In the recent case of Drysdale v Purvis and Another [2022] CSOH 66, the Court of Session presided over an action for rectification of a disposition and set of missives concluded in 1995.
In what was described as a 'catastrophic error' by the solicitors involved in the transaction, the main building was excluded from the contract terms in the missives and the disposition which transferred the title. The same firm of solicitors acted for both the seller and the buyer, and neither the solicitors nor the parties to the transaction realised the error. The issue only came to light when the seller's daughters disputed the buyer's use of the land – over 20 years later.
So, what happened?
What is rectification?
When a written contract, including one set out in missives or a disposition, fails to accurately express what the parties have agreed, a party seeking to correct the contract may apply to the court for rectification under section 8 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985.
Rectification will correct the contract retrospectively, but there is a stiff hurdle for parties to overcome before the court will grant an order for rectification. It must be shown on the balance of probabilities that there was an agreement between the parties, prior to the creation of the contract, in which the parties had a common intention.
Drysdale v Purvis: the background
The purchaser made an offer to purchase a farm steading on 7 August 1995, accompanied by two plans outlining the relevant parcel of land – one identifying the farming land, and the other identifying the buildings and part of the steading. If the offer had been accepted, the purchaser would have acquired the farm steading and an area of surrounding farmland.
However, after discussions about the relevant fields to be included in the sale, a qualified acceptance letter dated 24 August 1995 was sent. This attached only one plan outlining the subjects of the sale – the plan relating to the farming land – and therefore excluded the farm steading from the sale.
The disposition which was then prepared and signed only reflected the land as identified in the qualified acceptance letter of 24 August 1995, meaning the purchaser did not obtain title to the farm steading as outlined in the original offer to purchase.
This led to the dispute: was it the parties' common intention in 1995 that the farm steading should be included in the sale?
Drysdale v Purvis: the dispute
Amongst other issues, the court had to consider:
- whether the missives as concluded failed to accurately express the parties' common intention as to the land to be bought and sold; and
- whether the disposition failed to give effect to the agreement entered into as to the land to be bought and sold.
Drysdale v Purvis: the decision
Lord Turnbull acknowledged that a high quality of evidence was required to persuade the court to grant rectification. However, those involved in the transaction in 1995 were either incapable of giving evidence or had little memory of the events, and the solicitors' files had been destroyed.
Despite this, Lord Turnbull agreed that, objectively, the evidence demonstrated that there was a prior agreement and common intention that the farm steading should be conveyed to the purchaser, which the missives and disposition ultimately failed to express accurately. The farm steading had been an essential part of the offer for the purchaser, and the purchaser had taken possession and transformed the steading with the knowledge and active participation of the seller. There had been no suggestion that the farm steading should be excluded from the sale in the parties' prior discussions, and no evidence that the parties had changed their mind on this point.
The weight of this evidence, Lord Turnbull said, was enough to put aside doubts resulting from the seller's signatures to the disposition.
Key takeaway
Of note is that the parties' solicitor admitted a 'catastrophic error' had been made by excluding the farm steading from the qualified acceptance, and thereafter the disposition. Lord Turnbull explained that 'there is perhaps no one who would have a better understanding of what the parties to the transaction had in mind to agree than the solicitor who acted for all of them'. It is questionable whether the same decision would have been reached by the court if the solicitor had been unable to give evidence.
Nevertheless, this case serves as a useful reminder that an action for rectification will only succeed if it can be objectively shown that the parties' intention was different to that expressed in the written contract.
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