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Coercion

Kesarmal & Anor v. Valliappa Chettiar & Anor Chin Nam Bee Development Sdn Bhd v Tai Kim Choo & Ors C.M. Naested v. The State of Perak Kanhaya Lal v National Bank of India Ltd

C.M. Naested v. The State of Perak


The plaintiffs application for a grant of 23,000 acres of land was approved by defendant. He then paid a certain sum for survey fees calculated upon the area approved as being one block Yet, the land was cut up into 16 blocks, but plaintiff was not informed. Upon demand made by the District Officer the plaintiff's agents paid a further sum for survey fees, the calculation of the amount being based upon the 16 blocks. The plaintiff sued to recover the sum so paid by the agents. Under these circumstances, it is impossible to consider the payment as a voluntary one. The parties were not on equal terms. I think that the plaintiff is entitled to recover the money as a payment made without consideration, and under coercion, within the meaning of s. 72 [s.73] of the Contract Enactment.

Kesarmal & Anor v. Valliappa Chettiar & Anor


Invalid a transfer executed under the orders of the Sultan, issued in the ominous presence of 2 Japanese officers during the Japanese Occupation of Malaysia. Since the consent was not given voluntarily/consent was not free, the agreement to be voidable at the instance or the consent of the options available so the requirement or option obtained the consent of such. Held: -

Held: -

Chin Nam Bee Development Sdn Bhd v Tai Kim Choo & Ors
The respondents purchase homes off the plan to be constructed by the appellants. Each of the respondents had signed a sale and purchase agreement to purchase a house at $29,500. Subsequently, the respondent was made to pay an additional payment was made to pay an additional $4,000. The court was asked to determine if the additional payment was made voluntarily or under threat by the appellants to cancel the respondents booking for their houses. The appeal dismissed by the High Court which ruled that there was coercion as defined in section 15 of the Contract Act. It further added that the definition in section 15 should only apply for the purpose contained in section 14, and not for the entire Act.

Kanhaya Lal v National Bank of India Ltd


the word `coercion' as defined under s. 15 of the Indian Contract Act, (Act IX of 1872) should be confined to the interpretation of the word`coercion' as found under s. 14 of the Indian Act, and that the word `coercion' as found in s. 72 of the Indian Contract Act should be given its ordinary meaning.

Held: -

Undue influence
Morris v Burroughs Cooke v Lamotte Morley v Loughnan Lloyds Bank v Bundy Tate v Williamson Satwath Haneem v Hadjee Abdullah Datuk Jaginder Singh and Ors v Tara Rajaratnam Inche Noriah v Shaik Allie Chait Singh v Budin bin Abdullah Letchemy Arumugan Iwn Annamalay Tan Chye Chew v Anor Iwn Eastern Mining & Metals Co Ltd

Morris v Burroughs
as a reminder to parents to watch their exercise of authority over their children

Tate v Williamson
T is a student intends to sell some property to settle the tuition fees. He has found a defendant who is a lawyer for advice on the sale. Later defendant has buy property T at 7.000 without informing that the actual value of the property is 20,000.

Cooke v Lamotte
being used to cover possibility of improper or misuse of influence by guardian and those in loco parentis, solicitor, spiritual adviser, doctor, medical attendant, and may be said to apply to every case in which two persons are so situated, that one may obtain considerable influence over another unnecessary to show existance of special r/ship between dcsd and D, for he has took possession, so to speak , of the whole life of the dcsd., & the gift were not the result of the dcsds own free will, but the effect of that influence and domination.

Held : - The Court held, the contract must be set aside because there is trust between the defendant's relationships with T. This is because T has referred to the defendant to obtain counsel and by the defendant was not entitled to buy the property without making the disclosure.

