Rectification of a Lease – The Requirement of Convincing Proof
By Evelyn Marcou, Senior Associate, MST Lawyers
What is Rectification?
Rectification is a discretionary remedy available to a party in instances where the executed lease has failed to record the common intention that the parties held prior to executing a lease. Rectification is not available to correct a mistake or for a party who later changes their mind.
A party seeking rectification must be able to show to the court, “convincing proof” that the written terms of the lease have failed to reflect the common intention of the parties held during negotiation of the lease. The standard for ”convincing proof” is the same as the civil standard of proof, that is, on the balance of probabilities. This standard was set out by Brightman LJ in Thomas Bates and Son Ltd v Wyndham’s (Lingerie) Ltd:
The standard of proof required in an action of rectification to establish the common intention of the parties is…[that of] convincing proof… in order to counteract the cogent evidence of the parties’ intention… It is not…the standard of proof which is high, so differing from the normal civil standard, but the evidential requirement needed to counteract the inherent probability that the written instrument truly represents the parties’ intention because it is a document signed by the parties.
The “convincing proof” must be specific enough to allow the court to determine the common intention of the parties.
Case examples of “convincing proof”
Pukallus v Cameron
In this case, the parties contracted for the sale of land which was described in the contract as “Subdivision 1 of Portion 1154”. The parties held the common intention that the sale of the land would contain a bore and that the land was cultivated. However, the parties did not have a common intention as to where the boundary lines of the land lay. The court held that there was no proof of the parties common intention to fix the boundary lines in order to ensure that the bore and cultivated land was included and therefore rectification could not be ordered by the court.
W and K Holdings (NSW) Pty Ltd v Mayo
More recently in W and K Holdings (NSW) Pty Ltd v Mayo the court confirmed the position in Pukallus v Cameron by reiterating that in order to satisfy the “convincing proof” standard the plaintiff must:
[A]dvance “convincing proof” that the written contract does not embody the final intention of the parties. The omitted ingredient must be capable of such proof in clear and precise terms. The Court must not assume for itself the task of making the contract for the parties.
Check before you sign
A party to a lease must always ensure that, before the lease is signed, that it adequately reflects the common intention of the parties because it can be a very difficult task to seek rectification of a lease if you do not have the requisite ”convincing proof”.