Transview Properties Ltd v City Site Properties Ltd

Rectification for unilateral mistake is an exceptional equitable jurisdiction. The claimant must provide convincing proof that it was mistaken about the document, that the other party knew of the mistake, and that the other party sought unfairly to take advantage of it. The burden is particularly onerous where experienced businesspeople concluded a formal instrument with legal advice.

An appellate court will generally respect findings of primary fact and credibility influenced by oral evidence. It will intervene only where the trial judge failed to use that evidential advantage properly and the findings were plainly wrong. Fresh evidence should ordinarily be admitted on appeal only where it could not reasonably have been obtained for trial, is apparently credible, and would probably influence the outcome.

Transview Properties Ltd bought an office block from City Site Properties Ltd under a sale agreement containing provisions for an overage payment. Transview sought rectification by inserting an alleged overage-abatement term. It claimed that the term had been removed without its knowledge. Alternatively, it sought a declaration that its liability had ceased under a collateral agreement.

Briggs J dismissed both claims in [2008] EWHC 1221 (Ch). He found that the parties had agreed to address abatement in a side letter, subject to specified payments within six months of completion, and that no sharp practice or unilateral mistake had occurred.

Transview appealed against those factual findings and made two applications under rule 52.11(2) of the Civil Procedure Rules 1998 to adduce further evidence. The central issues were whether that evidence should be received, whether the judge's findings could be displaced, and whether the requirements for rectification had been proved.

1. The appeal and both applications to adduce further evidence were dismissed. The trial judge was entitled to find that the parties intended the overage-abatement arrangement to appear in a side letter rather than the sale agreement. He was also entitled to find that abatement depended on payment of the stipulated sums within six months of completion. Those findings left no sharp practice, trick or mistake capable of supporting rectification, and no contractual basis for declaring that the overage liability had ceased.

2. Rectification for unilateral mistake is an exceptional equitable jurisdiction and a species of equitable estoppel. It prevents a person who knows of the other party's mistake about a document or its contents from taking unfair advantage of that mistake. Convincing proof is required. The burden was especially onerous because experienced businesspeople had negotiated the transaction with professional legal advice. The judge was therefore entitled to require convincing proof of the pleaded allegation and to find that Transview had failed to provide it.

3. An appellate court will generally leave undisturbed a trial judge's assessment of credibility and findings of primary fact where they are based on, or significantly influenced by, oral evidence. Intervention is justified only where the trial judge failed to take proper advantage of the opportunity to assess that evidence and the findings were plainly wrong. Although the challenged findings involved inferences from documents, Briggs J remained better placed to draw them. His assessment of the documents was inseparable from his experience of the trial, his view of the witnesses and the inherent probabilities.

4. Under rule 52.11(2) of the Civil Procedure Rules 1998, admitting evidence not produced below depends on whether admission is just in accordance with the overriding objective. Relevant considerations include whether reasonable efforts could have secured the evidence for trial, its apparent credibility, and whether it would probably have an important influence on the result. Finality is significant, since admitting new evidence commonly entails a retrial.

   The substance of the proposed evidence concerning the disputed letter had been available before trial and could have been pursued through hearsay evidence or compulsory process. In any event, excluding that letter would not probably have changed the result. The evidence concerning the solicitors' former premises could also have been obtained through reasonable investigation before trial.

Mummery LJ delivered the judgment. Sir Peter Gibson and Moore-Bick LJ agreed.

1. Court of Appeal (Civil Division): The court unanimously dismissed the appeal and refused both applications to adduce further evidence: [2009] EWCA Civ 1255.

2. High Court, Chancery Division: Briggs J dismissed the claims for rectification and declaratory relief with costs: [2008] EWHC 1221 (Ch).