This is a claim for rectification of an agreement (“the Sale Agreement”) dated 1st December 2004 and completed on that day for the sale of the freehold of a substantial office block known as Northway House, 1379 High Road, Whetstone, London N20. The claim is made by the purchaser under the Sale Agreement, Transview Properties Limited (“Transview”) against the vendor, City Site Properties Limited (“CSP”). Immediately prior to the sale, Transview was CSP’s lessee of the whole of the property.

The purchase price under the Sale Agreement was £13.5 million. Although nowhere so stated in the Sale Agreement, £2.5 million of that amount was provided to Transview on completion by Woodvale Estates Limited (“Woodvale”), CSP’s parent company, secured by a second charge of the property ranking behind a first charge to Barclays Bank Plc, the lender of substantially the remainder of the purchase money to Transview.

The Sale Agreement also contained provision for payment of overage to CSP upon either or both of the re-sale of the property by Transview at a profit (“the Disposal Overage”) or the obtaining of planning permission for the residential development of the property (“the Planning Overage”). In each case, CSP was to be entitled to 50% of the increase in value obtained by the disposal or attributable to the grant of planning permission. Disposal Overage was only payable if the disposal preceded the grant of planning permission. Planning Overage was to be reduced by the amount of any Disposal Overage already paid. The overage provisions are set out in Schedule 3 to the Sale Agreement. Transview was at the time of the Sale Agreement in arrears of rent due to CSP and, by clause 12, the Sale Agreement made provision for payment of those arrears by six equal monthly instalments commencing on 25th December 2004.

Transview seeks by its rectification claim to have inserted into the Sale Agreement, as paragraph 2.3 of Schedule 3 thereto, the following provision:

Transview’s case for rectification is pleaded, in the alternative, both in common mistake and in unilateral mistake. As the result of disclosure of documents and the provision of witness statements, its claim had been pursued at trial purely on the basis of unilateral mistake. In short, Transview claims that, paragraph 2.3 having been specifically included by CSP’s solicitors in a travelling draft of the Sale Agreement on 29th November 2004, it was thereafter removed by CSP by means of conduct amounting to sharp practice, without Transview becoming aware of its removal.

CSP’s case is, in outline, that paragraph 2.3 was deliberately removed from the Sale Agreement by mutual consent, upon the basis that a broadly equivalent provision was to be made the subject of a side letter but that, during a telephone conversation on 30th November, the condition for the abatement of the overage was agreed to be varied, such that payment by Transview of its rent arrears and of the monies due under the second charge to Woodvale had to be made within six months of the completion of the Sale Agreement rather than before any relevant application for planning permission. CSP claims that this varied abatement agreement was duly incorporated in a side letter sent by CSP to Transview on 1st December. Since those payments were not made by 1st June 2005, CSP claims still to be entitled to the benefit of the overage.

It will be apparent from that abbreviated summary that the case turns largely on factual disputes about the dealings between the parties during the very short period spanning 29th November to 1st December 2004. Nonetheless, in order to bolster the probability of their competing accounts of those events, and to highlight the alleged improbability of the rival accounts of their opponents, the parties have deployed evidence and submissions relating to the whole of the lengthy negotiation of the sale, and a substantial part of their conduct subsequent to 1st December 2004, part of which is relied upon by CSP in support of a submission that, even if otherwise entitled to rectification, Transview lost its rights by laches and/or acquiescence.

By contrast, there has been no dispute about the applicable law which, in relation to unilateral mistake rectification, was reviewed by the Court of Appeal as recently as March 2008 in Chartbrook Limited v. Persimmon Homes Limited [2008] EWCA Civ 183. On the view which I have formed about the facts, it is not necessary for me to set out the applicable legal principles, which are both well known and well settled.

It might have been expected that a £13 million commercial property transaction negotiated in 2004 between substantial business concerns and completed with the assistance of experienced solicitors would be so heavily documented as to leave little room for factual dispute. This has proved to be far from the case. For a start, neither party’s solicitors’ files relating to the transaction have survived intact. I was told that Transview’s solicitors, Evans Dodd, suffered a catastrophic computer breakdown in the course of which their electronic files and relevant emails were lost. For reasons which were not explained in any detail, CSP’s solicitors Jeffrey Green Russell’s physical files have not survived intact either. Furthermore, neither side has waived privilege in relation to legal advice in connection with the transaction.

The archiving of relevant documents concerning the transaction by each of the companies appears if anything to have been even less satisfactory. A feature of the case is that both sides’ pleaded account of the transaction materially changed during the course of the litigation, due apparently to the late discovery of highly relevant documents which were unavailable as aids to the recollection of those involved in the transaction when statements of case were first exchanged.

Nonetheless, the successive drafts of the Sale Agreement have survived, together with relevant Heads of Terms which preceded them. There is also a considerable amount of surviving email traffic between the parties recording their exchanges during the negotiations. Although by no means complete, the documentation therefore affords a substantial basis for testing the differing recollections of the parties’ witnesses by reference to contemporaneous material. There are also mobile telephone records which provide some, but by no means comprehensive, assistance as to the occasions when the parties did, or did not, communicate with each other orally.

The individual most closely involved in the negotiation of the transaction on behalf of Transview was a Mr Ivor Gershfield. He had just turned 76 at the time of the Sale Agreement and, although by then retired from full-time business, remained an active participant as a consultant in relation to the activities of the group of companies of which Transview formed part, all of which were owned by the Harris Trust, of which he and his son Aaron were both discretionary beneficiaries and protectors. He and his son may therefore loosely be described as co-owners of the business. He was, both in 2004 and at trial, seriously impaired in his sight, so much so that he was obliged to read documents line by line with the aid of an illuminated magnifying glass.

Nonetheless, in the witness box, Ivor Gershfield demonstrated an impressive and sophisticated alertness of mind, a full and intelligent appreciation of the nuances of questions asked, to which he provided direct and clear answers with the assistance of an apparently good memory. He retained both composure and a sense of humour notwithstanding lengthy and vigorous cross-examination, and had evidently prepared himself very thoroughly indeed for giving evidence, by what must have been for him a difficult and painstaking review of the available documents. He was on a small number of occasions slightly evasive in certain of his answers, but never found himself having to contradict his oral evidence in the light of forgotten documents, nor was his evidence irreconcilable with the documents save in one very important respect to which I shall return. He was, at first sight, and in particular for a man of his age, an impressive and apparently credible witness.

The principal difficulty with Ivor Gershfield’s evidence, as with that of most of the other important witnesses, was that it is quite clear that the apparently vivid recollection of key events to which he deposed at trial cannot have been available to him at the time when this litigation commenced, by letter before action in March 2007, or at the time of the formulation of the Particulars of Claim (in their original form), which he signed under a Statement of Truth on 30th March. Strikingly, that pleading made no reference at all to an overage abatement provision as having been included in a draft of the Sale Agreement in the form of paragraph 2.3 of Schedule 3, and then mistakenly omitted. It relied by contrast upon a substantially different provision for abatement of the overage contained in revised Heads of Terms dated 3rd August 2004. As I shall describe in more detail, the pleading in its original form made no reference at all to the events of 29th November to 1st December about which Ivor Gershfield gave detailed oral evidence at trial.

The inescapable inference is that Ivor Gershfield’s evidence on the key events during that short period has been the result of a “refreshment” of memory which was in March 2007 simply absent, by reference to documents becoming available to him thereafter. While of course such documentary assistance does frequently refresh or bring back a reliable but previously subconscious recollection of the past, the fact that in the present case Ivor Gershfield’s account is so heavily dependent on that process of refreshment necessarily requires its credibility to be treated with considerable caution. While it may be a genuinely recreated recollection, it may equally be no more than an artificial construct. One of the unfortunate fallibilities of the human memory as a historical record is that a witness may come to believe that an artificial construct is his refreshed original recollection, and to do so perfectly genuinely, even though it be not the case.

In relation to Mr Gershfield’s evidence, and despite his generally impressive demeanour, I have been driven by my overall assessment of the probabilities to the conclusion that, although painstakingly prepared, it was a construct rather than a reliable recollection. In so saying, I acquit him of any conscious intention to mislead.

Aaron Gershfield was a less impressive witness than his father. Although the de facto managing director of the family business, he played a much less important role in the negotiation of the purchase of Northway House, being content to leave its negotiation with CSP and the necessary liaison with Evans Dodd to his father, on the basis that they would consult together on any matter of importance. Nonetheless, as will appear, he gave evidence which, if believed, would have been of decisive effect in relation to his part in the checking, signing and delivery to Jeffrey Green Russell of a side letter containing an overage abatement provision broadly equivalent to the missing paragraph 2.3.

Unfortunately, the reliability of that evidence was undermined both by Aaron’s lack of prima facie credibility as a witness and also (like his father’s evidence) by the fact that in its most important aspect, it consisted of recollection apparently refreshed after March 2007 by the study of subsequently available documents, together with prompting from Transview’s third and final witness Ian Harries.

Aaron’s evidence was generally less well prepared than that of his father, and it was, all too often, revealed by Mr Tager QC’s thorough cross-examination to be inconsistent with the documents. Although no less acutely alert to the implications of the questions asked of him, his responses were generally more impulsive and less carefully considered than those of his father, although the apparent reliability of his evidence improved a little as his lengthy cross-examination progressed.

I have nonetheless been even less able to place reliance upon Aaron Gershfield’s evidence on the key factual issues which I have to decide, for the same reason which undermined his father’s evidence, namely my conclusion after weighing all the probabilities that it was essentially a construct rather than genuine recollection, whether or not he himself believed in the accuracy of his refreshed memory.

