J U D G M E N T

1. LORD JUSTICE CHADWICK: This is an appeal from an order made on 6th June 2005 by Mr James Allen QC, sitting as a Deputy Judge of the High Court in the Leeds District Registry in the Chancery Division, in proceedings brought by Castlebay Limited against the appellant, Asquith Properties Limited.

2. The proceedings arise out of an option agreement made between the parties and dated 18th August 2003 upon the terms of which Castlebay, a company registered in the Isle of Man, granted to Asquith an option to purchase property at Grammar School Street, Bradford, at a purchase price of £1,000,000. The option consideration was £15,000. The option was exercisable by the service of a notice at any time during the "option period", a term defined in the agreement. As defined, the option period expired on the "termination date". The termination date was defined to mean 22nd December 2004, unless, on that date, the circumstances fell within one or other of five subparagraphs; of which, for present purposes, the relevant was 1.1:

"a decision is awaited in respect of a Planning Application submitted by or on behalf of the Grantee to the Local Planning Authority prior to such date."

3. If circumstances did fall within one or other of subparagraphs 1.1 to 1.5 in the definition of "termination date", the termination date was postponed until 21 days after the earlier of the occurrence of one or other of three events set out under subparagraphs 2.1 to 2.3. In the present context, the relevant date or event would have been the date 14 weeks after the date of the grant of a planning permission: see subparagraph 2.2. But, in any event, the termination date was not to be later than 22nd June 2005.

4. The primary issue between the parties was whether, on 22nd September 2004, a decision was awaited in respect of a planning application submitted by or on behalf of Asquith to the local planning authority; which, in this case, was the City of Bradford Metropolitan District Council. The judge found that no such decision was then awaited. Accordingly, the option period determined; the option was no longer exercisable after that date; and the option notice, served on 15th April 2005, was of no effect.

5. That issue turns on the meaning to be given, in the context of the agreement of 18th August 2003, to the expression "a decision in respect of a planning application. "Planning application" is also defined in the agreement. The expression means:

"any application for planning permission for the Development submitted by or on behalf of the Grantee and the Owner jointly and in their joint names."

The Grantee is Asquith and the Owner is Castlebay. In that context, "the Development" is defined to mean:

"the demolition of any buildings on the Property and the construction and erection of dwellinghouses apartments and flats on the Property (with or without any other property) as the Grantee may require together with any car parking access roads and such other facilities and/or development as the Grantee shall reasonably require to facilitate the development of the Property and any other property for residential purposes."

6. "Planning permission" is also a defined term. It means:

"a planning permission granted in respect of a Planning Application."

For my part, I find that definition of "planning permission" of no assistance in determining what is meant by the phrase "planning application". It is, of course, necessary to understand what is meant by the expression "an application for planning permission"; but the defined term "planning permission" does not assist in that task. Read together, the definitions are circular.

7. The underlying facts may be summarised shortly. On 12th February 2004 Asquith submitted an outline application in respect of "a proposed new build residential development with limited office and A3 use", at a location described as City Gate, Hamm Strasse, Grammar School Street, Bradford. The matters for which approval was sought were siting of buildings, access, design and landscaping. Approval for external appearance was not sought in that application. The activity to be carried out on the site was described as "residential, office, leisure" on a combined floor space of 13,724 m², apportioned as to 12,504 m² to residential use, 1,000 m² as to office use, and 220 m² to leisure use. The number of parking spaces was specified; as were the surface materials for vehicular access and hardstanding and the nature of the lighting. The application was not made in the joint names of Castlebay and Asquith. It was made in the name of Asquith alone; although it contains a certificate that, on 13th February 2004, the day after the date of the application, notice of the application was served on Castlebay. On one view it was not a "planning application" within the meaning given to that expression by the agreement - which requires that the application be in joint names - but no point has been taken on that.

8. The application was amended by a letter of 4th May 2004 from Asquith's architectural consultants to the Council in which it was requested that the application be treated as omitting the reserved matters for design and landscaping and so as to include only siting of buildings and access. Although not happily expressed, we are asked to assume that what is meant by that request is that the approval of design and landscaping were to be treated as reserved matters.

