroft, Mr. Geoffrey Hunter and Sir Rodney Walker. Sir Rodney, Mr. Hunter and Kevin Wheatcroft attended the meeting on 1st December 2003 at which the Agreement was made. The other people there were Mr. David Rogers, Mr. Terry Carnes and Mr. Robert Fearnall, who all attended for DPL. There were no lawyers present.

WSL retains possession of a substantial area of land within the Estate which surrounds the Circuit, including, to the west of the Circuit, a part-tarmacadamed area known as the Sunday Market Site ("SMS") and, to the south, a motor racing museum which houses Tom Wheatcroft's extensive and valuable collection of vintage racing cars.

Although referred to as the SMS and used for a market on most Sundays of the year, a substantial part of the SMS is itself a racetrack with a high grade surface comparable to that of the racetrack within the Circuit, a fact which was much emphasised in evidence in order to explain WSL's reluctance to allow heavy equipment and heavy vehicles as well as other paraphernalia on the SMS. A section of the Circuit, known as the Melbourne Loop, was part of the Circuit before World War II. This is from time to time hired out for purposes other than that of a Sunday market on Sundays, for example, to the

The majority of racing at the Circuit involves motor cycles rather than cars. It is currently the home of the British Motor Cycle Grand Prix ("the Moto GP"), which is held on a Sunday in July each year and which race is the focal point of an annual three day race metting.

In a good year, and most are, it seems, good, crowd numbers for the Moto GP can reach well in excess of 65,000, a high proportion arriving at the Circuit in cars and on motorcycles. At meetings as large as this, emergency services obviously have to be present and to be able to reach points where they are needed without obstruction. Pedestrians and traffic have to be carefully and efficiently organised. Pedestrians should, so far as possible, be kept separate from traffic. A traffic management scheme has to be agreed with the authorities well in advance of the event. The more vehicular and separate pedestrian accesses the easier it is to manage the whole operation. These things are obvious.

Fig. 1 below reproduces a section of a plan adduced in evidence of the Circuit including the SMS, with arrows pointing to the positions of vehicular and pedestrian accesses. It shows the position of the paddocks within the Circuit and other features mentioned below.

Fig. 2 below has been reproduced from a 1995 race programme adduced in evidence and is likewise useful as a visual and factual aid. It corroborates evidence that certain of the gates have been advertised as available means of access to and from the Circuit for pedestrians. Gate 1 (Redgate Lodge) and Gate 2 are not advertised for access, doubtless because these let on to paddocks from which the public is sensibly excluded. The vehicular accesses are not depicted on this plan. However, the positions of these are sufficiently clear if one follows the arrows in fig. 1. It is pertinent that both of these let on to public roads, in the case of gate 6 (the Melbourne Lane entrance), from the main highway, and in the case of gate 7 (the Paddock entrance), indirectly from the main highway via an adopted access road.

Since the grant of the Lease, WSL has periodically granted permission to DPL, on an ad hoc basis, to use the SMS as an additional parking area in connection with the Moto GP and other racing events. In 2004, DPL used a significant part of the SMS as a paddock, ostensibly with permission for use by BMW, although WSL has disputed this, contending that the permission was exceeded. WSL is adamant that paddock use is impermissible, a position which is well supported by evidence that paddock structures such as marquees and support vehicles can seriously damage the hard standing.

It is probably an understatement to say that DPL and WSL have little affection for one another. The reasons, justified or unjustified, illusory or real, are, fortunately, unimportant. There is no need, therefore, to descend into the detail of them for the purposes of this judgment. What is important is that DPL and WSL fell out over the settling of the terms of the Agreement and that the upshot has been two sets of court proceedings and the present application.

The schedule to the Tomlin Order, so far as material, provided (with my substitutions of the abbreviations adopted in this judgment for the references to 'claimant' and 'defendant', and otherwise as convenient) as follows:

The 2003 proceedings are irrelevant for present purposes. I have redacted from paragraph 2 an interim provision which the parties agreed for DPL's use of the SMS solely for 2005 because nothing turns on this. The date set by paragraph 6 for performance of its provisions was not, as will be obvious, met.

