England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice, Strand, London, WC2A 2LL
		08/07/2009

Mrs Justice Proudman:

1. The claimants, Mr and Mrs Baynes Clarke, and the defendants, Mr and Mrs Corless, are neighbours in a gated development called Carmelstead Close ("the Close") comprising three substantial detached houses in Haywards Heath.
2. In 2000 Allum Estates Limited ("Allum") bought the house called Carmelstead and its grounds from a Mr Burley, who still owns land to the north of the Close and has a right of access through the Close. Allum developed the property, building two further houses, North Heath and South Heath, to the north of Carmelstead in what was formerly its back garden. Allum constructed an estate road to the west to serve all three houses, leaving a grassy verge to the west ("the western strip"). Allum installed some automatic electric gates adjacent to the house Carmelstead, where the estate road joins the main road. The estate road includes a turning area to the west of North Heath. This is useful to all three properties because the access to the highway is at a busy point and it would be dangerous to reverse vehicles onto the main road. Allum also installed a Klargester sewage treatment plant ("the STP") to serve all three houses on the western strip opposite North Heath.
3. In July 2001, Allum sold North Heath to the defendants. Later the same month, Allum sold South Heath to the claimants. Both the claimants and the defendants thought that they would acquire the portion of the estate road and western strip adjacent to their properties, but Allum decided to retain this land within its ownership, merely granting rights of way over the road and agreeing to maintain it for a period of three years. It seems that Allum wished to keep the option of acquiring adjacent land for the purposes of further development.
4. In February 2003 Allum sold Carmelstead to a Mr and Mrs Gareze, who were the sitting tenants. This sale included that part of the western strip that lies immediately opposite Carmelstead.
5. On 23rd December 2004, Allum sold the estate road and the rest of the western strip to the defendants.
6. On 28th October 2005, Mr and Mrs Gareze sold Carmelstead to a Mr and Mrs Grey.
7. The principal issue in the case is whether the defendants are entitled to retain for their own benefit the estate road and the part of the western strip which they acquired in December 2004. There are three other disputes, a claim about the turning area, a dispute about the ownership of a boundary wall and an argument about some wooden trellising. I propose to deal with the main issue first.

The principal issue

8. The claimants claim that the defendants hold the land which they acquired in 2004 on a constructive trust, in accordance with the principle enunciated in Pallant v. Morgan [1953] Ch 43, for the owners for the time being of North Heath, South Heath and Carmelstead on such terms as the Court thinks fit. It is claimed that, as agreed, the land should be held through the medium of a management company. Such a company has now been established for the purpose by the claimants. This proposal is different from one that was mooted by Allum in early negotiations, that a management company should be set up merely to manage the estate without owning any of the land.
9. It is said that there was a continuing agreement, arrangement or understanding that there would be negotiation with Allum for the purchase on behalf of all the residents once the STP problems had been resolved, but that the defendants went behind the claimants' back and acquired the property for themselves.
10. For some years, Allum was viewed as the common enemy by the residents of the Close. They found Mr Allum, the managing director, difficult to deal with and they did not want his participation in any management company. They also wanted to avoid the threat of further development nearby. The STP kept breaking down causing an escape of sewage and noxious smells. While Allum was the enemy, the residents' relationship was a cordial one. Their plan was to get Allum to fix the sewage problem and then, when that had been done, to remove Allum from ownership of and all influence over the Close.
11. It is accepted that there was a meeting between the three resident couples at the end of January 2003 to discuss ongoing problems with the STP and the electric gates. It is at that meeting that the claimants allege that the relevant agreement, arrangement or understanding was reached that a management company would be established once the sewage problems had been resolved and that Allum's retained land should be purchased by all the residents through the medium of that company. The claimants' case is based entirely upon that meeting; all other allegations in the claimants' pleadings in relation to this issue are said to be in the nature of evidence confirming the alleged January 2003 agreement.
12. The defendants say that there was no settled or lasting consensus in January 2003 giving rise to legal consequences about the manner in which Allum should be removed from the Close. Further, they say that whatever the consensus at that meeting, it was overtaken by events; it did not affect the consciences of any of the parties and none of them relied upon it.