9. On 2nd August 2004 Bradford Metropolitan District Council notified Asquith that outline planning permission had been granted in respect of the application made in February 2004, as amended by a revised plan received on 23rd June 2004 which showed altered access. There is no reference in that grant to the amendment made by the letter of 4th May 2004, but its effect is carried through into the conditions.

10. The permission of 2nd August 2004 was granted, subject to 17 conditions, the first of which was in these terms:

"Application for approval of the matters reserved by this permission for subsequent approval by the Local Planning Authority shall be made not later than the expiration of three years beginning with the date of this notice."

The matters for subsequent approval included those in condition 3 (constructional specification of vehicular and pedestrian access), 6 (street lighting specification), 7 (car park lay out), 8 (works affecting the stability of the highway), 10 (construction plan relating to the hours of construction work, delivery and location of site offices and other matters), 11 (facing and roofing materials), 13 (noise insulation scheme), 15 (design of the external appearance and landscaping of the site), and 16 (phasing of construction). The most important of those matters was that reserved by condition 15:

"Before any development is begun plans showing the (i) design (ii) external appearance of the building (iii) and the landscaping of the site, must be submitted to and approved in writing by the Local Planning Authority."

11. On 17th December 2004 Asquith submitted a reserved matters application, seeking approval in respect of design, external appearance and landscaping - the matters reserved by condition 15 of the outline permission. Again, that application was not made in joint names; although notice of it was given to Castlebay. The application was accepted as valid by the Council on 20th December 2004, two days before the option period would have expired under the terms of the agreement.

12. On 23rd December 2004, Messrs Wells Connor & Co, solicitors for Asquith, wrote to Castlebay's solicitors, Messrs Lee & Priestley, in these terms:

"As a matter of courtesy, I enclose a copy of my client's architect's letter of 16th December to Bradford Council Planning Department, a copy of the application for the approval of the reserved matters, and a copy of the Council's acknowledgment of the valid application dated the 21st December.

In the circumstances and in accordance with the terms of the contract, the provisions of paragraph 1.1 and 2.2 of the definition of 'Termination Date' apply.

I am instructed to advise you that it will be my client's intention to proceed to exercise the Option and complete the purchase as soon as possible after the reserved matters approval has been granted by the Council."

13. Lee & Priestley replied on 7th January 2005; in a letter which contained the following paragraphs:

"However I cannot accept that an application for the approval of reserved matters in the Outline Permission falls within those circumstances defined in 'Termination Date' as one of those cases which might take such a date beyond 22 December 2004. Surely such matters are not 'in respect of a Planning Application' but are matters in respect of a Planning Permission already granted.

My clients also take the view that Asquith Properties Ltd have not met the Grantees obligations in the agreement of 18 August 2003, specifically those contained in clause 4.5 of that agreement.

Accordingly Asquith Properties Ltd have not exercised their option within the Option Period and in any event were in breach of the terms of that agreement during the Option Period.

Please therefore make immediate arrangements to remove any notice or caution which may have been registered against the title of Castlebay Ltd."

Clause 4.5 of the agreement, to which reference is made in that letter, is in these terms:

"In conducting discussions or negotiations with the Local Planning Authority the Grantee will keep the Owner and its agents fully informed of all applications the progress of applications correspondence meetings negotiations proposals and proceedings and shall furnish copies of all such applications correspondence and minutes of meetings and shall consider any representations of the Owner in relation to such applications negotiations proposals and proceedings."

That point is now not pursued.

14. Two further points were taken in a letter from Lee & Priestley, dated 7th March 2005. The first was that under 4.1 of the agreement Asquith were required to make a planning application within six months following the date of the agreement, with time being of the essence. The letter went on:

"If we accept (which we do not) that your client's application of December 2004 was a Planning Application (as defined in the Option Agreement) it must be out of time under the terms of the Agreement. This would be a fundamental breach of the Agreement which our client would accept as terminating the Agreement. However as we have already stated the position is quite clear and time runs on the basis of your application received by the planning department on 16 February 2004.

