• The place of the rule in the law of contracts
• The original rule
• Reasons for the rule

the Rule in Pigot’s case to determine whether the rule should be abolished or restated in a more restricted way.

THE PLACE OF THE RULE IN THE LAW OF CONTRACTS

1.2 The rule in Pigot’s Case is a part of the law of contracts. The rule’s practical application is in contracts that are written, whether under seal or not, it being essentially concerned with the consequences of an alteration made to a written contract after it has been signed. It does not apply to negotiable instruments which are covered by legislation.^*2

Types of contracts

1.3 A contract is formed when one party (the promisor) makes a promise which the law will enforce because certain conditions have been met. The party to whom the promise is made is called a promisee.^*3 When parties enter into a contract, they do not necessarily have to reduce their agreement to writing. However, sometimes (either by choice or by necessity) the terms are reduced to writing and signed (“executed”) by the parties. The writing can be in many forms. The two broad categories which are relevant to the issues considered in this Report are deeds and simple written contracts – although there are other special forms such as negotiable instruments which are considered when the need arises:

• Simple written contracts. Simple contracts generally do not need to be in writing and parties may choose to reduce their agreements to writing (either in whole or in part) or not. Simple contracts require some consideration to be effective.
• Deeds. Deeds, or formal contracts under seal, are documents in which certain formalities are followed with the result that they can be enforced even if consideration is absent from the agreement. Traditionally the formalities (derived from practices in the Middle Ages) have been that the document be sealed and delivered with the intention that it take effect as a deed. In some cases these formalities have been altered^*4 by legislation^*5 and in others by judicial interpretation.^*6 Deeds are chiefly used in New South Wales to deal with interests in property, for example, the conveyance of interests in land,^*7 establishing charges over real or personal property, the granting of options, and the granting of guarantees by third parties.

1.4 The rule in Pigot’s Case^*8 is derived from a judgment handed down in 1614. The case involved an action of debt on a bond for appearance brought by Benedict Winchcombe Esq, the Sheriff of the County of Oxford, against Henry Pigot. Pigot entered the deed on 2 March 1611. However, between then and the commencement of the action in 1614, a stranger, without the permission of Winchcombe inserted some extra words in the deed (which was in Latin) namely, the words “Vicecomiti Comitatus Oxon” (that is, “Sheriff of the County of Oxford”) between the words “Benedicto Winchcombe armig” (“Benedict Winchcombe, Esq”) and “in sexaginta libris” (“in the sum of £60”). As a result, Pigot, relying on an earlier line of authority, pleaded non est factum, that is, because of the alteration the deed was not, in fact, the one he originally entered into. The words inserted by the stranger were found to be not material since nothing turned on them – the bond was found to be an ordinary bond and not one taken by Winchcombe in his capacity as Sheriff of the County of Oxford. The result was that the bond was enforceable.

1.5 The principles arising from this case were stated by Lord Coke to be that:

when any deed is altered in a point material, by the plaintiff himself, or by any stranger, without the privity of the obligee, be it by interlineation, addition, rasing, or by drawing of a pen through a line, or through the midst of any material word, that the deed thereby becomes void.^*9

if the obligee himself alters the deed by any of the said ways, although it is in words not material, yet the deed is void: but ... if a stranger, without his privity, alters the deed by any of the said ways in any point not material, it shall not avoid the deed.^*10

• a deed is void if it is altered in any way by the promisee (the one to whom the deed is made);
• a deed is also void if altered in a material way by a stranger (that is, a third party) to the transaction; however
• a deed is not void if it is altered in a way that is not material by a stranger to the transaction.

For the deed is entire, and when after the delivery it is altered in any point, otherwise than it was at the time of the delivery, it has become void in its entirety and is not his deed in every part as he delivered it.^*12

1.9 The rule as developed throughout the succeeding four centuries continues to apply in New South Wales.

Relationship to the defence of non est factum

1.10 The rule in Pigot’s Case was originally closely related to the defence of non est factum. At common law, the defence of non est factum (which means literally “it is not his/her deed”^*14 ) was available to persons seeking to disown a document which it was alleged they had signed or sealed either on the ground that they did not sign the document at all or in a limited number of situations where the document had been signed by those who, through no fault of their own, were unable to understand the contract’s effect.^*15 This included situations where the document had been altered.^*16

1.11 Pigot’s Case was decided on a plea of non est factum.^*17 This was highlighted by Justice Grose in Master v Miller who said that Pigot’s Case stood for the proposition that:

the obligor may plead non est factum and give the matter in evidence, because at the time of plea pleaded it was not his deed... the effect of [the determination in Pigot’s Case] is, that a material alteration in a deed causes it no longer to be the same deed.^*18

1.12 The use of the plea has become rare as courts have become more reluctant to allow persons to disown documents they have failed to understand than were the courts in periods when the parties were less likely to be literate.^*20 Other doctrines have also developed to protect weaker parties to contracts.

1.13 In more recent times the two pleas have come to be quite distinct so that now, in relation to altered documents, it is simply the rule in Pigot’s Case that is pleaded as a defence rather than non est factum.

