Europa Failure of a Member State to fulfil obligations – Construction contrary to Community law of national legislation by case-law and administrative practice – Conditions for the recovery of sums paid though not due.
[2006] 2 CMLR 1, [2003] EUECJ C-129/00, [2003] ECR I-14637
European
Updated: 26 July 2022; Ref: scu.189876
Still photographs had been taken of a forthcoming film, which the producers had taken steps to keep confidential.
Held: A chancery judge may grant an injunction to restrain the publication of photographs taken surreptitiously in circumstances such that the photographer is to be taken to have known that the occasion was a private one and that the taking of photographs by outsiders was not permitted.
Mr Martin Mann QC said: ‘whether or not equity imposes an obligation to keep information confidential depends upon a great many factors often unique to the case in which it is said to do so. However, most cases will have certain common constituents, namely, the existence of a body of information which a plaintiff wishes to keep confidential for the protection of some lawful interest of his, a defendant coming into possession of such information in circumstances in which he actually knows (or is fixed by operation of law with knowledge of) or ought as a reasonable person to know the plaintiff intends to be kept confidential, a detriment actual or potential to the plaintiff from publication, the non-availability of such information to the public and the absence of any public interest in disclosure.’
Mr Martin Mann QC
[1994] EMLR 134
England and Wales
Cited – Douglas etc v Hello! Ltd etc ChD 11-Apr-2003
The claimants were to be married. They sold the rights to publish photographs of their wedding, but various of the defendants took and published unauthorised pictures.
Held: The claimants had gone to lengths to ensure the commercial value of . .
Cited – Douglas and others v Hello! Ltd and others (No 3) CA 18-May-2005
The principal claimants sold the rights to take photographs of their wedding to a co-claimant magazine (OK). Persons acting on behalf of the defendants took unauthorised photographs which the defendants published. The claimants had retained joint . .
Lists of cited by and citing cases may be incomplete.
Updated: 26 July 2022; Ref: scu.181407
The deposit of title documents, without more, gives rise to an inference that the deposit was intended by the parties to operate as creating an equitable charge or mortgage over the property whose title document is deposited. In logic there could be no distinction between deposits to secure a first and third party indebtedness.
Templeman J said: ‘But in my judgment this is a contractual lien – it is said to be a contractual lien – and that makes all the difference. It is also a contractual charge; true it is that the charge arises by presumption, but it does not arise by operation of law. What the court does is to say: `We shall not compel the parties to write down in so many words what the effect of the deposit of title deeds is; we shall simply assume that when they contract, and although they probably do not know the consequences, the person who takes the title deeds contracts not only to retain them but also to have an equitable charge on the land.’ The presumption reads into the contract the charge which is implied. If that is right, the charge was created by the company and is therefore registrable under s95.’
Templeman J
[1974] 1 WLR 391, [1974] 1 All ER 561, [1974] AC 467
England and Wales
Cited – United Bank of Kuwait Plc v Sahib and Others CA 2-Feb-1996
The bank appealed against a decision that the simple deposit of deeds with a bank did not take effect as an equitable charge.
Held: Depositing deeds with a bank is not sufficient to create a charge over them. The old law as to the creation of . .
Lists of cited by and citing cases may be incomplete.
Updated: 25 July 2022; Ref: scu.434815
Where a permn possesses a legal right, a Court of Equity will not interfere to restrain him from enforcing it, though, between the time of its creation and that of his attempt to enforce it, he has made representations of his intention to abandon it. Nor will Equity interfere even though the parties to whom these representations were made, have acted on them, and have, in full belief in them, entered into irrevocable engagements. To raise an equity in such a case, there must be a misrepresentation of existing facts, and not of mere intention (Lord St. Leonards dissentiente).
Per Lord St. Leonards, ‘ It is immaterial whether there is a misrepresentation of a fact as it actually existed, or a misrepresentation of an intention to do or abstain from doing an act which would lead tom the damage of the party whom you thereby induced to deal in marriage, or in purchase, or in anything of that sort, on the faith of that representation.’
[1854] UKHL J50, [1854] 10 ER 868, (1854) HL 185, (1854) 5 HL Cas 185, [1854] EngR 787, (1854) 5 HLC 185, (1854) 10 ER 868, [1854] UKPC 22
England and Wales
Updated: 23 July 2022; Ref: scu.293644
The mayor of a city who bought discounted debentures issued by the city was in the same position as an agent vis-a-vis the city, and was to be treated as holding the debentures on trust for the city.
[1858] EngR 365, (1858) 11 Moo PC 463, (1858) 14 ER 770, [1858] UKPC 10
Canada
Cited – FHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or . .
Lists of cited by and citing cases may be incomplete.
Updated: 23 July 2022; Ref: scu.288836
The parties had been friends and had discussed their sex lives. The defendant took the information to a newspaper and its editor, the second and subsequent defendants who published it. The plaintiff sought damages saying the conversations and disclosures had been confidential. The defendants appealed against a refusal to strike out the claim.
Held: The defendants had published knowing that the material was disclosed in confidence. Though gross sexual immorality might not be protected from disclosure, information about sexual activites could be protected under a legally enforceable duty of confidence, where it would be unconscionable for someone who had received information on an expressly confidential basis to disclose it. It was up to the defendants to show that there had been no basis in law for the claim. They had failed to do so. However, the fact that all the conditions for relief have been established does not mean, in the case of a remedy in equity, that relief will automatically follow. The court has an equitable jurisdiction to restrain a breach of confidence independently of any right at law, and this is capable of protecting relationships outside that of husband of wife, though possibly only where the confidence was express.
The fact that information may be known to a limited number of members of the public does not of itself prevent it having and retaining the character of confidentiality: ‘Information only ceases to be capable of protection as confidential when it is in fact known to a substantial number of people.’
Browne-Wilkinson V-C J said as to the case of Glyn v Weston Feature Film Co: ‘I entirely accept the principle stated in that case, the principle being that a court of equity will not enforce copyright, and presumably also will not enforce a duty of confidence, relating to matters which have a grossly immoral tendency. But at the present day the difficulty is to identify what sexual conduct is to be treated as grossly immoral. In 1915 there was a code of sexual morals accepted by the overwhelming majority of society. A judge could therefore stigmatize certain sexual conduct as offending that moral code. But at the present day no such general code exists. There is no common view that sexual conduct of any kind between consenting adults is grossly immoral . . If it is right that there is now no generally accepted code of sexual morality applying to this case, it would be quite wrong in my judgment for any judge to apply his own personal moral views, however strongly held, in deciding the legal rights of the parties. The court’s function is to apply the law, not personal prejudice. Only in a case where there is still a generally accepted moral code can the court refuse to enforce rights in such a way as to offend that generally accepted code.’
Sir Nicholas Browne-Wilkinson V-C
[1988] 2 WLR 1280, [1988] I Ch 449, [1988] 2 All ER 477, [1988] Ch 449, [1988] FSR 510, (1988) 11 IPR 439
England and Wales
Cited – Glyn v Weston Feature Film Co 1916
Relief for copyright infringement was refused where the nature of the work tended to gross immorality. Younger J said that it was: ‘clear law that copyright cannot exist in a work of a tendency so grossly immoral as this, a work which apart from its . .
Cited – Attorney-General v Greater Manchester Newspapers Ltd QBD 4-Dec-2001
The defendant newspaper had published facts relating to the whereabouts of two youths protected by injunction against the publication of any information likely to lead to their location. The injunction was not ambiguous or unclear. ‘Likely’ did not . .
Cited – Douglas etc v Hello! Ltd etc ChD 11-Apr-2003
The claimants were to be married. They sold the rights to publish photographs of their wedding, but various of the defendants took and published unauthorised pictures.
Held: The claimants had gone to lengths to ensure the commercial value of . .
Cited – Okta Crude Oil Refinery A D v Mamidoil-Jetoil Greek Petroleum Company S A and Another CA 17-Jul-2003
The parties had contracted to allow an exclusive right to deliver oil by tanker and to sell into Macedonia. The defendants claimed they were overborn, and claimed exemption under a force majeure clause.
Held: The acts which had made the . .
Cited – Okta Crude Oil Refinery A D v Mamidoil-Jetoil Greek Petroleum Company S A and Another CA 17-Jul-2003
The parties had contracted to allow an exclusive right to deliver oil by tanker and to sell into Macedonia. The defendants claimed they were overborn, and claimed exemption under a force majeure clause.
Held: The acts which had made the . .
Cited – Lord Browne of Madingley v Associated Newspapers Ltd CA 3-Apr-2007
The appellant sought to restrict publication by the defendants in the Mail on Sunday of matters which he said were a breach of confidence. He had lied to a court in giving evidence, whilst at the same time being ready to trash the reputation of his . .
Cited – AMM v HXW QBD 7-Oct-2010
The claimant had sought and been granted an injunction to prevent the defendant publicising matters which had passed between them and which were he said private.
Held: The jurisdiction to grant such injunctions was now established. Publication . .
Cited – Barrymore v News Group Newspapers Limited ChD 1997
The newspaper defendant sought to publish information about features of an intimate homosexual relationship. The plaintiff sought to prevent it.
Held: The injunction was granted.
Jacob J said: ‘The fact is that when people kiss and later . .
Cited – HRH The Duchess of Sussex v Associated Newspapers Ltd ChD 11-Feb-2021
Defence had no prospect of success – Struck Out
The claimant complained that the defendant newspaper had published contents from a letter she had sent to her father. The court now considered her claims in breach of privacy and copyright, and her request for summary judgment.
Held: Warby J . .
Lists of cited by and citing cases may be incomplete.
Updated: 23 July 2022; Ref: scu.181410
A purchaser who had been let into possession before completion and had spent money on improvements to the property was not entitled to claim for such expenses because they would not usually have been within the contemplation of the parties. As to rectification: ‘If, therefore, the defence of rectification is to succeed I must be convinced that it was not the intention either of Mr Stanbury or of Mr Lloyd that 1428 [that is a parcel of land] should be included in the contract. It is not sufficient that there should be convincing proof that the written contract did not represent the true intention of the parties. I must also be satisfied that there was a common intention and I emphasise a common intention, of Mr Stanbury and Mr Lloyd that 1428 should be excluded.’
Brightman J
[1971] 1 WLR 535, [1971] 2 All ER 267
England and Wales
Approved – Anglia Television v Oliver Reed CA 1971
The television company had agreed with the actor defendant for him to appear in a production. He breached the contract. The company sought both loss of profits and for the expense incurred. The issue before the Court of Appeal was whether such . .
Cited – Omak Maritime Ltd v Mamola Challenger Shipping Co Ltd ComC 4-Aug-2010
Lost Expenses as Damages for Contract Breach
The court was asked as to the basis in law of the principle allowing a contracting party to claim, as damages for breach, expenditure which has been wasted as a result of a breach. The charterer had been in breach of the contract but the owner had . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 22 July 2022; Ref: scu.421538
The court considered when a set off is available to a party. Lord Denning said: ‘It is available whenever the cross-claim arises out of the same transaction as the claim or out of a transaction that is closely related to the claim.’ and ‘In point of principle, when applying the law of limitation, a distinction must be drawn between a matter which is in the nature of a defence and one which is in the nature of a cross-claim. When a defendant is sued, he can raise any matter which is properly in the nature of a defence, without fear of being met by a period of limitation. No defence, properly so called, is subject to a time-bar. But the defendant cannot raise a matter which is properly the subject of a cross-claim, except within the period of limitation allowed for such a claim. A cross-claim may be made in a separate action, or it may be made by way of set off or counterclaim. But on principle it is always subject to a time-bar.’
Lord Denning MR
[1974] QB 233, [1973] 3 All ER 589, [1973] 3 WLR 556
England and Wales
Cited – British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd ChD 19-Dec-1978
Money expended by a tenant on discharging his landlord’s covenants will in appropriate circumstances operate as a partial or a complete discharge so as to furnish a defence at law to a claim for unpaid rent; and where the tenant has suffered damage . .
Lists of cited by and citing cases may be incomplete.
Updated: 21 July 2022; Ref: scu.247754
The Plaintiff had stabbed his wife to death when under the illusion, induced by a reaction to an anti-depressant drug, that she had just committed an act of infidelity. At his trial, a plea to guilty of manslaughter by reason of diminished responsibility was accepted. A hospital order was made and the trial judge expressed the view that ‘there was no responsibility left at all’.
Held: The forfeiture rule was not applied. The court made a comprehensive review of the authorities and asked: ‘Was Mr H guilty of deliberate, intentional and unlawful violence or threats of violence?’ He answered the question in the negative holding that the offender was ‘not responsible for his acts which were not deliberate or intentional.’ In those ‘highly unusual circumstances’ the Judge held that, on the Gray-v- Barr test, the forfeiture rule had no application.
Peter Gibson J
[1991] FLR 441
England and Wales
Cited – Davitt v Titcumb ChD 1989
The defendant bought a house in joint names with the deceased, but was subsequently convicted of her murder. The house was purchased with the assistance of an endowment life policy in their joint names. Whilst he was imprisoned, the policy was used . .
Cited – Gray v Barr ChD 1970
The defendant had used a shotgun to threaten a man and the gun had accidentally gone off and killed him. The issue was whether the defendant could recover in respect of his liability under a policy of insurance. .
Held: The rule of public . .
Cited – Dunbar (As Administrator of Tony Dunbar Deceased) v Plant CA 23-Jul-1997
The couple had decided on a suicide pact. They made repeated attempts, resulting in his death. Property had been held in joint names. The deceased’s father asked the court to apply the 1982 Act to disentitle Miss Plant.
Held: The appeal was . .
Lists of cited by and citing cases may be incomplete.
Updated: 21 July 2022; Ref: scu.185185
A widow had thought that she was to receive the bulk of her husband’s estate by survivorship, but discovered, only out of time and after the six months limit, that this was not the case. She applied for leave to apply out of time to rectify the will, saying that the revocation of the necessary provision was an error.
Held: The application should be decided on similar principles to applications for an extension of time under the Inheritance etc Act. The failure to proceed arose from a fundamental mistake as to the value of the estate. The beneficiaries had operated under the same misapprehension, and had not therefore acted to their detriment because of the delay. Leave was given.
David Donaldson QC
Times 05-Apr-2000, (2000) 1 WTLR 643
Inheritance (Provision for Family and Dependants) Act 1975, Administration of Justice Act 1975 4
England and Wales
Distinguished – Escritt v Escritt 1981
. .
Cited – In re Salmon (Deceased) 1981
The time limit under the 1975 Act is ‘a substantive provision laid down in the Act itself and is not a mere procedural time limit imposed by rules of court which will be treated with the indulgence appropriate to procedural rules. The burden on the . .
Lists of cited by and citing cases may be incomplete.
Updated: 21 July 2022; Ref: scu.82244
Entail – Provision – Equity. –
An entail empowered the next heir to grant provisions to his younger children; but he conceiving that the entail so executed was in fraud of his father’s marriage-contract, which provided the fee of the estate to the heir of the marriage, disponed the estate in fee to his own daughter, and did not exercise the powers conferred of granting provisions. Held, on reduction of the son’s settlement, as in fraud of the entail, that when she was deprived of the benefit of her father’s settlement, equity will support that deed to the extent of a reasonable provision, although the powers of the entail in this respect had not been exercised.
[1757] UKHL 1 – Paton – 643
Scotland
Updated: 21 July 2022; Ref: scu.558239
The pursuers maintained that, in consequence of the contract having become incapable of fulfilment, they were entitled to recover the money paid by them to the defenders in terms of the contract. The defenders contended that rights acquired under the contract cannot be disturbed by the termination of the contract owing to a cause for which neither is responsible, and that they were therefore entitled to retain the payment made to them.
Held: A buyer was entitled to repetition of the instalment of the price that was paid on signature of the contract as, owing to the war, further performance of the contract had become impossible. Lord Dunedin said that the remedy for frustration of the contract was given ‘not under the contract or because of breach of the contract inferring damages, but in respect of the equitable (of course I am not using the words in the technical English sense) doctrine of condictio causa data causa non secuta.’
Lord Dunedin
[1922] ScotCS CSIH – 3, 1922 SC 723, 1922 SLT 477
Cited – Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc SC 23-Jan-2013
A predecessor bank had created a trust into which it paid a small proportion of its profits. The parties now disputed the calculation of profits when the Bank declared a loss which allowed for an unrealised gain on the acquisition of HBOS. . .
Lists of cited by and citing cases may be incomplete.
Updated: 21 July 2022; Ref: scu.279331
The claimants alleged that over a five year period from 1992 to 1996 their employee Mr Simon Templeman, the first defendant, took bribes amounting to over US $1.4 million from or with the connivance of the second to seventh defendants. The essential issues are whether the allegation is true; and, if so, what loss the claimants have suffered and what remedies are available to them.
Toulson J
[2000] EWHC 224 (Comm), [2000] 2 Lloyd’s Rep 643
England and Wales
Cited – FHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or . .
Lists of cited by and citing cases may be incomplete.
Updated: 21 July 2022; Ref: scu.278302
Oliver LJ rejected a submission that, where parties were shown to have a common view about the legal effect of a contract into which they had entered and it was established that one of them would not, to the other’s knowledge, have entered into it if that party had appreciated its true legal effect, they are estopped from asserting that the effect was otherwise than the party originally supposed. He said that that submission could not be right and that he could not see how an erroneous belief as to the effect of the contract could properly be described as a ‘conventional basis for dealings’ so as to give rise to an estoppel, and ‘the jurisdiction to grant possession is exercisable only subject to the statutory provisions and it is a little difficult to see how the parties can, by estoppel , confer on the court a jurisdiction which they could not confer by express agreement’
Oliver LJ
[1984] 1 WLR 251, [1984] 1 All ER 75, (1983) 47 P and CR 639
England and Wales
Cited – J S Bloor (Measham) Ltd v Eric Myles Calcott ChD 23-Nov-2001
The tenant had claimed a tenancy under the Act. The landlord sought to assert a proprietary estoppel against them. There was nothing in the 1986 Act to stop the claimants relying on a proprietary estoppel and asserting their claims to occupation. . .