The witnesses: general observations

13. This type of dispute makes feelings and tempers run high and the parties do not always behave in a neighbourly fashion. Mr Corless confessed that on a couple of occasions he had deliberately placed wheelie bins and other obstructions in the turning area. That was in the heat of the moment and he accepts that he should not have done so. Another example was Mr Grey's evidence that he deliberately disarmed the security gates to the Close one Christmas Eve in order to provoke Mr Corless to come out and (as Mr Grey saw it) trespass on Carmelstead land to close them. When Mr Corless did come out to close the gates, (without, according to Mr Grey's own evidence, entering on to the land any more than was strictly necessary to do so) Mr Grey confronted him and tried but failed to pick a quarrel. Mr Grey seemed to think he was justified in such behaviour on the ground that Mr Corless was asserting ownership of the gates without providing documentary evidence in support.
14. The recollection of some otherwise honest witnesses was coloured, and to some extent falsified, by the strong sense of grievance that they felt. In particular the claimants' recollection of events in early 2003 was coloured in hindsight by their mounting sense of grievance bolstered by documents obtained on discovery. Sometimes it seemed to me that they failed to distinguish between un-neighbourly behaviour and behaviour giving rise to redress in law. As a result this action seems to have gained momentum and run away with itself.
15. Another feature of neighbour disputes is that they become very personal and the parties say things which they would normally avoid saying in the interests of politeness and consideration for others. One example is that in explaining why he did not keep Mr Baynes Clarke informed about negotiations with Allum Mr Corless portrayed Mr Baynes Clarke as unduly combative. Mr Baynes Clarke refuted this and his counsel, Mr Stafford, pointed to the reasonable tone of his many e-mails and letters. It is I believe important for me to state the impression I received after hearing all the evidence.
16. There was ample evidence that Mr Baynes Clarke tended to get carried away and engage in what he saw as plain speaking and others saw as aggression. There were several instances of this. He reduced an experienced planning officer to tears. He expressed his view that it was unprofessional of her to get upset and he did apologise but, on any basis, his attitude lacked tact. He forcibly tried to obstruct an engineer who had come to maintain the electric gates for the benefit of all the residents of the Close and vociferously objected to the engineer parking on the Greys' land near the gates. He deliberately tried to annoy the defendants by presenting them with the fait accompli of a new gate maintenance contract. He instructed solicitors at a very early stage in this dispute and told the defendants to address all correspondence through them. The claimants took what can only be considered extremely trivial points in this litigation about some screws in a boundary fence. Then there is the question of the photographs in the court bundle prepared by the claimants. The bundle contains over 340 photographs taken by Mr Baynes Clarke, some of which were intrusive and had no relevance to the dispute, such as photographs of Mr Corless filling a watering can. Mr Gareze gave evidence for the claimants but, uncomfortable though it evidently was for him to say so in front of them, he accepted that he had agreed with Mr Corless that Mr Baynes Clarke was capable of prejudicing negotiations with Allum because of his confrontational stance.
17. By contrast, as the evidence unfolded, I found Mr Corless's account of his actions in the autumn of 2004 convincing and coherent. He did not seek to evade criticism but tried to explain his behaviour, admitting that on occasion he had over-reacted.
18. Both sides now rely on Mr Gareze's evidence, saying, rightly, that he was a measured, careful and unpartisan witness and therefore a particularly impressive one. It probably helps that he is not living in the Close any more.
19. Mrs Baynes Clarke and Mrs Corless also gave oral evidence. Both are professionally qualified women of character but both took a secondary role in correspondence and negotiations over the amenity land. Understandably, both are at one with the positions adopted by their respective husbands.
20. Those are my preliminary observations. I now turn to the law on the principal issue.

Constructive trust

21. I was taken to several authorities on the proprietary claim based on constructive trust and what I may call its sister claim in proprietary estoppel, including the recent decisions of the House of Lords in Yeoman's Row Management Ltd and Another v. Cobbe [2008] UKHL 55 and Thorner v. Majors and Others [2009] UKHL 18. In the former case, Lord Scott of Foscote summarised the kind of constructive trust claim relied on in the present case as follows:

"It is impossible to prescribe exhaustively the circumstances sufficient to create a constructive trust but it is possible to recognise particular factual circumstances that will do so … A particular factual situation where a constructive trust has been held to have been created arises out of joint ventures relating to property, typically land. If two or more persons agree to embark on a joint venture which involves the acquisition of unidentified piece of land and a subsequent exploitation of, or dealing with, the land for the purposes of the joint venture, and one of the joint venturers, with the agreement of the others who believe him to be acting for their joint purposes, makes the acquisition in his own name but subsequently seeks to retain the land for his own benefit, the court will regard him as holding the land on trust for the joint venturers. This would be either an implied trust or a constructive trust arising from the circumstances and if, as would be likely from the facts as described, the joint venturers have not agreed and cannot agree about what is to be done with the land, the land would have to be resold and, after discharging the expenses of its purchase and any other necessary expenses of the abortive joint venture, the net proceeds of sale divided equally between the joint venturers. A number of cases exemplify the operation of a constructive trust in such a situation. Pallant v. Morgan [1953] Ch 43 was one such case. In essence, A and B agreed, prior to an auction of land in which both were interested, that A would bid for the land, that B would refrain from bidding and that if A became the purchaser the land would be divided between them….

Another case in which a constructive trust provided a remedy following a frustrated joint-venture was Banner Homes plc v. Luff Developments Ltd [2000] Ch 372. As Chadwick LJ, who gave the leading judgement in the Court of Appeal, observed at 397 "It is the pre-acquisition arrangement which colours the subsequent acquisition [of the land] by the Defendant and leads to his being treated as a trustee if he seeks to act inconsistently with it.""