Purely a common law issue

1.14 Traditionally, equity played no role in relation to documents that have been altered. At Common Law an obligor could plead non est factum if a deed was lost, destroyed or altered. However equity only granted equitable relief where the deed was lost or destroyed.^*21 Glanville Williams suggests that the failure to grant relief in cases of alteration is “inexplicable”.^*22 However, it has also been suggested that the English view that alterations would be due to either fraud or carelessness is the reason behind equity’s refusal to grant relief, whereas it “had no scruples about granting relief in cases of accidental loss or destruction.”^*23

REASONS FOR THE RULE

1.15 As already noted, the rule, as developed by the courts over the last four centuries, continues to apply in New South Wales. Many reasons have been suggested for the continued existence of the rule over the years. These are outlined here, though these reasons will be discussed in more detail in Chapter 3.

The document is the obligation

1.16 The prime reason for the rule is thought to lie in its original application to deeds only and the inability of the law at the time to separate the obligation from its physical evidence as manifested by the parchment, wax and ink of the old deeds.^*24

Evidential value

1.17 The need to preserve the evidential value or authenticity of a document has been often suggested as a reason for the continuation of the rule. Indeed, the need for certainty is seen as one of the reasons why parties choose to record agreements in writing in the first place. A particular outcome of this point of view is that the party with custody of the document is bound to preserve it against alteration.

Punishment of fraud

1.18 Another reason which continues to enjoy some support (and is possibly the strongest reason for the continuation of the rule in some form) is that the rule is there to punish a party who has fraudulently altered the contractual document.

*1. P Young, “Recent Cases: The Rule in Pigot’s Case” (1997) 71 Australian Law Journal 117 at 118.

*2. See para 4.2-4.6.

*3. See J W Carter and D J Harland, Contract Law in Australia (3rd edition, Butterworths, Sydney, 1996) at para 201.

*4. See N C Seddon and M P Ellinghaus, Cheshire and Fifoot’s Law of Contract (7th Australian edition, Butterworths, Sydney 1997) at para 4.2, footnote 5.

*5. For example, legislation in New South Wales governs when such instruments will be deemed to be sealed: Conveyancing Act 1919 (NSW) s 38 which deals with signing and attestation. See also J W Carter and D J Harland, Contract Law in Australia (3rd edition, Butterworths, Sydney, 1996) at para 312.

*6. For example, delivery is now a matter of intention: Federal Commissioner of Taxation v Taylor (1929) 42 CLR 80 at 87.

*7. As required by Conveyancing Act 1919 (NSW) s 23B; and Real Property Act 1900 (NSW) s 41.

*8. Pigot’s Case (1614) 1 CoRep 26b; 77 ER 1177. Pigot’s Case is reported elsewhere in English as Winchcombe v Pigot (1614) 2 Buls 246; 80 ER 1096, and in law French as Winscombe v Piggott (1614) 1 Roll Rep 39; 81 ER 311 and Anon (1614) Moore (KB) 835; 72 ER 937.

*9. Pigot’s Case (1614) 1 CoRep 26b at 27a; 77 ER 1177 at 1178.

*10. Pigot’s Case (1614) 1 CoRep 26b at 27a; 77 ER 1177 at 1178.

*11. (1567) 3 Dyer 261b; 73 ER 580. A more comprehensive report of the decision is now available in J H Baker (ed), Reports from the Lost Notebooks of Sir James Dyer (Selden Society, London, 1994) at 129-131.

*12. J H Baker (ed), Reports from the Lost Notebooks of Sir James Dyer (Selden Society, London, 1994) at 130.

*13. Warburton v National Westminster Finance Australia Ltd (1988) 15 NSWLR 238 at 243.

*14. The defence was originally phrased: scriptum predictum non est factum suum.

*15. See A W B Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit (Clarendon Press, Oxford, 1975) at 98; J W Carter and D J Harland, Contract Law in Australia (3rd edition, Butterworths, Sydney, 1996) at para 1267; R F Norton, A Treatise on Deeds (2nd edition, Sweet & Maxwell, London, 1928) at 35. See also Saunders v Anglia Building Society [1971] AC 1004 at 1024-1025 (Lord Wilberforce); and Gallie v Lee [1969] 2 Ch 17 at 42-43 (Salmon LJ).

*16. See Markham v Gonaston (1598) Cro Eliz 626; 78 ER 866; and J C Sheahan, “Use and Misuse of Legal History: Case Studies from the Law of Contract, Tort and Restitution” (1998) 16 Australian Bar Review 280 at 282.

*17. See also Suffell v Bank of England (1882) 9 QBD 555 at 560-561 (Jessell MR).

*18. Master v Miller (1791) 4 TR 320 at 345; 100 ER 1042 at 1055 (Grose J).

*19. See J W Carter and D J Harland, Contract Law in Australia (3rd edition, Butterworths, Sydney, 1996) at para 1267.

*20. On the modern use of the plea, see Petelin v Cullen (1975) 132 CLR 355 at 359; and J W Carter and D J Harland, Contract Law in Australia (3rd edition, Butterworths, Sydney, 1996) at para 1267-1275. See also accounts of the development of the plea in Gallie v Lee [1971] AC 1004 at 1024-1025 (Lord Wilberforce); and Gallie v Lee [1969] 2 Ch 17 at 42-43 (Salmon LJ).

*21. J C Sheahan, “Use and Misuse of Legal History: Case Studies from the Law of Contract, Tort and Restitution” (1998) 16 Australian Bar Review 280 at 282.

*22. G L Williams, Joint Obligations (Butterworths, London, 1949) at para 67.

*23. H Tarlo, “The Unilateral Alteration of Instruments” (1959) 2 Melbourne University Law Review 43 at 71. See also S Williston, “Discharge of Contracts by Alteration” (1904) 18 Harvard Law Review 105 at 113.