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\Status:

Positive or Neutral Judicial Treatment

*104 Alexander Barton Appellant v Alexander Ewan Armstrong and Others Respondents
Privy Council 5 December 1973

[1975] 2 W. .R. 1!5! [197"] A.#. 1!$

ord !ilber"orce # ord Simon o" $laisdale # ord Cross o" C%elsea # ord &ilbrandon and Sir $ar"ield 'ar(ic) 1973 June *1# *5# *+# *,- July *# 3- Dec. 5 /0n 122eal "rom t%e Court o" 122eal o" t%e Su2reme Court o" Ne( Sout% !ales3 ContractValidityDuressThreat to life and unlawful pressure contributing to party entering into contractCommercial and financial reasons making it necessary for party under duress to enter into contractWhether contract void against party under duress Onus of proof T%e a22ellant and t%e res2ondent (ere t%e ma4or s%are%olders in a com2any. 5ollo(in6 business ne6otiations# t%e a22ellant entered into an a6reement by deed e7ecuted on January 17# 19+7# (it% t%e res2ondent a6reein6 terms on (%ic% t%e a22ellant (ould buy out t%e res2ondent8s interest in t%e com2any. 0n January 19# 19+,# t%e a22ellant brou6%t a suit in e:uity a6ainst t%e res2ondent and ot%er interested 2arties alle6in6 t%at t%e res2ondent %ad coerced %im into a6reein6 to t%e matters dealt (it% in t%e deed by t%reatenin6 to %ave %im murdered and by ot%er(ise e7ertin6 unla("ul 2ressure on %im# and sou6%t a declaration t%at t%e deed o" January 17# 19+7# and certain ancillary deeds e7ecuted by %im (ere void so "ar as concerned %im. T%e trial 4ud6e "ound t%at t%e res2ondent %ad t%reatened t%e a22ellant# but t%at t%e 2rimary and 2redominant reason (%y t%e a22ellant %ad entered into t%e a6reement and e7ecuted t%e deeds (as because o" commercial necessity and t%at t%e t%reats did not in "act coerce t%e a22ellant into e7ecutin6 t%e deeds. ;e accordin6ly dismissed t%e suit. 0n a22eal t%e Court o" 122eal a6reed substantially (it% but modi"ied t%e "indin6s o" "act by t%e trial 4ud6e# and %eld t%at t%e a22ellant (as not entitled to succeed unless %e establis%ed t%at but "or t%e t%reats %e (ould not %ave si6ned t%e a6reement# and as %e %ad "ailed to do so dismissed %is a22eal. 0n a22eal to t%e Judicial Committee: < ;eld# allo(in6 t%e a22eal = ord !ilber"orce and ord Simon o" $laisdale dissentin6># =1> t%at t%e e:uitable rule (%ic% enabled a contract entered into as a result o" "raudulent misre2resentation to be set aside# a22lied in cases o" duress so t%at i" t%e res2ondent8s t%reats (ere a reason "or t%e a22ellant e7ecutin6 t%e deed %e (as entitled to relie" even t%ou6% %e mi6%t (ell %ave entered into t%e contract i" t%e res2ondent %ad uttered no t%reats to induce %im to do so =2ost# 22. 11,; < 119'>. Dictum o" ord Cran(ort% .J. in ?eynell v. S2rye =1,5*> 1 De $.@. A $. ++9# 79, a22lied . =*> T%at it (as "or t%e res2ondent to 2rove t%at t%e t%reats and unla("ul 2ressure did not in "act contribute to t%e a22ellant8s decision to si6n t%e deed and# since t%e 2ro2er in"erence to be dra(n "rom t%e "acts "ound (as t%at alt%ou6% t%e *105 a22ellant mi6%t %ave e7ecuted t%e deed even i" t%e res2ondent %ad not made any t%reats# t%e t%reats and unla("ul 2ressure did in "act contribute to t%e a22ellant8s decision to si6n t%e deed# t%e deeds (ere e7ecuted under duress and (ere void so "ar as t%e a22ellant (as concerned

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=2ost# 2. 1*9'<C# B<$>. Jud6ment o" t%e Court o" 122eal o" t%e Su2reme Court o" Ne( Sout% !ales /19733 * N.S.!. .?. 59, reversed. T%e "ollo(in6 cases are re"erred to in t%e 4ud6ments: Co7 v. Smail /191*3 C. .?. *7D . 5airban)s v. Sno( =1,,7> 13 N.B. 59+ . ?eynell v. S2rye =1,5*> 1 De $.@. A- $. ++9 .

1PPB1 =No. 15 o" 197*> "rom a 4ud6ment =June 39# 1971> o" t%e Court o" 122eal o" t%e Su2reme Court o" Ne( Sout% !ales =@ason J.1. and Taylor 1.<J.1.# Jacobs J.1. dissentin6> dismissin6 an a22eal by t%e a22ellant# *106 1le7ander 'arton# "rom a decree o" t%e Su2reme Court sittin6 in B:uity =Street J.> (%ereby %e dismissed a suit brou6%t by t%e a22ellant a6ainst t%e "irst res2ondent# 1le7ander B(an 1rmstron6# and a number o" ot%er de"endants in (%ic% t%e a22ellant sou6%t a declaration t%at a deed dated January 17# 19+7# and certain ancillary deeds to (%ic% %e and all t%e ot%er res2ondents (ere 2arties (ere e7ecuted by %im under duress and (ere void so "ar as concerned %im. T%e "acts are stated in t%e ma4ority 4ud6ment o" t%eir ords%i2s. ! C! "ru#man $!C! and ! %! Priestley $!C! =bot% o" t%e Ne( Sout% !ales 'ar> "or t%e a22ellant. T%e basic issue at t%e trial (as (%et%er t%ere (ere t%reats or no t%reats. T%e Court o" 122eal acce2ted t%at t%e a22ellant %ad been t%reatened (it% deat% unless %e a6reed to t%e 2ro2osed contract and t%at %e (as in "ear o" t%e t%reats by t%e res2ondent# yet t%e ma4ority %eld t%at %e (as not entitled to t%e relie" claimed. T%e correct 2rinci2le o" la( a22licable to t%e 6round u2on (%ic% a contract is voidable "or duress (as stated by ;olmes J. in 5airban)s v. Sno( =1,,7> 13 N.B. 59+ # (%ere %e revie(ed t%e %istorical ori6ins o" duress (it% re"erence to Co)e8s Enstitutes# T%orou6%6ood8s case =15,D> * Co.?e2. 9a and one o" t%e Fear 'oo) cases. ;olmes J. said at 2. 59,: G16ain# t%e 6round u2on (%ic% a contract is voidable "or duress is t%e same as in t%e case o" "raud# and is t%at# (%et%er it s2rin6s "rom a "ear or a belie"# t%e 2arty %as been sub4ected to an im2ro2er motive "or action.G /?e"erence (as made to 1stley v. ?eynolds =1731> * Stra. 915 - ?obertson v. 5ran) 'ros. =1,,9> 19 S.Ct. 5&an%aya al v. National 'an) o" Endia =1913> *9 T. .?. 31D - @as)ell v. ;orner /19153 3 &.'. 19+ and @ason v. State o" Ne( Sout% !ales =1959> 19* C. .?. 19, .3 T%e a22ellant (as entitled to a "ree c%oice unin"luenced by com2ulsion o" any sort. Et (as not su""icient t%at %e %ad a c%oice. T%e :uestion (as (%et%er %is c%oice bet(een t%e alternatives (as a real c%oice and made "reely. Su22ort "or t%e conclusions t%at t%e 2ro2er basis "or t%e doctrine o" duress is to be "ound in t%e statements o" 2rinci2le in certain "raud cases# (%ic% are analo6ous. /?e"erence (as made to !illiams8 Case =Note> =1,+9> .?. 9 B:. **5 - Smit% v. &ay =1,59> 7 ;. .Cas. 759 and ?eynell v. S2rye =1,5*> 1 De $.@. A $. ++9 .3 T%e cases in relation to "raud su66est t%at it is not necessary to be over(%elmed by "raud. 5raud vitiates consent# and "ear o" violence also vitiates consent. 'ot% t%ese are im2ro2er motives. Et is not su66ested t%at any "orm o" 2ressure is su""icient to set aside a deed "or duress# but only suc% 2ressure (%ic% is im2ro2er accordin6 to t%e la( o" contract# e.6.# "ear (it%in t%e meanin6 o" t%e doctrine o" duress. T%e distinction is bet(een no consent and consent obtained by im2ro2er means (%ic% vitiates t%e consent. E" t%ere are a number o" inducin6 "actors# one o" (%ic% is "raud# t%at "raud is su""icient to vitiate t%e contract: see ?eynell v. S2rye# 1 De $.@. A $. ++9 # 79,. 0n t%e "acts

