39 That e-mail contains serious errors of omission. Whilst it is true that Mr Van Roest at one stage in the negotiations argued that at review dates the rent should be adjusted according to changes to the Consumer Price Index, that was not the ultimate position which he negotiated in his dealings with Raine & Horne.
40 Nor does the lease provide for rent reviews except that it provides for changes to the rent at the commencement of each option period, if the options are exercised. It will be recalled that in the correspondence from the defendant in 2001, in which the terms of the lease were discussed, the defendant agreed to annual rental reviews.
41 Mr Van Roest did not give evidence. The e-mail of 15 October 2003 was not an accurate description of the negotiations.
42 The plaintiffs' claim for rectification was based on the principle that equity will rectify instruments so that they accord with the common intention of the parties, where that common intention can be demonstrated with appropriate clarity. The plaintiffs submit that their common intention in relation to the terms in question was clearly reflected in the terms signed by the agents and sent to the defendant, and the defendant's intention at the time in relation to those terms was clearly reflected in the document signed by Mr Van Roest and returned to Raine & Horne.
43 The position taken by the defendant was that I should infer, notwithstanding the fact that Mr Van Roest was not called to give evidence, that at the time the lease was executed the intention of the defendants had changed and that the defendant intended that the rent reviews would take place only in accordance with the lease document furnished by the plaintiffs' solicitors, whatever that document might on a proper construction mean.
44 It was submitted for the defendant that I should not infer that the defendant executed the lease under any mistake as to its terms. There was no suggestion that if the defendant did not labour under a mistake, it did anything to bring the mistake to the attention of the plaintiffs or those advising them. Whether the defendant's position be right in law or not, it does it little credit.
45 If rectification were ordered there must be an intention common to both parties at the time of the contract, to include in their bargain a term which by mutual mistake is omitted from it. (Pukallus v Cameron (1982) 180 CLR 447 at 452, 456.) The court will not order the rectification of a document embodying an agreement unless it is satisfied that the parties had a common intention which continued until execution of the agreement, which on its true construction does not accord with that intention.
46 Proof of such an intention is necessary in order to displace the hypothesis which arises from the execution of the written agreement, that it is the true agreement of the parties. (Maralinga Pty Limited v Major Enterprises Pty Limited (1973) 128 CLR 336 at 351.) It must be objectively apparent from the words or actions of each party that each party held and continued to hold a common intention on the point in question, so that each party's intention corresponds. (Bush v National Australia Bank Limited (1992) 35 NSWLR 390 at 406; Australasian Performing Right Association Ltd v Austarama Television Pty Limited [1972] 2 NSWLR 467 at 473.)
47 Although the standard of proof of such common intention remains the civil standard to the balance of probabilities, the authorities are replete with references to the need for a convincing proof, or clear and satisfactory proof, of that intent. (Pukallus v Cameron at 452; Crane v Heggemon-Harris Co. Inc. [1939] 1 All ER 662 at 669; The Olympic Pride [1980] 2 Lloyd's Rep 67 at 73.) Such evidence may include direct evidence that the parties' intention was not reflected in the written agreement, and it may also consist of facts occurring both before and after the contract was made from which inferences can be drawn as to the particular intention of the parties at the time the contract was entered into. (New South Wales Medical Defence Union Limited v Transport Industries Insurance Company Limited (1986) 6 NSWLR 740 at 752.)
48 The failure of a party to call a witness whose evidence is relevant to the issue may, in accordance with ordinary principles, give rise to the inference that the witness' evidence would not have assisted the case of the party who could be expected to call him. Other inferences available on the evidence can be drawn more readily from the failure of a witness to be called. (Winks v W H Heck & Sons Pty Limited [1986] 1 QdR 226 at 233; Anfrank Nominees Pty Limited v Connell (1989) 1 ACSR 365 at 396.)
49 I am satisfied that Mrs Garthon left the negotiation of the lease terms to her husband and to Mr Wilson. They each indicated that the terms as to the review of rent and as to the rent payable at the commencement of each option period should be as recorded in the correspondence between Raine & Horne and the defendant to which I have referred. That intention continued up to the time of the execution of the lease.
50 As the third plaintiff, Mrs Garthon, left matters of negotiation of the lease terms and content of lease documents to her husband and Mr Wilson, I am satisfied that all of the plaintiffs had the requisite intention that the lease should correspond in these respects to the terms which had been negotiated and agreed in November 2001. I am satisfied that as at 19 November 2001 that was also the defendant's intention through its relevant officer, Mr Van Roest.