Mr Ian Harries was the company secretary of Transview, and of other companies in the group owned by the Harris Trust, and a senior operational manager within the group’s varied businesses. He played no significant role in the negotiation of the purchase of Northway House, but was involved in the documentary process leading to its completion on 1st December. The main purpose of his evidence was to support Aaron’s account of the checking, signing and delivery to Jeffrey Green Russell of the side letter to which I have referred. Again, it seems to me that he cannot have had any relevant recollection of those events when this dispute began, for the reasons which I have explained, and his refreshed memory was based heavily upon what seemed to me to be an improbable interpretation after the event of a brief manuscript aide-mémoire of matters to be dealt with at completion, which he said he made during a brief meeting with Ivor Gershfield on 30th December. For reasons which I shall explain in due course in detail, I was not persuaded that Mr Harries’ supposed recollection of events was at all consistent with his manuscript note nor, more generally, with the probabilities of the matter. As a result, although he was at first sight an apparently careful, measured, calm and well prepared witness, I have not found myself able to place substantial reliance upon his evidence.

CSP relied on the evidence of three main and four subsidiary witnesses. First to be called was Mr Louis Goodman, the owner of 40% of the shares in City Site Estates Limited (“CSE”), the parent company of the group of which CSP formed a part. Like Aaron Gershfield, he was, save in relation to one meeting, consulted about rather than directly involved in the negotiation of the transaction, and played no part in the necessary liaison between CSP and Jeffrey Green Russell. Although ultimately the governing mind and will of CSP in connection with the sale of Northway House, and a signatory of the important documents recording the transaction, including the rival side letter allegedly faxed to Transview upon which CSP’s case was substantially based, he played no part in the events which lie at the heart of the factual dispute.

Mr Goodman was a cheerful, slightly dogmatic and terse witness. He took full advantage of his lack of detailed involvement in avoiding becoming engaged in Lord Grabiner QC’s cross-examination at any level of significant detail. In the end, his lack of relevant evidence about the key matters in dispute means that it unnecessary for me to form any considered view about his reliability.

CSP’s main representative in the negotiations was Mr Thomas James McCain. He was trained as a surveyor and had been employed by CSE since 1989, first as Property Manager and later as Investment Manager, becoming a director of CSE in 2006. He was therefore by the relevant time highly experienced in property transactions, and appears to have been given full authority by Mr Goodman to handle the sale of Northway House, and to give all relevant instructions to CSP’s solicitors Jeffrey Green Russell.

He wasted no words in giving evidence, appearing at times almost tongue-tied, and seemed throughout his cross examination to be adversely affected by a degree of nervousness about the process. He was taken to task by Lord Grabiner in cross examination for deliberately downplaying his level of knowledge about property transactions in general, and the present transaction in particular. To an extent I consider that this criticism was well made. Mr McCain did not come across in the witness box as the seasoned property man that his long career, backed up by Mr Goodman’s fulsome testimonial, suggested.

Nonetheless he gave clear and consistent evidence about the key factual issues which was generally consistent with the contemporary documents, save in one important respect, where his departure from the chronology demonstrated by the documents mirrored a similar departure by Ivor Gershfield. He was on numerous matters accused by Lord Grabiner of telling deliberate untruths. I did not find him to be a dishonest witness, save for one occasion when he lied about a minor matter to avoid embarrassment. This concerned the date when CSP began negotiations with a potential alternative purchaser for the property.

As with Ivor and Aaron Gershfield, much of Mr McCain’s evidence about the key factual issues was, I am sure, the product of reconstruction after the event rather than continuous recollection. It is clear from CSP’s original response to this claim, both in correspondence and in its original Defence, that Mr McCain’s evidence was simply unavailable to him in March 2007, and only became available after his discovery in a filing cabinet in his office of the side letter signed by Mr Goodman, upon which CSP’s factual case, as pleaded in its Amended Defence, is heavily based.

In terms of prima facie credibility Mr McCain’s evidence fell somewhere between that of Ivor Gershfield and his son. He was neither an impressive nor particularly unimpressive witness. In the end my assessment of the overall probabilities in the light of the contemporary documents has largely governed the extent to which I have been able to accept his evidence.

CSP’s third main witness, and the last to be cross examined, was Mr Merter Hilmi, a solicitor and in 2004 a salaried partner with Jeffrey Green Russell. He had the conduct of that firm’s retainer by CSP in connection with the sale of Northway House, and liaised closely with Mr McCain, as he had done on numerous previous transactions since 1999. He left Jeffrey Green Russell in March 2007 to set up his own firm, taking CSP’s property work with him, and it was at that point that his file in relation to the transaction went missing.

Mr Hilmi was a forthcoming and intelligent witness who engaged fully with Lord Grabiner’s cross examination. Although like the other main witnesses his evidence was a mixture of reconstruction and original recollection, he took considerable trouble to distinguish precisely between the two, to an extent which I found convincing and reliable. I found him to be an impressive witness, and accept his evidence, albeit that it was not of decisive relevance to the key factual issues.

All the evidence of CSP’s remaining witnesses was accepted in full without cross examination. It was mainly peripheral in its relevance, and I need say nothing about it at this stage.

The most important factual issues in this case concern what took place during telephone conversations between Ivor Gershfield and Mr McCain in late November 2004. It is therefore a paradigm case for applying the following dictum of Lord Goff in Grace Shipping v. Sharp & Co [1987] 1 Lloyd’s Law Rep. 207 at 215-6:

A proper appreciation of the overall probabilities, and of the possible motives of, in particular, Ivor Gershfield and Mr McCain, sufficient to resolve the fundamental conflict of evidence as to what took place orally between them, requires a quite detailed appreciation of the underlying background facts which had occurred by late November 2004, and some appreciation of subsequent events. It is therefore necessary for me to set out the facts at some length.

Northway House is a substantial 13 storey office block comprising some 98,000 square foot of office space, with parking facilities for over 200 cars, and occupying commanding views of substantial parts of North London. It was acquired by CSP in 1989. The main operating company within the group owned by the Harris Trust is The Heathmill Village Ltd (“HMV”) which took a business tenancy of part of the second floor of the building in 1992, thereafter expanding its occupied rented space there over the following eight years.

In March 2001 HMV took a 25 head lease on the whole of the building from CSP, at an initial rent of £950,000 with upward five yearly rent reviews thereafter. Although HMV was by then the building’s largest single occupant in terms of space, it became thereby the intermediate landlord of a considerable number of other occupying business tenants.

By 2004 it was the common perception both of CSP and HMV that it would in the medium to long term be cheaper for HMV to fund the acquisition of the freehold by bank borrowing than to continue as head lessee of the building, the interest burden being less than the anticipated reviewed rent burden under the head lease. That was and remained HMV’s principal motive for the acquisition of the building through the medium of Transview, an SPV formed for the purpose. The obtaining of a cash purchase price rather than a rental stream from a lessee of less than perfect covenant strength was, correspondingly, CSP’s principal motive in negotiating a sale.

Both parties were however aware that the conversion (or perhaps replacement) of the building for the purposes of residential use offered a potentially more profitable exploitation of Northway House, it being understood that the local planning authority was in principle sympathetic to such a change of use. The HMV group had no previous experience of or expertise in property acquisition or development, whereas the City Site group did, albeit from a base in Glasgow rather than London. Nonetheless, CSP realistically recognised that it would in practice be impossible to pursue a residential conversion or replacement of Northway House without the active cooperation and involvement of its head lessee HMV.

By 2004 HMV did not have a good record in the prompt payment of its substantial rent for the building. Aaron Gershfield told me that its business had not prospered since a relatively high point in 2001 when it acquired the head lease. On the contrary, it had been forced to make significant redundancies due to the loss of a major customer for its labour-intensive call centre business. By late 2004 HMV was actively engaged in a brand new business development in the United States of America, which was expected at least initially to constitute a substantial drain on its available resources, before yielding a net return.

Initial contact with a view to a sale was made between Ivor Gershfield and Mr McCain in 2002, and they appear to have contemplated the possibility of an outright sale for £11 million or a sale with part of the purchase price being deferred and secured by a second charge, for £11.3 million. This was more than HMV considered it likely that it could raise by a combination of borrowing and its own modest financial resources, and the proposal went no further.

On 24th March 2004 negotiations began again in the forms of heads of terms from CSP via Jeffrey Green Russell offering to sell for £14 million, with £12 million payable on completion, £1 million six months later (or, if earlier, on HMV obtaining planning permission for a change of use to residential) and a further £1 million after 12 months or upon HMV’s re-sale of the property, if earlier. The additional £2 million was to be secured by a second charge in favour of CSP. By that time it was envisaged by both parties that HMV would be raising the bulk of the purchase price by borrowing from Barclays Bank plc. Clause 7 of the Heads of Terms provided that the contract for sale should contain a joint obligation on both parties to submit a planning permission for change of use to residential within eight weeks after completion, and thereafter to prosecute it to a successful conclusion.

Further negotiations between Ivor Gershfield and Mr McCain led to the submission of a revised offer by CSP, by which the amount payable on completion was to be £11 million, and the two additional payments increased to £1.125 million each, but otherwise on the March heads of terms.

HMV were at the same time in active negotiation of a loan facility from Barclays, for which purpose Barclays obtained valuations of Northway House at £15 million and £15.5 million, and made a written facility offer of £10.989 million to Transview on 12th May. After appropriate adjustments this represented approximately 70% loan to value, but provided Transview with almost the whole of the sum payable on completion. Only five days later CSP pulled out of the negotiations. Although not disclosed to Transview at the time, CSP had obtained interest from a rival bidder at a slightly higher overall price of £13.5 million, but with £12.5 million payable on completion and a further £1 million upon the grant of residential planning permission. This led to a break in the negotiations between CSP and HMV until the rival purchaser pulled out in July.

