How has the court interpreted a common mistake in rescission terms?
British Columbia, Canada
The following excerpt is from Yawney v. Jehring, 2006 BCSC 1017 (CanLII):
Solle v. Butcher itself provides an example of how the court did not simply grant rescission based on common mistake, but rather, fashioned terms that would do “what is practically just.” In that case, a landlord gave a tenant a 7-year lease for the market rate of 250 pounds, although both parties were ignorant that the flat was bound by rent control limiting the rent to 140 pounds. The tenant had been paying the full amount for some time before the mistake was discovered and he demanded the lower rent. Had the fact of the rent control been known before the lease was signed, the landlord could have taken simple steps that would have allowed him to charge the market rent. The court found that there was a common mistake, but they did not simply allow the tenant to take the benefit of the 7-year lease at 140 pounds. That would have been unfair to the landlord. On the other hand, they did not simply order rescission, as that would have resulted in the tenant losing his home. The court granted rescission, but only on certain undertakings being given that would allow the tenant to keep his flat while paying at or near the market rent of 250 pounds. As well, the court refused the tenant’s claim for repayment of the rent he had already paid.
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