“ …the best price at which the sale of the freehold interest in the Premises…..would have been completed unconditionally for cash consideration by private treaty at the date of the Landlord’s Offer Notice with vacantpossession [emphasis added] on completion of the sale assuming [the assumptions are not material to this appeal]…”
“While it must be shown what was the common intention, the exact form of words in which the common intention is to be expressed is immaterial, if in substance and in detail the common intention can be ascertained.”
“It is clear that a person who seeks to rectify a deed upon the ground of mistake must be required to establish, in the clearest and most satisfactory manner, that the alleged intention to which he desires it to be made conformable continued concurrently in the minds of the parties down to the time of its execution, and also must be able to shew exactly and precisely the form to which the deed ought to be brought. For there is a material difference between setting aside an instrument and rectifying it on the ground of mistake. In the latter case you can only act upon the mutual and concurrent intention of all parties for whom the court is virtually making a new written agreement.”
“It is a jurisdiction which is to be exercised only upon convincing proof that the concluded instrument does not represent the common intention of the parties. That is particularly the case where you find prolonged negotiations between the parties eventually assuming the shape of a formal instrument in which they have been advised by their respective skilled advisers. The assumption is very strong in such a case that the instrument does represent their real intention, and it must be only on proof which Lord Eldon, I think, in a somewhat picturesque phrase described as ‘irrefragable’ that the court can act. I would rather, I think, say that the court can only act if it is satisfied beyond all reasonable doubt that the instrument does not represent their common intention, and is further satisfied as to what their common intention was; for let this be clear that it is not sufficient to show that the written instrument does not represent their common intention unless positively also you can show what was their common intention.”
“60. In my judgment, despite the confusion in the letters, notes, drafts and correspondence of the solicitors on both sides who no doubt struggled to understand just what their clients had agreed, and despite Mr Bailey’s muddled evidence, I find that the parties were reasonably clear on what they agreed and intended, at least by and at the meeting of10 September 2002 , and that understanding between them continued up to the date of execution of the Lease. Both plainly knew what was being purchased under the pre-emption rights. The Claimant was to have a right of pre-emption to purchase Mr Zafar’s reversionary freehold interest, that is the reversion to its the Claimants’, Lease. 61. What was being purchased was in essence the capitalised value of the passing rent at the date of sale, i.e. as at the date of the landlord’s offer notice. That, after all, was what the landlord was first proposing to sell to a third party, which triggered the necessity for serving notice on the tenant. They each struggled to find a formula to assess the right price at the date of sale when the pre-emption right was exercised, whatever that was. 62. It seems to me that both clearly understood that it was the value, subject to the Claimant’s Lease, and discounting or disregarding the money the Claimants had spent on improving the Mill by i.e. the money they had invested in refurbishing the property. That makes commercial sense, otherwise the Claimants would end up effectively paying twice. Again that left Mr Zafar’s capitalised rent at 10 to 12 times i.e. as he usually did the deal. In substance in my judgment, it was the same thing. If I had to state a preference, it would be for Mr Bailey, despite his inconsistencies, i.e it was intended to be the value of the reversion as it would be on the open Market, subject to the Claimants’ Lease, but both sides, however, anticipated that that would be no more than 10 to 12 times the passing rent at the date of the exercise of the pre-emption right. The form of words used in the Lease does not achieve this purpose.”
“ 63. ……it is plain that the form of words used in the Lease did not achieve what the parties’ common intention and purpose was, and indeed the construction favoured by the independent valuer was not what the parties’ true and common intention and understanding was as well. The parties thought that the Claimant was buying the reversion, and it was that that was to be valued. Mr Bailey thought it was whatever a third party would bid for it at auction. Mr Zafar thought that he might expect 10 times the passing rent, and that was what he would get. It was, as I have previously said, in my judgment in substance the same thing, and both thought each was talking about the same thing. Both assumed it was, and would be therefore subject to the Claimants’ existing Lease.”
“Both thought they were in substance, in my judgment, talking about the same thing, albeit they might have been coming at it from slightly different standpoints.”