Daniel Jean Mathieu Collard v Irina Elisabeth Faust [1996] ACTSC 4 (13 February 1996)

SUPREME COURT OF THE ACT

DANIEL JEAN MATHIEU COLLARD v. IRINA ELISABETH FAUST
No. SC628 of 1995
Number of pages - 12
Contract

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MILES CJ

CATCHWORDS

Contract - written agreement for lease of plaintiff's restaurant business and premises to defendant and sub-lease pending sale - agreement wholly in writing - plaintiff seeking rectification of contract due to common mistake - dispute as to agreed amount of rent for lease of business - written agreement expressly provided for $500 per month - whether subjective intention of parties was for $500 per week - plaintiff alleging common mistake and common subjective intent - onus upon party seeking rectification - evidence probative of both subjective intent and misapprehension as to writing admissible in suit for rectification - parole evidence rule inapplicable - rectification is a discretionary remedy on which the plaintiff bears the onus - proof in such cases to be clear and convincing - on the facts that onus not discharged.

The Australian Gypsum Limited v. Hume Steel Limited [1930] HCA 38; (1930) 45 CLR 54 at 64
Codelfa Construction Proprietary Limited v. State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337

HEARING

CANBERRA, 22, 23 and 24 November 1995
13:2:1996

Counsel for the plaintiff: Mr. A. Milshon

Solicitors for the plaintiff: Macphillamy Donald

Counsel for the defendant: Mr. J.D. Harris

Solicitors for the defendant: Corrs Chambers Westgarth

ORDER

THE COURT ORDERS THAT:
The claim for rectification be dismissed.

DECISION

MILES CJ This is an application made by way of originating summons for rectification of an agreement between the plaintiff and the defendant dated 8 May 1995. The agreement is described as an agreement for lease of a business (the business lease agreement). The business is a restaurant known as Alley Cats, formerly Legends, conducted by the defendant at Palmerston Lane, Manuka.

2. The rectification sought is the deletion of clause 6 of the business lease agreement and the substitution of the following:

"The lessee also agrees to pay the lessor a weekly rent in advance in
respect of the business commencing initially at $500.00 a week and
increasing by $100.00 a week at six monthly intervals."

3. The rectification could be similarly effected by deleting from clause 6 the words "month" and "monthly rent" respectively and replacing them with the words "week" and "weekly rent". In effect, the plaintiff seeks a judicial declaration that the parties agreed on payments of $500 per week increasing by $100 per week at six monthly intervals and not $500 per month increasing by $100 per month at such intervals as provided for in the document which purports to set out the terms of the agreement.

4. There are no pleadings and the issues need to be defined. It was common ground that the business lease agreement with annexures constituted the whole of the agreement between the parties. As I understand the submission of Mr. Milshon, for the plaintiff, the case is one of alleged common mistake following the reaching of an agreement by which the defendant agreed to pay, and the plaintiff agreed to accept, payment of $500 per week rising by $100 per week at six monthly intervals whilst the defendant remained in possession of the premises where the business was conducted pending completion of the sale of the business by the plaintiff to the defendant (or the expiration of 36 months whichever be earlier). There were other terms to the agreement to which reference will be made.

5. It was submitted for the plaintiff that the explanation for the mistake alleged is that each party failed to read the document properly and failed to notice the words "month" and "monthly rent" before signing the document. It is therefore appropriate to bear in mind that the case is not one in which the mistake is alleged to have been unilateral on the part of the plaintiff. In particular, it is unnecessary for the plaintiff to have to prove that the defendant signed in the knowledge that the document provided for payments by her of a lower figure than those agreed upon. The plaintiff is relieved from having to prove anything in the nature of fraud.

6. The case for the defendant is a denial that there was any agreement by her to pay $500 per week. She alleges that there was an agreement that she should pay $500 per month increasing by $100 per month at intervals of six months whilst she remained in occupation of the premises where the business was conducted. As I understand the submissions of Mr. Harris for the defendant, it was put in the alternative that it was sufficient for the defendant to defeat the plaintiff's claim if she believed that the agreement to which the parties were ad idem was for $500 a month (regardless of what was expressed in the document). As a matter of law and subject to findings of fact, the submission is, in my view, correct because such a belief is inconsistent with the plaintiff's case as to the true terms of the agreement and inconsistent with the allegation of a mistake which was common to the parties.

