K/S Victoria Street (A Danish Partnership) v House of Fraser (Stores Management) Ltd & Ors

Mr Anthony Speaight QC (instructed by Stockler Brunton) for the Claimant Mr Jonathan Seitler QC and Mr Nicholas Taggart (instructed by Lawrence Graham LLP) for the Defendants Hearing date: 26 October 2011 ____________________

It is alleged that, by reason of a mutual mistake, clause 3.15(F) was not drafted so as to have that intended and agreed effect, and the Lease should be rectified accordingly. There is also an alternative plea of unilateral mistake on the part of the defendants, which it is said was known to Victoria, but was not drawn to the defendants' attention because the error was beneficial to Victoria. The relief claimed is again rectification of the Lease.

It is then pleaded in the alternative that in his conversations with Mr White between 20 and 26 January 2006 (when the Lease was completed) Mr Bannister raised no issues as to the proper construction of clause 3.15(F), and indicated that he was ready to complete the Lease as it was then drafted.

On the other hand, this does not appear to be an immutable rule: see the discussion of the authorities by Briggs J in Kojima v HSBC Bank Plc [2011] EWHC 611 (Ch) , [2011] 3 All ER 359 , at [20] to [30], the notes in the second cumulative supplement to the 2011 edition of the White Book at paragraph 3.1.9.2, and my own observations on the subject in Woodford Land Ltd v Persimmon Homes Ltd (No. 2) [2011] EWHC 1823 (Ch) at [10] to [16].

This passage was approved by Lord Hoffmann (with whom the rest of their Lordships agreed on this point) in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 , [2009] 1 AC 1101 , at [48]. It was also established in the Chartbrook case that the intention of the parties is to be ascertained for this purpose on the same objective basis that the courts apply to the construction of contracts or other written instruments: see Chartbrook at [14] and [57] to [67], per Lord Hoffmann, and the comment of Baroness Hale of Richmond at [100]: