Parole Evidence RULE PDF

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PAROLE EVIDENCE RULEIntroductionThe parol evidence rule is a rule in the Anglo-American common law regarding contracts, and governs what kinds of evidence parties to a contract dispute can introduce to identify the specific terms of a contract.The rule prevents parties who have reduced their agreeme...

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PAROLE EVIDENCE RULE Introduction The parol evidence rule is a rule in the Anglo-American common law regarding contracts, and governs what kinds of evidence parties to a contract dispute can introduce to identify the specific terms of a contract. The rule prevents parties who have reduced their agreement to a final written document from later introducing other evidence, such as the content of oral discussions from earlier in the negotiation process, as evidence of a different intent as to the terms of the contract. The term "parol" derives from the Anglo-Norman French parol or parole, meaning "word of mouth" or "verbal", and in medieval times referred to oral pleadings in a court case. In short, there is Exclusion of Oral Evidence by Documentary Evidence Should referSections 91, 92 & 99 and these sections are interdependent of each other. S 91 – Evidence of terms of contracts, grants and other disposition of property Reduced to the Form of a Document - If the terms of a contract/grant or any other disposition or property have been with consent of parties is required by law to be reduced into document/writing, if want to prove the terms — can only do so by producing the original/primary evidence under s 61,64 & 65 or by permitted secondary evidence under section 63. - Cannot give oral evidence in substitution. - Once agreed to put the terms in document, if want to prove contents of transaction, must give document. - It always a question of fact Section 92: Exclusion of Evidence of Oral Agreement - If a contract/ grant or disposition of property is put in document form, have been proved according to s 91 — have been proved by producing original document or permitted copy, cannot adduce extrinsic evidence to show that there's contradictory term to contract to vary, subtract or contradict terms of contract. - 6 exceptions under s 92 to be read subject to s 93 — 98 (deals with construction of document) - Permits oral evidence to be given to explain ambiguity of legal document

Relationship between ss.91 & 92 S 91 would be frustrated without the aid of s 92 because they supplement each other. S 92 would be inoperative without the aid of s 91 Since s 92 excludes the admission of oral evidence for the purpose of contradicting, varying, adding to or subtracting from the terms of the document properly proved under s 91, it makes the proof of the document conclusive of its contents S 91 is an exclusive rule because it excludes the admission of oral evidence for proving the contents of the document except in cases where secondary evidence is allowed to be led under the relevant provisions of the Evidence Act 1950. S 92 applies to cases where the terms of contracts, grants or other disposition of property have been proved by the production of the relevant documents themselves under s 91. It is after the document have been produced to prove its terms under s 91 that the provisions of s 92 come into operation to exclude evidence of any oral agreement or statement, for the purpose of contradicting, varying, adding to or subtracting from its terms CASE: Datuk Tan Leng Teck v Sarjana Sdn Bhd & Ors HELD: Section 92 of the Evidence Act 1950 did not apply to all documents that come within s 91. The prohibition contained in s 92 applied only to bilateral and dispositive documents. The section had no application to unilateral and non-dispositive documents such as police reports and as a consequence thereof, oral evidence is admissible to contradict them. Since the return of allotment of shares was a unilateral document, it therefore could be contradicted if the facts warranted it CASE: PP v Datuk Harun Idris & Ors [1977] 1 MLJ 180 Per Abdoolcader J: The scope of the words "any matter required by law to be reduced to the form of a document" in the section show that the section applies only to bilateral and dispositive documents CASE: Ganam d/o Rajamany v. Somoo s/o Sinniah [1984] 2 MLJ 290 (FC) FACT: In this case the appellant had agreed to sell her lands to the respondent. At the time of signing the contracts the appellant orally agreed to allow the respondent to enter into occupation of one of the properties but she alleged that the respondent had wrongfully entered on the other properties also. The respondent had failed to pay the balance of the purchase price and the appellant purported to rescind the contracts.

