Herbert v Doyle & Anor

This action comprises a property dispute. In legal terms it raises questions of proprietary estoppel and constructive trusts. The property in question is called Mansfield House, near the corner of Southampton Road and Mansfield Road in Ringwood, Hampshire. Originally it consisted of a substantial two-storey residence with a large walled garden to the rear. Some time before 1993 a single-storey building was built to the left and rear of the main building and attached to it, and this building was and still is used as a dental surgery. (In this judgment the words left and right suppose the viewer to be looking towards the garden from the rear of the main building, or looking at the front of the main building from Southampton Road, which runs approximately north-east to south-west at this point, so that ‘left’ is north-east and ‘right’ is south-west.) There is a narrow, open-ended, rhomboid area, which has become know as ‘the quad’, between the surgery and the main building. The quad is essentially an unroofed, paved passageway leading to the garden, wider (more than 4 metres) at the garden end than at the house end (about 2½ metres).

The claimant Mr Julian Herbert (who has no family or other connection with myself so far as either of us is aware) is the freehold owner of most of the relevant property, and he has developed part of it by building three mews-style terraced houses to the rear of the property. From right to left they are Nos 1, 2 and 3 Mansfield Mews. He has also divided Mansfield House itself into flats. The area which formerly constituted the garden is therefore divided between (1) the new Mansfield Mews houses with their own small gardens behind them and (2) a private car park between those houses and the main building. Some of the disputes in the action concern the ownership, position and extent of parking spaces in this car park. Mr Herbert also effected improvements to the main building, including a small extension to the part linking the main building to the surgery. Some of the disputes relate to that extension, which came to be known as the staff-room extension. It is at present unfinished.

The defendants Mr Leonard Doyle and Mr Xerxes Talati are in partnership as dental surgeons in private practice, and they occupy the single-storey surgery as freeholders and a part of the ground floor of the main building under a long lease from Mr Herbert. They also own the freehold of nine parking-spaces in the car park. I shall need to explain the position of the various parts of the property in more detail below, but I mention now that No 2 Mansfield Mews, the central one of the new houses, encroaches on one of the defendants’ freehold parking spaces. That is common ground.

At the beginning of the trial of the action Mr Herbert was represented by counsel Mr Timothy Becker. Mr Herbert’s pleadings had been signed by other counsel, with two different counsel signing (1) the particulars of claim and an original defence to counterclaim and (2) an amended reply and defence to counterclaim. It was apparent that Mr Becker had been instructed only shortly before the hearing. On the morning of day 4, soon after Mr Becker had begun his cross-examination of the first defendant Mr Doyle the previous afternoon, Mr Herbert decided to dispense with counsel and continued the rest of the trial as a litigant in person. The defendants appeared before me by Miss Amanda Tipples.

The relief sought by Mr Herbert is simple. He claims to be entitled to a transfer by the defendants to himself of three parking spaces, which I shall call ‘the green spaces’ because their approximate position is shown edged green on a plan attached to the particulars of claim, in return for which he will grant them three replacement spaces, the red spaces, also identified on the plan. The point is that 2 Mansfield Mews has encroached on the green spaces, as have two parking spaces which Mr Herbert wishes to allocate to the future purchasers of 2 Mansfield Mews, while the red ones are close to the main building. All parties were well aware of the encroachment when the development began. Mr Herbert’s pleading does not use the phrases ‘proprietary estoppel’ or ‘constructive trust’, but it refers to an oral agreement evidenced by an e-mail dated 8 February 2003, which included provision for the defendants to transfer nine spaces (including the green spaces) to him in exchange for nine replacement spaces and an additional space. He claims that the defendants stood by when he began the development, without objecting to the proposed encroachment, so that he has acted to his detriment in reliance on that agreement.

Mr Herbert’s pleading also mentions a ‘compressor house’, a small shed at the front of the main building which houses pumping equipment for the dental practice. The parties agreed the construction of this compressor house on land belonging to Mr Herbert on the footing that this would be included in a lease having the same terms as the dentists’ main lease. Mr Herbert acknowledges that this entitles the defendants to an equitable interest in the compressor house and to the grant of a lease accordingly, and this right is evidently based on proprietary estoppel.

The defendants have made requests for further information under Part 18 of the Civil Procedure Rules 1998. After two earlier attempts which the defendants criticised, Mr Herbert’s third response to these requests, dated 10 September 2007, sets out a revised statement of the facts on which he relies to show that the defendants stood by without objection to the encroachment. In brief summary this statement gives numerous instances over the period from 1993 to April 2003, the time when he submitted his final application for planning permission for the mews houses, when the defendants were aware of Mr Herbert’s plans and are said not to have objected to them.

Meanwhile the defendants had responded to the claim with a defence and counterclaim which, after amendment in April 2007, run to 34 pages. Importantly, in regard to the e-mail of 8 February 2003, the defence claims that the agreement which it evidences included several terms other than those mentioned in Mr Herbert’s particulars of claim, and was also subject to contract (though the e-mail did not use that actual phrase). The defence claims that the agreement was not a simple, unqualified agreement to exchange the three green spaces for three red spaces, or anything similar. It goes on to assert that, shortly before the Mansfield Mews development began, Mr Doyle told Mr Herbert (amongst other things) that the defendants would not transfer any of their spaces to him until all the elements of the agreement of 8 February 2003 had been satisfied and recorded in writing. It claims therefore that, when Mr Herbert proceeded with the development without satisfying those elements, he did so at his own risk.

The defence and counterclaim refer to a multiplicity of disputes, quarrels and accusations which have arisen between the parties during the period from 1993 to 2005, many concerned with alleged failures on the part of Mr Herbert to implement the 2003 agreement or variations of that agreement. In its amended form the counterclaim contains the following claims : —

It will be seen from that summary that there have been numerous disputes between the parties, some of them of a type which is common between neighbours or those who share property and access to property. There is considerable conflict of evidence in respect of these disputes, which can be summarised by saying that (1) Mr Herbert sees the defendants as having improperly impeded or delayed his development project, of which they were always aware, while (2) the defendants see Mr Herbert as repeatedly resiling from agreements, seeking to re-negotiate them, or choosing to ignore parts of them. I shall need to make findings of fact in regard to those disputes.

