Chantry Estates (South East) Ltd v Anderson & Anor

An option agreement is not to be supplemented merely because it favours one party or produces an unattractive result. A term may be implied only where necessary to make the contract work. The court must not rewrite a detailed commercial agreement by selecting a more even-handed obligation from a range of possible terms.

On a summary judgment application, the question is whether the defence has a real prospect of success or whether there is another compelling reason for trial. Where the express terms operate coherently and the proposed implied term would create a different bargain, summary judgment may be granted.

Chantry Estates sought summary judgment under rule 24 of the Civil Procedure Rules for specific performance of a written option agreement under which Mr and Mrs Anderson had agreed to sell their property. The option period could be extended where a planning appeal had been lodged before the initial expiry date.

The defendants relied on the planning history and argued that the agreement should be controlled by an implied obligation requiring Chantry to pursue planning permission and any appeal with due or reasonable expedition. They also raised arguments based on collateral contract, mistake, misrepresentation and estoppel. The central issue was whether those matters disclosed a real prospect of a successful defence at trial.

1. Summary judgment. The application was suitable for determination under rule 24.2 of the Civil Procedure Rules. The relevant question was whether the defendants had a real prospect of successfully defending the claim or whether there was another compelling reason for trial.
2. Construction and operation of the option. The express terms extended the option period where a planning appeal had been lodged before the initial six-month period expired. The appeal was sent by post and was therefore deemed served in the ordinary course of post, absent proof to the contrary, applying section 329 of the Town and Country Planning Act 1990 and section 7 of the Interpretation Act 1978. The option was consequently exercised within the extended period.
3. Implied term. The proposed term requiring Chantry to pursue planning permission or an appeal with due, reasonable or best endeavours was not necessary to make the contract work. The agreement operated coherently according to its express terms, although it favoured the buyer and contained no final cut-off date apart from the perpetuity period.
4. The detailed nature of the agreement, and the existence of specific planning obligations in clause 19, further militated against implying a wider obligation. An implication of the suggested kind would produce a different contract and would require the court to choose between various possible formulations. That was impermissible contract rewriting.
5. The surrounding material did not establish an arguable collateral contract, rectifiable mistake, misrepresentation or estoppel capable of defeating the express bargain. The defendants had no reasonable prospect of success at trial. Summary judgment was therefore entered for Chantry on its claim for specific performance.