Cited – Wilson v Truelove ChD 25-Mar-2003
The claimants requested a declaration that an option to repurchase land was void under the 1964 Act.
Held: The option to repurchase land was prima facie void. The right arose on the coming into existence of the agreement, or at the latest on . .
Lists of cited by and citing cases may be incomplete.
Updated: 21 July 2022; Ref: scu.180372
Lord Alvanley MR said: ‘a party cannot call upon a Court of Equity for specific performance, unless he has shewn himself ready, desirous, prompt, and eager.’
Lord Alvanley MR
(1801) 5 Ves 720n, [1801] EngR 144, 31 ER 824
England and Wales
Cited – P and O Nedlloyd Bv v Arab Metals Co and others CA 13-Dec-2006
An order for specific performance had been refused in a disputed contract for carriage. The claimant argued that normal limitation periods should not be applied by analogy.
Held: Because there was no corresponding legal remedy the remedy in . .
Cited – Heath v Kelly and Another ChD 24-Jul-2009
The defendant and the deceased had purchased a house as joint tenants in equity. The claimant sought to enforce an agreement for the sale of the defendant’s half share. Payment having been made. The defendant argued that the agreement was uncertain . .
Lists of cited by and citing cases may be incomplete.
Updated: 19 July 2022; Ref: scu.375581
The plaintiff claimed a declaration that the defendants held a flat in Paris together with its contents in trust for the plaintiff, and made an order compelling the defendants to allow the plaintiff to inspect the flat. The fact that the subject-matter of the alleged trust was situate in France, a civil law country, was no bar to the jurisdiction.
Templeman J
[1979] Ch 439
England and Wales
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.640397
(New Zealand Court of Appeal) The Court contrasted ‘the state of some uncertainty as to the requisites for rectification in English law’ (referring to the Daventry case) with the ‘relatively settled’ position in New Zealand where ‘Tipping J’s 1987 formulation still applies’.
[2014] NZCA 42
England and Wales
Approved – Westland Savings Bank v Hancock 1987
Tipping J set out the requirements for rectification for common mistake: ‘(1) That, whether there is an antecedent agreement or not, the parties formed and continued to hold a single corresponding intention on the point in question.
(2) That . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.640350
Evershed J said that the remedy of rectification is not appropriate if the grantor’s real intention: ‘be no more precise than this, namely, that he intended, by whatever formulation of words was appropriate or possible, to achieve the result that he could deduct in his surtax return the amount of bounty that he paid to his sister . . ‘
Evershed J
[1947] Ch 306
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.640351
The equitable rule against clogging the equity of redemption of a mortgage applied to a contract governed by English law and would be enforced against a contracting party as regards land abroad in a state where the equity of redemption may not be recognised.
Cozens-Hardy MR said: ‘For centuries the Court of Chancery has, by virtue of its jurisdiction in personam, applied against parties to a contract or trust relating to foreign land the principles of English law, although the lex situs did not recognize such principles. … If indeed the law of the country where the land is situate should not permit or not enable the defendant to do what the court might otherwise think it right to decree, it would be useless and unjust to direct him to do the act; but when there is no such impediment the courts of this country, in the exercise of their jurisdiction over contracts made here, or in administering equities between parties residing here, act upon their own rules, and are not influenced by any consideration of what the effect of such contracts might be in the country where the lands are situate, or of the manner in which the courts of such countries might deal with such equities.
To take a simple case, if A by an English contract agreed to give a mortgage to secure an English debt upon land in a foreign country, the law of which country does not recognize the existence of what we call an equity of redemption, which was the case of our common law, and if a mortgage was given and duly perfected according to the lex situs, I feel no doubt that our courts would restrain the mortgagee from exercising the rights given by the foreign law and would treat the transaction as a mortgage in the sense in which that word is used by us. In doing this our courts would not in any way interfere with the lex situs, but would by injunction, and if necessary by process of contempt, restrain the mortgagee from asserting those rights. Similar observations would apply to a trustee, if the lex situs does not recognize trusts.’
Cozens-Hardy MR L
[1910] 2 Ch 502
England and Wales
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.640390
Two contracts for the sale of sultanas on cif terms were drawn up by a broker acting for the sellers. By mistake, the broker used a form intended for spot contracts instead of the form for cif contracts with the result that the written contracts did not include, as was customary in the trade, a clause exempting the seller from liability in the event of war preventing the delivery of the goods. No reference had been made to this clause in negotiating the contracts because it was a usual clause which did not need to be spelt out, and no one noticed until later that the clause was not included in the forms used to document the transactions.
Held: The sellers were entitled to have the contractual documents rectified to insert the war clause. The parties had taken it for granted that, when the written contracts were drawn up, if anyone read through them they would find the clause there.
(1923) 17 Ll L Rep 183, (1923) 40 TLR 124
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.640344
Judgment approved
[1939] 4 All ER 68
England and Wales
Appeal from – Crane v Hegeman-Harris Co Inc CA 1939
Judgment approved . .
Appeal from – Crane v Hegeman-Harris Co Inc CA 1939
Judgment approved . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.640339
James V-C said: ‘Courts of Equity do not rectify contracts; they may and do rectify instruments purporting to have been made in pursuance of the terms of contracts. But it is always necessary for a plaintiff to show that there was an actual concluded contract antecedent to the instrument which is sought to be rectified; and that such contract is inaccurately represented in the instrument.’
James V-C
(1869) LR 8 Eq 368
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.640338
Court of Appeal of New Zealand – Rectification is an equitable remedy whereby a written contract which does not reflect the common intention of the parties can be modified or corrected so that it does.
Arnold, Randerson and Allan JJ
[2009] NZCA 523
England and Wales
Approved – Westland Savings Bank v Hancock 1987
Tipping J set out the requirements for rectification for common mistake: ‘(1) That, whether there is an antecedent agreement or not, the parties formed and continued to hold a single corresponding intention on the point in question.
(2) That . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.640349
A contract of copartnery provided that in the event of the death of any of the partners the surviving and solvent partners who should continue the business should pay out to the representatives of the deceased the amount at his credit in the books of the firm, by ten biennial instalments, ‘with interest thereon at the rate of 5 per cent. per annum from the date of the balance.’ Held (aff. decision of Second Division, diss. Lord Watson) that at each payment interest must be paid upon the whole balance of the debt then remaining unpaid, and not upon the instalment.
Earl of Selborne LC said: ‘The Courts of Equity in England are, and have always been, courts of conscience, operating in personam and not in rem; and in the exercise of this personal jurisdiction they have always been accustomed to compel the performance of contracts and trusts as to subjects which were not either locally or ratione domicilii within their jurisdiction. They have done so as to land, in Scotland, in Ireland, in the Colonies, in foreign countries . .’
Lord Blackburn, Earl of Selborne LC
[1882] UKHL 240 – 1, 20 SLR 240 – 1
Scotland
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Cited – Luxe Holding Ltd v Midland Resources Holding Ltd ChD 23-Jul-2010
Midland agreed to sell to Luxe shares in 20 companies, 17 of which were incorporated in Russia or the Ukraine, with the lex situs of the shares in them being also there. Midland defaulted, sold the shares in the Russian and Ukrainian companies . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.637748
The written contract contained a restrictive covenant limiting the defendant’s freedom to carry on the business of a ‘provision merchant’ other than on behalf of the plaintiff company. On the facts found, the parties in their discussions before the contract was signed never reached any consensus on the intended scope of the restrictive covenant.
Held: The claim for rectification failed.
Buckley LJ said: ‘For rectification it is not enough to set about to find what one or even both of the parties to the contract intended. What you have to find out is what intention was communicated by one side to the other, and with what common intention and common agreement they made their bargain.’
Sir Herbert Cozens-Hardy MR said that rectification ‘may be regarded as a branch of the doctrine of specific performance’ and ‘The essence of rectification is to bring the document which was expressed and intended to be in pursuance of a prior agreement into harmony with that prior agreement. Indeed, it may be regarded as a branch of the doctrine of specific performance. It presupposes a prior contract, and it requires proof that, by common mistake, the final completed instrument as executed fails to give proper effect to the prior contract.’
Fletcher Moulton LJ said: ‘To my mind, it is not only clear law, but it is absolutely necessary logic, that there cannot be a rectification unless there has been a pre-existing contract which has been inaptly expressed.’
Sir Herbert Cozens-Hardy MR, Buckley LJ
(1911) 104 LT 85
England and Wales
Cited – Daventry District Council v Daventry and District Housing Ltd CA 13-Oct-2011
The appellant challenged refusal of rectification of its agreement with the defendant. They asserted either mutual or unilateral mistake. The parties had agreed for the transfer of housing stock and management staff to the respondents. The claimant . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Cited – Joscelyne v Nissen CA 1970
A father entered into a written contract with his daughter by which he transferred to her his car hire business in return for her agreement to pay him a pension and discharge certain expenses. In their discussions it had been agreed between them . .
Cited – Frederick E Rose (London) Limited v William H Pim Junior and Co Limited 1953
The plaintiffs, who were London merchants, had been asked by Egyptian buyers to supply ‘feveroles’. Not knowing what this term meant, they asked the defendants’ representative, who responded that ‘feveroles’ meant horsebeans. Relying on this . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.472861
Upjohn LJ
[1961] Ch 488
England and Wales
See Also – In Re Pilkington’s Will Trusts; Pilkington v Inland Revenue Commissioners ChD 1959
Whether Trust was void for perpetuity . .
See Also – In Re Pilkington’s Will Trusts; Pilkington v Inland Revenue Commissioners CA 1961
. .
See Also – In Re Pilkington’s Will Trusts; Pilkington v Inland Revenue Commissioners HL 8-Oct-1962
The trustees proposed establishing a new trust in respect of the share of an estate to which an infant beneficiary had a contingent entitlement. A portion of the trust fund would be allocated to the new trust.
Held: This was a lawful exercise . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.402932
[1789] EngR 1993, (1789-1817) 1 Ves Jun Supp 599, (1789) 34 ER 939 (B)
England and Wales
Appeal from – The Marquis Townshend v Stangroom 21-Jul-1801
. .
Lists of cited by and citing cases may be incomplete.
Updated: 18 July 2022; Ref: scu.367624
Where a quasi-partnership had been created with the expectation that a party would be involved in the management of the business, it was a breach of his right to exclude him. This was a consequence of the restraint imposed by equity on relations between majority and minority partners, and not the cause of it. Because the continuing partners would continue the business, the share of the partner ordered to be purchased, should be valued as a going concern.
Times 04-Jul-2000, Gazette 06-Jul-2000
England and Wales
Updated: 18 July 2022; Ref: scu.81869
The court was asked whether, for the purposes of establishing a company’s liability under the knowing receipt head of constructive trust, the knowledge of one of its directors can be treated as having been the knowledge of the company.
Held: The company was fixed with the knowledge of its part-time chairman and a non-executive director, because he had acted as its directing mind and will for the particular purpose of arranging its receipt of the tainted funds. It was sufficient that the director had management and control so far as the receipt of the fraud was concerned, having made arrangements for the receipt and disposal of the money, even though he had no general managerial responsibility in the company.
Hoffmann LJ set out the ingredients of knowing receipt: ‘For this purpose the plaintiff must show, first a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets are traceable to a breach of fiduciary duty.’
When asking who was the controlling mind of a company, the relevant test is to find the person who had management and control in relation to the act or omission in point. The formal position or status as a director is relevant but not decisive. A ‘pragmatic’ approach is necessary: ‘Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company’s articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so, although it has led me, with diffidence, to a conclusion different from his own’ and ‘ . . different persons may for different purposes satisfy the requirements of being the company’s directing mind and will. ‘ The court considered the ingredients of the tort of ‘knowing receipt’: ‘For this purpose the plaintiff must show, first, a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty.’ (Hoffmann LJ)
Nourse LJ said: ‘The doctrine attributes to the company the mind and will of the natural person or persons who manage and control its actions. At that point, in the words of Millett J ([1993] 3 ALL ER 717 at 740): ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’ It is important to emphasise that management and control is not something to be considered generally or in the round. It is necessary to identify the natural person or persons having management and control in relation to the act or omission in point. This was well put by Eveleigh J in . . R v Andrews Weatherfoil Ltd . .
Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company’s articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so, although it has led me, with diffidence, to a conclusion different from his own.’
Nourse, Rose, Hoffmann LJJ
Times 03-Jan-1994, [1994] 2 All ER 685, [1993] EWCA Civ 4, [1994] BCC 143, [1994] 1 BCLC 464
England and Wales
Appeal from – El Ajou v Dollar Land Holdings Plc and Another ChD 3-Jan-1993
A non active director may still be company’s ‘directing mind’. The doctrine of attributing the actions of individuals to a company is that ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’
Tracing was no . .
Cited – Lennard’s Carrying Company Limited v Asiatic Petroleum Company Limited HL 1915
The House was asked as to when the acts of an individual became those of his employer under section 502 (‘any loss or damage happening without (the ship owner’s) actual fault or privity’).
Held: Viscount Haldane LC said: ‘It must be upon the . .
Cited – Regina v Andrews-Weatherfoil Ltd CACD 1972
For so long as it is possible for persons concerned in a single offence to be tried separately, it is inevitable that the verdicts returned by the two juries will on occasion appear to be inconsistent with one another. Eveleigh J: ‘It is necessary . .
Applied – Bank of Credit and Commerce International (Overseas) Ltd and Another v Akindele CA 22-Jun-2000
The test of whether a person who received funds held them on constructive trust, was not whether he himself was dishonest, but rather whether he had knowledge of circumstances which made it unconscionable to hold on to the money received. In respect . .
Cited – Crown Dilmun, Dilmun Investments Limited v Nicholas Sutton, Fulham River Projects Limited ChD 23-Jan-2004
There was a contract for the sale of Craven Cottage football stadium, conditional upon the grant of non-onerous planning permissions. It was claimed that the contract had been obtained by the defendant employee in breach of his fiduciary duties to . .
Cited – Mahonia Limited v JP Morgan Chase Bankwest Lb Ag QBD 3-Aug-2004
The Claimant claimed on a letter of credit issued by the Defendant on behalf of Enron Ltd, who asserted it was not liable to pay there having been unlawful behaviour by Enron Ltd. Swap agreements had been entered into, and the defendant said the . .
Cited – Fassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd CA 30-Sep-2004
The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company . .
See Also – El Ajou v Dollar Land Holdings Plc ChD 1995
The tracing of assets into the hands of a third party depends upon a notional charge. There are no inflexible rules. The essential elements of ‘knowing receipt’ are: ‘For this purpose the plaintiff must show, first, a disposal of his assets in . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Cited – KR and others v Royal and Sun Alliance Plc CA 3-Nov-2006
The insurer appealed findings of liability under the 1930 Act. Claims had been made for damages for child abuse in a residential home, whom they insured. The home had become insolvent, and the claimants had pursued the insurer.
Held: The . .
Cited – Charter Plc and Another v City Index Ltd and others ChD 12-Oct-2006
An employee of the claimant had fraudulently spent several million pounds of the claimant’s money on personal bets through the defendant company. The claimant said that the defendants knew the origin of the funds and were liable to repay them. . .
Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.262615
The bank had received and paid substantial sums from the company before the petition for insolvency had been presented, and had discharged the director’s charge on his house. The liquidator sought restitution under the Act. The bank replied that it had acted already in such a way as to put its own position at risk, and that the claim in restitution should be denied.
Held: The court was required to try to achieve equal payment pari passsu of the debts. The bank was entitled to an order validating payments it had made prior to presentation. For payments made subsequently, the defence of restitution might be available according to the facts of the case allowing for good and bad faith. Here the alleged change of position resulted form the bank’s own act, not on any assessment of the validity of the credits.
Nicholas Warren QC
Times 08-Jul-2003, Gazette 31-Jul-2003
England and Wales
Cited – Dextra Bank and Trust Company Limited v Bank of Jamaica PC 26-Nov-2001
(Jamaica) A cheque was drawn which was used as part a complex financial arrangement intended to purchase foreign currency to work around Jamaica’s foreign exchange control regulations. It was asserted that by presenting the cheque used in the . .
Cited – Bank of Ireland v Hollicourt (Contracts) Limited CA 20-Oct-2000
A bank continued to pay on cheques presented to it against the company’s bank account even after the presentation of a petition for bankruptcy. The liquidator sought recovery of the amounts paid from the bank as well as the payees. It was held that . .
Cited – Re S A and D Wright Ltd, Denney v John Hudson and Co Ltd CA 1992
Fox LJ said: ‘A disposition carried out in good faith in the ordinary course of business at a time when the parties were unaware that a petition had been presented would usually be validated by the court unless there is ground for thinking that the . .
Cited – In re Gray’s Inn Construction Co Ltd CA 1980
After the presentation of a petition for the winding up of the company moneys were paid in and out of the company’s bank account which was overdrawn. The liquidator issued a summons for a declaration that the amounts credited and/or debited to the . .
Cited – Lipkin Gorman (a Firm) v Karpnale Ltd HL 6-Jun-1991
The plaintiff firm of solicitors sought to recover money which had been stolen from them by a partner, and then gambled away with the defendant. He had purchased their gaming chips, and the plaintiff argued that these, being gambling debts, were . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.184532
The tracing of assets into the hands of a third party depends upon a notional charge. There are no inflexible rules. The essential elements of ‘knowing receipt’ are: ‘For this purpose the plaintiff must show, first, a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty.’ The successful completion of a tracing exercise may be preliminary to a personal claim.
Robert Walker J
[1995] 2 All ER 213
England and Wales
See Also – El Ajou v Dollar Land Holdings Ltd CA 2-Dec-1993
The court was asked whether, for the purposes of establishing a company’s liability under the knowing receipt head of constructive trust, the knowledge of one of its directors can be treated as having been the knowledge of the company.
Held: . .
See Also – El Ajou v Dollar Land Holdings Plc and Another ChD 3-Jan-1993
A non active director may still be company’s ‘directing mind’. The doctrine of attributing the actions of individuals to a company is that ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’
Tracing was no . .