Before doing that I shall set out as briefly as possible the main principles of law on the subject of proprietary estoppel on which the claim is based, and particularly the facts which either side must establish in order to rely on an informal agreement. In arriving at this summary I received virtually no submissions on the law from Mr Herbert, or from his counsel during the period when he was instructed. I have mentioned that Mr Becker was evidently instructed shortly before the hearing, and in his brief opening he gave me no effective indication of the legal basis of his claim. Mr Herbert himself made no submissions of law in closing. Miss Tipples, once Mr Herbert had dispensed with counsel, realised immediately that her duties to the court had increased by her being faced with a litigant in person from that point onwards. On day 6, after the first weekend, she produced a note of the relevant law, for which I am grateful.

I have mentioned that Mr Herbert’s claim is based on an agreement said to have been made on 8 February 2003. It is common ground that this agreement is void and unenforceable because it does not comply with section 2(1) of the Law Reform (Miscellaneous Provisions) Act 1989. But that does not prevent a constructive trust being valid so as to create enforceable rights : section 2(5).

During the hearing those rights were described in terms of proprietary estoppel. After the hearing, in fact after this judgment had been circulated to the parties in draft, the House of Lords allowed the defendant’s appeal in Cobbe v Yeomans Row Management Limited [2008] UKHL 55, deciding that the claimant in that case, though entitled to restitutionary relief, was not entitled to any proprietary remedy, either by way of proprietary estoppel or a constructive trust. At the risk of over-simplifying the decision, the reason for refusing relief based on proprietary estoppel was that the defendants had not promised the claimant ‘a certain interest in land’ (the phrase used by Oliver J in Taylors Fashions Limited v Liverpool Victoria Trustees Co Limited [1982] QB 133, 144) but rather that he was expecting them to enter into a contract with him, some of the terms of which were yet to be negotiated.

But the House of Lords left unanswered the question whether a complete agreement for the acquisition of an interest in land that does not comply with the formalities prescribed by section 2 can become enforceable via the route of proprietary estoppel. Lord Scott of Foscote, who gave one of the two principal speeches, and with whom Lord Hoffmann, Lord Brown of Eaton-under-Heywood and Lord Mance agreed, said at paragraph 30 that it was unnecessary to answer the question, because the agreement in that case was not a complete agreement, but expressed the view that proprietary estoppel could not be prayed in aid in order to render enforceable an agreement that statute had declared to be void. He pointed out that proprietary estoppel is not explicitly mentioned in section 2(5) of the 1989 Act as an exception to the rule in section 2(1). Lord Walker of Gestingthorpe, with whom Lord Brown agreed, said at paragraph 93 that it was not necessary or appropriate to consider the issue.

Lord Scott’s statement of his present view was avowedly obiter, and in my view it remains the case that, if all the requirements are otherwise satisfied for a claim based on proprietary estoppel to succeed, the claim will not fail solely because it also consists of an agreement which falls foul of section 2. The analysis of such a case may be that the court gives effect to the proprietary estoppel by recognising or imposing a constructive trust, and it is this which enables section 2(5) to apply.

On that footing the rights to be acquired by virtue of proprietary estoppel depend on the claimant showing three elements : —

These three elements are interdependent. This is summarised in Gray & Gray Elements of Land Law (4th edition 2005) at paragraph 10.175, where the authors use the terms representor and representee in contexts where I have used promisor and promisee : —

I shall deal here with two further points, first that the e-mail of 8 February 2003 envisaged solicitors drawing up legal documentation, so that any agreement evidenced by that e-mail may have been intended to be ‘subject to contract’, and second that the e-mail was by no means the last word between the parties. The parties repeatedly revised the terms later.

In regard to negotiations expressed to be subject to contract, it was explained by Etherton J in Cobbe v Yeomans Row Management Limited [2005] WTLR 625 that such negotiations are unlikely to create an estoppel, but that it is not impossible. After mentioning three different types of case in which questions of this kind tend to arise (which can be characterised as (1) negotiations before solicitors are instructed, (2) negotiations subject to contract after the parties have legal representation and (3) withdrawal from negotiation before a fundamental point has been resolved) Etherton J said this at paragraph 122 : —

The decision in that case (though upheld in the Court of Appeal) has now been reversed on appeal to the House of Lords : [2008] UKHL 55. The analysis in the passage cited above therefore needs to be reconsidered in the light of that reversal. Certainly there is nothing in the speeches in the House of Lords to contradict the view that it will be extremely difficult to prove the required facts in cases falling within the second and third categories identified by Etherton J. Indeed that now seems to be impossible in those categories. Moreover the ‘paradigm’ case of Holiday Inns Inc v Broadhead (1974) 232 EG 951 was said by Lord Scott, in Cobbe v Yeomans Road Management Limited (above) at paragraph 24, not to be a case of proprietary estoppel at all but, properly analysed, to be concerned with a constructive trust imposed or recognised in the context of a joint venture. The present case does not fall into either of the two categories in which an estoppel would be ‘extremely difficult’ on the analysis of Etherton J or (in my view) impossible after Cobbe. Nor is it a case of a joint venture. It does however fall within the category of an informal agreement where the parties envisaged legal formalities later. In such a case the questions of fact remain whether the promisor has created an expectation or made a promise on which the promisee has relied and, if so, whether it is unconscionable for the promise to be withdrawn. It must now be regarded as highly improbable (if not practically impossible) for rights to be created by way of proprietary estoppel in the case of negotiations expressly subject to contract, even in this third category.

As to subsequent variations of the agreement, this point affects the defendants’ way of putting their case. Mr Herbert claims, in effect, that by offering the red parking spaces to replace the green ones the agreement of 8 February 2003 will be satisfied. But the defendants point to other terms included in the agreement and claim that they are entitled to all of them being satisfied. And yet some of these terms were later varied. In my view this does not make it impossible for the defendants to rely on the estoppel, if that estoppel has otherwise been established, so long as the parties regarded the new terms as merely variations of the original agreement. It is different if they regarded the original agreement as having been abandoned and superseded by a fresh agreement to which the original promises did not apply.

