For the purposes of the doctrine of rectification in the case of a voluntary settlement it was the subjective intention of the settlor that was of relevance in determining whether the court should order rectification and an outward expression or objective communication of that intention was unnecessary in such a case.

The Court of Appeal so held when allowing the appeal of the claimants, James Harry Day and Michael Harry Day, from the order of Recorder Chapman QC made on 15 May 2012 in the Central London County Court, dismissing their claim for rectification of a conveyance of their mother’s home to herself and the defendant, Terence Anthony Day, to be held by them as beneficial joint tenants.

The mother had executed a general power of attorney in favour of a solicitor who had executed the conveyance on her behalf. The claim sought to rectify the conveyance so as to provide that the property was held by the mother and the defendant on trust for the mother absolutely. In the absence of rectification, on the mother’s death in 2008 the defendant became by survivorship the sole legal and beneficial owner of the property.

SIR TERENCE ETHERTON C said that the conveyance was in the nature of a voluntary settlement and referred to In re Butlin’s Settlement Trusts [1976] Ch 251. What was relevant in such a case was the subjective intention of the settlor. It was not a legal requirement for rectification of a voluntary settlement that there was any outward expression or objective communication of the settlor’s intention equivalent to the need to show an outward expression of accord for rectification of a contract for mutual mistake. The argument advanced on behalf of the claimants was that, on the recorder’s finding that the mother never intended to give, and never thought she had given, a beneficial interest in the property to the defendant, the claimants were entitled to rectification. Both the existence of the solicitor’s power of attorney and the scope of his authority to execute the conveyance were irrelevant. His Lordship accepted that argument on the facts of the case. The recorder’s analysis was flawed. First, the doctrine of rectification was concerned with intention, or rather the mistaken implementation of intention, rather than the power and authority to effect a particular transaction. The intention of the principal and the scope of the agent’s authority might, and often would, overlap, but they were not synonymous concepts. In the case of a voluntary settlement, rectification hinged on whether the settlor executed the settlement in the mistaken belief that it implemented his or her intention. Whether or not the settlor’s solicitor was authorised to draw up the settlement on any particular terms or, as in the present case, was acting within his actual or apparent authority in executing it on behalf of, and in the name of, the settlor was a different question. The recorder appeared to have been of the view that the solicitor had authority to execute the conveyance on behalf of the mother because he acted pursuant to a general power of attorney and that was a complete answer to any claim that the mother might have made in her lifetime for rectification of the conveyance. The mother, however, was the settlor and it was her intention and the implementation of her intention, and not the scope of the solicitor’s authority, which were in issue on the claim for rectification. Secondly, the recorder appeared to have thought it axiomatic that the general power of attorney, by virtue of its very generality, authorised the solicitor to execute the conveyance on such terms as he saw fit to facilitate the mortgage. If that was the view of the recorder, it was wrong. Thirdly, the recorder had not addressed the critical question of the mother’s actual intention and, insofar as it had any relevance to that issue, the actual instructions given to the solicitor.

ELIAS and LEWISON LJJ concurred.