Cited – Foskett v McKeown and Others HL 18-May-2000
A property developer using monies which he held on trust to carry out a development instead had mixed those monies with his own in his bank account, and subsequently used those mixed monies to pay premiums on a life assurance policy on his own life, . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.192211
Fox LJ said: ‘A disposition carried out in good faith in the ordinary course of business at a time when the parties were unaware that a petition had been presented would usually be validated by the court unless there is ground for thinking that the transaction may involve an attempt to prefer the disponee – in which case the transaction would not be validated.’
When deciding whether to validate a disposition under section 127, the court ‘must always do its best to ensure that the interests of the unsecured creditors will not be prejudiced’, and, where there is said to have been a benefit in validating, ‘the court must carry out a balancing exercise’.
Fox LJ
[1992] BCLC 901, [1992] BCC 503
England and Wales
Cited – Rose v AIB Group (UK) plc and Another ChD 9-Jun-2003
The bank had received and paid substantial sums from the company before the petition for insolvency had been presented, and had discharged the director’s charge on his house. The liquidator sought restitution under the Act. The bank replied that it . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.184535
In the case of a bilateral transaction, there must be convincing proof that the concluded instrument does not represent the common intention of the parties to allow rectification. The policy reason for the need for convincing proof is that certainty and ready enforceability of transactions would otherwise be hindered by constant attempts to cloud the issue.
Mustill J said: ‘The prior transaction may consist either of a concluded agreement or of a continuing common intention. In the latter event, the intention must have been objectively manifested. It is the words and acts of the parties demonstrating their intention, not the inward thoughts of the parties, which matter.’
Mustill J
[1980] 2 Lloyd’s Rep 67
England and Wales
Cited – AMP (UK) Plc and Another v Barker and Others ChD 8-Dec-2000
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.184571
A non active director may still be company’s ‘directing mind’. The doctrine of attributing the actions of individuals to a company is that ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’
Tracing was no longer available at common law because funds received had become mixed with others, but the remedy remained available in equity.
Millett J
Times 03-Jan-1993, [1993] 3 All ER 717
England and Wales
Cited – Shalson v Russo ChD 11-Jul-2003
The claimant sought recovery of substantial sums he had advanced by way of loan, where the loan was induced by fraud. He sought to trace the funds into, inter alia, a motor yacht which it had been used to purchase.
Held: The transaction was . .
Appeal from – El Ajou v Dollar Land Holdings Ltd CA 2-Dec-1993
The court was asked whether, for the purposes of establishing a company’s liability under the knowing receipt head of constructive trust, the knowledge of one of its directors can be treated as having been the knowledge of the company.
Held: . .
Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .
See Also – El Ajou v Dollar Land Holdings Plc ChD 1995
The tracing of assets into the hands of a third party depends upon a notional charge. There are no inflexible rules. The essential elements of ‘knowing receipt’ are: ‘For this purpose the plaintiff must show, first, a disposal of his assets in . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.80281
The court considered an application to rectify a pension scheme.
Held: Warren J said: ‘There needs to be cogent evidence of the intentions of both the trustee and the employer where the power of amendment requires the consent of both. . . In a case such as Chartbrook or Daventry, what is sought to be rectified is a contract; it makes sense that, in order to displace the contract actually made by rectifying it, there should be found a consensus, albeit not one giving rise to a legally binding agreement. In contrast, in a case such as the present, no sort of agreement is required for there to be a valid deed of amendments. What is needed is an exercise of the power of amendment by the trustee and the consent of the employer to the exercise of the power. If that is to be called a consensus, so be it, but it is a different animal from the agreement or consensus which is relevant in a contractual case.’
Warren J
[2012] Pens LR 469
England and Wales
See Also – IBM United Kingdom Pensions Trust Ltd v Metcalfe and Others ChD 1-Feb-2012
. .
See Also – IBM United Kingdom Pensions Trust Ltd v IBM United Kingdom Holdings Ltd and Others ChD 12-Oct-2012
Application for further amendment of deed of amendment relating to company pension scheme. . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.640342
After the failure of the attempt by the Texan oil tycoon, Nelson Bunker Hunt, in the 1970s to corner the world silver market, his fortune collapsed and his companies were forced to sell off assets. In 1979 two of those companies (the defendants in the subsequent litigation) entered into a contract by which they assigned to the plaintiffs (then the British National Oil Corporation, which subsequently became Britoil plc) their interests in a licence to produce petroleum from a North Sea oil field. Under the terms of the contract the Hunt companies had a right to receive a share of the profits if the exploitation of the oil field was sufficiently successful. A dispute later arose as to whether this right had been triggered. This depended in the first place on what the relevant terms of the contract meant. That question of interpretation was decided in the plaintiffs’ favour. The defendants made an alternative claim for rectification. The contract had been preceded by non-binding ‘heads of agreement’. The defendants contended that it was the common intention of the parties that the definitive written contract should in the relevant respects give effect to the heads of agreement and that, under the terms of the heads of agreement, their right to a share of profits had been triggered. In so far as the contract on its proper interpretation had a different effect, the contract should be rectified so as to have the same effect as the heads of agreement.
The defendants further submitted that for this purpose the parties’ states of mind were wholly irrelevant. They argued that the heads of agreement should be construed objectively, in exactly the same way as a contract is construed.
Held: (Hoffmann LJ dissenting) The appeal failed, and rectification was refused. The defendants had failed to establish that there was a prior common agreement or intention in terms that the court could ascertain or that the definitive agreement failed to reflect that prior agreement. Hobhouse LJ noted that Saville J ‘did not base himself upon any consideration of the evidence as to the actual state of mind of the parties’.
The parties must actually be mistaken about the content or effect of the contractual document which they executed to allow equitable rectification.
Hoffmann LJ, in dissent, accepted the defendants’ argument. In his view, which he thought was supported by the authorities relied on: ‘The purpose of rectification of a contract (as opposed to rectification of a unilateral instrument like a will or voluntary settlement) is not to make the instrument accord with what the parties subjectively intended but with what they actually agreed. Agreement in English law does not require a meeting of minds, a consensus ad idem. It is an objective fact, requiring only the appearance of such a consensus. If therefore the parties both intended a written instrument to embody their agreement and it does not do so, the necessary common mistake exists. It does not require that the written instrument should actually mean something different from what each of the parties thought it meant.’
Hoffmann LJ accepted that there could be cases in which the proper inference is that the final document represents the true agreement of the parties even though it means something different from prior heads of agreement. However, in the Britoil case Hoffmann LJ thought it clear that: ‘the common intention was that the definitive agreement should reflect the meaning of the heads of agreement, whatever that might be. So far as it failed to do so, it was in my judgment a common mistake which should be rectified.’
Hobhouse LJ rejected in clear and emphatic terms the defendants’ contention that the heads of agreement should be construed wholly objectively, in the same way as a contract, and that what the parties subjectively intended was irrelevant: ‘Further, there must be a reality to the allegation of common mistake. It is a factual allegation, not a question of law. On the defendants’ argument before us no actual common mistake is required. The parties are to be treated as if they were bound by the objective interpretation of the, ex hypothesi, non-binding heads of agreement. Where the relevant document is a legally binding document, it is appropriate and just to hold the parties to the objectively ascertained meaning of the words used. But where they are not bound and where the court is only looking at the previous document to help it answer the factual question whether or not there has been a mistake in the preparation of the legal document, the matter becomes one of fact not law. The claimant must prove the mistake and he must prove that it is a common mistake. The answering of that factual question is assisted by considering what is the natural meaning of the words used in an earlier document – people normally mean what they say – but strictly it cannot be concluded by it. It cannot be right to treat as conclusive evidence of the existence of a mistake in the execution of a carefully prepared and clearly expressed later contract the fact that language has been used in an earlier document which is bona fide capable of being understood in more than one way.’
Glidewell LJ and Hobhouse LJ, Hoffmann LJ
[1994] CLC 561
England and Wales
Cited – George Wimpey UK Ltd v VI Construction Ltd CA 3-Feb-2005
A land purchase contract had been rectified by the judge for unilateral mistake. A factor had been dropped from a formula for calculating the price.
Held: The judge’s conclusion that the circumstances existed to allow a rectification was . .
Cited – Oceanbulk Shipping and Trading Sa v TMT Asia Ltd and Others SC 27-Oct-2010
The court was asked whether facts which (a) are communicated between the parties in the course of without prejudice negotiations and (b) would, but for the without prejudice rule, be admissible as part of the factual matrix or surrounding . .
Cited – Daventry District Council v Daventry and District Housing Ltd CA 13-Oct-2011
The appellant challenged refusal of rectification of its agreement with the defendant. They asserted either mutual or unilateral mistake. The parties had agreed for the transfer of housing stock and management staff to the respondents. The claimant . .
Cited – Daventry District Council v Daventry and District Housing Ltd CA 13-Oct-2011
The appellant challenged refusal of rectification of its agreement with the defendant. They asserted either mutual or unilateral mistake. The parties had agreed for the transfer of housing stock and management staff to the respondents. The claimant . .
Cited – Marley v Rawlings and Another SC 22-Jan-2014
A husband and wife had each executed the will which had been prepared for the other, owing to an oversight on the part of their solicitor; the question which arose was whether the will of the husband, who died after his wife, was valid. The parties . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.472863
Warren J
[2012] EWHC 3540 (Ch)
England and Wales
Updated: 17 July 2022; Ref: scu.467116
The parties had reached a clear common understanding in their negotiations as to how they intended the price of water supplied to the plaintiff council by the defendant corporation to be calculated; but, as each party only had power to contract under seal, no legally enforceable agreement could be made until a contract under seal was executed.
Held: The language of the contract bore the meaning for which the plaintiff council contended, so that its alternative claim to rectify the wording did not arise. Rectification may be granted in cases in which the instrument sought to be rectified constitutes the only agreement between the parties, but does not reflect their common intention. An antecedent binding and concluded contract is not a pre-requisite to rectification for common mistake. If necessary, he said that he would have been prepared to remedy an instrument of agreement entered into between the parties on the 6th May 1912 to give effect to the concurrent intention of the parties as evidenced by a prior provisional agreement drawn up and signed by them on the 4th April 1912 despite the fact that this prior agreement, not having been under their seals, was not legally binding and despite the fact that the parties had decided to add into the final agreement an arbitration clause not present in the provisional agreement. Had it been necessary for him to decide on the rectification point (which it ultimately was not because he interpreted the final agreement of 6th May 1912 in favour of the plaintiffs) he would: ‘have felt bound to hold that the proof in the present case that the concurrent intention of the parties was, at the moment of execution, to contract on the footing of the 540l being a sum per annum and the 450,000 Gallons a yield per diem would have made it necessary (but for my construing the instrument as I have construed it) to rectify the instrument so as to accord with that concurrent intention, notwithstanding that the parties can be bound only by their respective seals’
Clauson J
[1936] Ch 375
England and Wales
Approved – Crane v Hegeman-Harris Co Inc ChD 1939
A continuing common intention of the parties to a document alone will not suffice to justify rectification. For rectification to be appropriate, there must be convincing proof that the concluded instrument does not represent the common intention of . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.472859
The tenant appealed against an order for the rectification of the lease agreement between the parties. The recorder at first instance had found that both parties had been mistaken in their belief about the effect of a lease and had granted rectification.
Held: The appeal was dismissed.
Arden, Lloyd-Jones, Fulford LJJ
[2013] EWCA Civ 1005
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.514254
Appeal against refusal of order to rectify a conveyance of 1985.
Held: The conveyance was in the nature of a voluntary settlement and in such a case what is relevant is the subjective intention of the settlor.
Sir Terence Etherton Ch, Elias, Lewison LJJ
[2013] EWCA Civ 280, [2014] 1 Ch 114, [2013] WTLR 817, [2013] 3 All ER 661, [2013] 3 WLR 556, [2013] WLR(D) 129
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.472062
Warren J
[2012] EWHC 125 (Ch)
England and Wales
See Also – Re IBM Pension Plan ChD 2012
The court considered an application to rectify a pension scheme.
Held: Warren J said: ‘There needs to be cogent evidence of the intentions of both the trustee and the employer where the power of amendment requires the consent of both. . . In a . .
See Also – IBM United Kingdom Pensions Trust Ltd v IBM United Kingdom Holdings Ltd and Others ChD 12-Oct-2012
Application for further amendment of deed of amendment relating to company pension scheme. . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.450564
On a claim to rectify a written agreement made in contemplation of marriage, Lord Thurlow LC considered it ‘impossible to refuse, as incompetent, parol evidence, which goes to prove, that the words taken down in writing were contrary to the current intention of all parties.’
Lord Thurlow LC
[1781] EngR 38, (1781) 12 Sim 352, (1781) 59 ER 1167 (B)
England and Wales
Approved – The Marquis Townshend v Stangroom 21-Jul-1801
. .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.372504
The question was whether a particular piece of land was correctly included in the description of the land to be conveyed under a contract of sale.
Lord Thurlow LC said that:
‘ . . if both [parties] understood the whole was to be conveyed, it must be conveyed. But again, if neither understood so, if the buyer did not imagine he was buying, any more than the seller imagined he was selling, this part, then this pretence to have the whole conveyed is as contrary to good faith upon his side, as the refusal to sell would be in the other case. The question is, does it appear to have been the common purpose of both to have conveyed this part.’
Lord Thurlow LC
[1790] EngR 2447, (1790) 1 Ves Jun 210, (1790) 30 ER 306
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.365500
Lord Eldon LC
[1801] EngR 397, (1801) 6 Ves Jun 328, (1801) 31 ER 1076 (B)
England and Wales
Approved – Henkle v Royal Exchange Assurance Company 14-Nov-1749
(Court of Chancery) Lord Hardwicke LC was in ‘no doubt, that this court has jurisdiction to relieve in respect of a plain mistake in contracts in writing as well as against frauds in contracts: so that if reduced into writing contrary to intent of . .
Approved – The Right Honourable Mary Countess Dowager of Shelburne, John Hamilton Fitzmaurice, An Infant, By The Said Countess, His Grandmother And Next Friend v Morough Earl of Inchiquin And Others 22-Mar-1781
On a claim to rectify a written agreement made in contemplation of marriage, Lord Thurlow LC considered it ‘impossible to refuse, as incompetent, parol evidence, which goes to prove, that the words taken down in writing were contrary to the current . .
Appeal from – Stangroom v The Marquis Townshend 1789
. .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.345643
Lord Chelmsford LC said that a party seeking rectification must establish clearly ‘that the alleged intention to which he desires’ (the instrument) ‘to be made conformable continued concurrently in the minds of all parties down to the time of its execution, and also must be able to shew exactly and precisely the form to which the deed ought to be brought’.
and ‘The power which the court possesses of reforming written agreements where there has been an omission or insertion of stipulations contrary to the intention of the parties and under a mutual mistake is one which has been frequently and most usefully exercised.’
and ‘It is clear that the person who seeks to rectify a deed upon the ground of mistake must be required to establish, in the clearest and most satisfactory manner, that the alleged intention to which it desires it to be made conformable continued concurrently in the minds of all parties down the time of its execution . . ‘
and ‘Upon the question of rectifying a deed, the denial of one of the parties, that it is contrary to his intention, ought to have considerable weight. Lord Thurlow, in Irnham v Child (1 Bro C C 93) says, ‘The difficulty of proving that there has been a mistake in a deed is so great, that there is no instance of its prevailing against a party insisting that there was no mistake.’ And Lord Eldon, in Marquis of Townshend v Stangroom (6 Ves 334), after observing that Lord Thurlow seems to say that the proof must satisfy the Court what was the concurrent intention of all the parties, adds, ‘And it must never be forgotten to what extent the defendant, one of the parties, admits or denies the intention.”
Lord Chelmsford LC
[1859] EngR 598, (1859) 4 De G and J 250, (1859) 45 ER 97
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 July 2022; Ref: scu.287950
Mummery LJ expressed the view that an outward expression of accord, although established on the facts of that case, was not a strict legal requirement for rectification where the party resisting rectification had in fact admitted that his true state of belief when he entered into the transaction was the same as that of the other party. Mummery LJ saw the trend in recent cases as being ‘to treat the expression ‘outward expression of accord’ more as an evidential factor rather than a strict legal requirement in all cases of rectification.’
Lord Justice Mummery Lord Justice Scott Baker The Right Honourable Sir Charles Mantell
[2006] EWCA Civ 370
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 15 July 2022; Ref: scu.242008
Rectification was sought of an escalation clause in a charter-party which provided for a base figure in US dollars to be increased by reference to Italian inflation. The plaintiffs claimed that an accord had been reached that the base figure should be in lire rather than dollars, but that when the defendants prepared a draft charter-party, they put the base figure in dollars.
Held: The claim failed. The effect of allowing rectification for unilateral mistake was to impose on the defendants a contract which, at the time of its execution, they did not intend to make. In the absence of estoppel, fraud, undue influence or a fiduciary relationship between the parties, the authorities did not in any circumstances permit the rectification of a contract on the grounds of unilateral mistake, unless the defendant had actual knowledge of the existence of the relevant mistaken belief at the time when the mistaken plaintiff signed the contract. The authorities required actual knowledge by the defendant of the existence of the plaintiff’s mistake. There could be a case of an implied misrepresentation that a proffered draft gave effect to an accord and of a resultant estoppel if it was intended or reasonably foreseeable that the representation would be relied on and if the representee relied on that representation. On the facts those conditions were not satisfied. It had not been shown that the defendants intended or foresaw that the plaintiff would rely on any such representation when the defendants could have reasonably assumed that the plaintiffs would have read the escalation clause for themselves and would have noted any objection when discussing the clause with the defendants. The greater the degree of the carelessness in not detecting the error, the more unrealistic it became for the plaintiffs to assert that the reliance on the representation was foreseeable. The plaintiff’s witnesses did not attempt to blame the defendants for their mistake. The court was unpersuaded that there had been sharp practice by the defendants or that it would be inequitable to allow them to resist the claim for rectification. ‘As the law stands, the conditions which must be satisfied if rectification is to be granted on the grounds of common mistake may, in my opinion, be summarized as follows: First, there must be a common intention in regard to the particular provisions of the agreement in question, together with some outward expression of accord. Secondly, this common intention must continue up to the time of the execution of the instrument. Thirdly, there must be clear evidence that the instrument as executed does not accurately represent the true agreement of the parties at the time of its execution. Fourthly, it must be shown that the instrument, if rectified as claimed, would accurately represent the true agreement of the parties at that time . . The standard of proof required in an action of rectification to establish the common intention of the parties is the civil standard of balance of probabilities. Nevertheless, parties who append their signature to a written instrument prima facie indicate, by the very fact of their signatures, their assent to all the terms contained in it. In these circumstances’
Slade LJ (with whom Oliver and Robert Goff LJJ agreed) summarised the requirements in this way: ‘First, there must be a common intention in regard to the particular provisions of the agreement in question, together with some outward expression of accord. Secondly, this common intention must continue up to the time of execution of the instrument. Thirdly, there must be clear evidence that the instrument as executed does not accurately represent the true agreement of the parties at the time of its execution. Fourthly, it must be shown that the instrument, if rectified as claimed, would accurately represent the true agreement of the parties at that time . . ‘
Slade, Oliver and Robert Goff LLJ
[1984] 1 Lloyds Law Reports 353
England and Wales
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 15 July 2022; Ref: scu.216652
A continuing common intention of the parties to a document alone will not suffice to justify rectification. For rectification to be appropriate, there must be convincing proof that the concluded instrument does not represent the common intention of the parties. Where there has been prolonged negotiations resulting in a formal instrument, with parties having their own legal advisors, there is a strong assumption that the instrument represents their real intention.
