Option dispute decided in favour of landowner in Fishbourne Developments Limited v Stephens [2020] EWCA

National law firm Irwin Mitchell’s Real Estate Disputes Team has acted for the successful landowner in the recent Court of Appeal case of Fishbourne Developments Limited v Stephens [2020] EWCA Civ 1704 relating to the interpretation of an option agreement to acquire a 117-acre farm.

Danny Revitt, Joint Head of Real Estate Disputes Partner and George Cohen, Solicitor in Real Estate Disputes advised on the case. 

The option entitled the option holder (“FDL”) to purchase the farm at a 30% discount from open market value if they obtained “a planning permission granted by the Local Planning Authority permitting any development of the Property”. FDL gave notice to trigger the option based on a planning permission to erect a new pitched roof on one of the existing farm buildings.  The landowner argued that the planning permission relied on was not sufficient to give notice to trigger the option.   

The Court of Appeal dismissed FDL’s appeal against the High Court decision that the planning permission was not sufficient.  They concluded that an interpretation of the word “development” that enabled FDL to trigger the option with an inconsequential planning permission made little commercial sense in circumstances in which they would be entitled to purchase the farm at a discount of 30% from its open market value. They also held that the phrase “any development of the Property” meant that planning permission had to be obtained in relation to the whole or substantially the whole of the farm, and not part only of the farm.

“This was both an interesting and challenging case of contractual interpretation relating to an option agreement entered into nearly 20 years ago between two other parties”  said Danny Revitt and George Cohen.

Julian Greenhill QC of Wilberforce Chambers acted for the landowner as instructed by Irwin Mitchell.