51 As at 19 November 2001 there was no concluded agreement on those terms between the parties. There was some debate as to whether an agreement on terms could be inferred as having been made at the time the lessee moved into occupation of the premises in early December 2001. The defendant submitted that at that time the lease document had been forwarded to the defendant and hence the defendant's occupation of the premises in December could be referable to the terms of that document rather than the prior negotiations. That is a possible position, but in the absence of any evidence from anyone from the defendant, I do not think it is the correct inference to be drawn.
52 If the relevant date of contract is the date at which the lessee moved into occupation, I would conclude that at that time it was the lessee's intention also that the terms as to rent and rent review should be as set out in the correspondence.
53 There is no direct evidence that the defendant picked up the disconformity between the terms to which it had acceded on 19 November 2001, and the schedule to the lease. Indeed there are two pieces of evidence which suggest that that was not the position. The first is the statement of Ms Quillan to Mr Smith on 13 August 2002 that she had not picked up the mistake. She witnessed the signatures of the directors of the defendant to the execution of the lease. It would be surprising if the mistake or disconformity had been picked up by the directors but Ms Quillan, who was the Leasing Administration Manager, had not been told about the matter.
54 The second piece of evidence which suggests that the mistake escaped the defendant at the time it executed the lease was that even after the issue had been raised in 2002 the defendant for some ten months paid rent on the higher basis, which would only be consistent with there having been a rental review date on 1 December 2002. In the absence of any evidence being called by the defendant on the matter, I think the better view is that the document was executed under a mistake common to both parties.
55 Even if that conclusion is wrong the plaintiffs are still entitled to the rectification which they seek. It is well established that where a party enters into a contract under mistake on a fundamental matter, and the other party is aware of that mistake or indeed is aware that the first party is entering into the contract under some serious mistake or misapprehension about the subject matter of the term, then if the party who is not ignorant deliberately sets out to ensure that the first party does not become aware of the existence of his mistake, the mistaken party will be entitled to equitable relief as may be appropriate, including relief by rectification. (Taylor v Johnson (1983) 151 CLR 422 at 431, Riverlate Properties Limited v Paul [1975] Ch 133 at 145; Commission for the New Towns v Cooper (Great Britain) Ltd [1995] Ch 259.)
56 If Mr Van Roest had picked up the mistake in the schedule of items to the lease when the defendant executed the document, he must have been aware that the plaintiffs were proposing to execute the lease under a serious mistake or misapprehension about the terms upon which rent would be payable after the first year. That must have been apparent both because of the disconformity between the document and what had previously been negotiated and agreed, and because the document is itself self-contradictory.
57 In those circumstances for the defendant to have remained silent about the matter, and more, to have suggested amendments to the lease which did not address the mistake which on this assumption it was aware of, is for it to have engaged in conduct deliberately to ensure that the plaintiffs did not become aware of the existence of the mistake.
58 For those reasons, even if the defendant's contention that there was no common mistake or common intention is correct, the plaintiffs are still entitled to the relief which they seek.
59 The order which is sought in para 2 of the summons, after its amendment this morning, would provide for the insertion into item 15 of the schedule of items of the dates from 1 December 2002 to 1 December 2015, including the dates 1 December 2006 and 1 December 2011. In respect of those dates the proposed order would provide for rent to be reviewed according to method 3, that is to say, to current market rent.
60 However, I do not think that that is the appropriate form of amendment. The schedule of items draws a distinction between commencement dates of the term and of the renewed term on the one hand, and rent review dates on the other. Item 12 also provides that the rent from the commencement date of each renewed term will be the current market rent.
61 The amendment which is appropriate to be made to give effect to the common intention of the parties, or to relieve the plaintiffs from their mistake of which the defendant has taken unconscientious advantage, is to amend item 15 by including all of the dates specified in order 2, except the two dates in question.
62 I might add that I think it is sufficient in order to obtain rectification in the case of common intention that the Court can conclude with appropriate clarity both the substance and the detail of the precise variation that needs to be made to the wording of the instrument to give effect to that intention. (Bush v National Australia Bank Ltd at 407; Commonwealth Bank of Australia v Cluness (1997) 8 BPR 15,467 at 15,470.)
63 I do not think it necessary to make the declaration sought in para 1 of the summons, particularly as the plaintiffs' right to the order for rectification can be put on alternative bases. I make an order in terms of para 2 of the summons as amended this morning, but deleting from that paragraph the lines "1.12.2006 3" and "1.12.2011 3". I make an order in terms of para 3 of the summons.
64 At the request of counsel for the plaintiffs I also reserve further consideration of the matter before me in the event that it becomes necessary.
65 The defendant submits that each party should be ordered to pay its own costs. In my view that is inappropriate. I regard the position taken by the defendant, particularly that expressed in the e-mail of 15 October 2003, as being unconscionable, and falling well below the standards of commercial morality which the community is entitled to expect.
66 I will therefore order that the defendant pay the plaintiffs' costs of the proceedings, including any reserved costs.