There have been other breaches of clause 4. You have failed to keep the owner and its agents fully informed under clause 4.5 and you have failed to notify under clause 4.9."

15. No point on clause 4.9 is now pursued; but the first of those two points - that a planning application which is said to include the reserved matters application made on 17th December 2004 could not have been made within the six month period prescribed by clause 4.1 of the agreement - was argued before the judge and is raised in this court by way of respondent's notice.

16. The issues raised in the correspondence between the parties' solicitors were not resolved. On 12th May 2005, Castlebay issued a claim form under CPR Part 8 seeking the following relief:

"A declaration that the defendant is not entitled to exercise the option to acquire the property at Grammar School Street, Bradford registered under title no WYK371482 ('the Property') granted by an agreement in writing between the Claimant and the Defendant dated 18 August 2003;

(2) Alternatively a declaration that the Agreement has determined by breach;

(3) An order that the register of title no WYK371482 be altered by cancellation of the entry in the charges register protecting the option granted by the Agreement."

On the same day Castlebay issued an application notice seeking an order that the entry protecting the rights granted by the agreement of 18th August 2003 be cancelled; and that Asquith be restrained by injunction from applying for registration of any other entry on the register of title at Her Majesty's Land Registry.

17. That application came before the judge on or about 6th June 2005. As I have said, he held that the option period had determined on 22nd December 2004; on the basis that, on that date, no decision was awaited in respect of a planning application submitted by or on behalf of Asquith to the local planning authority.

18. The judge's reasons are set out in paragraphs 33 and 41 to 45 of his judgment. After referring to the provisions in sections 57, 58, 70 and 92 of the Town and Country Planning Act 1990, and to articles 3 and 4 of the Town and Country Planning (General Development Procedure Order) 1995, (SI 1995/419) he said this at paragraph 33:

"It is, in my judgment, clear from the statutory provisions to which I have referred that as a matter of planning law firstly outline planning permission is a planning permission which is made subject to the approval by the local planning authority of reserved matters on an application being made to it for such within three years of the grant of the permission. Secondly, the approval of the reserved matters enables the commencement of the development in respect of which the outline permission had been granted. Thirdly, a clear distinction is drawn between planning permission and reserved matters. Fourthly, separate and distinct procedures are laid down in respect of applications for planning permission and applications for the approval of reserved matters. The former is generally prescribed and governed by the Town and Country Planning Act of 1990, the latter by the General Development Procedure Order of 1995. There is to a limited extent however an overlap, as one can see from Article 3 of the General Development Procedure Order. Fifthly, the application for planning permission, and that for approval of reserved matters, serve different purposes. It is the grant of outline planning permission which establishes the principle of development."

And, after rehearsing the submissions made to him on behalf of the parties, the judge expressed his conclusions at paragraphs 41 and 44 and 45. He said this:

"41. My conclusions are as follows. I am satisfied, that, as a matter of planning law, firstly outline planning permission is planning permission and the grant of approval of reserved matters is not a planning permission. Secondly, an application for outline planning permission is an application for planning permission, and an application for reserved matters of approval is not. Thirdly, an application for outline permission does not have to be coupled with an application for reserved matters approval in order to constitute planning permission, and fourthly, an application for outline permission is not in any way dependent upon an application for reserved matters approval being made in order for it to constitute a planning application."

....

44. One starts from the premise that given, (1) the nature of the business carried on by the Defendant, its experience and knowledge of planning matters, (2) the option agreement was prepared by solicitors having experience of and knowledge of planning law, (3) the purpose of the agreement was to enable Asquith to acquire land for development which would be subject to planning law, and (4) the agreement had been prepared quite clearly with planning law in mind, with reference to planning law, and employing terminology derived from planning law. In all those circumstances the meaning to be ascribed to the phrase 'planning application' is a meaning which planning law ascribes thereto, unless, when I look at the agreement as a whole, I conclude the parties intended a different meaning to attach to the phrase.

