LEGAL PRINCIPLE: EQUITY AND TRUSTS — Rectification — Privity of Contract — Stranger to Contractual Document Cannot Seek Rectification
PRINCIPLE STATEMENT
Where a document is contractual, the competence of a party to seek its rectification must be determined within the privity rule, not on the basis of a benefit that a stranger may derive from the contract.
RATIO DECIDENDI (SOURCE)
Per Ayoola, JSC, in First Fuels Ltd v. The Vessel 'Leona II' (2002) NLC-3102001(SC) at p. 14; Paras A–C.
"Where the document is not a contractual document the court may enquire whether a party seeking its rectification has sufficient interest to enable him invoke the jurisdiction of the court. Such are cases, for instance, where the person seeking rectification of a trust document is a beneficiary. However, where a document is a contractual document the competence of a party to seek its rectification must be determined within the privity rule and not on the basis of a benefit that a stranger may derive from the contract."
EXPLANATION / SCOPE
For contractual documents, only parties or privies can seek rectification. A stranger who merely benefits from the contract cannot. For non-contractual documents (e.g., trust deeds), a beneficiary may have standing. The principle applies the privity of contract rule. The court will not allow strangers to interfere with contractual documents. The rule promotes certainty and finality. The party seeking rectification must show that they are party to the instrument. The exception for trust beneficiaries is based on the nature of trust property. The court will examine the nature of the document. The principle prevents abuse of equitable remedies.