7. The onus of proving the common subjective intent of the parties and of the common mistake lies on the party seeking rectification: The Australian Gypsum Limited v. Hume Steel Limited [1930] HCA 38; (1930) 45 CLR 54 at 64.

8. Evidence probative of both subjective intent and misapprehension as to the writing is admissible in a suit for rectification and the parole evidence rule does not apply. In Codelfa Construction Proprietary Limited v. State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, Mason J (as he then was) at 352 described "statements and actions of the parties which are reflective of their actual intentions and expectations" as "inadmissible in aid of construction, though admissible in an action for rectification". Hence a wide range of evidence as to the conduct of the parties including conversations with third parties is admissible and needs to be considered in the present case. Nevertheless there are limits as to what is relevant even in a rectification case and I made several rulings on admissibility during the course of the hearing. The following is a summary of the agreed or uncontroversial facts established by the evidence.

9. The plaintiff has been a restaurateur in Manuka for thirteen years. He trades under the name Chez Daniel. Although Belgian by origin, he presents high class French cuisine and has a regular clientele. The restaurant has a capacity of about 60 diners. It is on the first floor of a building in the centre of Manuka overlooking the main street, Franklin Street. Entry is gained by stairs in the Style Arcade which runs from Franklin Street to Palmerston Lane.

10. The plaintiff occupies the Chez Daniel premises as a sub-tenant from Liangis Investments Pty Limited, a company controlled by a Mrs. Liangis and which holds the head lease for the Style Arcade.

11. In about February 1994 the plaintiff took over the sublease of premises where an antique business was being conducted. Those premises are in Palmerston Lane at street level next to the entrance to the Style Arcade. The head lease is also held by Liangis Investments Pty Limited.

12. The plaintiff converted the Palmerston Lane premises to a bar and restaurant called Legends and began to operate there as well as at Chez Daniel. The new restaurant is of a different character from that of Chez Daniel and is directed towards a younger and apparently less discriminating diner. It appears that he employed a chef at Chez Daniel but carried out the duties of chef at Legends himself. However, he suffered an injury which prevented him from carrying out the duties of chef and he had to employ someone else for the purpose. The cost of employing the chef made the business unprofitable and he had in mind to put it on the market for sale. He gave certain instructions to Mr. Campbell, a solicitor. However, he recovered from the injury, sacked the chef, and resumed operating both Chez Daniel and Legends while carrying out the duties of chef at the latter. The instructions to Mr. Campbell remained in abeyance.

13. The defendant, a person younger than the plaintiff, commenced working as a waitress at Chez Daniel in about February 1994. She already had experience in the restaurant trade in that capacity and sometimes as an acting manager in other restaurants in the Manuka area. By the end of 1994 she had built up sufficient expertise and experience to be able to act from time to time as the manager at Chez Daniel. She became interested in acquiring and managing a restaurant business for herself but she lacked capital. The chef at Chez Daniel at that stage was a Mr. Andrew Welsh. The defendant and Mr. Welsh discussed the possibility of pooling their resources and going into a restaurant business together in which she would be the manager and he would be the chef. Together they entered into negotiations with the plaintiff to take over Legends from the plaintiff. Each of them signed a letter of agreement dated 21 February 1995 prepared by Mr. Campbell, the solicitor, who kept the contents on his computer. On 28 February 1995 the defendant went overseas and did not return until 8 April. In the meantime Mr. Welsh decided that he did not wish to pursue the proposal to acquire the Legends business, and informed the plaintiff accordingly. He told the plaintiff that he would reconsider if the rent were reduced. Upon her return from overseas the defendant learned that Mr. Welsh had left Chez Daniel to work in another restaurant and was no longer interested in the partnership proposal. She went to see the plaintiff, who told her that the purchase had to be completed by 3 May 1995. Over the next week or two there were several discussions between the plaintiff and the defendant regarding the possibility of the acquisition by her alone of the Legends business. The method proposed by the plaintiff was as had been agreed in terms of the letter of 21 February, that is to say, by sale of the business and transfer of the existing sub-lease from Liangis Investments Pty Limited, with a further sub-letting of the plaintiff's sub-tenancy and what was called a lease of the business in the interim pending settlement of the sale and transfer. It is to be inferred from the whole of the dealings between the plaintiff and the defendant that neither party regarded the other as bound to complete the agreement set out in the letter of 21 February and that an assumption that underpinned that agreement, namely that Mr. Welsh would bring his talents and capital to its consummation, could no longer be justified. Both the plaintiff and the defendant began considering and discussing the feasibility of the business being taken over and for that purpose being run, leased and ultimately purchased by the defendant alone.

