DATUK JAGINDAR SINGH & ORS v TARA RAJARATNAM [1983] 2 MLJ 196

FACT: In this case the respondent alleged that she was induced by the fraud and undue influence of the first and second appellants to transfer the land to the second appellant. The respondent claimed that when the land was transferred as a security and there were two undertakings that the land would not be sold to anyone for one year without the consent of the respondent and the land would be transferred back to the respondent on her repaying the $220,000 within one year. Contrary to these undertakings the second appellant some eighteen days later transferred the property to the third appellant. Subsequently the land was again transferred to a land development company almost wholly owned by the first appellant. The land was eventually subdivided and sold to the public. The appellants were advocates and solicitors. The learned trial judge found that the appellants were guilty of fraud, breach of agreement and undue influence. The appellants appealed. ISSUES:

1) Whether the transaction made is caused by misrepresentation and fraud 2) Whether the transaction made because of undue influence
3) Whether there is a breach of agreement

4) Whether the R can claim for damages in fraud

JUDGMENT: 1) The first and second appellants were guilty of fraud in that they falsely represented to the respondent that the transaction of 30 March 1974 was of the nature of a security such as would enable her to redeem the property by repaying the sum of $220,000 at any time, when it was in fact an outright sale coupled with an option to re-purchase the property for that sum within a year, and further that they falsely represented that it was their intention to give effect to the transaction as a security one, when in fact they had no intention of allowing the respondent to redeem the property at any time. The court found that the respondent had been induced by those misrepresentations to enter into the transaction.

2) It has already been shown that a solicitor-client relationship existed between the respondent and
the both appellants. No one disputed that Devan was acting as Taras agent during the negotiation. Appellants certainly took advantage of relationship though they said that they were merely assisting Tara. If they were not acting for Tara then they had acted rather unethically and for their own advantage in furthering their design to acquire the property. They used not only their professional position but also their social status in exercising undue influence over Tara and Devan. Clearly Devan was under their undue influence earlier as he dealt with them from the beginning on 30 March 1974.

3) The late payments to the two banks concerned were also regarded as breaches. The agreement of
30 March 1974 was actually a farce as Suppiah never intended to act on it. All he was interested was to get the transfer form signed by Tara. To prevent Tara from getting her property back Suppiah and Jagindar got Arul (3rd appellant) to help by posing as a registered proprietor when in actual fact he was merely a nominee. Thus Arul was instrumental in ousting Tara and family from her house and helping Jagindar to acquire the property by transferring it to Jet Age Construction Co. Arul seemed to think that he had done nothing wrong even when he must have known that he was being used to cheat Tara of her property. He had done everything he could to prevent Tara from setting aside the transfer; to the extent of not disclosing that he was a nominee.

4) On the evidence the learned Judge found all appellants liable for fraud. He found Jagindar and
Suppiah liable for breach of contract, undue influence and breach of trust. The property had been subdivided and sold to the general public so that specific restitution was not desirable or possible. The Judge decided to award damages for fraud which would also cover other heads of damages. The measure of damages may not be the same in an action for fraud as in an action for breach of contract or undue influence or breach of trust. Money compensation may not always be an adequate substitute for the deprivation of ones property. Appeal dismissed.

5th February 2010