Chin Nam Bee Development Sdn Bhd v Tai Kim Choo.docx

Chin Nam Bee Development Sdn Bhd v Tai Kim Choo & Ors -

The respondents purchase homes off the plan to be constructed bythe appellants.-

Each of the respondents had signed a sale and purchase agreement topurchase a house at $29,500. Subsequently, the respondent was madeto pay an additional payment was made to pay an additional $4,000.Held:$4,000.Held:-

The court was asked to determine if the additional payment wasmade voluntarily or under threat by the appellants to cancel therespondent ‟

s booking for their houses.-

The appeal dismissed by the High Court which ruled that there wascoercion as defined in section 15 of the Contract Act. It further addedthat the definition in section 15 should only apply for the purposecontained purposecontained in section 14, and not for the entire Act. SECTION 15 : COERCION “coercion is the committing or threatening to commit any act forbidden by the Penal Code or the unlawful detaining or threatening to detain any property to the prejudice of any person whatever with the intention of causing any person to enter into an agreement” “committing or threatening to commit any act forbidden by the Penal Code” Visu Sinnadurai J in Teck Guan Trading Sdn Bhd v Hydrotek Engineering (S) Sdn Bhd: “ Section 15 limit the wrong or threatened wrong to crimes under Penal Code alone…acts which are offences other than it or merely a civil wrong will not amount to coercion” “unlawful detaining” Facts: Defendant argued that Plaintiff refused to supply with price at $1180 amounted to unlawful detention of  property in order to make Plaintiff agreed for $1244 as as the price Held: this transaction did not amount to coercion because plaintiff exercised its legal right over its own property. Kannaya Lal v National Bank of India The pf was entitled to recover money paid as a consequence of coercion caused by the wrongful interference of the df bank with property. “with the intention of causing any person to enter into an agreement” The Privy Council in Kanhaya Lal v Bank of India Ltd (1913) 1 LR, 40 Cal. 598 was of the opinion that the definition of coercion was solely a definition which applied “to the consideration whether there has been free consent to an agreeme nt so as to render it a contract”. In this case the Privy Council ruled that the plaintiff was entitled to recover money paid as a consequence of coercion caused by the wrongful interference of the Bank with property Kanhaya Lal v Bank of India Ltd (1913) followed an earlier case of Dulichand v Ram Kishen Singh (1881) ILR 7 Cal 648 wherein the Privy Council held that money paid by the true owner to prevent the sale of his property under an execution could be recovered. It was held obiter that if the goods of a 3rd person are seized by the sheriff and are about to be sold as the goods of the defendant and the true owner pays money to protect his

goods and prevent the sale he may bring an action to recover back the money he has so paid; it is the compulsion under which they are about to be sold that makes the payment involuntary

EFFECT OF COERCION 1. S19(1) – an agreement is caused by coercion .. the agreement is a contract VOIDABLE at the option of the  party whose consent was so caused 2. S73 – a person to whom money has been paid or anything delivered …under coercion must REPAY or RETURN it Illustration (b) –  a railway company refuses to deliver certain goods to the consignee except upon the payment of an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled to recover so much of the charge as was illegally excessive Chin Nam Bee Development Sdn Bhd v Tai Kim Choo & 4 Ors [1988]2 MLJ 117 R purchased houses from A’s house whereas ad ditional sum of RM4,00 had paid to cancel their booking for the house. R claimed the refund for additional payment as it was under a threat of A. Held: the claim was allowed because it was made under coercion. Kesarmal s/o Lechman Das v Valiappa Chettiar [1954] 20 MLJ 119 the court held invalid a transfer executed under the orders of the Sultan issued in the presence of 2 Japanese officers during the Japanese occupation of Malaya. In this case consent was not free and therefore the transfer  became voidable at the will of the party whose consent was so caused In Kesarmal s/o Letchman v Valliappa Chettiar (1954) the court held invalid a transfer executed under the orders of the Sultan issued in the presence of 2 Japanese officers during the Japanese occupation of Malaya. In this case consent was not free and therefore the transfer became voidable at the will of the party whose consent was so caused Kesarmal s/o Letchman Das v. Valiappa Chettiar (1954) MLJ 119 It was held that the transfer executed under the orders of the Sultan, issued in the ominous presence of two Japanese officers during the Japanese Occupation of Malaysia was invalid. The consent had not been freely given, thus the transfer was voidable. Case: Chin Nam Bee Development v Tai Kim Choo The resp purchased certain houses for construction from the appellant. The resp claimed that they had to pay additional sum of RM4000 to the app under threat of the app to cancel the booking of the houses.