BL-2022-000438 - [2025] EWHC 2212 (Ch)

Fecha: 22-Ago-2025

Validity Issue 2: Should clause 18 be rectified to name Mr Kazolides as the Guarantor?

F.2.

Validity Issue 2: Should clause 18 be rectified to name Mr Kazolides as the Guarantor?

62.

In the event that Mr Kazolides does not fall within the definition of “the Guarantors” under clause 18, the Claimant seeks rectification of the agreement. Since I have resolved the construction point in favour of the Claimant, the issue of rectification does not arise. However, for completeness, I address it below.

63.

Rectification can be available in cases of common mistake and, occasionally, where there has been a unilateral mistake.

(1)

In relation to common mistake, Snell on Equity at 16-014 says: “The prior agreement between the parties on which a claim for rectification is based need not amount to an enforceable contract; it suffices if there is a common intention in regard to the particular provisions of the agreement in question continuing up to the date of the written instrument, together with some outward expression of accord. This requirement of an “outward expression of accord” was once thought to serve only an evidentiary function but is now treated as a legal requirement”.

(2)

In relation to unilateral mistake, Snell on Equity at 16-014 says “a document may exceptionally be rectified for unilateral mistake where one party knows of the other’s mistake and acts unconscionably in seeking to take advantage of it”.

64.

The Claimant’s case on rectification was put briefly in his written and oral submissions. In my view, that reflected the fact that there was very limited evidential material to support such a case.

65.

As regards common mistake, the Claimant has not identified any “outward expression of accord” which would justify rectification on the basis of common mistake save for drafts of the JVA. I have been provided with a draft JVA which includes a version of clause 18 (with the defects identified above regarding the reference to “the Guarantor” and the “the Guarantors” without definition of those terms) and which has manuscript amendments which say “Discussed + ag’d 18.7.06”. This draft appears to have been discussed at a meeting between Mr Stylianou and Mr Dunn which Mr Kazolides did not attend. Perhaps unsurprisingly given the passage of time, the evidence regarding the negotiation of the JVA was piecemeal. The recollection of both Mr Dunn and Mr Kazolides on matters that far back was limited and the documentary trail was also limited.

66.

The draft JVA referenced above, discussed between Mr Dunn and Mr Stylianou, is not any more illuminating than the final JVA on the “outward expression of accord” because the same inadequacies also exist in that clause. The Claimant also pointed to certain email correspondence, but none of that material could properly be characterised as an “outward expression of accord” in relation to the guarantee. In the circumstances, if I am incorrect on the construction point above, then I do not consider that there is a sufficient basis to rectify the agreement on the basis of common mistake.

67.

In closing submissions, the Claimant disavowed a case based on unilateral mistake saying that “[u]ltimately, this is a case of, at best, common mistake”. In my view, the Claimant was right to do so since I do not consider that a case on unilateral mistake could be made out.