With those points in mind I shall make findings of fact about the negotiations between the parties. It will be convenient to divide this account into four chronological sections : (1) the transactions in 1993 creating the initial relationship between the parties and the undoubted rights which they possessed before that date; (2) the compressor house, which was dealt with separately; (3) the other dealings between the parties from 2000 to the early and middle months of 2003; (4) later discussions and disputes.

Mr Herbert, Mr Doyle and Mr Talati all gave evidence before me and were cross-examined. All had given written witness statements. I am glad to say that all the witnesses were, in my view, doing their best to tell the truth as they remembered it. The conflicts of evidence resulted mainly from differences of perception or emphasis, and in some cases an inevitable and often unconscious selectivity in witnesses remembering what was in their interests to remember. Fortunately, much of what was discussed between the parties took the form of e-mail correspondence which has survived. At the same time, e-mails were often followed by meetings in person which were not minuted and which sometimes added significant material.

On Mr Herbert’s side I also heard evidence from Philip Easton, an architect at Western Design Ltd, Brian John Hoile, a civil engineer, and Colin Michael Bishop, a builder, all of whom did some work on the site for him. On the defendants’ side I also heard evidence from Christopher Douglas Bowen, a retired police officer, who gave factual evidence of the difficulties of manoeuvring cars in the car park in and between the spaces on the left side of the car park. I have also read a witness statement of Dr Peter Murphy, an Australian dentist who worked at the surgery between May 2003 and March 2005. His statement was admitted under a Civil Evidence Act notice. He gave graphic evidence of disputes between Mr Herbert and himself and the other dentists, sometimes vocal and heated on Mr Herbert’s side, during the period when Mansfield Mews was being built. A number of other statements were admitted under a CEA notice, mainly describing altercations between Mr Herbert and the dentists or their staff. These statements also included a letter from Mr R A Sheerin, an architect partner of Sheerin Beetle & Associates, which strongly suggests that the staff-room extension will not satisfy the relevant building regulations.

Expert evidence was also adduced. The defendants’ expert surveyor was Ms Julia Stolle of David J Powell Surveys Limited, and Mr Herbert’s witness in the same field was Ms Karen French of Sitechnics. Both made written reports on which they were cross-examined. Finally a single joint expert, Mr Howard Gross of the Goadsby & Harding Group reported on the damages claimed by the defendants as mentioned above. Mr Gross was cross-examined by both sides.

The 1993 transactions

I have mentioned that the defendants are dental surgeons, and I shall refer to them from time to time as ‘the dentists’. At one time there was a third partner, a Mrs Halliday, but she left the partnership at an early stage in the present story (soon after 6 August 2001) and can for practical purposes be ignored. In December 1989 the then partners bought the freehold of the single-storey surgery together with the freehold of nine parking-spaces spread out in the area of the walled garden. Those spaces were not physically marked out on the ground, but their positions were shown on a file plan. At that time there was no vehicular access to the walled garden, and the parking spaces were not used. The partners also took a long lease of one room and some other space on the ground floor of the main house from the then freeholders, a company called Hastenburgs Investments Limited. The lease also provided access from the front door of Mansfield House through to the single-storey surgery at the back.

Mr Herbert is not in business generally as a property developer. But he has been involved in two other development schemes (never as his principal occupation) and acquired an NHBC registration in July 2003. He lived and still lives in or near Ringwood, and he saw Mansfield House as a project for development and investment. In 1992 Hastenburgs went into receivership, and Mr Herbert agreed to buy the freehold of the house and grounds from the receivers for £107,500. His plan was to divide Mansfield House into residential flats and to build the three new houses already mentioned. In December 1992 he obtained planning permission for the flats, but his application for the houses was refused. His purchase included a driveway to the right of the main house which in due course gave access to the walled garden once an opening in the wall had been made on that side. The purchase was subject to, and with the benefit of, the dentists’ lease, and naturally it did not include the single-storey surgery. The purchase was completed on 25 February 1993. Despite the rejection of his application for permission to build the houses, Mr Herbert hoped to be able to put forward a different application some time later.

During 1992, and before Mr Herbert had completed his purchase, he had been in discussions with the dentists who were then in occupation. That led to a number of documents being executed on 26 February 1993, the day after Mr Herbert completed his purchase of the freehold. One such document was a new long lease of a larger part of the ground floor of Mansfield House in favour of the dentists. Another was an exchange by which, in consideration of a simultaneous transfer to Mr Herbert of the dentists’ existing nine parking spaces, Mr Herbert transferred the freehold of nine new spaces, identified by a plan, to the dentists. This remains the basis of their title to those spaces. Three are located close to the end wall of the freehold surgery. These are identified as D4, D5 and D6 from left to right on the plan served with the particulars of claim. Three more, identified as D1, D2 and D3 from left to right, are facing D4, D5 and D6, further from the surgery building. The space in between is used for manoeuvring into the spaces. In these spaces cars are parked perpendicular to the rear walls of the buildings, parallel to the garden wall. The remaining three are the green spaces, some yards to the right of D1, D2 and D3, and they abutted the other garden wall to the right until that wall was demolished as part of the later development. In the green spaces cars are (or were) parked parallel to the rear walls of the buildings, perpendicular to the garden wall. There was a covenant prohibiting the use of the parking spaces for any other purpose. A third document granted rights of way to the dentists over the unoccupied parts of the car park area.

The exact position of the green spaces is a matter of some controversy, although not ultimately crucial. According to the plan attached to the 1993 transfer the far boundary of the green spaces is roughly in line with the far boundary of spaces D1, D2 and D3, though slightly closer to the main building (perhaps by a foot or so). The plan served with the particulars of claim shows the green spaces somewhat closer to the main building. This plan also shows the position of No 2 Mansfield Mews, the front wall of which is closer to the main building than Nos 1 and 3, and the shift in position of the green spaces on this plan has the effect of reducing the apparent encroachment of No 2 Mansfield Mews onto the green spaces. I accept the evidence of the defendants’ expert witness Miss Stolle that the encroachment amounts to over 1 metre, about half the width of one of the green spaces. The parking spaces allocated to No 2 themselves encroach further into the green spaces.

