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casetreasury

Petelin v Cullen (1975) 132 CLR 355

Facts: Petelin (P), who spoke little English and could not read English, granted Cullin (C) an option to purchase land. C did not exercise the option in time. C’s agent, who was aware of P’s limited English, wrote to P enclosing a cheque for $50 ‘for a further 6 months' extension of the option’ and enclosed a form for P to acknowledge receipt of the money and grant the extension. The agent called P and asked whether he had received the $50. P said he had received the $50 and the form. The agent then said, ‘sign it that you received $50’. P did so believing that the form was a receipt. C exercised the option within the extended time, but P refused to sign a contract of sale.


Held: Non est factum operated as a defence rendering the document void.


Held (Barwick CJ; McTiernan, Gibbs, Stephen and Mason JJ, at 359-60): ‘The class of persons who can avail themselves of the defence is limited. It is available to those who are unable to read owing to blindness or illiteracy and who must rely on others for advice as to what they are signing; it is also available to those who through no fault of their own are unable to have any understanding of the purport of a particular document. To make out the defence a defendant must show that [they] 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, [their] failure to read and understand it was not due to carelessness on [their] part. Finally, it is accepted that there is a heavy onus on a defendant who seeks to establish the defence.’


The test from Saunders was reiterated by the High Court:

  1. The signer must be under a relevant disability (high threshold);

  2. There must be a radical difference between document as signed, and what it was believed to be; and

  3. The signer’s failure to understand was not due to their own carelessness.


The Court held there was a heavy onus on the party seeking to disown their signature.

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