Simonds J said: ‘Before I consider the facts and come to a conclusion whether the defendants are right in their contention, it is necessary to say a few words upon the principles which must guide me in this matter. I am clear that I must follow the decision of Clauson J, as he then was, in Shipley Urban District Council v. Bradford Corpn, the point of which is that, in order that this court may exercise its jurisdiction to rectify a written instrument, it is not necessary to find a concluded and binding contract between the parties antecedent to the agreement which it is sought to rectify. The judge held, and I respectfully concur with his reasoning and his conclusion, that it is sufficient to find a common continuing intention in regard to a particular provision or aspect of the agreement. If one finds that, in regard to a particular point, the parties were in agreement up to the moment when they executed their formal instrument, and the formal instrument does not conform with that common agreement, then this court has jurisdiction to rectify, although it may be that there was, until the formal instrument was executed, no concluded and binding contract between the parties. That is what the judge decided, and, as I say, with his reasoning I wholly concur, and I can add nothing to his authority in the matter, except that I would say that, if it were not so, it would be a strange thing, for the result would be that two parties binding themselves by mistake to which each had equally contributed, by an instrument which did not express their real intention, would yet be bound by it. That is a state of affairs which I hold is not the law, and, until a higher court tells me that it is the law, I shall continue to exercise the jurisdiction which Clauson J, as I think rightly, held might be entertained by this court.
Secondly, I want to say this upon the principle of the jurisdiction. It is a jurisdiction which is to be exercised only upon convincing proof that the concluded instrument does not represent the common intention of the parties. That is particularly the case where one finds prolonged negotiations between the parties eventually assuming the shape of a formal instrument in which they have been advised by their respective skilled legal advisers. The assumption is very strong in such a case that the instrument does represent their real intention, and it must be only upon proof which Lord Eldon, I think, in a somewhat picturesque phrase described as ‘irrefragable’ that the court can act. I would rather, I think, say that the court can only act if it is satisfied beyond all reasonable doubt that the instrument does not represent their common intention, and is further satisfied as to what their common intention was. For let it be clear that it is not sufficient to show that the written instrument does not represent their common intention unless positively also one can show what their common intention was. It is in the light of those principles that I must examine the facts of this somewhat complicated case.’
Simonds J
[1939] 1 All ER 662
England and Wales
Approved – Shipley Urban District Council v Bradford Corporation ChD 1936
The parties had reached a clear common understanding in their negotiations as to how they intended the price of water supplied to the plaintiff council by the defendant corporation to be calculated; but, as each party only had power to contract . .
Cited – Frederick E Rose (London) Limited v William H Pim Junior and Co Limited 1953
The plaintiffs, who were London merchants, had been asked by Egyptian buyers to supply ‘feveroles’. Not knowing what this term meant, they asked the defendants’ representative, who responded that ‘feveroles’ meant horsebeans. Relying on this . .
Approved – Joscelyne v Nissen CA 1970
A father entered into a written contract with his daughter by which he transferred to her his car hire business in return for her agreement to pay him a pension and discharge certain expenses. In their discussions it had been agreed between them . .
Cited – Daventry District Council v Daventry and District Housing Ltd CA 13-Oct-2011
The appellant challenged refusal of rectification of its agreement with the defendant. They asserted either mutual or unilateral mistake. The parties had agreed for the transfer of housing stock and management staff to the respondents. The claimant . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 15 July 2022; Ref: scu.184576
A father entered into a written contract with his daughter by which he transferred to her his car hire business in return for her agreement to pay him a pension and discharge certain expenses. In their discussions it had been agreed between them that these expenses should include the father’s gas, electricity and coal bills and the cost of home help. The court considered an application for rectification. At first instance, the court held that the signed contract did not on its proper interpretation provide for payment of these expenses, but rectification was granted. The daughter appealed, contending that as a matter of law the remedy of rectification was not available to the father in the absence of an antecedent concluded contract.
Held: The daughter’s contention as rejected. Rose v Pim did not assert or reinstate the view that an antecedent complete concluded contract was required for rectification. It only showed that prior accord on a term or meaning of a phrase to be used must have been outwardly expressed or communicated between the parties. The burden of proof on the party asking for rectification is high.
A contractual document could only be rectified in order to bring it into conformity with a contract that already existed before the document was executed and which the document failed accurately to record as a result of a mutual mistake.
Buckley LJ, Russell LJ
[1970] 2 QB 86
England and Wales
Explained – Frederick E Rose (London) Limited v William H Pim Junior and Co Limited 1953
The plaintiffs, who were London merchants, had been asked by Egyptian buyers to supply ‘feveroles’. Not knowing what this term meant, they asked the defendants’ representative, who responded that ‘feveroles’ meant horsebeans. Relying on this . .
Approved – Crane v Hegeman-Harris Co Inc ChD 1939
A continuing common intention of the parties to a document alone will not suffice to justify rectification. For rectification to be appropriate, there must be convincing proof that the concluded instrument does not represent the common intention of . .
Cited – Lovell and Christmas Ltd v Wall CA 1911
The written contract contained a restrictive covenant limiting the defendant’s freedom to carry on the business of a ‘provision merchant’ other than on behalf of the plaintiff company. On the facts found, the parties in their discussions before the . .
Cited – AMP (UK) Plc and Another v Barker and Others ChD 8-Dec-2000
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed . .
Cited – Pegler Ltd v Wang (UK) Ltd TCC 25-Feb-2000
Standard Conract – Wide Exclusions, Apply 1977 Act
The claimant had acquired a computer system from the defendant, which had failed. It was admitted that the contract had been broken, and the court set out to decide the issue of damages.
Held: Even though Wang had been ready to amend one or . .
Cited – Oun v Ahmad ChD 19-Mar-2008
The parties agreed in writing for the sale of leasehold property to the claimant. One document had been signed, but later one said that it had not included an aportionment. Another document then set out the apportionment. When the defendant refused . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 15 July 2022; Ref: scu.184577
Sir Billy Butlin had executed a voluntary settlement to allow a majority of trustees to exercise a power under the settlement. By a drafting error the settlement did not give effect to this intention.
Held: The court could rectify the settlement even though only one of the original trustees knew of the intention.
Brightman J said: ‘There is, in my judgment, no doubt that the court has power to rectify a settlement notwithstanding that it is a voluntary settlement and not the result of a bargain, such as an ante-nuptial marriage settlement. Lackersteen v. Lactersteen (1860) 30 L.J. Ch 5, a decision of Page-Wood V.C. and Behrens v. Heilbut (1956) 222 L.J. Jo.290, a decision of Harman J., are cases in which voluntary settlements were actually rectified. There are also obiter dicta to the like effect in cases where rectification was in fact refused; see Bonhote v. Henderson [1895] 1 Ch. 642; [1895] 1 Ch. 202.’ and ‘rectification is available not only in a case where particular words have been added, omitted or wrongly written as a result of careless copying or the like. It is also available where the words of the document are purposely used but it was mistakenly considered that they bore a different meaning as a matter of true construction. In such a case . . the court will rectify the wording so that it expresses the true intention . .’
Brightman J
[1976] Ch 251
England and Wales
Cited – Lansing Linder Ltd v Alber ChD 2000
Pension scheme rules were amended varying the ages etc for retirement. The rules gave the company power to amend the rules with the consent of the Trustees. The original rules permitted early retirement on an immediate, but actuarially reduced, . .
Cited – AMP (UK) Plc and Another v Barker and Others ChD 8-Dec-2000
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed . .
Cited – Chartbrook Ltd v Persimmon Homes Ltd and Another ChD 2-Mar-2007
The claimants had entered into an agreement with the defendant house-builder for the development of a site which the claimants had recently acquired. The structure of the agreement was that the developer would obtain planning permission and, under . .
Cited – Oun v Ahmad ChD 19-Mar-2008
The parties agreed in writing for the sale of leasehold property to the claimant. One document had been signed, but later one said that it had not included an aportionment. Another document then set out the apportionment. When the defendant refused . .
Cited – Marley v Rawlings and Another SC 22-Jan-2014
A husband and wife had each executed the will which had been prepared for the other, owing to an oversight on the part of their solicitor; the question which arose was whether the will of the husband, who died after his wife, was valid. The parties . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 15 July 2022; Ref: scu.184579
The plaintiffs, who were London merchants, had been asked by Egyptian buyers to supply ‘feveroles’. Not knowing what this term meant, they asked the defendants’ representative, who responded that ‘feveroles’ meant horsebeans. Relying on this information, the plaintiffs contracted to buy a quantity of horsebeans from the defendants, which they then sold on as ‘feveroles’ to the Egyptian buyers. To fulfil the contract, the defendants purchased ‘horsebeans’ from an Algerian supplier. There are in fact different varieties of horsebeans and those supplied were ‘feves’, which were less valuable than ‘feveroles’. The Egyptian buyers claimed the difference in value as damages from the plaintiffs, who then sought to rectify their contract with the defendants by adding the word ‘feveroles’ after the references to ‘horsebeans’. Held; Rectification was granted.
The court considered the circumstances under which it could order rectification of a contract: ‘Rectification is concerned with contracts and documents, not with intentions. In order to get rectification it is necessary to show that the parties were in complete agreement on the terms of their contract, but by an error wrote them down wrongly; and in this regard, in order to ascertain the terms of their contract, you do not look into the inner minds of the parties – into their intentions – any more than you do in the formation of any other contract. You look at their outward acts, that is, at what they said or wrote to one another in the coming to their agreement, and then compare it with the document that they have signed. If you can predicate with certainty what their contract was, and that it is, by a common mistake, wrongly expressed in the document, then you rectify the document; but nothing less will suffice. It is not necessary that all the formalities of the contract should have been executed so as to make it enforceable at law . . but, formalities apart, there must have been a concluded contract. There is a passage in Crane v Hegeman-Harris Co. Inc. [ [1939] 1 All ER 662, 664 ] which suggests that a continuing common intention alone will not suffice; but I am clearly of the opinion that a continuing common intention is not sufficient unless it has found expression in outward agreement. There could be no certainty at all in business transactions if a party who had entered into a firm contract could afterwards turn round and claim to have it rectified on the ground that the parties intended something different. He is allowed to prove, if he can, that they agreed something different… but not that they intended something different.’
Lord Denning
[1953] 2 QB 450
England and Wales
Cited – Crane v Hegeman-Harris Co Inc ChD 1939
A continuing common intention of the parties to a document alone will not suffice to justify rectification. For rectification to be appropriate, there must be convincing proof that the concluded instrument does not represent the common intention of . .
Cited – Lovell and Christmas Ltd v Wall CA 1911
The written contract contained a restrictive covenant limiting the defendant’s freedom to carry on the business of a ‘provision merchant’ other than on behalf of the plaintiff company. On the facts found, the parties in their discussions before the . .
Explained – Joscelyne v Nissen CA 1970
A father entered into a written contract with his daughter by which he transferred to her his car hire business in return for her agreement to pay him a pension and discharge certain expenses. In their discussions it had been agreed between them . .
Cited – Lansing Linder Ltd v Alber ChD 2000
Pension scheme rules were amended varying the ages etc for retirement. The rules gave the company power to amend the rules with the consent of the Trustees. The original rules permitted early retirement on an immediate, but actuarially reduced, . .
Cited – AMP (UK) Plc and Another v Barker and Others ChD 8-Dec-2000
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed . .
Cited – Pegler Ltd v Wang (UK) Ltd TCC 25-Feb-2000
Standard Conract – Wide Exclusions, Apply 1977 Act
The claimant had acquired a computer system from the defendant, which had failed. It was admitted that the contract had been broken, and the court set out to decide the issue of damages.
Held: Even though Wang had been ready to amend one or . .
Explained – London Weekend Television Ltd v Paris and Griffith ChD 1969
Megaw J said: ‘Where two persons agreed expressly with one another what was the meaning of a particular phrase but did not record their definition in the contract itself, if one of the parties sought to enforce the agreement on the basis of some . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 15 July 2022; Ref: scu.184575
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed that there had been a mistake, but chose not to correct it. The potential cost to the Scheme of such an increase in early leaver benefits would be enormous.
Held: When one is considering the intentions of a collective body such as a group of trustees it is their collective intention which is relevant. It would be a very odd case if that collective intention were not objectively manifested. The claimant had failed to show convincingly a continuing common intention by the Trustees to affect only incapacity benefits. Nevertheless, the employees were affected by the mistake, that the rectification sought would be effective. Rectification was therefore granted. There is a wide equitable jurisdiction to relieve from the consequences of mistake, and the court would have decided that this would have been an appropriate case for setting aside NPI’s consent for mistake.
Lawrence Collins J described the rule that rectification is not available if the mistake relates only to the consequences of the transaction or the advantages to be gained by entering into it as: ‘simply a formula designed to ensure that the policy involved in equitable relief is effectuated to keep it within reasonable bounds and to ensure that it is not used simply when parties are mistaken about the commercial effects of their transactions or have second thoughts about them. The cases certainly establish that relief may be available if there is a mistake as to law or the legal consequences of an agreement or settlement . . ‘
Mr Justice Lawrence Collins
HC 001897, [2000] EWHC Ch 42, [2001] OPLR 197, [2001] Pens LR 77
England and Wales
Cited – Walker v Armstrong 1856
The court considered a request for rectification of a document. . .
Cited – Lackersteen v Lackersteen 1860
The court has power to rectify a settlement notwithstanding that it is a voluntary settlement and not the result of a bargain, such as an ante-nuptial marriage settlement. . .
Cited – Bonhote v Henderson 1895
The court refused to allow rectification of a voluntary settlement, since the mistake was demonstrated by a prior agreement. . .
Cited – Frederick E Rose (London) Limited v William H Pim Junior and Co Limited 1953
The plaintiffs, who were London merchants, had been asked by Egyptian buyers to supply ‘feveroles’. Not knowing what this term meant, they asked the defendants’ representative, who responded that ‘feveroles’ meant horsebeans. Relying on this . .
Cited – Behrens v Heilbut 1956
A voluntary settlement was rectified despite it not being a representation of a previously negotiated bargain. . .
Cited – Joscelyne v Nissen CA 1970
A father entered into a written contract with his daughter by which he transferred to her his car hire business in return for her agreement to pay him a pension and discharge certain expenses. In their discussions it had been agreed between them . .
Cited – Re Butlin’s Settlement Trusts 1976
Sir Billy Butlin had executed a voluntary settlement to allow a majority of trustees to exercise a power under the settlement. By a drafting error the settlement did not give effect to this intention.
Held: The court could rectify the . .
Cited – The Olympic Pride (Etablissements Georges et Paul Levy v Adderley Navigation Co Panama SA 1980
In the case of a bilateral transaction, there must be convincing proof that the concluded instrument does not represent the common intention of the parties to allow rectification. The policy reason for the need for convincing proof is that certainty . .
Cited – Thomas Bates and Sons Ltd v Wyndham’s Lingerie Ltd CA 21-Nov-1980
An application was made for rectification of a rent review clause in a lease. When executing the lease, the tenants’ officer, Mr Avon, noticed that the rent review clause in the lease drafted by the landlords was defective in not including a . .
Cited – Grand Metropolitan plc v Wm Hill Group Ltd 1997
The court considered the standard of evidence required to allow rectification of a document. . .
Cited – Lansing Linder Ltd v Alber ChD 2000
Pension scheme rules were amended varying the ages etc for retirement. The rules gave the company power to amend the rules with the consent of the Trustees. The original rules permitted early retirement on an immediate, but actuarially reduced, . .
Cited – Hanley v Pearson 1879
Rectification was ordered of a voluntary settlement on the uncontradicted affidavit evidence of the settlor without any need for objective manifestation of intention. . .
Cited – McDonald and Others v Horn and Others CA 8-Aug-1994
A court may make a pre-emptive award of costs to pension fund members who wished to sue the trustees. Hoffmann LJ said: ‘if one looks at the economic relationships involved, there does seem to me to be a compelling analogy between a minority . .
Cited – Lady Hood of Avalon v Mackinnon 1909
Lady Hood made an appointment in favour of her elder daughter, in order to place her in the same position as her younger daughter to whom she had already made large appointments. But in doing so she (and her solicitor) had forgotten that she had, . .
Cited – Whiteside v Whiteside CA 1950
The husband had executed a deed in favour of his former wife after dissolution of their marriage covenanting to pay a specified sum per annum free of income tax up to but not exceeding a stated amount. This provision was in substitution for one . .
Cited – In Re Pilkington’s Will Trusts; Pilkington v Inland Revenue Commissioners HL 8-Oct-1962
The trustees proposed establishing a new trust in respect of the share of an estate to which an infant beneficiary had a contingent entitlement. A portion of the trust fund would be allocated to the new trust.
Held: This was a lawful exercise . .
