Following the rejection of its final account, Hurst brought proceedings seeking rectification to remove the relevant wording from the 27 April 2001 document and a declaration that Mr Mell did not have authority to enter into the agreement, if held that the document was in fact binding.
Reference
Hurst was successful at first instance and MLEP subsequently appealed. Lord Justice Buxton, giving the lead judgment upheld the judgment at first instance with respect to rectification on the basis that Mr Mell had been mistaken as to the content of the document, MLEP had actual or “shut eye” knowledge of the mistake and overall MLEP’s conduct was unconscionable.
The court also considered the issue of authority. It was argued that Mr Mell had no authority to vary the terms of the contract. It was held that the 27 April 2001 document was plainly not a loss and expense claim. It was rather an undertaking, said by MLEP to be binding, that it would make no loss and expense claims in respect of the periods leading up to 27 April 2001. The Court of Appeal held that the judge at first instance was fully entitled to find that no one contemplated Mr Mell as having authority to agree to so radical a departure from the process of valuation contemplated by the contract. It was held that Mr Mell did not have the authority to agree or authorise a change in the contractual machinery of that a fundamental a nature. Accordingly, this authority point was dismissed as well.
MLEP were therefore wholly unsuccessful in their appeal and ordered to pay the respondent’s costs.
*Full case details
Hurst Stores & Interiors vs ML Europe Property Ltd, [2004] EWCA Civ 490
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