The negotiations which led directly to the Sale Agreement resumed at a meeting in Glasgow on 30th July attended by Ivor and Aaron Gershfield, Mr McCain and Mr Goodman. After the meeting, but on the same afternoon, Mr McCain personally prepared and then emailed to Ivor Gershfield (ahead of his return to London) heads of terms providing for a sale at £13 million, with £11 million being paid on completion and £2 million paid over five years by monthly instalments of £33,333. There was to be an additional payment of what was described as a “consultancy fee” of £500,000 payable at the end of the five years. CSP were to receive a second charge as security for payment of the £2 million plus £500,000, and a planning application for a residential scheme was to be lodged at the joint expense of the parties. Following the receipt of an acceptable planning permission CSP was to receive 50% of any sum received on a sale to a third party in excess of £13 million, in which event the £500,000 final deferred payment was to be waived. The heads of terms provided for a completion target date of 29th September 2004. Mr McCain also sent a copy of the heads of terms to Mr Hilmi at Jeffrey Green Russell.

After consulting with his son, Ivor Gershfield replied to Mr McCain by email on 3rd August confirming the heads of terms as agreed save in one respect, in relation to which he said:

In cross-examination Mr McCain was eventually constrained to accept that the overage abatement provision which appeared for the first time in the August Heads of Terms had by mistake been omitted from the heads of terms which he emailed on 30th July, it having been agreed in principle at the meeting in Glasgow that day.

Both parties then instructed solicitors. Mr McCain went to Mr Hilmi at Jeffrey Green Russell. Ivor Gershfield went to Mahood Ahmed at Evans Dodd. It does not appear that either of them were specifically instructed to negotiate expressly by reference to the August Heads of Terms. Thus, in an email to Ivor Gershfield on 11th August Mr Ahmed described a conversation with Mr Hilmi in which he had been given details of the terms, which made no reference to the overage abatement, and Ivor Gershfield replied by email to the effect that:

The Gershfields’ planning for fund raising by loan and deferred payment of the purchase price did not extend to funding for the very substantial stamp duty (which in the event exceeded £500,000) which would be payable by Transview on completion, and without payment of which, registration of the transfer and of Barclays’ first charge would be impossible. There was a lengthy but inconclusive discussion between the parties as to whether this difficulty might be solved by a stamp duty saving scheme to be devised by Mr Hilmi, the benefit of which was to be shared by the parties. It came to nothing, in part because the cost and complexity of the scheme was of marginal benefit in connection with a stamp duty burden of only £500,000. The Stamp Duty problem therefore remained unresolved as negotiations continued into the autumn.

It is necessary at this stage to explore in a little detail the basis upon which Ivor and Aaron Gershfield were seeking to invite Barclays to provide substantially the whole of the money required to be paid for Northway House upon completion. The exercise is complicated by the fact that no witness was called from the bank, nor did the broker used by the Gershfields to obtain bank finance, a Mr Singh, give evidence. I draw no adverse inference from that, since the emphasis placed at trial by CSP upon Transview’s banking arrangements as explaining the motive behind Ivor Gershfield’s conduct began to emerge only when witness statements were exchanged early in 2008, and emerged fully only in the course of Mr Tager’s cross-examination.

In an email to Aaron Gershfield on 11th May 2006, at a time when the HMV group’s banking relationship with Barclays was deteriorating, a Mr Trevor Nobbs (who appears recently to have inherited the management of the bank’s side of that relationship) said this, about the Northway House transaction:

There is less corroboration of Mr Nobbs’ statement that the bank’s records showed that it had been told that about £5 million was being provided by the Gershfield family trust, and both Ivor and Aaron Gershfield were at pains to deny that this had been said, when cross-examined about it. If the bank had been so informed, it would have been untrue, as at November 2004, on the Gershfield’s case (which is common ground) that the family had no significant resources of their own with which to contribute to the purchase of Northway House.

I have concluded, on the evidence as a whole, that the transaction was probably presented to Barclays broadly on the basis summarised in Mr Nobbs’ email, namely as in substance a £16 million transaction in which the bank was invited to lend £11 million against a loan commitment of about £5 million by its customer’s family. My reasons for reaching that conclusion, notwithstanding the Gershfields’ oral evidence to the contrary, will appear as I describe the facts chronologically. In summary however, Mr Nobbs’ summary is corroborated by the fact that Ivor Gershfield took steps to try and minimise the risk that aspects of the transaction might come to the bank’s attention which would conflict with its presentation as involving a £5 million commitment by the family.

It is easy to see how a £16 million transaction supported as to £5 million by the borrower was a much more attractive basis for bank lending of £11 million than a £13.5 million transaction in which the surplus over the bank’s loan of £11 million was to be funded in effect by a loan-back by the seller.

After the hiatus caused by the fruitless search for a stamp duty saving scheme, matters got underway again in November. HMV invited Barclays to use Evans Dodd as its solicitors for the transaction, and the bank initially agreed to do so. Mr Ahmed arranged for assistance from his colleague Frances Hensen. On 9th November Mr Hilmi emailed to Ms Hensen his first draft of the Sale Agreement. It provided for a purchase for an outright payment of £13.5 million, with no reference to the deferral of any part of that sum, and for overage to be payable pursuant to Schedule 3. The draft contained no provision for overage abatement, as provided for in clause 5 of the August Heads of Terms. Since clause 5 linked the abatement of overage to an accelerated payment of a deferred £2.5 million, and the draft made no reference to that deferment, this is hardly surprising.

Terms as to deferment of the £2.5 million appear first in a draft side letter sent by Mr McCain to Ivor Gershfield by email on 15th November, providing for 54 monthly instalments of £37,000 odd, with a final payment of £500,000 in month 55. Although the draft side letter permitted early repayment by the buyer (then undefined), no reference was made to any consequential overage abatement. The draft side letter contemplated that CSP would receive a second charge to secure the deferred payment, ranking after Barclays’ first charge. The draft side letter had originally been prepared by Mr Hilmi.

The arrangements concerning the deferred payment of £2.5 million were the subject of a telephone conversation between Ivor Gershfield and Mr McCain on the evening of 15th November, from which a revealing email exchange ensued on the following day. At 10.10 a.m. Mr McCain emailed Ivor Gershfield stating his understanding, derived from Mr Singh (the broker), that Barclays were aware that CSP were to have a second charge as security for a loan of £2.5 million, asking for Ivor Gershfield’s confirmation whether or not this was so, and suggesting that the bank should, if not aware, be immediately informed. At 10.38 a.m. Mr McCain forwarded by email for Ivor Gershfield’s information advice he had just received from Mr Hilmi by email at 10.32 a.m., in the following form:

These two emails produced the following response from Ivor Gershfield, at 12.40 p.m.:

I infer that, after a discussion with Mr Singh, Ivor Gershfield persisted in his request for a company other than CSP to lend the £2.5 million, because on 17th November Mr McCain emailed his agreement that CSP’s immediate parent company Woodvale would obtain a second charge in relation to the £2.5 million “balancing payment” and that CSP would be given a third charge to secure payment of the overage.

From this exchange I also infer that Barclays were indeed unaware that £2.5 million of the purchase price was to be deferred, and that Ivor Gershfield was concerned not to draw that fact conspicuously to the bank’s attention, albeit that he was prepared to take a risk that, as advised by Mr Hilmi, the bank would in due course so conclude, by discovering the connection between Woodvale and CSP.

This exchange took place during a hiatus in the role of Evans Dodd as the intended solicitors for Transview and Barclays in connection with the transaction, which lasted between approximately 10th and 18th November. It occurred because Barclays ascertained that Evans Dodd’s professional indemnity cover was set at only £10 million, and therefore less than the amount at risk from any disastrous failure of the transaction. Attempts were made to instruct Goldkorn Mathias Gentle but, by 18th November, it appears that the Gershfields had decided to pay for any top-up cover needed by Evans Dodd, so that they resumed acting for Barclays thereafter. There is an issue which I need not resolve whether Evans Dodd’s retainer by Transview was itself terminated during that short period. For practical purposes, Evans Dodd did nothing of any consequence in relation to the transaction between their receipt of the first draft of the Sale Agreement on 9th November, and 19th November, when Mr Ahmed asked Mr Hilmi to supply the registered address of Woodvale.

In the meantime the bank had, in an instruction to Goldkorn Mathias on 16th November, requested specific confirmation “that the minimum price paid for Northway House will be £16 million”. Barclays formally sought information from Evans Dodd on 23rd November and, on the same day, received two letters from Evans Dodd, both written with the benefit of instructions from Transview. The first stated that the proposed purchase of Northway House for a price of £13.5 million was to be funded as to £10.8 million by Barclays’ loan £2.5 million by a loan from Woodvale and as to the balance of £0.2 million by Transview itself. It then referred to the overage clause in the Sale Agreement and stated that both Transview and CSP expected the overage payment to be a minimum of £2.5 million, for which CSP was to receive a third charge. It invited the bank to prepare a deed of priorities and stated that Transview’s instructions were that the requisite stamp duty of £540,000 (plus an amount to reflect the overage payment) would be made available within 30 days of completion. It concluded by inviting Barclays to consider whether to instruct Evans Dodd as its own solicitors in connection with the transaction. The second letter passed on to Barclays Transview’s instructions that the local planning authority (Barnet Council) had stated that it would not object to a change of use of Northway House to residential, subject to compliance with social dwelling requirements. The letter continued:

Nowhere in those two letters (or elsewhere) did Evans Dodd notify Barclays of the existence of any provision for abatement of the overage. The unconditional confirmation that the purchase price “will” be a minimum of £16 million was, on its face, inconsistent with the existence of any such provision. Save for Ivor Gershfield’s brief reference in his email on 11th August to “a trigger to stop the profit on the re-sale”, there is no evidence that by 23rd November Evans Dodd has been given any more specific instructions about the inclusion of any overage abatement provision. If they had been, they could not in good conscience have written to the bank in the terms of their second letter of 23rd November. It was by then expected, or at least hoped, that the transaction would complete on the following Friday, 26th November. I infer that, as at 23rd November, Evans Dodd had received no specific instructions as to an overage abatement provision.