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t%e res2ondent8s t%reats (ere a reason# even t%ou6% not t%e only reason# (%y t%e a22ellant entered into t%e contract. T%e a22ellant (as t%ere"ore entitled to t%e relie" claimed. /?e"erence (as made to 'acon8s Ne( 1brid6ment# 5t% ed. =179,># vol. *# 22. D9*<D93'racton on t%e a(s and Customs o" Bn6land =translation by Samuel B. T%orne># ;arvard Hniversity Press ='el)na2 Press> =19+,># vol. *# *107 2. +5- Fear 'oo)s: Cases en ey& Part EE# 39 Bd(. EEE =*,> and ;alsbury8s a(s o" Bn6land# 1st ed.# vol. 7 =1999># 2. 357.3 T%e criminal la( in relation to duress is di""erent and not to be reconciled (it% duress in t%e la( o" contract: see ?e6. v. ;udson /19713 * I.'. *9* . En criminal la( t%e relevant :uestion is: G!as it a voluntary actJG because# i" not# it (as not t%e act o" t%e 2arty. En t%e la( o" contract t%e relevant :uestion is: G!as t%e consent im2ro2erly inducedJG En t%e instant case t%e test as laid do(n by Jacobs J.1. in t%e Court o" 122eal (as t%e correct one. 0n t%e evidence t%ere (as an e7ternal circumstance (%ic% im2ro2erly induced t%e a22ellant8s act. P! '! Powell $!C! and %! (! "oldstein =bot% o" t%e Ne( Sout% !ales 'ar> "or t%e "irst si7 res2ondents. T%e issue (as not (%et%er t%ere (ere t%reats or no t%reats. T%e case 2leaded (as: =1> t%at t%reats (ere made to t%e a22ellant- =*> t%at t%e t%reats (ere made by t%e res2ondent or 2ersons actin6 on %is be%al"- and =3> t%at t%e t%reats overbore t%e a22ellant8s (ill. T%e issue (as t%at t%e e7ecution o" t%e deeds by t%e a22ellant (as a6ainst %is (ill. T%e in:uiry as to duress (as directed to causation and e""ect. En order "or t%e deeds to be set aside it must be s%o(n t%at t%e duress# i" not t%e sole reason "or t%eir e7ecution# (as t%e 2redominant reason in common la( or in e:uity. /?e"erence (as made to )racton on the aws and Customs of 'ngland # vol. *# 2. +5- Selected Cases in t%e Court o" &in68s 'enc% under Bd(ard EEE# Selden Society# edited by $. 0. Sayles =19+5># 22. +7<+,- 1non . =1599> &eil. 15D- Coke*s (econd +nstitutes =15,9> 22. D,*<D,3- T%orou6%6ood8s case# * Co.?e2. # 9a'lac)stone8s Commentaries on t%e a(s o" Bn6land =1,D1 re2rint># vol. 1# 22. 1*D# 131<13*Viner*s ,bridgment& *nd ed. =179*># vol. 9# 2. 31+ and )acon*s -ew ,bridgment # 5t% ed. =179,># vol. *# 22. D9*<D93 =(%ic% re"ers to !oodman v. S)ute =179,> Prec.C%. *++ >.3 Et is clear "rom )racton t%at t%e :uestion must be: G!as t%ere suc% com2ulsion as to cause t%e actJG i.e.# t%e in:uiry must be directed to causation. T%e em2%asis is on t%e causative relations%i2 and to succeed t%e a22ellant must s%o( t%at "ear (as t%e sole reason "or %is act# or i" not t%e sole reason# t%e 2redominant reason. 0n t%e "acts "ound by t%e trial 4ud6e t%e t%reats did not induce t%e a22ellant to e7ecute t%e deeds. 1ny :uestion o" la( (%ic% (as not raised at t%e trial s%ould not no( be allo(ed# e.6.# t%e :uestion o" onus o" 2roo". /?e"erence (as made to ey v. ;amilton =1935> 153 .T. 3,D and Per)o(s)i v. !ellin6ton City Cor2oration /19593 1.C. 53 .3 T%e a22ellant "ailed to disc%ar6e t%e onus o" s%o(in6 t%at in enterin6 into t%e deed and subsidiary deeds %e acted under duress by t%e res2ondent. /?e"erence (as made to !illiams v. 'ayley =1,++> .?. 1 ;. . *99 'audains v. ?ic%ardson /199+3 1.C. 1+9 - Talbot v. Con 'oris /19113 1 &.'. ,5D - &esarmal v. Callia22a C%ettiar /195D3 1 !. .?. 3,9 - 1ttorney<$eneral v. !%elan /193D3 E.?. 51, - ?e7 v. Steane /19D73 &.'. 997 - ?e6. v. ;urley and @urray /19+73 C.?. 5*+ - ?e6. v. ;udson /19713 * I.'. *9* - ?e6. v. !illiamson /197*3 * N.S.!. .?. *,1 - .alsbury*s aws of 'ngland # 3rd ed.# vol. , =195D># 2. ,D- Chitty on Contracts& *3rd ed. =19+,># vol. E# 2. 1++ and !illiston on Contracts# *nd ed. =1937># C%. K CEE# 2ara. 1+91# 2. DD93.3 Consideration o" t%e aut%orities leads to t%e conclusion t%at t%e in:uiry as to causation *108 and not# as su66ested by Jacobs J.1.# an in:uiry into tem2oral relations%i2s# and t%at t%e ultimate :uestion is (%et%er t%e 2lainti"" %as s%o(n t%at in enterin6 into t%e contract %e (as in"luenced solely by a desire to 2ut an end to t%e t%reats made or# as in !illiams v. 'ayley# .?. 1 ;. . *99 # t%at %is desire to avoid in4ury (as t%e main cause o" %is e7ecutin6 t%e contract. T%e trial 4ud6e correctly %eld on t%e evidence t%at t%e 2rimary and 2redominant reason (%y t%e a22ellant entered into t%e a6reement and e7ecuted t%e deeds (as because o" commercial

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necessity. E" t%e true test is t%at "ear must be t%e 2redominant cause# t%e a22ellant must "ail. T%e a22ellant (ould only be entitled to succeed i" %e could s%o( t%at "ear ti22ed t%e scale# i.e.# t%at it (as t%e 2redominant reason and t%e onus (as on %im to s%o( t%at. 1ll t%e 4ud6es too) t%e vie( t%at t%e 2redominant reason "or t%e a22ellant8s enterin6 into t%e contract (as commercial and not because o" "ear. T%at (as a "indin6 o" "act# not an in"erence dra(n "rom t%e "acts. T%e 'oard ou6%t not to inter"ere (it% concurrent "indin6s o" "act and s%ould not substitute its o(n o2inion on a :uestion o" "act "or t%at o" t%e 2rimary 4ud6e. 1n a22ellate court s%ould only inter"ere (%ere it is satis"ied t%at t%e "indin6s o" "act o" t%e 2rimary 4ud6e (ere clearly (ron6. /?e"erence (as made to Co7 v. Smail /191*3 C. .?. *7D Pascoe v. Commissioner o" Ta7ation =195+> 39 1. .J.?. D9* - Jacob v. Commissioner o" Ta7ation o" t%e Common(ealt% =1971> D5 1. .J.?. 5+, - Srimati 'ib%abati Devi v. &umar ?amendra Narayan ?oy /19D+3 1.C. 59, - Bd(ards v. Noble =1971> 1*5 C. .?. *9+ and 'enma7 v. 1ustin @otor Co. td. /19553 1.C. 379 .3 Et (as clear on t%e "acts t%at t%e a22ellant (ould %ave e7ecuted t%e deeds even i" t%ere %ad been no t%reats %avin6 re6ard to t%e ne6otiations (%ic% led to t%e e7ecution o" t%e deeds. Et (as clear t%at t%e matter (as a commercial transaction (%ic% (as "reely ne6otiated. En t%e Court o" 122eal Jacobs J.1. "ell into error in a22earin6 to acce2t t%at t%reats mi6%t be re6arded as relevant to an alle6ation o" duress even t%ou6% t%ey did not emanate "rom t%e res2ondent or %is a6ents and also in acce2tin6 t%at it (as not necessary "or t%e a22ellant to s%o( a causative# but su""icient to s%o( a tem2oral# relations%i2 bet(een acts and t%reats and im2u6ned transaction. T%at vie( is not su22orted by t%e aut%orities. /?e"erence (as made to 'acon8s Ne( 1brid6ment# 5t% ed.# vol. *# 22. D9*<D93 and !oodman v. S)ute# Prec. C%. *++.3 T%e 2ro2er in:uiry is: G!as t%e a6reement entered into (it% a "ree mindJG- see Cummin6 v. Ence =1,D7> 11 I.'. 11* and Seear v. Co%en =1,,1> D5 .T. 5,9 . T%e la( in relation to Gt%ird 2arty duressG %as develo2ed "rom a sta6e (%ere t%e de"endant8s )no(led6e o" any duress (as irrelevant to a sta6e (%ere suc% duress is irrelevant unless t%e de"endant )ne( and too) advanta6e o" it. /?e"erence (as made to 1non .# &eil. 15D- Talbot v. Con 'oris /19113 1 &.'. ,5D and &esarmal v. Callia22a C%ettiar /195D3 1 !. .?. 3,9 .3 S%ould t%e 'oard %o(ever %old t%at t%e a22ellant %as demonstrated a 2rima "acie claim "or relie"# t%e a22eal s%ould not(it%standin6 be dismissed on t%e 6round t%at restitutio in inte6rum (as not o2en at t%e time (%en t%e suit "ell to be decided. /?e"erence (as made to *109 Brlan6er v. Ne( Sombrero P%os2%ate Co. =1,7,> 3 122.Cas. 1*1, and 1lati v. &ru6er =1955> 9D C. .?. *1+ .3 "ru#man $!C! in re2ly. E" t%e same rule a22lies in cases o" duress as in cases o" "raud# t%en "ear# as "raud# may indicate a com2lete absence o" consent. T%e res2ondent %as contended t%at t%e 2ro2er test to be a22lied is (%et%er t%e "ear (as t%e only or 2rimary cause o" t%e a22ellant8s act# but %o( is t%at to be measuredJ E" t%e res2ondent8s test (ere t%e correct one# (%ic% is not acce2ted# t%en t%e la( (ill 2resume t%at (%enever t%ere is "ear it is t%e 2redominant cause. T%e duress did not ma)e t%e contract void# but entitled t%e a66rieved 2arty to %ave it set aside. See ?oman a( and Common a(# 'uc)land A @cNair# *nd ed. =rev. 19+5># 22. 197# 19,. T%e a22ellant %as ar6ued t%at t%e trial 4ud6e8s "indin6s (ere "indin6s o" "act and t%ere"ore conclusive# but see ?ava6nani v. ;olly(ood Sands Pty. td. /197*3 1 N.S.!. .?. 3+* . E" t%e trial 4ud6e8s "indin6s (ere "indin6s o" "act# t%ey (ere not soundly based. E" t%e 4ud6e %ad a22lied t%e correct test %e (ould %ave "ound t%at t%e contract (as entered into t%rou6% "ear. T%e :uestion o" restitutio in inte6rum %as no a22lication in t%e 2resent matter. Cur! adv! vult! December 5. T%e ma4ority 4ud6ment o" t%eir ords%i2s (as delivered by

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0?D C?0SS 05 C;B SB1. T%is is an a22eal by leave o" t%e Su2reme Court o" Ne( Sout% !ales "rom a decree o" t%at court =@ason J.1. and Taylor 1.<J.1.# Jacobs J.1. dissentin6> made on June 39# 1971. T%at decree dismissed t%e a22eal o" t%e a22ellant# 1le7ander 'arton# a6ainst a decree o" Street J. made on December 19# 19+,# (%ic% dismissed a suit brou6%t by t%e a22ellant a6ainst t%e res2ondents in (%ic% %e sou6%t a declaration t%at a deed dated January 17# 19+7# made bet(een t%e a22ellant and t%e "irst 1D res2ondents and certain deeds ancillary t%ereto %ad been e7ecuted by %im under duress e7erted by t%e "irst res2ondent# 1le7ander B(an 1rmstron6# and (ere void so "ar as concerned %im. T%e case is t%e outcome o" a stru66le bet(een 1rmstron6 and 'arton "or control o" t%e "ourteent% res2ondent# andmar) Cor2oration td.# a 2ublic com2any (it% an issued ca2ital o" 1#753#999 dollars divided into s%ares o" 1 dollar eac% (%ic% is no( in li:uidation. En t%e middle o" 19++ < (%en t%e story be6ins < 1rmstron6 (as t%e c%airman o" andmar) and eit%er %imsel" or t%rou6% t%e medium o" one or ot%er o" t%e second to t%e si7t% res2ondents =(%ic% are "amily com2anies controlled by %im> %eld 399#999 s%ares in t%e com2any < t%e lar6est sin6le s%are%oldin6 in its ca2ital. 'arton (as t%e mana6in6 director o" andmar) and (as a substantial s%are%older in it < t%ou6% %is %oldin6 (as less t%an t%at controlled by 1rmstron6. T%e ot%er directors (ere Jo%n 0sborne 'ovill# t%e ei6%teent% res2ondent# and a @r. Cotter. T%e sevent% to t%irteent% res2ondents are subsidiaries o" andmar). En 19++ t%e 2rinci2al activity o" andmar) (as t%e develo2ment t%rou6% t%e medium o" t%e ei6%t% res2ondent# Paradise !aters =Sales> Pty. td. =%ereina"ter called GSalesG># and t%e nint% res2ondent# Paradise !aters td.# *110 o" a buildin6 estate near Sur"er8s Paradise in Iueensland (%ic% (as to be )no(n as GParadise !aters.G T%e land in :uestion %ad been o(ned by t%e tent% res2ondent# $oondoo Pty. td.# (%ic% (as t%en controlled by 1rmstron6. $oondoo sold t%e land# (%ic% (as Gs(am2#G to Paradise !aters td. and $oondoo8s s%ares (ere bou6%t by andmar). 1ll t%e s%ares in Paradise !aters td. (ere %eld by Sales but only +9 2er cent. o" t%e s%ares in Sales (ere o(ned by andmar)# t%e remainin6 D9 2er cent. bein6 %eld by one o" t%e 1rmstron6 com2anies# t%e t%ird res2ondent# 5inlayside Pty. td. 0" t%e 2urc%ase 2rice 2ayable in res2ect o" t%e sale o" t%e Paradise !aters land# D99#999 dollars remained un2aid. T%is sum (as secured by mort6a6es 6iven by Paradise !aters td. to t%e res2ondent# $eor6e 1rmstron6 and Son Pty. td.# (%ic% 2rovided# inter alia# t%at t%e sum secured (it% interest s%ould become 2ayable "ort%(it% i" 1rmstron6 s%ould be removed "rom t%e c%airmans%i2 o" andmar). Et (ill be seen t%ere"ore t%at 1rmstron6 t%rou6% %is com2anies (as interested in t%e Paradise !aters 2ro4ect in t%ree di""erent (ays. 5irst as a secured creditor "or D99#999 dollars- secondly as %older o" D9 2er cent. o" t%e s%are ca2ital o" Sales# and t%irdly as t%e lar6est s%are%older in andmar) (%ic% %eld +9 2er cent. o" t%e ca2ital o" Sales. T%e GParadise !atersG 2ro4ect involved t%e e72enditure o" lar6e sums in dred6in6 and "ormin6 canals to 2rovide (ater "ronta6es "or t%e lots into (%ic% t%e land (as to be subdivided "or sale. T%is e72enditure (as bein6 "inanced by advances made by Hnited Dominions Cor2oration =1ustralia> td. =%ereina"ter called GH.D.C.G> (%ic% (ere secured by mort6a6es on t%e land (%ic% %ad 2riority over t%e mort6a6e "or D99#999 dollars to $eor6e 1rmstron6 and Son Pty. td. 'y November 19++# a sum o" over D99#999 dollars %ad been advanced by H.D.C. in res2ect o" develo2ment costs (%ic% (ere runnin6 at t%e rate o" over *9#999 dollars a mont% and (ere li)ely to continue to be incurred "or some time. andmar) itsel" (as an unsecured creditor o" t%e Paradise !aters com2anies "or bet(een +99#999 and 799#999 dollars (%ic% it %ad advanced to(ards t%e develo2ment. En t%e middle o" 19++ relations bet(een 1rmstron6 and 'arton (%ic% %it%erto %ad been not un"riendly be6an to deteriorate. En 2articular 'arton resented (%at %e considered to be t%e