The defendants now say that the nine new spaces in 1993 were not ideal for them, partly because the area of space D1 is reduced by the line of the side-wall of the garden turning half-right at about that point. Instead of D1 being rectangular in ground plan, the far left corner is eaten away by the diagonal of the wall. This makes it impossible to park a normal-sized car in D1 without one end sticking out beyond its proper boundary at the front. This can impede the parking and un-parking of the car in D4. Alternatively the three cars in D1, D2 and D3 would all have to park further to the right, impeding the parking and un-parking of cars in the green spaces. The dentists sometimes spoke of having only eight, or eight-and-a-half, spaces. To begin with the demand was less than it is today, and the dentists generally made do with the other eight spaces. But the sub-standard space rankled. Be that as it may, the new spaces were located more economically than the old ones, so that collectively the new spaces and the areas in between took up less of the total site, in order to liberate the area to the rear of the site (beyond D1, D2, D3 and the green spaces) for Mr Herbert’s planned development. Even so, not enough space was liberated, and in the event one of the new houses, 2 Mansfield Mews, does encroach on the green spaces as I have mentioned. It is difficult, if not impossible, to fit nine full-sized spaces into the available area, given the competing requirements of the occupants of the several properties occupying the site. In particular it would be difficult to find spaces adjacent to Mansfield House for all of the flats there. Hence this litigation.

Another document executed on 26 February 1993 was an option agreement. From this it can be deduced that the 1993 parking arrangements were already recognised as imperfect. Mr Herbert was given an option to call for a transfer of the six parking spaces most distant from the main building (D1, D2, D3 and the green spaces), conditional on simultaneously transferring six replacement spaces to the dentists. The positions for these replacement spaces were not specified, and Mr Herbert was given a discretion in identifying them, but the agreement provided that they ‘shall in all respects be equal in dimensions to [the existing six spaces transferred in 1993], shall be contained wholly within [the area of the old walled garden] and shall . . . enjoy unrestricted vehicular and pedestrian access.’ The option period expired on 31 January 1995 and the option was never exercised. Nevertheless it throws some light on the views of the parties in February 1993.

Several other possible improvements were discussed between Mr Herbert and the dentists, namely : the construction of a bicycle rack; the construction of a covering over the quad, to create what became known as a loggia; electrically operated gates at the entrance to the car park; resurfacing the car park. But these were not the subject of any concluded agreement in 1993. In April 1993 Mr Herbert marked out the new parking spaces, and that was when the dentists say they realised that space D1 was sub-standard. They discussed all these problems, or proposals, with Mr Herbert, but no action was taken in respect of them at the time. The dentists merely hoped that they would be dealt with along with the rest of the development, if and when it took place.

The compressor house

In the absence of planning permission for the houses, some years passed with little or no progress made towards completion of Mr Herbert’s plans. But during 1999 he turned towards selling leases of the flats at Mansfield House. Until then they had been rented out.

The dental practice made use of suction equipment. Originally this was housed in a corner of the quad, and in 1993 it had been housed in a soundproof cabinet. By 1999 Mr Herbert told Mr Doyle that he wanted to sell the three flats in Mansfield House, at which point he would sell his interest in the whole property. As part of this proposal it was informally agreed to move the suction equipment to a new position at the front of the building, and this became known as the compressor house. The agreement was that Mr Herbert would have the compressor house constructed, the dentists would pay for it, and it would be included in a lease on the same terms as the dentists’ existing lease.

The compressor house was built in September and October 2001, and the dentists paid some £5,000 for the work. However, no new lease was granted, and it still has not been. The dentists were sufficiently concerned about the lack of documentary title that they did not initially connect the new suction equipment to all the surgeries. They did this only in February 2003 when they had reached an agreement with Mr Herbert (as they claim) on other matters (as described in the next section).

2003 and the events leading to it

Meanwhile on 15 August 2000 Mr Herbert made a fresh application for planning permission for Mansfield Mews. Mr Doyle obtained copies of the plans for this application from the planning authority. The plans showed that (1) the middle one of the new houses encroached on one of the green parking spaces, (2) the dentists’ other spaces (D1 to D6) were unchanged and (3) the two parking spaces for 3 Mansfield Mews (originally numbered 1) were positioned on land over which the dentists had a right of way. The dentists discussed these issues with Mr Herbert during September 2000, and say that they made it clear during these discussions that the parking spaces shown on the plans were not agreed, and that they wanted acceptable parking arrangements. They made no objection to the planning application, and permission was granted on 8 November 2000. Mr Doyle says that Mr Herbert told him at this time that he planned to leave the site after the development was complete, and suggested that he would sell the freehold to the dentists then.

However, Mr Herbert did not actually begin the development at that time. Over a year later the dentists opened a different discussion with him, namely for them to acquire one of the Mansfield House flats or alternatively a single further room on the ground floor. These discussions were mentioned in an e-mail of 11 December 2001 from Mr Doyle to Mr Herbert in which the price of £17,500 was suggested for the single room plus the quad. This would not require any additional parking space, but the e-mail suggested relocating some spaces adjacent to Mansfield House, while ‘the remainder are to be allocated, within reason, on site — at your discretion’. The e-mail also mentioned some of the issues which had been raised back in 1993 such as gating, suggesting them as possible shared projects. But no agreement was reached, and no further discussion took place for more than another year.

By the end of 2002 the dentists had come to assume that Mr Herbert would not be going ahead with his plans. They had recently taken over another dentist’s practice and were considering expanding their premises by other means. But on 3 February 2003 Mr Doyle telephoned Mr Herbert and discovered that he still wanted to reach an agreement with them. This prompted Mr Doyle to put forward a larger proposal, namely to buy the ground-floor flat at Mansfield House so that they would then have the whole of the ground floor of the building. Mr Herbert said during this conversation that he no longer proposed to sell the freehold to the dentists, but that he would establish a management company instead. At the same time Mr Doyle took the opportunity of including several extra terms in what he called the package, including some of those which had been left outstanding in 1993 and adding some new terms as well. Mr Doyle’s e-mail of 3 February 2003, shortly after the telephone call, was in the following terms : —

That e-mail does not set out the terms of a concluded agreement, but is rather an agenda of the topics which any agreement would need to cover. It led to a meeting between the defendants and Mr Herbert at the surgery on 8 February 2003. There are conflicts of evidence about this important meeting, on which both sides rely. Mr Doyle describes the meeting as frank, and he says that they aired their grievances, including several about the parking spaces. He claims that several points emerged from the meeting : an agreement to buy the ground-floor flat, subject to Mr Herbert renting back what was described as a ‘one bed roomed flat’; an agreement to buy the quad; a proposal to build a two-storey extension over the surgery and the quad; as for parking, Mr Herbert proposed nine full-sized spaces plus one additional space to go with the ground-floor flat; Mr Herbert would take over the applications for planning and listed-building consents; the price would be £130,000 in all. Mr Talati recalls the meeting as amicable, but confirms that the requirement for nine full-sized parking spaces was accepted.

