Ontario Rectification: Correcting Mistakes in Written Contracts and Instruments

What Is Rectification?

Rectification is an equitable remedy that corrects a written document — a contract, deed, conveyance, mortgage, trust instrument, will, or other written agreement — to accurately reflect the parties' actual prior intention. The court does not create a new agreement; it reforms the document to give effect to the agreement that was actually made but incorrectly expressed in writing.

The foundational principle, established in Mackenzie v Coulson (1869) LR 8 Eq 368 and consistently applied in Ontario, is that courts of equity will not allow an instrument to be used as a means of fraud where it fails to express the true intention of the parties. Rectification does not change the agreement — it changes the document to match the agreement.

Rectification is distinguished from:

• Construction / interpretation — determining the meaning of words used. Rectification changes the words; construction assigns meaning to the existing words.
• Rescission — cancels the contract entirely for mistake or misrepresentation. Rectification preserves the contract but corrects the written expression.
• Variation — altering the terms of a valid contract by new agreement. Rectification reflects what was originally agreed; variation changes the original agreement.

Common Intention Rectification

The principal ground for rectification is a shared mistake — both parties agreed on the relevant term, but the written instrument does not accurately reflect that agreement. The requirements, as stated in Joscelyne v Nissen [1970] 2 QB 86 (CA) and applied in Ontario in Canada (Attorney General) v Fairmont Hotels Inc 2016 SCC 56, are:

1. Prior concluded agreement or continuing common intention — the parties must have had an outwardly expressed common intention on the particular point at the time of contracting, continuing without change up to execution. The prior agreement need not itself be a binding contract — it may be a term in a heads of agreement, a negotiated draft, or an oral understanding on a specific point (Joscelyne v Nissen).
2. Failure to record the agreed term — the written instrument does not correctly record the prior agreement on the point in question. The failure must be in the expression of the agreement, not in the agreement itself.
3. No change in intention — the common intention continued up to the moment of execution. If the parties changed their minds before executing, the prior agreement is no longer the operative one.
4. Clear, convincing, and cogent evidence — rectification requires more than the normal civil balance of probabilities in effect; the evidence must be clear and convincing because the remedy rewrites a formal document (Fairmont Hotels 2016 SCC 56 at para 39: "convincing proof").

Unilateral Mistake Rectification

Where only one party made a mistake in the written expression of the agreement, rectification is available only in limited circumstances. The leading English authority is A Roberts & Co Ltd v Leicestershire County Council [1961] Ch 555, applied in Ontario:

• Knowledge of the mistake by the other party — the non-mistaken party knew of the mistake in the instrument and failed to draw it to the mistaken party's attention, amounting to unconscionable conduct or sharp practice. The non-mistaken party cannot benefit from the other's mistake in the written document.
• Sharp practice / fraud — deliberate exploitation of the other party's error; not mere oversight on both sides.

Ontario courts have been cautious about expanding unilateral mistake rectification beyond the knowledge-plus-sharp-practice ground. The party resisting rectification cannot be required to accept a contract they never agreed to merely because the other party made a unilateral error.

Parol Evidence Rule and Rectification

The parol evidence rule excludes extrinsic evidence to vary, add to, or contradict a written contract. However, rectification constitutes a well-established exception — the parol evidence rule does not prevent extrinsic evidence being adduced to show that a written document does not reflect the parties' true prior agreement for purposes of rectification (United Group Rail Services Ltd v Rail Corporation NSW [2009] 74 NSWLR 618; consistently applied in Ontario).

Admissible evidence includes: prior drafts showing the intended term, pre-contract negotiations (letters, emails, term sheets), the parties' course of dealing, oral evidence of negotiations, post-contractual conduct (with care — limited probative value), and evidence of the error itself (comparison between draft and executed version).

Rectification of Deeds, Conveyances, and Registered Instruments

Rectification of registered instruments (transfers, mortgages, charges, easements, restrictive covenants registered under the Land Titles Act) presents additional issues:

• Third party rights — rectification cannot be ordered where it would affect the rights of a bona fide purchaser for value without notice who acquired an interest in the property in reliance on the registered instrument. The Land Titles system's indefeasibility provisions protect purchasers.
• Registration of rectification order — a court order for rectification of a registered instrument must itself be registered against the relevant PIN under the Land Titles Act to be effective against the world. Failure to register leaves the original erroneous instrument on title.
• Planning Act compliance — rectification of a registered conveyance may require a Planning Act consent if the correction effectively creates a new lot or changes lot boundaries. Check with the local planning authority.
• Land Titles Assurance Fund — where rectification is required due to a mistake by the Land Registrar, the Fund may compensate parties unable to recover the land itself (LTA s.57).

Rectification of Wills in Ontario

The Succession Law Reform Act R.S.O. 1990, c. S.26 does not expressly provide for rectification of wills, unlike some other provinces. However, Ontario courts have inherent equitable jurisdiction to rectify a will where there is a clerical or drafting error causing the will to fail to express the testator's actual intention:

• Clerical error — typographical error, wrong name, transposed figures, omission of a word or clause by the draftsperson
• Failure to understand instructions — the drafting lawyer or notary misunderstood or failed to implement the testator's instructions
• Not available for second thoughts — rectification does not allow the testator's estate to argue the testator made a mistake in their intentions; it only corrects the written expression of a clear intention

The application is made to the Superior Court of Justice (Estates Branch). Evidence of the testator's instructions to the drafting lawyer (including the lawyer's file and notes) is admissible, as is evidence of the surrounding circumstances. The standard of proof is the balance of probabilities, though clear and convincing evidence is required in practice. The application must be served on all persons interested under the will and on intestacy.

Defences to Rectification

Limitation Periods for Rectification Claims in Ontario

Rectification is an equitable remedy. Under the Limitations Act 2002, the two-year basic limitation period applies from the date the claim was discovered (s.4). The 15-year ultimate limitation period applies from the act or omission (s.15).

Discoverability is important: a party may not discover that an instrument contains an error immediately on execution. The two-year period runs from the date the claimant knew or ought to have known that the document did not reflect the prior agreement. In practice, the error may only become apparent when a transaction is contemplated or when a dispute arises about the instrument's operation.

Equitable doctrines (laches, acquiescence) may bar relief even within the limitation period where unreasonable delay has prejudiced the other party.

Procedure for Rectification Applications in Ontario

Rectification proceedings in Ontario are typically commenced by:

• Application (Rule 14.05) — where the facts are not in dispute or can be determined on affidavit evidence; appropriate where the error and prior agreement are clearly documented
• Action (Statement of Claim) — where the opposing party disputes the existence of the prior agreement or the nature of the error, requiring viva voce evidence at trial

The claim for rectification is typically pleaded alongside alternative claims including:

• Declaration as to the true meaning of the instrument (construction)
• Rescission for mutual mistake (if rectification is unavailable)
• Damages for negligent drafting against the solicitor (if applicable)

Frequently Asked Questions