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undue inter"erence o" 1rmstron6 in t%e day<to<day business o" t%e com2any and t%e use by 1rmstron6 o" o""ice "acilities "or 2ur2oses o" %is o(n unconnected (it% t%e com2any8s a""airs. Bventually %e came to t%e conclusion < and 'ovill and Cotter a6reed (it% %im < t%at t%e interests o" andmar) re:uired t%at 1rmstron6 s%ould be so "ar as 2ossible e7cluded "rom any say in t%e mana6ement o" its a""airs. En t%e middle o" 0ctober 'arton as)ed 1rmstron6 to resi6n < (%ic% %e re"used to do. 1t a directors8 meetin6 %eld on 0ctober *D# 19++# a series o" resolutions aimed at 1rmstron6 (ere 2assed# includin6 one (%ic% denied to t%e directors ot%er t%an 'arton any e7ecutive aut%ority in connection (it% t%e com2any8s a""airs. 0n November ,# at board meetin6s o" Paradise !aters td. and o" Sales# 1rmstron6 (as removed "rom t%e c%airmans%i2 o" t%ose com2anies and 'arton a22ointed c%airman in %is 2lace- and at a board meetin6 o" andmar) %eld on November 17# 1rmstron6 (as removed "rom t%e c%airmans%i2 in "avour o" 'ovill. 0n November *1# 1rmstron68s solicitors 6ave notice to andmar) t%at t%e D99#999 dollars must be re2aid. En antici2ation o" t%at demand 'arton %ad a22roac%ed H.D.C. "or an *111 advance o" D59#999 dollars to be used to disc%ar6e t%e D99#999 dollar debt and certain ot%er indebtedness to t%e 1rmstron6 com2anies and on November *3# H.D.C. (rote a "ormal letter to andmar) statin6 t%at its board %ad resolved t%at t%e necessary advance s%ould be made. 1t t%e annual 6eneral meetin6 o" andmar) (%ic% (as to be %eld on December *# Cotter (as due to retire and o""ered %imsel" "or re<election. 1rmstron6 nominated candidates o" %is o(n and eac% side circularised t%e s%are%olders to obtain 2ro7ies "or t%e im2endin6 trial o" stren6t%. T%e contest resulted in a victory "or 'arton# "or at t%e meetin6 Cotter (as re<elected and 1rmstron68s candidates re4ected. 1s arran6ements %ad been made "or disc%ar6in6 t%e debt due to %im it loo)ed as t%ou6% 'arton8s (is% to e7clude 1rmstron6 "rom any e""ective say in t%e com2any8s a""airs %ad been "ul"illed. 'ut (it%in a "e( days t%e 2icture %ad c%an6ed com2letely# "or on December 19# t%e mana6in6 director o" H.D.C. told 'arton t%at %is com2any %ad decided not# a"ter all# to advance t%e money necessary to disc%ar6e andmar)8s indebtedness to t%e 1rmstron6 com2anies and "urt%er not to ma)e any more loans in connection (it% t%e Paradise !aters 2ro4ect. 1t t%is 2oint ne6otiations started bet(een 'arton and @r. '. ;. Smit%# a (ell )no(n accountant (%o (as 1rmstron68s "inancial adviser# (%ic% eventually resulted in t%e a6reement o" January 17# 19+7# (%ic% 'arton claims to %ave e7ecuted under duress. T%e main ste2s in t%ese ne6otiations can be summarised as "ollo(s. =1> 0n December 1D# Smit%# actin6 on instructions "rom 1rmstron6# as)ed 'arton to ma)e a "irm o""er in (ritin6# to be sub4ect to acce2tance (it%in D, %ours# coverin6 t%e "ollo(in6 matters: =a> t%e re2ayment o" t%e debt o" D99#999 dollars (it% interest- =b> t%e 2urc%ase o" 5inlayside8s D9 2er cent. interest in Sales "or 175#999 dollars- =c> t%e 2urc%ase by 'arton o" 1rmstron68s 399#999 s%ares in andmar) "or 1,9#999 dollars < i.e.# at +9 cents a s%are# t%e mar)et 2rice bein6 t%en about D9 cents. H2on com2letion 1rmstron6 and %is nominees (ould resi6n "rom t%e boards o" t%e various com2anies. 'arton acce2ted in 2rinci2le t%e idea o" enterin6 into suc% an a6reement (it% t%e variation t%at t%e consideration "or t%e D9 2er cent. interest in Sales s%ould be 199#999 dollars in cas% and an o2tion to 1rmstron6 to buy 39 bloc)s in t%e Paradise !aters estate (%en develo2ed. "or t%e list 2rice less D9 2er cent. discount. =*> 0n December 1+# 'arton and Smit% met a6ain and discussed t%e terms on (%ic% and t%e 2eriod (it%in (%ic% t%e 599#999 dollars 2ayable in res2ect o" t%e debt o" D99#999 dollars and t%e 199#999 dollars cas% consideration "or t%e D9 2er cent. interest in Sales s%ould be 2aid. =3> 1bout December *9# H.D.C. t%reatened to a22oint a receiver under its "irst mort6a6e unless t%e sum o(in6 to it (as reduced by +9#999 dollars and 1rmstron6 a6reed to ma)e an advance o" 399#999 dollars to "inance t%e 2ro4ect. En vie( o" t%is t%reat 'arton su66ested to Smit% on December *1# t%at andmar) s%ould G6et outG o" t%e Paradise !aters 2ro4ect by sellin6 its +9 2er cent. interest to 1rmstron6 "or 159#999 dollars. T%is o""er (as not acce2ted by 1rmstron6 and on December

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*3# 'arton induced H.D.C. to %old its %and "or t%e time bein6 in return "or t%e 6ivin6 o" some "urt%er security by andmar). =D> 0n January 3 and D# 19+7# 'arton and Smit% %ad "urt%er intervie(s at (%ic% t%e terms o" t%e 2ayments to be made by andmar) and 'arton (ere "urt%er discussed. Bventually a6reement (as reac%ed on t%e "ollo(in6 basis: =a> andmar) s%ould trans"er to 1rmstron6 "or +9#999 dollars a 2ent%ouse listed at ,9#999 *112 dollars- =b> andmar) s%ould 2ay 1rmstron6 1D9#999 dollars in cas% (it%in seven days- =c> t%e balance o" 399#999 dollars o(in6 in res2ect o" t%e D99#999 dollars debt and t%e 199#999 dollars cas% consideration "or t%e D9 2er cent. interest in Sales (it% interest at 1* 2er cent. s%ould be 2aid (it%in a year and secured by a second mort6a6e on t%e Paradise !aters 2ro2erty- =d> 1rmstron6 to %ave an o2tion until @arc% 15# 19+7# to buy 35 bloc)s o" t%e estate at 59 2er cent. o" t%e list 2rice- =e> 1rmstron68s 399#999 s%ares to be 2urc%ased "or 1,9#999 dollars < t%e 2urc%ase 2rice bein6 2ayable over t%ree years (it%out interest- t%e 2urc%asers to be 'arton and nine ot%ers acce2table to Smit% eac% o" (%om (ould 6uarantee 2ayment o" %is 2art o" t%e 2urc%ase 2rice (%ile 'arton 6uaranteed t%e (%ole. Smit% obtained 1rmstron68s si6nature to a document embodyin6 t%ose terms (%ic% %e read over to 'arton and (%ic% "ormed t%e basis on (%ic% t%e solicitors "or t%e 2arties dre( u2 t%e deed e7ecuted on January 17# (%ic% is t%e sub4ect o" t%e suit. T%is (as a very len6t%y document containin6 recitals o" t%e relations%i2 bet(een t%e various com2anies and t%e connection o" 'arton and 1rmstron6 (it% t%em# but it is common 6round t%at sub4ect only to sli6%t modi"ications introduced by t%e solicitors# it im2lements t%e a6reement made bet(een Smit% and 'arton on January D. Et (as eventually a6reed t%at only seven ot%er 2eo2le as (ell as 'arton s%ould 4oin in 2urc%asin6 1rmstron68s s%ares in andmar). T%ese are t%e last seven res2ondents (%o on January 1,# e7ecuted mort6a6es o" t%e s%ares 2urc%ased by t%em res2ectively to secure 2ayment o" t%e 2urc%ase 2rice. 0n t%e e7ecution o" t%e various documents 1rmstron6 and %is nominees resi6ned "rom t%e boards o" t%e andmar) com2anies. T%e cas% 2ayment made by andmar) under t%e deed denuded it o" most o" its li:uid assetsH.D.C. re"used to c%an6e its mind (it% re6ard to t%e "inancin6 o" t%e Paradise !aters 2ro4ectand 'arton "ailed to obtain "inance "rom any ot%er source. Conse:uently andmar) (as soon in serious "inancial di""iculties. 1 sc%eme o" arran6ement bet(een t%e com2any and its subsidiaries on t%e one %and and t%eir creditors on t%e ot%er (as "ormulated but t%e 2etition see)in6 t%e a22roval o" t%e court to it (as dismissed on January 11# 19+,# and an order made t%at andmar) be (ound u2 on account o" its insolvency. 0n January 19# (it%out %avin6 2reviously served any letter o" demand 'arton commenced t%e 2resent suit alle6in6 t%at 1rmstron6 on be%al" o" %imsel" and t%e 1rmstron6 com2anies %ad coerced %um into a6reein6 to t%e matters dealt (it% by t%e deed o" January 17# 19+7# by t%reatenin6 to %ave %im murdered and by ot%er(ise e7ertin6 unla("ul 2ressure on %im. En ans(ers to interro6atories 'arton 6ave 2articulars o" numerous occasions on (%ic%# and t%e means by (%ic%# as %e alle6ed# 1rmstron6 and 2ersons actin6 on %is be%al" %ad t%reatened or brou6%t 2ressure to bear on %im in connection (it% t%e ma)in6 o" t%is deed. 'y %is de"ence 1rmstron6 denied all t%e alle6ations o" t%reats or unla("ul 2ressure made in t%e statement o" claim. Durin6 t%e %earin6 %is counsel stated t%at %is client did not see) to rely on 'arton8s inaction in t%e 2eriod "rom January 17# 19+7# to January 19# 19+,# as constitutin6 Glac%es# ac:uiescence or delayG but only as castin6 doubt on t%e trut% o" t%e alle6ations o" t%reats or unla("ul 2ressure. T%e %earin6 be"ore Street J. lasted "or 5+ days and its result (as some(%at sur2risin6. 0n t%e one %and t%e 4ud6e "ound t%at 1rmstron6 (as a *113 totally unreliable (itness (%ose evidence could not be acce2ted unless corroborated- t%at on many occasions %e %ad t%reatened 'arton (it% deat%- and t%at 'arton (as 4usti"ied in ta)in6 and did ta)e t%ese t%reats seriously. 0n t%e ot%er %and# %e %eld t%at t%ou6% 'arton (as durin6 t%e relevant 2eriod in conse:uence o" 1rmstron68s t%reats in real "ear "or t%e sa"ety o" %imsel" and %is "amily# t%ese t%reats and t%e "ear en6endered by t%em did not in "act coerce %im into enterin6

