Andrews & Ors v Andrews & Anor

Rectification of a voluntary unilateral settlement depends on the settlor’s subjective intention. An outward expression or objective communication of that intention is not a legal prerequisite, although its absence may make the mistake harder to prove evidentially. Rectification is available where the document’s wording was deliberately used but was mistakenly understood to bear a different legal meaning from its true construction. The court must be satisfied that there was a relevant mistake and that rectification will give effect to the settlor’s actual intention.

The claimants sought rectification under Part 8 of the Civil Procedure Rules of the Andrews Family Trust, an inter vivos settlement under which the first defendant was effectively the sole beneficiary during her lifetime. The claimants intended that the trust should benefit all their grandchildren, including grandchildren born after its creation, but the deed did not permit that result. The claim was unopposed, and the court considered whether the evidence established a mistake as to the deed’s legal effect and whether the proposed rectification accurately carried out the settlors’ intention.

1. The claim for rectification succeeded. The court ordered rectification of the Andrews Family Trust deed in accordance with the draft order, appointed the first defendant to represent her future spouses and civil partners, and appointed the second defendant to represent unborn or unascertained discretionary beneficiaries.
2. Following Day v Day [2013] EWCA Civ 280, reported at [2014] Ch 114, the requirement of an outward expression of accord applicable to contractual rectification for mutual mistake does not apply to a voluntary unilateral settlement. The relevant intention is the settlor’s subjective intention. The absence of an outward expression may nevertheless make the mistake more difficult to prove.
3. The court also applied the principle identified in Re Butlin’s Settlement Trust [1976] Ch 251, at pages 260–261, that rectification may be granted where words were purposely used but were mistakenly thought to bear a different meaning from their true construction.
4. The unchallenged evidence established a mistake as to the legal effect of the deed. The claimants believed that the trust could benefit any child of Dr Andrews and his wife, rather than only Zoe. The proposed rectification would give the trustees overriding powers of appointment and would carry out the settlors’ actual intention.
5. The rectified deed was declared effective as if the alterations had been made when it was executed. The claimants were ordered to pay the defendants’ costs personally, to be assessed if not agreed.