45. I have looked through the whole of this agreement. I have paid particular attention to Mr Crawford's arguments, but, having looked at the whole of the agreement, I have concluded the parties did not intend the phrase 'planning application' to bear a different meaning from that which it bears according to ordinary planning law. There is nothing within the four corners of the option agreement, or otherwise in the admissible evidence before me, which suggests the parties intended a different meaning from that prescribed by the basic planning law."

19. It followed, in the judge's view, that the only relevant application for planning permission was that made on 12th February 2004. Outline planning permission was granted on that application on 2nd August 2004, and no decision in respect of that application was awaited on 22nd December 2004. Accordingly, the judge ordered that the entry in the charges register of the title to the development site be cancelled; and he ordered that the defendant, Asquith, be restrained from applying for registration of any further entry. He gave permission to appeal, expressing the view that the defendant had a real prospect of success on an appeal, as this court might not uphold his construction of the agreement. Subsequently, he stayed his order of 6th June 2005 pending the appeal.

20. As I have said, Asquith has appealed from the order of 6th June 2005. It does so on the grounds set out in section 7 of the appellant's notice. They may be summarised - fairly, I think - as a contention that the judge was wrong to construe the expression "application for planning permission for the Development" - where that expression appears in the definition of "planning application" in the agreement - so as to exclude the application made on 17th December 2004 for approval of reserved matters.

21. What is said, in effect, is that approval of reserved matters was necessary to enable the development to be carried out; so that the phrase "application for planning permission for the Development" must be given a meaning which reflects that need. The appellant points out, also, that, contrary to the view which the judge expressed, "planning application" is not a term of art used in the planning legislation.

22. It is common ground, I think - and, if not, it seems to me beyond dispute - that the agreement of 18th August 2003 must be construed with the planning legislation in mind. The planning legislation is, plainly, part of the background which the parties to an agreement of this nature must be taken to have in mind at the time when they make the agreement; and, indeed, the agreement itself makes a number of references to the Town and Country Planning Act 1990, which it includes as a defined term.

23. It is convenient, therefore, to refer to the relevant provisions of the 1990 Act. They are primarily contained in Part III of the Act. Section 57(1) imposes the underlying requirement:

"Subject to the following provisions of this section, planning permission is required for the carrying out of any development of land."

Section 58(1) sets out the persons and bodies by which planning permission may be granted. In the present context, 58(1)(b) is in point:

"Planning permission may be granted -

(b) by the local planning authority on application to the authority in accordance with a development order."

24. Section 62(1) - in the form in which it was when the agreement was made in August 2003 - provided that:

"A development order may make provision as to applications for planning permission made to a local planning authority."

It is common ground that the relevant development order in that context, and in the context of section 58, is the Town and Country Planning (General Development Procedure) Order 1995.

25. Section 65 of the 1990 Act is in these terms, so far as material:

"(1) A development order may make provision requiring -

(a) notice to be given of any application for planning permission, and

(b) any applicant for such permission to issue a certificate as to the interests in the land to which the application relates or the purpose for which it is used

and provide for publicising such applications and for the form, content and service of such notices and certificates.

(2) Provision shall be made by a development order for the purpose of securing that, in the case of any application for planning permission, any person (other than the applicant) who on such date as may be prescribed by the order is an owner of the land to which the application relates, or is given notice of the application in such manner as may be required by the order.

(3) A development order may require an applicant for planning permission to certify, in such form as may be prescribed by the order, or to provide evidence, that any requirements of the order have been satisfied."

26. Section 70 of the Act provides for the determination of applications. Subsection (1) is in these terms:

"(1) Where an application is made to a local planning authority for planning permission -

(a) subject to sections 91 and 92, they may grant planning permission, either unconditionally or subject to such conditions as they think fit; or

(b) they may refuse planning permission."

27. Section 78 provides a right of appeal against planning decisions and the failure to take decisions. Subsections (1) and (2) are in these terms, so far as material:

"(1) Where a local planning authority -

(a) refuse an application for planning permission or grant it subject to conditions;

(b) refuse an application for any consent, agreement or approval of that authority required by a condition imposed on a grant of planning permission or grant it subject to conditions; or

(c) refuse an application for any approval of that authority required under a development order or grant it subject to conditions

the applicant may by notice appeal to the Secretary of State.