On the same day as the meeting Mr Doyle prepared a draft e-mail to be sent to Mr Herbert to record what was agreed and to add some further suggestions. This draft was sent to Mr Talati, who approved it in the following terms : —

This reveals a difference between Mr Doyle and Mr Talati. In order to integrate the rest of the ground floor into the dental practice, they realised that they would need planning permission for the change of use. They also intended to apply for a business development loan, and realised that the bank would make the offer of such a loan conditional on that planning permission being obtained. But Mr Doyle thought that, even if they did not obtain planning permission for the change of use, they could easily obtain a buy-to-let loan for the purchase and use the new flat for residential purposes. Mr Doyle must have persuaded Mr Talati that the purchase itself did not need to be conditional on obtaining that planning permission, but that Mr Herbert should at least make the application.

Mr Doyle’s e-mail was therefore sent without amendment to Mr Herbert soon after midnight and dated 9 February 2003. The text was as follows : —

It is that e-mail of 9 February 2003 which is relied on as evidence of the agreement reached on the previous day. It was not in terms subject to contract, but the reference at the end to legal eagles shows that the defendants intended one or more formal documents to be implemented.

The terms set out in that e-mail did not embody a concluded agreement of everything mentioned in it. Apart from the reference to legal eagles, it contained reference to items which would need to be further discussed between the parties, and it raised ideas additional to those which had been agreed at the face-to-face meeting. The position of the parking spaces was not to be determined by later agreement (as had evidently been said at the meeting). Instead the e-mail proposed that the ten spaces (including one for the new flat) would be reasonably accessible, somewhere on the site, and so far as possible adjacent to Mansfield House. Equally Mr Herbert did not initially consider that all the additional features were agreed, or indeed that they would form the subject of a legal agreement. On 11 February 2003 he says that he sent an e-mail to Mr Doyle in the following terms : —

Mr Doyle says that this e-mail was not received by him or Mr Talati, and Mr Doyle explains in his witness statement that it was sent to an address which Mr Doyle was not using at that time except for a different purpose. I accept that there was a mistake in the e-mail address and that Mr Doyle did not receive this e-mail immediately. But Mr Talati had recently seen a copy of it on 23 March 2003, as he describes in his witness statement, though he says that he does not now remember how or when he came by it. I find therefore that Mr Herbert’s reaction to the e-mail of 9 February 2003 was known to both of the dentists during March 2003. There is no dispute that Mr Herbert’s e-mail, whether or not successfully sent on the date which it bears, is authentic, and it shows that he did not regard all the terms of Mr Doyle’s e-mail as agreed.

One outstanding question was whether the sale of the flat was conditional on obtaining planning consent. On the face of the e-mail the purchase was expressed to be conditional on agreed planning ‘approval’ being submitted, and from the context I accept that this was intended to mean that an agreed application should have been submitted. Certainly Mr Herbert’s reply shows that he did not regard the sale of the flat as conditional on permission being granted, and in the witness box Mr Doyle accepted that the purchase itself was not so conditional, although the application for a business development loan would be. I have already mentioned his explanation about a possible buy-to-let mortgage instead.

Other items in the e-mail were mentioned in terms of an agreement to agree. In other words these were not agreed at the time. This goes for paragraph 6 (a system for collecting laboratory work) and parts of paragraphs 7, 9 and 10. I am also not persuaded that paragraph 4 (the standard of the car-park surface) was agreed. Even so, I find that other terms were agreed with sufficient clarity, as evidenced by the e-mail. These included paragraphs 3 (parking spaces) and 5 (electric gates).

One item which had been mentioned on 3 February 2003 but which was not mentioned explicitly in the e-mail of 9 February 2003 was the acquisition of the whole of the quad area, but I find that this was agreed at the meeting on 8 February 2003 on the footing that the proposal made on 3 February 2003 was understood as still part of the package. Indeed on 11 February 2003 (I infer before he tried to send the e-mail mentioned above) Mr Herbert had telephoned Mr Doyle in order to try to persuade him to agree a price above £130,000, on the footing that the price was too low if the whole of the quad (including ‘the area . . . not being “flat roofed”,’ to quote from paragraph 8 of the e-mail) was to be included in the transfer. Mr Doyle would not agree a higher price. This exchange is confirmed by Mr Herbert’s e-mail of 11 February 2003 (above), except that he described the discussion as ‘talking about’ including the quad, not agreeing it. In the event the inclusion of the quad continued to be a bone of contention between the parties.

In any event on 18 or 19 February 2003 Mr Herbert returned to the dentists with a revised plan for a smaller extension to be built, on the ground that it would be easier to obtain planning approval for this smaller extension. This smaller extension is essentially the staff-room extension which was in due course built. It involved demolishing a short passage at the base of the quad (which linked the surgery to the main building), and building a larger one-storey construction occupying about one-third of the area of the quad. The dentists accepted this on the basis that they could later put forward a more ambitious plan for developing the whole of the quad area once the purchase of the flat had gone through.

That is how matters stood on 14 April 2003 when Mr Herbert started to lay out areas to be excavated for the building of the mews houses. As was already clear from the plans submitted with the application for planning permission, these areas encroached on at least one of the three green spaces belonging to the defendants, and yet no formal transfer of any of those spaces had been effected, and there had not even been any correspondence from Mr Herbert’s solicitors. As soon as he was aware of Mr Herbert’s activity, Mr Doyle e-mailed him in the following terms : —

This led to a meeting on the same day around the kitchen table at Mr Doyle’s house. Before that meeting Mr Doyle had done some legal research of his own and had found (amongst other things) section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, which requires any contract for the transfer of land to be in writing and to include all the terms of the agreement, and to be signed by each party. Mr Doyle describes the meeting as a heated one. The dentists began by insisting that Mr Herbert could not start the development until the necessary land had been transferred. Mr Herbert said that this would delay the development, and that he would incur penalties for cancelled contracts, and complained that the parties had reached agreement on 8 February 2003. He threatened to sue if the defendants did not agree to the development going ahead. According to Mr Doyle the outcome of the meeting was that the defendants did indeed agree that the development could go ahead on the basis of the agreement reached on 8 February 2003.

