The claimant sought damages for injury alleged to have been suffered as tenant of a house after being subjected to carbon monoxide poisoning, and also from her former solicitors for their delay in her claim. The effective question was whether the compromise of proceedings entered into by the parties on the basis of a common mistake of law was void by reason of that mistake.
Held: At the time of the agreement, the condition of the law suggested that an appeal would be unsuccessful. The CA in Anderton v Clwyd later reversed the postion. The established principle was that a mistake of law common to the parties could not vitiate a contract. That law had developed: ‘(1) As with any other contracts, compromises or consent orders may be vitiated by a common mistake of law. (2) It is initially a question of construction as to whether the alleged mistake has that consequence. (3) Whilst a general release executed in a prospective or nascent dispute requires clear language to justify an influence of an intention to surrender rights of which the releasor was unaware and could not have been aware (Ali), different considerations arise in relation to the compromise of litigation which the parties have agreed to settle on a give-and-take basis (Huddersfield Banking) (4) For a common mistake of fact or law to vitiate a contract of any kind, it must render the performance of the contract impossible (The Great Peace).’ This was not a contract which would be impossible to perform. ‘So important is the principle of seeking to uphold contracts of compromise that in my view the court should not permit them to be reopened for mistake of law created by the retrospective impact of the declaratory theory of judicial decisions except where, for some truly exceptional reason, justice very clearly demands.’
Lord Justice Kay, Mr Justice Bodey Lord Justice Sedley
[2004] EWCA Civ 1017, Times 27-Aug-2004, [2005] QB 303, [2004] 3 WLR 1321
Bailii
England and Wales
Citing:
Appeal from – Margaret Brennan v Bolt Burdon, London Borough of Islington, Leigh Day and Co QBD 30-Oct-2003
The claimant had sought relief for the injury to her health suffered by condition of her flat. The legal advisers had settled the matter, thinking that the claim had not been timeously served. The defendant appealed an order that the compromise was . .
Cited – Godwin v Swindon Borough Council CA 10-Oct-2001
The claimant appealed against an order striking out his claim for personal injuries. The claim had been issued in time, but not served. An extension of time was granted, and the notice sent by first class post the day before that period expired. The . .
Cited – Rhiannon Anderton v Clwyd County Council (2) QBD 25-Jul-2001
The claim form had been issued only just before the limitation period expired. Under the rules it would have been deemed to have been served on a Sunday, the day before the expiry of the period, but evidence suggested it was not received until after . .
Cited – Anderton v Clwyd County Council (No 2); Bryant v Pech and Another Dorgan v Home Office; Chambers v Southern Domestic Electrical Services Ltd; Cummins v Shell International Manning Services Ltd CA 3-Jul-2002
In each case, the applicant sought to argue that documents which had actually been received on a certain date should not be deemed to have been served on a different day because of the rule.
Held: The coming into force of the Human Rights Act . .
Cited – Lowry v Boirdeau 1780
‘ignorantia juris non excusat’ – ignorance of the law is no excuse. . .
Cited – Bilbie v Lumley and Others 28-Jun-1802
Contract Not Set Aside for Mistake as to Law
An underwriter paid a claim under a policy which he was entitled in law to repudiate for non-disclosure. Although he knew the relevant facts, he was not aware of their legal significance. He claimed back the money he had paid.
Held: A contract . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – Cooper v Phibbs HL 1867
There is an exception to the general rule that a mistake of law does not vitiate a contract where the mistake was as to private rights. . .
Cited – Huddersfield Banking Co Ltd v Henry Lister and Son Ltd CA 1895
A consent order, which had been completed and acted upon, but without affecting interests of third parties, was set aside by the Court upon the ground of common mistake of fact.
Kay LJ said: ‘A compromise takes place when there is a question . .
Cited – Andre and Cie v Michel Blanc CA 1979
The court criticised the doctrine that a mistake as to the law, common to the parties, does not vitiate a contract. . .
Cited – The Amazonia CA 1991
The court rehearsed the doctrine that a common mistake as to the law would vitiate a contract, Though the rule was well established, the particular contract was void on the basis of a mistake as to foreign law because foreign law is to be treated by . .
Cited – Pankhania v The London Borough of Hackney ChD 2002
A brochure listing properties to be sold at auction decribed the property as being subject to a terminable licence. In fact it was a secure tenancy. The question arose as to whether a misrepresentation of law could found a cause of action.
Cited – Hazell v Hammersmith and Fulham London Borough Council HL 1991
Swap deals outwith Council powers
The authority entered into interest rate swap deals to protect itself against adverse money market movements. They began to lose substantial amounts when interest rates rose, and the district auditor sought a declaration that the contracts were . .
Cited – S v S (Ancillary Relief: Consent Order) FD 4-Mar-2002
An order for ancillary relief had been made by consent. Later the House of Lords issued a judgment which changed the law which had been the basis of the decision to accept the settlement. The wife now sought to set aside the consent order, and . .
Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Cited – Grains and Fourrages SA v Huyton 1997
Where a contract had apportioned a risk, it was not for the court to allow it to be re-opened: ‘If the buyers had made their proposal in terms, or on a basis, which amounted to an acceptance of risk on their part that the facts might turn out . .
Cited by:
Cited – Graves v Graves and others CA 3-Jul-2007
The parties had divorced and settled financial provision, but the former wife and her children came to need a house and one of the claimant’s properties became vacant, and she was allowed to occupy it as a tenant, with the majority of the rent being . .
Lists of cited by and citing cases may be incomplete.
Personal Injury, Housing, Professional Negligence, Contract
Leading Case
Updated: 01 November 2021; Ref: scu.199742
