Further Reflections on the Hastings-Bass Rule, Rescission for Mistake and Rectification

Abstract

This article examines the state of the development of the rule in Re Hastings-Bass (dec’d) [1975] Ch 25, rescission for mistake and rectification, in light of two recent English decisions Day v. Day [2013] EWCA Civ 280 and Futter v. Futter; Pitt v. Holt [2013] UKSC 26. It has two objectives. The first and principal objective is to analyse the doctrinal and practical distinctions between the three equitable doctrines in the context of voluntary dispositions. Two comparative exercises are conducted to achieve this objective: (a) between rescission for mistake and rectification; and (b) between the Hastings-Bass rule and rescission for mistake. The second objective is to examine how these equitable remedies interplay in the specific context of unwinding unsuccessful tax-planning schemes. This article argues that a distinction should be drawn between unacceptable tax avoidance practices and acceptable tax avoidance practices, and the law should not rely on rigid requirements that do not address this distinction to filter out undeserving cases.