Morley v Loughnan
-

Satwath Haneem v Hadjee Abdullah


P beneficiary, D- trustee of the family The plaintiffs husband executed a conveyance of property belonging to himself and the plaintiff to B and C, his brothers. The plaintiff agreed to the conveyance but after her husbands death, she bought an action seeking to set aside the agreement and the conveyance. A confidential relationship existed between the plaintiff and B and C. The burden of proof therefore lay on B and C to show that the plaintiff fully understood the transaction and executed the conveyance freely and without being subject to undue influence. Since both B and C failed to discharge the burdem

Lloyds Bank v Bundy


Plaintiff : Bundry, dependant : Llyods Bank Defendant was an old farmer who had little knowledge of the business world. He had to mortgage her farm three times to the bank as security against overdrafts taken by his company. Even if the bank knows that the company is experiencing financial difficulties, this situation is not explained to the defendant was completely dependent on advice from the bank.

Held: -

Held : - when the company went bankrupt, the court to decide, the bank is not entitled to exercise its right to such collateral. This is because, the failure of the bank to make sure the defendant to seek advice from an independent party cannot deny the assumption that the collateral contract entered into on the basis of the influence not affordable. - Later, Mr.Bundy claim bek the land n stating he is under influenced. - Unfair advantages, domination of will

Datuk Jaginder Singh and Ors v Tara Rajaratnam - The respondent who was the registered proprietor of land, claimed that she was induced by the fraud and under influence of the 1st and 2nd appellant to transfer her land to the 2nd appellant. Held: - The appellants and respondent were in a solicitor-client relationship, the transaction was unconscionable, the burden was on the appellants to rebut the presumption of undue influence. Since thay had not discharged that burden, the transaction was set aside. In addition to undue influence, the trail court also found that the appellants conduct had been fraudulent and exercised its discretion in awarding damages which was upheld by the appellate court. Inche Noriah v Shaik Allie - Point to be proved is that the other party has to act independently without any influence and fully understand the thing done by him.

1) Representation of certain fact, not opinion Chait Singh v Budin bin Abdullah - Farmer borrowed money from P, a financial company - Land of D was mortgage and a high interest of 63% is charged. - Defendant was an illiterate. Held: - Bargain is unconscious bargain therefore contract is voidable. Letchemy Arumugan Iwn Annamalay - Plaintiff who is a female rubber tappers are illiterate request to cancel the sale and purchase agreement has been entered by the defendant who was a developer. - According to plaintiff, the defendant with the help of his solicitor has taken advantage of his ignorance by calling on him to sign some documents in English. Plaintiff signed the documents without knowing and realizing that in fact he signed an agreement to sell its land in Port Dickson. Held: - Defendant claimed that the agreement was signed was witnessed by a lawyer who has explained everything to the plaintiff. The Court held evidence clearly shows that the defendant has committed a fraud on plaintiff. Thus, the painted is entitled to cancel the agreement. Bisset v Wilkinson

Bisset v Wilkinson
The claimant purchased a piece of farm land to use as a sheep farm. He asked the seller how many sheep the land would hold. The seller had not used it as a sheep farm but estimated that it would carry 2,000 sheep. In reliance of this statement the claimant purchased the land. The estimate turned out to be wrong and the claimant brought an action for misrepresentation. The Privy Council held that the statement was only a statement of opinion and not a statement of fact and therefore not an actionable misrepresentation. The claimant's action was therefore unsuccessful.

Held: -

2) Induce the other party to enter into contract

3) Induce the other party to enter into contract Mothoolal v. Life Insurance Corp

Tan Chye Chew v Anor Iwn Eastern Mining & Metals Co Ltd
although the geological experts have been brought by the respondent to check a second appellant land not included in the contract, because the respondent has adequate facilities to conduct its own investigation to determine whether the land is examined, including in the contract, the court ruled, the appellant not do any indirection.

Mothoolal v. Life Insurance Corp


the Indian Supreme Court in reference to the Explanation to section 19 of the Indian Contract Act stated that a false representation, whether fraudulent or innocent, is irrelevant if it has not induced the party to whom it is made to act upon it by entering into the contract.

