The Court of Appeal held that Denis and Sheila Cremins could exercise a buy-back option over their former lands at Knockacummer Wind Farm only on the relevant dates in 2042, unless the operator, Knockacummer Wind Farm Limited, brought the date forward by serving an acceleration notice. The court also ordered two dates in the option agreement to be rectified.
The appeal concerned a 2012 agreement under which the Cremins sold the lands to SWS, Knockacummer’s predecessor, for €6 million. It provided for a buy-back option for €1 and, if that option was exercised, an option for SWS to take a 25-year lease. The lands formed part of the wind farm in County Cork; nine of its 29 turbines were on the Cremins lands.
In March 2013, a notice on behalf of Mr Cremins purported to exercise the buy-back option. Knockacummer then purported to exercise the lease option. The parties disputed whether that lease notice had been properly served. Knockacummer also argued that the buy-back option could not be exercised before 2042 and sought rectification of the agreement. The Court of Appeal judgment addressed contractual construction and rectification; it noted that other appeal issues were addressed in separate judgments by the other members of the court.
The court said the agreement contained no express date for when the Cremins could first exercise the buy-back option. However, Hogan J agreed with the High Court that the agreement, read as a whole, implied that it could not be exercised before 2042. He relied on the lease provisions, which contemplated setting its terms and rent by reference to legislation, market practice and wind farm lease standards at the time the lease would be granted. In his view, those provisions could not operate if the option were exercised decades early. The agreement expressly allowed Knockacummer to accelerate the process by notice; it gave no equivalent early-exercise right to the Cremins.
The court directed that the purchase option date be changed from 22 June 2042 to 31 August 2042, thirty years after the sale closed. It also changed the option’s lapse date from 23 April 2042 to 1 September 2042. Hogan J said the footnotes to the dates showed they did not reflect the parties’ intentions and that rectification would remove potential discrepancies, including in the 90-day notice requirement.
The Court of Appeal varied the High Court order to include those rectifications and otherwise affirmed its decision on contractual construction. Hogan J agreed with Peart J’s judgment on the other appeal issues and with Whelan J on the interpretation of section 82(1)(b) of the Land and Conveyancing Law Reform Act 2009 and findings concerning Ms O’Connell. He disagreed with Whelan J’s conclusions on contract interpretation and rectification. The judgment does not state the court’s disposition of the separate dispute over service of the lease notice.