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

Armstrong, chairman of Landmark Corporation, threatened to have Barton, the managing director, killed unless he executed a deed purchasing Armstrong's shares. The Privy Council held that a contract may be avoided for physical duress even if the threats were not the main reason for entering the agreement.

Facts

Alexander Barton was the managing director of Landmark Corporation Ltd, a property development company. Alexander Armstrong was the chairman of the board. Barton executed a deed whereby the company would pay $140,000 to Armstrong and buy his shares for $180,000. At first instance, Street J found that Armstrong had threatened to have Barton killed. However, the New South Wales Court of Appeal held that Barton had failed to discharge the onus of proving that the threats had caused him to make the contract.

Issues

The key legal issue was whether a contract could be avoided for duress where the threats to the person were not necessarily the main or predominant reason for entering into the agreement, and whether the burden of proof should lie with the party claiming duress or the party seeking to uphold the contract.

Judgment

Majority Opinion

Lord Cross of Chelsea, Lord Kilbrandon and Sir Garfield Barwick advised that Barton could avoid the contract for being under duress. They held that physical duress does not need to be the main reason for entering an agreement; it merely needs to be one reason amongst others. Lord Cross held that the same rule should apply for duress as applies in misrepresentation cases.

Dissenting Opinion

Lord Wilberforce and Lord Simon of Glaisdale dissented on the facts while substantially agreeing on the law. They held that the threats needed to be at least a reason for entering the contract, but found that on the evidence, no duress existed on the facts. They addressed the nature of voluntary consent in law:

involves consideration of what the law regards as voluntary or its opposite… Absence of choice… does not negate consent in law; for this the pressure must be one of a kind which the law does not regard as legitimate. Thus, out of the various means by which consent may be obtained – advice, persuasion, influence, inducement, representation, commercial pressure – the law had come to select some which it will not accept as a reason for voluntary action: fraud, abuse of relation of confidence, undue influence, duress or coercion.

Legal Principles

The three tests established for physical duress are: first, to show that some illegitimate means of persuasion was used; second, that the illegitimate means used was a reason (not the reason, nor the predominant reason nor the clinching reason) for entering the contract; and third, that the claimant’s evidence is honest and accepted.

Implications

This case is significant in both Australian and English contract law for establishing that physical duress need only be a contributing factor, not the sole or predominant cause, for a party to avoid a contract. The decision aligned the rules on duress with those applying to misrepresentation, making it easier for victims of threats to obtain relief even where commercial considerations may also have influenced their decision.

Verdict: The Privy Council allowed the appeal and advised that Barton was entitled to avoid the contract on the ground of duress, despite the possibility that he might have entered into the agreement even without Armstrong’s threats.

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