Representation
1) Representation of certain fact, not opinion 2) Addressed to innocent party 3) Induce the other party to enter into contract

Duty of disclosure
Keates Iwn Lord Cadogen

Goh Chooi Leong v Public Life Assurance Co. Ltd.

Keates Iwn Lord Cadogen


Plaintiff knew defendant in desperate need of homes, has led to the plaintiff that nearly destroyed a house without telling the condition of the plaintiff.

Derry v Peek
The defendants were directors of the Plymouth, Devonport and District Tramways Co. Ltd., which was authorised by statute to run tramways by animal power, or with the consent of the Board of Trade, by steam power. The prospectus issued by the company indicated that steam power would be used, but the Board of Trade refused its consent. The plaintiffs, on the strength of the representation in the prospectus, had obtained shares in the company, but in the absence of any evidence that the defendants believed the statement in the prospectus to be untrue

Held : - Plaintiff claim for compensation has been denied because the court did not regard this as an indirection in the defendant.

Goh Chooi Leong v Public Life Assurance Co. Ltd.


The high Court ruled that there was a deliberate non-disclose when in a life insurance contract, the assured had failed to disclose that he had previously suffered from Tuberculosis. It is trite law that a contract of insurance is a contract uberrimae fidei which can be voided for non-disclose of material facts.

Held : - The House of Lords that they had not committed the tort of deceit.

Weber v Brown Nocton v Lord Ashburton


*is a leading English tort law case concerning professional negligence and the conditions under which a person will be taken to have assumed responsibility for the welfare of another. - Lord Ashburton was buying a property for 60,000 on Church Street, Kensington, London. His solicitor was Mr Nocton. Mr Nocton advised Lord Ashburton to release part of the mortgage security. This was a bad idea, because as Mr Nocton in fact knew, this meant that the security would become insufficient. Lord Ashburton alleged the advice was not given in good faith, but rather in Mr Nocton's self interest. Held: - Viscount Haldane LC for the House of Lords held that despite Derry v Peek (which had disallowed any claim for misstatements apart from in the tort of deceit) Mr Nocton was liable for his bad advice given the fiduciary relationship between the solicitor and client. Plaintiff-respondent sued the defendant-appellant for damages in respect of an alleged false and fraudulent misrepresentation relating to the number of rubber trees on an estate over which the latter had the right of purchase, which right he transferred for valuable consideration to the former. The number of trees represented was in excess of the number which actually existed on the estate. The defendant-appellant had made the alleged misrepresentation falsely and fraudulently and that it had caused the plaintiffrespondent to acquire and subsequently to exercise the rights to purchase.

Held: -

Datuk Jaginder Singh v Tara Rajaratnam


The respondent who was the registered proprietor of land, claimed that she was induced by the fraud and undue influence of the 1st and 2nd appellant to transfer her land to the 2nd appellant. Appellants and respondent were in a solicitor-client relationship, the transaction was unconscionable, and in therefore, the burden was on the appellants to rebut the presumption of undue influence. Since they had not discharged that burden, the transaction was set aside. In addition to undue influence, the trial court also found that the appellants conduct had been fraudulent and exercised its discretion in awarding damages which was upheld by the appellate court.

Lau Hee Teah v Hargill Engineering Sdn Bhd


Held: The plaintiff-appellant attempted to rescind an agreement to take a loader on hire-purchase alleging fraudulent misrepresentation. In dismissing the appeal, held that the appellant had failed to discharge the burden of proof required of him on the question of fraud.

Held: -

S24 Unlawful agreement (a) It is forbidden by law (b) It is of such a nature that if permitted, it would defeat any law (c) It is fraudulent (d) It involves or implies injury to the person or property of another (e) Courts regards it as immoral, or opposed to public policy (a) It is forbidden by law (b) It is of such a nature that if permitted, it would defeat any law
Hee Cheng v Krishnan Menaka v Lum Kum Chum Murugesan v Krishnasamy & Anor Ahmad b. Udoh & Anor v Ng Aik Chong

Murugesan v Krishnasamy & Anor


P bought TOL land from dependant who had applied for permanent title. They entered into an agreement with the plaintiff as soon as titles were issued. When application was unsuccessful, P claimed the return of money paid. The promise to allow the purchaser to enter the lands and occupy it was an attempt to transfer to him a part of the promisors rights under the TOL and therefore void. Illegal promise could be severed from other provisions, and held that the sale agreement was good but had become impossible to perform so that the plaintiff was entitled to recover the purchase money.

