ON 17 JULY 1975, the High Court of Australia delivered Petelin v Cullen [1975] HCA 24; (1975) 132 CLR 355 (17 July 1975).

http://www.austlii.edu.au/au/cases/cth/HCA/1975/24.html

Petelin owned land at Liverpool. He spoke little English and could not read English. Cullen through his agent sent Petelin $50 with a letter seeking his agreement to extend an option to purchase land for a further 6 months. Cullen’s agent then saw Petelin and asked him to sign to the letter that he received the $50. Petelin signed the letter believing he had signed a receipt, not an option.

Cullen sought an order for specific performance in the Supreme Court of NSW. The Supreme Court dismissed the action on the grounds that Petelin had made out the defence of non est factum. The NSW Court of Appeal then overturned the Supreme Court decision, ordering specific performance.

The High Court allowed Petelin’s appeal, overturning the Court of Appeal’s decision and dismissing Cullen’s action for specific performance.

The High Court found that Petelin was entitled to the defence of non est factum as he believed that he had signed a receipt, was not careless and that in any event, Cullen was not an innocent person without knowledge or reason to doubt the validity of the signature.

To make out a defence of non est factum, the defendant must show:

• that he or she signed the document in the belief that it was radically different from what it was in fact, and
• that (at least as against innocent persons) his or her failure to read and understand the document was not due to carelessness.

There is a heavy onus on the defendant to show that he or she believed the document to be radically different from what it was in fact.

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