The only paragraph of the particulars of claim which is relevant for present purposes, all other items having, as I understand the position, been either agreed or substantially agreed, is paragraph 30. This (again with my substitutions, as convenient) pleads:

It is pertinent to point out that the plan referred to in this paragraph was a 'not-to-scale' plan obviously produced from a blown up section of a photocopy of another plan, probably an ordnance survey plan. The copy of this in evidence did not show the SMS tinted blue, which correspondence in evidence showed to have been a mistake. Annex 5 showed the SMS edged blue. The blue edging described a boundary enclosing the SMS. It had been rather roughly delineated using a black felt tip pen over or under drawn with a blue felt tip pen. There were no breaks in the depicted boundary at all. All entrances were enclosed within the boundary line. Plainly, therefore, it was a plan for the purposes of identification in the most general sense only, utterly useless to depict the SMS for the purposes of construction.

However, although it appeared that WSL's solicitors might have placed some reliance on this plan at an early stage in the dispute surrounding the Agreement, as indicating that the SMS licence when drawn up should not include pedestrian access to the Circuit, this idea was rightly not pursued before me. A plan upon which WSL's solicitors had, however, relied was a plan disclosed by DPL during the course of the compromised proceedings. This was a project plan produced by surveyors in March 2005, which clearly showed gates 2 to 5 letting on to what one of WSL's witnesses, a solicitor, described as a ransom strip, in WSL's ownership. It is probable, in my judgment, that the sight of this triggered WSL to dig its heels in concerning pedestrian access following the making of the Tomlin Order, an opportunity which had presented itself as a result of an exchange of correspondence with DPL's solicitors just before the making of that order. DPL's solicitors had sought and obtained confirmation that DPL would have unrestricted rights of access to the SMS from the Melbourne Lane and Paddock entrances, and this, although the enquiry had obviously been confined to vehicular access from the public highway, enabled WSL to posit that DPL did not have any other rights of access. In my judgment, this is likely to have been tactical, to give WSL greater leverage in the negotiations over the documentation needed to carry the Agreement into effect. I am at a loss to see how the correspondence assists the court in the present exercise. Nothing turns on it.

By contrast, the plan corroborates the evidence of almost all of the witnesses, and, if their evidence were not enough, a number of photographs in evidence, which establish that gates have been present and obvious in the perimeter fence, where it is more or less contiguous with the Circuit, for as long as anyone can remember.

I shall not embark on a detailed examination of the oral evidence. The factual matrix is mainly to be derived from the physical evidence viewed through the documents adduced in evidence. The oral evidence, although to an extent helpful in explaining how the events held at the Circuit have been organised over many years and in illustrating the obvious difficulties which would follow should DPL have only limited rights of access, has in large part been directed to ascertaining whether the parties had common positions at the date of the Agreement. This is inadmissible in the task the court is asked to perform. At all events, I have not gleaned much from the oral evidence about the circumstances surrounding the making of the Agreement which has added to the sum of the relevant knowledge obtainable from the materials to which I have already alluded. As for the sparseness of the Agreement, in my judgment, what the parties wrote down was the most they could agree, which was not obvious and could be left unsaid on that account, at that meeting on 1st December 2003. The obvious included the physical attributes of the SMS. These did not need to be discussed because all of the participants at the meeting were very well aware of them. Had WSL wished to retain part of the SMS, or deny to DPL any of its apparent advantages, for example, the rights suggested by the gates letting on to the Circuit, its representatives at the meeting had only to say so. No one did.

In these circumstances, it is strictly unnecessary for the court to know which party historically has held the keys to gates 6 and 7 (it is WSL) and gates 1 to 5 (it is DPL). It is of interest, although not strictly relevant, that under the Lease DPL has ancillary rights to inspect and repair service media on WSL's retained land (a fact which is readily apparent from the Lease). It is of interest to know why and in what circumstances the negotiations which led to the Agreement began, but only relevant if this contributes to a better understanding of the relevant factual matrix. I do not find it so. It is unnecessary and inadmissible to receive evidence of one party's intentions or beliefs about the other's. Terms cannot readily be implied when chronic discord between the parties would have precluded express agreement about them.