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into t%e a6reement. 'arton < t%e 4ud6e said < Gdid not in %is o(n mind relate 1rmstron68s t%reats to a desire by 1rmstron6 to "orce t%rou6% t%e a6reement- nor (as it "orced t%rou6%. so "ar as 'arton (as concerned# by reason o" %is "ear o" 1rmstron68s 2o(er to %arm %im. T%e a6reement (ent t%rou6% "or t%e 2rimary and 2redominant reason t%at @r. 'arton alon6 (it% @r. 'ovill (as "irmly convinced t%at it (as indis2ensable "or t%e "uture o" andmar) to enter into some arran6ement as t%is (it% 1rmstron6. T%eir belie" (as t%at t%ey %ad to 6et rid o" 1rmstron6 i" andmar) (as to survive.G GEt (asG < to :uote anot%er 2assa6e < G(%at t%eyG < =i.e.# 'arton and 'ovill> < Gre6arded as s%eer commercial necessity t%at (as t%e real and :uite 2ossibly t%e sole motivatin6 "actorG underlyin6 t%e a6reement recorded in t%e deed o" January 17# 19+,. 1t t%is sta6e t%ere"ore it is necessary "irst to set out in some detail t%e t%reats alle6ed by 'arton (it% t%e 4ud6e8s "indin6s (it% re6ard to eac% and secondly to re"er to t%e 4ud6e8s reasons "or reac%in6 t%e conclusions (%ic% %e did as to t%eir e""ect. T%e t%reats alle6ed (ere as "ollo(s: =1> 'arton said t%at# (%en in t%e middle o" 0ctober 19++ %e told 1rmstron6 t%at %e could not continue to (or) (it% %im and su66ested t%at %e s%ould resi6n# 1rmstron6# a"ter declinin6 to do so# said: GT%e city is not as sa"e as you may t%in) bet(een o""ice and %ome. Fou (ill see (%at E can do a6ainst you and you (ill re6ret t%e day (%en you decided not to (or) (it% me.G Des2ite 1rmstron68s denial t%e 4ud6e %eld t%at %e did in "act utter t%is t%reat. =*> 'arton said t%at a"ter 1rmstron6 %ad been removed "rom t%e c%airmans%i2 < on November 17 < %e be6an to receive tele2%one calls in t%e middle o" t%e ni6%t. T%ey (ould usually be made bet(een D and 5 a.m. and (ould continue "or "our or "ive ni6%ts at a time. T%en t%ere (ould be a brea) "or a "e( days- a"ter (%ic% t%ey (ould start a6ain. T%is (ent on until early in January 19+7. $enerally no one s2o)e and %e only %eard %eavy breat%in6 into t%e tele2%one but on some occasions a voice (ould say GFou (ill be )illed.G $enerally t%e voice (as distorted but on one occasion in January 19+7 %e reco6nised t%is voice as 1rmstron68s. T%e 4ud6e "ound t%at 1rmstron6 (as in "act res2onsible "or t%ese calls. =3> 'arton said t%at over t%e 2eriod durin6 (%ic% %e (as receivin6 t%ese tele2%one calls %e noticed t%at %is %ouse (as bein6 (atc%ed by a man named ;ume. T%ere (as some evidence to s%o( t%at %e (as 1rmstron68s Gstron6 armG man. T%e 4ud6e acce2ted t%at 'arton (as in "act bein6 *114 (atc%ed by ;ume but said t%at t%ere (as not enou6% evidence to enable %im to "ind t%at 1rmstron6 (as res2onsible "or %is activities. =D> 'arton said t%at one day late in November 1rmstron6 said to %im: GE am o" $erman ori6in and $ermans "i6%t to t%e deat%. E (ill s%o( you (%at E can do a6ainst you and you %ad better (atc% out. Fou can 6et )illed.G En t%e li6%t o" some evidence to t%e e""ect t%at 1rmstron6 (as not o" $erman ori6in t%e 4ud6e doubted (%et%er 'arton (as ri6%t as to t%e "irst sentence but %e acce2ted t%at %e (as ri6%t as to t%e second and t%ird.

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=5> 'ovill# (%ose evidence (as acce2ted# said t%at on November 39# 1rmstron6 came into t%e board room and s%outed at 'arton: GFou stin)- you stin). E (ill "i7 you.G ater %e %ad a conversation (it% 1rmstron6 alone in t%e course o" (%ic% t%e latter made a number o" e7trava6ant statements suc% as t%at by virtue o" %is (ealt% and %is 2osition as a member o" t%e e6islative Council %e could 2rocure 2olice o""icers to do %is biddin6- t%at or6anised crime (as movin6 into Sydney and t%at "or *#999 dollars you could %ave someone )illed. T%e 4ud6e "ound not only t%at 1rmstron6 (as utterin6 t%reats o" t%is c%aracter at t%is time but t%at 'arton (as 4usti"iably seriously 2erturbed by t%em. Endeed on November *D# %e %ired a body6uard to (atc% over %is sa"ety until a"ter t%e annual 6eneral meetin6. 1t t%is meetin6 t%ree body6uards (ere 2resent < t(o o" t%em concealed be%ind a curtain near (%ere 'arton (as sittin6. =+> 'arton said t%at on December 7# a"ter a board meetin6 o" Sales# 1rmstron6 said to %im in t%e 2resence o" a number o" ot%er 2eo2le# GFou can em2loy as many body6uards as you (ant. E (ill still "i7 you.G En t%e absence o" corroborative evidence "rom any o" t%e ot%er 2ersons said to %ave been 2resent t%e 4ud6e (as not 2re2ared to %old t%at t%is t%reat (as made. =7> 'arton said t%at on December 1D 1rmstron6 said to %im: GHnless andmar) buys my interest in Paradise !aters =Sales> Pty. td. "or 199#999 dollars and t%e com2any re2ays D99.999 dollars o(in6 to me and you buy my s%ares "or +9 cents eac% E (ill %ave you "i7ed.G T%e 4ud6e said t%at t%ou6% 1rmstron6 mi6%t (ell %ave t%reatened 'arton on December 1D# %e (as not satis"ied t%at suc% t%reats# i" made# (ere cou2led (it% any re:uirement t%at %e enter into an a6reement (it% %im. =,> 0n January 7 a Ju6oslav named Co4inovic < a man (it% a bad criminal record < tele2%oned to 'arton sayin6 t%at %e (is%ed to see %im ur6ently. !%en t%ey met %e told 'arton t%at ;ume %ad %ired %im to )ill %im 2romisin6 %im L*#999 "or doin6 so and t%at ;ume (as actin6 on instructions "rom 1rmstron6. ;e said t%at %e (ould 2re"er not to commit t%e murder 2rovided t%at 'arton 2aid %im t%e money and 'arton 2ro"essed %is (illin6ness to do t%is i" t%e matter could be 2ut in t%e %ands o" t%e 2olice so t%at ;ume and 1rmstron6 could be brou6%t to 4ustice. Ne7t day 'arton (ent (it% andmar)8s solicitor and counsel to t%e Criminal Envesti6ation 'ranc% and re2orted t%e matter to t%e o""icer<in<c%ar6e. Co4inovic (as 2rom2tly arrested and made a statement assertin6 t%at %e %ad indeed been %ired on 1rmstron68s be%al" to )ill 'arton. T%e 2olice %o(ever never intervie(ed 1rmstron6 to "ind out (%at %e %ad to say (it% *115 re6ard to Co4inovic8s story. 'arton# o" course# considered t%at t%is (as due to 1rmstron68s intervention and (as sim2ly an e7am2le o" %is ability to in"luence t%eir conduct o" (%ic% %e %ad boasted to 'ovill. T%e 4ud6e (as very 2uMMled by and critical o" t%eir inaction# but %e did not consider t%at t%e evidence 4usti"ied %im in "indin6 t%at Co4inovic (as in "act em2loyed directly or indirectly by 1rmstron6. ;e %ad# %o(ever# no doubt t%at 'arton believed t%at 1rmstron6 %ad %ired a criminal to )ill %im and (as seriously and 4usti"iably alarmed "or %is sa"ety. ;is actions indeed bore t%is out "or %e bou6%t a ri"le# moved (it% %is (i"e and son "rom %is %ouse in t%e suburbs into a city %otel and did not return %ome until a"ter t%e documents (ere e7ecuted on January 17 and 1,. =9> 'arton said t%at on T%ursday# January 1*# 1rmstron6 ran6 %im u2 at t%e com2any8s o""ice and said GFou %ad better si6n t%is a6reement < or elseG to (%ic% %e re2lied t%at %e did not let %imsel" be blac)mailed into any a6reement. T%e 4ud6e inclined to t%e vie( t%at t%is conversation < (%ic% (as# o" course# denied by 1rmstron6 < did in "act ta)e 2lace. =19> 'arton said t%at by 5riday# January 13# %e %ad made u2 %is mind not to si6n t%e deeds < (%ic% (ere t%en bein6 "inalised by t%e solicitors < and not to advise %is co<directors to

