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Cobbe v Yeoman's Row Management Ltd

Cobbe v Yeoman's Row Management Ltd

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Case Copied 30 July 2008 86 min read

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HOUSE OF LORDS

SESSION 2007–08
[2008] UKHL 55

on appeal from: [2006]EWCA Civ 1139

OPINIONS

OF THE LORDS OF APPEAL
FOR JUDGMENT IN THE CAUSE

Yeoman’s Row Management Limited (Appellants) and another v Cobbe (Respondent)

Appellate Committee

Lord Hoffmann

Lord Scott of Foscote
Lord Walker of Gestingthorpe
Lord Brown of Eaton-under-Heywood
Lord Mance

Counsel

Appellants: Respondent:

Nicholas Dowding QC Thomas Ivory QC

Timothy Morshead Myriam Stacey

(Instructed by DLA Piper UK LLP) (Instructed by Bird & Bird)

Hearing dates:

4 and 5 JUNE 2008

WEDNESDAY 30 JULY 2008
HOUSE OF LORDS

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

Yeoman’s Row Management Limited (Appellants) and another v

Cobbe (Respondent)
[2008] UKHL 55

LORD HOFFMANN

My Lords,

1. I have had the advantage of reading in draft the speech of my

noble and learned friend Lord Scott of Foscote. For the reasons he
gives, with which I agree, I too would allow this appeal.

LORD SCOTT OF FOSCOTE

My Lords,

Introduction

2. The essence of the problem to be resolved in this case can be quite shortly stated. A is the owner of land with potential for residential development and enters into negotiations with B for the sale of the land to B. They reach an oral “agreement in principle” on the core terms of the sale but no written contract, or even a draft contract for discussion, is produced. There remain some terms still to be agreed. The structure of the agreement in principle that A and B have reached is that B, at his own expense, will make and prosecute an application for the desired residential development and that, if the desired planning permission is obtained, A will sell the land to B, or more probably to a company nominated by B, for an agreed up-front price, £x. B will then, again at his own expense, develop the land in accordance with the planning permission, sell off the residential units, and, when the gross proceeds of sale received by B equals £2x, any further gross proceeds of sale will be divided equally between A and B. Pursuant to this agreement in principle B makes and prosecutes an application for planning permission for the residential development that A and he have agreed upon. B is encouraged by A to do so. In doing so B spends a considerable sum of money as well, of course, as a considerable amount of time. The application is successful and the desired planning permission is obtained. A then seeks to re-negotiate the core financial terms of the sale, asking, in particular, for a substantial increase in the sum of money that would represent £x. B is unwilling to commit himself to the proposed new financial terms and A is unwilling to proceed on the basis of the originally agreed financial terms. So B commences legal proceedings. The question for your Lordships is what relief, in the circumstances described, B should be granted, for, I believe, none of your…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] UKHL 55
Decision Date: 30 July 2008

CaseChat Overview and Summary

Yeoman’s Row Management Limited (Yeoman’s Row) and another v Cobbe (Cobbe) was a House of Lords case concerning the availability of remedies to a party who had acted to his detriment in reliance on an oral agreement. Cobbe, an experienced property developer, had negotiated with Yeoman’s Row for the sale of a block of flats, which Yeoman’s Row intended to demolish and replace with six houses. Although the parties had not agreed on all the terms of the sale, they had agreed on the core financial terms and Cobbe had incurred expenses in obtaining planning permission for the redevelopment. Cobbe sought relief on the basis of proprietary estoppel, constructive trust, unjust enrichment, and quantum meruit. The lower courts had held that Yeoman’s Row was estopped from denying that Cobbe had acquired a proprietary interest in the property and had ordered Yeoman’s Row to compensate Cobbe for half the increase in value of the property attributable to the planning permission. The House of Lords held that Cobbe was not entitled to proprietary relief on the basis of proprietary estoppel or constructive trust. Instead, Cobbe was entitled to be compensated for his expenses in obtaining planning permission, less any reimbursement due to Yeoman’s Row for an earlier payment. The House of Lords substituted its own orders for those of the lower courts, ordering Yeoman’s Row to pay Cobbe a quantum meruit for his expenses in obtaining planning permission, less any reimbursement due to Yeoman’s Row.

Orders