Judge considers whether the test for rectification is an objective one


The test for rectifying a contract is: (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. The standard of proof  required is the civil standard of balance of probability. However, sufficiently strong proof will  in practice be needed to counteract the evidence of the parties’ intention displayed by the  contract itself.

In this case, Leggatt J opined that “an outward expression of accord” only meant that objectively  manifested intentions are required and that a mere coincidence of uncommunicated subjective  intentions would not suffice. However, in Chartbrook v Persimmon Homes (see Weekly Update 24/09)  the House of Lords (albeit obiter) endorsed a more objective test - ie what would a reasonable  observer have understood the terms of the contract to be. Leggatt J said that he had difficulty with that view: “It is one thing to say that a contract should not be  rectified just because both parties privately intend it to bear a meaning different from its  meaning objectively ascertained. It is quite another thing, however, to say that a contract should  be rectified to conform to what a reasonable observer would  have understood the parties previously to have agreed, irrespective of the parties’ own understanding”. However, despite his “real misgivings”, Leggatt J  said that, had he been required to decide the point (and, on the facts, he wasn’t), he would have  been bound to follow the approach endorsed in Chartbrook.