Analysis
The First Defendant sought to rectify two declarations of trust entered into by the Claimant and the deceased husband of the First Defendant (“Mr Saundry”) in 2006 and 2009. The trusts arose out of a residential property business operated by Mr Saundry and the deceased husband of the Claimant (“Mr Price”).
Both of the declarations of trust related to a large number of properties, which were legally held in Mr Saundry’s sole name, but according to the declarations of trust were beneficially owned as tenants in common in equal shares by Mr Saundry and the Claimant.
The 2006 declaration of trust related to 22 properties. These were set out in a list by geographical location – the final property listed was a house at 7 Lindwell Close in Cheltenham (“the Cheltenham Property”). The 2009 declaration of trust related to of 38 properties, including the Cheltenham Property.
The First Defendant submitted that the Cheltenham Property had been included in these declarations of trust by mistake, and that Mr Saundry should have remained the sole legal and beneficial owner. Not only had Mr Saundry regularly told his wife that this was the case, but in 2013 he unilaterally executed a further declaration of trust, which included the same list of properties found in the 2009 declaration, but with three properties crossed out in manuscript, including the Cheltenham Property.
The Claimant submitted that there had been no mistake. Mr Saundry was a professional mortgage broker who was familiar with legal documents and would have read them carefully. It was implausible that he would have made the same mistake in both 2006 and 2009. The mistake in 2006 was particularly unlikely, as the Cheltenham Property was listed directly above his signature and so he would inevitably have seen that it was included.
Held:
1) The application for rectification was dismissed. The evidence suggested that at the time that the 2006 and 2009 declarations of trust were executed, there was no intention to exclude the Cheltenham Property from the trusts, and so no mistake that could be rectified.
2) Had the first defendant made out a prima facie case for rectification, the Claimant would have been able to rely upon laches as a defence. The length of time that had elapsed since the making of the Deeds (12 and 9 years respectively) meant that it was too late to now rectify them.
3) The payment of mortgage instalments relating to the Cheltenham Property from the trust bank accounts did not amount to an affirmation that the Cheltenham Property was held on the trusts declared in 2006 and 2009. Making these payments was not an unequivocal act of affirmation – there were numerous plausible explanations.
JUDGMENT HHJ PAUL MATTHEWS: Introduction [1] This is my judgment on an application for rectification which has arisen during the trial of this part 8 claim. On 12 February 2019 I gave permission to the first defendant (whom I shall refer to as “the defendant”, because the second defendant is not concerned with this part …Continue reading "Price v Saundry & anr [2019] WTLR 683"