The trial judge had dismissed a claim for rectification on the basis that the defendant hoped and suspected, but did not know, of the relevant mistake by the plaintiff.
Held: Rectification was ordered because the defendant had sought to mislead the plaintiff into making the relevant mistake, the plaintiff had in fact made it, and this was sufficiently unconscionable conduct on the part of the defendant to render it liable to rectification. The deliberate attempt to hide the other’s mistake made the contract unenforceable. An offer and acceptance of a land contract may not be by letter. Rectification may in certain circumstances be ordered, where there has been no common mistake, but one party has proceeded on a base which the other knew to be mistaken. Where A intends B to be mistaken as to the construction of a contract and diverts B’s attention from discovering the mistake by making false and misleading statements and B makes the mistake which A intends, then suspicion and not actual knowledge of the mistake is enough for rectification to be granted.
Stuart-Smith LJ said: ‘[W]here a false representation is made for the purpose of inducing the other party to adopt a certain course of conduct and the representation is such as to influence a person behaving reasonably to adopt that course of conduct, the court should infer, in the absence of evidence to the contrary, that the representation did have that effect.’ and
‘In the case of unilateral mistake, that is to say where only one party is mistaken as to the meaning of the contract, rectification is not ordinarily appropriate. This follows from the ordinary rule that it is the objective intention of the parties which determines the construction of the contract and not the subjective intention of one of them. Also, it would generally be inequitable to compel the other party to execute a contract, which he had no intention of making, simply to accord with the mistaken interpretation of the other party: see Olympia Sauna Shipping Co SA v Shinwa Kaiun Kaisha Ltd [1985] 2 Lloyds Rep. 364, 371 per Bingham J. But the court will intervene if there are ‘additional circumstances that render unconscionable reliance on the document by the party who has intended that it should have effect according to its terms:’ Spry, Equitable Remedies, 4th ed. (1990), p.599. The debate in this case turns on what amounts to unconscionable conduct.’
Stuart-Smith LJ, Evans LJ, Farquharson LJ
Times 04-Mar-1995, Independent 15-Mar-1995, [1995] 2 All ER 929, [1995] Ch 259, [1995] 26 EG 129
Law of Property (Miscellaneous Provisions) Act 1989 2
England and Wales
Cited by:
Cited – Well Barn Shoot Limited and Well Barn Farming Limited v Shackleton and Another CA 22-Jan-2003
The defendants had been tenant farmers of the plaintiff company which retained shooting rights over the land when part was sold to the defendants. The defendant object to the use of a roadway by the plaintiff. The plaintiff sought to repurchase the . .
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 – Royal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .
Cited – Coles and Others v William Hill Organisation Ltd ChD 18-Mar-1998
When agreeing an extension of an existing lease, the new lease by mistake included a break clause which had been intended by neither party. The tenant’s solicitors noticed the error in their client’s favour but did not mention it. The landlord only . .
Cited – North Eastern Properties Ltd v Coleman and Another CA 19-Mar-2010
The appellants challenged specific performance orders obliging them to complete the purchase of apartments, saying that the contracts had not complied with the 1989 Act, and that their repudiation of the contracts had been accepted. The contracts . .
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.
Land, Contract, Equity
Leading Case
Updated: 11 November 2021; Ref: scu.79287