[2025] UKUT 178 (LC)

Rectification is an equitable remedy, which means that an applicant is not entitled to it as of right on proof of certain facts; instead, the court or tribunal has a discretion whether or not to grant it.

Subject to that over-arching principle, rectification can be ordered on the basis of mistake, and the law classifies mistakes in a number of ways. In the FTT the appellant pleaded both common mistake and unilateral mistake, but the latter is not pursued on appeal and the only concept with which the Tribunal is here concerned is common mistake. The idea behind common mistake is that the parties to a contract or other document shared a common intention, and by mistake that intention was not reflected in the document. The authorities have travelled a roundabout route in terms of the nature of that shared intention, but the settled position following the decision of the Court of Appeal in FSHC Group Holdings Ltd v GLAS Trust Corporation Ltd [2019] EWCA Civ 1361 is that what has to be proved is the parties’ subjective intention – in other words, what they actually intended rather than what might objectively seem to be their intention on the basis of documents and other evidence.

The decision in FSHC thus rejected the idea that rectification was available only on the basis of the objectively ascertained intentions of the parties, laying to rest the controversy raised by what Lord Hoffmann said in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38. Rectification is based, not on the principle that parties must abide by what they can be seen (objectively) to have agreed, but on the principle that it is unconscionable for a party to seek to enforce a written agreement that is inconsistent with what the parties both subjectively intended and understood each other to intend (Leggatt LJ, FSHC atparagraph 146).

The parties must have understood each other’s intentions; private intentions that they never communicated to each other will not do. As the Court of Appeal put it, there must be an “outward expression of accord” (FSHC paragraph 73 and following), although that may include understandings that are so obvious as to go without saying (FSHC paragraph 84, quoting with approval Chitty on Contracts).

In Ralph v Ralph [2021] EWCA Civ 1106 the Court of Appeal had to consider an application for rectification of a transfer, where the transferees’ solicitor had ticked the box indicating that the two transferees of the land, who were father and son, would hold the land as tenants in common without discussion with them. The son now sought to rectify the document by un-ticking the box. The application failed because there was no shared intention held by the two parties that the box should not be ticked. At paragraphs 26 and following the Master of the Rolls, Sir Geoffrey Vos, left open the question whether, in relation to a document whose terms have not been negotiated and which is not a commercial contract, the principles set out in FSHC might not be applicable.