A recent decision I came across reminded me that while sometimes the law is complex, sometimes it only sounds complex but is really just common sense. In Justice Gray's decision in Bhuvanendra v. Sivapathasundram et al, 2014 ONSC 278, one defendant successfully relied upon a defence described in Latin that can be described much more simply as don't try to enforce a contract against someone who signed it in the middle of period of sleep.
In this case, the plaintiff loaned approximately $57,000 to some friends in 1998. About four years later, the plaintiff decided to document the loan and asked his friends to sign a promissory note. The plaintiff also wanted his friends' 18 year old daughter to sign the promissory note. The daughter was described by the trial judge as “obviously very intelligent”, with three university degrees including a Master of Law degree by the time of the trial.
According to the daughter, she was asleep in her bedroom and heard a knocking on the door. The plaintiff entered her bedroom and shook her by the shoulder. He told her that her mother wanted her to sign the paper and gave her a pen. She signed the paper without reading it and went back to sleep. She said that the plaintiff did not tell her what the paper was about.
When the loan was not repaid, the plaintiffs sued the parents and their daughter to recover his money. The trial judge found that the plea of non est factum had been made out by the daughter. To prove a plea of non est factum, the trial judge described that it was necessary to establish that the party signing the document had a fundamental misunderstanding as to the nature or effect of the document and not merely as to its contents, and must not be guilty of carelessness and signing the document without being aware of its contents.
The trial judge accepted the daughter's evidence that she was awakened and told to sign a document which she did so without reading it or knowing anything about the document after which she fell back asleep. The trial judge felt that the daughter had proved not only that she did not have a misunderstanding as to the nature of the document, but also that she had no idea what the document was. The Court also noted that “it does not lie in the mouth of the plaintiff that [the daughter] was careless in signing the documents” as the plaintiff had taken advantage of his position as a family friend. Simple math tells us that the monies had been loaned when the daughter was only 14 years old.
We do not see very many cases where the plea of non est factum is established as a defence to a contractual obligation. However, based on the findings of fact made by the trial judge, the result was inevitable.
Two lessons from this case are that you should never lend money to friends and whenever asking someone to sign a document you expect to be legally binding, make sure you ask “Are you awake?”