FSHC Group Holdings Ltd v GLAS Trust Corporation Ltd [2019] ...

Facts

• The case involved a complex financial agreement relating to the restructuring of loan arrangements between FSHC Group Holdings Limited (FSHC) and GLAS Trust Corporation Limited (GLAS).
• FSHC sought rectification of a deed of release, alleging it mistakenly removed protection over certain assets that both parties had intended to preserve.
• FSHC argued that both it and GLAS shared the intention that the asset protection would remain and that the deed’s failure to reflect this constituted a mutual error.
• The dispute centered on whether there was a truly shared intention not captured in the final written document.

Issues

1. Whether the requirements for rectification based on mutual mistake were satisfied, particularly in proving a continuing common intention that the written instrument failed to reflect.
2. Whether FSHC had provided sufficiently clear, factual, and certain evidence to establish the existence of a mutual mistake at the time of the agreement.
3. The extent to which the court could rely on evidence of pre-contractual negotiations and the subjective intentions of the parties.

Decision

• The Court of Appeal found that FSHC had not met the high standard of proof required to establish mutual mistake justifying rectification.
• The evidence presented was insufficiently clear or certain to prove that both parties shared the same specific intention regarding asset protection at the relevant time.
• Much of FSHC’s evidence centered on its own understanding, rather than a proven mutual intention with GLAS.
• The court held that rectification is only available where it is clearly shown that the written instrument fails to record a concluded common intention.

Legal Principles

• Rectification is available to correct a written document that does not reflect the parties' true agreement due to mutual mistake, but requires strong and certain proof of a continuing common intention.
• The relevant intention for rectification is the objectively ascertainable shared goal of both parties, assessed by the facts and conduct, rather than undisclosed or private beliefs.
• Pre-contractual negotiations may be admissible to establish a shared intention, but their persuasive value depends on clarity and consistency with the final written terms.
• Private views, unclear discussions, or after-the-fact recollections are insufficient; substantial documentary or factual evidence is needed to justify altering an executed contract.

Conclusion

The Court of Appeal confirmed that rectification for mutual mistake requires compelling evidence of a shared intention not reflected in the contract and that claimants must prove this through clear, factual, and certain evidence rather than private belief or ambiguous negotiation records.