The following day, 24th November, was taken up in finalising arrangements for loan of just under £11 million, to be secured by a first legal charge, a copy of which, executed as having been made on 24th November, was available at trial. Nonetheless, the second and third charges, together with the necessary deed of priorities, had yet to be negotiated.

On 25th November Ivor Gershfield sent two very relevant emails to Mr McCain, both of which contained a clear assumption on his part that the transaction was expected to complete on the following day. The first, timed at 7.49 a.m. said:

It is necessary to decide to what Ivor Gershfield was referring by his references to “the side letter”. There were, in all, three aspects of the transaction which, at varying times, were to be dealt with by side letter. The first was the terms of deferment of the £2.5 million to which I have already referred. By 25th November that had fallen by the wayside, since deferment had been replaced by an immediate £2.5 million loan from Woodvale, the terms of which were to be recorded in the second legal charge.

The second item concerned a refund of £125,000 of the purchase price by CSP back to Transview immediately after completion, but this had not even been raised as a negotiating item by 25th November.

The only other item calling to be dealt with by way of a side letter was of course the overage abatement provision itself. It was, at this stage, not intended that the Sale Agreement should itself include any overage abatement provision. None was included in the first draft prepared by Mr Hilmi, and Evans Dodd’s comments on that draft, sent to Mr Hilmi on 26th November made no request for its inclusion, or reference to it at all. In a supplementary witness statement, made after re-reading his 25th November emails, Ivor Gershfield concluded that the references to a side letter did indeed relate to the overage abatement provision, and Mr McCain did not in his evidence disagree. In my judgment, both witnesses were right to make that assumption.

I infer therefore that, as at 25th November, the common intention of the parties, represented for that purpose by Mr McCain and Ivor Gershfield, was that provision for abatement of overage was to be dealt with not in the Sale Agreement, but in a side letter, and that there had prior to that date never been an intention on either side that it should appear in the Sale Agreement.

A crucial question is: at whose instigation was it decided to deal with overage abatement in a side letter rather than in the Sale Agreement, as at 25th November? Neither Ivor Gershfield nor Mr McCain provided any helpful evidence about this. In his first witness statement Ivor Gershfield purported to recall that the first request for a side letter about the overage abatement provision came from Mr McCain on the evening of 29th November, and was sought on the basis that it would replicate rather than replace any similar provision in the Sale Agreement. In his supplementary witness statement Ivor Gershfield sought to re-date Mr McCain’s request as having been before 25th November (in the light of the emails which I have described), but his recollection that it was a request to replicate a provision in the Sale Agreement cannot have been correct as at that earlier date, because there existed no such provision in any draft of the Sale Agreement, and none was then proposed.

Mr McCain’s evidence was of no greater assistance. He said that Ivor Gershfield had asked for the overage provision to be removed from the Sale Agreement and placed in a side letter “shortly prior to completion”. Again, this cannot relate to a decision to use a side letter as the means of recording the overage abatement provision on or before 25th November, for the same reasons.

In that relative evidential vacuum, I have little hesitation in concluding that the initiative for the use of a side letter as the sole means of recording the overage abatement provision came from Ivor Gershfield, rather than from Mr McCain. To some extent, his 25th November emails, in particular the first of them, suggest that conclusion. More importantly, the conclusion derives from an assessment of the parties’ probable motives. Whereas I can see no reason at all for CSP to wish to include the overage abatement clause in a side letter, rather than in the Sale Agreement, I can envisage a real motive for Ivor Gershfield wishing to do so. I have referred to Barclays’ request for, and receipt of, an unequivocal confirmation that the transaction had a £16 million price tag. Disclosure in the Sale Agreement of an overage abatement provision which enabled Transview by early repayment of the £2.5 million loan to reduce the price tag to £13.5 million would cause precisely the “raised eyebrows” at the bank which Ivor Gershfield had expressed himself as being anxious to avoid on 16th November. Furthermore, the trigger actually agreed for the abatement, namely early repayment of the (by then) Woodvale loan, would have demonstrated beyond any ambiguity an inevitable connection between Woodvale and CSP which Ivor Gershfield had been equally anxious not to emphasise, for the same reason.

It is not a necessary step towards that conclusion that the Gershfields (possibly through Mr Singh) allowed the bank to think that the £2.5 million was being contributed from the resources of the family trust but plainly, if that is what had been suggested, disclosure of the overage abatement clause to Barclays would have given rise to the most serious risk that that earlier assurance would be perceived by Barclays to have been, or to have become, untrue.

I was much pressed by Lord Grabiner with the submission that, as Mr Hilmi had advised in an email copied to Ivor Gershfield, the bank could not be expected to have remained in ignorance of the connection between Woodvale and CSP. In particular, Barclays had by 25th November prepared a draft deed of priorities which on its face identified Woodvale’s registered office as being at the same address as CSP’s registered office. It is a matter for conjecture whether that realisation, which I accept probably was entertained by the in-house legal draftsman at Barclays, ever percolated through to those with executive responsibility for the transaction. It does not appear to have come to Mr Nobbs’ attention, but he was not involved in the transaction at the time.

For present purposes however, what matters is not the bank’s actual knowledge, but Ivor Gershfield’s expectation. It is clear from the email exchange on 16th and 17th November which I have described, that Ivor Gershfield did not accept Mr Hilmi’s advice that it was pointless to substitute another company for CSP as the lender of the £2.5 million. Accordingly, whatever may in fact had been Barclays’ understanding at the material time, I find that Ivor Gershfield continued to entertain a wish to avoid drawing the bank’s attention to the possibility of overage abatement, and that this played a significant part in his wish to confine the overage abatement provision to a private side letter which, according to his first 25th November email, was not to be sent to Evans Dodd, who were by then acting as Barclays’ solicitors.

Although Barclays was ready to lend on 26th November, negotiation of the second and third charges and of the deed of priorities had not by then been completed and, for understandable reasons, neither CSP nor Woodvale were prepared to complete on the basis of leaving those items outstanding. The 27th and 28th November were a weekend, and matters resumed in earnest on Monday 29th. By this time, Jeffrey Green Russell had received Evans Dodd’s detailed comments on the first draft of the Sale Agreement so that they were ready to and did respond with a second draft at 9.11 a.m. on the Monday morning.

Ms Hensen and Mr Hilmi had very different ways of amending travelling drafts. Ms Hensen’s traditional method was to make manuscript amendments of the previous draft, whereas Mr Hilmi prepared a fresh draft electronically, and invariably sent it together with a red-lined version showing precisely the amendments he had made to the previous electronic draft. In my judgment, both methods were equally effective to draw to the recipient’s attention both items added and items deleted. A feature of all the successive amendments to the draft sale agreement is that the solicitors on each side concentrated on Schedule 3, in which the overage provisions were, apart from certain definitions, exclusively contained.

For present purposes the only amendment which matters is the appearance as paragraph 2.3 of Schedule 3 of a new form of overage abatement clause in the following terms:

A number of points need to be made about this new provision. First, “Buyer” was defined in paragraph 1 of Schedule 3 as including Transview’s successors in title as owners of Northway House. Secondly, Planning Permission was defined in clause 1.1 of the draft Sale Agreement as a planning permission for the development, conversion or alteration of Northway House or part of it permitting in aggregate 70,000 square feet or more (net) of accommodation for residential use. Thirdly, the Financial Legal Charge was identified both in paragraph 2.3 of Schedule 3 and in clause 1.1 of the draft Sale Agreement as, in effect, the second charge to be granted to secure the £2.5 million loan, although this was nowhere spelt out in the Sale Agreement.

More generally, paragraph 2.3 represented a significant departure from the overage abatement provision in clause 5 of the August Heads of Terms, because it greatly reduced the scope for its implementation by requiring repayment of the £2.5 million by the time of the making of a planning application by CSP, rather than within the generous five year period originally contemplated. The additional requirement that monies due under clause 12 also be repaid within that (probably) shorter period was concerned with rent arrears.

There was much debate before me both in cross-examination and in counsel’s submissions as to the legal and practical implications of defining the trigger or condition for the abatement of overage in that way. Paragraphs 3.4 to 3.6 of this draft of Schedule 3 (also introduced by Mr Hilmi by amendment) gave CSP the discretion whether and if so when to apply for planning permission, and also a power to amend or withdraw (and immediately submit a fresh application). The relevant planning legislation, to which I was taken by Mr Tager, permits applications for outline planning permission for (inter alia) the alteration of buildings: see paragraph 1(2) and 3(1) of the Town and Country Planning (General Development Procedure) Order 1995. Although an outline planning permission is likely to involve reserved matters, it is nonetheless a planning permission for all purposes connected with the Act: see Hargreaves Transport v. Lynch [1969] 1 WLR 215.

CSP’s case was that paragraph 2.3 in that form exposed Transview to the real risk that CSP might by a speedily prepared application for outline planning permission within a few days or weeks of completion close off Transview’s opportunity to abate the overage. Transview’s case was that no serious application for planning permission (whether outline or not) in connection with a building as large and important as Northway House could realistically be prepared in much less than a year, if CSP expected to obtain a planning derived overage in any significant amount. To that Mr Tager responded that CSP had full discretion under paragraph 3.6 of this draft of Schedule 3 to amend any initially cheap and cheerful application for outline permission so as to avoid the consequence of shooting itself in the foot by excess haste.

