Property – Conveyance – Rectification – Settlor mother granting general power of attorney to solicitor – Solicitor executing conveyance of property on behalf of settlor – Conveyance erroneously describing settlor and respondent as beneficial joint tenants – Respondent acquiring sole legal and beneficial ownership of property on settlor’s death – County Court refusing application to rectify conveyance to declare property held by settlor and respondent on trust for settlor absolutely – Whether solicitor’s power of attorney and authority to execute conveyance precluding right to rectification – Appeal allowed On her husband’s death in 1976, a property vested in the settlor, as the testator by survivorship. In May 1985, the mother executed a general power of attorney in favour of a solicitor who executed a conveyance as her attorney, conveying the property from the settlor to the settlor and her son (the respondent), as beneficial joint tenants. By her will, executed in November 2008, the settlor appointed the appellants and the respondent as her executors and directed, inter alia, that the property be sold and the sale proceeds be divided equally. Without rectification of the conveyance, the respondent became, by survivorship, the sole legal and beneficial owner of the property on the settlor’s death. The appellants brought proceedings for rectification, contending that the conveyance and a mortgage on the property had been executed to raise funds for the benefit of the respondent, using the property as security; it had not been intended that the respondent should acquire a beneficial interest in the property. They claimed that the conveyance had described the respondent and the settlor as beneficial tenants in error. The county court held that, as the conveyance had been executed by the solicitor on the settlor’s behalf, rather than by the settlor, the solicitor had acted within the scope of his authority and there was no ground on which to rectify the conveyance. The appellants appealed, arguing that the settlor had never intended to give, and never thought that she had given, a beneficial interest in the property to the respondent so that they were entitled to rectification to provide that the property was held by the settlor and the respondent on trust for the mother absolutely. Held: The appeal was allowed. (1) The doctrine of rectification was concerned with the mistaken implementation of intention, rather than the power and authority to effect a particular transaction. The intention of the principal and the scope of the agent’s authority might overlap but they were not synonymous concepts. In a voluntary settlement, rectification hinged on whether the settlor executed the settlement in the mistaken belief that it implemented his or her intention. Whether or not the settlor’s solicitor was authorised to draw up the settlement on any particular terms or, as here, was acting within his actual or apparent authority in executing it on behalf of the settlor was a different question. In the present case the mother had been the settlor and it was her intention and the implementation of her intention, and not the scope of the solicitor’s authority, which were in issue. (2) A solicitor’s actual authority was prescribed by any instructions expressly given by the client, whether or not those instructions were then implemented by the solicitor acting pursuant to a general power of attorney. Insofar as there was any overlap between the principal’s intention in carrying out a transaction and the scope of the agent’s authority to execute that transaction, it was the actual authority of the principal that was relevant and not the principal’s apparent or ostensible authority. The actual instructions to the agent might cast light on the actual intention of the principal, which was the relevant factor for rectification. Apparent or ostensible authority of the agent might make the transaction binding on the principal even where it did not coincide with the actual intention of the principal and the express instructions given to the agent, but, subject to the facts of a particular case, there was no obvious reason why such apparent authority should throw any light on the right to rectification. (3) In the present case, apart from the generality of the power of attorney itself, there was no evidence that the intention of the settlor had been that the solicitor could carry out the proposed transaction in any way he chose. The recorder had not addressed the critical question of the settlor’s actual intention and, insofar as it had any relevance to that issue, the actual instructions given to the solicitor. Leaving aside the general power of attorney, the factual findings of the recorder were all inconsistent with any intention, let alone actual instructions to the solicitor to carry out the transaction in any way he might choose. The only proper inference was that the respondent instructed the solicitor, on behalf of the settlor, to do what was necessary, consistently with the settlor’s best interests, to allow the property to be used as security to enable the respondent to raise funds. The transfer of a beneficial interest in the property to the respondent went beyond those instructions and the solicitor’s actual authority. (4) In any event, the onus was not on the appellants to disprove that the settlor’s intention and instructions to the solicitor were that he had a completely free hand to structure the transaction as he chose. The recorder having found that it was not the settlor’s actual intention to confer any beneficial interest on the respondent, the evidential burden passed to the respondent to show that such intention was negated by some different overriding intention on her part. It was impossible on the facts for the respondent to do so. Michael Norman (instructed by Anthony Harris & Co, of New Milton) appeared for the appellant; Timothy Becker (instructed directly) appeared for the respondent. Eileen O’Grady, barrister
