BL-2023-MAN-000072 - [2025] EWHC 2442 (Ch)

There was no real dispute between the parties as to the essential requirements for a claim in rectification based upon common mistake, save perhaps as to how an “outward expression of accord” might be expressed.

The essential requirements were helpfully summarised in Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, [2002] 2 EGLR 72, per Peter Gibson LJ at [33]-[34], as follows:

“33.

The party seeking rectification must show that:

(1)

the parties had a common continuing intention, whether or not amounting to an agreement, in respect of a particular matter in the instrument to be rectified;

(2)

there was an outward expression of accord;

(3)

the intention continued at the time of the execution of the instrument sought to be rectified;

(4)

by mistake the instrument did not reflect that common intention.

34.

I would add the following points derived from the authorities:

(1)

The standard of proof required if the court is to order rectification is the ordinary standard of the balance of probabilities.

"But as the alleged common intention ex hypothesi contradicts the written instrument, convincing proof is required in order to counteract the cogent evidence of the parties' intention displayed by the instrument itself": Thomas Bates and Sons Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505 at page 521 per Brightman LJ.

(2)

Whilst it must be shown what was the common intention, the exact form of words in which the common intention is to be expressed is immaterial if in substance and in detail the common intention can be ascertained: Cooperative Insurance Society Ltd v Centremoor Ltd [1983] 2 EGLR 52 at page 54, per Dillon LJ, with whom Kerr and Eveleigh LJJ agreed.

(3)

The fact that a party intends a particular form of words in the mistaken belief that it is achieving his intention does not prevent the court giving effect to the true common intention: see Centremoor at page 55 A−B and Re Butlin's Settlement Trusts [1976] Ch 251 at page 260 per Brightman J.”

These requirements were more recently confirmed by the Court of Appeal in FSHC Group Holdings Limited v GLAS Corpn Ltd [2020] Ch 365, where the Court of Appeal considered, but rejected the argument that the common intention was a matter to be determined objectively, i.e. by reference to what an objective observer of the relevant communications passing between the parties would have thought their common intention to be. At [176], Leggatt LJ emphasised that where rectification is sought on the basis that the parties had a common intention in respect of a particular matter which, by mistake, the document did not accurately record, then it was necessary to show by evidence not only that each party to the contract had the same actual subjective intention with regard to the relevant matter, but also that there was an ““outward expression of accord” – meaning that, as a result of a communication between them, the parties understood each other to share that intention.”

Further, as to “outward expression of accord”, at [73] Leggatt LJ referred to the fact that by insisting on the requirement of an outward expression of accord, the Court of Appeal in Joscelyne v Nissen [1970] 2 QB 86 at 92 had made it clear that it was not sufficient for rectification to prove that each party privately and independently had the same intention as the other with regard to a particular provision of their contract, but rather that they had each had such intention, and that as a result of some communication between them, the parties understood each other to share that intention.

However, Leggatt LJ recognised that the shared understanding might be tacit, provided that there was evidence of communication and actual understanding – see at [80]-[87]. As to the latter, Leggatt LJ, at [84], accepted as correct a statement in Chitty on Contracts, 33^rd Edn (2018) at 3-064 that: … “The accord may include understandings that the parties thought so obvious as to go without saying, or that were reached without being spelled out in so many words.” At [87], Leggatt LJ added: “provided that it is understood that on a claim for rectification the court is concerned with what the parties actually communicated to each other, and not with identifying their presumed intention by means of an officious bystander test, we consider that the formulation in Chitty is sound.”

Other relevant points to note are: