Gallie v Lee
| Jurisdiction | UK Non-devolved |
| Year | 1970 |
| Date | 1970 |
| Court | House of Lords |
Contract - Mistake - Non est factum - Mistake as to document signed - Conveyance on sale of leasehold interest in house - Fraudulently induced belief that document deed of gift to different party - Subsequent mortgage by assignee and appropriation of moneys raised - Whether onus of proof of non est factum discharged - Whether document signed of different class and character from that intended to be signed - Duty on person executing document having legal consequences for third parties.
G., a widow aged 78, who had a leasehold interest in a house, gave the deeds to her trusted nephew, intending to make a gift to him to take effect immediately. She knew that her nephew wished to raise money on the house and that L., her nephew's business associate, was to collaborate with the nephew in raising money on the house. In June, 1962, L. asked her to sign a document. She had broken her spectacles and could not read it. She asked what it was and L. told her that it was a deed of gift of the house to her nephew. She executed it in that belief, and the nephew witnessed the execution, it being part of his arrangements with L. that L. should raise money on the house and repay it to the nephew by instalments. The document signed was in fact an assignment of the house by her to L. for £3,000. The £3,000 was never paid nor intended to be paid to her. L., having obtained the deeds and a reference as to his reliability from the nephew, mortgaged the house for £2,000 to a building society, but used the money so raised to pay his debts and defaulted on the mortgage instalments. The building society sought to obtain possession of the house.
G., at the nephew's instigation, began an action, in which she pleaded non est factum, against L. and the building society and asked for a declaration that the assignment was void and that the title deeds should be delivered to her. The judge found that G. did not read the document, that L. represented it to her as a deed of gift to the nephew; that she executed it in that belief; and that a sale or gift to L. was something which she did not and would not ever have contemplated; and he held that the plea of non est factum was established and granted the declaration asked for.
The Court of Appeal reversed the decision. On appeal to the House of Lords:—
Held, that the plea of non est factum which would make the assignment void against the innocent building society had not been established. G., having signed what was obviously a legal document on which money was advanced on the faith of it being her document, could not now disavow her signature.
Per Lord Reid. The plea of non est factum could not be available to anyone who signed without taking the trouble to find out at least the general effect of the document. Nor could it be available to a person whose mistake was really a mistake as to the legal effect of the document. There must be a radical or fundamental difference between what he signed and what he thought he was signing (post, p. 1082A, C, G–H).
Per Lord Hodson. The difference to support a plea of non est factum must be in a particular which goes to the substance of the whole consideration or to the root of the matter (post, p. 1084D).
Per Viscount Dilhorne. It will not suffice if the signer thought that in some respect the document would have a different legal effect from what it has; nor will it suffice if in some respects it departs from what he thought it would contain. The difference must be such that the document signed is entirely or fundamentally different from that which it was thought to be, so that it was never the signer's intention to execute the document (post, pp. 1087H–1088A).
Per Lord Wilberforce. A document should be held to be void (as opposed to voidable) only when the element of consent to it is totally lacking, i.e., when the transaction which the document purports to effect is essentially different in substance or in kind from the transaction intended (post, pp. 1090H–1091A).
Per Lord Pearson. The essential features of the doctrine are expressed by Byles J. in Foster v. Mackinnon (
The following cases are referred to in their Lordships' opinions:
Bolton v. Stone [
Carlisle and Cumberland Banking Co. v. Bragg [
Carlton and United Breweries Ltd. v. Elliott [
Edwards v. Brown (
Foster v. Mackinnon (
Howatson v. Webb [
Hunter v. Walters (
King v. Smith. [
Lewis v. Clay (
Mercantile Credit Co. Ltd. v. Hamblin [
Muskham Finance Ltd. v. Howard [
National Provincial Bank of England v. Jackson (
Shulter's Case (
Swan v. North British Australasian Co. Ltd. (
Thoroughgood's Case (
Vorley v. Cooke (
Whelpdale's Case (
The following additional cases were cited in argument:
Bagot v. Chapman [
Bell v. Lever Brothers Ltd. [
Bridge v. Grand Junction Railway Co. (
Brocklesby v. Temperance Permanent Building Society [
Butterfield v. Forrester (
Carr v. London and North Western Railway Co. (
Constantine (Joseph) Steamship Line v. Imperial Smelting Corporation Ltd. [
Davis Contractors Ltd. v. Fareham Urban District Council [
Dyster v. Randall & Sons [
Ingram v. Little [
Lake v. Simmons [
Lee v. Angus (
Leighton's Conveyance, In re [
Mason v. Ditchbourne (
Onward Building Society v. Smithson [
Painter v. Manser (
Perry Herrick v. Attwood (
Powell v. Duff (
Said v. Butt [
Sinfield v. Sweet [
APPEAL from the Court of Appeal (Lord Denning M.R., Russell and Salmon L.JJ.).
This was an appeal brought by leave of the House of Lords from an order of the Court of Appeal dated February 25, 1969, allowing the appeal of the respondents, Anglia Building Society, from such part of the judgment of Stamp J. delivered on March 29, 1968, on the trial of an action between Mrs. Rose Maud Gallie (widow), the original appellant as plaintiff, and one William Robert Lee and the respondents as defendants, as declared that an assignment of leasehold property known as No. 12 Dunkeld Road, Dagenham, now in the County of Greater London, dated June 15, 1962, was void and of no effect and ordered the respondents to deliver up to the appellant the title deeds of that property and to pay to the appellant three-quarters of her taxed costs of the action. Leave to appeal from the order of the Court of Appeal was granted by the House of Lords on April 24, 1969. Between the hearing of the appeal and the delivery of the decision of the House of Lords the appellant died and the executrix of her estate was substituted on the record as appellant.
The facts are stated in their Lordships' opinions.
Michael Albery Q.C. and A. E. Holdsworth Q.C. for the appellant.
P. R. Oliver and H. F. J. Teague for the respondents.
Their Lordships took time for consideration.
November 9. LORD REID. My Lords, I am in general agreement with the speech of my noble and learned friend, Lord Pearson. In my opinion, this appeal must fail, however one states the law. The existing law seems to me to be in a state of some confusion. I do not think it is possible to reconcile all the decisions, let alone all the reasons given for them. In view of some general observations made in the Court of Appeal I think that it is desirable to try to extract from the authorities the principles on which most of them are based. When we are trying to do that my experience has been that there are dangers in there being only one speech in this House. Then statements in it have often tended to be treated as definitions and it is not the function of a court or of this House to frame definitions: some latitude should be left for future developments. The true ratio of a decision generally appears more clearly from a comparison of two or more statements in different words which are intended to supplement each other.
The plea of non est factum obviously applies when the person sought to be held liable did not in fact sign the document. But at least since the sixteenth century it has also been held to apply in certain cases so as to enable a person who in fact signed a document to say that it is not his deed. Obviously any such extension must be kept within narrow limits if it is not to shake the confidence of those who habitually and rightly rely on signatures when there is no obvious reason to doubt their validity. Originally this extension appears to have been made in favour of those who were unable to read owing to blindness or illiteracy and who therefore had to...
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