22. I would make the following observations on the law as it applies in the present case. First, although the agreement between the parties requires less than contractual certainty (for otherwise a constructive trust would not be necessary) it is not engaged with anything less than an express accord between the parties. The court does not impute an agreement to the parties based on conduct alone although of course conduct could lead the court to infer that there had as a matter of fact been consensus.
23. Secondly, while unconscionable behaviour is a necessary condition for relief by way of constructive trust, it is insufficient by itself. I accept Mr Morshead's submission that the court should have two aims: one is to recognise and prevent unconscionable conduct, but the other is to protect people from unintended legal consequences resulting from informal relationships. Thus while something less than contractual certainty will suffice it is not clear in the absence of some rubric such as "subject to contract" how informal the consensus may be. What does seem to me to be plain as a matter of law is that in order to be enforced there must be a clear agreement on the basic details of the arrangement without difference of principle.
24. Thirdly, in order to succeed, the claimants have to show that they relied on the alleged agreement, arrangement or understanding. Typically that would be by staying out of the market themselves, or by committing expenditure that they would not otherwise have committed, but on any view their activity or inactivity must be referable to the consensus on which they rely. As Chadwick LJ said in the Banner Homes case at 398E and 399 B,

"It is necessary that, in reliance on the arrangement or understanding, the non-acquiring party should do (or omit to do) something which confers an advantage on the acquiring party in relation to the acquisition of the property; or is detrimental to the ability of the non-acquiring party to acquire the property on equal terms…

What is essential is that the circumstances make it inequitable for the acquiring party to retain the property for himself in a manner inconsistent with the arrangement or understanding on which the non-acquiring party has acted. "

Facts

25. With these principles in mind, I turn to the facts.
26. First, as I have said, there was the meeting of January 2003. On 3^rd February 2003 Mr Corless wrote to Allum's solicitors with what was evidently the result of the meeting. His letter complains about Mr Allum's failure to reply to letters, about the malfunctioning of the STP and the gates and then says:

"At some stage we will also have to discuss the maintenance of the estate going forward and the ownership of the common areas, the gate and the roadway within the estate. I propose that this be done once the work on the Klargester has been completed…"

Mr Baynes-Clarke, having seen the letter, e-mailed Mr Corless as follows:

"You have beaten me to the letter writing- well done. I am intending to write myself but my work schedule is tight at the moment."

27. The following month the claimants' solicitors wrote to Allum's solicitors with their concerns that the western strip had been sold to Mr and Mrs Gareze along with the rest of Carmelstead. The claimants did not however take any point at this or any later stage that the Garezes had contravened an agreement reached the previous month.
28. Significantly, on 9^th November 2003, a letter was written to Mr Allum drafted by Mr Corless and signed by Mr Gareze over the word 'Carmelstead', Mr Corless over the words 'North Heath' and Mr Baynes-Clarke over the words 'South Heath'. The letter complained about the STP and then went on to say,

"Regarding the maintenance of the Carmelstead site, the residents will be forming a formal management company to manage the estate once your involvement with the estate ceases. Your responsibility to us for the Klargester unit ends on 11 March and your commitment to maintain the road surface ends in July next year…We therefore expect, once all outstanding claims by the residents have been settled, that the common land be transferred to the management company set up by the residents (as originally proposed) on 12^th March 2004. Ownership of the roadway and gates should be transferred (as originally proposed) in July 2004 on the expiry of the agreement with South Heath. We would therefore expect your involvement with the estate to cease and all means of access to the estate to be returned to the residents. We will take on the responsibility of negotiating access to the woods to the north of the property with Mr Burley, who would also be happy for your involvement in the estate to cease."

29. The claimants rely on this letter, with its references to 'as originally proposed' as confirmation of the consensus that they say was reached in January 2003. The defendants say that there were no such original proposals and what is being referred to is the original proposal that each property should have the amenity land adjacent to it and that the whole estate should be managed through a management company. However it appears from an e-mail from Mr Corless to Mr Gareze and Mr Baynes-Clarke that Mr Corless believed (although I have seen no evidence that this was in fact the case) that the original arrangement with Allum, before it decided to retain the amenity land, had been to transfer the land to a management company. At all events, the transfer proposed in the letter of 9 November 2003 was promptly rejected by Allum.
30. On 21 March 2004, Mr Corless e-mailed Mr Gareze and Mr Baynes-Clarke, saying,

"I was thinking about drafting a letter to go to the Allums, saying that the residents are setting up a management committee to take over the running of the estate and to require them to hand over the land to the management company. Once handed over we could transfer the land in front of North and South Heath to Simon and myself and we can start to manage it properly."

The e-mail then goes on to mention landscaping and the continued smell from the STP. The letter proposes a meeting "to discuss the above". Mr Gareze responded that he thought a meeting would be a good idea but it seems that no meeting took place.

31. On 26^th April Mr Corless wrote to Mr Baynes Clarke in terms that showed that he was entrusting him to sort out the problems about the STP with Allum and saying that he, Mr Corless, would draft a letter to Allum about the land. However on 3^rd May he had second thoughts and suggested as follows:

"We should wait to address the land situation until this [landscaping and the STP] is sorted out…Anything to put pressure on the Allums and their contractors..."

32. The claimants rely on these two letters as an indication or representation that Mr Corless would not proceed further with the land question until the STP problem had been resolved and there had been further discussions with both the Garezes and the claimants. It is perhaps here that one finds the claimants' evidence that they stayed out of the negotiations in reliance on the former agreement.
33. There is an issue between the parties as to Mr Baynes Clarke's handling of the STP issue with Allum. The defendants and, it seems, Mr Gareze, believed that the claimants had so antagonised Allum that the problem took longer to resolve than necessary. Mr Corless's e-mails to Mr Baynes Clarke at the time do not show the dissatisfaction he says that he felt. Mr Stafford submitted that Mr Corless's explanation that the defendants kept their reservations about the claimants to themselves was incredible. However, I accept Mr Corless's evidence that he acted as he did to maintain cordial relations with his neighbours. That is not hypocrisy, it is good sense.
34. The problems with the STP were finally resolved by the beginning of September 2004, but this was because Mr Corless contacted the Environment Agency which then put pressure on Allum to fix the STP.
35. On 14 September 2004 the defendants wrote to Allum offering to buy the part of the western strip and the estate road opposite North Heath in exchange for dropping all claims against Allum. In order to put pressure on Allum the letter contained two threats: one, of a civil claim against Allum; the other, a threat to involve the planning authority in relation to Allum's alleged breach of planning conditions. In the same e-mail the defendants also said:

"In addition at a later stage we would require you to transfer the tarmac road and the gates of the estate to a management company that will be set up by the residents of Carmelstead. In consideration of which the residents of Carmelstead would take over complete management of the estate with no further expense or time to be incurred by yourself."

