Mistake–Too much land included by error in contract and conveyance–Negligence of vendor’s solicitors–Question of rectification–Analysis by court of kinds of rectification–Effects of common mistake and unilateral mistake–Court will correct instrument where it would be unconscionable for one party to take advantage of other party’s mistake–Rectification the right remedy in this case–Appeal by purchaser dismissed
This was an
appeal by Daniel Warner George Blaney from a decision by Judge Thomas, sitting
as a deputy judge of the Chancery Division, in favour of Basil Mark Weeds, who
sought rectification of a contract and conveyance whereby, through a mistake on
the part of the solicitors acting for Mr Weeds, the whole of certain land owned
by him near Downham Market, Norfolk, instead of a part only, was conveyed to Mr
Blaney. The facts are fully set out in the judgment of Lord Denning MR.
Norman Primost
(instructed by S B Gilinsby & Co, of Edgware) appeared on behalf of the
appellant; J H Hames QC and Robin Laurie (instructed by Metcalfe, Copeman &
Pettefar, of Downham Market) represented the respondent.
Giving
judgment, LORD DENNING MR said: Near Downham Market in Norfolk there is a
farmhouse and land called College Farm. The house is divided into two parts
called respectively 10 and 10A Whin Common Road. All was owned by an old lady,
Mrs Weeds. She died and left 10 Whin Common Road to her grandson, Basil Weeds,
together with half an acre of land surrounding it. It was vested in the
grandson by an assent dated March 5 1973 and he was registered as the
proprietor of it under title no NK 19064. The file plan showed no 10 and the
whole of the half-acre as the subject of that title.
The grandson
Basil decided to divide the half-acre into two parts: a northern half, on which
he intended to build a bungalow for himself; a southern half, which he intended
to sell together with the house 10 Whin Common Road. He put up a post and wire
fence so as to divide the northern half (which he intended to keep for himself)
from the southern half (which he intended to sell). Accordingly, he applied for
planning permission to build a bungalow on the northern half: and he was
granted permission in October 1973. He put the southern half (together with the
house, no 10) into the hands of estate agents for sale. The agents prepared
particulars, offering no 10 and the southern half for sale at £5,000. At the
end of July 1973 a prospective purchaser came and saw the property. He was Mr
Blaney, a builder from Romford in Essex. He was shown the fence marking the
boundary. He saw the estate agent who showed him the Ordnance Survey map and
told him exactly what was on offer, namely, the house no 10 and the southern
half: but not the northern half, which the vendor was retaining. The builder
indicated he was agreeable to buy the property offered for £5,000 and paid a
part deposit of £50, for which he was given a receipt.
Instructions
were given to solicitors for both sides. The vendor’s solicitor sent a plan to
the purchaser’s solicitor, showing the property to be sold. It had a clear line
dividing the southern half (which was the subject of the sale) from the
northern half (which was being retained). The purchaser’s solicitors used it to
make their searches at the Norfolk County Council showing correctly the land
being sold. But after all this had been done, the vendor’s solicitors made a
mistake at the next step. In October 1973 they prepared a draft contract of
sale and sent it to the purchaser’s solicitors. The property was described
simply by a title number in the Land Registry, NK 19064. Afterwards they sent a
copy of the filed plan under that title number. Now that title number and that
filed plan included the northern half as well as the southern half with the
house. It was the assent plan and showed the whole of the land which was vested
in the grandson Basil under his grandmother’s will. The vendor’s solicitors
frankly admit that they made a mistake. They ought to have described the land
being sold as part only of title NK 19064, and have filed a new plan showing
that the part to be sold was only the house and the southern half.
The
purchaser’s solicitors accepted that draft contract, together with the filed
plan, as it stood, with the mistake in it. They did not notice the mistake or,
if they did, they did not correct it. On November 20 1973 the contract of sale
was signed, with the mistake in it; and on December 18 1973 the transfer was
executed, with the mistake in it; and on January 16 1974 the purchase was
registered as the property of the whole of the land in title no NK 19064.
Now there was
a conflict of evidence about the knowledge of the purchaser and his solicitor.
Both of them gave evidence that they saw the plan in October 1973 and said that
it included the whole (that is, the northern half as well as the southern
half): and that the purchaser, seeing it, said to his solicitor: ‘That’s
fine.’ In short, he saw that on these
formal documents he was getting the whole for £5,000, and this suited him well.
