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Malayan Law Journal Reports/1972/Volume 1/GUTHRI !"UGH #H$ % M"L"IPP"& MUTHU'UM"RU ( )1972* 1 MLJ +, ( 1- &o%em.er 1971 7 pages )1972* 1 MLJ +,

GUTHRIE WAUGH BHD v MALAIPPAN MUTHUCUMARU

OCJ SEREMBAN SHARMA J CIVIL SUIT NO 138 OF 1970 18 Nove !e" 1971 Contract -- Consideration -- Debt -- "Deed of arrangement" for payment of -- Whether void and of no legal effect -- Contracts (Malay States) Ordinance, !"#, ss $(a), (b), (c), (d), (g) and $%(b) (c) T/e pla0nt011s 2la0me3 a sum o1 412+56,6781 an3 0nterest as 3ue 1rom t/e 3e1en3ant w/o was allege3 to /a%e 9assume3 respons0.0l0ty9 1or su2/ payment un3er a 93ee3 o1 arrangement9 e:e2ute3 .y /0m on June 2;5 19767 T/e a%erment 0n paragrap/ 2 o1 t/e statement o1 2la0m was t/at goo3s to t/e %alue o1 412+56,6781 were suppl0e3 .y t/e pla0nt011s 9to t/e estates9 spe2010e3 0n t/e sa03 paragrap/7 It 303 not say t/at t/e goo3s were suppl0e3 to t/e 3e1en3ant7 T/e 3e1en2e was t/at t/e 3e1en3ant was not l0a.le 1or goo3s w/02/ /a3 .een suppl0e3 not to /0m .ut to t/e sa03 estates an3 t/at t/e so(2alle3 93ee3 o1 arrangement9 was %o03 1or want o1 2ons03erat0on7 T/e 3ee3 st0pulate3 t/at goo3s were to .e suppl0e3 .y t/e pla0nt011s 9to t/e estates name3 0n t/e s2/e3ule9 an3 all t/at t/e 3e1en3ant appeare3 to /a%e agree3 to 3o was to assume respons0.0l0ty 1or t/e payment o1 412+56,67815 .e0ng t/e amount 2lue to t/e pla0nt011s 0n respe2t o1 t/ose suppl0es7 T/us5 t/e 1ollow0ng two 0ssues were to .e 3eterm0ne3 .y t/e 2ourt< =1> w/et/er t/e statement o1 2la0m 30s2lose3 any 2ause o1 a2t0on? an3 =2> w/et/er t/e 3ee3 o1 arrangement 3ate3 June 2;5 19765 was %o03 an3 o1 no legal e11e2t as aga0nst t/e 3e1en3ant7 T/e 1ormer was tr0e3 as a prel0m0nary 0ssue7 He#$%

1>

1> 1>

as 1ar as t/e 3e1en3ant was 2on2erne35 t/e 3ee3 was e:e2ute3 .y /0m ne0t/er 1or any past 2ons03erat0on5 nor 0n respe2t o1 any 1or.earan2e to sue /0m 1or t/e suppl0es ma3e to t/e estates5 nor 0n 2ons03erat0on o1 any prom0se to supply /0m goo3s on 2re30t 0n 1uture7 T/e 3ee3 was w0t/out 2ons03erat0on as un3erstoo3 0n t/e l0g/t o1 t/e 'ontra2ts =Malay @tates> Ar30nan2e5 19,67 "ll t/at t/e 3e1en3ant 2oul3 .e sa03 to /a%e un3ertaBen was a moral o.l0gat0on? as t/ere was no 2ons03erat0on 1or t/e e:e2ut0on o1 t/e 3ee35 0t was unne2essary to say w/et/er 2ons03erat0on 2oul3 .e pro%e3 .y parol e%03en2e? t/ere1ore5 0n t/e l0g/t o1 t/e e%03en2e an3 t/e aut/or0t0es5 Cu3gment was 0n 1a%our o1 t/e 3e1en3ant on t/e prel0m0nary 0ssue t/at t/e statement o1 2la0m 30s2lose3 no 2ause o1 a2t0on7

A.ser%at0ons on 92ons03erat0on9 0n t/e law o1 2ontra2t as well as t/e a3m0ss0.0l0ty o1 parol e%03en2e 0n t/e 0nterpretat0on o1 a wr0tten 3o2ument7 C&'e' "e(e""e$ )o