She then brought an action to claim that the contracts had been effectively rescinded, forfeiture of the deposits, damages for trespass, mesne profits and ancillary relief. HELD: Section 92 does not preclude the admission of oral evidence to contradict a recital of fact in a written contract. CASE: Tan Chong & Sons Motor Co (Sdn) Bhd v. Alan McKnight [1983] 1 MLJ 220 (FC) FACT: He agreed to buy a car from the appellants and signed a Buyer’s Order which contained a condition that no guarantee or warranty of any kind whatsoever was given by the company. However the respondent only bought the car on the representations of the appellant’s salesman that the car conformed to the Australian Design Regulations. The car supplied did not comply with the Regulations and the respondent had to sell the car for $6,500 thereby incurring a loss of $11,219.54 ($17,719.54–$6,500) HELD: the prohibition against admissibility of evidence under s 92 only applies where all — as opposed to some only — of the terms of the contract are written into the agreement. Thus where some terms are given orally and some in writing, oral evidence can be given to prove the terms agreed to orally; where the oral representations as in this case are in conflict with the printed condition in the written contract, the representations must be given an overriding effect and the printed condition must therefore be rejected; CASE: Lee Soh Hua v. Kow Lup Piow & Ors [1984] 2 MLJ 101 (FC) HELD: Extrinsic evidence adduced for the purpose of contradicting, varying, adding to or subtracting from a written agreement is inadmissible. CASE: Tan Swee Hoe Co Ltd v. Ali Hussain Bros [1980] 2 MLJ 16 (FC) HELD: A collateral contract does not offend the extrinsic evidence rule because it is separate from the main contract. CASE: PP v. Datuk Haji Harun Idris & Ors. [1977] 1 MLJ 180 (HC) HELD: The clause `any matter required by law to be reduced to the form of a document' refers to bilateral instruments and dispositive documents only. Section 93 Exclusion of evidence to explain or amend ambiguous document When the language used in a document is on its face ambiguous or defective, evidence may not be given of facts which would show its meaning or supply its defects. ILLUSTRATIONS

(a) A agrees in writing to sell a horse to B for RM500 or RM600. Evidence cannot be given to show which price was to be given. (b) A document contains blanks. Evidence cannot be given of facts which would show how they were meant to be filled.

CASE: Chai Chung Ching Chester & Ors v Diversey (Far East) Pte Ltd [1991] 3 MLJ 444 (also [1991] 3 CLJ 2632) FACT: Diversey (defendant) argued that the agreement was ambiguous and extrinsic evidence on the circumstances leading up to the agreement should be referred to. HELD: The agreement was clear and unambiguous, could not refer to extrinsic evidence in its construction of the agreement.

S94 Exclusion of evidence against application of document to existing facts When language used in a document is plain in itself and when it applies accurately to existing facts, evidence may not be given to show that it was not meant to apply to such facts. - If language of the deed is plain and accurately applies to existing facts, no evidence may be given to construe it in other way. ILLUSTRATION A conveys to B by memorandum of transfer "my estate at Kranji containing 100 acres." A has an estate at Kranji containing 100 acres. Evidence may not be given of the fact that the estate meant was one situated at a different place and of a different size.

CASE: Hj Aminah bt Bakri v Manisah bte Hj Bakri & Ors HELD: The facts deposed to by Miss Jalil were clearly admissible. Far from altering what was in cl 15, they helped to clarify the intention of the parties and the meaning of that clause. The rule against parol evidence embodied in s 94 of the Evidence Act (Cap 97) was not absolute and one of the exceptions was that any fact may be proved which showed in what manner the language of a document was related to existing facts.

EXCEPTIONS 1. s95-98 2. Judicial Exception a. Historical background b. Evidence of surrounding circumstances to help interpret the document c. Recitals of Document 3. s92 provisos

1. Sections 95 — 98 However, not to be dealt with in detail. These sections relates to the types of ambiguity in the written document. If there is a total lack of clarity of the documents, there will be a dispute. Because the documents is not clear and cannot pinpoint the disagreement, the law allows extrinsic evidence to clarify the writing. The documents suffer from 2 types of ambiguity. 1. Patent Ambiguity If we read the whole document, we cannot understand on the face of it. The court will not allow extrinsic evidence to cure patent ambiguity by producing extrinsic evidence. 1. ss 93, 94 2. Language on its face is ambiguous/defective. 3. Extrinsic evidence not allowed 2. Latent Ambiguity (Hidden) On the face of it, it is all right but cannot exactly be precise. For example if there are 2 places of the same name we can introduce extrinsic evidence to cure the defect. 1. ss 95, 96,97 & 98 2. On perusal, no ambiguity, only uncertainty to application/collatrl matter tht breed ambiguity 3. Extrinsic evidence allowed

S95 Evidence as to document unmeaning in reference to existing facts When language used in a document is plain in itself, but is unmeaning in reference to existing facts, evidence may be given to show that it was used in a peculiar sense. ILLUSTRATION A conveys to B by memorandum of transfer "my plantation in Penang." A had no plantation in Penang, but it appears that he had a plantation in Province Wellesley of which B had been in possession since the execution of the memorandum. These facts may be proved to show that the memorandum related to the plantation in Province Wellesley.