36. At first Allum and indeed the defendants' own solicitors thought that the defendants were proposing to act on behalf of all the residents, but Mr Corless explained to his solicitors that he was not. He was then advised that as the defendants could not unilaterally release Allum from claims by the other residents the only way they could satisfy Allum was to grant an indemnity against claims by the other residents. The defendants' solicitors advised them against giving such an open-ended indemnity. As Mr Corless acknowledged in oral evidence, this proved to be very good advice since the defendants were indeed called on under the indemnity in relation to an unanticipated claim which the claimants made against Allum.
37. The correspondence shows that it was not immediately clear to the defendants whether Allum was prepared to sell the whole of the amenity land or merely the part adjoining North Heath. They set a deadline for Allum but I accept Mr Corless's evidence that they were concerned that Allum might turn that deadline against them and seek to withdraw from the negotiation. It is evident that they did not trust Allum and wanted to achieve a deal while Allum was receptive to one, even if it meant that they had to give Allum an indemnity against claims from the other residents of the Close. It is also evident that they did not want to involve the other residents in the negotiations, in part because they believed it would delay matters to do so.
38. On 4^th October 2004 Allum wrote to the defendants, threatening development of nearby land for low-cost housing but also saying that it would be receptive to offers for the amenity land. It is the defendants' evidence that Mrs Corless showed this letter both to Mr Gareze and to Mrs Baynes Clarke on the evening of the day that the letter was received, 5^th October 2004. Mr Gareze accepts that he was shown the letter and he expressed an interest, asking to be kept informed. The claimants however deny that they ever saw the letter or knew that Allum was willing to sell the amenity land. They say that Mrs Corless, distressed about the low-cost housing proposal, did indeed visit South Heath to say she had had a letter from Allum, but that she only mentioned the threatened development. She neither showed Mrs Baynes Clarke the letter nor told her that Allum was inviting offers for the amenity land.
39. There is therefore a direct conflict of evidence about the letter. I have little doubt that both Mrs Corless and Mrs Baynes Clarke believe their respective versions of this visit, namely (Mrs Corless) that Mrs Baynes Clarke did see and read the letter and (Mrs Baynes Clarke) that she was not even shown the letter. One of them must be mistaken. Mr Stafford submitted that it was hard to believe that if the claimants had indeed been shown the letter they would not have asked to see the letter of 14^th September 2004 which had prompted it. There are so many possibilities about what may have happened that I cannot be satisfied of where the truth lies and I make no finding about it. I cannot at any rate assume that Mrs Baynes Clarke saw and understood the implications of the part of the letter which related to the amenity land.
40. It is common ground that the defendants did not keep the claimants informed about their negotiations with Allum. It appears from contemporaneous correspondence with Mr Gareze that both he and Mr Corless felt that Mr Baynes Clarke would prejudice the success of the negotiations. They did not want to put at risk closing a deal which would get rid of Allum at last. It is also true to say that the defendants had become disenchanted with the claimants and wanted to have control of the negotiations. I also accept, for reasons that will appear, that they believed that the claimants had lost interest in the Close.
41. The defendants did keep Mr Gareze informed that they were negotiating with Allum, but they did not furnish details of the proposals. By 27^th November 2004 the defendants and Mr Gareze seemed to have reached agreement that each house in the Close should take a transfer of the land opposite it in consideration only of an agreement to release Allum from all claims.
42. Mr and Mrs Gareze then said that they did not wish to assume ownership of the gates and would prefer a transfer of the estate road and gates to a management company. This altered the whole picture for the defendants who did not want to have to enter into parallel negotiations with the residents of the Close. The defendants had the opportunity to buy the amenity land for themselves and they took it. As Mr Corless wrote to his solicitor on 25^th October 2004,

"If it is just the land in front of our property, we would act on our own and indeed this is our primary purpose (as we were originally told that this was the land we were purchasing). This is our base case assumption.

If, however, the land is the rest of the estate, we would envisage buying it ourselves and then gifting the land in front of our neighbours' property to them in two packages, retaining the land in front of our property. This may be slightly underhand, but we do not want the potential argument about the land in front of our property, which our next door neighbours sometimes use to park in, much to our annoyance. We would want to enclose this land with gates, develop it to our design etc and we want to retain control over the issue."

