Captiva Estates Ltd v Rybarn Ltd

The contract for the construction of flats was a development agreement within the meaning of the Construction Contracts Exclusion Order 1998 where the consideration was a specified sum and an option for the contractor to purchase leases in respect of some of the flats
 
CAPTIVA ESTATES LTD v RYBARN LTD

Technology and Construction Court
His Honour Judge David Wilcox
11 November 2005
 
 
The issue for determination was whether the contract for the construction of flats was a development agreement within the meaning of the Construction Contracts Exclusion Order 1998 (Statutory Instrument 1998 no 648) ("the Exclusion Order") where the consideration was a specified sum and an option for the contractor to purchase leases in respect of some of the flats. Judge Wilcox held that the contract was such an agreement.
 
The Exclusion Order provided that (1) a contract was a development agreement if it included provision for the grant or disposal of a "relevant interest" in the land on which took place the principal construction operations to which the contract related and (2) A "relevant interest" meant a freehold or a leasehold for a period which was to expire no earlier than 12 months after the completion of the construction operations.
 
There were many ways in which parties might arrange or provide for the disposition of an interest in land or the grant of a "relevant interest", for example the disposition might be (1) at some future time or (2) subject to the fulfilment of some condition wholly within a third party's control, such as a planning authority, a parent company or a lender or within the control of one or both of the parties to the contract, such as timely or satisfactory completion of the works by the contractor or the issue of the final certificate by an architect.
 
There was nothing in the Exclusion Order which would import the requirement that it was only concerned with unconditional agreements. Also it was not the case that the option to purchase did not relate to the relevant land, namely the whole site, on the ground that it was only for some of the flats insofar as "relevant" related to the interest and not to the land.
 
The option provisions of the contract gave the contractor an interest in land which was, incidentally, protected by another provision which provided for the deposit of the developer's land certificate in respect of the registered title (to facilitate registration of the agreement as a caution or notice).
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