Page + &'tton v Watling )19;-* '/ +9- at p ;6+ (ro)n v (yrne 11- R 1+6; at p 1+69 Clifford v *'rrell =1-;,> LJ '/ +96 at p +97 82 R -28 +rith v +rith )1968* "' 2,; at p 2,9 *'rner v +or)ood )19,1* 1 "ll R 7;8 at p 7;9 ,chal -am v -a.a /a0im &'sain /han +2 I" 11+ &aniff'nnissa v +ai0'nnissa +- I" -, M /rishnayya v Mohammed 1aleb Sahib "IR 19+6 Ma3 8,9 Mohammad *a2i /han v 3ang Singh "IR 19+, "ll ,29 Shore v Wilson 9 'l D E0n +,, at p ,+2 - R ;,6 -ann 4 Other 56ec'tors of Mary &'ghes v 7sabella &'ghes, ,dministratri6 of 3 &'ghes in 5rror 7 TR +,6? 161 R 161; =note> Wigan v 5nglish 4 Scottish 8a) 8ife ,ss'rance ,ssociation )1969* 1 '/ 291 at p 297 -a.a of 9en2atagiri v Sri /rishnayya -ao (ahad'r "IR 19;- P' 1,6 at p 1,, 5ast)ood v /enyon 11+ R ;-2 at p ;-8 Sada -am v Saha0ada -am "IR 19+; La/ 7-9 *he ,lliance (an2 v (room 82 R 8+1 at p 8+2 +'llerton v :rovincial (an2 of 7reland )196+* "' +69 at p +1+ Miles v ;e) <ealand ,lford 5state Co =1--8> +2 '/ $ 288 at 2-9 /ali :rasad *e)ari v -a.a Sahib :rahlad Sen =1-89> 11 #engal Law Rep 111 at p 122 3M Wotherspon 4 Co 8td v &enry ,gency &o'se )1982* MLJ -8 D'rga :rasad v (aldeo 4 Ors ILR + "ll 221 Manna 8al v *he (an2 of (engal ILR 1 "ll +69 ;ana2 -am v Mehin 8al ILR 1 "ll ;-7 -amas)amy :andia *halavar v ,ndhappa Chettiar =1986> 18 Ma3 LJ Rep ;22 M'th'2ar'ppa M'dali v /athapp'dayan )191;* Ma3 LJ Rep 2;9? )191;* M!& 768 8i='idator, (agha Co-operative Society v Debi Mangal :rasad Sinha 4 Ors "IR 19+7 Pat ;16 1h'lam &'ssain v +aiya0 ,li "IR 19;6 Au3/ +;8 /ali Charan v ,bd'l -ahman "IR 191- P' 228 CIVIL SUIT )F8,,++* M Shan2ar 1or t/e pla0nt011s7 ; -amachandran 1or t/e 3e1en3ant7 SHARMA J

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=rea3 .y W&* S+#e, &* J->< T/e spe20ally 0n3orse3 wr0t o1 summons 0n t/0s 2ase was 10le3 .y t/e pla0nt011s on 22n3 "ugust 19767 It 2la0me3 a sum o1 412+56,6781 an3 0nterest as 3ue 1rom t/e 3e1en3ant w/o 0t allege3 /a3 9assume3 respons0.0l0ty9 1or su2/ payment un3er a 93ee3 o1 arrangement9 e:e2ute3 .y /0m on 2;t/ June 19767 T/e statement o1 2la0m g0%es t/e 0mpress0on t/at t/e 2la0m o1 t/e pla0nt011s 0s %ery s0mple5 stra0g/t1orwar3 an3 un30sputa.le7 T/e a%erment 0n paragrap/ 2 o1 t/e statement o1 2la0m 0s t/at goo3s to t/e %alue o1 412+56,6781 were suppl0e3 .y t/e pla0nt011s 9 to the estates" spe2010e3 0n t/e sa03 paragrap/7 It 3oes not say t/at t/e goo3s were suppl0e3 to t/e 3e1en3ant7 T/e 3e1en2e 0s t/at t/e 3e1en3ant 0s not l0a.le 1or goo3s w/02/ /a3 .een suppl0e3 not to /0m .ut to t/e sa03 estates an3 t/at t/e so(2alle3 93ee3 o1 arrangement9 0s %o037 T/e 3e1en3ant amen3e3 /0s statement o1 3e1en2e on +6t/ Mar2/ 19717 T/e su0t 2ame up 1or /ear0ng on 18t/ "pr0l 1971 w/en t/e pla0nt011s amen3e3 paragrap/s + an3 ; o1 t/e statement o1 2la0m7 It was only on t/at 3ate t/at t/e learne3 2ounsel 1or t/e 3e1en3ant sa03 0n unm0staBa.le an3 2lear terms t/at w/ere t/e statement o1 3e1en2e state3 t/at t/e 3ee3 o1 arrangement was %o03 0t meant t/at 0t was %o03 1or want o1 2ons03erat0on7 An t/e plea30ngs as t/ey t/en stoo3 I 1rame3 t/e 1ollow0ng two 0ssues<(

2> 2>

$oes t/e statement o1 2la0m 30s2lose any 2ause o1 a2t0onG Is t/e 3ee3 o1 arrangement 3ate3 2;t/ June 1976 %o03 an3 o1 no legal e11e2t as aga0nst t/e 3e1en3antG