Cited – Re Earl of Coventry’s Indenture 1974
. .
Cited – Re Hastings-Bass; Hastings v Inland Revenue CA 14-Mar-1974
Trustees of a settlement had exercised their power of advancement under the section, in order to save estate duty by transferring investments to be held on the trusts of a later settlement. However the actual effect of the advancement was that the . .
Cited – Kerr v British Leyland (Staff Trustees) Ltd 26-Mar-1986
In confirming that trustees did not have an uncontrolled discretion to determine whether the incapacity of a beneficiary of the trust was permanent, the Court held ‘Now this is not a case of trust where the beneficiaries are simply volunteers. The . .
Cited – Gibbon v Mitchell ChD 1990
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to . .
Cited – Mettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
Cited – Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd 1991
A company pension scheme had been operating for many years, with increases being provided for under one rule. A new rule was introduced to provide regular increases. The company was taken over, and the trustees sought clarification of the company’s . .
Cited – Stannard v Fisons Pension Trust Limited CA 1991
Fisons had sold their fertiliser division to Norsk Hydro. Acting on advice of actuaries and thinking that the fund was in deficit, the trustees made a transfer to a new fund to provide for pensions of transferring employees in accordance with a . .
Cited – Breadner v Granville-Grossman ChD 2000
‘it cannot be right, whenever trustees do something which they later regret and think they ought not to have done, they can say they never did it in the first place’
It was not correct to suggest that whenever trustees do something which they . .
Cited – Green v Cobham ChD 19-Jan-2000
cw The Trustees had overlooked the fact that a Will Trust and two sub-settlements together constituted a single composite settlement for the purposes of CGT with a single body of trustees. As a result of his . .
Cited – Futter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .
Cited – FSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
Lists of cited by and citing cases may be incomplete.
Updated: 15 July 2022; Ref: scu.135647
Shares in a tea company had been mortgaged to secure a loan from a broker on terms that the mortgagor would seek to ensure that the mortgagee should thereafter have sale of the company’s teas. The mortgage contained a covenant that, if the company sold its teas otherwise than through the mortgagee, the mortgagor would pay to the mortgagee an amount equivalent to the commission that he would have earned from the company as broker. It was complained that the agreement was a clog on the mortgagor’s equity of redemption.
Held: (Lord Lindley dissenting): The agreement did not fail, falling within the principle in Noakes v Rice.
Macnaghten, Davey, Robertson, Lindley LL
[1903] UKHL 1, [1903] AC 253
England and Wales
Cited – Noakes and Co Ltd v Rice HL 17-Dec-2001
A charge on a public house provided that even after repayment of the principal, the owner continued to be obliged to purchase his beer from the brewery, and that any non-payment would be charged on the property.
Held: The clauses operated as a . .
Explained – G and C Kreglinger v The New Patagonian Meat and Cold Storage Company HL 20-Nov-1913
Mortgagor’s collateral dvantage is not a clog
The appellant woolbrokers had lent the respondent andpound;10,000 with a floating charge over its undertaking. The loan agreement provided that, for five years, the appellants would have first refusal over all sheepskins sold by the company. The . .
Cited – Jones v Morgan CA 28-Jun-2001
The claimant appealed against an order refusing him enforcement an agreement for the purchase of a one half share in a property. The judge had found the agreement to be unconscionable.
Held: The appeal was dismissed. The judge had wrongly . .
Lists of cited by and citing cases may be incomplete.
Updated: 13 July 2022; Ref: scu.263838
A trustee is required to use the same degree of prudence and diligence as a person of ordinary prudence would have done if he had been conducting his own affairs.
Lord Blackburn, Earl of Selborne LC
(1883) 9 App Cas 1, [1883] UKHL 1, (1883-84) LR 9 App Cas 1
England and Wales
Appeal from – Speight v Gaunt CA 20-Jan-1883
A trustee must act for the beneficiaries as a prudent person of business would act in his own affairs. Sir George Jessel MR said: ‘It seems to me that on general principles a trustee ought to conduct the business of the trust in the same manner that . .
Cited – Nestle v National Westminster Bank CA 6-May-1992
The claimant said that the defendant bank as trustee of her late father’s estate had been negligent in its investment of trust assets.
Held: The claimant had failed to establish either a breach of trust or any loss flowing from it, though . .
Cited – Richards v Wood CA 27-Feb-2014
The defendants had purchased their council house with financial asistance from their son, the claimant. He now asserted that a trust existed in the property in his favour.
Held: ‘unless there is a secure tenancy the statutory right to buy . .
Lists of cited by and citing cases may be incomplete.
Updated: 13 July 2022; Ref: scu.263825
The claimant sought rectification of the land register. In a development deal, an option agreement had not been registered, and the land sold on. The land was required to allow the building of a roundabout necessary for the intended store. An application had been made for registration of the option, but requisitions had not been answered. The purchaser had bought the land from chargees of the buyer, and who were aware of the possible legal interest of the claimant.
Held: ‘the main characteristics of an option are that it is an undertaking to sell property to the grantee if the latter wishes to purchase it, usually within a specified period.’ An option had been created which was not void for uncertainty, and an equitable interest had arisen in favour of the claimant. On cancellation of the application for first registration, the land reverted to the seller on trust for the buyer who then had only an equitable interest. His chargee had therefore only an equitable interst and could proceed to enforce his charge only by a court order. The order made only affected the buyer’s equitable estate, and therefore the chargee was unable to convey the legal estate. The claimant had established that it would be unjust for the rectication not to be made.
The Honourable Mr Justice Mann
[2005] EWHC 1235 (Ch)
Law of Property Act 1925 90, Land Registration Act 1925, Land Registration Act 2002 65 Sch 4
England and Wales
Cited – London and Blenheim Estates v Ladbroke Retail Parks Ltd CA 1-Jun-1993
The land-owner sold part of his land, granting easements over the retained land, and an agreement that, if further plots were purchased, similar easements would be granted. The agreement stated that the purchaser should have the right to give notice . .
Cited – Pearce v Watts CA 9-Jun-1875
An agreement for the sale included the reservation: ‘[The Vendor] reserves the necessary land for making a railway through the estate to Prince Town.’ Specific performance was sought by the purchaser, and the vendor objected that it was void for . .
Cited – London and South Western Railway Co v Gomm CA 1882
A grant was given to repurchase property, but was void at common law for the uncertainty of the triggering event.
Held: The ‘right’ to ‘take away’ the claimants’ estate or interest in the farm was immediately vested in the grantee of the right . .
Cited – Midland Bank Trust Co Ltd v Green (No 1) HL 11-Dec-1980
A father had granted an option over land to his son, but it had not been registered. The father later tried to frustrate the option by conveying the land to his wife for 500 pounds. The land was worth 40,000 pounds. When the son found out about it, . .
Cited – James Hay Pension Trustees Ltd v Cooper Estates Ltd ChD 20-Jan-2005
The court ordered rectification of the land register where not to do so would give the then registered proprietor an unattractive and uncovenanted ransom position. . .
Cited – Horrill v Cooper CA 1999
(Year?) The appelant had bought unregistered land knowing of restrictive covenants and paying accordingly, but the covenants had not been registered and his title was free of them. He now appealed an order for rectification of the register which had . .
Cited – Horrill v Cooper QBD 1998
Restrictive covenants were registered against unregistered land, but were not revealed by a subsequent formal search with the result (as found) that as matter of technicality the purchaser took free from them. However, that purchaser knew of the . .
Cited – Pallant v Morgan ChD 1952
The agents of two neighbouring landowners orally agreed in the auction room that the plaintiff’s agent would refrain from bidding at auction and that the defendant, if his agent’s bid was successful, would divide the land according to an agreed . .
Cited – Banner Homes Group Plc v Luff Developments and Another CA 10-Feb-2000
Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: Although there was no formal . .
Cited – Greasley v Cooke 1980
For a proprietary estoppel to arise the plaintiff must have incurred expenditure or otherwise have prejudiced himself or acted to his detriment. However, once it has been established that promises were made, and that there has been conduct by the . .
Cited – Gillett v Holt and Another CA 23-Mar-2000
Repeated Assurances Created Equitable Estoppel
Repeated assurances, given over years, that the claimant would acquire an interest in property on the death of the person giving the re-assurance, and upon which the claimant relied to his detriment, could found a claim of equitable estoppel. The . .
Cited – Gold Harp Properties Ltd v Macleod and Others CA 29-Jul-2014
The company appealed against an order re-instating to the register leases which the company said it had forfeited for non-payment of rent. After the forfeiture, the landlord had granted new leases. It appealed saying that exceptional circumstances . .
Lists of cited by and citing cases may be incomplete.
Updated: 13 July 2022; Ref: scu.226740
[1820] EngR 667, (1820) 2 Jac and W 349, (1820) 37 ER 661
England and Wales
Updated: 12 July 2022; Ref: scu.330919
The vendor challenged the validity of an option agreement, saying that the consideration (one pound) was only nominal.
Held: ‘a valid option to purchase constitutes an offer to sell irrevocable during the period stated, and a purported withdrawal of the offer is ineffective. When therefore the offer is accepted by the exercise of the option, a contract for sale and purchase is thereupon constituted, just as if there were then constituted a perfectly ordinary contract for sale and purchase without a prior option agreement. The Court is asked to order specific performance of that contract of sale and purchase, not to order specific performance of a contract not to withdraw the offer: provided that the option be valid and for valuable consideration and duly exercised, it appears to me to be irrelevant to the question of remedy under the contract for sale and purchase that the valuable consideration can be described as a token payment: and so also if the option agreement be under seal with no payment, which is what I take the learned Judge to be referring to when he refers to a gratuitous option in his Judgment. While I therefore agree that a valid option to purchase constitutes an interest in the land, I do not consider, as the learned Judge appears to have thought, that that fact is necessary to his conclusion and my conclusion on what is the appropriate remedy.’
Russell, Cairns LJJ, Sir John Pennycuick
[1974] EWCA Civ 10, [1975] Ch 258
England and Wales
Appeal from (affirmed) – Mountford and Another v Scott 1973
The plaintiff paid one pound for an option to buy property in London. The option allowed the plaintiff to acquire the property at the agreed price at any time within six months. Soon after the option was granted the defendant resiled, saying he was . .
Lists of cited by and citing cases may be incomplete.
Updated: 12 July 2022; Ref: scu.262734
Millett LJ discussed the assertion of a vendor’s lien where a third party would be adversely affected: ‘A party with an equitable charge can be taken to agree to the postponement of his property against any party who was allowed to his knowledge to purchase the land on the faith that it is unencumbered.’ and
‘As soon as a binding contract for sale of land is entered into the vendor has a lien on the property for the purchase money and a right to remain in possession of the property until payment is made. The lien does not arise on completion but on exchange of contracts. It is discharged on completion to the extent that the purchase money is paid: In re Birmingham, decd.; Savage v. Stannard [1959] Ch. 523, cited with approval in London and Cheshire Insurance Co. Ltd. v. Laplagrene Property Co. Ltd. [ 1971] Ch. 499 , 514. Even if the vendor executes an outright conveyance of the legal estate in favour of the purchaser and delivers the title deeds to him, he still retains an equitable lien on the property to secure the payment of any part of the purchase money which remains unpaid. The lien is not excluded by the fact that the conveyance contains an express receipt for the purchase money.
The lien arises by operation of law and independently of the agreement between the parties. It does not depend in any way upon the parties’ subjective intentions. It is excluded where its retention would be inconsistent with the provisions of the contract for sale or with the true nature of the transaction as disclosed by the documents. It is also excluded where, on completion, the vendor receives all that he bargained for: Capital Finance Co. Ltd. v. Stokes [1969] 1 Ch. 261 and Congresbury Motors Ltd. v. Anglo-Belge Finance Co. Ltd. [1971] Ch. 81. In each of those cases the vendor took a legal charge to secure payment. The unpaid vendor’s lien was held to be excluded notwithstanding that the charge later became void for want of registration. In Williams on Vendor and Purchaser , 4th ed. (1936), vol. 2, p. 984, there is a passage which deals with the exclusion of the lien: ‘The vendor may, however, waive or abandon his lien for the unpaid purchase-money, and his intention to do so may be either expressed or implied from the circumstances of the case.’
After dealing with express waiver or abandonment the author continues:
‘Where such waiver or abandonment is sought to be implied, the onus lies on those who deny the existence of the lien, which arises by the rule of equity in the absence of stipulation to the contrary; the question is one of the parties’ intention, to be determined by the documents they have executed and the circumstances of the case; and the test is, whether they have in effect agreed that the vendor shall have some other security or mode of payment in substitution for his lien.’
As the authorities demonstrate the test is an objective one. The question is: what intention is to be attributed to the parties from the transaction into which they have entered? . . ‘
Millett LJ, Waite LJ, Thorpe LJ
[1997] 1 WLR 415, [1996] EWCA Civ 1354, (1997) 74 P and CR 30
England and Wales
Analysed – Kettlewell v Watson 1884
A vendor’s lien was postponed to the equitable interest of a third party with whom the purchaser from the vendor had had dealings. . .
Cited – Bank of Scotland Plc v King and others ChD 23-Nov-2007
The parties contracted to buy and sell a property. The lending bank sought possession, saying that it had advanced the money which had been spent acquirng the property. The defendant purchasers said that completion had not taken place, the full . .
Cited – Scott v Southern Pacific Mortgages Ltd and Others SC 22-Oct-2014
The appellant challenged a sale and rent back transaction. He said that the proposed purchaser had misrepresented the transaction to them. The Court was asked s whether the home owners had interests whose priority was protected by virtue of section . .
Cited – Bank of Cyprus UK Ltd v Menelaou SC 4-Nov-2015
The bank customers, now appellants, redeemed a mortgage over their property, and the property was transferred to family members, who in turn borrowed from the same lender. A bank employee simply changed the name on the mortgage. This was ineffective . .
Lists of cited by and citing cases may be incomplete.
Updated: 12 July 2022; Ref: scu.261516
Appeal from a decision as to whether equitable set-off can be applied to the statutory procedure under Case D in Schedule 3 to the Agricultural Holdings Act 1986.
Mr Justice Birss
[2019] EWHC 1526 (Ch)
England and Wales
Updated: 11 July 2022; Ref: scu.639297
[2007] EWHC 1632 (Comm)
See Also – Kensington International Ltd v Republic of Congo and Another ComC 20-Jul-2006
The claimant sought leave to cross examine an officer of the defendant in connection with his affidavit sworn in search order proceedings. The case had a history of deceit and dishonest oral evidence.
Held: Though such an order would be . .
See Also – Kensington International Ltd v Republic of the Congo; Glencore Energy UK Limited, Sphynx UK Limited, Sphynx (BDA) Limited, Africa Oil and Gas Corporation, Cotrade SA (Third Parties) ComC 28-Nov-2005
The claimant had taken an assignment of debts owed by the defendant, and obtained judgment in US$121m. They sought to enforce the judgment and obtained third party debt orders against the parties listed.
Held: Officers in the third party . .
See Also – Kensington International Ltd v Republic of The Congo ComC 16-Apr-2003
. .
See Also – Kensington International Ltd v Republic of the Congo CA 13-May-2003
The claimant had obtained judgment against the defendant for US$60m, and had sought a Mareva injunction against the defendant republic’s assets and against the assets of companies through which it operated in the UK. The claimant now appealed . .
See Also – Kensington International Ltd and Another v Republic Of the Congo ComC 26-May-2006
. .
See Also – Kensington International Ltd v Republic of Congo and Another ComC 20-Jul-2006
The claimant sought leave to cross examine an officer of the defendant in connection with his affidavit sworn in search order proceedings. The case had a history of deceit and dishonest oral evidence.
Held: Though such an order would be . .
See Also – Kensington International Ltd v Republic of Congo CA 7-Nov-2007
The defendants appealed against orders requiring them to disclose documents in an action regarding the payment of bribes, saying that the requirement effectively required them to incriminate themselves.
Held: The appeal failed. The public . .
Lists of cited by and citing cases may be incomplete.
Updated: 11 July 2022; Ref: scu.258166
A father devised his estate to trustees for a term, for them to pay a residue of rents from that estate to his sons as tenants in common; but the reversion of the estate he devised to his sons as joint tenants. The question was whether the joint tenancy of the reversion had been severed because the sons, during the term, had used the estate in their partnership trade as brewers.
Held: They had not, and so the surviving son took the whole of the reversion, subject to the term.
(1857) 24 Beav 254
England and Wales
Cited – Bathurst (As Administrator of the Estate of Michael David Bathurst Deceased) v Scarborow CA 1-Apr-2004
The deceased and defendant had been partners and friends. They had bought a property expressly for the partnership and was conveyed into their names as joint tenants.
Held: The declaration in the partnership was not itself sufficient cogent . .
Lists of cited by and citing cases may be incomplete.
Updated: 10 July 2022; Ref: scu.238857
Where one of two or more joint tenants of land grants a parcel of that land to a third party, that acts to sever the joint tenancy.
[1584] Cro Eliz 33, [1584] 73 ER 412
England and Wales
Updated: 10 July 2022; Ref: scu.238855
The principle in Hughes v Metropolitan Railway could apply to a reduction by concession in payments due to a creditor and a concession could be terminated by giving reasonable notice.
Viscount Simonds, Lord Oaksey, Lord Reid, Lord Tucker, Lord Cohen
[1955] UKHL 5, [1955] 1 WLR 761, [1955] 2 All ER 657
Patents and Designs Act 1938 38
England and Wales
Cited – Hughes v Metropolitan Railway Co HL 1877
A notice to repair had been served by the landlord on the tenant. The tenant wrote offering to buy the premises and proposed deferring the commencement of repairs until the landlord responded. The landlord replied by letter asking the price. It was . .
Cited – WWF (World Wide Fund for Nature) and Another v World Wrestling Federation Entertainment Inc CA 2-Apr-2007
The parties had disputed use of the initals WWF, with a compromise reached in 1994 allowing primary use by the Fund with restricted use by the Federation. The Federation now appealed an award of damages made after a finding of a breach of the . .