But the judge did not accept that evidence. At any rate he did not refer to it
in his judgment. He said that the purchaser did not discover the mistake until
he visited the property on February 23 or 24 1974. He took with him a copy of
the filed plan which showed the whole of title NK 19064. He saw there one of
the Weeds family and asked him where the boundary was. He said that, so far as
he knew, it was up to the fence. The purchaser then said that the plan he had
(which showed the whole) must be wrong and he must see about it. The judge found
that ‘it was at this stage that the purchaser realised that a mistake had been
made. It was a mistake engendered by the vendor’s solicitor and overlooked and
perpetuated by the purchaser’s solicitor.’
Nevertheless,
when the purchaser went back to his own solicitor he determined to take
advantage of the mistake:
. . . We are
informed by our client that he has been told by a relative of your client’s
that ‘his uncle’ (presumably your client) has obtained planning permission for
and intends to erect a bungalow on the northern half of this land. We shall be
obliged if you will write to us confirming that this rumour is unfounded and
that neither your client nor any relative of his has any intention of carrying
out any plans for the erection of a bungalow on the northern half of the land,
which of course that person would have no right to do in any event as the land
in question quite clearly is included in our client’s title and in the property
which was transferred to him by your client.
So there they
were, the purchaser’s solicitors, sticking by the paper title which, as I say,
was entered into and made by a mistake on the part of the vendor’s solicitors.
The vendor’s solicitors acknowledged this mistake and asked for the matter to
be rectified: but the purchaser’s solicitors insisted on the title as shown on
the deed of, transfer. The matter was heard. Although it was only half an acre
of land, it took, we are told, eight days to try, with 20 witnesses or so being
called before the judge. In the result the judge did rectify the contract and
the deed. He said it was never intended that the northern half-acre should be
included at all. The £5,000 was paid for the house and the northern half. The
purchaser appeals to this court.
Now for the
law. The first point is this: the builder’s solicitor says: ‘the plaintiff
ought not to get rectification because it was all the mistake of his own
solicitor in sending forward the wrong plan. The solicitor was negligent. So
the builder must keep the land and the grandson must sue his own solicitor for
negligence.’ It is said: A plaintiff
cannot get rectification if his own solicitor has been at fault. We were
referred to a passage in Halsbury’s Laws of England, 3rd ed, vol 26, p
906, para 1679, where it says:
The court
will not interfere in favour of a man who is wilfully ignorant of what he ought
to know, or, in other words, who commits a mistake without exercising the due
diligence which the law would expect of a reasonable and careful person, nor
will relief be granted when the ignorance was due to the negligence of the
party’s legal adviser.
Those words
seem just to cover this case–‘due to the negligence of the party’s legal
adviser.’
In that
passage the writers are speaking of relief in equity generally. It should be
confined to cases of unilateral mistake–that is, a mistake of one of the
parties only of which the other party is unaware and to which he has in no way
contributed: and even in these cases the passage states the position in too
absolute terms. While the court will not usually grant equitable relief against
a unilateral mistake–where the mistake is due to the negligence of a legal
adviser–it may in a suitable case do so. Such at any rate was the view of Lord
Esher MR in Barrow v Isaacs & Son [1891] 1 QB 417 at p 421.
Any other view would, he said, cripple the salutary equitable powers of the
courts.
The passage
has no application whatever to rectification. There are two kinds of
rectification. One is where both parties are under a common mistake–that is,
both of them believe that the concluded instrument expresses their common
intention in regard to a particular provision or aspect of the agreement–but
both of them are mistaken in that the instrument on its proper construction
does not carry out that common intention. Both contribute to the mistake. The
one party who sends forward a draft containing the mistake. The other party who
returns it without correcting it. That kind of rectification was considered in Frederick
E Rose (London) Ltd v William H Pim Jnr & Co Ltd [1953] 2 QB
450; and Joscelyne v Nissen [1970] 2 QB 86; and in Prenn v
Simmonds in this court (Bar Library Transcript) and in the House of
Lords [1971] 1 WLR 1381. The other kind of rectification is where there is a
unilateral mistake by one party which is known to the other party. Such as
where a party puts forward a contract or instrument for signature, but himself
makes a mistake in the drafting of it–maybe a negligent mistake: and the other
party spots the mistake–he sees that there has, or probably has, been a
mistake–and turns a blind eye to it. He sees that it will or may operate to his
advantage and so says nothing about it, and signs the contract as it stands.