14. The letter dated 21 February 1995 addressed by the plaintiff to the defendant and Mr. Welsh, and signed by both of them, was headed "Acquisition of Legends Restaurant Manuka, Area 5 SLP 2714 Block 20 Section 1 Griffith" and referred to discussion about "the delayed purchase and interim leasing of the abovementioned premises". It continued:

"As discussed, the business of Legends is to be purchased and leased
in the interim by both you (sic) jointly on the following basis:
.....
2. LEASE
(a) A sub-lease of the Legends business (including premises in
connection with which a copy of the existing lease is attached for
your information) pending completion of the agreement to purchase.
Liangis Investments Pty Limited has already indicated its in-principle
consent to this arrangement, however, I require you to formally seek
approval in the usual way.
(b) The lease will commence 25 April 1995 and the lease rental shall
be:
(i) initially $500.00 per week paid in advance increasing by $100.00
per week at 6 monthly intervals for the rent of the business,
i.e. Legends name, goodwill, plant fixtures and chattels, together
with,
(ii) a bond of $2815.42 to be held by me representing one month's rent
in advance for the premises and;
(iii) monthly rent for the premises in accordance with the terms of
the attached lease. All payments for rent of the premises are to be
made to me prior to the commencement of each month."

15. Some particular matters arise from this letter and may be noted. First, the letter is evidence of an existing agreement, which agreement the parties contemplated would be merged in or replaced by a subsequent and more formal document. Secondly, the sub-leasing proposal clearly distinguished between, on the one hand, payments to the plaintiff for the use of the business, and, on the other hand, payment in respect of the rent of the premises. Payments in the nature of the former are of course not rent at all. The amounts of the latter payments were those which the plaintiff was obliged to pay to his landlord, Liangis Investments Pty Limited, in accordance with the sub-lease to him from that company, dated 18 March 1994. The rent reserved therein was $33,785.00 a year payable by monthly instalments of $2815.42. Thirdly, the agreement was with the defendant and Mr. Welsh jointly and not jointly and severally. It might also be noted that no time was fixed expressly for the payment of the bond and that the amount of the bond was calculated as one month's rent being paid by the plaintiff to Liangis Investments Pty Limited.

16. I turn to the disputed areas of fact.

17. There was by the middle of April 1995 some urgency to the negotiations between the plaintiff and the defendant. The plaintiff, who had not had a vacation in three years, had made arrangements to go on holidays on 3 May 1995. He was keen not to incur further liability for the rent of the Legends premises during his absence. The restaurant there ceased operating some time in about the middle of April. He had presumably made arrangements for the management of Chez Daniel during his absence, but was not concerned to do so for the management of Legends. He told the defendant that he wanted the deal between them finalised by 3 May.

18. The defendant consulted her accountant, Mr. Gallagher. Her evidence on this aspect was corroborated by that of Mr. Gallagher himself. Mr. Gallagher had already advised her in February that rental payments of $500 per week on a business that was to be purchased for $100,000 were far too high and that $500 per month would be closer to a proper figure. Mr. Gallagher repeated that advice or the thrust of it when consulted again in April. He told the defendant that the business was not profitable enough for her to be able to afford $500 per week pending its purchase. Moreover he advised her that she should take out insurance on the basis that the business was capable of generating not more than $80,000 gross income per year. The defendant was prepared to accept $80,000 as a basis for insurance against loss of income but only because she knew of a similar business which had insured for that amount. Mr. Gallagher explained his calculations to her. Although she appeared to him to accept his conclusions she did not appear to understand the reasons for them.

19. I accept the evidence of Mr. Gallagher, whom I regard as an impressive and sufficiently disinterested witness. It follows then that the defendant's evidence should be accepted so far as it is corroborated by him.

20. The defendant's enthusiasm to take over the Legends business and become a Manuka restaurant operator was such that she persisted in trying to find an acceptable way of doing so, despite the pessimism of Mr. Gallagher. She had hopes that her father, who was in Germany, would put up a capital sum which would overcome the difficulty of no longer having the support of Mr. Welsh and having the further expense of employing a chef for wages. She told various people that she was taking over Legends and expected to do so by 26 April.

21. The plaintiff in the meantime instructed Mr. Campbell to prepare a formal agreement in accordance with the letter of 21 February 1995, with the only difference that it would be the defendant alone who would be named as purchaser and lessee.

