Sundarlal Lallu v Parvati Manilal Lallu Ranchod, unreported, Court of Appeal, Fiji, ABU0053 of 1995S (Case Note) [1998] JSPL 20; (1998) 2 Journal of South Pacific Law

SUNDARLAL LALLU v PARVATI MANILAL LALLU RANCHOD

unreported
Court of Appeal, Fiji
CAN ABU0053 of 1995S

FACTS:

On the death of her husband in 1980, the plaintiff became the executor and trustee of his estate and sole beneficiary for life. In these capacities she became equal partner with the defendant, her late husband's brother, in the business of merchants and theatre proprietors. The business also owned certain properties. In 1990 the defendant was convicted of assaulting the plaintiff who was forced to move out of the house she shared with the defendant and his family, into accommodation behind the theatre. From that accommodation, she operated a small grocery business. After various meetings with the defendant and members of the Gujerati Indian Community, the plaintiff and defendant executed a deed providing for the dissolution of the partnership with all assets to be transferred to the defendant and $50,000 to be paid to the plaintiff. After execution of the deed the plaintiff became aware that she would only receive $50,000, and not the money and the theatre as she had thought.

CLAIM:

The following preliminary issues were put to the High Court for determination:

1. Did the plaintiff execute the deed and related documents voluntarily or by virtue of inducement, duress, undue influence and misrepresentation by the defendant?

2. Was the plaintiff given the opportunity to seek independent legal advice and did she receive such advice before signing these documents.

The defendant appealed against the High Court’s determination of these two issues in the plaintiff’s favour.

OUTCOME:

The appeal was dismissed with costs to the plaintiff.

LEGAL PRINCIPLES:

Ratio Decidendi

1. Exercise of dominion and inequality of bargaining power are factors to be taken into account in establishing undue influence.

2. If third parties ‘recruited’ by the dominant party to a contract substantially undermine the ability of a party to make independent decisions this may amount to undue influence.

3. Non-disclosure of:

• Profits of the partnership;
• Sales forming a substantial part of trading operations;
• Acquisition of land in an individual partner’s name with partnership funds; and
• Questions regarding gross profits in a period following serious damage to the trading premises;

are all instances of misrepresentation.

4. Partners are in a fiduciary relationship based on good faith and good will.

Obiter Dicta

Capability in trade does not necessarily mean that a person is literate.

COMMENTARY:

1. Silence and Misrepresentation

The common law rule is that silence does not amount to misrepresentation (