Cited – Collier v P and M J Wright (Holdings) Ltd CA 14-Dec-2007
Agreement for payment by joint debtor not contract
The claimant appealed against refusal of an order to set aside a statutory demand. He said that he had compromised a claim by the creditors. He argued for an extension to the Rule in Pinnel’s case, so that where a debtor agrees to pay part of a . .
Lists of cited by and citing cases may be incomplete.
Updated: 09 July 2022; Ref: scu.248524
The parties disputed the taxpayer’s liability to income tax on income coming due to her on an American based family trust.
Held: A beneficiary in a fully administered deceased estate has an equitable interest in property which is the subject of a benefit devised or bequeathed to him or her under the will.
Lord Buckmaster, Viscount Dunedin, Lord Warrington of Clyffe, Lord Tomlin, Lord Thankerton
15 TC 693, [1930] UKHL 2, [1931] AC 212
England and Wales
See Also – Baker v Archer-Shee HL 26-Jul-1927
‘The ultimate question in this Appeal turns upon the description which in income tax phraseology ought properly to be applied to the moneys paid during the two years in question by the Trust Company of New York to the order of Lady Archer-Shee, the . .
Cited – Anson v Revenue and Customs SC 1-Jul-2015
Interpretation of Double Taxation Agreements
This appeal is concerned with the interpretation and application of a double taxation agreement between the United Kingdom and the United States of America. A had been a member of an LLP in Delaware, and he was resident within the UK, but not . .
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.
Updated: 09 July 2022; Ref: scu.248479
When striking out a claim for rectification of a contract on the basis of a unilateral mistake: ‘the remedy of rectification for unilateral mistake is a drastic remedy, for it has the result of imposing on the defendant to the claim a contract which he did not, and did not intend to, make. Accordingly the conditions for the grant of such relief must be strictly satisfied.’
Lightman J
[2007] EWHC 32 (Ch)
England and Wales
Cited – Connolly Ltd v Bellway Homes Ltd ChD 23-Apr-2007
The claimant sought rectification of a contract for the sale of land, or damages in deceit. They said that it had been agreed that the price would be adjusted to reflect any change in values. The formula inserted made no great sense mathematically, . .
Cited – Connolly Ltd v Bellway Homes Ltd ChD 23-Apr-2007
The claimant sought rectification of a contract for the sale of land, or damages in deceit. They said that it had been agreed that the price would be adjusted to reflect any change in values. The formula inserted made no great sense mathematically, . .
Lists of cited by and citing cases may be incomplete.
Updated: 09 July 2022; Ref: scu.248253
The claimant alleged that substantial sums had been obtained from it by fraud, and in part had passed through the hands of the respondent solicitors: ‘Agip does not contend that the defendants were parties to the fraud and had actual knowledge of it. The claim is at common law for money had and received. In the alternative, it is contended that the defendants are bound to account in equity as constructive trustees. As against the first and second defendants, Agip relies on the mere receipt of the money. In addition, however, it is alleged that all the defendants and in particular the first and third, were guilty of wilful and reckless failure to make inquiries in order to satisfy themselves that they were not acting in furtherance of a fraud.’
Fox, Butler-Sloss, Beldam LJJ
[1990] EWCA Civ 2, [1991] Ch 547, [1992] 4 All ER 451
England and Wales
Updated: 09 July 2022; Ref: scu.248042
An order for specific performance had been refused in a disputed contract for carriage. The claimant argued that normal limitation periods should not be applied by analogy.
Held: Because there was no corresponding legal remedy the remedy in equity was not ‘correspondent to the remedy at law’, and nor did ‘the suit in equity [correspond] with an action at law’. Therefore it would not be correct to import normal limitation rules. The claimant’s appeal succeeded, and the claim should proceed to trial.
Lord Justice Moore-Bick said: ‘For more than two hundred years delay on the part of the claimant has been recognised as a defence to a claim for specific performance, which, like all equitable remedies, is discretionary. Lord Alvanley MR’s words in Milward v Earl Thanet (1801) 5 Ves 720n have passed into Chancery folklore: ‘a party cannot call upon a Court of Equity for specific performance, unless he has shewn himself ready, desirous, prompt, and eager.’ See also Lord Cranworth in Eads v Williams (1854) 4 De GM and G 674 at 691, 43 ER 671 at 678: ‘Specific performance is relief which this Court will not give, unless in cases where the parties seeking it come promptly, and as soon as the nature of the case will permit.’ Any suggestion that a claimant can delay for years in bringing his suit for specific performance is therefore contrary to well-established principle.’
Lord Justice Buxton, Lord Justice Jonathan Parker and Lord Justice Moore-Bick
[2006] EWCA Civ 1717, Times 15-Jan-2007, [2007] 2 Lloyd’s Rep 231, [2007] 2 All ER (Comm) 401
England and Wales
Cited – Knox v Gye HL 1872
A court will, by analogy, apply a statutory limitation period if the remedy in equity, specific performance, is ‘correspondent to the remedy at law’ and where ‘the suit in equity corresponds with an action at law’. Lord Westbury said: ‘For where the . .
Cited – Companhia De Seguros Imperio v Heath (REBX) Ltd and Others CA 20-Jul-2000
Although a claim for breach of fiduciary duty, as a claim in equity, was not subject to the same limitation periods imposed by the Act as claims in tort or contract, a court exercising an equitable jurisdiction should apply similar periods under the . .
See Also – P and O Nedlloyd Bv v Arab Metals Co and others CA 28-Mar-2006
. .
Cited – Milward v Earl Thanet CA 1801
Lord Alvanley MR said: ‘a party cannot call upon a Court of Equity for specific performance, unless he has shewn himself ready, desirous, prompt, and eager.’ . .
Cited – Heath v Kelly and Another ChD 24-Jul-2009
The defendant and the deceased had purchased a house as joint tenants in equity. The claimant sought to enforce an agreement for the sale of the defendant’s half share. Payment having been made. The defendant argued that the agreement was uncertain . .
Lists of cited by and citing cases may be incomplete.
Updated: 08 July 2022; Ref: scu.246993
A testator left his business and land to his two sons jointly to carry on that business after his death. They did so as partners. One issue was whether in doing so they severed the joint tenancy in the land, which was accessory to the business. Lord Eldon LC said that if the father’s will had made clear that the joint tenancy was to survive despite the sons’ dealings with it as partnership property, then the intention of the testator should prevail. As it was, in the absence of such an intention, it was open to the sons to sever the joint tenancy, and they had done so: ‘after transactions for 12 years; shewing that William lived and died in the persuasion, maintained by the acts of the other, that he was entitled to one-half; and after his death the Defendant acting upon the idea; which is the rational inference from the nature of the property and the transactions till his brother’s death; who was, during his whole life, entitled to sever his interest.’
Lord Eldon LC
(1804) 9 Ves Jr 591, [1804] EngR 302, (1804) 9 Ves Jun 591, (1804) 32 ER 732
England and Wales
Cited – Bathurst (As Administrator of the Estate of Michael David Bathurst Deceased) v Scarborow CA 1-Apr-2004
The deceased and defendant had been partners and friends. They had bought a property expressly for the partnership and was conveyed into their names as joint tenants.
Held: The declaration in the partnership was not itself sufficient cogent . .
Lists of cited by and citing cases may be incomplete.
Updated: 07 July 2022; Ref: scu.238856
The appellant had transferred his property with the intention that it should be subject to a right on his part to repurchase it. He now said the sale was in practice merely a charge.
Held: The appeal failed. The legal nature of the transaction was in accordance with the form of the transaction and did not involve the grant of a security interest which could be redeemed. ‘Courts of equity have traditionally been careful to endeavour to ensure that something which is in reality a transaction by way of loan upon security, with a conveyance to a lender by way of security for the repayment of money, is not wrongly characterised as an absolute conveyance. Historically a mortgage of a freehold estate was effected by a conveyance, subject to a legal right of redemption, which might well be expressed in limited form; equity attached to that or imposed upon it an equitable right of redemption which was much more general. ‘
Chadwick LJ, Thomas LJ, Lloyd LJ
[2006] EWCA Civ 694
England and Wales
Cited – Re Curtain Dream plc 1990
The company sought to finance its stock. It first sold it to a finance company, then repurchased it on terms including a retention of title clause.
Held: The whole transaction was, in its nature, a charge on the company’s assets, and as such . .
Cited – Lloyds and Scottish Finance Ltd v Cyril Lord Carpet Sales Limited HL 1992
The appellants were a Northern Irish company, which had entered liquidation, and the liquidator of that company. The respondent was a finance house. The company entered into a ‘block discounting’ agreement, which involved assigning customer credit . .
Cited – Welsh Development Agency v Export Finance Co Ltd CA 1992
The court was asked whether a transaction relating to goods between an exporter and the defendant, as a financier, associated with sales by the exporter to third-party purchasers, amounted to a true sale by the exporter to the defendant or was . .
Cited – Brighton and Hove City Council v Audus ChD 26-Feb-2009
The claimant was the proprietor of a fourth legal charge on a title. It sought a declaration that a second charge in favour of the defendant was void as a clog on the proprietor’s equity of redemption. An advance secured by a first charge, also in . .
Lists of cited by and citing cases may be incomplete.
Updated: 06 July 2022; Ref: scu.242277
(From the Court of Appeal of the Cayman Islands) ‘When one person gives another (the option holder) a conditional option to buy her land, the option holder will be entitled to exercise the option when the conditions for exercising it are fulfilled by following any procedural requirements set by the terms of the option. A new contract then arises between the parties and their relationship changes from one of option giver and option holder to one of vendor and purchaser. This appeal concerns the consequences for their relationship, in the context of proceedings for specific performance, if the option holder delays in exercising her option rights or in enforcing her rights under that new contract to which exercise of the option has given rise. ‘
Lord Reed, Lord Carnwath, Lady Black, Lady Arden, Lord Kitchin
[2019] UKPC 14
Commonwealth
Updated: 06 July 2022; Ref: scu.638472
A fund of money was bequeathed on trust to be invested so as to generate an income payable to A ‘the principal to go to her children at her death’.
Held: The will created a joint tenancy. The court set out three ways in which a joint tenancy may be severed. Where joint tenants indicated by their conduct that they treated their interests separately, the fact that they did not understand that their interests had been joint did not prevent such behaviour acting to sever the tenancy.
Sir William Page Wood VC
[1861] 1 John and Hem 546, [1861] 30 LJ CH 878, [1861] 5 LT 203, [1861] 7 Jur NS 771, [1861] 70 ER 862, [1861] EWHC Ch J51
England and Wales
Followed – Burgess v Rawnsley CA 15-Apr-1975
. .
Cited – Barton v Morris 1985
A couple lived together as man and wife and bought a property for use as a guest house business to be run as a partnership. The conveyance executed by both of them included an express declaration that they held the property upon trust for themselves . .
Cited – Re Palmer (A Deceased Debtor), Palmer v Palmer CA 6-Apr-1994
Property had been conveyed to the deceased and the appellant, his widow, to be held as joint tenants. The deceased dies whilst under investigation for defalcations as a solicitor, and an insolvency administration order was obtained in the estate. . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 July 2022; Ref: scu.238854
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to the fund. That rule applied also in an administration where there was no set off between the two debts.
Chadwick LJ explained the rule in Cherry v Boultby, saying: ‘(1) The general rule applicable in the distribution of a fund is that a person cannot take an aliquot share out of the fund unless he first brings into the fund what he owes. Effect is given to the general rule, as a matter of accounting, by treating the fund as notionally increased by the amount of the contribution; determining the amount of the share by applying the appropriate proportion to the notionally increased fund; and distributing to the claimant the amount of the share (so determined) less the amount of the contribution.’
Chadwick LJ
Times 20-Jan-2006, [2006] EWCA Civ 7, [2006] BPIR 457, [2006] Ch 610, [2007] 1 BCLC 29, [2006] 2 WLR 1369, [2006] WTLR 705, [2006] BCC 233
England and Wales
Applied – In re Melton, Milk v Towers CA 1918
In 1901 Richard Melton and another guaranteed to a Bank his son Arthur’s debts up to andpound;500. Richard died survived by his widow, Arthur and three daughters, giving his real estate to his widow for her life, with remainder to his four children . .
Explained – Cherry v Boultbee HL 22-Nov-1839
B died having made a will leaving a fund to pay income to A who owed her money but had been made bankrupt before the death. The debt to B remained unpaid.
Held: The liability to pay the debt and the right to receive the legacy had never tested . .
Not followed – In re Fenton CA 1931
A surety under a pre-insolvency guarantee, had not actually paid, and could not pay, being bankrupt with his assets vested in the trustee. The creditor was still owed the money and entitled to prove in the liquidation.
Held: One could not have . .
Cited – Midland Banking Co v Chambers 1869
. .
Cited – in Re Kayford Ltd ChD 1975
The court considered what was meant by the ‘certainty of words’ requirement necessary to create a trust. Megarry J said: ‘The sender may create a trust by using appropriate words when he sends the money (though I wonder how many do this, even if . .
Cited – Cherry v Boultbee CA 6-Apr-1838
TB was indebted to CB, his sister, in the sum of andpound;1878. He became bankrupt, and shortly after his bankruptcy C B made her will, giving legacies of andpound;500 and andpound;2,000 to her executors, in trust to pay the interest thereof (as to . .
Cited – In re Polly Peck International plc ChD 1996
It was argued, unsuccessfully, that a special purpose company incorporated in the Cayman Islands should be regarded as a single economic unit with the holding company, so as to eliminate ‘double dip’ as well as double dividend.
Held: There . .
Cited – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Cited – Brazzill and Others v Willoughby and Others CA 27-May-2010
The regulated bank Kaupthing Singer and Friedlander Ltd (KSF) was in financial difficulties. The Bank of England required KSF to credit to a trust account all future deposits. KSF later went into insolvency. Some deposits had been credited to the . .
Binding – Re Kaupthing Singer and Friedlander Ltd ChD 19-Feb-2010
. .
Cited – In re Kaupthing Singer and Friedlander Ltd CA 11-May-2010
The court was asked as to the set-off, in a company administration, of future debts owed by the company to its creditors and by those creditors to the company, and whether the effect of those provisions was that, after the future debts were . .
Cited – In re Kaupthing Singer and Friedlander Ltd SC 19-Oct-2011
The bank had been put into administrative receivership, and the court was now asked as to how distributions were to be made, and in particular as to the application of the equitable rule in Cherry v Boultbee in the rule against double proof as it . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 July 2022; Ref: scu.238731
The Court was asked to decide (i) which, if either, of the two parties to a 15 year agreement lawfully terminated it; (ii) whether, if one of them did so, it was by giving notice under a contractual termination clause or by way of acceptance of the repudiation of the contract by the other party, or both; and (iii) whether a notice of termination pursuant to a particular clause of the contract may, also, serve as an acceptance of a repudiation by the other party or may, if the notice was invalid and there was no such repudiation, itself, be a repudiation.
Held: Christopher Clarke J observed: ‘a) Equity, before the Judicature Acts, insisted that prima facie time for payment was not essential. But Equity’s patience was exhaustible. It would allow the contract to be treated as repudiated if the party in default had been given the opportunity to mend his ways by the giving of a notice to comply within a reasonable time. Whilst this is described as making time of the essence in reality the notice is the means of bringing to an end equity’s interference with the contract: Behzadi v Shaftesbury Hotels Ltd [1992] Ch 1
b) Such a notice, which may be given in respect of any species of term, may not be served until the time for performance has expired; but it may be served as soon as that time arrives;
c) Such a notice must state clearly what the other party is required to do and the consequence if he fails i.e. that the contract may be terminated; Afovos Shipping Co SA v Pagnan[1982] 1 Lloyd’s Rep562, 565 col 2; [1982] 1 WLR 848, 854C;
d) If the defaulting party fails to perform after service of such a notice, the failure is not automatically a repudiation of the contract, giving rise to a right to terminate. The breach must go to the root of the contract;
e) The notice operates as evidence of the date by which the promisee considers it reasonable to require the contract to be performed, failure to perform by which is evidence of an intention not to perform: see Lord Simon of Glaisdale in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904, 946E-947A; Astea (UK) Ltd v Time Group Ltd [2003] EWHC 725 (TCC) para 147.’
Christopher Clarke J
[2006] EWHC 63 (Comm), [2006] 1 Lloyd’s Rep 599, [2006] 1 LLR 599, [2006] 2 P and CR 9
Cited – Hobson v Gorringe CA 1897
The intention of the parties in affixing an object to land is only relevant to the extent that it can be derived from the degree and object of the annexation: ‘the intention of the parties as to the ownership of the chattel fixed to the land is only . .
See Also – Celtech International Limited v Dalkia Utilities Services Plc ChD 12-Feb-2004
. .
Cited – Behzadi v Shaftsbury Hotels CA 1992
The court must distinguish between an open contract such as Green v Sevin where no date for completion is fixed by the contract and the more normal case where a completion date is fixed but time is not of the essence of the date specified. In the . .
Judgement – Dalkia Utilities Services Plc v Celtech International Ltd (No. 2) ComC 2-Feb-2006
. .
Cited – Stocznia Gdynia Sa v Gearbulk Holdings Ltd CA 13-Feb-2009
Orders were placed for the construction of ships. They were not delivered. The buyer, the defendant, cancelled the orders. The defendants sought the loss of profit. The claimants said they were entitled only to the repayment of instalments. The . .
Cited – Imageview Management Ltd v Jack CA 13-Feb-2009
The appellant company acted for the respondent footballer in placing him with a football club. The respondent said that he had also taken a payment from the club, nominally for arranging a work permit. The respondent said this was improper. The . .
Cited – Warren and Another v Burns QBD 13-Nov-2014
The boxing manager and boxer each said that the other owed him money.
Held: The contract entitled the claimant to take some share of the boxers earnings but as part of the overall management fee, but as a part of the overall sum and at a share . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 July 2022; Ref: scu.238351
The court discussed the application of the equitable doctrine of set-off. Justice Hobhouse said: ‘Equitable principles derive from a sense of what justice and fairness demand. This does not mean that equitable set-off has been reduced to an exercise of discretion. Since the merging of equity and law equitable set-off gives rise to a legal defence. This defence does not vary according to the length of the Lord Chancellor’s or arbitrator’s foot. The defence has to be granted or refused by an application of legal principle.’
