Au Lut Chi and Hannah Tang acted for the Defendant in Lau Wai Kwong v Lau Cheung Kam Ling Margaret née Cheung, Kam Ling Margaret [2023] HKCFI 1097 and successfully opposed a claim for rectification by mistake of a settlement entered in a big money case in the matrimonial proceedings.
In gist, the Plaintiff claimed for rectification of an agreement entered between the parties as set out in a Consent Order made over 9 years ago on the ground of common/ mutual mistake or unilateral mistake. The subject matter of the dispute was a 15 million liability.
Dismissing the Plaintiff’s claim under common/mutual mistake, the Court specifically distinguished pre-contractual negotiations (subject to variations) from the final agreement evincing the common continuing intentions between the parties to the contract. So long as the Plaintiff’s claim of mistake as to terms was concerned, the Court concluded that it was not a case where the formal document failed to reflect what was previously and objectively agreed. Kowloon Development Finance Ltd v Pendex Industries Ltd (2013) 16 HKCFAR 336 was followed.
While the defendant’s culpability is irrelevant in a claim for rectification for common/mutual mistake, it is essential in a claim for rectification for unilateral mistake: Daventry DC v Daventry Housing Ltd [2012] WLR 1333. The Court will look at the subjective states of mind and the knowledge of the parties to find a case of unilateral mistake.
If a contract contains a provision which one party knows that the other party thinks is not there, or that the other party is mistaken about its meaning, the court may, as a matter of discretion, either refuse to allow him to enforce the contract as it would ordinarily be construed, or go further and rectify the written contract to give effect to what the mistaken party thought had been agreed. In the absence of actual knowledge, it is necessary to prove “dishonesty” to establish that the defendant had sufficient knowledge as to the mistake of the claimant. Commission for the New Towns v Cooper (Great Britain) Ltd [1995] Ch 259 and Global Display Solutions Ltd v NCR Financial Solutions Group Ltd [2021] EWHC 1119 affirmed.
Of an interesting note, it was once raised by the Plaintiff that adverse inference should be drawn against the Defendant for not calling one of her then legal representatives to give evidence. Without showing a case for that alleged key witness to answer and given the development of the evidence, the Court thought it cannot be said that the alleged key witness might have material evidence to give. By the same vein, the Plaintiff’s then legal representatives’ admission of oversight on their part could not secure a claim for rectification.
Au Lut Chi and Hannah Tang, led by Jason Pow SC, instructed by Cheng Alvin & Rosaline Choy, acted for the Defendant in securing the dismissal.
LC was called to the Bar in 2013. He has a civil practice and is regularly instructed in contentious probate, administration of high value estate, trust, land, commercial, civil fraud litigation and personal injuries matters.
LC is a contributor to numerous practitioners’ texts, including the Hong Kong Civil Procedure and Atkin’s Court Forms Hong Kong (Companies (General)).
Click here to view more about LC.
Hannah was called to the Bar in 2022. She is developing a broad civil and criminal practice and is regularly instructed in matters related to commercial litigations, lands, chancery matters and crimes.
Click here to view more about Hannah.