Property – Conveyance – Rectification – Settlor mother granting general power of attorney to solicitor – Solicitor executing conveyance of property on behalf of settlor – Conveyance erroneously describing settlor and respondent as beneficial joint tenants – Respondent acquiring sole legal and beneficial ownership of property on settlor’s death – County Court refusing application to rectify conveyance to declare property held by settlor and respondent on trust for settlor absolutely – Whether solicitor’s power of attorney and authority to execute conveyance precluding right to rectification – Appeal allowed On her husband’s death in 1976, a property vested in the settlor, as the testator by survivorship. In May 1985, the mother executed a general power of attorney in favour of a solicitor who executed a conveyance as her attorney, conveying the property from the settlor to the settlor and her son (the respondent), as beneficial joint tenants. By her will, executed in November 2008, the settlor appointed the appellants and the respondent as her executors and directed, inter alia, that the property be sold and the sale proceeds be divided equally. Without rectification of the conveyance, the respondent became, by survivorship, the sole legal and beneficial owner of the property on the settlor’s death. The appellants brought proceedings for rectification, contending that the conveyance and a mortgage on the property had been executed to raise funds for the benefit of the respondent, using the property as security; it had not been intended that the respondent should acquire a beneficial interest in the property. They claimed that the conveyance had described the respondent and the settlor as beneficial tenants in error. The county court held that, as the conveyance had been executed by the solicitor on the settlor’s behalf, rather than by the settlor, the solicitor had acted within the scope of his authority and there was no ground on which to rectify the conveyance. The appellants appealed, arguing that the settlor had never intended to give, and never thought that she had given, a beneficial interest in the property to the respondent so that they were entitled to rectification to provide that the property was held by the settlor and the respondent on trust for the mother absolutely. Held: The appeal was allowed. (1) The doctrine of rectification was concerned with the mistaken implementation of intention, rather than the power and authority to effect a particular transaction. The intention of the principal and the scope of the agent’s authority might overlap but they were not synonymous concepts. In a voluntary settlement, rectification hinged on whether the settlor executed the settlement in the mistaken belief that it implemented his or her intention. Whether or not the settlor’s solicitor was authorised to draw up the settlement on any particular terms or, as here, was acting within his actual or apparent authority in executing it on behalf of the settlor was a different question. In the present case the mother had been the settlor and it was her intention and the implementation of her intention, and not the scope of the solicitor’s authority, which were in issue. (2) A solicitor’s actual authority was prescribed by any instructions expressly given by the client, whether or not those instructions were then implemented by the solicitor acting pursuant to a general power of attorney. Insofar as there was any overlap between the principal’s intention in carrying out a transaction and the scope of the agent’s authority to execute that transaction, it was the actual authority of the principal that was relevant and not the principal’s apparent or ostensible authority. The actual instructions to the agent might cast light on the actual intention of the principal, which was the relevant factor for rectification. Apparent or ostensible authority of the agent might make the transaction binding on the principal even where it did not coincide with the actual intention of the principal and the express instructions given to the agent, but, subject to the facts of a particular case, there was no obvious reason why such apparent authority should throw any light on the right to rectification. (3) In the present case, apart from the generality of the power of attorney itself, there was no evidence that the intention of the settlor had been that the solicitor could carry out the proposed transaction in any way he chose. The recorder had not addressed the critical question of the settlor’s actual intention and, insofar as it had any relevance to that issue, the actual instructions given to the solicitor. Leaving aside the general power of attorney, the factual findings of the recorder were all inconsistent with any intention, let alone actual instructions to the solicitor to carry out the transaction in any way he might choose. The only proper inference was that the respondent instructed the solicitor, on behalf of the settlor, to do what was necessary, consistently with the settlor’s best interests, to allow the property to be used as security to enable the respondent to raise funds. The transfer of a beneficial interest in the property to the respondent went beyond those instructions and the solicitor’s actual authority. (4) In any event, the onus was not on the appellants to disprove that the settlor’s intention and instructions to the solicitor were that he had a completely free hand to structure the transaction as he chose. The recorder having found that it was not the settlor’s actual intention to confer any beneficial interest on the respondent, the evidential burden passed to the respondent to show that such intention was negated by some different overriding intention on her part. It was impossible on the facts for the respondent to do so. Michael Norman (instructed by Anthony Harris & Co, of New Milton) appeared for the appellant; Timothy Becker (instructed directly) appeared for the respondent. Eileen O’Grady, barrister
