Saunders v Anglia Building Society [1970]

Saunders v Anglia Building Society [1970]

Saunders v Anglia Building Society [1970] UKHL 5, also known as Gallie v Lee, is a significant English contract law case that established the principle that in contract law, the burden lies with the plaintiff to demonstrate that they have not acted negligently. This means that the plea of non est factum, which asserts that a person of full capacity did not understand or know the nature of the document they were signing, cannot normally be claimed without proper justification.

The case revolved around Mrs Gallie, who, having broken her spectacles, signed a document without fully informing herself of its contents. She had been misled by her nephew's business partner, Mr Lee, who falsely claimed that the documents were merely to confirm a gift of her house to her nephew. In reality, Mrs Gallie unwittingly signed papers allowing the nephew's business partner to grant a mortgage over the property in favour of Anglia Building Society. When the business partner defaulted on the mortgage, Anglia Building Society sought to foreclose and repossess the house.

In the Court of Appeal, Lord Denning MR, reversing the judge's decision, held that Mrs Gallie, as a literate person, could not simply sign documents without being bound, even if she was misled. The House of Lords upheld the Court of Appeal's decision, although they disapproved of the strength of Lord Denning's criticisms.

Lord Reid explained that the defence of non est factum is unavailable unless there is a radical difference between what the person signed and what they thought they were signing. This difference must be significant, fundamental, serious, or very substantial. Furthermore, the inability to understand the document may arise from factors such as defective education, illness, or innate incapacity. The determination of what amounts to a radical difference depends on the specific circumstances of each case.

This case clarified the legal position regarding the plea of non est factum, emphasising the responsibility of the party signing a document to exercise due diligence, even when misled by others.
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