What is rectification?
Common Law’s parole evidence rule forbids oral evidence being admitted to add to, vary or subtract from a written instrument. Rectification, an equitable remedy, is an exception to the parole evidence rule.
Rectification of a written contract may be ordered if the parties’ written deal doesn’t properly reflect their real intentions. The agreement isn’t rectified, rather the writing is. Equity looks to intent rather than form.
Mutual mistake
General rule?
Mutual mistake is when a written instrument doesn’t accurately record the intention of both parties i.e. the common intention in respect of a particular term. Both had same intention, but contract doesn’t reflect it.
Old view: Had to prove enforceable contract. Now not necessary: just need a ‘continuing common intention’
Mutual mistake
Shipley UDC v Bradford Corporation [1936]
- Held not necessary there be such a contract provided there was a common intention with regard to the particular term that continued up until the contract was recorded in writing.
Mutual mistake
Rooney & McPartland Ltd v Carlin [1981]
- A written instrument purported to record an agreement to settle legal proceedings. It said P would buy land belonging to D in a certain folio. At time of settlement, P + legal advisors mistakenly believed the folio contained all of D’s lands in the vicinity of P’s quarry but 1 field not incl. Was there CCI?
- Held no as neither lawyer had considered this field/knew it was D’s throughout the case.
- Lowry LCJ identified the following conditions precedent to the grant of rectification:
(a) There must be a concluded agreement antecedent to the instrument that is sought to rectified; but
(b) The agreement needn’t be binding in law nor in writing: just helps discharge the burden of proof
(c) A complete antecedent concluded contract isn’t required provided there was prior accord on a term of a proposed agreement, outwardly expressed and communicated bw the parties.
Mutual mistake
Irish Life Assurance Co Ltd v Dublin Land Securities [1989]:
IESC adopted the Rooney criteria. Q is whether there’s convincing proof the written contract didn’t represent the CCI’s on which the court can act
Mutual Mistake - Proving a Common Continuing Intention
Irish Life Assurance Co Ltd v Dublin Land Securities [1989]
- P + D entered agreement for sale of properties. Seller P intended to exclude a site in Palmerstown. P’s intention to exclude the site communicated to D’s agent in an unclear way + not passed on.
- P sought rectification of the agreement, and D counterclaimed for SP.
- HC held for D, accepting ‘antecedent’ contract + ‘CCI’ meant same thing. Said an outward expression of accord is necessary + P bore heavy burden of proof in this regard. This was unilateral mistake.
- SC upheld: P must provide strong evidence to show the instrument fails to record the parties’ CCI
- Held imprecise nature of P’s communication to D’s agent showed it wasn’t their CCI to exclude site
Mutual Mistake - Proving a Common Continuing Intention
Hawksford Trustees Jersey v Stella Global UK [2012] Recent statement of law
- Held the requirements for a claim in rectification are well settled as:
(a) Parties’ had common intention in respect of particular matter in the instrument
(b) There was an outward expression of accord
(c) The intention continued at the time of the execution of the instrument
(d) By mistake, the instrument didn’t reflect the common intention.
Unilateral Mistake
A Roberst & Co v Leicestershire CoCo [1961]
- P agreed to build school for D. Agreement originally said it’d be completed in 18 mths. D changed it to 20 mths. P signed w/o noticing. Held D aware of the mistake thus rectification ordered on this basis. Aware!!
Unilateral Mistake
Riverlate Properties Ltd v Paul [1975]
- P leased apartment to D. P intended, while it’d be responsible for exterior repairs, D obliged to contribute
- Written lease didn’t say this but D understood P responsible for total cost of repairs. P sought rectification
- Held as D unaware of P’s mistake + no misfeasance, no justification for rectification
Unilateral Mistake
Thomas Bates & Son v Wyndham’s Lingerie Ltd [1981]
- P + D’s lease said the amt of rent should be agreed bw them or in default of agreement, by an arbitrator
- 1970: negotiations for new lease. Agreed a rent for 5 yrs + be reviewd then. But new lease didn’t contain arbitration clause like old one. After new lease in writing, D noticed defect but didn’t tell P.
- 1975: Failed to agree on rent. P sought to get lease rectified. Conditions for rect of unilateral mistake:
(a) One party wrongly believed the document included / excluded a particular term
(b) The other party was aware of the mistake
(c) The other party failed to draw attention to the mistake
(d) The mistake was calculated to benefit the other party.
Unilateral Mistake
Irish Life Assurance Co Ltd v Dublin Land Securities [1989]
- SC held a party who entered into a written contract by mistake is entitled to rectification if he establishes evidence that the other party knew of such intention and mistake + nevertheless concluded the agreement.
- Must be some element of fraud or sharp practice by D or inequitable for D to retain the benefit.
Unilateral Mistake
Slattery v Friends First [2015] IECA
- Held rectification can be granted in UM if P establishes (i) it executed the doc under a mistake, (ii) that D was aware of the mistake (iii) that there’s an element of sharp practice in D’s conduct or that the circs are such that it’d be unconscionable to enforce the terms of the doc as executed.
- Here D mistakenly thought the deed was executed the same as last draft, P knew + was sharp practice
Unilateral Mistake - Standard of Proof
General rule?
Onus on P is heavy (Marlin, 2005). This is bc it is an exception to the parole evidence rule so in overcoming this rule strong oral evidence must be adduced to prove it doesn’t accurately record their intentions’.
Unilateral Mistake - Standard of Proof
Nolan v Graves [1946]
Historically, high standard of proof was applied. Noted ‘v heavy onus’ + standard of proof is much higher than civil balance of prob
Unilateral Mistake - Standard of Proof
Thomas Bates & Son v Wyndham’s Lingerie Ltd [1981
A lowering of the standard has occurred in the past 40 years: - Held the standard is civil balance of probability but bc the alleged CCI contradicts the written agr, convincing proof required to counteract evidence of intention: the evidential standard is high not proof
Unilateral Mistake - Standard of Proof
Irish Life Assurance Co Ltd v Dublin Land Securities [1989]
- This approved Thomas Bates noting the heavy burden of proof – standard is “convincing proof”
Unilateral Mistake - Standard of Proof
Boliden Tara Mines v Cosgrove [2010]
- In Ireland, ‘proof on the balance of prob’ should be used – no other standard in civil cases in Ireland.
Unilateral Mistake - Discretionary Factors
Whiteside v Whiteside [1950]
- Held the remedy of rectification must be cautiously watched and jealously guarded
Unilateral Mistake - Discretionary Factors
Nolan v Graves [1946]
- Held the courts’ jurisdiction is delicate and must be exercised with discretion and care
However, the remedy is rarely withheld on discretionary grounds as this would bind parties to an instrument that doesn’t accurately record their intention!
Unilateral Mistake - Discretionary Factors
In what equitable circumstance will it generally not be granted?
Rectification probably won’t be ordered if it’d operated to the prejudice of a bona fide purchaser for value without notice i.e. someone who has:
(a) For valuable consideration acquired an interest under the interest P is seeking to have rectified
(b) No notice (actual or constructive) of Ps right to have the instrument rectified.
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Injunctions74
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Injunctions - Specific Circumstances13
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Mareva Injunctions & Anton Piller Orders37
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Express Trusts64
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Charitable Trusts85
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Specific Performance63
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Rectification20
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Equitable Estoppel53
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Trustees46
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Resulting Trusts61
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Rescission43
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Secret Trust21
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Constructive Trusts30
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Doctrines12
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Maxims of Equity21
