Vendors selling land subject to repurchasing option – Vendors obtaining permission for scheme relating to other property – Scheme requiring relocation of council allotments – Extent of land covered by option – Whether option triggered by permission – Judge finding option not exercisable – Appeal allowed
In 1975 the Stockwood Estate in Bedfordshire, which included a 280 acre farm located within the green belt, was conveyed to the claimant trustees (the Stockwood conveyance). In 1977 the trustees sold the farm to a predecessor of the defendant (the 1977 conveyance). The sale was subject to an option agreement whereby the trustees could repurchase part of the land (the option land), if planning permission were granted, at any time within 20 years from the date of the conveyance. The trustees retained ownership of a 1.24 acre area of land (the retained land) that lay between the field and an area of council-owned land given over to statutory allotments.
In the 1990s, the council showed themselves willing to remove the retained land from the green belt, provided that: (i) it could be comprehensively developed with the council land; and (ii) an alternative location could be found for the allotments. To meet those requirements, the trustees proposed a scheme that included the acquisition of the option land for the allotments. The council accepted the proposal and granted planning permission.
Accordingly, the trustees sought to exercise the option agreement, but following a dispute over what land was covered by the option, it was discovered that the 1977 conveyance, and all drafts of it, had been lost. Therefore the trustees had to rely upon the Stockwood conveyance’s definition of each of the parcels of land within the estate. The trustees claimed that a field identified as OS 0062 and OS 0052 (62 and 52) constituted the option land. The judge held, inter alia, that it could not be concluded from the wording of the option that both 62 and 52 were included within the option agreement. He also held that since permission was not required for agricultural use of the land, and as the land in issue was to be used for an agricultural use, namely allotments, it could not be said that the permission obtained by the trustees had triggered the option. The trustees appealed.
Held: The appeal was allowed.
1. The judge should have started with the presumption that the plan attached to the Stockwood conveyance was correct, thereby resolving any ambiguity between the wording of the option and the plan by applying the information contained within the plan. Further, the judge had not taken into account the commercial context in which the option had been granted, namely that the trustees would benefit from the development of the option land. Common sense compelled the conclusion that the parties had intended the option to cover the whole field, namely 62 and 52, since without area 52, area 62 was landlocked.
2. Whether the option had been triggered depended upon the construction of the option. The option referred simply to the grant of planning permission for part of the land, and did not stipulate that the permission in question was actually necessary for the land. The trustees were seeking to realise the development value of the land either directly or indirectly. They could not carry out the development without exercising the option. Accordingly, the planning permission granted was sufficient to enable the trustees to exercise their option.
Joseph Harper QC (instructed by Wilsons, of Salisbury) appeared for the claimants; Patrick Clarkson QC and Richard Langham (instructed by Knowles Benning, of Shefford) appeared for the defendant.
Thomas Elliott, barrister