22. There is a conflict of evidence about some of what the parties said to each other in the latter part of April 1995. The plaintiff gave evidence that he told the defendant that she should make sure that she could pay the rent of $500 per week. The defendant gave evidence that she told the plaintiff that she could not afford $500 per week. These two pieces of evidence are, of course, not necessarily in conflict with each other. Both parties were optimistic in their own minds that a formal agreement would be entered into.

23. On about 20 April 1995 the plaintiff told the defendant, in response to her request, that she could have access to the Legends premises for the purpose of carrying out renovations at her own expense, as the premises were already vacant and he had paid the rent for the premises for that month. The defendant accepted the invitation, stating that the renovations could be carried out largely by herself and her friends at little expense.

24. Mr. Valter, a sales representative, gave evidence that the defendant told him at a birthday party for the plaintiff held at Chez Daniel on the night of 25 April that she would have no problem paying $500 per week for the lease of the business. Mr. Zarew gave evidence that he visited Chez Daniel in the week commencing 15 or 22 May in order to discuss with the defendant arrangements for his daughter's birthday party to be held at Legends on 26 May, and that she told him that she was "here signing lease documents" and that a rent of $500 per week had been negotiated. Mr. Ruff, an insurance broker, gave evidence that he discussed insurance matters with both parties on 30 May and that, in the presence of the plaintiff, he informed the defendant that she should be insured against gross loss of income of $80,000 per year, to which she did not demur, and he advised the plaintiff to insure for annual gross profit of $28,600, which he subsequently did.

25. According to the plaintiff, before he went on holidays on 3 May 1995, the defendant already had in her possession for signature the agreements for sale and lease. However, he gave no evidence as to how he came by this knowledge, and whilst I accept that it represents his belief, I do not accept it as evidence of the fact. I am not convinced that the documents were in existence prior to the plaintiff going on holidays on 3 May.

26. There is a conflict of evidence between that of the defendant and that of Mr. Campbell, who was not practising at the time of the hearing, about what happened following the plaintiff's departure. Mr. Campbell gave evidence that he did not in fact act as the plaintiff's solicitor, but merely allowed the plaintiff the convenience of using the data base on Mr. Campbell's computer. That data base included the letter of 21 February and could be used to generate a formal agreement incorporating the substance of the letter. Whether or not Mr. Campbell was acting as a solicitor or as a mere agent, a matter to which I shall return, it is clear that he prepared the formal agreement for sale and lease and that he did so on the authority of the plaintiff given before the plaintiff went on holidays.

27. Mr. Campbell gave evidence as to the execution of the agreement as follows. The plaintiff before departure requested him "to collect the agreement, signed by the defendant, and money on his behalf in his absence." He went to Chez Daniel about midday on 8 April 1995. He met the defendant there, she signed the agreement "in front of her witness" and she handed two copies to him which he dated 8 May. The defendant presented cash and bank cheques to him, stating that she "was paying pro rata, the balance of the monthly premises rent for May, $500 for that week's business rent beginning 8 May and $10,000 for the deposit on the purchase agreement". The defendant said further that she did not have funds to pay the bond and that it was more important to her "to pay the regular leasing commitments first". At her direction he wrote out line by line a "statement and receipt" for what had been paid. A document is in evidence as an annexure to Mr. Campbell's affidavit sworn 4 October 1995. The document is headed "Settlement Statement" and includes an entry for "business lease rent for week 8-14 May 1995" against a credit of $500. It also shows a net deficiency of $2,815.42 being an amount equal to the unpaid bond.

28. In contrast, the defendant's evidence was that she did not sign the agreement and sub-lease until 15 May 1995 on which date they were backdated to 8 May. She stated in her affidavit sworn 25 October 1995 that she went to Chez Daniel on 9 May 1995 where she met Mr. Campbell. She gave him a cheque for $10,000 for purchase of the restaurant and $2769.68 in cash. She also asked for receipts to confirm what she had paid him. They are in evidence, in handwriting, both dated 9 May. The receipt for cash includes an entry for "lease of Legends at above premises for 8-14 May 1995 $500". The defendant denied receiving the settlement statement of 8 May 1995 as deposed to by Mr. Campbell on that date or at any other time.

29. Before trying to resolve the conflict between the evidence of Mr. Campbell and that of the defendant relating to the events of 8 or 9 May, I think it desirable to examine the evidence relating to subsequent events.

