Can recover goods as well as money paid to prevent unlawful seizure or to obtain release (in restitution): Astley v Reynolds.
Can be used to avoid contract (Siboen overruling Skeate); threat need not be express, reasonable belief enough: Hawker Pacific.
Needs to be a cause.
Economic Duress
Two situations:
1) P has made payment under ED in absence of contract or contract without consideration (unjust enrichment)
2) Contractual modification
Payments
Smith v William Charlick – recognized possibility but was no illegitimate pressure.
Cf White Rose Flour Milling – threatened to not supply in breach of contract- ED.
TA Sundell v Yannoulatos – Money can be recovered.
Contractual modification
Siboen & Sibotre – economic duress can be used to rescind, not just recover payments. Same result in Pao On v Lau Yiu Long.
When is there economic duress/commercial pressure?
Crescendo per McHugh J:
1) Did pressure applied induce victim to enter contract or modify existing one?
2) Did pressure go beyond what law prepared to countenance as legitimate?
Does pressure have to be unlawful? Or is illegitimate pressure wider?
Threatening to breach contract is unlawful (Furphy v Nixon) but may not be if done in good faith (Mitchell per Keane JA).
Kirby P in Equiticorp – scrap duress and deal with under other doctrines.
Karam – NSWCA limited duress to threatened or actual unlawful conduct.
Woodside – Murphy J limited it to conduct unlawful/wrongful according to some external legal standard. McLure P (Newnes JA agreeing) – if actual/threatened unlawful conduct, prima facie illegitimate. If lawful conduct, maybe illegitimate if no reasonable/justifiable connection between pressure applied and demand. HC decided on other grounds.
Mitchell v Pacific Dawn – Keane JA – duress and unconscionable conduct are distinct doctrines.
Protest
McHugh JA in Crescendo – non-definitive factor. Windeyer J in Mason v NSW – relevant to whether acted freely/under compulsion; non-conclusive factor.
Commercial Pressure
Siboen & Sibotre (1976)– asked to reduce charter cost; charter market particularly bad. Mere commercial pressure.
Atlas v Kafco (1989)– A underquoted price. Asked for more or wouldn’t deliver. Christmas time. Found economic duress.
Reconciling them?
Timing – courts have become more willing to find ED.
Charter market’s bad state may have been an important factor.
In Siboen they asked for less. In Atlas they asked for more; owner had to pay because was 80% of business.
Causal Link
McHugh JA in Crescendo cited Barton and said a cause.
Burchett J (FI) in News v Aust Rugby Football League cited Lord Goff in Evia Luck and said significant cause (preferable).
Remedies
Rescission
Standard. But, if pressure subsequently lifted and contract affirmed, not available (Atlantic Baron).
Payments under contract recoverable, otherwise - restitution.
Restitution
Not available until after the contract has been rescinded: Evia Luck.
Damages
Universe Tankships – preferable view is Lord Diplock- damages not available unless pressure is also a tort.
ACL s 20(1) – unconscionable conduct within meaning of common law.
ACL s 50- physical force/undue harassment/coercion with supply/payment of goods/services or land interest.
Excite Mobile – fell under both provisions.
Undue Influence
What is it?
Never been defined (Allcard v Skinner per Lindley LJ). If defined, people will avoid it (Chesterfield v Jannsen per Lord Hardwick).
Allcard per Lindley LJ: “some unfair and improper conduct, some coercion from outside, some overreaching, some form of cheating and generally, though not always, some personal advantage obtained by a donee placed in some close and confidential relation to the donor.”
Johnson v Buttress per Dixon J: “unconscientious use of any special capacity or opportunity that may exist or arise of affecting the alienor’s will or freedom of judgment in reference to such a matter.”
Influence itself is not per se objectionable: Allcard per Kekewich J.
Balance between autonomy and protection by court (see Kakavas). Court won’t help you get out of a bad bargain.
But not necessary to show loss of autonomy: Tufton v Sperni.
Categories
See Lord Nicholls in Royal Bank of Scotland v Etridge (No 2).
