Solle v Butcher
Lord Denning's equitable jurisdiction to rescind for common mistake, later held to be wrong in Great Peace Shipping.
Facts
Mr Butcher let a flat to Mr Solle for seven years at £250 a year. Both parties believed, mistakenly, that because of the extensive works that had been carried out, the flat was a new property and not subject to the Rent Restriction Acts. In fact, the flat was subject to rent control, so the rent could not lawfully exceed £140 a year unless the landlord had served a notice before the lease, which he would have been entitled to do and which would have allowed a higher rent. Mr Solle later sued to recover the excess rent he had paid.
Legal principle
The Court of Appeal held, by a majority, that the lease was not void at common law, but that it could be set aside in equity because of the common mistake. Denning LJ said that a contract is liable in equity to be set aside if the parties were under a common misapprehension either as to facts or as to their relative and respective rights, provided that the misapprehension was fundamental and that the party seeking to set it aside was not himself at fault. The court set the lease aside on terms giving Mr Solle the choice of taking a new lease at the full rent the landlord could lawfully have charged. In Great Peace Shipping v Tsavliris Salvage [2003] QB 679, the Court of Appeal held that this equitable jurisdiction was inconsistent with Bell v Lever Brothers and did not exist.
Related cases on mistake
- Associated Japanese Bank (International) Ltd v Crédit du Nord SA [1989] 1 WLR 255
- Bell v Lever Brothers Ltd [1932] AC 161
- Couturier v Hastie (1856) 5 HLC 673
- Cundy v Lindsay (1878) 3 App Cas 459
- Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2003] QB 679
- Hartog v Colin & Shields [1939] 3 All ER 566
- Ingram v Little [1961] 1 QB 31
- Lewis v Averay [1972] 1 QB 198
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