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e7ecute t%em on be%al" o" andmar) and t%at %e so in"ormed Smit% on t%at day- but t%at on January 1+ 1rmstron6 ran6 %im u2 in t%e mornin6 sayin6# GHnless you si6n t%is document E (ill 6et you )illed#G and t%at yieldin6 to t%is t%reat %e c%an6ed %is mind and e7ecuted t%e deeds. T%e 4ud6e re4ected t%is 2art o" 'arton8s evidence. ;e %eld t%at# alt%ou6% be"ore C%ristmas# 'arton may (ell %ave "elt < and e72ressed to 'ovill < doubts as to t%e (isdom o" enterin6 into an a6reement on t%e lines bein6 su66ested by Smit% on be%al" o" 1rmstron6 %e %ad ceased to "eel any suc% doubts by t%e be6innin6 o" January# t%at t%erea"ter %e never c%an6ed %is mind and t%at 1rmstron6 did not t%reaten %im (it% deat% on January 1+# unless %e si6ned. T%eir ords%i2s must no( re"er to t%e reasons 6iven by t%e 4ud6e "or %oldin6 t%at 'arton (as not coerced into si6nin6 t%e a6reement by any t%reat o" 2%ysical violence made by 1rmstron6. !%en H.D.C. (ent bac) on its 2romise to advance t%e money needed to 2ay o"" t%e debt to 1rmstron6 and "urt%er said t%at it (as not 2re2ared to 6o on advancin6 money to enable t%e develo2ment to be com2leted it must %ave been obvious to 'arton t%at unless H.D.C. could be induced to c%an6e its mind a6ain or t%e necessary money could be obtained "rom some ot%er source t%e Paradise !aters 2ro4ect (as G"inis%edG so "ar as andmar) (as concerned even it andmar) itsel" could survive. T%e 4ud6e acce2ted t%at (%en %e %eard o" H.D.C.8s decision 'arton (as at "irst des2ondent. 'ovill 6ave evidence < (%ic% t%e 4ud6e acce2ted < t%at on December 13 'arton said to %im: GT%e money %as not come t%rou6%. E don8t t%in) t%at it (ill come t%rou6%. E (ould li)e to resi6n. E don8t t%in) t%at (e can 6et t%is money any ot%er (ay. E t%in) t%at it is "inis%ed.G 'ut t%e 4ud6e %eld t%at 'arton soon came to s%are t%e vie( < (%ic% a22ears al(ays to %ave been %eld by 'ovill < t%at i" only 1rmstron6 could be 6ot out o" t%e (ay H.D.C. (ould c%an6e its mind and 2rovide t%e necessary "inance to enable t%e 2ro4ect to be com2leted and t%at to enter *116 into an a6reement on t%e lines su66ested by Smit% on be%al" o" 1rmstron6 (as G6ood businessG "rom andmar)8s 2oint o" vie(. En %is 4ud6ment t%e 4ud6e lists a number o" acts done and statements made by 'arton bot% be"ore and s%ortly a"ter t%e documents in :uestion (ere e7ecuted (%ic% indicate t%at %e (as o2timistic as to t%e "uture once 1rmstron6 (as out o" t%e (ay. T%us on January 3# 19+7# %e told Smit% t%at once 1rmstron6 (as out o" t%e (ay %e (as sure t%at H.D.C. (ould 6ive t%e com2any "inance and a"ter t%e deed (as e7ecuted %e said to 1rmstron68s solicitor =@r. $rant> GNo( (e %ave 6ot rid o" 1rmstron6 not%in6 (ill sto2 usG and told Smit% t%at %e t%ou6%t t%at t%e deal (as Ga miracle.G 16ain durin6 t%e ne6otiations and in t%e 2eriod immediately a"ter t%e e7ecution o" t%e deeds 'arton (as eit%er %imsel" or t%rou6% %is "amily com2anies lendin6 money to andmar) or its subsidiaries and buyin6 andmar) s%ares on t%e Stoc) B7c%an6e. T%e 4ud6e re"used to acce2t t%at t%ese mani"estations o" o2timism and con"idence (ere a mere G"acade.G 5urt%er %e (as muc% im2ressed by t%e evidence 6iven by Detective Ens2ector endrum as to (%at %e (as told by 'arton8s solicitor =@r. @illar> in 'arton8s 2resence (it% re6ard to t%e ne6otiations "or an a6reement bet(een 'arton and 1rmstron6 (%en t%ey re2orted t%e Co4inovic incident to %im. 1ccordin6 to endrum8s notes (%ic% t%e 4ud6e acce2ted as accurate @illar said t%at s%ortly be"ore C%ristmas it a22eared t%at andmar) (ould "all but t%at since t%en 'arton %ad mana6ed to save t%e com2any- t%at t%ere %ad been some con"erences bet(een re2resentatives o" 1rmstron6 and 'arton in connection (it% a com2romise# t%at on !ednesday# January D# 1rmstron68s re2resentative# @r. '. ;. Smit%# and 'arton %ad reac%ed (%at a22eared to be an a6reement sub4ect to documentation to be 2re2ared by 1rmstron68s la(yers and submitted to @illar8s "irm: and t%e dra"ts %ad in "act been submitted on 5riday# January +. T%e 4ud6e 2ointed out t%at i" t%e a6reement (%ic% 'arton %ad a22arently reac%ed (it% Smit% %ad been

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induced by 1rmstron68s t%reats it (as very sur2risin6 t%at 'arton s%ould %ave allo(ed @illar to 6ive suc% a misleadin6 2icture o" t%e 2osition to endrum. 'arton %ad come to t%e 2olice in order to 6et 1rmstron6 brou6%t to 4ustice "or %irin6 criminals to murder %im and i" %is a6reement (it% Smit% %ad itsel" been induced by t%reats on 1rmstron68s 2art %e (ould surely %ave brou6%t t%at "act to endrum8s attention at t%e same time. T%e 4ud6e indeed (ent so "ar as to %old t%at 1rmstron6 (as# as %e 2ut it# a Greluctant vendorG and t%at %is t%reats (ere not intended and (ere not t%ou6%t by 'arton to be intended to induce %im to enter into t%e a6reement but (ere sim2ly mani"estations o" blind malevolence. ;e t%ou6%t t%at 'arton < t%ou6% by com2arison (it% 1rmstron6 an %onest (itness < %ad a"ter t%e "ailure o" andmar) come to believe t%at 1rmstron68s t%reats 2layed a 2art in inducin6 %im to enter into an a6reement (%ic% %ad 2roved disastrous (%ic% t%ey did not in "act 2lay. 'arton a22ealed "rom t%e 4ud6ment o" Street J. to t%e Court o" 122eal Division o" t%e Su2reme Court and t%ere contended t%at many o" t%e "indin6s o" "act adverse to %im made by t%e 4ud6e s%ould be reversed. 5or t%e most 2art t%is attac) "ailed but it succeeded on a "e( 2oints to (%ic% t%eir ords%i2s must no( re"er. En t%e "irst 2lace @ason J.1. and Taylor 1.< J.1. %eld t%at t%e 4ud6e (as (ron6 in re"usin6 to dra( t%e *117 in"erence t%at 1rmstron6 %ad em2loyed ;ume to G)ee2 a ta6G on 'arton. Secondly# all t%ree 4ud6es %eld t%at 1rmstron6 (as not a Greluctant vendorG and t%at suc% t%reats as %e uttered a"ter December 13 (ere intended by %im to induce and (ere understood by 'arton to be intended to induce %im to enter into t%e a6reement. T%eir ords%i2s %ave no %esitation in a6reein6 (it% t%e 4ud6es o" t%e 122eal Division on t%ese 2oints. 0n t%e "acts 2roved t%e in"erence t%at 1rmstron6 (as res2onsible "or ;ume8s G(atc%in6G o" 'arton is irresistible. 16ain# as t%eir ords%i2s read it# t%e evidence 2oints stron6ly to t%e conclusion t%at so "ar "rom bein6 a Greluctant vendorG 1rmstron6 (as ea6er to G6et outG o" andmar) on t%e best terms t%at %e could so soon as %e %eard# as %e did about December 19# t%at H.D.C. %ad decided not to advance it any more money. Smit% (as in touc% (it% t%e directors o" H.D.C. durin6 t%e ne6otiations and %e never t%ou6%t "or a moment t%at H.D.C. (as li)ely to c%an6e its mind (%et%er or not 1rmstron6 (as Gout o"G andmar). ;e declined to become c%airman o" t%e com2any < t%ou6% 'arton and 1rmstron6 (ould bot% %ave li)ed %im to ta)e on t%e c%airmans%i2 < because %e realised t%at it (as doomed and it must %ave seemed to %im < and conse:uently to 1rmstron6 < t%at an a6reement under (%ic% 1rmstron6 ac:uired all or nearly all o" andmar)8s li:uid assets and sold %is s%ares at nearly t(ice t%eir mar)et value (as very "avourable to %im. 1rmstron6 < bein6 t%e sort o" man %e (as < %ad every reason to t%reaten 'arton in order to induce %im to 6o t%rou6% (it% t%e a6reement and t%eir ords%i2s %ave no doubt t%at suc% t%reats as %e made durin6 t%e ne6otiations (ere made "or t%is 2ur2ose and t%at 'arton (as (ell a(are o" t%e "act. T%e 4ud6e %as "ound t%at on January 1* 1rmstron6 told 'arton in terms GSi6n t%e a6reement < or else.G @oreover Ser6eant !ild (%o (as in c%ar6e o" t%e investi6ation into t%e Co4inovic incident said t%at on January 11 'arton told %im %o( nervous %e (as "or %is sa"ety and t%at o" %is "amily but added# G!ell# t%e a6reement (ill be si6ned on t%e 1,t% and it (ill all be over.G T%is remar) < (%ic% is not mentioned in t%e 4ud6ment o" Street J. < a22ears to t%eir ords%i2s to s%o( clearly t%at 'arton (as (ell a(are t%at 1rmstron68s t%reats (ere in "act directed to inducin6 %im to si6n t%e a6reement. T%e t%ree 4ud6es in t%e Court o" 122eal Division (ere in substantial a6reement on t%e "acts o" t%e case but t%ey reac%ed di""erent conclusions because t%ey di""ered as to t%e la( a22licable to t%em. @ason J.1. and Taylor 1.<J.1. t%ou6%t t%at 'arton could not succeed unless %e could establis% t%at but "or t%e t%reats %e (ould not %ave si6ned t%e a6reement and t%at %e %ad "ailed to establis% t%at "act. Jacobs J.1. a6reed t%at i" 'arton %ad indeed to s%o( t%at but "or t%e t%reats %e (ould not %ave si6ned t%e a6reement %e %ad "ailed to do so. ;e t%ou6%t# %o(ever# t%at i" t%e evidence s%o(ed t%at one 2arty to t%e transaction %ad 2ut t%e

