Nirah Holdings Ltd v British Agricultural Services Ltd & Anor

Under a carefully negotiated option agreement, a party entitled to withhold consent to an ancillary planning agreement must apply the contractual test agreed by the parties. A protection against adverse impact on the value and development of retained land does not permit that party to maximise its future development value or to insist on absolute certainty about planning or access arrangements. At the outline-planning stage, reasonably sufficient information may be enough even though route details, travel plans and mitigation measures remain subject to later refinement. A party acts unreasonably where it refuses to undertake proportionate further assessment and instead insists on information which the other party is not free to provide under a confidentiality obligation.

The claimant held an option to acquire land from the defendants for a major visitor attraction and science research park. The option agreement required the claimant to obtain satisfactory planning permission and required the defendants to approve and enter into ancillary agreements, including a section 106 agreement, unless doing so would adversely affect their stated business and development aims.

The dispute concerned whether the claimant had supplied sufficient information about a park-and-shuttle bus route, travel plans and highway mitigation measures. The defendants refused approval, sought to terminate the option, and brought a counterclaim alleging contractual breaches. The central issues were the meaning of the contractual protection, the level of certainty and information required, and whether the defendants’ refusal was reasonable.

1. Claim and counterclaim. The claimant was entitled to a declaration that it had supplied sufficient information for the defendants to decide whether to approve the final draft section 106 agreement. The defendants were ordered specifically to make that decision. The counterclaim for declarations of breach and termination failed.
2. Construction of the option agreement. The defendants’ contractual protection concerned their ability to enhance the value of, and promote and undertake the development or redevelopment of, their retained land. It did not permit them to maximise the future development value of that land or to block proposals merely because some uncertainty remained. The parties’ stated aims required the defendants to accommodate and make allowances for the claimant’s project.
3. Information and reasonableness. The claimant had supplied all information reasonably available at the relevant stage. More detailed travel plans and highway mitigation measures could not reasonably be required because the experts agreed that refinement at a later stage was appropriate. The defendants had sufficient information to model the effects of the alternative shuttle-bus routes at modest cost. Their continued refusal to undertake that assessment, and their insistence on a confidential feasibility study which the claimant could not provide, were unreasonable.
4. Access route and planning requirements. The defendants could not insist on a route through the Wixams or require proof that a route would be delivered with certainty. A reasonable prospect of delivery was sufficient. The possibility that an alternative route might later require an application under section 73 did not justify refusal. The court also rejected the submission that the proposed section 106 agreement lacked a sufficient connection with the development.
5. The claimant had not unlawfully varied the planning application. The proposed Grampian condition requiring the shuttle-bus route before opening was consistent with the approved position. Any failures to provide documents or give notice of meetings were neither sufficiently particularised nor substantial material breaches justifying termination.