CASE: Tan Suan Sim v Chang Fook Shen [1980] 2 MLJ 66 FACT: The appellant had agreed to sell to the respondent her land and house. The appellant paid the sum of $2,000 as deposit and it was agreed that the balance of the purchase price was to be paid “at a later date.” It was understood that the balance would be paid when the respondent obtained a loan from the bank and that the house the subject matter of the purchase was to provide the security for the loan.The appellant however insisted on payment of the balance before execution of the transfer and demanded payment “on or before 10 June 1974” failing which the appellants purported to cancel the contract. The respondent applied for specific performance of the agreement and in the High Court it was held that the respondent in this case was in a position to perform the contract and should have been given reasonable time to do so. In the circumstances specific performance of the contract was ordered. The appellant appealed. HELD: This evidence (explaining “at a later date”) is clearly admissible under ss 92(f) and 95, Evidence Act to explain the latent ambiguity in the agreement. In dismissing the appeal: on the evidence and in the circumstances of this case, it is clear that “a later date” meant in the intention of the parties a reasonable time after the loan had been approved.

S 96 Evidence as to application of language which can apply to one only of several persons When the facts are such that the language used might have been meant to apply to any one, and could not have been meant to apply to more than one of several persons or things, evidence may be given of facts which show to which of those persons or things it was intended to apply. ILLUSTRATIONS (a) A agrees to sell to B for RM500 "my white horse." A has two white horses. Evidence may be given of facts which show which of them was meant. (b) A agrees to accompany B to Halifax. Evidence may be given of facts showing whether Halifax in Yorkshire or Halifax in Nova Scotia was meant.

S 97 Evidence as to application of language to one of two sets of facts to neither of which the whole correctly applies When the language used applies partly to one set of existing facts and partly to another set of existing facts, but the whole of it does not apply correctly to either, evidence may be given to show to which of the two it was meant to apply. ILLUSTRATION A agrees to sell to B "my land at X in the occupation of Y." A has land at X, but not in the occupation of Y, and he has land in the occupation of Y, but it is not at X. Evidence may be given of facts showing which he meant to sell.

S98 Evidence as to meaning of illegible characters, etc. Evidence may be given to show the meaning of illegible or not commonly intelligible characters, of foreign, obsolete, technical, local and provincial expressions, of abbreviations and of words used in a peculiar sense. ILLUSTRATION A, a sculptor, agrees to sell to B, "all my mods." A has both models and modelling tools. Evidence may be given to show which he meant to sell.

2. Judicial Exception a. Historical background - During pre contractual negotiation will make some representation that will become terms of a contract. - Depends on basic intention. Q: Whether can give evidence of pre contractual negotiation with a view to discovering the intention of the parties? A: Parties can give historical background to discover the nature of the contract but cannot adduce pre negotiation transaction to discover the intention of the parties. CASE: Prenn v Simmonds [1971] 2 All ER 237, 241 Lord Wilberforce: “evidence of negotiations, or of the parties’ intentions ... ought not to be received, and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the ‘genesis’ and objectively the ‘aim’ of the transaction ”. CASE: KENG HUAT FILM CO SDN BHD v MAKHANLALL (PROPERTIES) PTE LTD FACT: There was dispute and argument about the terms of contract regarding to the renewal of lease. HELD: the learned judge said that, for the construction of a written agreement the established doctrine is;Firstly to exclude evidence of negotiations leading up to the contract on the ground that it is only the final agreement which records a consensus and as such evidence of negotiations is unhelpful; and Secondly to exclude evidence of the parties’ subjective intentions so that any individual purpose which either of them hopes to achieve by the agreement and their own interpretation and understanding of the agreement is not admissible. As against this, evidence of surrounding circumstances and factual background have always been admissible. The 1st lease should be classified as a factual background of the case known to the parties at or before the first lease was executed and therefore admissible in evidence.