(2) A person who has made such an application may also appeal to the Secretary of State if the local planning authority have done none of the following:-

(a) given notice to the applicant of their decision on the application;

(aa) given notice to the applicant that they have exercised their power under section 70A to decline to determine the application;

(b) given notice to him that the application has been referred to the Secretary of State in accordance with directions given under section 77

within such period as may be prescribed by the development order or within such extended period as may at any time be agreed upon in writing between the applicant and the authority."

28. Section 92, to which section 70(1) is made subject, is concerned with outline planning permission. It is in these terms, so far as material:

"(1) In this section and section 91 'outline planning permission' means planning permission granted, in accordance with the provisions of a development order, with the reservation for subsequent approval by the local planning authority or the Secretary of State of matters not particularised in the application ('reserved matters').

(2) Subject to the following provisions of this section, where outline planning permission is granted for development consisting in or including the carrying out of building or other operations, it shall be granted subject to conditions to the effect -

(a) that, in the case of any reserved matter, application for approval must be made not later than the expiration of three years beginning with the date of the grant of outline planning permission."

29. Section 336(1) of the 1990 Act contains general definitions. The following are of relevance in the present context. "Planning permission" means permission under Part III of the Act. That is to be seen in contrast with the definition of "planning decision", which means a decision made on an application under Part III. "A planning decision" is, plainly, a wider definition than a decision to grant or refuse a planning permission. There is no statutory definition of "planning application"; but the phrase "application for planning permission" within the Act must mean an application for permission under section 58(1) and not an application for approval of reserved matters under section 92(2)(a). That that is the correct view is confirmed by the decision of the Divisional Court in R v Bradford upon Avon Urban District Council, ex parte Bolton [1964] 1 WLR 1136 at pages 1147 and 1148.

30. As I have said, the relevant Development Order for the purposes of section 62 of the 1990 Act is the General Development Procedure Order 1995. Article 1(1) of that Order contains definitions of "outline planning permission" and "reserved matters":

"'Outline planning permission' means a planning permission for the erection of a building, which is granted subject to a condition requiring the subsequent approval of the local planning authority with respect to one or more reserved matters."

"Reserved matters" in relation to an outline planning permission, or an application for such permission, means any of the following matters, in respect of which details have not been given in the application, namely, (a) siting; (b) design; (c) external appearance; (d) means of access; (e) the landscaping of the site."

31. Article 3 of the General Development Procedure Order provides for an application for outline planning permission. Article 3(1) is in these terms:

"Where an application is made to the local planning authority for outline planning permission, the authority may grant permission subject to a condition specifying reserved matters for the authority's subsequent approval."

The note to that article in the Encyclopaedia of Planning Law, 3B-3010, explains the reasons underlying article 3(1):

"The idea of outline planning permissions was introduced by the 1950 General Development Order (arising from the informal practice of several planning authorities). It allows the planning authority to give a decision in principle, and to reserve details for subsequent approval. This requires a balance to be struck between the scope of the outline permission (which is the planning permission for all purposes of the Act: see Hargreaves Transport v Lynch [1969] 1 WLR 215; (1969) 20 P & CR 143) and the detailed approval."

32. Article 4 of the 1995 Order addresses applications for approval of reserved matters:

"4. An application for approval of reserved matters -

(a) shall be made in writing to the local planning authority and shall give sufficient information to enable the authority to identify the outline planning permission in respect of which it is made;

(b) shall include such particulars, and be accompanied by such plans and drawings, as are necessary to deal with the matters reserved in the outline planning permission; and

(c) except where the authority indicate that a lesser number is required shall be accompanied by three copies of the application and the plans and drawings submitted with it."

The editorial note to that article in the Encyclopaedia of Planning Law, 3B-3013, explains that:

"An application for approval of reserved matters is not an application for planning permission, so the provisions as to ownership certificates (art 6), publicity (art 8) and consultation under art 10 are all inapplicable."

