Faulty sub-DMC: rectification

In Re Lee Mei Yan Kris ([2013] HKEC 382, CFI) a flat was owned by three people as tenants in common in equal shares. The flat was partitioned in 1980.  A sub-DMC was entered into but this failed to express the parties’ common intention that each was to have a one-third share of the shares attached to the flat. The assignment to one of the owners made a mistake and purported to attach 11/20 of the shares attached to the flat to the part assigned. A later purchaser sought rectification of the 1980 assignment to reflect the common intention of the tenants in common that each was to own one-third of the shares attached to the flat. This relief was granted.

Deputy Judge Marlene Ng identified the applicable principles thus:

‘a party seeking rectification for a common mistake should show that (a) the parties had a common continuing intention in respect of a particular matter in the instrument to be rectified, (b) there was an outward expression of accord, (c) the intention continued at the time of the execution of  the instrument sought to be rectified, and (d) by mistake the instrument did not reflect that common intention.’ ([19])

These conditions were satisfied here. The relief was granted ex parte since the relevant tenant in common could not be found.

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