The issue to which all this vigorous and learned debate went is whether it was conceivable that Ivor Gershfield would, as Mr McCain asserted in evidence, have later volunteered an amendment to that formula by substituting a six month deadline for early repayment, for the deadline constituted by CSP’s application for planning permission. In that context it has to be borne in mind that Ivor Gershfield was neither trained or experienced in property development, such that his view (if any) as to the risk of loss of opportunity to abate the overage constituted by the formula in paragraph 2.3 was in all probability untutored by any of the sophisticated considerations propounded by counsel in cross-examination and submissions. In his evidence, Ivor Gershfield vigorously asserted a belief that in November 2004 he would have expected a planning application to have taken eighteen months to prepare. In my judgment that supposed recollection was strongly influenced by hindsight, and I have no confidence in it as a reliable independent recollection of his actual belief as at that time.

In any event, there was no evidence of any kind before me as to the genesis of paragraph 2.3, save that it evidently came from the pen (or computer) of Mr Hilmi, and that, as might be expected, he assumed in the absence of any specific recollection that he had drafted it on his client’s instructions. Mr McCain avowed no expertise in overage provisions, let alone overage abatement provisions, and both he and Mr Hilmi said that this was the first transaction in which either of them had been involved which contained an overage provision at all.

For reasons which I have already given, the most curious aspect of the emergence of paragraph 2.3 is that it appeared in the Sale Agreement at all, rather than in a draft side letter. Ivor Gershfield’s first email to Mr McCain on 25th November had confirmed an earlier oral undertaking by Mr McCain to get Mr Hilmi to prepare a side letter. I received no cogent explanation from anyone for the change of course constituted by including it in the Sale Agreement. During closing submissions I raised the possibility that it was simply included by mistake, but Lord Grabiner pointed with some force to the fact that in their response to the second draft, Evans Dodd made no adverse comment about its appearance. The natural inference, he submitted, was that they had obtained Ivor Gershfield’s instructions to the effect that it had been intentionally included.

I am not persuaded by that submission. On the footing that Ivor Gershfield’s motive for asking Mr McCain to include an overage abatement provision in a side letter rather than in the Sale Agreement was to keep its content from coming to Barclays’ attention, it would have been in practice impossible for him to explain to Evans Dodd, while acting as solicitors for the bank, that paragraph 2.3 had been inserted into the Sale Agreement by Jeffrey Green Russell in error. As a provision plainly designed to benefit Transview he could hardly have provided Evans Dodd with any convincing explanation for an instruction to request its removal. As I see it, his only options were either to shrug his shoulders and accept the inevitability of the overage abatement provision being reported to the bank, or to persuade Mr McCain to instruct Mr Hilmi to take paragraph 2.3 out again, and replace it with a side letter, as had been contemplated on 25th November. As will appear, this second alternative is exactly what occurred, although Ivor Gershfield stoutly denied any responsibility for, or even knowledge of, its occurrence.

I have concluded that paragraph 2.3 probably was included in the draft Sale Agreement, rather than in a side letter, as the result of a mistake on the part of CSP. Whether the mistake was Mr McCain’s or Mr Hilmi’s, or simply the result of a misunderstanding between them, is unnecessary for me to decide. I should add, for completeness, that the possibility that paragraph 2.3 was included in the second draft of the Sale Agreement by mistake was not canvassed with any of the witnesses. Nonetheless, since it is evident to me that none of them had any, still less any reliable, recollection of the circumstances in which paragraph 2.3 came to be included, I am not thereby precluded from reaching the conclusion that this is indeed the most probable explanation for its inclusion.

The events of the morning of the 30th November lie at the heart of this dispute. Ivor Gershfield and Mr McCain each affected to have a clear recollection of what occurred, but their evidence about it was in total conflict. It is convenient to begin by summarising their rival accounts. Ivor Gershfield said that he was telephoned by Mr McCain and asked if he would agree that the terms of the overage abatement agreement (by then in paragraph 2.3) could be replicated in a letter, signed by Transview and delivered to Jeffrey Green Russell after the other transactional documents had been signed. He was told that CSP wanted such a letter so as to be able to explain the terms of the overage abatement provisions to third parties, such as its auditors, without having to disclose the whole agreement. After consultation with Aaron, Ivor agreed upon such a letter with Mr McCain, on the basis that Mr McCain would provide an acceptable draft. Originally, Ivor Gershfield’s evidence was that this occurred on the evening of 29th November but, as I have said, in a supplementary witness statement, after reviewing the 25th November emails, he concluded that it must have occurred on or before 25th November.

Ivor Gershfield’s evidence was that he received a satisfactory draft in an email from Mr McCain on the morning of 30th November, believing it to be intended to be additional to, rather than by way of substitution for, paragraph 2.3. Having read the draft, he telephoned Mr McCain to approve it, and Mr McCain told him that he would have the letter prepared, signed on behalf of CSP and couriered to Northway House for it to be countersigned by Transview and delivered to Jeffrey Green Russell’s offices on the following day, being by then the day planned for completion.

Since Ivor Gershfield was due to go into hospital for an operation late on 1st December, he said that he got his secretary to make a copy of Mr McCain’s side letter (“the McCain Draft”), and gave it to Mr Harries, telling him to expect a letter in those terms to be couriered from CSP the following morning, that it needed to be checked against the draft, signed by Aaron and delivered to Jeffrey Green Russell later on 1st December.

Mr Harries and Aaron took up this account by way of corroboration. Mr Harries said that he made a manuscript note to expect the side letter by courier and a note of Jeffrey Green Russell’s address, that on 1st December a signed version of the McCain Draft was duly delivered to Northway House by courier, checked by him against the draft, and given to Aaron to sign, together with the draft, so as to enable Aaron also to check the one against the other. For his part, Aaron confirmed Mr Harries’ account, said that he signed the signed letter given to him by Mr Harries after checking its text against the McCain Draft, and delivered it to Jeffrey Green Russell’s offices shortly after 6 p.m. on 1st December. Finding no-one at reception he said that he posted it through the firm’s letter box. He said that he took no copy of the signed side letter, but took home his copy of the McCain Draft, which he discovered only in 2007, after the commencement of these proceedings.

At the heart of the Gershfields’ account of these events is their purported recollection that the side letter in the terms of the McCain Draft was never intended to do more than replicate paragraph 2.3 of the Sale Agreement, so that it was appropriate for Transview to deal with it in a relatively hand-to-mouth and informal manner such as, for example, by failing to take a copy of it before delivering the countersigned letter to Jeffrey Green Russell. On their case, no part of the process was designed to add or subtract anything from Transview’s legal rights, all of which were fully recorded in the Sale Agreement. Part and parcel of that account was the Gershfields’ firm assertion that at no time until, at the earliest, March 2007 when they reviewed the Sale Agreement did they realise that paragraph 2.3 of Schedule 3 had been removed.

CSP’s case and Mr McCain’s evidence about these events is as follows. During a telephone conversation “shortly prior to completion and exchange” (Mr McCain is no more precise than that) Ivor Gershfield asked him to ask Jeffrey Green Russell to remove the overage abatement provision from the Sale Agreement and to provide for it in a side agreement to be confirmed by way of side letter, between Transview and CSP directly. He was not offered an explanation for this request, but suspected that it was connected with Ivor Gershfield’s previously expressed desire to avoid emphasising to the bank any connection between Woodvale and CSP. He instructed Mr Hilmi both to remove the overage abatement provisions from the draft Sale Agreement and to include those provisions in a side letter. He received a draft of the proposed side letter from Mr Hilmi on the morning of 30th November by email, and forwarded it to Ivor Gershfield.

Mr McCain said that he was then telephoned by Ivor Gershfield, who expressed his unhappiness with the mechanism for the overage abatement, on the basis that it left Transview exposed to CSP making a swift planning application immediately after completion. After discussion, they agreed upon a six month time limit for early repayment, in place of a time limit based upon the uncertain date of CSP’s application for planning permission. Mr McCain then amended the draft side letter to that effect, got it signed by Mr Goodman, and he then faxed the letter to Ivor Gershfield on 1st December, immediately prior to completion.

Each party, and all their relevant witnesses, vigorously denied receiving a signed side letter from the other, and neither could produce any reliable documentary evidence of its delivery.

As I have already mentioned, the recollections of these events pressed upon me by the main witnesses on each side are quite clearly entirely the result of ‘refreshment’ carried out by reference to subsequently discovered documents. When these proceedings began in the spring of 2007, neither side could remember anything about paragraph 2.3 of the Schedule 3 to the second draft of the Sale Agreement, or about any side letter relating to overage abatement. This is plain from a reading of the pleadings in their original form. Both the McCain Draft (emailed to Ivor Gershfield on the morning of 30th December) and the version of the side letter signed by Mr Goodman (“the Goodman Letter”) were discovered in what counsel described (and the witnesses agreed) as eureka moments later that year, and Transview only saw the second draft of the Sale Agreement for the first time (after December 2004) when it was disclosed by CSP during the course of the litigation. There is therefore every reason to treat the witnesses’ recollections about these critical events with the greatest of caution, and to test them by reference to a painstaking reconstruction of what can be shown to have occurred from the incomplete surviving documents, and then by reference to background, probability and motive. I therefore turn first to the process of documentary reconstruction.

The story begins with Mr Hilmi’s email to Mr McCain, sent at 11.47 a.m. on 30th November, containing what I refer to as the McCain Draft. The draft consists of more or less precisely the wording in paragraph 2.3 (of Schedule 3 to the second draft of the Sale Agreement) wrapped in a letter form, and containing a number of added terms and conditions, the first of which, in contrast with paragraph 2.3 itself, provided that:

At 11.53 a.m. Mr McCain forwarded Mr Hilmi’s email to Ivor Gershfield with the simple addition:

At some time on 1st December, a final version for signature by Mr Goodman was prepared, with the phrase “Subject to Completion” removed, the date of the letter changed to 1st December, and the phrase “Within six months after completion” was replaced by the phrase “by 1st June 2005”, it being then known that completion was taking place on 1st December 2004.

