LEGAL TRANSPLANT AND UNDUE INFLUENCE: LOST IN TRANSLATION OR A WORKING MISUNDERSTANDING?
Published online by Cambridge University Press: 30 January 2013
Is legal transplant possible? The stark bipolarity of a ‘yes’ or ‘no’ answer attracted by such a question is much less interesting and revealing than the question: what shapes the life of legal transplants? The answer to the latter question is contingent on a wide range of variables triggered by the particular transplant; the result can occupy any point along the spectrum from faithful replication to outright rejection. This case study of the transplant of the English doctrine of undue influence into Singaporean law asks why the Singaporean courts have applied the doctrine in family guarantee cases to such divergent effect, when they profess to apply the same law. The answer owes less to grand theories than to a careful examination of the nature of the transplanted law and the relationship between the formal and informal legal orders of the originating and the recipient society raised by the particular transplant.
- Copyright © British Institute of International and Comparative Law 2013
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16 One rare exception in the law of contract is the Singapore Court of Appeal decision in Chwee Kin Keong and Others v Digilandmall.com Pte Ltd  SGCA 2;  1 SLR 502 which rejected the position in the English Court of Appeal decision on equity's jurisdiction in the case of unilateral mistake in Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd  EWCA Civ 1407,  QB 679,  4 All ER 689. Another is the recent rejection of Lord Hoffmann's approach to remoteness of loss in The Achilleas  UKHL 48; the Singapore Court of Appeal in MFM Restaurants Pte Ltd v. Fish & Co Restaurants Pte Ltd  SGCA 36;  1 SLR 150, preferring the traditional approach set out in Hadley v Baxendale  EWHC Exch J70.
18 Royal Bank of Scotland v Etridge  UKHL 44,  AC 773.
21 Allcard v Skinner (1887) LR 36 Ch D 145, 171; See also Bank of Credit and Commerce International SA v Aboody  1 QB 953 (BCCI v Aboody); Barclays Bank v O'Brien  1 AC 180 HL, 189–90.
23 Allcard v Skinner, (n 21), (at 171) sets out two categories of undue influence, which, despite the refinements by Etridge, remain substantially intact. These categories are affirmed in BCCI v Aboody, (n 21), at 953 and Barclays Bank v O'Brien, (n 21) at 189–90. In class 1 cases the claimant can prove that the defendant's positive application of pressure induced his consent to the contract.
24 In class 2 cases undue influence is presumed from the claimant's proof that: (a) she was in a ‘relationship of trust and confidence’ with the defendant (Class 2A covers specified relationships where the influence is automatically presumed, class 2B describes relationships outside Class 2A where the existence of influence must be proved), and (b) the resulting transaction is manifestly disadvantageous to the claimant. It is then up to the defendant to rebut the presumption by proof that the claimant nevertheless entered the transaction freely (usually by evidence of the presence of independent advice).
25 eg Rajabali Jumabhoy & Ors v Ameerali R Jumabhoy & Ors  3 SLR 802; Overseas-Chinese Banking Corp Ltd v Chng Sock Lee & Anor  4 SLR 370; Bank of India v Sujanani Thakur Rochiram & Ors  SGHC 185; Standard Chartered Bank v Uniden Systems (S) Pte Ltd  2 SLR 385; Malayan Banking Bhd v Hwang Rose and others  SGCA 10; ING Bank NV v Inselatu Co Pte Ltd & Ors  SGHC 81; Susilawati v American Express Bank Ltd  1 SLR 237,  SGHC 179; Oversea-Chinese Banking Corp Ltd v Tan Teck Khong and Another (Committee of the Estate of Pang Jong Wan, Mentally Disordered) and Others  2 SLR 694;  SGHC 61; Bank of East Asia v Mody Sonal M  4 SLR 113.
34 Etridge .
35 BCCI v Aboody (n 21); the court declined relief because it found that the wife would have agreed even if the husband had insured that she fully understood the risks. The flaw in this reasoning is that it obstructs the finding of undue influence in the cases where it is most needed. See (n 57–8) below.
36 The bank insisted on offering the wife independent advice in the absence of her husband. While this was happening, the husband burst into the room in a high state of excitement and said, ‘Why the hell don't you get on with what you are paid to do and witness her signature?’ There followed a scene which reduced the wife to tears. The advisor certified that the wife understood the transaction, but added: ‘Husband is a bully. Under pressure and she wants peace.’ A further attendance note read: ‘Both our proposals were rejected out of hand by your husband … Your husband very rude and overbearing but you seemed to be quite content to submit and expressed your confidence in the business.’
44 Bank of East Asia v Mody Sonal M .
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56 Etridge (n 18) ; however, the court also said, obiter, at , that a wife's support is the ‘natural and admirable consequence of the relationship of a mutually loyal married couple’, it is readily explicable in terms of her normal trust and confidence in her husband. In Allcard v Skinner, (n 21), the nun knew what was expected of her before she joined the sisterhood (her mother and barrister brother had opposed her action). The judges recognized that everything she did came out of her own willing submission and enthusiastic devotion to the life and work of the sisterhood. Nevertheless, the doctrine protects her.
57 Credit Lyonnais Bank Nederland v Burch  1 All ER 144 CA.
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