One of the directions given by the Master on 15th December 2005 was for there to be a Scott Schedule, a helpful procedural device for crystallising the issues in a complicated case. This was duly produced, such that by the time the application came on for hearing the issues between the parties had been considerably narrowed and refined, a process which has continued throughout the course of the hearing before me. Towards the conclusion of the hearing, moreover, counsel for the parties had put together a document in the form of a draft licence ("the SMS draft licence") which clearly identified, by using different coloured fonts, the remaining issues upon which they could not agree. I will assume, therefore, that the issues identified in this way remain alive and are now to be determined. I will also assume that the SMS draft licence is otherwise an agreed document.

Adopting the language of the SMS draft licence, the outstanding issues include:

I should add that the SMS draft licence also incorporates non-waiver and other provisions inserted by WSL, but it is not seriously contended that these should be implied and I shall say no more about them.

It is tempting in a dispute such as this, where the parties have sought to eliminate their differences by compromising an action on terms which incorporate lacunae, to supply terms which will plug them. It is in the interests of justice that litigation should be brought to an end. This, however, the court does not have carte blanche to do.

The authorities which govern the principles the court adopts when asked to construe and to give effect (or not, as the case may be) to agreements are very numerous. Fortunately, on this application, the parties are substantially ad idem. The principles, for present purposes, are, in the main, encapsulated in the judgment of Lord Cross of Chelsea in Liverpool City Council v. Irwin [1977] AC 239, at 258:

It is, of course, only the second category of case which is now in point, as to which the following (which I gratefully take from the opening submissions of leading counsel for WSL) must be borne in mind. He submits:

This group of propositions is taken from the advice of the majority of the Judicial Committee of the Privy Council, delivered by Lord Glaisdale, in B.P. Refinery (Westernport) Pty. Ltd. V. Shire of Hastings (1978) 52 A.L.J.R. 20 at 26.

In Phillips Electronique Grand Public S.A. v British Sky Brodcasting Ltd. [1995 E.M.L.R. 472 at 481 Sir Thomas Bingham M.R. warned against the simplicity of that formulation and emphasised the stringency of the test to be applied before implying terms:

In Equitable Life Assurance Society v Hyman [2002] 1 A. C. 408 Lord Steyn at page 459 emphasised that the test for the implication of a term as being one of strict necessity and emphasised that the test was a stringent one and described the term that the Court was there prepared to imply as "essential to give effect to the reasonable expectations of the parties."

In Trollope v North West Metropolitan Regional Hospital Board [1973] 1 W.L.R. 601 the House of Lords declined to imply a term into a building contract on the basis that at least four possible alternatives might have been intended by the parties. Lord Pearson explained (at 609C) that:

There is, furthermore, an important overriding principle, which, in my judgment, is especially salient in this case which is summed up in the doctrine of non-derogation from grant – the rule that a grantor, having given a thing with one hand, is not to take away the means of enjoying it with the other. So if a grant is made for a particular purpose, the grantor comes under an obligation not to do anything on his land which will render the land granted materially less fit for the purpose for which the grant was made. This ancient doctrine is not confined to easements, and I can see no juridical basis anyway for excluding its operation in the case of licences, still less licences coupled with an interest, as in this case.

Logically, I should deal first with questions of construction arising on the face of the Agreement. There are, it seems to me, only two pure issues of construction on this application which the court must determine. The first of these concerns the meaning of 'car parking', the rival contentions being not so much whether the phrase includes motorcycles, but rather whether it includes not just motorcars and motorcycles but also the vehicles and equipment mentioned in paragraph 22(i) above.

The second such issue concerns rights of access. To my mind, however, the more apt question is whether on its true construction the Agreement restricts access so as to preclude the use of any available route on and off the SMS which the physical attributes of the SMS allow.

Not surprisingly, there is broad agreement between the parties that 'car parking' includes 'motorcycle parking'. I say, 'not surprisingly', because 'car parking', and 'car park', are words of description which in common parlance have come to be synonymous with parking for motorcycles as well as cars. To conclude otherwise would, therefore, fly in the face of the obvious meaning of the expression.

However, a construction which permitted wider use absent contextual indicia permitting the label to be interpreted differently would, in my judgment, involve attributing to the parties a common intention which is neither to be found in the evidence nor as a consequence of applying any permissible aid to construction. The additional permitted uses contended for by DPL are not obvious, irrespective of whether all or any of them would be reasonable. Reasonableness is not a sufficient basis for judicial implication.