The fact that the process of revising the McCain draft into what became the Goodman Letter was carried out on Mr Goodman’s PA’s computer does not lead to the inference that Mr Goodman played any active part in that process. I am satisfied that, as Mr McCain explained, he supervised the process, made all relevant amendments first in manuscript, and then simply made use of Ms Falconer’s secretarial assistance.

Mr McCain’s evidence was that the critical amendment by which the six months from completion time limit was inserted, and which appears in draft in electronic form for the first time at 12.30 p.m. (according to Ms Falconer’s computer clock) was responsive to a request to that effect from Ivor Gershfield. His mobile telephone records do not record a call on 30th November to Mr McCain’s mobile telephone earlier than 12.35 p.m., and Ivor Gershfield was adamant that he was not a user of a landline. This is some albeit negative evidence against an inference that the critical amendment resulted from a call from Ivor Gershfield to Mr McCain, as the latter asserts. But its weight depends critically on the relevant clocks being precisely synchronised. Personal computer clocks are not continuously synchronised with GMT (or BST), even when part of a large network such as that in the Royal Courts of Justice. There was no evidence whether Ms Falconer’s computer was even on a network.

At 2.21 p.m. on 30th November Evans Dodd sent Jeffrey Green Russell their comments on the second draft Sale Agreement. They did so by faxing only those pages of the draft to which they wished to make amendments, which related again mainly to Schedule 3. As I have said, Evans Dodd did not comment on the insertion of paragraph 2.3. They did however request the insertion of a provision designed to ensure that planning permission would not be deemed to be granted earlier than four months after the completion date, apparently designed to prevent the obligation to pay planning overage being triggered any earlier than that, even if planning permission was actually obtained earlier. I raised with counsel the question whether this shed light on what might have been Ivor Gershfield’s perception as to the earliest time when planning permission might have been applied for. Lord Grabiner submitted that this was a point which, were it to be relied upon, should have been put to Ivor Gershfield in cross-examination, but was not. Mr Tager declined my invitation to consider whether to apply to recall Ivor Gershfield for that purpose, and in the circumstances I place no reliance upon that requested addition to Schedule 3 in my assessment of the relevant factual issues, including in particular Ivor Gershfield’s state of mind at the time. The proposed amendment was not in the event accepted by Jeffrey Green Russell.

The next potentially relevant document is Mr Harries’ aide-mémoire. In the form included in the trial bundles, it appears as a manuscript addition to an email from Evans Dodd to Aaron and Ivor Gershfield timed at 1.21 p.m. on 30th November, but Mr Harries asserted that his practice was to put aide-mémoires on blank pieces of paper, so that its appearance in the trial bundle must have been the result of a photocopying mistake. If that is right, it is difficult to date or time the aide-mémoire, other than by concluding that it cannot have been earlier than mid-afternoon on 30th November, since it records Evans Dodd’s inability to open a draft Transfer sent by email by Jeffrey Green Russell, due to having inadequate software, which they reported to Mr Hilmi just before 3 p.m. that afternoon.

The aide-mémoire appears in the following form:

In order to understand the aide-mémoire, it needs to be recalled that the parties to the transaction were based respectively in Whetstone, North London and in Glasgow, while their solicitors were located within a few minutes of each other, in Mount Street and New Bond Street, London W1. On its face, the aide-mémoire appears to be concerned with arrangements for completion, recording that the contract was to be delivered by email, but the transfer by courier because in its email version it could not be opened. The references to the legal charge and the deed of priority appear to be no more than an indication of the time when they were to be dealt with.

That this is the meaning to be attributed to item 2, relating to the Transfer, is precisely confirmed by Mr Ahmed’s email to Mr Hilmi at 3.20 p.m., stating:

Mr Harries said that his note opposite point 2 referring to a courier and Jeffrey Green Russell’s address was not concerned with the transfer, but with the side letter which Ivor Gershfield had told him he should expect to receive from CSP in Glasgow by courier, and which, after checking and countersignature, he was to arrange to have delivered to Jeffrey Green Russell. Mr Harries adhered to that explanation despite vigorous cross-examination. It plainly formed the basis, long after the event, of his ‘refreshed’ memory of the episode concerning the receipt, checking and handing to Aaron Gershfield of the side letter corresponding with the McCain Draft.

In my judgment this is a wholly improbable reconstruction by Mr Harries of his aide-mémoire, and its improbability undermines the rest of Mr Harries’ relevant evidence. It is improbable both because everything on the right hand side of the aide-mémoire (in relation to points 1, 3 and 4) corresponds and relates to the items on the left hand side, so that the reference to courier and Jeffrey Green Russell’s address corresponds naturally with the transfer, and also because, taken as a whole, point 2 precisely corresponds with a contemporaneous emailed request by Evans Dodd, made specifically in relation to the transfer. It follows that not only is the aide-mémoire of no evidential assistance to Transview’s case, but also that Mr Harries’ dogmatic misinterpretation of it undermines one of the few documentary foundations of the reconstruction exercise upon which its case is based.

At 10.01 p.m. on 30th November Mr Hilmi sent Mr Ahmed the third draft of the Sale Agreement, together with a red-lined version highlighting the amendments made to the second draft. Again, Schedule 3 was the part most heavily amended, and paragraph 2.3 is shown crossed out in the red-lined version. The third draft of the Sale Agreement also included an amendment to the definition of Planning Permission in clause 1.1 seeking to define it for the first time as an outline planning permission. His covering email began:

The trial bundles disclosed no documentary comment from Evans Dodd about the removal of paragraph 2.3 from the third draft of the Sale Agreement, either to Jeffrey Green Russell, or for that matter to Transview. Mr Hilmi said (and I have no reason to doubt him) that there were frequent telephone exchanges between the two firms during the course of the drafting of the documents (including the Sale Agreement) recording the transaction. I infer from the fact that the engrossment of the Sale Agreement sent by Mr Himi to Ms Hensen at 3.52 p.m. that afternoon contained (by reference to the red-lined version) yet further amendments, including the removal of “outline” from the definition of Planning Permission, that these further amendments must have been the subject of discussion between the solicitors. No-one was called from Evans Dodd and, unsurprisingly, Mr Hilmi could not after the passage of time recall any specific relevant discussions. Needless to say, the engrossment of the Sale Agreement and the Sale Agreement as executed also omitted paragraph 2.3 from Schedule 3.

But some time on 1st December, which it is impossible to pinpoint from any documentary evidence, Mr Goodman signed the Goodman Letter. Although Mr McCain’s evidence was that he recalled faxing a copy of it to Transview, there is no documentary evidence that it was ever faxed, or delivered in any other manner. Mr McCain and Mr Goodman evidently forgot all about it after completion, until Mr McCain discovered the original signed letter in a file of papers about Northway House in a filing cabinet in his office in late August 2007. No copy of it ever reached Jeffrey Green Russell in 2004. Transview was unable to locate a copy of it.

There is, equally, no documentary evidence that a side letter in terms of the McCain Draft (that is as emailed to Ivor Gershfield on 30th November) was ever prepared in a form suitable for signature by or on behalf of CSP, or that it was couriered or delivered in any other way to Transview, as Mr Harries and Aaron Gershfield asserted. Nor is there any documentary evidence of its subsequent delivery to Jeffrey Green Russell on 1st December. So far as the documents go, the earliest version of a side letter relating to overage abatement in a form suitable for signature (namely the draft timed at 12.30 p.m. on 30th November) was in the form providing for a deadline for six months for early repayment.

The documents show that the final negotiation of the second and third legal charges, the preparation of execution copies, the signing of the documents (including requisite board resolutions) and the completion of the transaction all proceeded during the afternoon and evening of 1st December, completion being timed as having taken place at 8.15 p.m. The result is that, in terms of documentary record, the transaction completed on terms which contained no provision at all for abatement of overage. Leaving aside rectification, a conclusion that the contract between the parties contained any such provision depends entirely upon the court accepting one or other of the parties’ witnesses’ reconstructed recollections, designed to show that a side letter either in terms of the McCain Draft or alternatively the Goodman Letter was delivered to the opposing party by the time of completion.

Before stating my conclusions in relation to the parties’ rival evidential cases, it is appropriate briefly to describe relevant events following completion, so as to complete the context in which those findings fall to be made. Contrary to Transview’s assurance to Barclays, communicated via Evans Dodd, the money necessary to pay the stamp duty arising on the sale was neither available nor therefore provided within 30 days of completion, or for a substantial period thereafter. The result was that neither the transfer nor any of the three charges were registered until September 2005, Barclays’ security for an £11 million loan therefore being at risk for over nine months. The risk that registration would be delayed by a failure to pay stamp duty had been appreciated by Mr Hilmi shortly prior to completion, but he pragmatically took the view that since CSP would therefore remain the registered proprietor, the non-registration of the second charge to Woodvale and the third charge to CSP represented no unacceptable risk.

So far as I can ascertain, Ivor and Aaron Gershfield allowed the transaction to complete on the basis of an assurance to Barclays that Transview would provide the Stamp Duty within 30 days, with which they had no reason to believe that Transview would be able to comply. Long after the event, the growing success of their new business in the USA provided the funds necessary to pay the stamp duty, together with interest and a penalty. In the meantime the Gershfields sought disingenuously to blame Evans Dodd for the non-payment, and then blamed Barclays for failing to provide an informally promised loan of the necessary money. I am satisfied that no such promise was made by Barclays until, if at all, well after completion, and then no doubt on the basis of a sober reflection that unless someone provided the money, the bank would face the long-term risk of remaining an unsecured creditor for a very large loan to a company of uncertain strength.