43. The defendants say that the principal reason why they believed that it was not unconscionable to proceed on their own was that both the claimants and the Garezes were moving from the Close. As they saw it, the Garezes were quibbling about the gates and the claimants were showing a distinct lack of interest in the whole issue of the amenity land. Although relations were still ostensibly cordial, the defendants were, rightly or wrongly, losing patience with the claimants. They also decided that if they could not make a simple transfer of amenity land to the other residents in consideration of a release of Allum they did not want to make a gift at all.
44. The claimants' case is that they did not intend to move from the Close in the short or indeed medium term and that it was therefore an unacceptable and disingenuous excuse for keeping them in ignorance of negotiations. They say that they were indeed interested in the amenity land but were unaware of what was going on behind their backs. Their case is that they continued to rely on the consensus which they say had been reached in January 2003 and said and did nothing to give a contrary impression.
45. On 24^th December 2004, after completion of the transfer of the amenity land, the defendants wrote to both the Garezes and the claimants telling them what had happened. They offered to sell (not by that stage give) the western strip opposite South Heath to the claimants. Their letter was not received with any outward show of hostility. I accept Mr Baynes Clarke's evidence that he did complain orally to Mr Corless about the acquisition, but this was on the basis that Mr Corless had acted in an un-neighbourly and underhand manner, rather than because there had been breach of any long-standing agreement.
46. Relations deteriorated between the claimants and the defendants. It is notable that the issues then raised by the claimants did not include allegations about breach of any agreement reached in January 2003. The argument was about what land had been transferred, whether it included the boundary wall, and use of the turning area. By July 2005 the claimants had raised an argument based on alleged misrepresentations to Allum that the defendants were acting on behalf of all the residents. At the end of 2005 the claimants were asking for a management company to be set up to share responsibility for maintenance, failing which the defendants as owners had to deal with maintenance of the amenity land at their own risk. There was still no mention of any agreement at the beginning of 2003. The first time an argument based on constructive trust was raised was in the claimants' solicitors' letter of 13^th September 2006 but, again, this was based on alleged misrepresentation rather than any prior consensus.
47. The reason Mr Baynes Clarke gave for this in his oral evidence was that until the claimants saw the letter of 9^th November 2003 they were unable to prove the agreement. On the one hand he said that with sight of the letter he would have relied on the January 2003 meeting, on the other he said he would not have done so as that would have been unduly confrontational. I cannot help but infer that the claimants' memory of what happened has been coloured with hindsight.
48. Two principal issues of fact I have to decide are (i) what was agreed at the meeting in January 2003 and (ii) whether any understanding then reached bound the defendants in September 2004. This second issue involves the subsidiary matters of whether the claimants continued to rely on any such understanding and whether they were intending to move away from the Close.

What was agreed at the meeting in January 2003 and what was the nature of that agreement?

49. The claimants say that at the meeting there was agreement that the residents of the Close would work together as follows:

•    To get Allum to fix the STP;

•    To remove Allum from the remaining parts of the estate after the sale of Carmelstead to the Garezes;

•    To transfer ownership of those parts to all the residents (and it followed, not to any one of them alone);

•    While the details of that ownership remained to be worked out it was understood that a management company would be the vehicle for holding ownership as well as managing the estate.

50. It is not alleged that there was a legally binding contract to the above effect. What is said is that there was an agreement, arrangement or understanding. Much was made in evidence and argument of the difference between these three concepts but it does not seem to me that anything turns on any such distinction in the present case. What is relevant is whether there was sufficient consensus between all those present at the meeting to found the claim.
51. The defendants accept that the first two matters were agreed at the meeting. However they say that there was no clear agreement as to how Allum would be removed or how the amenity land was to be owned and managed. There was a campaign to get rid of Allum but no discussion of detail.
52. I agree with Mr Stafford that it follows logically that if Allum were to be displaced, someone else would have to take its place and that this had to be the residents as a whole. I also accept Mr Baynes Clarke's evidence that although the residents did not know exactly what the ownership mechanism would be, a management company was discussed as the probable vehicle. A management company was evidently thought to be a good idea for the purpose of holding the amenity land as well as managing the Close. There was therefore in my judgment a degree of consensus in January 2003 about the approach that was to be made to Allum at that stage and what was to be the effect if that approach were successful.
53. I note the type of arrangement described by Chadwick LJ in the Banner Homes case as giving rise to a constructive trust. He said (at 398 C-E)'

"It is necessary that the pre-acquisition arrangement or understanding should contemplate that one party ... will take steps to acquire the relevant property; and that, if he does so, the other party ... will obtain some interest in that property. Further, it is necessary that (whatever private reservations the acquiring party may have) he has not informed the non-acquiring party before the acquisition ... that he no longer intends to honour the arrangement or understanding. "

54. All the cases to which I have been referred involve an express arrangement that one party will proceed with a transaction for the benefit of all. I do not think that this type of equity is necessarily confined to such a cut and dried transactional situation. The issue in each case is whether the arrangement was such as to give rise to legal consequences, binding on the conscience of all the parties.
55. However I find some difficulty in construing the consensus that was reached in January 2003 as binding on the defendants' conscience in the acquisition of the amenity land. It was of the nature of an informal agreement between neighbours as to how to proceed against the common enemy, rather than an agreement intended to give rise to legal consequences between themselves. The thrust of the meeting was directed at forcing Allum out, not at the acquisition of the land.
56. This conclusion is supported by Mr Gareze's conduct. Very shortly after the meeting, in February 2003, he and his wife purchased Carmelstead and part of the amenity land for themselves. His evidence showed that he had no thought that his purchase of the western strip contravened any prior agreement or understanding. He had a clear conscience. His anger against the defendants was not because they had breached any agreement reached in January 2003 but because they had acted in what he felt was an underhanded way in the context of the discussions he had had with Mr Corless in the autumn of 2004. Mr Gareze was one of the supposed joint venturers in 2003 but he seemed to have no idea that the parties' consciences were affected by any earlier understanding about the destination of the land. His own conduct would otherwise be inexplicable, both in 2003 on the purchase of Carmelstead with part of the western strip, and in 2004, when he agreed with Mr Corless that the claimants should not initially be involved in the negotiations with Allum.