Held: -

Hee Cheng v Krishnan


Plaintiff entered into a contract with defendantto purchase a house built by the defendant on the ground temporary occupation license. The defendant and the plaintiff claiming breach of promise of specific performance. the contract is contrary to Rule 41 rules the land, in 1930that temporary occupation licenses shall not be transferred. The court decides, the contact is an attempt to sell and purchase the defendant's rights under temporary occupation license. Therefore, if the contract is allowed, it would defeat the provisions of relevant laws.

Ahmad b. Udoh & Anor v Ng Aik Chong - R leased padi land from A for 6 years & $1500 was paid therein. This agreement contravened s.3(1) of PCO. A then disallowed R to till the land & R claimed the return of the $. Held: - both were ignorant of the illegality at the time of executing the agreement, s.66 would apply.

(d) It involves or implies injury to the person or property of another Syed Ahamed Alhabshee v Puteh binte Sabtu Mohd Ali Jahn b Yusop Sahibjahn & Anor v Zaleha bt Mat Zin & Anor

Held: -

Syed Ahamed Alhabshee v Puteh binte Sabtu


Trustee of the land belonging to a child has agreed to sell the land to the plaintiff. If the purchase is allowed, it would be detrimental to the interests of the children and therefore, the court ruled that the transaction is void.

Menaka v Lum Kum Chum:


The appellant was a registered moneylender and through her attorney she lent money to the respondent on the security of a charge of certain lands belonging to the respondent. Contract was discovered vopid only after the proceedings had been started.

Held: -

Mohd Ali Jahn b Yusop Sahibjahn & Anor v Zaleha bt Mat Zin & Anor
In 1948, the plaintiffs father, who was registered as guardian in the title of a piece of land, sold the said land to the defendants father By this agreement the plaintiffs father guaranteed that the plaintiffs, who were minors then, would execute the transfer of the land to the purchaser when they attained the age of majority. Title to the land and possession thereof were then given to the purchaser, whose family, including the defendants, started and continued to occupy the land until this day. Quit rent was paid by the purchaser's family until 1990 and by the plaintiffs as well since 1984. Minors contract is void; court will protect minors interest; as guardian failed to seek leave of a Court or a Judge in order to deal with the land, the sale is void & the agreement therefore is unenforceable.

Theresa Chong v. Kin Khoon & Co


The court ruled that the appellant-defendant must settle on a contract though made in contravention of the by-laws of the Stock Exchange which imposed a penalty on the plaintiffs respondents. The plaintiffs-respondents might have breached the by-laws of the Stock Exchange by dealing with an unregistered remisier but such dealing did not make the contract illegal as being opposed to public policy.

Held: -

(e) Courts regards it as immoral, or opposed to public policy


Pearce v Brooks Aroomogum Chitty v Lim Ah Hang MAA Holdings v Ng Siew Wah

Pearce v Brooks
Contract of hire of vichicle for purpose of prostitution

MAA Holdings v Ng Siew Wah - A contract for the sale of all shares of a company owning land contained a clause to the effect that the purchaser would apply to Foreign Investment Committee for approval of the transaction and should approval within three (3) months from the date of agreement. The defendants-vendors refused to complete, pleading among other things that they were not bound by the agreement as approval of the F.I.C had not been sought. Held - The failure to apply for approval was not a breach that went to the root of the contract and the parties had in fact expressly provided fir that in the agreement. - The defendants-vendors were therefore not entitled to consider themselves discharged from their obligations under the contract because if the purchasers breach, which at best, merely entitles them to a claim for damages. Restraints of Trade, S.28 Wrigglesworth v Anthony Wilson
P & D agreed that D was restrained from practicing as advocate & solicitor within 5 miles of Kota Bahru town for period of 2 years after the termination of his service contract with P. However, contrary to what was promised after the service, the defendant opened his firm in the Kota Bahru. Former employer to apply for an injunction from the courts to prevent the defendants from doing so.

