A rule of law that has survived the last four centuries will be repealed if the government adopts the recommendation of the New South Wales Law Reform Commission that was released today.
The Rule in Pigot's Case stems from a decision handed down in 1614. It operates to cancel a written contact in certain circumstances if somebody alters it after it has been signed. The Rule is used arbitrarily and its results are often seen as capricious. An extreme example is that a person could get out of paying back a debt if a complete stranger happened to get access to the contract and write an extra zero on the amount owed.
The Rule originally encouraged people to protect written contracts at the beginning of the modern age when evidence of transactions was harder to obtain and preserve. However, the commercial and technological context has changed significantly in the last 400 years. Contracts are now easily duplicated and records of negotiations are often kept, making attempts at fraud easier to detect.
Attempts at fraud can now also be punished more appropriately under the criminal law.
However, the Rule remains in force in New South Wales and is raised several times a year in the New South Wales Supreme Court.
The Commission has proposed that the Rule be abolished by legislation. Executive Director of the Commission, Peter Hennessy said:
"The Rule has troubled Australian courts for the past 30 years, yet they have been unwilling to overturn completely so ancient a rule. Abolishing it by legislation is the only answer. The Rule has long outlived its usefulness."
Copies of the Report recommending that the Rule be abolished are available on the Commission's web page at
www.lawlink.nsw.gov.au/lrc. Copies may be obtained from the Commission on (02) 9228 8230.
Peter Hennessy (Executive Director) or Joseph Waugh (Legal Officer) on (02) 9228 8230.