Barton v Armstrong [1973] UKPC 2, [1976] AC 104

Facts

Mr Barton was the managing director of a company, and Mr Armstrong was its chairman. Following a power struggle, Barton agreed to buy Armstrong’s shares in the company through the execution of several deeds. Barton subsequently sought a declaration that these deeds were void, alleging that he had been coerced into signing them by Armstrong’s threats to have him murdered. The trial judge found that Armstrong had indeed made death threats and that Barton had taken them seriously. However, the trial judge also found that Barton had entered into the agreement for what were considered sound business reasons, primarily to ensure Armstrong’s departure from the company, which was seen as essential for the company’s survival. The New South Wales Court of Appeal upheld the trial judge’s decision that the deeds were not voidable for duress because Barton had not established that he would not have executed the deeds ‘but for’ the threats.

Issues

The principal legal issue for the Judicial Committee of the Privy Council was to determine the correct test for causation in cases of duress to the person. Specifically, the court had to decide whether, for a contract to be voidable for duress, the illegitimate pressure (the threats) must be the sole or dominant reason for the victim entering the contract, or whether it is sufficient that the threats were merely one of the reasons, even if the victim might have entered the contract anyway for other valid business reasons.

Judgment

The Privy Council, by a majority, allowed the appeal, siding with Barton and finding the contract voidable. The majority opinion, delivered by Lord Wilberforce and Lord Simon of Glaisdale, rejected the stringent ‘but for’ test of causation applied by the lower courts. They established that if illegitimate pressure or threats were made, the onus of proof shifts to the party who made the threats to prove that they had no effect on the other party’s decision to enter the contract. The threats only needed to be *a* reason, not the sole or principal reason. They drew a direct analogy with the law of fraudulent misrepresentation.

The majority judgment stated:

…if it is made to appear that the party threatened was subject to the pressure of the threats, and that they were a factor in his decision, it is for the other party to show that ‘the threats he was making and the unlawful pressure he was exerting contributed nothing to B’s decision to sign’.

In a powerful dissent, Lord Cross of Chelsea articulated the alternative view, which was rejected by the majority. He argued for a stricter standard, suggesting that duress should only be grounds to void a contract if the victim would not have entered into it without the threats. He summarised the majority’s position, with which he disagreed, as follows:

…if Armstrong’s threats were ‘a’ reason for Barton’s executing the deed he is entitled to relief even though he might well have entered into the contract if Armstrong had uttered no threats to induce him to do so.

The majority’s decision prevailed, establishing that once duress is proven, the contract is voidable unless the coercer can prove it was not a contributing factor at all.

Implications

The decision in Barton v Armstrong is of fundamental importance in the English law of contract. It clarifies and establishes the modern test for causation in cases of duress to the person. By holding that the duress need only be *a* cause, rather than the sole or ‘but for’ cause, the Privy Council significantly lowered the threshold for a claimant to successfully plead duress. This approach aligns the rules on duress with those concerning fraudulent misrepresentation, where the misrepresentation need only be one of the factors inducing the contract. The case is a leading authority that underscores the principle that the law will not tolerate the use of illegitimate threats to pressure a party into a contract, and it places a heavy burden on the wrongdoer to demonstrate that their threats had no impact on the victim’s consent.

Verdict: The appeal was allowed. The deeds were declared voidable by Barton due to duress.

Source: Barton v Armstrong [1973] UKPC 2 ) [1976] AC 104