The defendants sold a commercial property to the plaintiffs knowing that the plaintiffs intended to redevelop it and would need planning permission for it. Unknown to both parties the building had been identified by the Department of the Environment as a possible candidate for ‘listing’ as a protected property. The parties signed a contract for sale but the very next day the building was listed, thus making it much harder for the plaintiffs to get permission to redevelop. The value of the property with no redevelopment potential was Euros 1.5m less then the contract price. The plaintiffs sought to rescind the contract on the ground of common mistake.
Held: Rescission was refused.
Buckley LJ said: ‘for the application of the doctrine of mistake it was necessary to show that the mistake existed at the time of the contract. Here the listing of the property had occurred one day after the contract was entered into’, and commented: ‘there was no mutual mistake as to the circumstances surrounding the contract at the time when the contract was entered into. The only mistake there was one which related to the expectation of the parties. They expected that the building would be subject only to ordinary town planning consent procedures and that expectation has been disappointed. But at the date when the contract was entered into I cannot see that there is any ground for saying that the parties were then subject to some mutual mistake of fact relating to the circumstances surrounding the contract.’
Buckley LJ
[1977] 1 WLR 164, [1976] 3 All ER 509
England and Wales
Cited by:
Cited – John Lewis Properties PLC v Viscount Chelsea ChD 1993
Three Leases of the Peter Jones site to T’s predecessor in 1934 contained covenants by T to redevelop the site in two phases, the second of which related to the MackMurdo and Simon’s Street buildings and was to be completed by December 25 1987. In . .
Lists of cited by and citing cases may be incomplete.
Updated: 09 September 2021; Ref: scu.652984