When pressed to depart from the rule in Nanfri for fairness, the court said: ‘It is also correct that equitable principles derive from a sense of what justice and fairness demand and should therefore include the capacity to develop and adapt as the need arises . . But this does not mean that equitable set-off has been reduced to an exercise of discretion. Since the merging of equity and law, equitable set-off gives rise to a legal defence. This defence does not vary according to the length of the Lord Chancellor’s foot. The defence has to be granted or refused by an application of legal principle.
The relevant principle is that identified by Lord Cottenham in Rawson v. Samuel (1841) Cr. and Ph. 161, at p. 179: ‘The equity of the bill impeached the title to the legal demand’. What this requires is that the Court or arbitrator should consider the relationship between the claim and the cross-claim. This is why not every cross-claim, even though it arises out of the same transaction, necessarily gives rise to an equitable set-off. This element of the cross-claim impeaching the plaintiff’s demand is to be found in all the modern cases and is a recognition that the principle being applied is essentially the same as that stated by Lord Cottenham.’
Justice Hobhouse
(1985) 2 Lloyd’s Rep 470
England and Wales
Cited – Geldof Metaalconstructie Nv v Simon Carves Ltd CA 11-Jun-2010
The parties contracted for the supply and installation of pressure vessels by Geldof (G) for a building constructed by Simon Carves (SC). The contract contained a clause denying the remedy of set-off. G sued for the sale price, and SC now sought an . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 July 2022; Ref: scu.200255
(High Court of Australia) The idea of conscience is too vague a notion to found the principles of equity, it would open the door to ‘idiosyncratic notions of fairness and justice’ and ‘That property was acquired, in pursuance of the consensual arrangement between the parties, to be held and developed in accordance with that arrangement. The contributions which each party is entitled to have repaid to her or him were made for, or in connexion with, its purchase or development. The collapse of the commercial venture and the failure of the personal relationship jointly combined to lead to a situation in which each party is entitled to insist upon realization of the asset, repayment of her or his contribution and distribution of any surplus.’
Deane J drew attention to the nature and function of constructive trusts in the common law: ‘The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice. As an equitable remedy, it is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, starting from the conceptual foundations of such principles . . Under the law of this country – as, I venture to think under the present law of England . . proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’ . . and the ‘formless void’ of individual moral opinion.’ and ‘Under the law of [Australia]-as, I venture to think, under the present law of England-proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’ and ‘the formless void of individual moral opinion’.’
Deane J, Mason J
(1985) 160 CLR 583
Australia
Cited – R Griggs Group Ltd and others v Evans and others (No 2) ChD 12-May-2004
A logo had been created for the claimants, by an independent sub-contractor. They sought assignment of their legal title, but, knowing of the claimant’s interest the copyright was assigned to a third party out of the jurisdiction. The claimant . .
Approved – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .
Cited – Yeoman’s Row Management Ltd and Another v Cobbe HL 30-Jul-2008
The parties agreed in principle for the sale of land with potential development value. Considerable sums were spent, and permission achieved, but the owner then sought to renegotiate the deal.
Held: The appeal succeeded in part. The finding . .
Lists of cited by and citing cases may be incomplete.
Updated: 05 July 2022; Ref: scu.199475
Trustees, in the exercise of their fiduciary discretions, are under constraints which do not apply to adult individuals disposing of their own property. Walker LJ said: ‘Certain points are clear beyond argument. Trustees must act in good faith, responsibly and reasonably. They must inform themselves, before making a decision, of matters which are relevant to the decision. These matters may not be limited to simple matters of fact but will, on occasion (indeed, quite often) include taking advice from appropriate experts, whether the experts are lawyers, accountants, actuaries, surveyors, scientists or whomsoever. It is, however for advisers to advise and for trustees to decide: trustees may not (except in so far as they are authorised to do so) delegate the exercise of their discretions, even to experts. This sometimes creates real difficulties, especially when lay trustees have to digest and assess expert advice on a highly technical matter (to take merely one instance, the disposal of actuarial surplus in a superannuation fund).’
Walker LJ
[1998] 2 All ER 705
England and Wales
See Also – Regina v National Trust for Places of Historic Interest Or Natural Beauty ex parte Scott, Summerskill and others Admn 16-Jul-1997
. .
Appeal from – Scott v The National Trust ChD 12-Nov-1998
The Trust applied to be joined in an application by the plaintiffs. . .
Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
Lists of cited by and citing cases may be incomplete.
Updated: 04 July 2022; Ref: scu.509121
(Ireland) All the parties to a joint personal estate in equity had throughout their lives acted on the basis that the interests were in fact under a tenancy in common.
Held: The joint tenancy had been severed.
(1843) 5 I Eq 501
England and Wales
Updated: 04 July 2022; Ref: scu.227921
A Court of Equity has a discretion in highly exceptional cases to withhold from parties the legal remedy to which they would in ordinary cases be entitled as a matter of course.
An inhabitant of a burgh had obtained interdict against the magistrates to prevent them building on a particular piece of ground dedicated to the public uses of the burgh. While this process was in dependence the magistrates proceeded with the building, and completed it before interdict was granted; the building was for public purposes. The complainer then brought an action for declarator of the public right, and decree against the magistrates to remove the building; the magistrates offered to convey to the community a piece of ground in every way as suitable for public purposes in lieu of that now occupied by buildings. Held (aff. judgment of the Court of Session) that this offer was a reasonable offer, and that in respect the interest of the pursuer was as one of the community, the Court was entitled to apply the rule stated above, and to refuse the remedy asked in so far as the removal of the building was demanded.
Opinion, that if the pursuer had sued as an individual to enforce his own private right and interest in similar circumstances the Court could not have denied him his full legal remedy.
Held (rev. judgment of Court of Session) that the pursuer was entitled to decree of declarator and to his expenses in both Courts, in respect the magistrates had gone on to complete the building after the process of interdict had been brought, and had not proposed to recognise the rights of the community except in so far as they might be forced to recognise and make provision for them by the pursuer’s action.
Question whether the case of Begg v. Jack, October 26, 1875, 3 R. 35, was well decided.
Lord Chancellor Selborne, Lords O’Hagan, Blackburn, Watson, and Bramwell
[1882] UKHL 893, 19 SLR 893
Scotland
Updated: 04 July 2022; Ref: scu.637744
Request for repayment of sums said to be due in equity.
[2009] EWHC 367 (Ch)
England and Wales
Updated: 01 July 2022; Ref: scu.316599
Rectification of an agreement was sought.
Held: Laddie J rejected a submission that evidence of the subjective state of mind of one of the parties contained in statements which had not been communicated to the other party (‘crossed the line’) was inadmissible. I
Laddie J
[2004] EWHC 2974 (Pat), [2005] FSR 590
Principal Judgment – Cambridge Antibody Technology v Abbott Biotechnology Ltd and Another 2005
. .
Cited – Daventry District Council v Daventry and District Housing Ltd CA 13-Oct-2011
The appellant challenged refusal of rectification of its agreement with the defendant. They asserted either mutual or unilateral mistake. The parties had agreed for the transfer of housing stock and management staff to the respondents. The claimant . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 July 2022; Ref: scu.227185
A party claiming under an instrument, raising, as he contends, a case of election in equity against a party in possession under a legal right, must make out a clear and satisfactory case to entitle him to displace the legal right.
Where, under the will of a son, giving benefits to his father, but of doubtful construction, there was no evidence that the father understood that a case of election was raised by the will, or that in fact he elected to take under it, and to give up estates disposed of by the will, to which he was entitled under a marriage settlement; and where it was in evidence that the father did acts in opposition to the will of the son ; and where, by his own will, he so disposed of the estates, that his daughters might either claim life estates under that will, or estates in fee under the will of the son ; and it was in evidence that they by letters declared and executed deeds, reciting that they took as tenants for life under the will of their father ; and especially where the equity, if any, arose forty – three years before the suit, and the daughters had then the opportunity to call on the father to elect and failed to do so : Held, that it was doubtful whether a case of election existed, and that a party claiming under the daughters as heir could not assert such right after such lapse of time in a court of equity.
Where possession is referrible to either of two inconsistent rights, the acts of a party bound to elect, in order to constitute election, must imply a knowledge of the rights, and an intention to elect.
[1833] EngR 137, (1833) 7 Bligh NS PC 325, (1833) 5 ER 796
England and Wales
Updated: 30 June 2022; Ref: scu.318131
[2005] EWCA Civ 547
England and Wales
Updated: 30 June 2022; Ref: scu.226049
The father thought he had given his younger son land in Wales, in signing a memorandum and presenting it to him ‘for the purpose of furnishing himself with a dwelling-house’. The memorandum was not by deed. The son built his home on the land. When the father died, the elder son disputed his brother’s title.
Held: The Master of the Rolls said younger son was entitled to a life interest. Lord Westbury LC allowed the younger son’s appeal, saying: ‘About the rules of the Court there can be no controversy. A voluntary agreement will not be completed or assisted by a Court of Equity, in cases of mere gift. If anything be wanting to complete the title of the donee, a Court of Equity will not assist him in obtaining it; for a mere donee can have no right to claim more than he has received. But the subsequent acts of the donor may give the donee that right or ground of claim which he did not acquire from the original gift . . so if A puts B in possession of a piece of land, and tells him, ‘I give it to you that you may build a house on it,’ and B on the strength of that promise, with the knowledge of A, expends a large sum of money in building a house accordingly, I cannot doubt that the donee acquires a right from the subsequent transaction to call on the donor to perform that contract and complete the imperfect donation which was made. The case is somewhat analogous to that of verbal agreement not binding originally for the want of the memorandum in writing signed by the party to be charged, but which becomes binding by virtue of the subsequent part performance.’ The Lord Chancellor awarded the younger son the fee simple since ‘no one builds a house for his own life only.’
The Lord Chancellor Lord Westbury
[1862] EWHC Ch J67, [1862] 45 ER 1284, (1862) 4 De GF and J 517, [1862] EngR 908, (1862) 4 De G F and J 517, (1862) 45 ER 1285
England and Wales
Cited – Yeoman’s Row Management Ltd and Another v Cobbe HL 30-Jul-2008
The parties agreed in principle for the sale of land with potential development value. Considerable sums were spent, and permission achieved, but the owner then sought to renegotiate the deal.
Held: The appeal succeeded in part. The finding . .
Lists of cited by and citing cases may be incomplete.
Updated: 30 June 2022; Ref: scu.245427
The son of the deceased sought payment under a deed executed by the testator but not disclosed to his trustees who now refused to act upon it, saying it was a voluntary deed.
Held: The debt must be paid: ‘The rule against relief to volunteers cannot, I conceive, in a case like that before me, be stated higher than this, that a Court of Equity will not, in favour of a volunteer, give to a deed any effect beyond what the law will give to it. But if the author of the deed has subjected himself to a liability at law, and the legal liability comes regularly to be enforced in equity, as in the cases before referred to, the observation that the claimant is a volunteer is of no value in favour of those who represent the author of the deed. ‘ and ‘ Its being executory makes no difference, whether the party seeks to recover at law in the name of the trustee, or against the assets in this Court.’
[1844] EWHC Ch J69, (1844) 4 Hare 67, 67 ER 564
England and Wales
Updated: 30 June 2022; Ref: scu.245423
The equitabe remedy of ratification cannot be relied upon so as to render an innocent recipient a wrongdoer. Cotton LJ said ‘an act lawful at the time of its performance [cannot] be rendered unlawful, by the application of the doctrine of ratification.’
Cotton LJ
(1889) 41 ChD 295
England and Wales
Cited – Lipkin Gorman (a Firm) v Karpnale Ltd HL 6-Jun-1991
The plaintiff firm of solicitors sought to recover money which had been stolen from them by a partner, and then gambled away with the defendant. He had purchased their gaming chips, and the plaintiff argued that these, being gambling debts, were . .
Distinguished – Dibbins v Dibbins 1896
A partnership deed provided an option for a surviving partner to purchase a deceased’s partner’s share upon giving notice within three months of the death. The partner who survived was not of sound mind, but his solicitor gave timely notice, later . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 June 2022; Ref: scu.259438
An inalienable government contract held by one of the partners constituted a partnership asset. On the dissolution of the partnership, a value had to be given to it (since it could not be sold) and the partner who held it debited with that amount in the partnership accounts.
Lord Romilly MR
(1872) LR 14 Eq 427
England and Wales
Cited – Barbados Trust Company Ltd v Bank of Zambia and Another CA 27-Feb-2007
The creditor had assigned the debt, but without first giving the debtor defendant the necessary notice. A challenge was made to the ability of the assignee to bring the action, saying that the deed of trust appointed to circumvent the reluctance of . .
Cited – Faulks v Faulks ChD 1992
One brother, as tenant farmed land under a partnership with his brother. On the death of either partner, an account was to be taken and a valuation. On the death of the tenant, there was a dispute as to whether the value of the farm’s milk quotahad . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 June 2022; Ref: scu.249315
The parties entered into a commercial agreement for the sale and purchase of properties.
Held: The claimants had failed to meet their part of the bargain, and had failed to make mortgage payments, leaving the defendants to do so. The defendants were not entitled to any beneficial part of the proceeds of sale at auction.
Mr Justice Sullivan Lord Justice Keene Lord Justice Mummery
[2005] EWCA Civ 157, Times 02-Mar-2005
England and Wales
Cited – Frawley v Neill CA 1-Mar-1999
The modern approach to a laches claim, was not to test the facts against numbers of earlier cases, but to look at the situation as a whole, and to ask whether the delay made it unconscionable to permit the party to assert those rights. Aldous LJ . .
Cited – Williams v Greatrex CA 1956
A purchaser agreed to buy land to be laid out in building plots. On payment of a deposit and giving notice, the purchaser was to be entitled to enter onto a particular plot in order to build on it. The arrangement met with difficulties, with the . .
Cited – Knight v Bowyer 7-May-1858
knight_bowyer1858
The doctrine of laches and delay did not apply to an express trust, save possibly where there was a release or abandonment by the beneficiary and that was capable of being presumed from the facts of the case. . .
Cited – Mills v Drewitt 1855
A beneficiary cannot be divested of his beneficial interest in the capital of the trust by the operation of the doctrine of laches. ‘A trustee who is in possession of property which he admits to be trust property cannot plead the laches of the . .
Cited – Hourigan v Trustees Executors and Agency Co Ltd 1934
(Australia) The defence of laches may be raised in answer to a claim by a beneficiary of an express trust where there had been acquiescence or ‘gross laches’. . .
Cited – In re Cross 1882
The court applied the doctrine of laches and delay to a claim against a trustee, not for the recovery of trust property, but for breach of trust. . .
Cited – Bright v Legerton (No 1) 1860
The court will not listen to a claim by a cestui que trust trying to challenge accounts settled by his trustees where those accounts had been settled for more than twenty years and he had had ample opportunity to go into them. Lapse of time alone is . .
Cited – Orr v Ford 1989
Ordinarily the laches of a beneficiary would not make it inequitable or unreasonable to grant relief in proceedings for the enforcement of an express trust in relation to property in the possession of the trustee. . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 June 2022; Ref: scu.223234
The court upheld a declaration by the trial judge that the claimant was an equitable chargee under an equitable charge of the defendant’s property, notwithstanding that the claimant relied on an oral agreement by the defendant for the grant to the claimant of a charge on the property and which therefore did not comply with s.2(1) of the 1989 Act. The claimant had established a proprietary estoppel which overlapped with a constructive trust, the same facts were capable of giving rise to both a proprietary estoppel and a constructive trust within s. 2(5) of the 1989 Act. Arden LJ: A claimant seeking to rely on proprietary estoppel as a basis for disapplying s. 2(1) of the 1989 Act is not prevented from relying in support of the case on the agreement which s.2(1) would otherwise render invalid. In order to succeed in establishing the estoppel it is not sufficient merely for the claimant to put the agreement in evidence. The essential requirements of the estoppel have to be satisfied in every case: in Kinane the claimant had to prove, and did prove, that the defendant encouraged the claimant to believe that the security agreement was valid and binding: ‘the cause of action in proprietary estoppel is thus not founded on the unenforceable agreement but upon the defendant’s conduct which, when viewed in all relevant respects, is unconscionable.’
Arden, Neuberger, Thorpe LJJ
[2005] EWCA Civ 45
Law of Property Act 1925 53(1), Law of Property (Miscellaneous Provisions) Act 1989 291)
England and Wales
Cited – In re Vandervell’s Trusts (No 1); Vandervell Trustees Limited v White and Others HL 15-Jul-1970
Practice – Parties – Joinder – Proceedings between subjects raising issues material to income tax – Joinder of Commissioners of Inland Revenue – Income Tax Act 1952 (15 and 16 Geo. 6 and 1 Eliz. 2, c.10), ss. 52 and 64 ; Income Tax Management Act . .
Cited – Cobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 June 2022; Ref: scu.222612
The company sought repayment of excess advance corporation tax payments made under a mistake of law. The question was the extent of the effect of the ruling in Klienwort Benson, in particular whether it covered sums paid as taxation, and how the law of limitation was to be allowed for.
Held: Money paid under a mistake as to law was subject to restitution either where the demand had been unlawful even though it was a payment of tax, but such a claim was subject to limitation laws, or under section 33 of the 1970 Act where the demand was lawful. The Kleinwort Benson case could not be used to make such a claim.
Buxton, Rix, Jonathan Parker LJJ
[2005] EWCA Civ 78, Times 15-Feb-2005
Taxes Management Act 1970 33, Limitation Act 1980
England and Wales
Cited – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .
Appeal from – Deutsche Morgan Grenfell Group Plc v The Commissioners of Inland Revenue, HM Attorney General ChD 18-Jul-2003
The taxpayer sought to bring an action for restitution by the revenue of sums paid under a mistake of law. Under the Metallgesellschaft decision, rights of election for recovery of overpaid tax applied only between UK resident companies.
Held: . .
Cited – Metallgesellschaft Ltd and Others v Inland Revenue Commissioners and Another Hoechst Ag and Another v Same ECJ 8-Mar-2001
The British law which meant that non-resident parent companies of British based businesses were not able to recover interest on payments of advance corporation tax, was discriminatory against other European based companies. Accordingly the law was . .