Ex facie, one would not think that there could be any viable dispute about access, whether vehicular or otherwise. This is on account of the existence in the perimeter of the SMS of the seven gates to which I have already alluded, all of which are not only prominent physical features (albeit, on the evidence, gate 5 is somewhat derelict) but also very obvious means of entering and leaving the SMS, for the purposes for which their physical characteristics and limitations indicate they can be used. Leaving out of account gate 1 (gate 1 is fit for vehicles but, as I understand the position, is not required for this purpose), this is vehicular use in the case of gate 6 (the Melbourne Lane entrance) and gate 7 (the Paddock entrance), which, as I have already said, let on to, and off, either directly or indirectly, the public highway, and pedestrian use in the case of gates 2 to 5, which let on to DPL's demise via a narrow strip of land in the ownership of WSL. Superadded to this, however, is the fact that the licence, as expressed in the Agreement, is "for the premier motorsports event held at Donington Park each year", without limitation. Any restriction barring DPL from making use of all or any of these gates would, therefore, constitute an unwarranted derogation.

This said, it is nevertheless obvious, given the permitted use of the SMS, that vehicular access is exclusively for use by any vehicle which falls within the permitted use. This would not, of course, preclude entry with vehicles for any of the purposes permitted by the Lease.

A number of the terms which the parties seek to include in the SMS draft licence do not strictly fall to be implied according to the dicta in the authorities which I have cited. It is, accordingly, pertinent to emphasise that the court always leans against a conclusion which will leave parties who clearly intended to contract without a legally binding contract, and that this is the more so where they have acted as though they were bound. The court strains to supply mechanisms which will make agreements work in circumstances where the parties' own attempts to provide them have broken down, and also where it is obvious the parties must have intended to provide a mechanism in order to make their agreements work but have neglected to do so in their agreements. An example of a case where the court was at pains to explain this proactive policy is Mamidoil-Jetoil Greek Petroleum Co SA v. Okta Crude Oil Refinery [2001] EWCA 406 (Comm).

In summary, it is permissible for the court to supply machinery through the implication of a term which is reasonable and necessary to ensure that the parties' common intention to be bound does not fail for want of such a mechanism.

This is an important safeguard in many a dispute, not least this one where it is clear to me that the parties wish to resolve the issues between them with the court's assistance, but would, or might be unable, to do so were this jurisdiction not available.

A term which is perhaps most obviously missing from the Agreement is one which defines how and when the three days in each year that the SMS is to be made available to DPL for car parking are to be identified, and whether such are to be consecutive. There is no difficulty with identifying in whom the right to nominate the days is vested because, applying trite rules of construction, this is plainly DPL, the grantee. However, a term which is invasive of a property right must clearly be exercised reasonably, implying a requirement for notice. Accordingly, just as the Lease requires DPL to give reasonable notice of intention to enter WSL's land to inspect and carry out repairs to service media and boundary structures, so also, in my judgment, should DPL be required to give reasonable notice of the days it wishes to nominate. In my judgment, had the parties thought about this, they would have said, "this is obvious".

It follows that a term is to be implied that DPL shall give reasonable notice of the days on which it requires the SMS to be available. On the evidence before me, what would be reasonable notice is not something which can be determined with precision. WSL wants as much notice as possible; DPL wishes to be under an obligation to give as little notice as possible. Since, however, it is the Moto GP, customarily held in July, which is the 'premier motorsports event' (note the use of the singular) for which the SMS is 'guaranteed', and fixtures for this event have, on the evidence, with, it seems, only one exception, historically been settled upon and published in co-ordination with the sport's governing bodies and the promoter before Christmas every year, and DPL would be content with a cut-off date of 28th February, in my judgment, reasonable notice will be notice given (1) within 28 days of the date of first publication in the press of the final confirmed date on which the Moto GP will be held in any year (the word 'press' meaning and including the sporting press in any form whether paper or published electronically via the worldwide web) or (2) by 28th February in any year, whichever is the earlier.

It will be observed that I have not yet said anything about whether the three days must be consecutive. In my judgment, however, the use of the singular signifies perfectly that three days means three full days, which must necessarily be consecutive.

