Option to purchase — Consideration — Death of vendor intestate — Purported notice to exercise option — Notice addressed to executors — High Court holding that option holder had not effectively exercised option — Plaintiffs not estopped from denying effectiveness of notice
B owned a house at 68 Chapel Hill, Tilehurst, Reading, Berkshire, where he lived with his wife. On April 7 1977, then aged 79, he entered into an agreement with S granting S an option for 21 years to purchase the property for £4,000. The consideration for the option was £3,000, payable in instalments in addition to the purchase price. The option was exercisable on two events, namely the death of the survivor of B and his wife; or the giving of vacant possession of the property by B and his wife or the survivor of them. B’s wife predeceased him. B died intestate on March 8 1990. He was survived by his two daughters (“the plaintiffs”), who were alone entitled to his estate on his intestacy.
On April 25 1990 S delivered a letter addressed to the “executors” of B deceased, stating that it was his intention to exercise the option to purchase the property. Clause 4 of the agreement required notice of the exercise of the option to be served on B or “his successors in title”. The plaintiffs said that on the death of B, pending the grant of administration, the property vested in the President of the Family Division and the option could and should have been exercised by service of notice on him in the same way that notices to quit property held under periodic leases were served on him: see Fred Long v Burgess [1950] KB 115.
Held The option was not validly exercised and it ceased to have effect.
1. The schedule to the option agreement contained an extract of a conveyance dated October 12 1971 relating to the property. It was clear that the expression “successor in title” therein was synonymous with “the owners or owners for the time being of such adjoining property or any part or parts thereof”. That extract was from an instrument other than the option agreement and the meaning given to it in the expression “successors in title” was not conclusive of its meaning in the body of the option agreement. None the less one would not have expected the parties to have used in the body of their agreement the expression “successors in title” in circumstances where the same expression had been given a markedly different meaning in the extract set out in the schedule.
2. Thus, the wording of the schedule confirmed that the expression “successors in title” in clause 4 did not include the plaintiffs in their capacity as sole beneficiaries of B’s estate on his intestacy.
3. In the present case, there was a written agreement prescribing on whom notice was to be served and its express requirements had to be satisfied in order for valid notice to have been served. That agreement required notice on the successors in title to B. It did not provide for service on the occupiers of the property. The case was concerned with the acquisition of freehold title to property, title to which was not vested in the plaintiffs at any time: cf Rees v Perrot (1830) 4 C&P 230; Sweeny v Sweeny (1876) IR 10 CL 375.
4. Moreover, the plaintiffs were not estopped from denying the effectiveness under the agreement of the letter of April 25 1990 as notice exercising the option and the agreement had ceased to have effect.
Gavin Purves (instructed by Ellis & Fairbairn, of Reading) appeared for the plaintiffs; David Giles (instructed by Rowberry Morris, of Reading) appeared for the defendants.