b. Evidence of surrounding circumstances to help interpret the document CASE: PHIONG KHON v CHONH CHAI FAH FACT: a Chinese woman upon the death of her husband, set up a home with the appellant until her death. The appellant alleged that the respondent had executed a document which transferred the land to him. One of the extrinsic evidence given is the appellant has never established the validity of his marriage with the deceased. Therefore he has no legal claim to the deceased’s estate which he would have as of right if he was her lawful husband HELD: the terms of the document to be vague and uncertain and that it must be seriously be doubted whether there was any intention to create a legal relationship. The agreement is extremely vague and ambiguous. Without hearing extrinsic evidence it is impossible to know what are the arrangements set out in the document. The agreement is silent as to the exact portion to be given to appellant. It is also silent as to whether the promise to transfer is absolute or for life only. Appeal dismissed c. Recitals of Document CASE: GANAM D/O RAJAMANY v SOMOO S/O SINNAH [1984] 2 MLJ 290 In many agreements in written form, there are recitals in the' contract, which is different from the terms of contract. Recital is a rehearsal of the facts, usually at the back of the document like S&P agreements. If there is a dispute as to the instruments, can give extrinsic evidence. It is not prohibited to do so. CASE: Sah Lal Chand v Indarjit [1899-1900) PC HELD: section 91 of the Indian Evidence Act (which is in the same terms with section 92 of our Evidence Act 1950) does not preclude oral evidence to contradict a recital of fact in a written contract.

3. 6 provisos of section 92 a. Proviso (a) Facts may be proved which would invalidate any document or which would entitle any person to any decree or order relating thereto such as fraud, etc. Illustrations (d) and (e) of the section refer to this proviso. (d) A enters into a written contract with B to work certain mines, the property of B, upon certain terms. A was induced to do so by a misrepresentation of B as to their value. This fact may be proved. (e) A institutes a suit against B for the specific performance of a contract, and also prays that the contract may be reformed as to one of its provisions on the ground that that provision was inserted in it by mistake. A may prove that such a mistake was made as would by law entitle him to have the contract reformed - Proviso (a) is a wide-ranging proviso.

- Contract is enforceable if they do not have vitiating factors such as mistake, misrepresentation, fraud, incapacity, for lack of consideration. - As long as can show instrument is not legally effective because of vitiating factors, that makes the instrument void/voidable, we can admit extrinsic evidence to show the nature of the contract. CASE: TANG SIEW HEE & ORS v HII SII UNG [1964] MLJ 385 FACT: The plaintiffs claimed the sum of $3,356 on a promissory note signed by the defendant which alleged a loan to the defendant by the plaintiffs. Oral evidence was given that the sum represented amounts due from him as the head of a hwei which he ran in 1962 and that the defendant had in fact never received the loans from the plaintiffs. HELD: Held: (1) the oral evidence was admissible under the proviso to s 94 of the Evidence Ordinance (now s 92 Evidence Act 1950) to show that there was a want or failure of consideration; (2) as such evidence showed that the consideration shown in the promissory note and alleged by the plaintiffs was non-existent, the plaintiff’s claim must fail. Nature and method of operation of hwei explained.

CASE: GUTHRIE WAUGH BHD v MALAIAPPAN MUTHUCHUMARU [1972] 1 MLJ 35 FACT: The plaintiffs claimed a sum of $123,050.61 and interest as due from the defendant who was alleged to have “assumed responsibility” for such payment under a “deed of arrangement” executed by him on 24 June 1970. The averment in para 2 of the statement of claim was that goods to the value of $123,050.61 were supplied by the plaintiffs “to the estates” specified in the said para. It did not say that the goods were supplied to the defendant. The defence was that the defendant was not liable for goods which had been supplied not to him but to the said estates and that the so called “deed of arrangement” was void for want of consideration. HELD: There was no consideration for the execution of the deed (the goods were not supplied), it was unnecessary to say whether consideration could be proved by parole evidence b. Proviso (b) Doctrine of collateral contract or collateral warranty “the existence of any separate oral agreement, as to any matter on which a document is silent and which is not inconsistent with its terms, may be proved, and in considering whether or not this proviso applies, the court shall have regard to the degree of formality of the document;” - Proof of separate oral agreement on any matter on which a document is silent having regard to the degree of formality of the document. - There can be circumstances where some terms, the parties have not written into the document; b...