Aroomogum Chitty v Lim Ah Hang


Whom the plaintiff to claim back money lent to the defendant to operate a brothel. court decides a sum of money loaned to conduct business of prostitution cannot be claimed back for the real purpose of the contract is immoral

Held : - The Court held, because the agreement is null, the application for an injunction denied.

Consequently of illegality Ahmad b. Udoh & Anor v Ng Aik Chong


R leased padi land from A for 6 years & $1500 was paid therein. This agreement contravened s.3(1) of PCO. A then disallowed R to till the land & R claimed the return of the $. both were ignorant of the illegality at the time of executing the agreement, s.66 would apply. contract was discovered void only after the proceedings had been started. only one party unaware of illegality, she only can recover her money (innocently depositing $).

Held: -

Menaka v Lum Kum Chum


-

Yeap Mooi v Chu Chin Chua & Ors


-

Discharge of contract Sumpter v Hedges - The claimant agreed to build two houses and stables for the defendant. It was agreed that 565 would be payable on completion. The claimant commenced performance and then ran out of money and was unable to complete. He had performed just over half of the contract. The defendant completed the work himself. The claimant sought to recover 333 representing the value of the work he had completed. He argued that in completing the work himself, the defendant had thereby accepted partial performance and prevented the claimant from completing the contract. Held: - The claimant's action failed. The court held that the defendant had no choice but to accept partial performance as he was left with a half completed house on his land.
D had no option but to accept the building partly erected on his land. Yeow Kim Pong v Ng Kim Pong Eng Mee Yong & Ors v Letchumanan Sy. Eastern Plastic Industry v Sy. Lam Seng Trading Wong Kup Sing v Jeram Rubber Estate Ltd Louinder v Leis

Wong Kup Sing v Jeram Rubber Estate Ltd - Defendants had failed to give reasonable notice to the plaintiff that intended to terminate the contract after having agreed to n extension of time for performance in a contract for the purchase of a rubber estate. Frustration There is Frustration if: a) The essence of frustration is that the extraneous event is outside the control of the parties, not caused by one of them Ramli Zakaria & Ors v Government of Malaysia

Ramli Zakaria & Ors v Government of Malaysia


Court held that an agreement containing the provisions of a specific salary is not to be disappointed when the salary is then removed and replaced with a new salary scale. Court stated that a contract will not be released solely on the basis of the influence of frustration itself ("self-induced frustration")

Taylor v. Caldwell
P entered into a contract with D where P would pay D 100 pounds/day to use D's music hall to give a concert. After making the agreement but before the first performance, D's music hall was destroyed by fire. Neither party was at fault in the fire. P sued D for breach of contract.

Yeow Kim Pong v Ng Kim Pong


His lordship stated that if in a contract in which time is of the essence, a party fails to perform it by the stipulated time, the innocent arty has the right either to rescind the contract, or to treat as still subsiting. If he treats it either expressly or by cobduct as still continuing, the contract exists but time cease to be of the essence and become at large. The respondent had wavied his right to rescind the contract and consequently was deemed to have opted tto treat the contract as subsiting.