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ot%er in "ear o" %is li"e durin6 t%e ne6otiations leadin6 u2 to t%e e7ecution o" t%e deed in :uestion t%e common la( (ould assume t%at %e (as not Ga "ree a6entG and t%at %e could conse:uently avoid t%e transaction. 5urt%ermore %e t%ou6%t t%at in any case e:uity (ould allo( %im to avoid t%e transaction i" t%e evidence s%o(ed t%at t%e t%reats %ad any a22reciable e""ect in inducin6 %im to e7ecute t%e a6reement even i" %e (ould in "act %ave *118 e7ecuted it i" t%ere %ad been no t%reats and t%at t%e evidence did at least establis% t%at. T%eir ords%i2s turn no( to consider t%e :uestion o" la( (%ic% 2rovo)ed a di""erence o" o2inion in t%e Court o" 122eal Division. Et is %ardly sur2risin6 t%at t%ere is no direct aut%ority on t%e 2oint# "or i" 1 t%reatens ' (it% deat% i" %e does not e7ecute some document and '# (%o ta)es 18s t%reats seriously# e7ecutes t%e document it can be only in t%e most unusual circumstances t%at t%ere can be any doubt (%et%er t%e t%reats o2erated to induce %im to e7ecute t%e document. 'ut t%is is a most unusual case and t%e "indin6s o" "act made belo( do undoubtedly raise t%e :uestion (%et%er it (as necessary "or 'arton in order to obtain relie" to establis% t%at %e (ould not %ave e7ecuted t%e deed in :uestion but "or t%e t%reats. En ans(erin6 t%is :uestion in "avour o" 'arton# Jacobs J.1. relied bot% on a number o" old common la( aut%orities on t%e sub4ect o" GduressG and also < by (ay o" analo6y < on later decisions in e:uity (it% re6ard to t%e avoidance o" deeds on t%e 6round o" "raud. T%eir ords%i2s do not t%in) t%at t%e common la( aut%orities are o" any real assistance "or it seems most unli)ely t%at t%e aut%ors o" t%e statements relied on %ad t%e sort o" 2roblem (%ic% %as arisen %ere in mind at all. 0n t%e ot%er %and t%ey t%in) t%at t%e conclusion to (%ic% Jacobs J.1. came (as ri6%t and t%at it is su22orted by t%e e:uity decisions. T%e sco2e o" common la( duress (as very limited and at a com2aratively early date e:uity be6an to 6rant relie" in cases (%ere t%e dis2osition in :uestion %ad been 2rocured by t%e e7ercise o" 2ressure (%ic% t%e C%ancellor considered to be ille6itimate < alt%ou6% it did not amount to common la( duress. T%ere (as a 2arallel develo2ment in t%e "ield o" dis2ositions induced by "raud. 1t common la( t%e only remedy available to t%e man de"rauded (as an action "or deceit but e:uity in t%e same 2eriod in (%ic% it (as buildin6 u2 t%e doctrine o" Gundue in"luenceG came to entertain 2roceedin6s to set aside dis2ositions (%ic% %ad been obtained by "raud: see ;olds(ort%# 1 ;istory o" Bn6lis% a(# vol. C =19*D># 22. 3*,<3*9. T%ere is an obvious analo6y bet(een settin6 aside a dis2osition "or duress or undue in"luence and settin6 it aside "or "raud. En eac% case < to :uote t%e (ords o" ;olmes J. in 5airban)s v. Sno( =1,,7> 13 N.B. 59+ # 59, <G t%e 2arty %as been sub4ected to an im2ro2er motive "or action.G 16ain t%e similarity o" t%e e""ect in la( o" metus and dolus in connection (it% dis2ositions o" 2ro2erty is noted by Stair in %is Enstitutions o" t%e a( o" Scotland# Ne( ed. =1,3*># 'oo) EC# title D9.*5. ;ad 1rmstron6 made a "raudulent misre2resentation to 'arton "or t%e 2ur2ose o" inducin6 %im to e7ecute t%e deed o" January 17# 19+7# t%e ans(er to t%e 2roblem (%ic% %as arisen (ould %ave been clear. E" it (ere establis%ed t%at 'arton did not allo( t%e re2resentation to a""ect %is 4ud6ment t%en %e could not ma)e it a 6round "or relie" even t%ou6% t%e re2resentation (as desi6ned and )no(n by 'arton to be desi6ned to a""ect %is 4ud6ment. E" on t%e ot%er %and 'arton relied on t%e misre2resentation 1rmstron6 could not %ave de"eated %is claim to relie" by s%o(in6 t%at t%ere (ere ot%er more (ei6%ty causes (%ic% contributed to %is decision to e7ecute t%e deed# "or in t%is "ield t%e court does not allo( an e7amination into t%e relative im2ortance o" contributory causes. G0nce ma)e out t%at t%ere %as been anyt%in6 li)e dece2tion# and no contract restin6 in any de6ree on t%at "oundation can standG: per ord *119 Cran(ort% .J. in ?eynell v. S2rye =1,5*> 1 De $.@. A $. ++9 # 79, < see also t%e ot%er cases re"erred to in C%es%ire and 5i"oot8s a( o" Contract# ,t% ed. =197*># 22. *59<*51. T%eir ords%i2s t%in) t%at t%e same rule s%ould a22ly in cases o" duress and t%at i" 1rmstron68s t%reats (ere GaG reason "or 'arton8s e7ecutin6 t%e deed %e is entitled to relie" even t%ou6% %e mi6%t (ell %ave entered

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into t%e contract i" 1rmstron6 %ad uttered no t%reats to induce %im to do so. Et remains to a22ly t%e la( to t%e "acts. !%at (as t%e state o" 'arton8s mind (%en %e e7ecuted t%e deed is# o" course# a :uestion o" "act and a :uestion t%e ans(er to (%ic% de2ended lar6ely on 'arton8s o(n evidence. T%e 4ud6e (%o %eard %im 6ive evidence (as in a better 2osition t%an anyone else to decide (%et%er "ear en6endered by 1rmstron68s t%reats (as GaG reason "or %is e7ecutin6 t%e deed. Et (as submitted t%at t%e decision o" Street J. in "avour o" 1rmstron6 amounted to a "indin6 t%at "ear en6endered by t%e t%reats (as not suc% a reason and t%at as t%at decision %ad been a""irmed by a ma4ority o" t%e 122eal Division t%e 'oard s%ould not disturb it. 'ut t%is case# as t%eir ords%i2s see it# is not one to (%ic% t%e rule as to Gconcurrent "indin6sG is a22licable. En t%e "irst 2lace some o" t%e "indin6s o" "act made by t%e 4ud6e (ere varied by t%e 122eal Division. En 2articular t%ey %eld t%at %e (as (ron6 in "indin6 t%at 'arton did not t%in) t%at 1rmstron68s t%reats (ere bein6 made (it% a vie( to inducin6 %im to e7ecute t%e a6reement. 16ain t%ere a22ears to %ave been little discussion o" t%e la( be"ore Street J. and it is by no means clear t%at %e directed %is mind to t%e 2recise :uestion (%ic% (as debated in t%e 122eal Division and be"ore t%e 'oard. Conse:uently one cannot be sure t%at i" %e %ad a22lied to t%e "acts "ound by %im as modi"ied by t%e 122eal Division (%at t%eir ords%i2s t%in) to be t%e correct 2rinci2le o" la( %e (ould %ave reac%ed t%e conclusion (%ic% %e did reac%. ;e mi6%t %ave done so but e:ually %e mi6%t not %ave done so. T%e 4ud6es in t%e 122eal Division a22roac%ed t%e case no doubt in t%e li6%t o" (%at t%eir ords%i2s assume to be t%e ri6%t "indin6s o" "act but t%e ma4ority a22lied to t%em (%at in t%eir ords%i2s8 4ud6ment (as a (ron6 2rinci2le o" la(. En t%ese circumstances t%eir ords%i2s t%in) t%at t%ey can 2ro2erly# and indeed s%ould# reac% t%eir o(n conclusion by a22lyin6 t%e la( as t%ey understand it to t%e "acts "ound by t%e 4ud6e as modi"ied by t%e 122eal Division. T%ey 2roceed t%en on t%e "ootin6 t%at alt%ou6%# (%en %e learnt t%at H.D.C. %ad decided no lon6er to "inance t%e Paradise !aters 2ro4ect# 'arton (as at "irst des2ondent as to its "uture %e soon came to s%are 'ovill8s vie( t%at H.D.C. (ould c%an6e its mind (%en once 1rmstron6 (as out o" t%e (ay- t%at t%e con"idence as to t%e eventual success o" t%e 2ro4ect to (%ic% %e 6ave e72ression to Smit% and ot%ers durin6 t%e ne6otiations and s%ortly a"ter t%e e7ecution o" t%e documents (as 6enuine- t%at %e t%ou6%t t%at t%e a6reement (it% 1rmstron6 (as a satis"actory business arran6ement bot% "rom t%e 2oint o" vie( o" andmar) and also "rom %is o(n 2oint o" vie(- and t%at t%e evidence (%ic% %e 6ave at t%e trial# t%ou6% 2ossibly %onest# (as a lar6ely erroneous reconstruction o" %is state o" mind at t%e time. 'ut even so 'arton must %ave realised t%at in 2artin6 (it% all andmar)8s li:uid assets to 1rmstron6 and in a6reein6 %imsel" to buy 1rmstron68s s%ares "or almost t(ice t%eir mar)et value in t%e %o2e t%at (%en 1rmstron6 (as out o" t%e (ay H.D.C. (ould once more 2rovide "inance %e (as ta)in6 a very 6reat ris). Et is only *120 reasonable to su22ose t%at "rom time to time durin6 t%e ne6otiations %e as)ed %imsel" (%et%er it (ould not be better eit%er to insist t%at any settlement (it% 1rmstron6 s%ould be conditional on an a6reement (it% H.D.C. or to cut %is o(n and andmar)8s losses on t%e Paradise !aters 2ro4ect alto6et%er rat%er t%an to increase t%e sta)es so drastically. E" 'arton %ad to establis% t%at %e (ould not %ave made t%e a6reement but "or 1rmstron68s t%reats# t%en t%eir ords%i2s (ould not dissent "rom t%e vie( t%at %e %ad not made out %is case. 'ut no suc% onus lay on %im. 0n t%e contrary it (as "or 1rmstron6 to establis%# i" %e could# t%at t%e t%reats (%ic% %e (as ma)in6 and t%e unla("ul 2ressure (%ic% %e (as e7ertin6 "or t%e 2ur2ose o" inducin6 'arton to si6n t%e a6reement and (%ic% 'arton )ne( (ere bein6 made and e7erted "or t%is 2ur2ose in "act contributed not%in6 to 'arton8s decision to si6n. T%e 4ud6e %as "ound t%at durin6 t%e 19 days or so be"ore t%e documents (ere e7ecuted 'arton (as in 6enuine "ear t%at 1rmstron6 (as 2lannin6 to %ave %im )illed i" t%e a6reement (as not si6ned. ;is state o" mind (as described by t%e 4ud6e as one o" Gvery real mental tormentG and %e believed t%at %is "ears (ould be at end (%en once t%e documents (ere e7ecuted. Et is true t%at t%e 4ud6e (as not satis"ied t%at Co4inovic %ad