The position in autumn 2004

57. If I am wrong about the effect of the 2003 meeting an allied question arises whether the consensus in January 2003 continued to bind the conscience of the defendants some two years later. What has to be shown is not merely that the parties drew up a plan of campaign but that there was a lasting consensus that they would proceed on the basis of that plan.
58. The letter of 9^th November 2003 to Allum to which I have referred stated the residents' position. Allum rejected it out of hand. The letter is expressed as a statement of what the residents expected, but in my judgment that was a turn of phrase intended to put pressure on Allum to accede. Under cross-examination, Mr Baynes Clarke showed a marked reluctance to accept that this letter could be analysed as a proposal rather than a mere statement of intent. It seems to me that this was because he saw and understood the inconsistency of his position; the letter could be construed as a discrete proposal, separate from the discussions of January 2003, but even if it were not, it could be said that once Allum had rejected the residents' stance, any earlier agreement came to an end. In that context, Mr Corless's statement that the acquisition of the land should be addressed after the resolution of the STP problems can be taken at face value. There was no thought in his mind that the consensus reached at the January 2003 was still binding.
59. On 23^rd March 2007, the claimants' solicitors wrote a letter to the defendants' solicitors complaining about the defendants' purchase. It is significant that this letter expressly, emphatically and no fewer than three times, repudiates the existence at the time of the purchase of any agreement between the residents to establish a management company. Mr Baynes Clarke could not explain this in evidence other than to say that it was misleading. Again, however it seems to me that the letter, written on the claimants' instructions, shows that the stance agreed in January 2003 had been abandoned.
60. One of the principal reasons why the defendants say that they changed their approach by September 2004 was that both the Garezes and, they believed, the claimants, were leaving the Close. It was clear by the autumn that the departure of the Garezes at any rate was on the horizon. Accordingly, submitted Mr Morshead, if anything was to come of a supposed understanding between the neighbours, time was of the essence since matters had to be sorted out before new owners purchased Carmelstead. However the claimants remained inactive. I agree that this was a further indication that any earlier agreement about the destination of the amenity land had been abandoned. The claimants said and did nothing to indicate that they were relying on the January 2003 agreement. The claimants declined to join the defendants in making a claim based on landscaping as a means of putting pressure on Allum to quit the Close. At various points the STP appeared to have been fixed, but the claimants did not take steps to press the matter of the amenity land.
61. In deciding whether the claimants had indeed lost interest in matters relating to the Close at that time I have to determine a further conflict of fact. The defendants assert that the claimants told them that they were intending to move to their new property at Maresfield in Sussex. The claimants said that they did not and indeed could not have done so as they had had no present intention of leaving the Close. Their case is that their move to the Maresfield property was only ever a long-term proposition. They adduced planning evidence to show that they were intending to demolish the existing house and build a new one, an exercise which would take years rather than a few months to complete. In the events which have happened they still live in the Close, some five years later.
62. The claimants' case nevertheless exhibits a number of difficulties. It is beyond doubt that the defendants believed that the claimants were about to move. The defendants not only mentioned this belief to their own solicitors and to the Garezes but they said so to the claimants themselves in e-mail correspondence which went unchallenged at the time. When cross-examined about this the claimants' answer was simply that their plans were none of the defendants' business.
63. Then there is evidence from the defendants that they had a conversation with the claimants' daughter about how nice it would be for her to live near her grandmother, Mrs Baynes Clarke's mother. Significantly, Mrs Baynes Clarke's response when this was put to her was that the defendants had no business discussing such matters with the claimants' daughter; they should have addressed their queries to the claimants themselves. This was a surprising comment about an apparently innocent remark made to their daughter when she was baby-sitting for the defendants. It was even more surprising that this was the primary nature of the complaint.
64. The claimants gave the same account (of moving to be close to Mrs Baynes Clarke's mother) to their prospective new neighbours in Maresfield. The claimants' primary complaint about this evidence was that the defendants had invaded their privacy by speaking to their new neighbours. Under cross-examination they were unable satisfactorily to deny that this was the impression that the neighbours had gained from them. In answer to a question from the court it transpired that Mrs Baynes Clarke's mother was 84 years of age at the time of the trial and thus at least 79 at the relevant time.
65. It is common ground that the claimants put South Heath on the market with local estate agents in 2004. The claimants say that this was only for the purpose of establishing a value for mortgage purposes in order to finance the Maresfield purchase. However when I asked Mrs Baynes Clarke whether the claimants had in fact received any offers for South Heath she replied, rather bitterly I thought, that so far from having any offers they had not even had a second viewing.
66. In all those circumstances I accept the defendants' account that they gained the impression as a result of what they were told by the claimants that the claimants intended to move to Maresfield in the short term. Indeed I find that this was the claimants' original plan although it soon changed to the long-term plan that they now assert.
67. Against that background, and the claimants' reluctance to admit it, I am satisfied that there were conversations between the defendants and the claimants in which the claimants either disowned interest, or showed little interest, in the future of the Close.
68. In all the above circumstances any consensus reached in January 2003 had been abandoned by September 2004. In any event, in order to succeed in their claim, the claimants have to show that they relied on the consensus reached at the January 2003 meeting. The circumstances would have to be such that the defendants' consciences were affected by the consensus and by the reliance. I find that the claimants placed no reliance on what happened in January 2003, whether in failing to press the defendants, or in failing themselves to negotiate with Allum, or at all.
69. In all the above circumstances, I find that the claimants have not made out their claim to a constructive trust of the amenity land.