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 – British Steel Plc v Her Majesty’s Commissioners for Customs and Excise CA 20-Dec-1996
The claimant company paid excise duty on hydrocarbon oil used in its blast furnaces, whilst consistently contending that it was entitled to relief under section 9(1) of that Act on the ground that the oil was not used as fuel. The Commissioners . .
Cited – Marcic v Thames Water Utilities Limited HL 4-Dec-2003
The claimant’s house was regularly flooded by waters including also foul sewage from the respondent’s neighbouring premises. He sought damages and an injunction. The defendants sought to restrict the claimant to his statutory rights.
Held: The . .
Cited – Eagerpath Ltd v Edwards (HM Inspector of Taxes) CA 14-Dec-2000
Where the special commissioner had determined that the dispute had been concluded by agreement, the taxpayer was precluded from appealing that decision claiming an ‘error or mistke’ That issue was not one relating to the computation of profits in . .
Cited – Mallusk Cold Storage Ltd v Department of Finance and Personnel QBNI 29-Aug-2003
The first plaintiffs constructed premises which were rated as from 1 April 1987. Having taken advice, they appealed the rating assessment on the ground that the premises were industrial premises, and had a nil rateable value. The appeal was . .
Cited – D B Ramsden and Co Ltd v Nurdin and Peacock Plc and Another ChD 14-Sep-1998
The tenant overpaid rent, including a payment in May 1997 on advice that the payment would be recoverable following litigation establishing that it was an overpayment. The court later held that the payments in question were indeed overpayments. The . .
Cited – Autologic Holdings Plc and others v Commissioners of Inland Revenue HL 28-Jul-2005
Taxpayer companies challenged the way that the revenue restricted claims for group Corporation Tax relief for subsidiary companies in Europe. The issue was awaiting a decision of the European Court. The Revenue said that the claims now being made by . .
Appeal from – Deutsche Morgan Grenfell Group Plc v Inland Revenue and Another HL 25-Oct-2006
The tax payer had overpaid Advance Corporation Tax under an error of law. It sought repayment. The revenue contended that the claim was time barred.
Held: The claim was in restitution, and the limitation period began to run from the date when . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 June 2022; Ref: scu.222200
The plaintiff sought possession of a house. She had owned it with her late husband. The defendant lived in and had done much work on the house, but the deceased left it all to the plaintiff and the defendant’s wife who had since also died. She sought possession after the defendant paid no rent. At first instance it was held that D had acquired an equitable interest in the house for the repairs and the expectation under the wills.
Held: The will created no sufficient legitimate expectation to justify the claim. The plaintiff’s and defendants needs had to be balanced, and an equitable remedy should not be used to create an injustice. The plaintiff’s need was more pressing. D had lived in the house for 20 years rent free and the equity created by his expenditure had expired.
Roch LJ, Hobhouse LJ
[1996] 72 P and CR 196, [1996] CLY 4949, [1996] EWCA Civ 1305
England and Wales
Cited – Inwards v Baker CA 13-Jan-1965
An indulgent father had encouraged his son to build a bungalow on his, the father’s, land. The son had done so in the expectation, encouraged by the father, that he would be permitted to remain in occupation.
Held: The court formulated the . .
Cited – Crabb v Arun District Council CA 23-Jul-1975
The plaintiff was led to believe that he would acquire a right of access to his land. In reliance on that belief he sold off part of his land, leaving the remainder landlocked.
Held: His claim to have raised an equity was upheld. The plaintiff . .
Cited – Pascoe v Turner CA 1-Dec-1978
The defendant had been assured by the plaintiff that ‘the house is yours and everything in it.’ In reliance on that assurance she carried out improvements to the house. Although the improvements were modest, their cost represented a large part of . .
Cited – Jennings v Rice, Wilson, Marsh, Norris, Norris, and Reed CA 22-Feb-2002
The claimant asserted a proprietary estoppel against the respondents. He had worked for the deceased over many years, for little payment, and doing more and more for her. Though he still worked full time at first, he came to spend nights at the . .
Cited – Fisher v Brooker and Others HL 30-Jul-2009
The claimant sought a share in the royalties from the song ‘A whiter shade of pale’ but had delayed his claim for 38 years. He had contributed the organ solo which had contributed significantly to the song’s success. He now sought a share of future . .
Lists of cited by and citing cases may be incomplete.
Updated: 28 June 2022; Ref: scu.183180
The claimant sought damages for breach of trust against the defendant solicitors, who had acted as trustees under deeds of trust. They claimed for losses incurred by way of penalties for the late payment of capital gains tax. The defendants said that there should be offset the sums earned by the unpaid tax by way of interest.
Held: Whether a breach of trust had occurred was to be decided as at the date of the alleged acts constituting the breach, but the damages fell to be caculated with respect to the situation as at the date of the hearing. Accordingly the sums received could be set off. Courts of equity did not award damages, but ordered restitution.
Richard Seymour QC, J
Times 07-Feb-2003
England and Wales
Cited – Target Holdings Ltd v Redferns (A Firm) and Another HL 21-Jul-1995
The defendant solicitors had acted for a purchaser, Crowngate, which had agreed to buy a property from a company called Mirage for andpound;775,000. Crowngate had arranged however that the property would first be passed through a chain of two . .
Lists of cited by and citing cases may be incomplete.
Updated: 28 June 2022; Ref: scu.179023
The claimant asserted an equitable interest in a property underlying a development stating that his share in the profits gave hm that right. He had provided consultancy services, with a promise of payment of a fee calculated as a small percentage of the final project. He had also contributed some funds.
Held: the relationship between the parties was contractual in nature. He was not to bear any share of any losses and was to receive interest on his capital contribution. The entitlement to a share in the profits did not amount to a share in the property itself. Nor had a resulting trust been created buy his contribution. The parties had set out their agreement in the contract and there was ‘no gap for equity to fill.’ The defendant had been accused of slander of title. No malice had been established against him and the tort was not made out.
Lewison J
Times 21-Apr-2006
England and Wales
Updated: 28 June 2022; Ref: scu.241301
The appellant loaned andpound;5000 to the respondent taking security of a andpound;30,000 mortgage debenture stock which would allow him to purchase any part of the stock at 40 per cent within twelve months. The company sought to repay the advance within the period of twelve months, whereupon the appellant claimed to purchase the whole of the stock at the agreed price. The company brought a redemption action, seeking a declaration that the option was void.
Held: The appeal failed. The company was entitled to the declaration. Lord Halsbury and Lord Macnaghten reached that conclusion with reluctance. If a court determined that a transaction was truly a mortgage, a court will strike down any term of the loan which prevents the mortgagor from getting back the property secured on repaying what was due to the mortgagee. A mortgage may not contain a clause that conferred on the mortgagee an option to buy the mortgaged property.
Lord Lindley said that the doctrine ‘Once a mortgage, always a mortgage’ was not confined to deeds creating legal mortgages; it applied to all mortgage transactions, and: ‘The doctrine . . means that no contract between a mortgagor and a mortgagee made at the time of the mortgage and as part of the mortgage transaction, or, in other words, as one of the terms of the loan, can be valid if it prevents the mortgagor from getting back his property on paying off what is due on his security. Any bargain which has that effect is invalid, and is inconsistent with the transaction being a mortgage. This principle is fatal to the appellant’s contention if the transaction under consideration is a mortgage transaction, as I am of opinion it clearly is.’
Earl of Halsbury, Lord Chancellor, Lord Macnaghten and Lord Lindley
[1904] AC 323, [1904] UKHL 2
England and Wales
Updated: 27 June 2022; Ref: scu.219904
The appellant had failed in his action against the police and been ordered to pay the costs. A statutory demand was issued in the name of the respondent, but as the new chief constable had no deed of assignment, he was only equitable assignee.
Held: It had not been unfair not to set aside the statutory demand. Though the action was conducted in the name of the chief constable it was as nominee and for and on behalf of the police force. Appeal refused.
Waller Chadwick Carnwath LJJ
[2004] EWCA Civ 1259, Times 22-Oct-2004, [2005] 1 WLR 130, [2005] BPIR 62
England and Wales
Appeal from – Coulter v Chief Constable of Dorset Police ChD 12-Dec-2003
The claimant had failed in an action for damages against the respondent, and had failed to pay the costs award. The respondent issued a statutory demand. He claimed that it was invalid because the chief constable had changed in the interim, and . .
Cited – In re a Debtor (No 1 of 1987), ex parte the Royal Bank of Scotland CA 1989
A statutory demand as served showed an incorrectly calculated sum owed and was in the wrong form.
Held: The application to set the demand aside was refused. A statutory demand should not be set aside for a mere technicality.
Lord Justice . .
See Also – Coulter v Chief Constable of Dorset Police CA 13-Jul-2005
An appeal was made against an order refusing to set aside a second statutory demand. The demand was to enforce payment of an order for costs made in proceedings between the parties. The first statutory demand had been upheld, and the judge found . .
Cited – Bryce Ashworth v Newnote Ltd CA 27-Jul-2007
The appellant challenged a refusal to set aside a statutory demand, in respect of his director’s loan account with the respondent company, saying the court should have accepted other accounts to set off against that debt.
Held: A statutory . .
Lists of cited by and citing cases may be incomplete.
Updated: 27 June 2022; Ref: scu.219135
The court was asked whether a company which had a legal mortgage, had lost its priority to a subsequent equitable mortgage which had been created because the company’s manager, acting on his own account, had a duplicate key to the safe where the title deeds were kept. The Court had to decide whether the company’s carelessness should be equated to equitable fraud.
Held: ‘In the case of a person taking the legal estate, and not seeking for or obtaining the title deeds from the mortgagor [i.e. not inspecting the title], the question may arise between the legal mortgagee and either a prior or a subsequent incumbrancer or purchaser. But in such a transaction the fraud about which the Courts are most solicitous is that which is practised when a man takes the legal estate with knowledge of a prior equitable sale or incumbrance, and yet strives to place himself in a position to show that he took without notice – that kind of fraud which Lord Hardwicke explained in Le Neve v. Le Neve, when he said:- ‘The taking of a legal estate after notice of a prior right, makes a person a mala fide purchaser . . This is a species of fraud, and dolus malus itself; for he knew the first purchaser had the clear right of the estate, and after knowing that, he takes away the right of another person by getting the legal estate.’
Fry LJ
(1884) 26 ChD 482
England and Wales
Cited – R Griggs Group Ltd and others v Evans and others (No 2) ChD 12-May-2004
A logo had been created for the claimants, by an independent sub-contractor. They sought assignment of their legal title, but, knowing of the claimant’s interest the copyright was assigned to a third party out of the jurisdiction. The claimant . .
Lists of cited by and citing cases may be incomplete.
Updated: 23 June 2022; Ref: scu.199513
A mere volunteer was postponed to a subsequent equitable claimant for value without notice.
Stirling LJ said: ‘The ground of postponement relied on in this case is that the prior equitable claimants allowed Tasker to remain in possession of the title-deeds, including the mortgages to himself. There are undoubtedly cases (as, for example, Waldron v Sloper (1852)1 Drew. 193 and Farrand v Yorkshire Banking Co 40 Ch D 182), where an equitable mortgagee who has allowed his mortgagor to retain or regain possession of the title-deeds has been postponed to a subsequent equitable incumbrancer who has obtained possession of the deeds. But where the relation between the equitable incumbrancer and the person in possession of the title-deeds is not merely that of mortgagee and mortgagor, but is of a fiduciary nature (as, for example, that of cestui que trust and trustee, or client and solicitor), there is a great body of authority to show that the equitable incumbrancer is not to be deprived of his priority by reason of the improper acts of the person entrusted with the deeds, so long, at all events, as the incumbrancer has no ground to suppose that there has been any want of good faith on the part of the custodian of the deeds.
The leading authorities on this point appear to be Cory v Eyre (1863)1 DJ and s149, Shropshire Union Railways and Canal Co. v Reg. (1875) LR 7 HL 496, and In re Vemon, Ewens and Co (1886) 33 Ch D 402, before the Court of Appeal.’
Fry LJ said: ‘A distinction is to be drawn between two sets of circumstances, which at first sight look very similar. One class is where a mortgagee knows that the mortgagor has not fulfilled his obligations, and yet does nothing. The other is where the mortgagee does not know that the mortgagor has failed to fulfil his obligations, but knows only that there are obligations which he may in the future fail to fulfil, and yet takes no precautions against the consequences of his doing so. Instances of the first class are cases where the mortgagee, knowing that the mortgagor has the title deeds, neither receives them nor demands them from the mortgagor, or where the mortgagor has received them from the mortgagee for a particular purpose and does not return them when he ought to do. Layard v Maud Law Rep 4 Eq 397 is a case of this class. There was an agreement which bound the mortgagor to execute a mortgage and hand over the deeds in six months, and the mortgagee allowed eighteen months to elapse after the expiration of that period without making any inquiry. There was, therefore, to the knowledge of the mortgagee a default by the mortgagor in fulfilling his obligations.
The other class of cases is where the mortgagee has taken no precautions against future default by the mortgagor, no default having yet to the knowledge of the mortgagee taken place. I know of no decided case in which the mortgagee has been postponed on the ground that he did not take precautions against a future fraud by the mortgagor; and I do not know of any general rule whi
Stirling LJ, Fry LJ
[1901] 2 Ch 231
England and Wales
Cited – R Griggs Group Ltd and others v Evans and others (No 2) ChD 12-May-2004
A logo had been created for the claimants, by an independent sub-contractor. They sought assignment of their legal title, but, knowing of the claimant’s interest the copyright was assigned to a third party out of the jurisdiction. The claimant . .
Lists of cited by and citing cases may be incomplete.
Updated: 23 June 2022; Ref: scu.199511
The claimant sought damages from what were said to be speculative trades carried out by the defendant whilst working in Russia. The claims were in both equity and in tort. He was a director of the company which was incorporated in Guernsey.
Held: If the acts complained of did not relate to the constitution of a company, it must relate to its internal management. Where the claim related to the duties inherent in the office of director, the claim should be heard in the place of incorporation wherever the acts complained of took place. Russian law was applicable for the claim in tort, but Guernsey, where the company was incorporated, was the proper law of the claim in equity.
Lady Justice Arden Lord Justice Tuckey Mr Justice Newman
[2004] 4 All ER 1, [2004] EWCA Civ 1316, Times 01-Nov-2004
Contracts (Applicable Law) Act 1990
England and Wales
Appeal from – Base Metal Trading Ltd v Shamurin ComC 22-Oct-2003
. .
Cited – Cordoba Shipping Co Ltd v National State Bank, Elizabeth, New Jersey (The Albaforth) CA 1984
A negligent misrepresentation was made in a telex sent from the United States but received and acted upon in England. The judge had set aside leave to serve the document out of the jurisdiction.
Held: The appeal succeeded. The transmission was . .
See Also – Base Metal Trading Ltd v Shamurin ComC 21-Nov-2001
. .
Cited – Harding v Wealands CA 17-Dec-2004
The claimant sought damages here for a road traffic accident which had occurred in Australia. The defendant was working in England. The defendant argued that the law of New South Wales applied.
Held: The general rule in section 11 was not to . .
Lists of cited by and citing cases may be incomplete.
Updated: 21 June 2022; Ref: scu.216419
The defendant bought a house in joint names with the deceased, but was subsequently convicted of her murder. The house was purchased with the assistance of an endowment life policy in their joint names. Whilst he was imprisoned, the policy was used to pay off the mortgage, and the house sold. The issue was how to calculate any share he had in the proceeds.
Held: The fund would not have come into existence but for his criminal act. He was barred by public policy from benefiting under it. The equity of redemption in the policy enured to the personal representatives of the deceased., who were to be treated as having provided the proceeds of the policy for the calculation.
Scott J
[1990] Ch 110, [1989] 3 All ER 417
England and Wales
Applied – Cleaver v Mutual Reserve Fund Life Association CA 1892
The deceased’s executors objected to his widow maintaining action on a trust created by an insurance policy in her favour under the Act. She had been convicted of his murder. The executors’ case was that ‘it is against public policy to allow a . .
Cited – Dunbar (As Administrator of Tony Dunbar Deceased) v Plant CA 23-Jul-1997
The couple had decided on a suicide pact. They made repeated attempts, resulting in his death. Property had been held in joint names. The deceased’s father asked the court to apply the 1982 Act to disentitle Miss Plant.
Held: The appeal was . .
Cited – Re H deceased CA 1991
The Plaintiff had stabbed his wife to death when under the illusion, induced by a reaction to an anti-depressant drug, that she had just committed an act of infidelity. At his trial, a plea to guilty of manslaughter by reason of diminished . .
Lists of cited by and citing cases may be incomplete.
Updated: 21 June 2022; Ref: scu.185183
The terms expressly agreed by the parties provided for the grant of a lease and the sale of the contents of the property. There was a single agreement for the lease and the contents. The written document did not incorporate the terms as to the sale of the contents and so did not comply with section 2.
Held: Rectification of the written document was ordered so as to include the terms as to the sale of the contents, with the result that the written document as rectified did comply with section 2. Dillon LJ remarked that the availability of rectification in that case was ‘obvious’ and ‘straightforward’.
Dillon LJ, Henry LJ
Unreported, 23 March 1994
Law of Property (Miscellaneous Provisions) Act 1989 2
England and Wales
Cited – Oun v Ahmad ChD 19-Mar-2008
The parties agreed in writing for the sale of leasehold property to the claimant. One document had been signed, but later one said that it had not included an aportionment. Another document then set out the apportionment. When the defendant refused . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 June 2022; Ref: scu.266513
Issues – rectification of a transfer made in 1992 – whether there was a mutual mistake as at the date of the transfer – whether the equity of rectification bound subsequent purchasers – whether the previous purchasers were in ‘actual occupation’ pursuant to section 70(1)(g) of the Land Registration Act 1925 – whether the Tribunal should exercise its discretion to rectify.
[2014] EWLandRA 2013 – 0036
England and Wales
Updated: 17 June 2022; Ref: scu.552859