The provisions referred to are provisions introduced to give effect to section 65 of the 1990 Act. Note 10 to section 62 of the 1990 Act, at paragraph P62.20, is to the same effect, as the judge noted at paragraph 29 in his judgment.

33. It is clear that received planning wisdom - as embodied in the editorial comments in the Encyclopaedia - is that an application for approval of reserved matters is not an application for planning permission. And, as I said, that has a firm foundation in the decision of the Divisional Court in the Bradford upon Avon case.

34. It follows from that analysis of the statutory provisions that the judge's summary in paragraphs 33 and 41 of his judgment is plainly correct. Indeed, I do not understand that summary to be the subject of any serious criticism on this appeal. What is said, however, is that - whatever may be the correct meaning of the expression "application for planning permission" in the context of the legislation and the 1995 Order - the expression which the judge was required to interpret is that in the agreement: "application for planning permission for the Development". Reading that expression together with the agreed definition of the development, the relevant application, it is said, is an application for planning permission for development comprising "the demolition of any buildings on the property and the construction and erection of dwellinghouses apartments and flats on the property, as the grantee may require together with any car parking access roads and other facilities and/or development as the grantee shall reasonably require to facilitate the development of the property for residential purposes". And it is said that "planning permission for the Development" cannot have been obtained until all reserved matters had been approved; because until all reserved matters had been approved the grantee, Asquith, was not in a position to carry out the development which is contemplated by the agreement.

35. In support of that submission, we were taken to the decision of this court in Hargreaves Transport Ltd v Lynch [1969] 1 WLR 215. It is important to have the facts of that case in mind. The vendor, Mr Lynch - who was a demolition contractor - had applied to the local planning authority for outline planning permission for use of the site as a transport depot. While that application was outstanding, he entered into a contract for the sale of a site to Hargreaves Transport Limited - which, as its name suggests, was a transport company. Condition 9(a) of that contract was in these terms:

"The said property is sold subject to the following further conditions - (a) That the purchaser shall receive permission from the appropriate planning authority (i) to use the said property as a transport depot and (ii) to develop the said property by the erection of buildings, and carrying out such works and using the property in such manner as is appropriate for a transport depot and the carrying on of the purchaser's business of road haulage contractors in the manner in which it is customary according to modern practice in this type of business. For the purpose of this agreement planning permission shall not be deemed to be received if such planning permission is subject to a condition which the purchaser reasonably considers to be unacceptable."

36. Outline planning permission was granted for the use of the site as a transport depot; so satisfying, at first sight at least, condition (i). But the outline permission imposed a condition for reserved matters approval in these terms:

"Permission for carrying out of the development referred to in Part 1 hereof in accordance with the application and plans submitted has been granted, subject to the following conditions - (1) That satisfactory detail plans, sections and elevations of the proposed buildings showing their siting, design and external appearance and any existing or proposed means of access thereto shall be submitted to and approved by the local planning authority before any development is commenced."

When the purchaser submitted detailed plans for approval, local opinion in opposition to the use of the site as a transport depot had become so intense that approval of reserved matters was refused.

37. The purchaser sought to rescind the contract and recover the deposit which it had paid. It was held by this court that it was entitled to do so. Lord Denning MR said this, at page 219A and B:

"While I agree that in planning law, outline permission is the permission, nevertheless, I do not think that it is the permission required by condition 9 of this contract. The contract must be construed sensibly. The purchasers wanted a planning permission which would enable them to erect buildings and use them for their transport business. An outline permission was quite insufficient for that purpose. They could not turn a sod or lay a brick until the details were approved. In order to make the condition work sensibly it must mean that the purchasers are to receive detailed permission from the planning authority so as to be able to use the site as a transport depot and to develop it by putting buildings on it."

