Conveyance — Right of pre-emption — Offer to sell made — Acknowledgement of interest by offeree — Whether offer valid exercise of conditions of pre-emption — Whether letter of acknowledgement valid acceptance
By an agreement of May 1963, certain land at Peartree Cottage, Albany Road, West Bergholt, Suffolk, was conveyed by a Mrs Ivy Churchman to the defendants. Clause 8 of that agreement provided that “if at any time hereafter during the lifetime of the Vendor she should desire to sell the land coloured brown and yellow on the said plan … the Purchasers … shall have the option of purchasing the said land … on the following terms:-(a) The Vendor will make an offer to sell in writing to the Purchasers and such offer will remain open to acceptance for a period of one month from the date [t]hereof. (b) If the Purchasers shall before the expiration of the period in writing accept such an offer the Vendor will sell the said property to the Purchasers on the terms hereinafter mentioned…. (g) The sale [price] under the said option shall in default of agreement be fixed by the valuation of a valuer appointed by the parties hereto or in default of agreement to be appointed by the Vendor’s solicitors”.
On May 4 1988 a letter, headed “Re: Option Agreement dated 13th May 1963”, was sent on behalf of Mrs Churchman to the defendants. It stated: “under the terms of the above Option Agreement, we hereby give you notice of Mrs Churchman’s intention to sell the piece of land coloured brown and yellow on the plan attached to the said Option Agreement. We shall be grateful if you will please let us know within one month of today’s date whether or not you wish to exercise your option to purchase”. On May 26 1988, the first defendant replied: “I confirm my conversation with Mrs Churchman when I said I retained the interest in the land first expressed in 1963 as a logical squaring off of my site — subject to agreement in price”.
The plaintiffs, as executors of the late Mrs Churchman, moved for a declaration that the terms of the option had been validly exercised, that there had been no valid acceptance of the offer to sell, and that a caution against dealing with the title should be vacated. On behalf of the defendants it was submitted that this was a right of pre-emption, which required two stages, an indication of a desire to sell and an offer to sell; the letter of May 4 may have satisfied the first stage, but it did not satisfy the second.
Held The motion succeeded and the declaration sought by the plaintiffs was granted.
The agreement of 1963 contained a pre-emption, and not an option, and the clauses must be construed strictly. The letter of May 4 expressly referred to the agreement and identified the land; its express reference to the so-called option agreement incorporated by reference the terms of the pre-emption. The letter was an offer to sell. The letter of May 26 was written by the first defendant alone and was not a clear acceptance. It was equivocal in its expression of interest. The terms of the right of pre-emption had been complied with by Mrs Churchman; as there had been no acceptance within the time-limit, the rights had now lapsed.
Banstead Urban District Council v Wilkinson
(1962) 182 EG 159 considered.
Malcolm Davis-White (instructed by Ellison & Co, of Colchester) appeared for the plaintiffs; and M R King (instructed by Budd Martin Burrett, of Colchester) appeared for the defendants.
