FSHC Group Holdings Ltd v GLAS Trust Corp Ltd [2019] EWCA Civ 1361

FSHC was party to a financing arrangement requiring security over a shareholder loan. Years later, advisers could not locate documentation establishing part of that security. Accession deeds were executed to address the perceived omission. The deeds inadvertently imposed wider obligations than the parties intended. FSHC sought rectification, arguing that both sides had understood the exercise as filling the limited security gap. GLAS challenged the test used to identify their common intention, relying on the objective approach discussed in Chartbrook. The Court of Appeal reconsidered the proper foundations of the remedy.

Should the deeds be rectified to reflect the parties’ shared limited security purpose, and when is the relevant intention assessed objectively or subjectively?

The Court of Appeal upheld rectification of the accession deeds. It distinguished two bases for common-mistake rectification. Where a document fails to give effect to a prior binding contract, that contract is interpreted objectively. Where there is no such antecedent contract, the claimant must establish an actual common continuing intention, outwardly expressed and understood as shared, which the written document mistakenly failed to record.

The parties intended the deeds to fill a missing security requirement, not to impose the broader obligations they inadvertently contained. The necessary shared intention was proved. The court declined to follow the broader objective approach suggested in obiter discussion in Chartbrook. Rectification remained a remedy requiring convincing evidence, not a general means of escaping an unfavourable written agreement.

Common-mistake rectification can enforce an objectively construed antecedent contract or correct a document that fails to record the parties' actual shared continuing intention. The latter requires an outwardly expressed accord understood as common. Uncommunicated matching intentions or a preferable bargain are insufficient.

FSHC is important because interpretation and rectification ask different questions. Interpretation identifies objective meaning; rectification may require proof of what the parties actually shared and intended the document to record. The case explains why Chartbrook's obiter formulation cannot simply supply an objective test for every rectification claim. For revision, identify the claimed antecedent contract or continuing accord, show its communication and continuity, and then demonstrate the mismatch with the signed document.