Laches

70. Alternatively, the defendants say that the claim, even if a good one, is barred by laches. They say there was grave delay in bringing the claim. Until these proceedings were started none of the claimants' complaints was founded on the basis of the claim as framed. Even in March 2007 the claimants were repudiating the idea that there was any agreement, live in 2004, about a management company.
71. Three heads of prejudice are relied upon. First, the fact that the claimants stood back and let the defendants do expensive landscaping work on the western strip which they had bought from Allum. Secondly, that it is unfair for the defendants to have to defend a different claim from that originally advanced. Thirdly, that it is now impossible to find an equitable solution based on an agreement of January 2003: the Garezes have left and no management company was ever set up.
72. As to the Garezes' involvement, I accept Mr Stafford's submission that if a defendant has acquired a benefit through unconscionable behaviour he should not be allowed to retain that benefit and the court will work out the best means of doing equity. The Greys have accepted that they should step into the shoes of the Garezes. If they had not done so, the Court could make an order in favour of the claimants and defendants alone.
73. The management company is a more difficult issue. It is common ground that the details of the company and how liabilities should be dealt with was never agreed by the parties. If I had found that the claim was made out, I agree that it would have been unsatisfactory to order a sale of the amenity land, as suggested in the authorities. The claimants have now set up a management company, but agreement as to sharing of expenses and liabilities cannot be foisted on to the parties where none already existed.
74. However it seems to me that all those grounds, except perhaps the second, support the defendants' defence to the substantive claim rather than support the laches defence. I do not believe that the delay was exorbitant, or that it has made a fair trial impossible. I find that the defence of laches has not been made out.

The turning area

75. The Transfer of South Heath to the claimants contains the following grant:

"The right for the Transferee and his successors in title and their respective licensees (in common with the transferor and all other persons entitled to the like rights) subject to payment of a fair proportion according to user of the cost of renewal repair and maintenance thereof… of way with and without private vehicles over the roadways within the land coloured brown on the plan annexed hereto subject to the Transferee's compliance with any regulations reasonably made by the transferor relating to the proper use thereof".

76. There is a considerable amount of common ground about the effect of this transfer in the events which have happened. It is common ground that the claimants are entitled to turn in the turning area and that such right stems from the transfer of 26^th July 2001 rather than any later document. It is also common ground that the right extends to the whole width of the turning area. Further, as I have said, Mr Corless admitted in evidence that the defendants deliberately obstructed that access (with his car, a wheelie-bin and basketball posts) because, rightly or wrongly, he believed that the claimants were deliberately annoying him by revving their car engine very early in the morning and thereby committing a nuisance. He accepted that the defendants were not entitled deliberately to obstruct access and, as I understood his evidence, they will not do so again. In March 2005 the defendants drew up plans for gateposts and a brick wall in the turning area. Although they maintain that implementation of those plans would not interfere with access they now appear to have abandoned them. It seems to me that permanent structures of that kind might well have been an actionable interference. However I find it impossible on the evidence before me to so determine and I make no findings in that regard. Mr Morshead assures me that the defendants now have no intention of doing anything other than enclosing North Heath without coming out at all into the turning area. Again, in a letter dated 22^nd July 2007 the defendants sought to gain agreement from the claimants that they would not use the estate road and turning circle save at certain times of day and on payment of specified charges. It is conceded that they cannot insist on this without, at any rate, making regulations as contemplated by the terms of the transfer. No such regulations have been made to date.
77. The only live issue between the parties is thus as to the actual use that may be made of the turning area by the defendants without interfering with the claimants' access. It is notable that the particulars of claim make no claim in nuisance. Accordingly what the court is being asked to do is to make a finding as to what does or might constitute unlawful interference. To some extent this is a theoretical exercise.
78. Mr Stafford primarily put his case as a matter of construction of the grant. However, the question is not the construction of the grant (which is common ground) but what user would be interference with the easement as so granted.
79. He relied on a condition of the original planning permission that the turning area can only be used as such. He submitted that the condition supports the proposition that the defendants cannot use the turning area for any other purpose even in the absence of proof that such user would constitute an interference with the claimants' access. It seems to me that while the planning condition is one of the factors that I should take into account in determining the extent of the claimants' rights (see Scott v. Martin [1987] 1 WLR 841), it is not determinative of what user is capable of infringing those rights.
80. I cannot properly make a declaration that the defendants are not entitled to use the turning circle for any purpose other than turning unless I am satisfied that this would constitute an interference with the easement: see Keefe v. Amor [1965] 1QB 334. As Blackburne J said in B&Q Plc v. Liverpool & Lancashire Properties Limited [2001] EGLR 92 at 96, the test is one of convenience and not necessity, and the question for the court is "Can the right of way be substantially and practically exercised as conveniently as before?" That is not a matter addressed in the evidence. Again, an injunction would be impossibly vague unless it addressed particular user.
81. Mr Stafford sought to overcome this problem by reformulating the claim for a declaration in the following terms:

"the defendants…are not entitled to park their vehicles in such a way or otherwise use the turning area in such manner as causes unreasonable interference to the rights of the claimants under the transfer of 26 July 2001".