Russell LJ agreed; but expressed his view in more guarded terms, at page 219H to 220C:

"But the question is whether this clause 9 inserted at the instance of the purchaser is to be satisfied by anything short of such planning authority consent - I use an intermediate phrase - as would allow the purchaser to lay the first brick, to take the first essential step in converting this site to its intended use. Now, it is said for the vendor that ever since the outline planning permission of April 5, clause 9 had been satisfied. Several points were made in support of that submission. It was said that the language in clause 9 is the language of planning legislation which distinguishes, as it does, between planning permission and the approval of details under a condition attached to a planning permission. The parties had before the contract, it is pointed out, co-operated in an outline planning application; but clause 9 makes no mention of the approval of detail, though such approval is an inevitable condition of any outline planning permission. The clause, it was said, should be construed contra proferentem. The parties, it was said, may have assumed that detailed approval would follow without difficulty on outline planning permission. Now, these, it seems to me, are valid points of argument, and my mind has, I confess, wavered a good deal in the course of argument. I am, however, on the whole persuaded that in all the circumstances of this case, the urgency, known to both parties, for the purchaser to start to use the site as its depot as soon as possible; the uselessness of the site to the purchaser until the work could be started on it; the fact that the purchaser could not lawfully start work until a condition requiring approval of detail was resolved - those circumstances seem to me enough and just enough to justify the construction of clause 9 in the sense of it being a reference to such planning consent - again I use an intermediate work - as would enable work to start on the site."

Widgery LJ agreed with both the other members of the court on that.

38. It can be seen, therefore, that the decision in Hargreaves turned on the particular circumstances of that case set out by Russell LJ in his judgment: the urgency known to both parties for the purchaser to start to use the site as its depot as soon as possible; the uselessness of the site to the purchaser until work could be started on it; the fact that the purchaser could not lawfully start work until the condition requiring approval of detail was resolved. Those circumstances were enough - and, in Russell LJ's words, just enough - to justify construing clause 9 in the sense of it being a reference to a planning consent which would enable work to start on the site forthwith.

39. I turn, therefore, to the agreement in the present case. It is, of course, an option agreement. The grantee of the option, Asquith, has a limited period - the option period - in which to decide whether it wishes to exercise the option and purchase the property. There is an obvious tension between the interest of the owner, Castlebay, in not restricting its power to dispose of the site elsewhere for longer than is reasonably necessary to enable Asquith to reach an informed decision, and the interest of Asquith in having as long as it needs to reach a decision, with as much assurance as it can obtain from the local planning authority that it will be able to develop the site as it wishes. That tension is resolved by the provisions which define the option period; and, in particular, the provisions which determine the termination date on which that period will end.

40. It can be seen, at once, that the parties agreed that the termination date would fall on or within two dates which were six months apart. The option period would not terminate before 22nd December 2004; and it would not extend beyond 22nd June 2005. So Asquith had until 22nd December 2004 to satisfy itself as to the matters which would affect its ability to develop - whether or not it needed that time - and it would have only until 22nd June 2005 to satisfy itself about those matters - again whether or not it needed any more time. That was the essence of the bargain which the parties struck. But there was an opportunity for an extension within the six month period.

41. The circumstances which would lead to the option period continuing after the 22nd December 2004 - and, potentially, for a further six months - are set out under the five subparagraphs in the definition of "termination date". They were these:

"1.1 a decision is awaited in respect of a Planning Application submitted by or on behalf of the Grantee to the Local Planning Authority prior to such date [that being prior to 22nd December 2004]; or

1.2 an inquiry and decision are awaited in respect of an Appeal or if such an inquiry has been held (in whole or in part) a decision is awaited; or

1.3 the period of fourteen (14) weeks shall not have expired after the date of the grant of a Planning Permission; or

1.4 proceedings have been instituted; or

1.5 the Local Planning Authority has passed a resolution to grant or the Secretary of State has issued a statement saying he is minded to grant a Planning Permission and a Planning Permission has not been granted."