Such conduct on his part savours of sharp practice: and the court will rectify
the instrument so as to correct the mistake. That kind of rectification was
considered in Roberts (A) & Co Ltd v Leicestershire County
Council [1961] Ch 555; and Riverlate Properties Ltd v Paul
[1975] Ch 133.
In both those
kinds of rectification there is a negligent mistake by the plaintiff or his
solicitors, but that is no bar to rectification. It is indeed the very reason
why rectification is granted. It is to correct that mistake and rectify the instrument
so as to ensure that it expresses the common intention of the parties. So I
find myself in agreement with the passage in Snell’s Equity, 27th ed at
p 613, on rectification: ‘It is no defence that the plaintiff was careless, or
that the plaintiff, being a solicitor, drafted the instrument himself.’ So in this case, although the vendor’s
solicitor was negligent, that is no bar to the vendor getting the contract and
transfer rectified. It was either a common mistake (as the judge found): or it
was a mistake which the purchaser or his solicitors noticed (as they said) and
said nothing. Their only right course would have been to have pointed out to
the vendor’s solicitors that they had made a mistake. In any case these should
be rectified.
As to the
other two cases which were cited this afternoon–Rose v Pim reported in [1953] 2
QB 450 as qualified in Joscelyne v Nissen [1970] 2 QB, 86. They
show that there should be some outward evidence of the common intention of the
parties. There is ample evidence here. The particulars of sale, the interview
with the estate agent, the fence and the original plans, all offer ample
evidence of the common intention of the parties. That is all that is needed.
There is only
one further point. It was said that if rectification is given in a case like
this, it should not be the defendant who has to pay the costs; it is said that
the plaintiff’s solicitor is the one who has been responsible for all this: and
he should pay. Certain rules as to costs were quoted from the case of Harris
v Pepperell (1867) LR 5 Eq 1, where Lord Romilly MR stated some rules
for guidance with regard to costs, which have been quoted in Halsbury’s Laws
of England, 3rd Ed vol 26 p 910 para 1689, as if they were rules of law.
But they are not rules of law at all; they are just statements for the guidance
of the court in its discretion in awarding costs. It seems to me that in this
particular case the judge was quite right in ordering that all the costs should
be paid by the defendant. On the evidence it is pretty plain that he knew what
he had bought; he knew that he had only bought the small piece and had only
paid for the small piece. Yet he tried to take advantage of this mistake so as
to get away with the lot.
The judge was
quite right in deciding against him and in ordering him to pay the costs. I
think his decision should be affirmed.
GOFF LJ
agreed. In the course of his judgment he said, after referring to the case of Barrow
v Isaacs & Son: The learned judge distinguished that case, in my
judgment rightly, on the ground that that was not a case of rectification on
the ground of common mistake, but an attempt to obtain relief from forfeiture
based on unilateral mistake; and of course, the considerations applicable to
those two types of case are entirely different. Offsetting the suggestion that
it is impossible not to see that such relief would be an incentive to
negligence, it is impossible not to see that refusing such relief would be an
incentive to dishonest persons to take
am not going to lay down a hard and fast rule that negligence could never be
taken into account in such a case, though I think it is difficult to see how it
could be so; but certainly, in my judgment, generally speaking it is an
irrelevant consideration, as was pointed out, and in my view rightly, by
Ungoed-Thomas J in the case of Kent v Hartley, reported in (1966)
200 ESTATES GAZETTE 1027. There, dealing with the very case of Barrow v Isaacs,
his Lordship said:
Secondly it
was said that the mistake must not be caused by the omission of some degree of
care: see Barrow v Issacs & Son [1891] 1 QB 417. That was a
case not of rectification but of relief against forfeiture for breach of
covenant against under-letting without consent. The lessee had underlet by
mistake on his part, and it was a case of unilateral mistake far removed from
rectification based on mutual mistake. In his (the judge’s) view, a party’s
negligence which caused the mistake of the mistaken party was relevant when
relief was sought by that party against the effect of his negligent unilateral
mistake, but had no bearing where the basis for relief was a mistake common to
all parties, including a failure to give expression to their common agreement
or intention. Equitable relief in rectification was founded on the common
intention of the parties.
CUMMING-BRUCE
LJ also agreed.
The appeal
was dismissed with costs.
