London Borough Of Barnet v Barnet Football Club Holdings Ltd

For rectification, a corporate public body's relevant intention is that expressed through the persons and process authorised to approve the transaction. The intention of an officer who merely negotiated and prepared the proposal cannot be attributed to the body where it differs from the terms later authorised.

A claimant must produce clear, irrefragable evidence that the authorised decision-makers intended terms other than those recorded. An ambiguous authorising report will not establish that the executed instruments failed to reflect that intention.

The Borough sold the freehold of Underhill Football Ground to the respondent for £10,000. The transfer restricted use of the ground to football for ten years. A supplemental deed also provided a ten-year cut-off for further consideration payable on a variation of that restriction.

The Borough sought rectification. It alleged that the intended restriction and its entitlement to share development value, save on a qualifying relocation within the borough, were to endure without that time limit. The Deputy High Court judge dismissed the claim on 13 February 2004.

The Borough appealed, contending that the negotiated accord and delegated-powers report showed an unlimited arrangement. The central issue was whose intention constituted the Borough's intention for rectification and whether the evidence established a different authorised intention.

1. Appeal dismissed unanimously. The Borough's pleaded rectification claim depended on Mr Stephens's intention. That intention was immaterial because he was only the negotiator and preparer of a proposed sale. He was not one of the persons empowered under the Borough's delegated-powers procedure to sanction it.
2. The relevant intention was the Borough's intention as manifested by the authorised decision-making process. If the persons who approved the proposal had shared Mr Stephens's intention, his state of mind could have been relevant indirectly. The Borough, however, neither pleaded that case nor called those persons to prove it.
3. The only available evidence of the relevant decision-makers' intention was therefore the delegated-powers report which they approved. They were to be taken to have intended what that report authorised. The report did not provide clear, irrefragable evidence that a ten-year cut-off was not intended. Its express reference to a ten-year period was not displaced with sufficient clarity by its broader references to the Borough sharing future development value.
4. The Borough's alternative reliance on Mr Lustig's earlier email also failed. It did not establish his understanding when the instruments were executed, and there was no evidence that his later instructions extended beyond the delegated-powers report.
5. It was consequently unnecessary to decide whether the respondent's knowledge of the Borough's unilateral mistake amounted to sharp practice capable of founding an estoppel. The appeal was dismissed with costs, an interim payment on account of costs, and refusal of permission to appeal to the House of Lords.

• Court of Appeal (Civil Division): appeal dismissed unanimously: [2004] EWCA Civ 1191.
• High Court of Justice, Chancery Division: Mr AG Bompas QC, sitting as a deputy High Court judge, dismissed the Borough's claim for rectification on 13 February 2004.