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been em2loyed by 1rmstron6 but i" one man t%reatens anot%er (it% un2leasant conse:uences i" %e does not act in a 2articular (ay# %e must ta)e t%e ris) t%at t%e im2act o" %is t%reats may be accentuated by e7traneous circumstances "or (%ic% %e is not in "act res2onsible. Et is true t%at on t%e "acts as t%eir ords%i2s assume t%em to %ave been 1rmstron68s t%reats may %ave been unnecessary# but it (ould be unrealistic to %old t%at t%ey 2layed no 2art in ma)in6 'arton decide to e7ecute t%e documents. T%e 2ro2er in"erence to be dra(n "rom t%e "acts "ound is# t%eir ords%i2s t%in)# t%at t%ou6% it may be t%at 'arton (ould %ave e7ecuted t%e documents even i" 1rmstron6 %ad made no t%reats and e7erted no unla("ul 2ressure to induce %im to do so t%e t%reats and unla("ul 2ressure in "act contributed to %is decision to si6n t%e documents and to recommend t%eir e7ecution by andmar) and t%e ot%er 2arties to t%em. Et may be# o" course# t%at 'arton8s "ear o" 1rmstron6 %ad eva2orated be"ore %e issued %is (rit in t%is action but 1rmstron6 < understandably enou6% < e72ressly disclaimed reliance on t%e de"ence o" delay on 'arton8s 2art in re2udiatin6 t%e deed. En t%e result t%ere"ore t%e a22eal s%ould be allo(ed and a declaration made t%at t%e deeds in :uestion (ere e7ecuted by 'arton under duress and are void so "ar as concerns %im. T%eir ords%i2s e72ress no vie( as to (%at# i" any# e""ect t%is may %ave on t%e ri6%ts or obli6ations inter se o" t%e ot%er 2arties to t%e deeds < and t%e order s%ould include liberty to any o" t%em to a22ly to t%e court o" "irst instance "or t%e determination o" any :uestions (%ic% may arise bet(een t%em in t%at re6ard. T%eir ords%i2s t%in) t%at t%e costs belo( s%ould be dealt (it% as su66ested by Jacobs J.1. < t%at is to say# t%at 1rmstron6 and %is com2anies =t%e "irst to si7t% res2ondents> s%ould 2ay 'arton8s costs o" t%e %earin6 be"ore Street J. but t%at t%ere s%ould be no costs o" t%e a22eal to t%e 122eal Division because so muc% o" t%e time t%ere (as ta)en u2 by submissions (%ic% all t%ree 4ud6es (ere a6reed in re4ectin6. T%e "irst res2ondent =1rmstron6> must 2ay to t%e a22ellant ='arton> %is costs o" t%e a22eal to t%e 'oard. T%eir ords%i2s (ill %umbly advise ;er @a4esty accordin6ly. *121 Dissentin6 4ud6ment by 0?D !E 'B?50?CB and 0?D SE@0N 05 $ 1ESD1 B. T%e reason (%y (e do not a6ree (it% t%e ma4ority decision is# brie"ly# t%at (e re6ard t%e issues in t%is case as essentially issues o" "act# issues moreover o" a c%aracter 2articularly (it%in t%e s2%ere o" t%e trial 4ud6e bearin6# as t%ey do# u2on motivation and credibility. 0n all im2ortant issues# clear "indin6s %ave been made by Street J. and concurred in by t%e Court o" 122eal eit%er unanimously or by ma4ority. 1cce2ted rules o" 2ractice and# suc% rules a2art# sound 2rinci2le s%ould# in our o2inion# 2revent a second court o" a22eal "rom revie(in6 t%em in t%e absence o" some miscarria6e o" 4ustice# or some mani"est and im2ortant error o" la( or misdirection. En our vie( no suc% circumstance e7ists in t%is case. 'e"ore statin6 t%ose "indin6s o" "act# (%ic% are to our mind conclusive# (e t%in) it desirable to de"ine in our o(n (ay t%e le6al basis on (%ic% t%ey rest. T%e action is one to set aside an a22arently com2lete and valid a6reement on t%e 6round o" duress. T%e basis o" t%e 2lainti""8s claim is# t%us# t%at t%ou6% t%ere (as a22arent consent t%ere (as no true consent to t%e a6reement: t%at t%e a6reement (as not voluntary. T%is involves consideration o" (%at t%e la( re6ards as voluntary# or its o22osite- "or in li"e# includin6 t%e li"e o" commerce and "inance# many acts are done under 2ressure# sometimes over(%elmin6 2ressure# so t%at one can say t%at t%e actor %ad no c%oice but to act. 1bsence o" c%oice in t%is sense does not ne6ate consent in la(: "or t%is t%e 2ressure must be one o" a )ind (%ic% t%e la( does not re6ard as le6itimate. T%us# out o" t%e various means by (%ic% consent may be obtained < advice# 2ersuasion# in"luence# inducement# re2resentation# commercial 2ressure < t%e la( %as come to select some (%ic% it (ill not acce2t as a reason "or voluntary action: "raud# abuse o" relation o" con"idence# undue in"luence# duress or coercion. En t%is t%e la(# under t%e in"luence o" e:uity# %as develo2ed "rom t%e old common

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la( conce2tion o" duress < t%reat to li"e and limb < and it %as arrived at t%e modern 6eneralisation e72ressed by ;olmes J. < Gsub4ected to an im2ro2er motive "or actionG: 5airban)s v. Sno(# 13 N.B. ?e2orter 59+# 59,. En an action suc% as t%e 2resent# t%en# t%e "irst ste2 re:uired o" t%e 2lainti"" is to s%o( t%at some ille6itimate means o" 2ersuasion (as used. T%at t%ere (ere t%reats to 'arton8s li"e (as "ound by t%e 4ud6e# t%ou6% %e did not acce2t 'arton8s evidence in im2ortant res2ects. !e s%all return to t%is 2oint in detail later. T%e ne7t necessary ste2 (ould be to establis% t%e relations%i2 bet(een t%e ille6itimate means used and t%e action ta)en. 5or t%e 2ur2oses o" t%e 2resent case =reservin6 our o2inion as to cases (%ic% may arise in ot%er conte7ts> (e are 2re2ared to acce2t# as t%e "ormula most "avourable to t%e a22ellant# t%e test 2ro2osed by t%e ma4ority# namely# t%at t%e ille6itimate means used (as a reason =not the reason# nor t%e predominant reason nor t%e clinching reason> (%y t%e com2lainant acted as %e did. !e are also 2re2ared to acce2t t%at a decisive ans(er is not obtainable by as)in6 t%e :uestion (%et%er t%e contract (ould %ave been made even i" t%ere %ad been no t%reats because# even i" t%e ans(er to t%is :uestion is a""irmative# t%at does not 2rove t%at t%e contract (as not made because o" t%e t%reats. *122 1ssumin6 t%ere"ore t%at (%at %as to be decided is (%et%er t%e ille6itimate means used (as a reason (%y t%e com2lainant acted as %e did# it "ollo(s t%at %is reason "or actin6 must =unless t%e case is one o" automatism (%ic% t%is is not> be a conscious reason so t%at t%e com2lainant can 6ive evidence o" it: GE acted because E (as "orced.G E" %is evidence is %onest and acce2ted# t%at (ill normally conclude t%e issue. E"# moreover# %e 6ives evidence# it is necessary "or t%e court to evaluate %is evidence by testin6 it a6ainst %is credibility and %is actions. En t%is case 'arton 6ave evidence < %is (as# "or 2ractical 2ur2oses# t%e only evidence su22ortin6 %is case. T%e 4ud6e re4ected it in im2ortant res2ects and acce2ted it in ot%ers. T%e issues as to 'arton8s motivations (ere issues 2urely o" "act =t%at motivation is a :uestion o" "act %ardly needs aut%ority# but see Co7 v. Smail /191*3 C. .?. *7D per Cussen J.>: t%e "indin6s as to motivation (ere lar6ely# i" not entirely# "indin6s as to credibility. Et (ould be di""icult to "ind matters more 2eculiarly t%an t%ese (it%in t%e "ield o" t%e trial 4ud6e (%o sa( bot% contestants in t%e bo7# and (%o dealt care"ully and at len6t% (it% t%e credibility# or lac) o" credibility# o" eac% o" t%em. !e t%in) it im2ortant to notice %o( little o" 'arton8s case (as acce2ted: %o( muc% o" it < indeed almost t%e (%ole o" %is essential contentions < "ailed. En 6eneral t%e 4ud6e "ound t%at %is case (as reconstructed a"ter t%e event: it (as not until nearly a year a"ter si6nin6 t%e a6reement in January 19+7 t%at %e brou6%t "or(ard %is claim o" duress. 'arton8s case# (%ic% %e 2ut "or(ard at t%e trial# (as t%at ne6otiations "or t%e a6reement =sc. to buy 1rmstron6 out> started in January 19+7: t%at no a6reement %ad been reac%ed on January D# 19+7: t%at on January 13# 19+7# %e %ad made u2 %is mind not to 2roceed- t%at t%ere (as a 2o(er"ul t%reat by 1rmstron6 on January 1+# 19+7# by (%ic% %e (as coerced into si6nin6 on January 17. T%e "acts as "ound (ere t%at ne6otiations started on December 1D# 19++: t%at t%erea"ter t%ere (as a 6ood deal o" bar6ainin6 o" a normal c%aracter not (it% 1rmstron6 directly but (it% @r. Smit%# %is res2ectable accountant# in t%e course o" (%ic% 'arton 6ained some advanta6es: t%at a6reement (as essentially reac%ed on January D# 19+7: t%at so muc% (as stated to t%e 2olice on January ,# 19+7# by 'arton8s le6al adviser in 'arton8s 2resence (it%out any re"erence to or su66estion o" coercion < t%e 4ud6e attac%ed considerable im2ortance to t%is intervie(# notes o" (%ic% (ere available at t%e trial: t%at 'arton never decided not to 2roceed: t%at %e t%ou6%t it a matter o" ur6ency to si6n: t%at t%ere (as no t%reat on January 1+# 19+7. T%e 4ud6e also re4ected 'arton8s evidence as to a number o" t%reats alle6ed by 'arton to %ave been made on various occasions.

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0" course t%is is not t%e (%ole 2icture < or 'arton could not %o2e t%at %is case (ould stand u2. T%ere are also "indin6s t%at 'arton (as in a 6eneral state o" "ear o" 1rmstron6# nouris%ed by t%e tele2%one conversations and evidenced by %is removal o" %imsel" to a %otel and o" %is "amily to t%e country. T%e 4ud6e acce2ted t%at# on January 1*# 19+7# 1rmstron6 %ad said on t%e tele2%one to 'arton Gyou %ad better si6n t%e a6reement < or else.G 'ot% courts "aced t%e 2roblem t%us created. !ere t%ese "acts alone su""icient to conclude t%e case in 'arton8s "avour# or (as it o2en to t%e court to in:uire (%et%er# 6iven t%e e7istence o" a state o" "ear# it (as *123 a reason "or actionJ T%at a man in a state o" "ear may yet act voluntarily < i.e.# totally "or ot%er reasons or motives < is undoubtedly e7ce2tional and %as to be clearly 2roved# but t%is is in so many (ays an e7ce2tional case t%at not%in6 can be ruled out. T%is issue (as s:uarely "aced by @ason J.1. bet(een (%ose 4ud6ment and t%at o" Taylor 1.< J.1. t%ere is substantial a6reement. !e "ind it necessary to re"er to some )ey 2assa6es. =1> ;e acce2ted t%at 1rmstron6 intended by t%reats and intimidation to coerce 'arton into si6nin6 t%e a6reement and t%at 'arton# in %is o(n mind# related 1rmstron68s t%reats to %is desire to "orce it t%rou6%. ;e acce2ted t%e 4ud6e8s "indin6 t%at 'arton (as in "ear o" 1rmstron6. =*> ;e continued: G... it 6oes (it%out sayin6 t%at a man (%o is in "ear o" anot%er is 2rone to com2ly (it% t%e demands o" t%at ot%er# (it%out brin6in6 a "ree and inde2endent mind to t%e matter in %and. T%e outcome o" t%e issue t%ere"ore de2ends in 2art on t%e de6ree o" t%e a22re%ension (%ic% a""ected t%e a22ellant8s mind and %is ca2acity# des2ite t%at a22re%ension# to brin6 a "ree mind to bear on t%e :uestion (%et%er %e s%ould assent to t%e 2ro2osed a6reement.G =3> ;e a6reed (it% t%e 4ud6e in t%in)in6 t%at at all relevant times t%e a22ellant# alt%ou6% a22re%ensive as to t%e sa"ety o" %imsel" and %is "amily in t%e li6%t o" t%reats and intimidation to (%ic% %e %ad been sub4ected# nevert%eless vie(ed and considered t%e 2ro2osed a6reement dis2assionately (it% a "ree and inde2endent mind. 5or G... reasons (%ic% %is ;onour s%ortly described as commercial necessity# %e decided to enter t%e a6reement....G =D> ;e said: GT%e stron6 2oint in t%e a22ellant8s case is t%e "indin6 t%at t%e a22ellant (as "ear"ul "or %is o(n sa"ety and t%at o" %is "amily. En 6eneral t%e e7istence o" a condition o" "ear associated (it% a 2articular event is incom2atible (it% t%e 2ossession o" a "ree and dis2assionate mind (it% re"erence to a course o" action (%ic% involves as a 2ossibility t%e occurrence o" t%at event. 'ut it is not universally so "or# as E %ave said# muc% de2ends on t%e de6ree o" a22re%ension and t%e ca2acity o" t%e mind to act inde2endently o" t%e a22re%ension.G =5> GEn my o2inion in duress# as (ell as undue in"luence# t%e court is concerned to ascertain (%et%er entry into t%e transaction (as "ree and voluntary- t%e area o" t%at in:uiry is not circumscribed by a ri6id 2ro2osition o" la( t%at a condition o" "ear or a22re%ension is absolutely and in all circumstances incom2atible (it% t%e 2ossession o" a "ree and voluntary mind.G T%ese 2assa6es s%o( t%at t%e 4ud6e o" 122eal too) t%e 2osition t%at it (as in %is 2o(er# and (as %is 4udicial duty# to in:uire (%et%er# not(it%standin6 t%e e7istence o" intimidation and a state o" "ear# t%e "ear (as a reason inducin6 'arton to si6n t%e a6reement# or (%et%er %e (as s%o(n to %ave si6ned it "or ot%er reasons. T%e same 2osition (as ta)en e72licitly# or

