Construction of option deed – Option subject to obtaining planning permission – Dispute over extent of land covered by option – Plan allegedly in conflict with deed – Modern approach to resolution of ambiguity
Where the valid exercise of an option depends upon the obtaining of a planning, permission the option giver may well be anxious to demonstrate that the permission obtained does not comply with the option agreement.
The successful appeal by the option taker in Smith v Royce Properties Ltd [2001] 25 EG 156 (CS) deserves attention if only because it demonstrates the modern approach to cases of ambiguity. Taking its cue from the speech of Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896), the court refused to allow 19th-century rules of construction to stand in its way when it rejected a meaning that failed to make commercial sense in the light of the background knowledge reasonably available to the parties at the time of the agreement.
PP 2002/77
Construction of option deed – Option subject to obtaining planning permission – Dispute over extent of land covered by option – Plan allegedly in conflict with deed – Modern approach to resolution of ambiguity
Where the valid exercise of an option depends upon the obtaining of a planning, permission the option giver may well be anxious to demonstrate that the permission obtained does not comply with the option agreement.
The successful appeal by the option taker in Smith v Royce Properties Ltd [2001] 25 EG 156 (CS) deserves attention if only because it demonstrates the modern approach to cases of ambiguity. Taking its cue from the speech of Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896), the court refused to allow 19th-century rules of construction to stand in its way when it rejected a meaning that failed to make commercial sense in the light of the background knowledge reasonably available to the parties at the time of the agreement.