Held : - contract rescinded. - A contract may be rescinded if a key provision in the contract becomes impossible to perform due to no fault of either party. - If a person signs a contract to act as a servant of another, the executors of the servant's estate are not liable when the servant dies. - The excuse that a contract does not have to be enforced upon the destruction of a person or thing is implied by law though it may not be explicit in the contract. Object of contract destroyed/ non-occurrence of a particular event

Held: -

Krell v Henry
D agreed to hire a flat from P for June 26 &27, 1902, the contract contained no reference to the coronation processions, but they were

to take place on those days and to pass the flat. The processions were cancelled. 2/3 of the rent had not been paid and the COA held that the P cannot recover it. Death or incapacitating illness: contract for personal services. Robinson v Davison: - Wife D, famous pianist, for the presentation promised for the concert, but could not implement it because of dangerous diseases

The contract was not frustrated. The contract had not been deprived of its sole commercial purpose as it was still possible to perform the days cruise. The Naval Review was not the only commercial purpose of the contract.

d) Becomes more onerous or costly Davis Contractor v Fareham UDC Davis Contractor v Fareham UDC - The Court held that a construction contract not to be disappointed just because of shortage of labor and construction work becomes more difficult. a) Void from the very beginning Goh Yew Chew v Soh Kian Tee The appellant contractor had undertaken to construct two buildings on land belonging to the respondent employer. The sum of $5,000 was paid by the respondent to the appellants as earnest money. It was found that, owing to the encroachment of a neighbors house into the lot, there was not sufficient area to construct the buildings according to the plans. In his action the respondent claimed the return of the sum of $5,000 as money paid for a consideration which had failed.

Berney v Tronoh Mines Ltd Employment contract released by the disappointment when the Japanese invaded Malaya at that time. This means that the events that lead to frustration must be something that cannot be expected to be reasonable by both parties.

Lee Kin Suan Eng v Chan


5-year lease renewal at all frustrated with the existence of the new enactment that sets the annual renewal.

Not frustration if a) Void from the very beginning b) Can be expected to happen / foreseeable c) Collateral object achievable d) Becomes more onerous or costly c) Collateral object achievable Herne Bay Steam Boat v Hutton

Held - The respondent was entitled to the balance of the deposit of $5,000 after deduction of all reasonable expenses incurred by the appellants. b) Can be expected to happen / Foreseeable Khoo Than Sui v Chan Chiau Hee

Herne Bay Steam Boat v Hutton


The defendant hired out the claimant's steamship. The purpose of the contract was to take paying passengers to view the Naval Review which was part of King Edward VII's coronation celebrations. The defendants were also offering a days cruise for the passengers. The Naval Review was cancelled as the King was ill. The defendant did not use the steamship and the claimant brought an action for the agreed contract price. The defendant argued the contract had become frustrated due to the cancellation of the Naval Review.

Khoo Than Sui v Chan Chiau Hee


The defendant has contracted to recuse logs from the river Sugut plaintiff to Sandakan. Defendants are required to attract eighty two logs, but only eleven arrived safely only because of strong riut at sea. Plaintiff has made a claim for damages for any loss of logs wood, but the defendant refused to pay damages on the grounds that the natural disasters that have occurred that caused the contract to be frustrated.

Held:

Held: -

The defendants reason that natural disasters that cause the contract to be disappointed not acceptable due tempest that occurred have not reached the stage of natural disasters and should be in such weather conditions, the defendant should take precautions to face all eventualities.

c) Becomes more onerous or costly Davis Contractor v Fareham UDC

Davis Contractor v Fareham UDC


Davis were contractors - to build 78 houses over 8 months. There was a labor shortage at the time, delayed completion of contract actually nearly 22 months. Davis claimed a larger sum of money on a Quantum Mires basis.

Held : - Was the contract still a binding one? House of Lords said is this contract frustrated? Due to extraneous events? Originally, the contract was not binding, since: a) There was adequate labour b) The contract would be frustrated if there was a labour shortage - No - not going to look for an implied term, no frustration. Merely, there is a performance obligation more onerous than conceived to be. Lord Reed said that the doctrine of frustration was not based on -

an implied term notion, instead there were two facts to be considered: 1) Nature of the contract itself 2) Circumstances surrounding the contract at the time of its formation. - The doctrine of frustration addresses the problem of the frustrating arising after formation. The distinction may turn on the question of timing, as is illustrated in the following case: *The Court held that a construction contract not to be disappointed just because of shortage of labor and construction work becomes more difficult.

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