DATUK JAGINDAR SINGH & ORS V TARA RAJARATNAM

GSM 5131 business law and ethics

EMIL AKBAR GM03403MOHD. FIZAN BIN MAT NOR GM03095NORIDA ABU BAKAR GM03118NOR AINNATUL IRYANI A. RAHMAN GM03119

Fact about the case

first and second appellants were advocates and solicitors

respondent was a lady who owned some five acres of land in Johor Bahru

The respondent’s brother in law had an overdraft facility

The second appellant told the respondent that her property was required as security for her brother in law’s overdraft

On march 30, 1974, the first and second appellants came to the respondent house and ask her to sign various document

The respondent was not happy with the matter as nothing was said of the fact that the property was to be used as security for the payment of two sums of $110,000 each, Why TRANSFER?

the second appellant said the security was by way of transfer , the second appellant amended the agreement

This overcame the respondent’s doubts and the falsehood sufficed to procure the respondent’s signature on various documents including a transfer form

Fact about the case

The first appellant paid off the overdraft and attended to the discharge of charge

Thereafter, the first appellant transferred the property into the name of the second appellant who transferred it into the name of the third appellant

third appellant subsequently transferred the property to a development company that was almost wholly owned by the first appellant

The land was subsequently sub-divided into housing lots and sold to individual buyers for a profit of some $500,000.

Fact about the case

Fact about the case

She claimed that when the land was transferred it was transferred was security and there were 2 undertaking:

1. That the land would not be sold to any one for one year without the consent of the respondent

2. That the land would transfer back to her on her repaying 220,000

Issue

Brief explanation of the principleFraud FRAUD is a word that we commonly

encounter. Often a person claims that another person has committed a fraud on him. Yet it is also said that fraud is difficult to establish or prove

Because of this, not only do people often not pursue a claim, as they feel they will not be successful, it also encourages the delinquent party to be more courageous in relying on such conduct in future.

EVIDENCE OF FRAUD

We are dealing with professional men who take advantage of their status and occupation to lure the unwary clients into parting with their property and making sure that they could not recover their property back.

It is the very case of the respondent that the appellants deliberately obtained the transfer form with the intention of using the transfer form to secure the property and then to enable Suppiah to transfer it to Arul in such haste as to prevent Tara from recovering her property.

Fraud may also be caused by deliberately and dishonestly registering an interest and then transferring the interest even before the ink is dry to another person without the consent of the original registered proprietor

Both Jagindar and Suppiah knew that Tara merely wanted the agreement to be a security agreement. Her questioning of Suppiah about the agreement and the insertion by Suppiah of the manuscript showed quite clearly that they knew it was meant to be a security agreement. They denied they acted as solicitors but were merely assisting. The learned Judge rightly rejected such a proposition.

EVIDENCE OF FRAUD

the appellants were not honest in that the 1st appellant and the 2nd appellant never really intended to fulfill the conditions of the agreement and that all they wanted was mainly to get the respondent to sign the transfer form so that they could lay their hands on the property at a time of their choosing. As regards the 3rd appellant he must have known what was going on since he claimed himself to be the registered proprietor and denied he was a nominee. In effect he impliedly claimed to be a bona fide purchaser for value. He colluded with the other appellants to get possession of the property.

EVIDENCE OF FRAUD

Undue Influence  Actual undue influence: in these cases it is necessary

for the claimant to prove affirmatively that the wrongdoer exerted undue influence on the complainant to enter into the particular transaction which is impugned

  Presumed undue influence: in these cases the

complainant only has to show, in the first instance, that there was a relationship of trust and confidence between the complainant and the wrongdoer of such a nature that it is fair to presume that the wrongdoer abused that relationship in procuring the complainant to enter into the impugned transaction

Brief explanation of the principle

there are four elements must be shown to establish undue influence:

First, it must be demonstrated that the victim was susceptible to overreaching

Second, there must be an opportunity for exercising undue influence

Third, there must be evidence that the defendant was inclined to exercise undue influence over the victim

Fourth, the record must reveal an unnatural or suspicious transaction

Brief explanation of the principle

Evidence of undue influence

They used not only their professional position but also their social status in exercising undue influence over Tara and Devan. Clearly Devan was under their undue influence earlier as he dealt with them from the beginning.

When they visited Tara's house not a word was said about Jagindar being the attestor of the transfer. We were told Jagindar and Sivanathan were merely accompanying Suppiah there. We see from the evidence that Jagindar was interested in the property

That Jagindar was the true owner became clear when he caused Suppiah to transfer the property to Arul who later transferred it to Jet Age Construction Company.

1) Fraud Letchemy Arumugan vs. Annamalay

(1982) and Derry v Peek (1889) 2) undue influence Salwath Haneem v. Hadjee

Abdullah 86 and Chait Sing v. Budin bin Abdullah87

Relevant case-law and explanation:

HELD

As regards the 3rd appellant he colludedwith the other appellants to get possession of the property; the learned trial judge was correct in holding that the agreement was a security agreement and did not constitute an outright transfer of the land

At the learned trial judge was not wrong in holding that the transaction was unconscionable and that the burden was on the appellants to rebut thepresumption of undue influence

 HELD

The Federal Court dismissed the appeal In this case it was clear from the

correspondence that the 1st and 2nd appellants were acting for the respondent and there was a solicitor-client relationship between them

The evidence the learned judge was entitled to take the view that the appellants were not honest in that the 1st and 2nd appellant never really intended to fulfill the conditions of the agreement and that all theywanted was to get the respondent to sign the transfer form so that they couldlay their hands on the property

HELD

in this case the learned trial judge exercised his discretion correctly in awarding damages for fraud and in not deducting the sums paid bythe appellants in payment of overdrafts to the banks as the sums were paid inpursuance and furtherance of the fraud

Q and A session

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Chinese New Year!!