Tutorial 3 (Week 4)

Question 1

Iskandar is a consultant working for Garuda Sdn Bhd and he was given a task to advise the
villagers in Kg Mawar on the latest housing development in Kg Mawar. He made friends
with the villagers and he is very close with Tuan Haji Hassan. He advised Tuan Haji Hassan
for a lot of matters including matters related to Tuan Haji Hassan’s properties. Tuan Haji
Hassan who does not have any children has trust and confidence with Iskandar. When
Iskandar advises Tuan Haji Hassan to sell his agriculture land because of the value of the land
amount to RM50.000.00. Tuan Haji Hassan has not asked any independent advise and put all
his trust to Iskandar to settle everything related to the sale of the agriculture land. After the
land was sold, Tuan Haji Hassan realized that the agriculture land is undervalued.

Advise Tuan Haji Hassan.

Issue 1: Whether Iskandar had any presumed undue influence towards the sale of Tuan Haji’s
agriculture land

Law:

- S.2(i) of CA stated that an agreement which is enforceable by law at the option of one
or more of the parties thereto, but not at the option of the other or others, is a voidable
contract.
- S.10(1) of CA stated that all agreement are contracts if they are made by the free
consent of parties competent to contract, for a lawful consideration and with a lawful
object, and are not hereby expressly declared to be void
- S.14(b) of CA stated that the consent is said to be free when it is not caused by undue
influence.
- S. 16(2)(a) of CA stated that in particular and without prejudice to generality of the
foregoing principle, a person is deemed to be in a position to dominate the will of
another where he holds a real or apparent authority over the other or where he stands
in a fiduciary relation to the other.
- In the case of Tengku Abdullah ibni Sultan Abu Bakar & Ors v Mohd Latiff bin
Shah Mohd & Ors and other appeals,

Application:

- By applying S.10(1) of the CA, the question of free consent is raised in relation to the
current situation between Iskandar and Tuan Haji Hassan as to what vitiates the free
consent of Tuan Haji Hassan to declare the immediate agreement to be void.
- By applying S.14(b) and S.16(1) of CA, the fact that Tuan Haji Hassan who did not
have any children had put his trust and confidence with Iskandar whom leveraged this
trust and superior experience in such matters to create a fiduciary relationship to
obtain an unfair advantage over Tuan Haji Hassan.
 - By applying the case of Bank of Credit and Commerce International SA v
Aboody, the Court of Appeal retained the two traditional classes of "actual undue
influence" and "presumed undue influence" but went on to subdivide the category of
"presumed undue influence" into two further sub-classifications which are known as
Class 2A and Class 2B cases. The current situation between tuan haji hassan and
iskandar it can be seen that this is a class 2B incidence of undue influence as if the
complainant proves the de facto existence of a relationship under which the
complainant generally reposed trust and confidence in the wrongdoer, the existence of
such relationship raises the presumption of undue influence.

Conclusion:

- Thus, all tuan haji has to do is prove said de facto existence of a relationship as trust
and confidence is already obvious which shows there is presumed undue influence.

Issue 2: Whether Iskandar had manifested disadvantage against Tuan Haji

Law:

- S16(1) of CA: A contract is said to be induced by “undue influence” where the

relations subsisting between the parties are such that one of the parties is in a position
to dominate the will of the other and uses that position to obtain an unfair advantage
over the other.
- In the case of National Westminster Bank plc v Morgan, the presumption that
undue influence was exercised would only arise if the transaction was "manifestly
disadvantageous" to the person influenced. The principle justifying the court in setting
aside a transaction for undue influence can now be seen to have been established by
Lindley LJ in Allcard v Skinner. It is not a vague 'public policy' but specifically the
victimisation of one party by the other.”
- In the case of Polygram Records Sdn Bhd v The Search & Anor, this case involved
a group of young singers known as "The Search" who had entered into two written
contracts with the plaintiffs, both recording contracts containing substantially the
same terms. The defendants, the group of singers, alleged that the second contract was
made under undue influence. In this case, having established the existence of undue
influence, the next issue was whether the defendants had succeeded in establishing the
necessary element of "manifest disadvantage".

Application:

- By applying the case of Polygram Records Sdn Bhd v The Search & Anor

Whether Tuan Haji can claim back his agriculture land from Iskandar

S16(3)(a), S20, [if he chooses to rescind the contract S66,65 can be applied]
Question 2

Janaki, a wealthy widow of 56 years was suffering from poor health and mental depression.
She was under the treatment of Dr Ayden, her family doctor. Meanwhile, Mr Aaron a
solicitor advised Janaki on other social and financial matters. Janaki has trust and confidence
of Mr Aaron and followed his advice. Janaki does not know that both Dr Ayden and Mr
Aaron have conspired to influence Janaki to sell some property of hers. Dr Ayden told Janaki
that she has about one year more to live. Mr Aaron advised her to sell her penthouse for the
price of RM1,00,000.00. Janaki agreed to the proposed price in January 2016. In June 2016,
when her health and mental condition improved, she realised that the value of the penthouse
that she had sold was much more than RM1,000,000.00 Janaki felt that she had been
deceived. Janaki is now seeking legal advice to rescind the sale of the penthouse.

Advise Janaki the possible action to be taken against Dr Ayden and Mr Aaron.

Whether the presumption can be rebate by Dr Arden and Mr Aaron