BLATANT DISREGARD FOR CLAIMANTS’ VULNERABILITY: AN ANALYSIS OF THE BURDEN OF PROOF IN NON-EST FACTUM

Introduction

The law of Contracts, based on the doctrine of consensus ad idem, i.e., meeting of minds between the parties, provides certain defences to the parties in cases where the ‘meeting of minds’ is disputed and there is no consensus between them. One such defence is the doctrine of Non-Est Factum. Despite providing a defence, the doctrine places quite a heavy burden on the parties claiming relief. In this blog, the author analyses the reasonability of the burden of proof placed on the party alleging Non-Est Factum, to comment on the justifiability of the burden.

Non-Est Factum: A brief History

The Latin phrase Non-Est Factum translates to ‘this is not my deed‘.[1] This defence in contract law allows the signer of a document to claim that the document he/she signed was not accompanied by his/her mind. In other words, the document he/she signed was different from what he/she actually thought was signing. This defence allows the claimant (innocent signer) to render a contract completely void on grounds of mistake as there has been no ‘ad idem’ between the parties, giving relief to the innocent signer. However, the courts have kept this doctrine restricted to written documents and disputes regarding signature made by one of the parties in a contract.

Initially, the courts only allowed people who had not physically executed the document to avail the defence, but later it was expanded to give protection to the blind, illiterate, and to people who have been fraudulently induced into signing the document.[2] The modern approach to the defence of Non-Est Factum was laid down in the landmark case of Saunders v. Anglia Building Society[3], which ruled that claim the defence, one has to prove that the document was fundamentally different from what he/she actually thought while signing, there was no carelessness on his/her part and that the signature was a result of the fraudulent explanation by the person relying on whom he/she signed.

Burden of Proof: The Judicial Approach

The courts have generally been strict about the burden of proof of the party asking for relief by availing the defence. One of the earliest cases on this issue is Foster v. Mackinnon[4]. In this case, the claimant was fraudulently induced to sign a bill of exchange which was represented to him as a guarantee. Although the court did not explicitly address the burden of the innocent party, it examined whether the claimant party had been negligent while signing the documents.

In the landmark case of Saunders v. Anglia Building Society[5], one widow was fraudulently induced by her nephew’s friend, Lee, to sign a deed which she thought was a gift deed to her nephew, but was a gift to him, which he later mortgaged. The House of Lords here held that the burden of proof lies on the claimant disputing the validity of the signature is heavy and it needs to be proved that the document signed was fundamentally different in contents, not merely in characters, and that there was be no negligence on claimant’s part.

Later, in the Australian case of Petelin v. Cullen[6], the court reiterated the same principle and held that the document must be fundamentally different than what the signer thought and there shouldn’t be any negligence. In the case of The First National Bank of Chicago v How Lee Realty Pte Ltd[7], the court again pointed out the heavy burden of establishing Non-Est Factum lying on the party claiming relief by challenging the signature. In C F Asset Finance Limited v Okonji[8], the court held that ‘… a person may not raise the defence of Non-Est Factum if he has been guilty of negligence in appending his signature to the document which he wishes to disown…’ and ‘…There is a heavy burden on the person who seeks to invoke the remedy. He must prove that he took all reasonable precautions in the circumstances.’  

In the Indian case of Selvarasu Kounder v. Sahadeva Kounder[9], the Madras High Court, referring to a few authorities held that for availing the benefit of this doctrine, the person has to prove that his mind did not accompany the signature, so much so that the document signed was fundamentally different from what he knew he signed. The Kerala High Court, in the case of Mathu v. Cherchi[10], held that unless the claimant had been a victim of fraud, the plea of Non-Est Factum would not be available to an able-bodied individual who was too busy to study the contents and had not taken adequate care.

Burden of Proof and the Disregard for Claimant’s Vulnerability

From the decisions referred to above, the vulnerability of the parties claiming relief under the doctrine of Non-Est Factum is evident. The parties challenging the validity of their signatures are mostly people who are blind, illiterate or fraudulently induced to sign. Despite this, it can be observed that the judicial approach over the years has shown no concern for such vulnerabilities of the claimants and has instead placed an unnecessarily heavy burden[11] on them. Due to the heavy burden of proof, the parties being in a vulnerable position, often fail to prove the requisites to get relief despite having suffered a huge loss at the hands of the party who lured the claimant into signing the document (fraudster). It is really painful to see such a heavy burden placed on a person who has already suffered from the trickery of the fraudster. It is high time that the judiciary takes into account the position of the special category of claimants in cases related to Non-Est Factum and work out some other approach that will grant the necessary relief to such claimants without them going through any procedural hassle.

It is suggested that the courts can take up a completely different approach by placing the burden of proof on the party who lured the claimant into signing the document. To achieve this, the courts can- a) have a presumption of fraud in cases where a signature is challenged by invocation of the doctrine of Non-Est Factum and b) place the burden of rebutting this presumption on the party who allegedly defrauded the claimant into signing the document.

This approach, will not only reduce the unnecessarily heavy burden placed on the vulnerable claimants but will also help in getting proper relief which was inaccessible due to such a heavy burden of proof. However, the courts must be restrictive in following this approach and should only apply it in cases where the claimant is vulnerable and is not frivolously challenging the validity of signatures.

Conclusion

Therefore, it can be concluded that the burden of proof in cases of Non-Est Factum was never unreasonable, but it has been placed on the wrong person for all this time. The innocent claimant should not suffer for the trickery of the fraudster. Rather, complete justice can only be done if the fraudster is imposed with a heavy burden to rebut the presumption of fraud in cases where the claimant invokes the doctrine of Non-Est Factum.

Author(s) Name: Tridib Mandal (WBNUJS, Kolkata)

References:

[1] Bortey Lamptey, ‘The Plea of Non Est Factum’ (1979) 11 Rev Ghana L 125

[2] Simon Connell, ‘Not My Doctrine: Finding a Contract Law Explanation for Non Est Factum’ (2016) 47 Victoria U Wellington L Rev 245

[3] [1970] UKHL 5

[4] (1869) LR 4 CP 704

[5] [1970] UKHL 5

[6] (1975) 132 CLR 355

[7] [1981] 1 MLJ 183

[8] [2014] EWCA Civ 870

[9] (1998) 1 MLJ 209

[10] (1990) 1 KLT 416

[11] L D Bowden, ‘Non Est Factum – A Fundamental or Radical Change’ (1970) 7 U Queensland LJ 440

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