That is important to Mr Herbert’s case. I find that it was in reliance on the agreement reached at that meeting on 14 April 2003 that he proceeded with the development without obtaining a transfer of the green spaces. It is crucial therefore to decide what the terms of that agreement were. All parties concur that this means the terms agreed on 8 February 2003, but there is no concurrence as to what terms were agreed on that earlier date. In my judgment the essential terms were these : —

I have mentioned that the parties intended to instruct solicitors, but that the terms discussed between them were not expressed to be subject to contract. Indeed my finding is that the discussion on 14 April 2003 was intended by both sides to be relied on. In particular the dentists did agree to allow the development to go ahead, implicitly undertaking not to withdraw that agreement if the other agreed terms were satisfied. The agreement was not subject to contract in the sense that the parties would be free to withdraw from it at will.

After the meeting on 14 April 2003 Mr Herbert proceeded to build the new houses which became Mansfield Mews. Materials began to arrive in May. Planning permission for Mansfield Mews was granted on 28 May 2003, and permission for the staff-room extension was granted on 11 August 2003. On 9 June 2003 Mr Herbert’s solicitors wrote to the dentists’ solicitors about the proposed new lease of the ground-floor flat, promising documents in due course. On 11 August 2003 they wrote again. Their understanding of the transaction was that the dentists would be paying £130,000 for a further commercial lease of a kitchen area and access way, plus a residential lease of the ground floor flat. This was correct, except that it is unclear how much of the access way (the quad) the solicitors thought was being transferred. This letter also revealed that Mr Herbert had now decided that there would be no management company, and that the freehold would remain in his own ownership.

Meanwhile the dentists had approached the Royal Bank of Scotland for a business development loan. In August 2003 RBS agreed to provide them with a loan of £140,000 to include the cost of the works which the dentists planned. RBS wrote to the dentists’ solicitors on 27 August 2003 instructing them to act also on their behalf in regard to the proposed security for the loan. At that time Mr Herbert wanted completion of the conveyancing for the ground-floor flat at the end of September, as he wrote in a letter of 3 September 2003.

Soon after that a series of meetings took place during September 2003 between Mr Doyle and Mr Herbert, interspersed with Mr Doyle reporting back to Mr Talati. All three were frustrated by the delays which had occurred, and Mr Doyle and Mr Herbert each blamed the other. It was during the first of these meetings that a further important change to the proposals was suggested, namely that, instead of the dentists taking a lease of the whole ground-floor flat, the new lease would comprise only one room plus the new extension. Mr Herbert claims that this was Mr Doyle’s idea, but I find that it was in fact Mr Herbert’s. Mr Doyle did not like this proposal but Mr Talati did, and the latter prevailed. There was accordingly a new agreement at an inclusive price of £15,000, to include £3,000 for the building works which Mr Herbert would do to create the extension.

Mr Doyle says that, although the area of the lease was now to be smaller than previously proposed, and although the size of the extension shown in the planning application was smaller than originally proposed, nevertheless he understood that the lease was to include the whole of the quad. He still looked forward to the possibility of reapplying for planning permission for the more extensive development of the quad area at a later date. But Mr Herbert’s intention was that the new lease would apply only to the area to which the planning permission applied. The misunderstanding became apparent during further discussion between Mr Doyle and Mr Herbert a few weeks later. Mr Doyle reluctantly accepted that the new lease would cover only one room from the ground-floor flat (namely the staff room) plus the extension shown in the planning application.

At the same time he and Mr Herbert agreed certain revised specifications for the extension, the most important of which was that the wall forming the new base of the quad would not have French windows as originally planned, but top-hung windows instead. The dentists regarded this as a crucial means of ventilation for this part of the surgery during the winter months. Other specifications for the extension were embodied in an informal exchange of notes between Mr Doyle and Mr Herbert, and Mr Herbert was to turn this into a proper specification for his builders to use.

The parties evidently regarded the agreement made in February 2003 as still in place, subject to the variation agreed in September 2003. But in fact much of what had originally been agreed had now been varied substantially : —

Later discussions and disputes

Even this was not an end to the variation of the terms, even though the actual building project at Mansfield Mews was progressing. The most significant was that in November 2003 Mr Herbert told the dentists that he wanted to start the building work on the staff room and the extension with a view to completing the work by April 2004, explaining that he would lose money if he had to lay off workmen and re-employ them later. Mr Doyle pointed out that the parking spaces were not agreed and that none of the necessary conveyancing documents had been executed. As a result he 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 to their satisfaction. This was a significant change to the terms previously agreed. Mr Doyle recognized this, and proposed it in response to Mr Herbert’s pressure to start work on the staff-room extension before completing the conveyancing documents.

Both sides attempted to secure other variations as well, but these came to nothing. For example Mr Herbert put forward a number of variations, including (1) that the dentists should agree to vary the terms of their leases so as to share the maintenance costs of Mansfield House on a broader basis and (2) that the parking spaces should be leasehold instead of freehold. On the other side the dentists wanted the freehold of the quad to be included.

Meanwhile Mr Herbert did not produce plans for the car park until he provided two alternative plans on 13 February 2004. Mr Doyle rejected both of these on the basis that they did not give nine full-sized spaces. A meeting followed, at which both those plans and a third, more radical, plan prepared by Mr Doyle were all discussed. Mr Doyle says that he believed that Mr Herbert agreed to a package by which (1) Mr Doyle’s plan was accepted, (2) the quad would be transferred, subject to a covenant to keep it tidy, and (3) Mr Herbert would not object to an extension at first-floor level over some of the parking area. Mr Herbert’s solicitors are said to have advised that this was entirely unworkable. In any event no agreement about these terms, or indeed about later attempts to vary those terms, has been reached. Instead, in June 2005, Mr Herbert produced through his solicitors the proposal on which he ultimately relies, namely what amounts to a straight swap of three red spaces in exchange for the green spaces, leaving spaces D1 to D6 in place and including the sub-standard space D1.

