Let’s hear it for The Hoff

Today will go down as being one of the most memorable of Lord Hoffmann’s career.

Hoffmann retired at the end of April, but today a judgment was handed down on his final case, Chartbrook v Persimmon Homes. He can now officially hang up his judicial wig and head to his tenancy at Brick Court Chambers (20 April 2009).

Hoffmann, the second most senior law lord, has been one of the most influential members of the courts and will always be remembered, perhaps unfairly, for his association with the case of General Augusto Pinochet. (In 1999 he upset the establishment when he failed to declare his links with Amnesty International before being one of the five law lords who sat in judgment on Pinochet extradition case).

Yet it is on the more technical aspects of the law that Hoffmann has developed an expertise and helped shape the courts approach.

One such area is contractual law, which sat at the centre of the dispute between Chartbrook and Persimmon Homes.

Having lost in the first two rounds, Persimmon Homes had been given a bumpy time in the High Court and the Court of Appeal. But, thanks to the efforts of its legal team, which included Mayer Brown partner Andrew Legg and Wilberforce Chambers’ Christopher Nugee QC, the case made it to the House of Lords with Hoffmann requesting to chair the five strong judicial panel.

In the case, the court decided that where something had obviously gone wrong in the drafting of the contract the court should intervene to correct a mistake.

Chartbrook, represented in the House of Lords by Carter Ruck partner Adam Tudor, who instructed Robert Miles QC of 4 Stone Buildings, claimed it was owed significantly more cash by Persimmon because taken literally the contract, signed by Persimmon, said so.

The defendants refuted the claim pointing out that taken literally it would be economically unviable for Persimmon. When it signed the document it was on the understanding that the contract be construed and not taken literally.

After losing in both the High Court and the Court of Appeal, Persimmon was today handed a victory by Hoffmann and his fellow panel of four, who all agreed that the court had the right to intervene and that the contract should be construed.

It seems even in his final days as a sitting judge Hoffmann wanted to see his judicial  views enshrined and carried on.

Hoffmann gave the leading judgment on this area of law when he presided over the Compensation Scheme v West Bromwich Building Society litigation in 1998. Back then he said the court had a right to intervene. Chartbrook gave the court the opportunity to revisit the area and modernise the law in anticipation of a wave of contractual disputes.

But Hoffmann hasn’t wavered. Instead, the judgment upholds the original views and vindicates Legg’s decision to take the fight to the House of Lords.

This will stand Mayer Brown in good stead when it goes to the Lords today to argue over the definition of a Security Trust Deed (STD) in relation to collapsed structured investment vehicle (SIV) Sigma Finance. 

Unfortunately, Hoffmann won’t be around to make sure the remaining Law Lords follow the advice given in Chartbrook. But, as Legg points out, the Chartbrook judgment will have some bearing on the case: “The House of Lords feels that the court should approach issues of construction [of the contract]. It’s a current endorsement of the principles.”