Monaghan County Council v Vaughan

• Jurisdiction: Ireland
• Judgment Date: 01 January 1948
• Date: 01 January 1948
• Docket Number: (1946 No. 144 P.)
• Court: High Court

Monaghan County Council v. Vaughan.

THE COUNCIL OF THE COUNTY OF MONAGHAN

Plaintiffs

and

MICHAEL VAUGHAN

Defendant.

(1946 No. 144 P.)

Contract - Rectification - Written contract not correctly representing terms of prior agreement between parties - One party only aware of error in written contract - Whether principles of law relating to mutual mistake applicable - Whether plaintiff estopped from seeking rectification by reason of error having been caused partly by his negligence - Contract requiring seal of local authority - Whether capable of rectification by the Court - Local Government (Ir.) Act, 1898 (61 & 62 Vict. c. 37), s. 100.

The plaintiffs, who were the owners of a ruined building which they wished to have demolished and removed from its site, caused an advertisement to be inserted in a newspaper inviting tenders for the work, and subsequently accepted, in writing, a written tender submitted by the defendant. The intention of the plaintiffs in inserting the advertisement and accepting the tender, was that the defendant should pay to the plaintiffs a sum of £1,200 in return for the concession granted to him whereby, in consideration of his removing the debris and clearing the site, he should have the right of disposal for his own benefit of the material so to be removed by him. Both the advertisement and the tender were ambiguous in terms, and after the conclusion of the work the defendant contended that the effect of the agreement between the parties was, and had in fact been intended by him to be, that he should be paid the sum of £1,200 by the plaintiffs, and not that he should pay that sum to the plaintiffs, in respect of the work so carried out. In an action by the plaintiffs to have the written contract rectified on the ground of mistake, the trial Judge found that the intention of both parties throughout had been that the defendant should pay to the plaintiffs the sum in question, and held that the case constituted one of mutual mistake, and that for the purposes of the application of the principles of law applicable to mutual mistake, it was immaterial that one of the parties was, at all material times, aware of the mistake in the instrument sought to be rectified.

The principle of law stated in Fowler v. Fowler, 4 De G. & J. 250, at p. 265, applied.

Held further, that while there may have been a degree of negligence on the part of the plaintiffs and their officials in the manner of drawing up the advertisement and completing the contract, such negligence did not constitute a ground of defence to an action for rectification of the contract on the ground of mutual mistake.

Held further, that the provisions of the Local Government (Ir.) Act, 1898, requiring the seal of the plaintiff council to a contract in writing by the council did not preclude the rectification by the Court of such a contract to which the council was a party.

The principles laid down in United States v. Motor Trucks Ltd, [1924] A. C. 196, at p. 200, applied. The reasoning of Clauson J. in Shipley U.D.C.v. Bradford Corporation, [1936] Ch. 375, at p. 398, adopted.

Witness Action.

The plaintiffs in the month of September, 1945, by advertisement published in a number of newspapers, invited tenders for the demolition according to a specification of the workhouse buildings at Clones, County Monaghan, and on 5th October, 1945, the defendant sent a written communication in the following terms to the plaintiffs:—"Tender for demolition of Clones Workhouse according to specifications, price £1,200, Michael Vaughan." On 13th October, 1945, the defendant, by telegram, confirmed the figure of £1,200, and in a letter dated 16th October, 1945, he said:—"I wish to confirm my price for demolition of Clones Workhouse, price £1,200." By letter dated 6th November, 1945, the defendant was notified by the plaintiffs that his offer had been accepted subject to his entering into a bond in accordance with the specifications. The particular form of tender usually adopted by the plaintiffs in connection with contracts of this nature was not supplied to the defendant for completion.

A formal contract which was subsequently prepared for the purpose of embodying the terms of the agreement between the parties, and duly executed by both parties, provided that the said sum of £1,200 should be paid by the plaintiffs to the defendant in respect of the demolition work so to be carried out. Pursuant to the provisions of the contract, the defendant commenced work on the demolition of the workhouse, and at the date of the commencement of the proceedings he had demolished and removed a considerable portion of the building, having disposed of the materials by sale.

The plaintiffs, in their statement of claim, alleged that the formal contract as so prepared and executed did not correctly embody the terms of the common agreement between the parties, and that it should have provided that the said sum of £1,200 be paid by the defendant to the plaintiffs, and had been executed by them in the erroneous belief that it so provided. They further alleged that the error in the formal contract was a mistake common to both parties or, alternatively, that it was made by them alone and that the defendant had been cognisant of the error and, with intent to take advantage of it and in the hope of profiting improperly by it, had deliberately refrained from bringing the error to the notice of the plaintiffs, such conduct amounting to fraud or being equivalent to fraud.

The plaintiffs accordingly claimed (a) rectification; (b) alternatively, rescission with a direction to the defendant to account to the plaintiffs for the moneys received by him from the sale of materials and a declaration that the defendant was entitled to be paid by the plaintiffs on the basis of aquantum meruit; (c) damages for fraud; (d) further and other relief; (e) costs.

The defendant in his defence denied that his tender was an offer to pay to the plaintiffs the said sum of £1,200 or that it was so accepted by them, and further denied that the provision in the contract for the payment to him was an error and pleaded that if that provision was an error he had been unaware of the fact. He also denied all allegations of fraud, and claimed that, by virtue of s. 100 of the Local Government (Ir.) Act, 1898 or, alternatively, s. 201 of the Public Health (Ir.) Act, 1878, the agreement between the parties prior to the execution of the formal contract was void as not being under seal, and that the plaintiffs' claims to rectification or rescission were not sustainable in law. The defendant also pleaded negligence by the plaintiffs, laches and acquiescence.

The evidence adduced at the hearing is sufficiently referred to for the purpose of this report in the judgment of Dixon J. post.

Dixon J. :—

I have had an opportunity of considering fully the facts in this case and of considering the numerous authorities opened to me by counsel. The case has been so well presented to the Court by counsel for each party, that I feel that I can give judgment now while the facts are fresh in my mind.

My view of the facts in the case is this. At the close of the plaintiffs' case, I had no doubt (and still have none), that a mistake was made by them in the written form of...