The case of Fishbourne Developments Limited v Stephens highlights the problems where words are not given clear meaning in legal documents.
Fishbourne and Stephens had entered into an Option Agreement in respect of 117 acres of land. The Option was exercisable “if and when the Purchaser (Fishbourne) obtains a Planning Permission”. Planning Permission was defined in the Option Agreement as:
“a planning permission granted by the local planning authority permitting any development of the Property”.
Fishbourne obtained a planning permission for the construction of a new roof on one of the buildings on the Option Land. Fishbourne claimed that it was able to trigger the Option on the basis that it had a planning permission permitting development. Stephens said, no that was not what the Option Agreement meant. Assumedly, the objection was based on the fact that by reason of the limited extent of the area having the benefit of a planning permission what Stephens would be paid for the land was appreciably less than he was anticipating.
Stephens claimed that what the Option Agreement meant was a planning permission for development of a new building which should apply to all or a substantial part of the Option Property.
Presumably because Fishbourne thought it would acquire the Option Property at, as they say, a good price, it opposed Stephens’ stance, relying on the technical definition of the word ‘development’ – as to which see the Town and Country Planning Act 1990 s.55.
The dispute ended up in the Courts which found in favour of Stephens. Whether the decision is right or wrong and whether it will be appealed is not the point. The point is that the Option should have been drawn so that there was no margin of error or misinterpretation. I appreciate that modern Option Agreements seem to have more definitions than actual provisions and that lawyers seem to spend unnecessary hours in agreeing the definitions. This case explains why that is necessary.
One of the difficulties is where, as in this case, a word can be interpreted in more than one way.
Here is something to keep you amused whilst subject to restriction and not able to go to the pub. Try finding a simple definition of a table. You may say a table is made of wood and has four legs. I know tables made of glass with no legs. Keep going – and have fun!
Hugh Ellins – June 2020