The court considered whether a party can avoid a contract procured by duress in circumstances where he cannot offer the other party substantial restitutio in integrum.
Held: Unless the claimant could offer counter-restitution, the remedy of rescission for duress was not available: ‘the common law remedy of rescission on the grounds of duress requires an ability to give counter restitution. My reasons for reaching that conclusion may be summarised as follows:
i) Rescission at common law on the grounds of fraudulent misrepresentation required an ability to give counter restitution.
ii) The logic of rescission is that the parties are put back into the position in which they would have been had there been no contract. That logic requires an ability to give counter restitution.
iii) Although no case has been found in which it was held that an ability to give counter restitution is required in order to rescind a contract on the grounds of duress there is no reason why the nature of the remedy of rescission or the circumstances in which it is available should differ depending upon whether the ground of rescission is fraud or duress. ‘
and ‘[E]quity, when dealing with rescission, applies the principles of counter restitution, albeit in a broader sense than those principles were applied at common law. That is because, in circumstances where counter restitution is required when a contract is rescinded or avoided both at common law on the grounds of fraudulent misrepresentation and in equity on the grounds of innocent misrepresentation or undue influence, there does not appear to me to be any good reason of justice or logic why it is not required when a contract is rescinded or avoided at common law on the grounds of duress. ‘
Nigel Teare QC
[2006] 3 WLR 946, [2006] EWHC 1642 (Comm), Times 18-Jul-2006, [2006] EWHC 1728 (Comm), [2006] 3 All ER 1139, [2007] QB 88, [2006] 2 CLC 479, [2006] 2 All ER (Comm) 484
Bailii, Bailii
England and Wales
Citing:
Cited – Dunbar Bank Plc v Maurice Nadeem Zubaida Nadeem and Another CA 1-Jul-1998
Manifest disadvantage had to be shown in order to establish a claim of presumed undue influence, but only damage if actual undue influence shown. Equity can only help if restitutio in integrum could be achieved. . .
Cited – Dorimex Srl; Tradex Srl and Intertrade Srl v Visage Imports Limited CA 18-May-1999
In relation to a plea of economic duress the trial judge, His Honour Judge Diamond QC, had directed himself ‘impeccably’ by reference to principles stated in Snell ‘s Equity 29th ed. and Goff and Jones on the Law of Restitution. The defence of . .
Cited – Clarke v Dickson 1858
The plaintiff brought his claim for money had and received by the purchaser of shares in a company. He said that he had been induced to purchase the shares by a fraudulent misrepresentation but he had failed in his action at common law.
Held: . .
Cited – Royal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .
Cited – The Western Bank of Scotland v Addie HL 1867
Rescission of a share purchase agreement was sought on the grounds of fraudulent misrepresentation.
Held: Lord Cranworth said: ‘Relief under the first head, which is what in Scotland is designated restitutio in integrum, can only be had where . .
Cited – Fairbanks v Snow 1887
In each case where a party’s disposition has been set aside for duress or undue influence: ‘the party has been subjected to an improper motive for action.’ . .
Cited – Spence v Crawford HL 1939
The vendor of shares sought rescission of a contract for their sale.
Held: He succeeded. Express orders for their return were made.
Lord Wright said: ‘Restoration, however, is essential to the idea of restitution. To take the simplest . .
Cited – Barton v Armstrong PC 5-Dec-1973
(New South Wales) The appellant had executed a deed on behalf of a company to sell shares to the respondent in the context of a long running boardroom battle. He said that the deed had been obtained by duress and was voidable. The respondent was . .
Cited – Adam v Newbigging HL 1988
There was a sale of a share in a partnership, which had become insolvent since the contract.
Held: The House ordered rescission and mutual restitution, though the misrepresentation was not fraudulent, and it gave ancillary directions so as to . .
Cited – O’Sullivan v Management Agency and Music Limited CA 1985
osullivan_mamCA1985
The claimant alleged undue influence. As a young singer he had entered into a management agreement with the defendant which he said were prejudicial and unfair. The defendant argued that the ‘doctrine of restitutio in integrum applied only to the . .
Cited – Abram Steamship Company v Westville Shipping Company HL 1923
The defendant argued for rescission of a shipbuilding contract for misrepresentation.
Held: Rescission in the general law of contract is by act of the innocent party operating independently of the court. When a contract is avoided the remedies . .
Cited – Redgrave v Hurd CA 1881
The plaintiff, an elderly solicitor wishing to retire, advertised for someone to enter into partnership with him and to buy his house. The defendant responded to the advertisement and negotiations followed, in which the plaintiff stated that the . .
See Also – Halpern and Another v Halpern and others ComC 24-Mar-2006
The deceased parents, being orthodox Jews, had first made standard wills and then made provision accoding to Jewish law. A dispute after the second death was referred to a Beth Din arbitration. After an initial resolution, various distributions were . .
Cited by:
Appeal from – Halpern and others v Halpern and Another (No 2) CA 3-Apr-2007
The parties had settled by compromise a dispute about the implementation of a will before the Beth Din. It was now said that the compromise agreement had been entered into under duress and was unenforceable. The defendant said that rescission could . .
These lists may be incomplete.
Updated: 26 March 2021; Ref: scu.243074