Following completion, CSP took preliminary steps towards the obtaining of planning permission but, since Mr McCain did not succeed in persuading Transview to agree to pay half the cost, nothing came of those preparations, and no planning application was in the event made. In the meantime, the 1st June 2005 (the deadline for early repayment of the £2.5 million under the Goodman Letter) came and went without any attempt by Transview to make early repayment.

In September 2006 Transview sought and obtained Woodvale’s agreement to a redemption of the second charge by settlement of the outstanding balance of the £2.5 million still unpaid. For this purpose Transview instructed Ruth Boulton at the London office of Thomas Eggar & Co, and Woodvale continued to retain Mr Hilmi at Jeffrey Green Russell. Transview offered a substantially discounted amount, and after negotiation Woodvale accepted £1.25 million, allowing a discount both for early payment (since interest did not run on the instalments) and for the benefit of closing off a continuing exposure to Transview’s credit risk.

During negotiations between the solicitors, Ruth Boulton sought to proffer the early repayment in full and final settlement of all matters arising from the sale and purchase of Northway House, a negotiating stance which Jeffrey Green Russell interpreted as seeking discharge not merely of the Woodvale charge, but of the third charge to CSP designed to secure payment of the overage. This was resisted by Jeffrey Green Russell and, in the event, not further pursued by Thomas Eggar or by Transview.

During the negotiations, Ruth Boulton sought and obtained from Mr Hilmi copies of the relevant transactional documents, including the Sale Agreement. At first, a pre-execution draft only was sent, but on 10th October Mr Hilmi sent Ms Boulton a copy of the Sale Agreement as executed, and later that day, the CSP third charge and the Deed of Priority, confirming by implication that there were no other documents relevant to the transaction known to Jeffrey Green Russell. The redemption of the Woodvale charge by early repayment then completed on 13th October.

This transaction is relevant to the issues which I have to decide, first because no reference is made by either party to the existence of any overage abatement provision, either in the Sale Agreement or in any side letter. Secondly, CSP relies upon the transaction as giving rise to a distinct defence to Transview’s rectification claim, based on laches and acquiescence.

The present dispute finally emerged in early 2007 in the context of Transview’s wish to re-finance its borrowing from Barclays, a process which necessitated the obtaining of CSP’s consent as (by then) second chargee, to the substitution of Lloyds Bank plc as a new first chargee and to a fresh deed of priorities. CSP sought to obtain, as the price of its consent, a pre-emption right in connection with any sale by Lloyds as mortgagee, so as to protect itself from exposure to the devaluation of its security in the event of a forced sale. In the event CSP did not persist in this demand, but it led to Aaron Gershfield raising for the first time in an email dated 13th March a claim that, by reference to the August Heads of Terms, repayment of the £2.5 million in less than five years meant that no Overage was payable.

This was followed up by correspondence from solicitors newly instructed by Transview, namely Hunton & Williams, initially seeking to investigate the matter, and in due course on 21st March, by a letter before action, basing itself entirely on the discrepancy between the August Heads of Terms, and the absence of any overage abatement provision in the Sale Agreement as executed. As I have already said, Transview’s original Statement of Case was based on the same approach.

I return therefore to state my conclusions on the acute conflict of evidence concerning the events of 30th November and 1st December. My findings of fact are as follows. Upon appreciating that, (in his view in error) paragraph 2.3 had been added to Schedule 3 in the second draft of the Sale Agreement by Jeffrey Green Russell, and facing the difficulty of being unable to explain to Evans Dodd why it should be removed, Mr Gershfield telephoned Mr McCain to request its removal, and the inclusion of its terms in a side letter, as originally planned. This may have occurred at any time from about midday on 29th November until early on 30th November, giving Mr McCain time to give Mr Hilmi the requisite instructions, leading to Mr Hilmi’s email containing what I have referred to as the McCain Draft, timed at 11.47 a.m. on 30th November.

I accept Mr Hilmi’s evidence that his instruction was simply to take paragraph 2.3 out of Schedule 3 and put it in a side letter, and that he lifted the added conditions from a Jeffrey Green Russell precedent, without giving much thought either to their spelling or to their implications.

Mr McCain then forwarded the McCain Draft to Ivor Gershfield at 11.53 a.m. and, without waiting for his response, arranged for Ms Falconer to transcribe the McCain draft onto her computer so that in its earliest form, it precisely replicated the McCain Draft.

Ivor Gershfield then telephoned Mr McCain. In my judgment it was he that requested a change in the time limit for early repayment from CSP’s application for planning permission to six months from completion, and this was duly reflected by Mr McCain in instructions to Ms Falconer to make the necessary amendments to the next draft of what became the Goodman Letter. It is necessary in this context for me to infer that Ms Falconer’s computer’s clock was running a few minutes slow or, (less probably), that the relevant conversation between Ivor Gershfield and Mr McCain took place slightly earlier than 12.35 a.m. on 30th November.

I do not accept that Ivor Gershfield asked, or that Mr McCain promised, to courier the side letter once signed by Mr Goodman from Glasgow to London in time for counter-signature and completion, nor that Ivor Gershfield told Mr Harries to expect a side letter to be couriered. In short, I reject the whole of this aspect of Transview’s evidence as a misconstruction based, after the event, on a misinterpretation of Mr Harries’ aide-mémoire, coupled with (possibly unconscious) wishful thinking. Nor do I accept that a side letter in the terms of the McCain Draft was signed by anyone on behalf of CSP, or couriered to London, or indeed delivered to Transview at all.

On the contrary, while I find that Aaron Gershfield did visit the offices of Jeffrey Green Russell on 30th November, at or about 5.45 p.m. as recorded in the firm’s visitors book for that day, this was before any side letter from CSP could, in practice, have been couriered from Glasgow to Transview in North London, checked, counter-signed and returned, and Aaron did not suggest that he delivered the side letter that day. In my judgment he made a brief visit to Jeffrey Green Russell on 30th November either to collect or to deliver relevant documents, or both, but those documents did not include any side letter..

Accordingly, I find that when on 1st December Mr McCain emailed the third draft of the Sale Agreement, from which paragraph 2.3 had by then been removed, he did so believing, correctly, that its removal had been agreed. I find that, although he probably knew that Ivor Gershfield was suffering from some unidentified illness which required his attendance at hospital, he did not know or intend that his email would not come to Ivor Gershfield’s attention, as Transview have alleged.

In my judgment, someone at Transview (and whether it was Ivor or Aaron Gershfield does not matter) was well aware by the time of completion on 1st December that paragraph 2.3 had been removed from Schedule 3. Mr McCain’s email containing a copy of the third draft of the Sale Agreement (and the red-lined version) was sent by Ivor Gershfield’s secretary to Aaron soon after receipt. The natural inference is that Evans Dodd also drew their client’s attention to the removal of paragraph 2.3, although the destruction of their computer records, and the privilege which had been maintained, coupled with the absence of any evidence from anyone from Evans Dodd, makes it impossible for me to know how that information was conveyed. I make it clear that I draw no adverse inference either from the claimed privilege or from the absence of any witness from Evans Dodd. My inference that Transview was informed of the removal of paragraph 2.3 derives both from the ordinary inference that reasonably competent solicitors would have pointed it out, and from the fact that a red-lined version of the third draft was sent direct to Transview, and emailed to Aaron. Furthermore that removal is, on the findings of fact which I have made, precisely what Ivor Gershfield requested Mr McCain to do.

I have also concluded that, in fact, the Goodman Letter was probably not delivered to Transview either. In my judgment Mr McCain simply forgot to do so, and those responsible for dealing with the matter at Transview simply failed to notice his omission. This probably occurred due to a communication failure between Ivor Gershfield, who was preparing himself to enter hospital, and Aaron Gershfield, who was by comparison with his father much less well versed in the detail of the transaction. No blame can be attached to Evans Dodd in relation to the side letter since, on my findings of fact, it was part of the Gershfields’ plan that it should not come to Evans Dodd’s attention at all.

The result was that, in my judgment, the Sale Agreement was executed in a form which was precisely in accordance with the parties’ intentions as to its form, but in the absence of any side letter, which it had been agreed between Ivor Gershfield and Mr McCain should take the form in due course adopted by the Goodman Letter.

My reasons for reaching those conclusions are as follows. First, consideration of the probabilities and of the parties’ motives strongly suggests that the initiative for Mr Hilmi’s instructions to prepare what became the McCain Draft came originally from Ivor Gershfield, rather than independently from Mr McCain. I can think of no rational reason why Mr McCain should have wanted a side letter merely replicating paragraph 2.3 for the purpose of showing to CSP’s auditors, or anyone else. By contrast, as I have explained, there was both reason and a prior track record for Ivor Gershfield wishing to have paragraph 2.3 replaced rather than merely supplemented by a side letter, and every reason why he should make that request of Mr McCain, rather than through Evans Dodd.

I regard the notion that the side letter (in the form of the McCain Draft) was to supplement rather than replace paragraph 2.3 as inherently improbable, regardless from whom came the initiative for its preparation. By contrast it is a perfectly natural inference to draw simply from the surviving documents that it was designed to replace paragraph 2.3, and that therefore, paragraph 2.3 was removed deliberately as the result of an instruction to Mr Hilmi to do so.

I also regard as highly improbable the notion that Mr McCain would, after agreeing with Ivor Gershfield that the side letter was to supplement rather than replace paragraph 2.3, then have instructed Mr Hilmi to remove paragraph 2.3. It is improbable first because dishonesty is itself inherently improbable, but secondly and more importantly, because with Transview being represented by an apparently competent firm of solicitors it seems to me quite inconceivable that Mr McCain would, if dishonestly motivated, have thought that he could get away with it. Furthermore, Mr Hilmi drew attention to the removal of paragraph 2.3 by red-lining it in the version which accompanied the third draft, and Mr McCain took the trouble to send both the clear and red-lined third draft to Ivor Gershfield.

Again, I regard the allegation that in sending the clear and red-lined versions of the third draft of the Sale Agreement to Ivor Gershfield on 1st December Mr McCain thereby intended to provide false evidence of his honesty while in reality seeking to trick him, knowing that he would not read it, as wholly improbable. Ivor Gershfield did not in his evidence suggest that he told Mr McCain precisely when he would be admitted to hospital, and in fact this did not occur until that evening. While I accept that Ivor Gershfield did not go into the office on 1st December, there is no evidence at all that he informed Mr McCain that he would not be doing so, or that, for example, he told Mr McCain that an email sent to him that day would not (as in fact it was) be picked up and sent to Aaron, or otherwise be dealt with in a responsible and efficient manner.

It follows that I wholly reject the central plank in Transview’s case, that the removal of paragraph 2.3 from the Sale Agreement was achieved by some form of trick, or by anything coming anywhere near sharp practice. On the contrary, its removal was both requested by Transview, and communicated by CSP, both directly and through its solicitors, in a conspicuous and conscientious manner.

Turning to the substitution of the six months’ time limit for the planning application time limit in what became the Goodman Letter, my conclusion that this was, again, requested by Ivor Gershfield derives principally from the evidence of the amendments which caused the McCain Draft to be changed into what became the Goodman Letter and, again, from the complete improbability that Mr McCain, even if dishonestly motivated, would have thought that he could have made such change and get away with it, if he had not been asked to do so. It is, furthermore, very difficult to see why McCain, who was apparently perfectly content with a planning application time limit when forwarding the McCain Draft to Ivor Gershfield should, of his own motion, have become unhappy with it shortly thereafter. If CSP really wished to close off Transview’s opportunity to avail itself of the overage abatement provision, then it could do so by making an early planning application. Originally, in the March heads of terms, it had been contemplated that an application for change of use would be made within four months of completion, and Schedule 3 as finally agreed gave CSP every opportunity to amend an early planning application so as to get it into a form more likely to produce a rewarding overage. By contrast, a six months’ time limit would take it beyond CSP’s power to prevent Transview abating the overage within six months, if it could find or if necessary borrow the money to do so within that period.

By the same token, I reject the numerous arguments advanced, both in evidence by Ivor Gershfield and in submissions by Lord Grabiner, in support of the proposition that Ivor Gershfield would not in his right mind have dreamt of substituting a six months’ time limit for a planning application time limit. First, the March heads of terms contemplated a four month time limit for making a change of use application. Although this may be simpler than a planning application for conversion of a building, there is no evidence that Ivor Gershfield was sufficiently experienced in planning matters to appreciate that. In my judgment his evidence that a planning application of the type contemplated by Schedule 3 would take more than a year was the result of the benefit of hindsight, and in particular of research in that direction taken by Transview after completion.

The point that Ivor Gershfield knew that Transview was unlikely to be able to come up with the money to meet a six month time limit is a stronger one, but I bear in mind the Gershfields’ Micawberish ‘something will turn up’ approach to finding the money to pay the stamp duty. Furthermore, if as I think probable, Ivor Gershfield regarded a planning application time limit as exposing Transview to a risk of loss of the overage abatement opportunity much sooner than six months after completion, the amendment to a six month time limit seems to me to be a sensible alteration for Ivor Gershfield to have requested, even if it gave Transview only a modest opportunity in terms of a little extra time, and certainty as to the deadline within which to try and raise the additional funds.

My rejection of Aaron Gershfield’s and Mr Harries’ evidence that they received a couriered side letter in the form of the McCain Draft, checked it, signed it and delivered to Jeffrey Green Russell on 1st December is based on a number of factors. First, it seems to me inherently improbable that Ivor Gershfield would have asked, or Mr McCain would have agreed, to courier the document from Glasgow to North London, rather than to deal with it by email or in some other quicker and more convenient manner. Much more important documents relevant to the transaction were dealt with on completion by methods that avoided couriering them from Glasgow, including the Sale Agreement and Transfer themselves, in relation to which completion took place on Jeffrey Green Russell’s assurance that they held faxed copies of documents executed by their client.

My second reason is, as already explained, my perception that the whole of Mr Harries’ and in due course Aaron Gershfield’s account of the receipt, checking, counter-signature and delivery of the side letter has been triggered by Mr Harries’ misreading of his aide-mémoire, and Aaron’s late discovery of the McCain draft, neither of those witnesses having any relevant recollection of those matters when these proceedings commenced. It is wholly unsupported by any other surviving document and requires the court to assume that they took so lightly the task of counter-signing and returning a document connected with the largest transaction in which either of them had ever been involved that they kept no copy of it for Transview’s records.

My third reason is that Aaron Gershfield’s account of his delivery of the (by then) counter-signed side letter to the offices of Jeffrey Green Russell conflicts with a significant body of evidence deployed by CSP. Aaron Gershfield’s account is that he attended Jeffrey Green Russell’s offices shortly after 6 p.m. on 1st December, found no-one at reception, and therefore posted the letter through the firm’s letter box.

In late 2004 Jeffrey Green Russell’s offices (including their reception area) lay at the end of a passage leading from New Bond Street, past the doors of adjacent premises, the passage serving as the means of access to both premises. CSP’s evidence (which was not significantly challenged in cross-examination) established first that it would be very difficult for anyone at the New Bond Street end of the passage to see whether the Jeffrey Green Russell reception was or was not manned at any particular time, without walking down the passage. Secondly the evidence showed that neither the doors at the New Bond Street end nor the doors at the inner end of the passage giving access to Jeffrey Green Russell’s reception area would have been locked until very much later in the evening. Thirdly the evidence showed that Jeffrey Green Russell employed the services of a security guard whose duty was to man the reception from not later than 5.30 p.m. (half an hour before the day receptionist left) until 8.30 a.m. on the following morning, that the security guard that day did not leave reception to patrol the building between 5.40 p.m. on 1st December and 12.30 a.m. on 2nd December, having made numerous calls to his employers from the reception area in the meantime.

Finally, although the evidence (including photographs) showed two letter boxes adjacent to the outside doors of the passageway, but none for Jeffrey Green Russell at the inner doors giving access to their reception, the evidence demonstrated that putting letters through the outside letter boxes (even if Jeffrey Green Russell’s box could be identified as one rather than the other) would simply lead to the documents falling on the floor, just inside a communal passageway behind doors which were not in any event locked.

The combined effect of all this evidence is that it is in my judgment most unlikely that Aaron Gershfield delivered the supposed side letter to Jeffrey Green Russell’s offices on 1st December. Whether his recollection is completely imagined, or reconstructed from a dim recollection of his having delivered or collected a relevant document shortly before 6 p.m. on the previous day, is now impossible to ascertain. Whatever its source, I reject the evidence that he delivered a side letter on 1st December.

Finally, my conclusion that Mr McCain failed to deliver the Goodman Letter either, so that no side letter was delivered by either side, is based primarily on the absence of any evidence that it was delivered, other than Mr McCain’s own recollection which, like so much of the re-constructed evidence in this case was plainly not available to him when these proceedings began. It seems to me that if the Goodman Letter had been delivered to Transview, Mr McCain would have sent a copy of it to Jeffrey Green Russell (there being no reason on CSP’s side for concealing it from their own solicitors). Both Jeffrey Green Russell’s archive of documents in relation to this transaction, and their full email records, have survived and have been searched, and no copy of the Goodman Letter has been found.

I have thus far described my reasons for rejecting Transview’s evidential case separately in relation to each main issue. Taken together, the considerations which I have described lead me to a clear conclusion that Transview’s account as a whole clearly fails to satisfy the balance of probabilities, let alone the requirement for convincing proof appropriate for a rectification claim, especially one necessarily involving proof of an allegation of sharp practice.

It follows from my findings of fact that Transview’s rectification claim wholly fails. There was in my judgment no intention by either party, at the time of its execution, that the Sale Agreement should contain an overage abatement clause. Even if there had been such an intention on the part of Transview, the evidence does not in my judgment begin to establish any sharp practice on the part of CSP, sufficient to ground a case in unilateral mistake rectification. On the contrary, CSP took appropriate steps to draw the removal of paragraph 2.3 to the attention of both Transview and its solicitors, in the manner which I have described.

Had there been a claim for it, I might have been disposed to rectify the contract (rather than the Sale Agreement) by some method which included an overage abatement clause in the terms of the Goodman Letter on the basis that an overage abatement provision in those terms was orally agreed on 30th November, and thereafter prepared and signed by CSP, but mistakenly not delivered to Transview before completion. But in the events which have happened such a provision would have been of no assistance to Transview, because it did not make early repayment of the £2.5 million within six months of completion.

For completeness, I should add that had I been minded, having found very different facts, to think that Transview’s rectification claim was well-founded, I would not have accepted CSP’s defence of laches or acquiescence, arising out of the 2006 early repayment and consequential redemption of the Woodvale charge. In my judgment, the facts disclose neither laches (by which I mean delay coupled with some form of relevant prejudice to the defendant) nor acquiescence (by which I mean the non-exercise of a right in circumstances where the obligor may reasonably assume that it will never be exercised). Nor would I have accepted CSP’s alternative defence, namely that the payment by Transview of a discounted sum in discharge of its obligations to pay the £2.5 million to Woodvale was in any event an insufficient performance to trigger the overage abatement, had it been conferred in terms of the McCain Draft, or paragraph 2.3.

Nonetheless the consequence of my findings of fact is that the claim must be dismissed in its entirety.