Wilson v Truelove

An option to repurchase land is an interest in land which may arise when the agreement granting it is made. Later events which determine when the option becomes exercisable do not necessarily make it conditional or postpone the perpetuity period. Rectification cannot substitute a different bargain merely because the parties shared a mistake about the law. Equity may prevent reliance on a statutory right only where unconscionable conduct gives rise to an equity. Estoppel by convention requires a shared assumption followed by joint dealings on that basis.

The claimants, the freehold owners of a farm, sought to rely on section 9(2) of the Perpetuities and Accumulations Act 1964 to defeat a contractual right of repurchase granted to the defendants under a 1974 agreement. The defendants argued that the right arose only when specified future events occurred, that the agreement should be rectified, and that equity or estoppel by convention prevented reliance on the statutory rule.

The court had to determine whether the right was void under section 9(2), whether rectification was available, and whether equitable doctrines prevented reliance on the provision.

1. The right of repurchase was an interest in land which arose on the making of the 1974 Agreement, or at the latest on the Conveyance. It was immediately vested because the grant gave the defendants a right to take away the claimants’ estate or interest. The later reference to the right being issued was, at most, procedural.

2. The specified triggering events identified when the right became exercisable. They did not constitute conditions which might never be fulfilled. The right was therefore subject to section 9(2) of the Perpetuities and Accumulations Act 1964 and had become void and of no effect.

3. Rectification was refused. The parties intended an unlimited right and the written agreement accurately recorded that bargain. The mistake concerned its legal effect. Rectification could not substitute a differently timed right to avoid the rule against perpetuities.

4. Equity can in principle override reliance on a statutory right, but relief requires unconscionable conduct by the person relying on the statute. The claimants had made no representation, encouragement or other unconscionable contribution to the defendants’ mistaken belief.

5. Estoppel by convention requires parties to proceed jointly on a shared assumption and establish a conventional basis for their dealings. The parties merely entered the agreement while independently misunderstanding its legal effect. There was no subsequent joint course of dealing on that basis.

6. The right was void, was not rectified, and was not protected by equity or estoppel. Pursuant to section 1(6) of the Land Charges Act 1972, the registration of the Class C(iv) land charge was ordered to be vacated.

First-instance decision. No earlier decision in the same proceedings is stated in the judgment.