Saunders v Anglia Building Soc (sub nom Gallie v Lee) [1971] AC 1004

Key point

  • For a contract to be void by non est factum it must be proven that the person signing was not negligent and there was a fundamental difference between what was signed and what was thought to be signed

Facts

  • A widow (C) wanted to make a gift of a house to her nephew, Lee, for the allowing him to sell it to raise funds for his business
  • Lee made her sign a document to sell the house to his business partner instead
  • C had broken her spectacles and signed the document thinking it was a deed to Lee
  • Lee took out a mortgage with D, defaulted and the house was foreclosed by D

Held (Court of Appeal)

  • The sale of the house was not void for non est factum

Lord Reid

Non est factum applies where:

  1. The person asserting non est factum:
    • did not sign the document;
    • signed the document but is blind, illiterate and have to trust someone to tell them what they were signing; or
    • signed the document but has no understanding of the document without fault, due to defective education, illness or innate capacity
  2. The person asserting non est factum proves that he is not negligent (reasonable precautions must be taken, including finding out the general effect of the document)
  3. There was a fundamental difference between what he signed and what he thought he signed (If he thought he was giving property to A instead of B, it will qualify)

Current case

  • C knew that nephew and Lee were jointly interested in using the house to raise money
  • Hence the transaction was not fundamentally different