London Borough of Barnet v Barnet Football Club Holdings Ltd

Rectification requires proof of a prior accord, a document that fails to record it, the claimant’s mistaken intention that the document should implement it, knowledge of that mistake, and unconscionable conduct by the defendant. The standard of proof remains the balance of probabilities, although the evidential burden may be heavy.

A local authority’s failure to obtain the Secretary of State’s consent, or its disposal of land for less than the best consideration reasonably obtainable under Local Government Act 1972, does not invalidate a completed disposal in favour of a person claiming under the authority where section 128(2) applies.

The claimant local authority sold the freehold of a football ground to the defendant for £10,000. The sale documents included a restrictive covenant and an overage deed. The claimant alleged that negotiations had produced an agreement under which its entitlement to development value was not limited to ten years, but that the contractual and conveyancing documents mistakenly introduced such a limit.

The claimant sought rectification, alternatively a declaration that the transfer was void because the disposal contravened section 123(2) of the Local Government Act 1972. The central issues were whether the requirements for rectification were established and whether section 128(2) protected the defendant’s title.

1. Rectification. The claim failed. The necessary ingredients were a prior accord manifested by an outward expression, an inaccurate document, an intention that the document should implement rather than vary the accord, knowledge of the claimant’s mistake, sharp or unconscionable conduct, and a proposed rectification that accurately represented the accord.

2. The civil standard of proof applied to every ingredient. The seriousness of the allegation could increase the evidential weight required, but did not convert the standard into the criminal standard. The approach in Atlantic Marine Transport Corp v Coscol Petroleum Corp (The ‘Pina’) was explained accordingly, and the reasoning in Re H (Minors) (Sexual Abuse: Standard of Proof) and Thomas Bates Ltd v Wyndham’s Ltd was followed.

3. Although there had been an accord in July 2001 and the executed documents did not reflect it, the claimant had not proved that the local authority itself intended the documents to implement that earlier accord. The relevant intention was that of the authority as expressed through the authorised decision-making process, not merely the intention of an officer whose understanding differed from the terms authorised.

4. Alternatively, the defendant’s conduct was not sufficiently unconscionable. The defendant recognised that the ten-year limit might reflect an internal mistake or failure, but called attention to the provisions, discussed them with the conveyancing lawyer and the negotiating officer, and gave the authority an opportunity to correct them.

5. The disposal was for less than the best consideration reasonably obtainable on the actual terms. However, section 128(2) of the Local Government Act 1972 protected a person claiming under the authority from invalidity arising from the absence of a required ministerial consent or non-compliance with section 123(2). That protection applied to a freehold disposal and could be relied on by the authority’s own transferee.

6. The action was dismissed. The private-law claim did not fail merely because it had not been brought by judicial review.