James Hay Pension Trustees Ltd v Cooper Estates Ltd

Rectification of a transfer requires proof of a common continuing intention, an outward expression of accord, continuation of that intention when the instrument was executed, and a mistake causing the instrument to fail to record it. The intention may be objectively identified by the commercial purpose of the transaction and the parties’ reliance on an agreed criterion, even where one party lacked a precise understanding of the criterion’s legal source. Where a registered proprietor in possession is concerned, rectification of the register under Land Registration Act 2002, Schedule 4, paragraph 3 depends on whether it would be unjust not to rectify. The accidental receipt of land retained solely as a means of extracting payment may make refusal of rectification unjust.

The claimant pension trustee transferred land to the defendant as part of a development transaction. A parcel containing part of an access road was transferred by reference to a boundary which extended beyond the line that the parties had intended. The claimant later sought rectification of the transfer and the registered title after discovering that the defendant could use the excess land to demand payment for co-operation in completing the road’s adoption.

The central issues were whether the parties had a common continuing intention as to the extent of the land transferred, whether that intention had been outwardly expressed, and whether the transfer and register should be rectified.

1. The claim for rectification of the transfer succeeded. Applying the summary of the law in Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, the claimant had to establish a common continuing intention concerning the land to be transferred, an outward expression of accord, continuation of the intention at the time of transfer, and a mistake in the document.
2. The parties’ common intention was to transfer only the parcel required for the turning area and road adoption. The relevant objective measure was the line indicated by the highway authority as necessary for adoption. The defendant’s managing director did not have to know the precise legal basis of that requirement. His evidence showed an intention to acquire no more than the land needed to satisfy the requirement, and an assumption that the conveyancers were correcting the plan to show the right boundary.
3. The letter and plan sent by Bond Pearce on 11 March 1999 provided sufficient outward expression of accord. The later movement of the boundary on successive plans was a mistake which caused the transfer to include land beyond the common intention.
4. The register also should be rectified. The defendant was a proprietor in possession for the purposes of paragraph 3 of Schedule 4 to the Land Registration Act 2002. It would be unjust to refuse rectification because the defendant had accidentally acquired a small parcel which was of no practical use except as leverage for a ransom payment.
5. The transfer plan and the register were ordered to be rectified.

First-instance decision. No earlier or appellate decision is stated in the judgment.