Persimmon Homes Ltd v Bovis Homes Ltd (Rev 1)

In construing a contractual condition that an identified bypass had been opened to the public, effect must be given to the contract’s own definition of the bypass. The condition cannot be replaced by a test based on whether a planning authority considered a separate planning condition satisfied. Where the defined bypass comprised part single carriageway and part dual carriageway, public access to only one lane of the dual-carriageway section did not satisfy the condition. The reason for the restriction was immaterial. Construction obligations elsewhere in the agreement and the possibility of opening before highway adoption did not alter the meaning of clause 18.3.2. Specific performance of the put option was therefore upheld.

Bovis sold land to Persimmon under an agreement requiring Persimmon to construct the Stanground Bypass. The agreement granted Bovis a put option requiring Persimmon to repurchase the land if the bypass was not opened to the public by 31 October 2009.

Persimmon permitted public use from the evening of 30 October, but one lane of the dual-carriageway section remained coned off and parts of the lighting scheme were incomplete. Bovis served notice exercising the option, deemed served on 2 November 2009. Persimmon disputed the notice’s validity.

HH Judge Purle QC granted Bovis summary judgment for specific performance. The appeal concerned whether the defined bypass existed and had been opened to the public within clause 18.3.2.

Disposition. The appeal was dismissed unanimously. The order granting Bovis summary judgment and specific performance of the put option was upheld.

1. Contractual construction. The rationale for clause 18 was found in condition C6 of the Residential Development Permission, but the parties had not expressed clause 18.3.2 by reference to satisfaction or discharge of that condition. The contractual assumption was that this different wording was deliberate. Condition C6 referred generally to a bypass, whereas the Sale Agreement expressly defined the By-Pass by reference to the section 106 agreement and the detailed bypass planning permission. Clause 18.3.2 therefore had to be construed consistently with that contractual definition. Interpreting it by reference to the Council’s view of condition C6 would improperly enlarge the condition and make it more onerous.
2. Relevant contractual standard. The issue was whether the By-Pass, as defined in the section 106 agreement and authorised by the planning permission, had been constructed and opened to the public. The construction and adoption obligations in clause 10 were irrelevant. So too was the parties’ contemplation that the bypass might be opened before adoption as a highway maintained at public expense.
3. Opening to the public. The defined bypass comprised part single carriageway and part dual carriageway. By 2 November 2009, one lane throughout the dual-carriageway section remained closed to the public, so the public had access only to a single lane in each direction. On the plain wording of clause 18.3.2, the bypass had not been opened to the public. The reason for closing the lane, including work on bridge abutments, was immaterial.
4. Other matters. The incomplete lighting provided a powerful basis for contending that the bypass had not been constructed, but the court considered it unnecessary to reach a concluded view on that issue. The alternative implied-term argument was not addressed. The absence of disclosure and cross-examination did not prevent summary judgment because the material contractual background was common ground and the result did not depend on whether outstanding works were properly characterised as snagging.

• Court of Appeal (Civil Division): Appeal from the order dated 18 January 2010 of HH Judge Purle QC, sitting as a High Court Judge, granting Bovis summary judgment for specific performance of the put option. The appeal was dismissed in [2010] EWCA Civ 1252.