82. In my judgment this formulation begs the very question that the court is being asked to decide. The defendants do not deny that they are not entitled to cause unreasonable interference; the issue is as to what constitutes such interference.
83. As an alternative to deciding that the turning area cannot be used for any purpose at all other than turning I am asked to decide whether playing basketball or parking on the turning area would be an interference with the easement. However the evidence does not assist with any certain indication of the circumstances or of the extent of potential interference. The court will not make a declaration on theoretical facts.
84. I would like to assist the parties because I do not want my judgment to be the source of yet further litigation. However, bearing in mind the common ground between the parties and the theoretical exercise I am being asked to undertake, I am unable to do so. Although I hope the defendants will heed the observations I have made I do not therefore propose to grant the relief sought in respect of the turning area.

Screws in the fence

85. It seems that a single screw which ought not to be there remains (or remained at the start of these proceedings) in the claimants' fence, attaching a trellis to it. There is a photograph of the screw. I accept the defendants' evidence that it was left in error and should have been removed. I trust it has been removed by now. It would be wholly disproportionate for me to say anything more about this part of the claim.

Ownership of the wall

86. I am asked to make a declaration of ownership of a wall constituting part of the boundary between North Heath and South Heath. Allum evidently thought it owned the wall when it sold the amenity land to the defendants. The claimants say that Allum was mistaken as the wall had already been transferred to them on their purchase of South Heath.
87. The boundary wall comprises a combination of a wooden fence (which, it is common ground, belongs to South Heath) and a brick wall running along a North-East South-West axis. A flower bed on the defendants' land runs up to the wall.
88. A true boundary is an imaginary line, although the term may be used to denote the physical objects by reference to which a line of division is described as well as the line of division itself. An actual boundary line may be either side of the feature that marks the boundary, or the median line that marks the boundary feature. However, the one thing the parties are agreed upon is that the wall is not a party wall and that the boundary does not run through the middle.
89. Mr Baynes Clarke gave evidence that Mrs Corless confirmed an understanding in summer 2003 that the wall belonged to South Heath. He also said that Mr Corless referred to the wall as if it were separate from Allum's title. Mr Corless, by contrast, said that he believed that Allum erected the wall to provide a boundary line when it decided to retain the amenity land, enhancing control and giving some measure of protection of its retained land. Mr Baynes Clarke responded that the wall was built in March 2001 before Allum decided to retain the amenity land. Both sides genuinely believe their account of events. However, the ownership of the wall is not a matter of the beliefs of the parties; the Court must ascertain their inferred intention from the construction of the transfers in the context, if appropriate, of the admissible extrinsic evidence.
90. The title deeds and associated plans constitute the primary evidence in establishing the boundary line. If the boundaries are clear from that evidence they will prevail.
91. The first transfer to be considered is the one from Allum to the defendants of North Heath. The land transferred was identified as that edged in red on the attached plan. The second is the transfer of South Heath. Again the land transferred is that identified as that outlined in red on the attached plan. On one copy of the plan in the Court bundle, there is a white space between the lines, but it was common ground before me that a different plan where there was no such space was the proper plan. These plans do not determine the issue of the boundary because of the "general boundaries rule" preserved by s.60 of the Land Registration Act 2002. The rule is that marking on a plan for the purposes of the register is general and the exact line of a boundary is undetermined unless an application is made for the exact boundary to be fixed.
92. Further, the Land Registry has confirmed that the jutting line shown on some of the plans as the northern boundary of South Heath is illusory and the boundary is thus a straight line.
93. In the Transfer of South Heath the claimants covenanted to maintain, repair and renew the boundary fences marked with a 'T' mark within the boundary on the Transfer plan. On the plan, the 'T' marks go up to the colouring of the perimeter line and Mr Stafford submitted that this supported the claimants' claim to the land. In the light of the general boundaries rule, however, I find the Transfers and their associated plans ambiguous in this regard. In my judgment the Transfers and plans are far from clear and unambiguous in delineating the boundary between North and South Heath.
94. It seems to me therefore that I have to turn to extrinsic evidence to determine what is the true intention to be imputed to the parties to the transfers on sale of North and South Heath and thereafter on the sale of the amenity land to the defendants. As I see it, there are only two matters of extrinsic evidence which bear upon the outcome. The first is a topographical feature, namely that the level of land on South Heath is, as is apparent from the photographs, significantly higher than that of North Heath. The wall can therefore be said to retain the land at South Heath as a safety feature, giving the claimants 'lateral and subjacent support and protection' as specified in the Transfer of South Heath. The second piece of evidence is that the brick wall appears from the photographs to follow a straight line from the wooden fence which indubitably belongs to South Heath.
95. Accordingly, while the evidence is thin, I find that such evidence as there is supports the claimants' case that the wall is part of the South Heath land and belongs to the claimants. I therefore so find.