The development of Mansfield Mews was completed in November 2005. Shortly after this the dentists claim that Mr Herbert did a number of acts which they regard as deliberately intended to intimidate them. The basic allegations are as follows : —

Mr Herbert does not dispute those allegations (though he denies an intention to intimidate). Nor does he dispute that his acts wrongfully interfered with the dentists’ rights of way and other rights. His explanation is that he had become frustrated by what he sees as the dentists’ prevarications, and that he hoped that his actions would encourage them to perform their side of the 2003 agreement. He points out that he has not repeated this kind of behaviour in the intervening period after December 2005, which itself is not disputed, and says in evidence, and through his counsel in opening, that he has no intention of repeating these acts.

The three new houses have been built, and the outer two have been sold. No 3, on the left, has been provided with two parking spaces, approximately between D3 and the green spaces, though the dentists claim that they encroach on D3. No 2 has not been sold pending the present dispute. Leases of the staff-room extension and the compressor house have not been granted. The green spaces have not been transferred to Mr Herbert. The staff room extension has been substantially built, but the walls between the old premises and the new extension have not been broken through, and the work is therefore not finished. The dentists claim that it does not satisfy the building regulations, and that the work has not been carried out to the agreed specification. In particular the extension does not have top-hung windows as were, I find, agreed.

There is a disparity between Mr Herbert’s pleaded case and his evidence in support of it. His pleadings refer to an oral agreement of 8 February 2003, whereas the main focuses of his evidence were the arrangements made in 1993 and the later agreement reached on 14 April 2003. In each case he categorises the agreement simply in terms that the dentists allowed him to continue with the development of Mansfield Mews and that they cannot now complain that he has done so partly on land belonging to them.

The agreements and arrangements were, however, not as simple as that. There was no unequivocal agreement for the dentists to disregard their title to the parking spaces. In the period leading up to April 2003 they frequently reminded Mr Herbert of the absence of written legal agreements, and warned him of putting the cart before the horse. It is revealing that the only reference in Mr Herbert’s witness statement to the events of February 2003 is a quotation from Mr Doyle’s e-mail of 3 February 2003 : —

Indeed, during some parts of Mr Herbert’s evidence, and some parts of his cross-examination of Mr Doyle and Mr Talati, Mr Herbert gave the impression that he might prefer the 2003 agreement not to be binding on him, or at least not all of it. But in truth his case depends on that agreement. Without it he has no basis for claiming an entitlement to the green spaces by way of proprietary estoppel or in any other way.

Besides, his pleaded claim is for a straight exchange of the three red spaces for the three green ones, and the terms discussed in February 2003 were never in such simple terms (even if everything other than parking spaces is disregarded). Mr Herbert has been keen to deflect attention away from the sub-standard space D1, and indeed from the encroachment into D3. In cross-examination he made the fair points that the sub-standard space was not identified at the time of the 1993 transactions, that the dentists did not object to his application for planning permission in 2000, even though the plans submitted with that application showed spaces D1 to D3 substantially unchanged, and that even the e-mail of 9 February 2003 did not explicitly require the elimination of the sub-standard space. With my permission he introduced a short video film, as part of his cross-examination of Mr Bowen, showing himself reversing a car out of space D4 and manoeuvring so that it could leave the car park without being obstructed by cars parked properly in spaces D5 and D6. This was designed to bolster his argument that there is nothing of value in the dentists’ objections to spaces D1 to D3. But I was unconvinced by this demonstration, because it was not clear to Mr Bowen (or to me) exactly how much of spaces D1 to D3 were occupied at the time of the manoeuvre.

In my judgment it was clear to Mr Herbert, probably from as early as April 1993 when the present spaces were laid out, that the dentists regarded space D1 as inadequate. I accept Mr Doyle’s evidence that this was discussed between the parties during their discussions in September 2000 about the planning application made at that time. So far as it is relevant, I find that indeed D1 was and remains inadequate. That situation has been at the heart of the discussions and disputes between the parties probably from 1993 but at least from 2003 right through to the present day. Crucially the discussions in 2003 were not in terms of an exchange of three spaces for three others, and I find that this is because the dentists were insisting on eliminating the sub-standard space D1. They knew that they had a strong bargaining position because they owned land which Mr Herbert needed for his development (or at least he needed it for the particular development for which he had submitted his application for planning permission), and this was reflected in the terms in which they spoke and wrote about the relocation of the spaces. Mr Herbert emphasises that there was no agreement explicitly to rectify or eliminate the sub-standard space, but I find that this issue was known to Mr Herbert clearly enough by February 2003 at the latest. All the discussion from that time has included a search for a solution which would eliminate the sub-standard space. Only that can explain Mr Herbert’s failure, during 2003 and 2004, to provide a satisfactory plan for the parking-spaces. If space D1 had been regarded as satisfactory, there would have been little difficulty in finding a total of nine adequate spaces.

In addition it is clear to me that the agreement reached in 2003 included terms other than those relating to the parking spaces. I have already identified in paragraph 52 above the terms which I find were agreed in April 2003 by reference to the agreement of 8 February 2003. I have also explained how those terms came to be varied in September 2003, by eliminating the ground-floor flat (apart from the staff-room extension itself), the parking space which went with it and (in the result) the rest of the quad from the proposed lease. Mr Doyle doubtless regards this as one of the instances in which Mr Herbert resiled from a previous agreement. It is true that this was an important variation of the agreement, and I have found that it was initiated by Mr Herbert (not by the dentists), first on 18 or 19 February 2003 by downsizing the proposed extension, and second (in September 2003) by downsizing the proposal for the lease. But I find that these variations were agreed by the dentists at those times, even though they may not have appreciated all the consequences of those variations immediately. Mr Herbert was within his rights to propose the variations, perhaps succeeding by shrewdly exploiting differences of approach between Mr Doyle and Mr Talati.

I also accept that the variations agreed in September 2003 would not themselves be a bar to Mr Herbert’s claim based on proprietary estoppel. They did not amount to the abandonment of the underlying basis on which the dentists had agreed in April 2003 to allow the development to begin. If therefore Mr Herbert were able and willing to satisfy the other terms agreed, it would in my view be unconscionable for the dentists now to resile from their agreement by refusing to transfer the green spaces to him. But the other side of the coin is that, if Mr Herbert is not able and willing to satisfy those other terms, then it is not unconscionable for the dentists to withhold the green spaces unless those other terms are satisfied.