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im2licitly# by Street J. and by Taylor 1.<J.1. 1ll t%ree 4ud6es "ully reco6nised t%at a conclusion to t%e latter e""ect (ould be *124 e7ce2tional# and must be clearly 2roved. En our o2inion t%e direction t%ey t%us 6ave t%emselves (as correct. 0n t%is direction t%e 4ud6es reac%ed t%eir ultimate and crucial "indin6s o" "act as to motivation. Street J. %ad "ound t%at 'arton (as motivated to enter into t%e a6reement by s%eer commercial necessity. 'y t%is %e meant t%at t%e com2any (ould survive and be 2ro"itable (it%out 1rmstron6# but not (it% %im# and t%at t%e li)eli%ood and e7tent o" suc% 2ro"it 4usti"ied t%e 2rice to be 2aid to 6et rid o" 1rmstron6. ;e meant also# as %is 4ud6ment s%o(s# t%at 'arton (as motivated by a desire "or uncontested control over t%e business# rat%er t%an a s%arin6 o" it (it% 1rmstron6. T%is "indin6 and t%e evidence su22ortin6 it (as care"ully scrutinised by t%e Court o" 122eal# and# in t%e end# endorsed. T%e court (as# in 2articular# concerned to see (%et%er Street J. %ad a22lied an incorrect standard < i.e.# one o" G2redominant causeG < but came to t%e conclusion t%at %e %ad not done so. T%e "indin6 o" @ason J.1. as to motivation is conveyed in t%e "ollo(in6 2assa6e: GE a6ree (it% t%e 4ud6e in t%in)in6 t%at at all relevant times t%e a22ellant# alt%ou6% a22re%ensive as to t%e sa"ety o" %imsel" and %is "amily in t%e li6%t o" t%reats and intimidation to (%ic% %e %ad been sub4ected# nevert%eless vie(ed and considered t%e 2ro2osed a6reement dis2assionately (it% a "ree and inde2endent mind. ;e entered into t%e a6reement and committed andmar) to it# not because %e (as overborne by @r. 1rmstron6# but because in t%e e7ercise o" %is "ree and inde2endent 4ud6ment %e considered t%e a6reement to be advanta6eous. 5irst# %e t%ou6%t t%at Paradise !aters %eld t%e 2romise o" very considerable 2ro"its. Secondly# %e a22reciated t%at to enable com2letion to ta)e 2lace it (as essential to secure "inance (%ic% could be obtained only in t%e event t%at t%e controversy (it%in t%e com2any (as brou6%t to an end by a settlement (%ic% terminated t%e 1rmstron6 interest in t%e com2any. T%irdly# "or t%e (ell<bein6 o" t%e com2any %e t%ou6%t it essential to sever t%e conne7ion (it% @r. 1rmstron6 and eliminate %is ca2acity to create trouble. 5or t%ese reasons# (%ic% %is ;onour s%ortly described as commercial necessity# %e decided to enter into t%e a6reement and commit andmar) to it.G T%e 4ud6e8s "indin6s (ere also acce2ted# a"ter care"ul e7amination by Taylor 1.<J.1. < G... t%e conclusion#G %e "inds# Gt%at 'arton entered into t%is a6reement because %e (anted to and "rom commercial motives only is# E t%in) undoubtedly correct.G T%e a22eal cannot succeed unless t%ese most e72licit "indin6s are overturned. !e consider t%at no basis e7ists "or doin6 so. T%ere are t(o contentions a6ainst t%e acce2tance o" t%em# (it% (%ic% (e s%ould deal. 1. 1n attem2t (as made to s%o( t%at t%ere (as no suc% commercial necessity as t%e 4ud6e "ound to %ave motivated 'arton# and %is collea6ues# to buy out 1rmstron6 on t%e terms a6reed. 1 detailed e7amination (as made < bot% in t%e a22ellant8s 2rinted case and in ar6ument < to demonstrate t%at andmar)8s 2osition (as# at any rate a"ter Hnited Dominions Cor2oration %ad re"used to 2rovide "urt%er "inance# %o2eless: t%at t%e a6reement *125 (as# "rom t%e 2oint o" vie( o" 'arton and %is associates# disastrous# and "rom 1rmstron68s 2oint o" vie(# e7tremely "avourable. Traces o" t%e in"luence o" t%is ar6ument and even o" its acce2tance are "ound in t%e ma4ority 4ud6ment. !it% all res2ect (e t%in) it to be ille6itimate and misconceived. T%e 2oint is not (%et%er t%e a6reement (as "inancially advanta6eous to

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one side or t%e ot%er =(e (ould not venture any 2ronouncement as to t%is> but (%et%er it (as t%ou6%t to be advanta6eous by 'arton and %is associates. T%at it (as so t%ou6%t is bot% "ound by t%e 4ud6e as a matter o" "act# and s%o(n by over(%elmin6 evidence. 'e"ore t%e a6reement (as si6ned# 'arton and %is "riends t%ou6%t t%at t%e arran6ement (ould be t%e salvation o" t%e com2any# and t%at it (as vital to 6et 1rmstron6 to si6n as soon as 2ossible. !%en it (as si6ned# and "or mont%s a"ter(ards# 'arton and %is "riends acted and e72ressed t%emselves in t%e same s2irit. 0n January 1,# 19+7# 'arton said GNo( (e %ave 6ot rid o" 1rmstron6 not%in6 (ill sto2 us.G 0n January 19# %e said to @r. Smit% =1rmstron68s adviser> GE t%in) t%e deal is a miracle.G 1s to t%e subse:uent 2eriod u2 to 12ril 19+7# Street J. lists 17 "acts 2roved in evidence illustratin6 'arton8s con"idence and o2timism. ;o(ever little 4usti"ied t%ese turned out to be# t%ey undoubtedly e7isted. !e cannot see %o( a success"ul attac) can be made a6ainst t%e "indin6 t%at# to 'arton# t%e deal a22eared as a commercial necessity. *. En vie( o" t%e stron6 "indin6s o" "act summarised above# and o" t%eir concurrent ado2tion by t%e Court o" 122eal# a situation (%ic% on (ell )no(n 2ractice 2revents a "urt%er revie(# attention (as directed to certain "indin6s o" Street J. (%ic% (ere reversed by t%e Court o" 122eal. T%is# it (as ar6ued# too) t%e case out o" t%e concurrent "indin6s rule and entitled t%e 'oard to ma)e t%eir o(n assessment o" t%e "acts. !e "ind traces o" acce2tance o" t%is ar6ument in t%e ma4ority 4ud6ment. 'ut in our o2inion t%is is but a "ra6ile su22ort "or a total reversal o" t%e essential "indin6s o" bot% courts. T%e 2oints =D in number out o" 1+# t%e rest o" (%ic% (ere s2eci"ically a""irmed> (ere =stalin6 t%e Court o" 122eal8s "indin6s < t%ose o" Street J. bein6 to t%e contrary>: =1> t%at 1rmstron6 (as res2onsible "or ;ume8s (atc%in6 activities- =*> t%at 1rmstron6 (as not a reluctant vendor- =3> t%at 1rmstron68s t%reats and intimidation (ere intended to coerce t%e a22ellant into t%e ma)in6 o" t%e a6reement- =D> t%at t%e a22ellant did in %is o(n mind relate 1rmstron68s t%reats to a desire by 1rmstron6 to "orce t%rou6% t%e a6reement. 0" t%ese =1> is 2eri2%eral- =*> is not inconsistent (it% 'arton bein6 a (illin6 buyer- =3> does not 2reclude t%e critical :uestion (%et%er t%e t%reats (ere a reason (%y 'arton made t%e a6reement. Et is only =D> (%ic% a22ears to be o" si6ni"icance in relation to t%e ultimate issue (%et%er intimidation 2layed a 2art in securin6 'arton8s assent to t%e a6reement. 'ut# as %as already been s%o(n# t%is 2oint (as 6iven "ull consideration by t%e Court o" 122eal. @ason J.1. said: GEt is im2licit in (%at E %ave said t%at t%e variations (%ic% E am dis2osed to ma)e in t%e "indin6s made by Street J. do not cause me to di""er "rom t%e ultimate "indin6 o" "act (%ic% ;is ;onour made. T%ese variations are o" minor si6ni"icance (%en com2ared (it% t%e *126 ot%er ob4ective evidence t%ro(in6 li6%t on t%e a22ellant8s attitude o" mind.G !e a6ree. En our o2inion t%e case is "ar "rom bein6 one in (%ic% a second a22ellate court s%ould reverse "indin6s made belo( and endorsed by a Court o" 122eal. ?es2ect "or suc% "indin6s < 2articularly (%ere t%e issues de2end so muc% u2on credibility and an estimate o" rival 2ersonalities < a22ears to us to be a central 2illar o" t%e a22ellate 2rocess. Et is 2er%a2s otiose# but also "air to t%e 4ud6es belo(# to say t%at (e %ave no 6round "or t%in)in6 t%at t%e "actual conclusions (%ic% t%ey reac%ed a"ter so 2rolon6ed a searc% did not re2resent t%e trut% o" t%e situation < or at least t%e nearest a22ro7imation to trut% t%at (as attainable. !e (ould dismiss t%e a22eal. Representat%on Solicitors: En6lede(# 'ro(n# 'ennison A $arrett - !ater%ouse A Co ./0! W! 1(! 2

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=c> Encor2orated Council o" a( ?e2ortin6 "or Bn6land A !alesN *91* S(eet A @a7(ell