30. The plaintiff's evidence was that on 15 May, the day after he returned from holidays, he met Mr. Campbell at Chez Daniel and they went together from there to a coffee shop nearby which he identified as Endeavour House. He said that Mr. Campbell presented the agreements to him already executed by the defendant and that he then signed those agreements in the presence of Mr. Campbell, who attested as witness. Mr. Campbell's evidence is not on all fours. He said that the agreements having been executed by the defendant on 8 May, they were signed by the plaintiff at Chez Daniel on 15 May, at which time the defendant was absent. The defendant's evidence is that she attended Chez Daniel when Mr. Campbell and the plaintiff were both present on 15 May and she spent some one and a half hours reading through documents which eventually both parties signed. It may be noted that the matter of the attestation of the defendant's signature was addressed in evidence only by Mr. Campbell. He said that the defendant's signature was attested "by her witness", and he was asked nothing further about this aspect. None of the persons who gave evidence were asked anything about it. Whoever the person was who signed attesting to the plaintiff's signature, he or she was not called to give evidence at the hearing. In the circumstances, I do not think that any inference adverse to either party is to be drawn from the attesting witness' absence.

31. The only other witness who shed any light on this subject at all was Mr. Zarew, who said that either in the week of 15 or 22 May but "probably in the week of 15 May" when he was getting anxious about whether the Legends premises would be ready for his daughter's birthday on 26 May, he went to Chez Daniel where he saw the defendant. The defendant told him, "I am here signing the lease documents" and assured him that the restaurant would be ready for the birthday. Mr. Zarew's evidence was, in my view, more consistent with that of the defendant than that of the plaintiff and Mr. Campbell. I see no reason to reject it.

32. The case for the plaintiff relied heavily on the conduct of the defendant after going into possession of the premises in order to establish that the defendant mistakenly believed that the agreement which she signed provided for $500 per week for lease of the business pending the sale. It is not necessary to repeat the evidence in detail. It is clear enough that the defendant received several documents and oral demands from or on behalf of the plaintiff in which it is plain that the figure "$500 per week" is used. It is also clear that several months elapsed during which the defendant did not raise any precise demur to that figure as the rental for the lease of the business. I have already referred to the handwritten receipt of Mr. Campbell dated 8 May and the settlement statement dated 9 May. Invoices for "lease rent for Legends' business" for subsequent weeks were prepared and given to the defendant by the plaintiff. I infer from their face that the invoices were prepared on Mr. Campbell's typewriter or computer. They indicate by notation (either that of the plaintiff or of Mr. Campbell) that by 5 June the defendant was regarded as overdue with her payment of the rent bond and that she began paying $500 per week on invoices which showed that amount owing for "Legends business" and other amounts including the rent bond and the rent due on the premises. One invoice also includes an amount for electricity.

33. In the last week of June the defendant had difficulty making the payments and the cheque for rent of the business for the week commencing 26 June was dishonoured. On 3 July she paid $500 in respect of the rent of the business by means of cash and cheques from customers but failed to pay the rent for the premises and also failed to pay the bond. The following day, 4 July, the plaintiff served the defendant with a notice of demand for payment of the bond and $2815.42 being the rent for the "business premises for July". The notice of demand purported to reserve the plaintiff's right to terminate the agreement and re-enter and take possession of the premises. The defendant referred the matter to Mr. Gallagher and by a letter dated 14 July she drew attention, inter alia, to clause 6 in the business lease agreement which provided for rent of $500 per month. The plaintiff responded by a fax to Mr. Gallagher (not in evidence). The plaintiff and his wife that day attended upon the defendant in the restaurant which the defendant by then referred to as Alley Cats, but which the plaintiff continued to call Legends. They endeavoured without success to have the defendant sign an acknowledgement that the rent of the business was agreed at $500 per week. In the early hours of the following day the plaintiff re-entered the premises, but in the legal proceedings which followed, the defendant was permitted to resume and remain in occupation and to continue trading pending the hearing of the plaintiff's present claim for rectification, provided that the defendant continue to pay $500 per month for the use of the business and abide by the other terms of the agreement.