I cannot therefore grant the relief which Mr Herbert seeks. I accept that he relied to his detriment on the agreement reached on 14 April 2003 by reference to the terms agreed on and around 8 February 2003 and subsequently varied. The detriment consists in not acquiring legal title at that time to the green spaces and incurring the expense of the development accordingly. But in order to obtain legal title to the green spaces, or an equitable title to them by way of a constructive trust, he must be in a position to satisfy the other terms which I have specified. As to those other terms, my conclusions are these : —

However, it follows from what I have written that, if Mr Herbert were to satisfy the other terms of the agreement, then he would in principle be entitled to require the defendants to transfer the green spaces to him.

While revising the draft of this judgment in the light of Cobbe v Yeomans Row Management Limited [2008] UKHL 55, I have been struck by similarities between it and the present case. In particular an analysis of the present case might be that, because of the numerous additional terms discussed between the parties in and around February 2003, Mr Herbert was not in a position to invoke a proprietary estoppel at all. Instead, it may be said, what he was truly relying on obtaining from the dentists was not title to the green parking-spaces but rather a contract which would include the green spaces and other terms as well. On that footing his claim based on proprietary estoppel would evidently fail, just as much as Mr Cobbe’s similar claim has now been found to fail. In that event Mr Herbert would be found simply to have taken upon himself the risk of beginning his development before obtaining an enforceable contract to acquire the missing land. But that is not how the case against Mr Herbert has been put in this case and, since I have decided to refuse his claim for other (though more complex) reasons, I say no more now about the effect of the Cobbe case.

Turning to the defendants’ counter-claim, Miss Tipples urged me not to leave the parties in their present state of uncertainty. I shall deal with the items lists in paragraph 9 above, though in a slightly different order.

It is implicit in my reasons for refusing the relief claimed by Mr Herbert that I am prepared to make a declaration in conditional terms that Mr Herbert will be entitled to a transfer of the green spaces if, but only if, he previously or simultaneously satisfies the required conditions of the 2003 agreement. Not all of the conditions demanded in the defendants’ pleading are justified, and I shall not repeat the details of them again. But in summary they are (1) the completion of the staff-room extension in accordance with the specification and building regulations, (2) the transfer of parking spaces along the lines of my judgment above, (3) leases of the staff-room extension and the compressor house and (4) electrically operated gates.

The principal difference between the evidence of Miss Stolle and Miss French on this point was whether sufficient certainty can properly be derived from the available plans. Miss French took the view that it could not. But in the end I prefer the evidence of Miss Stolle. She accepted that there were limits to the accuracy of the plans, but I was persuaded by her evidence about overlaying plans against each other so as to achieve a best fit between them, and relying on fixed points on the ground, sufficiently to accept her view that it is possible with adequate accuracy to compare the position of the parking spaces D1 to D3 from the conveyancing documents with the actual position of the new buildings and their associated spaces. On that footing I find that 3 Mansfield Mews does not itself encroach on any of the defendant’s spaces, but that the parking spaces allocated to No 3 do encroach on space D3 by about 0.5 metres (between 0.4 and 0.6 metres) along the length of that space.

The defendants’ claim for a declaration in the terms set out above is made in the alternative to their claim for damages in lieu of an injunction. For this I have the benefit of evidence from the single joint expert, Mr Gross. His advice was given on two alternative bases, either that the loss is assessed at August 2000, when Mr Herbert’s principal application for planning permission was made, or that it is assessed at April or May 2003. Mr Herbert favoured the first date and the defendants the latter. In my judgment the correct date is April 2003, because that is the date at which the defendants would have applied for the injunction in question if they had not reached agreement with Mr Herbert at that time.

Mr Gross was also asked to provide his advice on two further alternative bases, either (1) that Mr Herbert could not have built Mansfield Mews without encroaching on the defendants’ land or (2) that he could have done so but decided not to. In my judgment the second of these alternatives is correct. If the dentists had insisted on seeking or threatening an injunction in April or May 2003, Mr Herbert could have made a sufficient amendment to his plans. Mr Easton, Mr Herbert’s architect, gave evidence to that effect and I accept that evidence.

On that basis Mr Gross’s advice, which I accept, is that the sum of damages would be £5,145. This would combine, in a single sum, both (1) the damages (in lieu of an injunction) for the actual encroachment of 2 Mansfield Mews onto the green spaces and (2) the damages for the encroachment into space D3.

I therefore propose to order damages in the sum of £5,145. I would consider a request to suspend the execution of the order for those damages for a short period (as to which I shall hear further submissions) in order to allow Mr Herbert an opportunity to obtain a transfer of the green spaces by satisfying the 2003 agreement as set out above.

Mr Gross was also asked to provide his advice as to the damages appropriate for boarding up the windows in the staff-room extension, but found that he was unable to advise the court on this matter on the basis of the material available to him. I have similar lack of evidence of any substantive loss suffered by the defendants, and I shall decline to order damages under this head.

I am satisfied that Mr Herbert committed the acts complained of, namely that he obstructed the entrance to the car park and that he entered the surgery premises as a trespasser and verbally abused the dentists and their staff. The first wrongfully obstructed the dentists’ right of way, and the second constituted a number of trespasses. In each case Mr Herbert’s actions were deliberate and unjustified. Such acts are not to be condoned.

If necessary I am prepared to impose an injunction to restrain Mr Herbert from obstructing the dentists’ right of way, and even an injunction to restrain him from entering the surgery premises (other than the leasehold premises in accordance with the terms of the lease). However, the acts in question occurred more than two-and-a-half years ago and I accept that they have not been significantly repeated since. As I mentioned earlier, Mr Herbert informed me through counsel (while he was still represented by counsel) that he had no intention of obstructing the car-park entrance, or indeed of entering the surgery premises uninvited, ever again. I would therefore be reluctant to impose those injunctions at this time if Mr Herbert were prepared to give undertakings to the court in appropriate terms to be discussed.

I shall hear submissions from the parties on the incidence of costs.