42. Those paragraphs have to be read with the definitions of "appeal" and "proceedings" in mind. "Appeal" is defined as:

"all or any of the following as the case may be:-

1. an appeal to the Secretary of State under section 78(1) of the Act against the refusal of a Planning Application;

2. an appeal to the Secretary of State under section 78(2) of the Act against the non-determination of a Planning Application;

3. A Call-In.

4. An application for Planning Permission pursuant to section 73 of the Act."

It is necessary to have in mind in that context that a "Planning Application" is any application for planning permission for the development. "Proceedings" are defined to mean:

"all or any of the following:-

1.1 an application for judicial review under Part 54 - Civil Procedure Rules; or

1.2 an application pursuant to section 288 of the Act including in each case any appeals to a higher court following judgment of a lower court.

2. any reconsideration by the Local Planning Authority of a Planning Application or the Secretary of State of an appeal (as the case may be) following a previous Planning Permission or Refusal being quashed pursuant to an application within the meaning of paragraph 1 above and the matter being remitted to the Local Planning Authority or the Secretary of State (as the case may be)

3. an application (within the meaning of paragraph 1 above) arising from the grant of a Planning Permission or a Refusal following a reconsideration of a Planning Application by the Local Planning Authority or an appeal by the Secretary of State pursuant to paragraph 2 above."

43. It is to be noted that "appeal" is defined in terms which include an appeal to the Secretary of State under section 78(1) of the Act against the refusal of a planning application. Section 78(1) of the Act, which I have read earlier, makes a clear distinction between paragraph (a), the refusal of an application for planning permission, and (b) the refusal of an application for any consent, agreement or approval of the authority required by a condition imposed on a grant of planning permission. In other words, section 78(1) makes a distinction between the refusal of an application for planning permission and the refusal of an application for approval of reserved matters, a distinction which is common throughout the Act and the General Development Procedure Order.

44. It is relevant to see for how long the period is extended in the circumstances that one or other of the five paragraphs of the definition of "termination date" are satisfied. The extension was for 21 days after the earlier of: 2.1, the date on which proceedings are exhausted and a planning permission is not granted or upheld; 2.2, the date 14 weeks after the date of grant of planning permission unless prior to such date proceedings shall have been instituted, in which case it shall be the date referred to in paragraph 2.1; and 2.3, the date six weeks after the date of issue of a refusal by the Secretary of State, unless within such period proceedings shall have been instituted in which case it shall be the date referred to in paragraph 2.1. In that context "refusal" is also a defined term. It means:

"either the following:-

1. refusal of a Planning Application by the Local Planning Authority; or

2. the dismissal of an Appeal by the Secretary of State."

45. I have read those provisions in order to see whether they shed some light upon what the parties had in mind in the present case. But, taken together, they support whichever conclusion is reached once it is decided that "planning application" does mean an application for planning permission in the Town and Planning sense; or it is decided that "planning application" does have the wider meaning for which the appellants contend - that is to say, does include an application for approval of reserved matters.

46. For those reasons I do not find assistance in those various provisions, save this: this is clearly an agreement which has been drawn with the provisions of the planning legislation fully in mind. In those circumstances, I would expect the parties to have intended, by the phrase "application for planning permission", the meaning which that phrase has long been recognized to bear in the context of planning legislation. If there were a context which required that meaning to be enlarged,, the court would give effect to that requirement, as it did in the Hargreaves case. But, absent any context which requires some larger meaning, I am left with an agreement which is intended to strike a balance between the interests of the owner and the interests of the grantee. And I am left with the firm conclusion that, if these parties had intended some meaning to be given to the phrase, "any application for planning permission" wider than the meaning which that phrase normally bears, they would have made that clear.

47. The parties have not made that clear. So I am left with the meaning which the judge gave to that phrase; which is the meaning which it bears in planning legislation. There is no reason in the present case to give a wider meaning by reason of circumstances analogous to those in the Hargreaves decision. There was a balance to be struck between the interests of the two parties; and it is impossible to take the view that a balance struck by giving that phrase its normal planning meaning other than a sensible and commercial meaning arrangement.

48. For those reasons, I would dismiss this appeal. I do not find it necessary to consider the point raised by the respondent's notice.

49. LORD JUSTICE RIX: I agree. I agree.

ORDER: Appeal dismissed with costs; detailed assessment; payment on account of £16,000 within 14 days.