34. The defendant contended that at the time of executing the documents she believed that they reflected the agreement between the parties that she was to pay $500 per month for the use of the business in addition to paying the plaintiff the $2815.42 per month for the rent of the premises. She was in some respects an evasive witness on this issue and overall she was not an impressive witness in relation to matters of financial detail. She contended that she continued in her belief that $500 per month was agreed upon for the use of the business pending sale until she consulted her accountant on or soon after 4 July 1995. On the face of it, it is difficult to accept the latter contention in view of the clear content of the various invoices served on her to which she raised no objection. However, if that evidence has any force in the plaintiff's favour, it has to be on the footing that the defendant signed the agreement in ignorance of the fact that it provided for $500 per month as rent for the business and in the mistaken belief that it provided for $500 per week, a belief which persisted until after 4 July when she consulted her accountant. The plaintiff's case is not that she signed, knowing that contrary to the terms of what they had agreed, the document mistakenly provided for $500 per month and that she refrained from disclosing her knowledge of the mistake to the plaintiff until she was no longer able to raise $500 per week, the true agreed figure. If this had in fact been the case, it would, in my view, have involved positive deceit on the part of the defendant. But no fraud is alleged. Furthermore, there is not the slightest suggestion that there was anything deceitful on the part of the defendant in any other respect, particularly in relation to the negotiations leading up to the signing of the agreements.

35. Two aspects of the case stand out relatively clearly. One was the urgency with which both parties regarded the need to close some sort of a deal. Foremost was the plaintiff's wish to get away on his long overdue leave by 3 May without leaving the premises empty. Conversely, the defendant was keen to go into occupation to carry out renovations in order to begin what was a cherished ambition nourished by the hope of a partnership with a successful chef and dashed only after it had taken firm hold. The other aspect was the lack of sophistication with which the parties went about their negotiations. The defendant was short of money and had no legal advice at all. The plaintiff was represented by Mr. Campbell but the extent to which he was represented is unclear and the position taken by Mr. Campbell is somewhat unusual.

36. Mr. Campbell was not an entirely satisfactory witness. In his evidence he was concerned to disavow that he was acting as the plaintiff's solicitor at all. He claimed that he was merely doing the plaintiff the favour of allowing the plaintiff to use the data base on his computer on which he had installed the contents of the letter of 21 February as well as some precedents for agreements of the type needed. Whether or not Mr. Campbell made any charge for his services was not the subject of evidence and for present purposes hardly matters. In my view, his role and conduct was that of a legal adviser to the plaintiff and in the plaintiff's absence he became the plaintiff's legal representative. Despite the responsibility cast upon him, he appears to have kept no notes or records of relevant conversations or events. The present dispute is due to what Mr. Campbell claimed to be a computer error in clause 6 of what he called the agreement for lease of the business. I will only say that if there is any human error involved in the preparation of the document, then it is the error of Mr. Campbell and no one else. In any event, the evidence of Mr. Campbell does not attract special weight.

37. The plaintiff I found to be an essentially honest witness, despite his obvious anger and sense of being duped. He is subject of course to the usual frailties of human recollection. The only aspects of his evidence which I think are called into question relate to the circumstances of the execution of the documents and the general nature of the negotiations between the parties once it became clear that Mr. Welsh was no longer involved and the defendant would have difficulties in taking over the Legends business on her own.

38. The plaintiff's strikingly clear account of signing the documents in the Endeavour House coffee lounge is not corroborated by Mr. Campbell except to the extent that both witnesses said that it took place in the absence of the defendant, who had already signed them. However, the defendant's account is supported by that of Mr. Zarew, a regular customer of Chez Daniel, whose evidence I have little difficulty in accepting. Mr. Zarew clearly places the date as more likely 15 May rather than 8 May and he also places the venue at Chez Daniel. For what it is worth, I think that the plaintiff must have had in mind a meeting with Mr. Campbell at which Mr. Campbell produced the receipts from the earlier meeting with the plaintiff and possibly the settlement statement of 9 May. It is to be noted that there is in evidence a second settlement statement of that date which appears to have been generated by computer. I also conclude that the defendant's account of her meeting with Mr. Campbell is more likely to be correct than the account given by Mr. Campbell. It is more likely that the meeting occurred on 9 May than on 8 May. I conclude that what was discussed were the payments which the defendant was to make under the agreement once it was executed. I further conclude that the so-called "settlement statement" dated 9 May was prepared by Mr. Campbell after the meeting with the defendant and that the defendant did not receive that settlement statement or a copy of it at any time.