It has not been sought to persuade me that there is any basis in law for WSL's proposition, implicit in its position that the benefit of the SMS licence should not be assignable. It is true that the benefit of a purely personal contract cannot be assigned, and that this is also usually the case with a revocable licence. But the Agreement is for a licence coupled with an interest entered into on commercial terms, without more. It is, therefore, prima facie assignable, without restriction. However, since the SMS licence is for the purposes of the 'premier motorsports event', and is obviously for the better organisation and operation of it, and nothing else, this strictly legal position must yield to common sense, consonant with the parties' 'presumed common intention'. This, in my judgment, is discovered in the Lease, which, subject to conditions, permits assignment of the whole of the demise, but not of part. It is obvious in light of this provision that the parties, had they thought about the issue, would have agreed that a similar restriction should go into the licence. It is not onerous but it is, in my judgment, necessary and reasonable. The licence should incorporate a similar restriction.

Neither can I see at first blush any prima facie basis in law for implying any restriction on WSL's right to deal with its interest in reversion. However, since the word 'guarantee' has a particular connotation in ordinary parlance (and the Agreement was made by businessmen, not lawyers), and, contextually, WSL was well aware of DPL's need for the SMS in connection with the Moto GP, it is appropriate, in my judgment, for the court to ask itself whether it is nevertheless necessary to provide a mechanism to ensure WSL cannot undermine the expectation which it has guaranteed. In my judgment, it is necessary for the simple reason that the word 'guarantee', standing alone, is a legally meaningless expression unless it means the guarantee of a third party's obligations, which in the context of the Agreement was plainly not intended. The so-called 'guarantee', as it stands, therefore, is no more than a promise by WSL to make the SMS available, come what may. It is true that DPL would have a contractual right to claim damages should WSL's conduct occasion a breach, but this would not serve at all, and was plainly not the parties' intention when they chose the word they used. This is obvious. A restriction on WSL's register of title is therefore the minimal protection, and, in my judgment, a necessary and reasonable form of protection. Such is needed to ensure that the SMS will be available, 'come what may', and the licence should so provide.

Although the provision in the Agreement enabling WSL to substitute, "suitable and similar land at a suitably appropriate location", for the SMS, should DPE or WSL require the SMS 'for further development' in the future, is ex facie nothing more than an agreement to agree, it does not, in my judgment, fall foul of the doctrine that an agreement to agree is no agreement. This is because, on its true construction, what the Agreement actually confers is a break or option which WSL can exercise at any time. What is missing, however, is a mechanism for resolving issues which could arise, such as, for example, whether, when and if the time comes to exercise the right, the SMS is truly required for the specified purpose, and, if so, when it will be required, and as to the suitability of the replacement land offered in answer to the obligation to provide it.

While it is tempting to choose between the parties' opposing solutions to the problem, it appears to me that the appropriate course is simply to provide a mechanism for dispute resolution, rather than to go the whole hog and attempt to straightjacket the parties into machinery which could later on turn out to be inadequate.

Now, the Lease, in making provision for dispute resolution by arbitration, provides a simple and obviously sensible mechanism. In my judgment, the licence should provide likewise.

The short answer to DPL's insistence on the inclusion of additional terms which were not agreed, or even discussed, on 1st December 2003 is the same that I have already given in relation to WSL's proposition that DPL has only restricted rights of access. DPL did not seek these obligations then, and there is no basis in law for implying them now.

A licence takes effect according to its terms. A right to exclusive possession is not asserted. What DPL has acquired by virtue of the Agreement is a chose in action - a lesser right which needs no further expression than the Agreement itself.

WSL argues for the implication of a forfeiture clause. However, the idea that a forfeiture clause should be implied in a licence is a novel one, to say the least, the more so when it is obvious the SMS licence must stand or fall with the Lease, irrespective of whether it determines by effluxion of time or through forfeiture according to its terms. There is, furthermore, on the evidence, no contextual basis for presuming the inclusion of a forfeiture clause to have been the parties' common intention. This is sufficient, in my judgment, to dispose of this contention. The SMS licence will expire automatically with the Lease, just as the first two sentences of paragraph 8 of the SMS draft licence contemplate.

It follows that for an SMS licence to be in accordance with the Agreement it must be in the form of a document which reflects my foregoing findings. This does not preclude the inclusion of the agreed terms in the SMS draft licence and such additional terms as the parties can agree. Subject to these observations, I shall settle a compliant form which incorporates agreed terms, should the parties so desire.