PT-2023-001131 - [2025] EWHC 2728 (Ch)

Fecha: 21-Oct-2025

Issue 2: Is the Defendant entitled to set aside the Deed on ground of mistake?

Issue 2: Is the Defendant entitled to set aside the Deed on ground of mistake?

68.

In assessing a claim to rescind a gift for mistake, analysing the nature of the mistake is the critical first step. The Defendant’s case as to how she was mistaken has, unquestionably, shifted. In her Defence and Counterclaim, the Defendant says that she was mistaken in believing that (a) the Claimant intended to “preserve the Property as a family home (b) the Claimant intended to do so by settling it on trust and (c) the Claimant would do so”. This formulation was abandoned during the course of the trial. The Defendant accepted in cross-examination that she did not believe that the Property was going to be put in trust, and that the reference to a trust in her Defence and Counterclaim was “a mistake on my part”. She also indicated that she believed that she had corrected the mistake. However, at least until the last day of trial, no amended Defence and Counterclaim was put forward.

69.

Her witness statement for trial adopts another formulation, referring to her agreement with the Claimant “… paramount of which that I would live in the house for my entire life, such that it would be only after my death that he would receive the third share without conditions.” In closing, the mistaken belief is said to be that the Claimant would buy the Property from the estate “in part to provide [the Defendant] with a place to live for the rest of her life”.

70.

In Pitt v Holt, Lord Walker warned that one of the difficulties with the law on mistake is that “… the court may have to make findings as to the state of mind, at some time in the past, of a claimant with a lively personal interest in establishing that there was serious causative mistake”. In this case, I do not consider that the Defendant believed at the time that she would have the right to live in the Property for the rest of her life. This is an after the fact rationalisation. The supposed mistake is not reflected in the documents. Her claim to rescind the Deed fails on that straightforward basis alone.

71.

I note the following:

(1)

The shifting nature of what she says was the nature of the mistake, from preserving it as a “family home”, to a different formulation that the Claimant was to purchase it “in part” to provide a place for her to live in for the rest of her life, undermines the contention that the Defendant’s “mistake” was of a sufficient seriousness to warrant the rescission of the Deed.

(2)

In her email of 22 November 2022, the Defendant says nothing about her belief that the Claimant intended to purchase the Property to provide the Defendant with a home for life. If the position were truly as she now asserts it to be, this is a very surprising omission. She makes a number of complaints in that email, but nowhere does she refer to her right to reside at the Property “for life”.

(3)

The suggestion that the Defendant would have a home at the Property “for life” is not reflected in the documents. I remind myself that the parties were family members, and a degree of informality in their dealings and in the way they expressed themselves is to be expected. Nevertheless, one would expect there to be some contemporaneous indication that this was the Defendant’s intention.

(4)

In cross-examination, the Defendant said that it was the conversion of the Property which was objectionable. That is different from suggesting that the fundamental mistake was that the Defendant would have a home at the Property for life.

(5)

There is also the matter of the Chelsea property. In the summer of 2022, the Defendant was clearly investigating the possibility of buying a one-bed flat in Chelsea. This is inconsistent with a fundamental mistake that the purchase of the Property was to provide her with a home “for life”. The Defendant explained in cross-examination that the Chelsea property was a potential investment. However, the likely position is that the Defendant intended the Chelsea property as both a pied-à-terre for her in London, as well as being an investment which could be sold in the future. The two options are not mutually exclusive.

(6)

The bargain between the two parties, as now alleged by the Defendant, is fundamentally unattractive from the Claimant’s point of view. He was undertaking a long term commitment by way of entering into a mortgage. The Defendant would have the right to live in the Property for life. The Defendant says that the Claimant would inherit from her, but any will which the Defendant made could be torn up at any time before her death. The Defendant was, on her case, providing him with a deposit, but she indicated in cross-examination that she would also be taking a charge over this as security. I do not believe that the Claimant would ever have been willing to enter such a lopsided deal.

72.

I therefore reject the Defendant’s contention that she believed that she would have any right to stay at the Property for life. On that basis, the Defendant’s case to rescind the Deed for mistake fails.

73.

Quite apart from the factual problems with the Defendant’s case on mistake, I accept the Claimant’s submissions that in any event the nature of the “mistake” as now formulated on behalf of the Defendant is really about something to happen in the future. It is not a traditional mistake, but more akin to a misprediction: see Dextra Bank & Trust Co Ltd v Bank of Jamaica [2001] UKPC 50, at [29]. A misprediction does not provide the basis for a claim to set aside the Deed, which is otherwise unchallengeable. This is another reason for refusing to set aside the Deed on the grounds of any “mistake”. The Defendant has not attempted to advance any case for misrepresentation.

74.

The parties also made legal submissions concerning whether, assuming the Defendant had been acting under an operative and legally relevant mistake, it would be unconscionable to allow the Claimant to retain the benefit of the Deed. Given my earlier findings on the claim for mistake I do not consider that I need to address these points.

75.

There were also submissions made concerning whether the Defendant would be estopped from denying the validity and effect of the Deed. There is a considerable overlap between the arguments on estoppel and on unconscionability. Again, I do not need to say anything further on estoppel, given my finding that the Defendant was not operating under a relevant, operative mistake.