Dichand v Hydraredox Technologies Holdings Ltd

A party who signs a clear contractual document after having sufficient opportunity to read and understand it cannot ordinarily rescind it on the basis of an alleged misunderstanding where the evidence does not establish induced misrepresentation. A unilateral mistake likewise requires proof of the relevant mistake and its legal effect. Failure to pay nominal consideration stated in an assignment does not generally render the contract void for lack of consideration; it may create a debt for the unpaid amount. The court must determine these issues on the evidence, including the document’s terms, the time available for reading it and the parties’ conduct.

The claimant and another inventor jointly owned four patent applications concerning vanadium redox batteries. The applications were assigned under a written deed to a company and subsequently to the defendant. The claimant alleged that he had been induced to sign the first assignment by a fraudulent representation that it concerned a further patent application.

He alternatively relied on unilateral mistake, lack of consideration, unjust enrichment and breach of fiduciary duty. The central issues were whether the assignment had been procured by misrepresentation or mistake, whether it was void for want of consideration, and whether the defendant held the applications and resulting rights on trust.

1. Claim dismissed. The court found that the claimant knew what he was signing and signed the assignment because he had lost faith in the project but wished to retain the prototype. The alleged December meeting and misrepresentation were not proved.
2. The assignment was a short document headed “DEED OF ASSIGNMENT”. It clearly identified the four existing patent applications in a schedule-like box and did not resemble an application for a fifth patent. The claimant read it for approximately one to two minutes, which was sufficient time to understand its effect. If he had been uncertain, he could have obtained advice from his legal advisers.
3. The claimant’s alternative case based on unilateral mistake failed because the evidence did not establish a mistake sufficient to invalidate the transaction. The related claims based on fiduciary duty, duty of fidelity and unjust enrichment also failed.
4. The stated consideration was one US dollar for each assignor. Although the dollar was not paid, the consequence was potentially a claim for an outstanding debt of 50 cents by each assignor, not that the assignment was void for lack of consideration.
5. On the facts found, the claimant’s claim failed in every alternative form in which it was advanced.