H&S Developments v Chant [2016] EWCA Civ 848

Charlie instructed by Stephen Wray at Porter Dodson Solicitors was successful in the Court of Appeal in resisting an application for a second appeal in the matter of H&S Developments v Chant [2016] EWCA Civ 848, a case involving the construction of a land option.

Charlie Newington-Bridges was instructed by Stephen Wray at Porter Dodson and acting for H&S Developments was successful in the Court of Appeal in resisting an application for a second appeal in the matter of H&S Developments v Chant [2016] EWCA Civ 848, a case involving the construction of a land option.

H&S Developments (‘H&S’), a development company, entered into an option agreement with Mrs Chant, a land owner, on 24 February 2010 by which it acquired an option to purchase land from her if ‘detailed planning permission’ were obtained in respect of the land by 23 February 2015. Accordingly, it was accepted by both parties that ‘detailed planning permission’ was a condition precedent for the exercise of the option. The issue was what that phrase meant. On 29 January 2014 planning permission in an outline form was granted by the Local Planning Authority. On 5 February 2014, H&S served its first notice exercising the option. Mrs Chant declined to transfer the land on the basis of that notice of call of option. In April 2014 H&S issued proceedings seeking specific performance and damages. On 19 December 2014 there was a determination by the Local Planning Authority to grant permission in respect of reserved matters in relation to the outline planning permission. On 13 January 2013 the Claimant served a second notice of call of option; this was done before the end of the option period.

The principal issue at first instance and on the first appeal was whether the outline planning permission obtained by H&S in January 2014 qualified as a planning permission according to the relevant definition in the option agreement i.e. ‘detailed planning permission’. Having considered Court of Appeal authority including Castlebay Limited v Asquith Properties Limited [2005] EWCA Civ 1734 in which Chadwick LJ held that ‘an application for approval of reserved matters is not an application for planning permission’, both the District Judge and the Circuit Judge came to the conclusion that ‘detailed planning permission’ did cover such planning permission as had been obtained in January 2014 and accordingly that the first notice of exercise of the option was valid and should have been complied with. HHJ Denyer QC also noted that the reserved matters left open by the outline planning permission had been resolved by the end of 2014 and before the second notice of call of option.

As the case was a second appeal the threshold test for granting permission to appeal was whether the appeal raised important points of principle or practice or there was some other compelling reason for the Court of Appeal to hear the second appeal: CPR 52.13(2).

The main submission made on behalf of Mrs Chant was that there was an important point of principle or practice involved in the case because the definition of planning permission in the option agreement was in a form which reflected a common precedent for a landowner’s option agreement. In his judgment Sales LJ, finding for H&S, held that there was no important point of principle or practice or other compelling reason to grant permission for a second appeal because the option agreement was a non-standard agreement, albeit it bore some similarity to a precedent to which he was referred. In any event, he reasoned that even if successful on the construction point it would amount to a Pyrrhic victory because the second notice of call of option would, even on the interpretation of the contract proposed by Mrs Chant, have been a valid exercise of the option rights under the option agreement because by that stage a detailed planning permission was in place, taking the outline planning permission in conjunction with the reserved matters approval of 19 December 2014. In practical effect, LJ said, the appeal would be academic. Accordingly, the application was dismissed and H&S were successful.