Pitt v Holt; Futter v Futter
[2013] UKSC 26
Independent editorial summary — not the official judgment. Read the full judgment via the source link.
Ratio Decidendi
A voluntary disposition can be set aside for mistake only if the mistake is sufficiently grave. It is not enough that the claimant would not have entered the transaction but for the mistake; the mistake must make it unconscionable for the donee to retain the property.
Facts
Two appeals were heard together. Both involved transactions by trustees that had unintended adverse tax consequences.
Judgment Summary
The Supreme Court reformulated the law of mistake in relation to voluntary dispositions. Lord Walker held that the test is whether the mistake was of so serious a character as to render it unjust for the donee to retain the property.
Key Quotes
"I would provisionally conclude that the true requirement is simply for there to be a causative mistake of sufficient gravity; and, as additional guidance to judges in finding and evaluating the facts of any particular case, that the test will normally be satisfied only when there is a mistake either as to the legal character or nature of a transaction, or as to some matter of fact or law which is basic to the transaction."
— Lord Walker at [122](verbatim, verified against the judgment)
Subsequent Treatment
The leading authority on setting aside voluntary dispositions for mistake.
What To Do Next
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