In the Australian case
Petelin v Cullen (1975), the defendant, Petelin, was illiterate and could speak very little English, but still signed a document he believed to be a receipt for $50 but which actually gave Cullen the option to purchase Petelin's land, which he exercised. Petelin refused to sign the contract for sale, alleging he had been deceived, and Cullen sought
specific performance. The
High Court of Australia found that because of Petelin's mistaken belief which was not because of his carelessness, his claim of was successful. The court noted that even if he had been careless, "Cullen was not an 'innocent person without knowledge or reason to doubt the validity of the appellant's signature. In the English case of
Lloyds Bank v Waterhouse a father acted as a guarantor to his son's debt when purchasing a farm. The father was illiterate and signed the bank document under the belief that he was acting as the guarantor for the farm only, when the contract was actually for all the debt accumulated by the son. As he was illiterate, this was a mistake as to the document signed and the father was successful in claiming . In the English case of
Foster v Mackinnon, an elderly man signed a
bill of exchange but was only shown the back of it. He was granted a new trial. Illustratively, in the
New South Wales case
Ford v Perpetual Trustees Victoria Ltd, the son of Mr. Ford (Appellant) had arranged a loan from a bank to arrange for the purchase of a cleaning business, by using his father's residential property as security. When he defaulted, the bank sought to enforce its rights under the loan and mortgage agreements. Because Mr Ford was illiterate (though capable of signing his name), suffered from a "significant congenital intellectual impairment" and had no understanding of the particulars of the agreement or consequences of non-payment, the judge at appeal found that he had been the pawn of his son throughout, and "his mind was a mere channel through which the will of his son operated". The Court dismissed the argument that the appellant had been careless as that would presume that he was capable of turning his mind to the issue and making judgements. It ruled that Mr Ford lacked legal capacity, and therefore contract was void for . This example illustrates an application of
Petelin v Cullen [1975] as it depicts the necessary level of incapacity and level of misunderstanding required to shift the heavy burden of the party raising the defence. ==References==