Duress Flashcards
CTN Cash and Carry Ltd v Gallagher [1994]
POSSIBLE, in some cases, FOR A THREAT OF LAWFUL ACTION TO BE ILLEGITIMATE.
EXERTION OF PRESSURE BY LAWFUL MEANS DOES NOT PRECLUDE A FINDING OF ECONOMIC DURESS.
Cigarettes delivered to P’s wrong warehouse - Ds agreed to redeliver, but then stolen - Ds demanded that P pay for cigarettes - threatened to remove P’s credit facility.
In instant case, pressure held NOT to be illegitimate as D acted in good faith believing that they had a right to be paid for the stolen cigarettes.
But said, in principle, EXERCISE OF A LAWFUL RIGHT CAN BE ILLEGITIMATE PRESSURE.
Tam Tak Chuen v Khairul Rahman
(High Ct Singapore, but authoritative)
Exhibited 4 factors to be considered in assessing whether a threat of lawful action can be illegitimate.
- Whether the threat is an abuse of the legal process
- Whether the demand is not made in good faith (as in CTN Cash and Carry)
- Whether the demand is unreasonable
- Whether the demand is unconscionable
Case: medical partners - jointly owned company - one having affair in practice - caught on CCTV by D - threatened to use in legal dissolution proceedings - NOT blackmail, so a LAWFUL right.
Agreed to accept unfavourable buy out offer, but once wife found out about affair, claimed agreement was made under duress.
D contended that the pressure was lawful and thus not illegitimate.
Held; that the LAWFUL PRESSURE WAS ILLEGITIMATE.
1) Abused right to bring legal proceedings as using it as an opportunity to take advantage of the legal system.
2) Not acting in good faith - 3 months of planning.
3) Demands were unreasonable - right to consider partner’s actions and impact on medical practice - but NOT entitled to demand that the partner should sell his shares at such a reduced price.
4) D was acting without conscious throughout
Huyton SA v Peter Cremer GmbH & Co [1999]
Affirmed and elaborated on causation test for economic duress.
‘decisive or clinching reason’
Assessed subjectively - courts try to ascertain the effect of the pressure on the particular individual.
Minimum test - ‘but for’
Henessey v Craigmyle & Co
Illustration: for economic duress, courts expect the victim to have pursued any REASONABLE PRACTICAL ALTERNATIVE.
Employee offered redundancy package if he gave up right to bring unfair dismissal claim if summarily dismissed.
Accepted offer but later claimed economic duress.
Employer argued: had alternative course of action being an unfair dismissal claim in court, rather than signing the agreement.
Henessey: can’t as NOT A REASONABLE alternative - won’t receive JSA for some weeks - in meantime - poverty.
BUT: Employer: could’ve applied for social security benefit - would’ve been given immediately.
H - unaware of this –> IMMATERIAL.
Judgement for employer: THERE WAS A REASONABLE PRACTICAL ALTERNATIVE AVAILABLE - IMMATERIAL THAT EMPLOYEE WAS UNAWARE OF IT.
Requirement of causation was not satisfied.
Universe Tankships of Monrovia v International Transport Workers Federation (The Universe Sentinel) [1983]
H of L CONFIRMED 2 STAGE TEST FOR DURESS:
(1) THERE MUST BE PRESSURE AMOUNTING TO COMPULSION OF THE WILL OF THE VICTIM (essentially a causation test)
(2) THE PRESSURE EXERTED MUST BE ILLEGITIMATE
R. v Attorney General for England and Wales
Affirmed CTN Cash and Curry Ltd v Gallagher
If not acting in good faith, then a threat of lawful action CAN be held to be illegitimate pressure - duress.
B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984]
Builders erecting stands at exhibition in 3 days time
Builders - went on strike demanding more money = SIGNIFICANT CHANGE IN CIRCUMSTANCES
Contractor (who builders worked for) - willing to pay builders more.
Lacked the cash - requested money from the other party (employer)
Employer offered to pay money by advanced payment on contract price.
Contractor insisted on cash being on top of contract price - said that if you don’t pay stands would not be completed in time.
Employer late claimed payment had been made under duress.
Held; WHILST THERE WAS A SIGNIFICANT CHANGE IN CIRCUMSTANCES, THE DEMAND OF THE CONTRACTOR WAS EXCESSIVE, AND THEREFORE UNREASONABLE. = ILLEGITIMATE PRESSURE.
Pao On v Lau Yiu Long
Case also confirms general rule that a victim who received independent advice (financial and legal) before entering into contract will be regarded as having done so voluntarily.
Exception: when the advice merely confirms the situation - that there is no practical alternative choice.
Dimskal Shipping Co SA V International Workers Federation (The Evia Luck) [1991]
Authority that DURESS OF GOODS can amount to pressure that is compulsion of the will - capable of causing victim to enter into contract.
(A threat to destroy one’s property)
ALSO authority: NO longer necessary to specify which category of duress is in play.
Question is simply whether the pressure that has been applied caused victim to enter into contract.
CAUSATION TEST FOR ECONOMIC DURESS
Higher threshold than test for duress to the person. PRESSURE MUST BE A SIGNIFICANT CAUSE.
Pao On v Lau Yiu Long [1980]
Authority recognising threats to ECONOMIC INTERESTS capable of causing someone to enter into a contract.
Privy Council (per Lord Scarman) - gave list of evidential factors - will help court in their subjective assessment - ‘evidence of causation’:
1) Whether the victim protested
(General rule - protest shows V unwilling to enter in contract and lack of protest indicates voluntary consent. But: court won’t always expect protest (e.g. gun to head) and sometimes D makes it impossible for V to communicate his protest, e.g. by absconding.
2) Whether victim had an alternative course of action
3) Whether the victim was independently advised
4) Whether after entering into the contract he took steps to avoid it (once pressure was removed.)
Barton v Armstrong
Authority for duress to the person (long recognised form of duress.)
Power struggle for full control of a company between 2 majority shareholders.
A forced B to sign agreement - sent dodgy characters in night - threatened to kill B.
CAUSATION TEST FOR DURESS TO THE PERSON:
Threat merely has to be ‘a’ reason for entering into contract. NOT ‘the’ reason, the ‘predominant’ reason nor the ‘clinching’ reason.
LEGITIMATE PRESSURE
General rule: a threat of lawful action (when you have the legal right to do something) is NOT illegitimate
Unless (2 exceptions)
1) Where the threat of lawful action becomes unlawful due to a demand that was made. (E.G. Blackmail - lawful right to report crime - becomes unlawful if threatened to meet demands)
2) When the threat remains lawful but can be possible to be illegitimate.
Illegitimate pressure
General rules
- Every threat to commit a criminal offence or a tort = illegitimate pressure.
- BUT, NOT every threat to commit a breach of contract (despite being unlawful) - illegitimate.
Courts will take into account: - Whether there has been a change of circumstances (from the time contract was formed to the time performance was required thereunder)
- Whether the demand of the threatening party was reasonable in the circumstances.