39. Without presuming to reflect upon the defendant's character or personality, I think that she is a person who does not bring to financial matters the same care and precision as the plaintiff does. She was enthusiastic to achieve her ambition to go into the Manuka restaurant trade. She considered that she had the experience and skills in management and that Mr. Welsh had the experience and skills in cuisine. But her management experience does not seem to have extended to broad matters of finance. Once the partnership with Mr. Welsh slipped away from her, hopes were revived when the $10,000 deposit became available from her father. She had the sense to take financial advice. It reinforced the previous advice that the business could not justify $500 a week rent and that $500 a month was a more realistic figure especially if she were to conduct it on her own. Yet she did not give up. With the plaintiff's permission she occupied the vacant premises and engaged friends to assist in renovations at little or no cost. She was, in my view, optimistic that agreement could be reached on terms suitable to her. Until the plaintiff's departure there continued to be negotiations over various matters including the bond and payment of the deposit. She told Mr. Gallagher that the plaintiff was going to charge rent of $500 per month and that she could afford to go ahead accordingly. There is no satisfactory explanation for her informing Mr. Zarew that she was going to pay $500 a week, but I think it is likely that she was as imprecise in some of her conversations about financial details as she was in some of her evidence. I conclude that when the plaintiff went on his holiday there was still no precise agreement as to financial details. The agreement at that stage could be described as no more than an agreement in principle to take over the Legends business on terms similar to those in the letter of 21 February, but without agreement finally being reached. I accept that the plaintiff considered that there had been agreement but I am not convinced that the plaintiff and defendant were ad idem. Nor am I persuaded that the meeting between the defendant and Mr. Campbell of 9 May 1995 gave rise to a consensus sufficient to constitute an agreement containing a precise term that the plaintiff would pay $500 a week for the business together with the other payments due pending completion of the sale.

40. It was no doubt with great relief that when the formal agreement was produced to the defendant on 15 May, she saw that it provided for $500 per month, although she was shrewd enough to keep a straight face about it. The fact that the rent for the business was expressed in monthly figures was consistent with other monthly figures provided for in the lease agreement.

41. The somewhat ambiguous or inaccurate use of the terms in the agreement should not be overlooked. The document in question bears a front page entitled "Agreement for Lease of Business", yet it is not that at all. It is partly an agreement for sub-lease of premises and partly an agreement for licensing the use of a business. Rent for the sub-lease is to be distinguished from periodic payments in respect of the licence and the document makes the distinction in certain respects. But both are lumped together in the document under the term "rent" and that has a tendency to confuse. Other payments which stood to be made periodically as a result of negotiations in the light of the defendant's financial difficulties include the bond which the defendant wanted broken down into instalments, and monthly instalments at that. The result is, I think, that immediately prior to execution of the formal agreement on 15 May the defendant was still in the frame of mind that she expected that there was room for negotiation on the financial aspects, including the periodic payments for use of the business pending purchase, and that she had hopes of securing agreement of $500 per month for that component of the agreement. It is not necessary for me to make a finding as to what the defendant might have done had the agreement expressly provided for $500 a week for the rent of the business.

42. I am not satisfied that there was agreement between the parties as to the figure to be paid by the defendant for use of the business pending purchase. It is to be borne in mind that the plaintiff has sought relief by way of an order for rectification. That remedy is discretionary. The onus is on the plaintiff to prove both the facts upon which the relief is to be granted and to persuade the Court that relief by way of rectification is appropriate. Whist the onus of proving the facts is the ordinary civil onus of proof on the balance of probabilities, in a suit for rectification the proof must be clear and convincing: The Australian Gypsum Limited v. Hume Steel Limited. The facts on which the plaintiff relies in this case are not clear enough, in my view, for the Court to be convinced that the joint subjective intention of the parties was as the plaintiff claims. The claim for rectification fails. That is not to say that the plaintiff would not have been entitled to some remedy if his claim had been formulated in some other way. Nothing I have said is to be construed as a judicial declaration that the defendant is entitled to remain in possession at $500 per month. Perhaps the plaintiff could have been entitled to rescission or payments in the nature of quantum meruit. Perhaps the plaintiff is entitled to terminate the tenancy if he has not already done so. These are not matters for me in determining the plaintiff's present claim. However, this has been expensive and acrimonious litigation. If there is any hope of saving further costs and repairing the relationship between the parties, I am prepared to stand the matter over to a further date for mention. It should also be noted that there is an application by the plaintiff for delivery of possession of the premises still before the Court.

43. In the meantime I will hear the parties on costs.