I may a33 /ere t/at .ot/ t/e statement o1 2la0m an3 t/e statement o1 3e1en2e were re(amen3e3 0n t/e 2ourse o1 t/e tr0al an3 t/at 3elet0on o1 paragrap/s +5 ; an3 , !>$ M83 ?" at ?% o1 t/e amen3e3 statement o1 3e1en2e ren3ere3 0ssue &o7 2 unne2essary7 Issue &o7 1 was tr0e3 as a prel0m0nary 0ssue7 "t t/e 2lose o1 t/e arguments on t/at 0ssue I /a3 taBen t/e %0ew t/at 01 t/e pla0nt011s /a3 e:pressly state3 0n t/e0r plea30ngs t/at t/e 3ee3 o1 arrangement was 1or 2ons03erat0on t/e 3e1en3ant was not5 on t/e plea30ngs alone5 ent0tle3 to suggest t/at t/ere was no 2ons03erat0on 1or t/at 3ee3 .e2ause 1or t/e purposes o1 argument un3er A7 2, rr7 2 an3 + o1 t/e Rules o1 t/e @upreme 'ourt t/e 3e1en3ant woul3 .e 3eeme3 to /a%e a3m0tte3 all t/e 1a2ts state3 0n t/e statement o1 2la0m7 I 1elt t/at 01 all t/e 2orrespon3en2e appear0ng 0n :/0.0ts " an3 # was 2ons03ere3 an3 taBen 0nto a22ount 0t 2oul3 at least .e urge3 t/at t/ere 0n 1a2t was some sem.lan2e o1 2ons03erat0on to .e seen5 01 not 1oun35 0n t/at e%03en2e7 Howe%er my %0ew5 at t/at t0me5 was t/at t/e 0nterests o1 Cust02e woul3 .est .e ser%e3 01 t/ere was an amen3ment o1 t/e statement o1 2la0m so t/at t/e real Huest0on to .e 3eterm0ne3 s/oul3 looB apparent on t/e plea30ngs an3 t/at t/e matter s/oul3 not .e 3e203e3 on mere te2/n02al0t0es7 I 303 not at t/at stage 1eel 0n2l0ne3 to 30sm0ss t/e pla0nt011sI 2la0m merely .y an e:am0nat0on o1 t/e 3ee3 " 16 an3 w0t/out /ear0ng any ot/er e%03en2e 1rom t/e part0es =.es03es w/at appeare3 0n :/0.0ts " D #>7 T/e statement o1 2la0m /a%0ng .een re(amen3e3 I 1rame3 t/e 1ollow0ng a330t0onal 0ssue<(
9!as t/ere 2ons03erat0on 1or t/e 3ee3 " 16G9

T/e statement o1 2la0m 2alls t/e 3ee3 " 16 a 3ee3 o1 arrangement7 I 3o not Bnow w/y t/e sol020tors 1or t/e pla0nt011s e:pressly 2/ose to 2all 0t .y t/at 3es2r0pt0on7 Ane normally 2omes a2ross t/at e:press0on 0n .anBrupt20es or un3er t/e 2ompany law7 " 2ompos0t0on agreement may taBe t/e 1orm o1 an agreement .y w/02/ t/e 2re30tors agree to a.an3on t/e0r 2la0m 0n 2ons03erat0on o1 re2e0%0ng a 2ompos0t0on on t/e0r 3e.ts5 t/at 0s5 a smaller sum .ear0ng an agree3 proport0on to t/e amount o1 t/e0r respe2t0%e 2la0ms7 It may also taBe t/e 1orm o1 an ass0gnment .y w/02/ t/e 3e.tor ass0gns t/e w/ole o1 /0s property to a trustee 1or real0sat0on an3 ratea.le 30str0.ut0on o1 t/e pro2ee3s amongst all /0s 2re30tors or amongst t/ose w/o assent to an3 taBe t/e .ene10t o1 t/e ass0gnment an3 t/e 2re30tors 0n 2ons03erat0on o1 su2/ ass0gnment release t/e0r or0g0nal 2la0ms an3 a22ept t/e 30%03en3s paya.le un3er t/e agreement 0n 30s2/arge o1 t/e0r 3e.ts7 T/e 3ee3 " 16 3oes not purport to .e su2/ an agreement .etween t/e pla0nt011s an3 t/e 3e1en3ant7 &ot/0ng 0n 1a2t 2an

Page , turn on w/at t/e pla0nt011s 2/ose to 2all t/0s 3ee37 It 0s t/e 2ontents o1 t/0s 3ee3 an3 t/e 20r2umstan2es 0n w/02/ 0t was e:e2ute3 t/at are 0n t/e last analys0s mater0al to 3eterm0ne t/e Huest0ons 0n%ol%e3 0n t/0s su0t7 T/e e%03en2e pro3u2e3 at t/e tr0al was %ery .r0e17 T/e 3e1en3ant ele2te3 not to 2all any e%03en2e an3 stoo3 on /0s su.m0ss0ons alone7 T/e only w0tness 2alle3 .y t/e pla0nt011s was Mr7 'urr0e5 t/e general manager o1 t/e 2/em02als 30%0s0on o1 t/e pla0nt011 2ompany7 He soug/t to pro%e t/at t/e pla0nt011s 3ealt only w0t/ t/e 3e1en3ant an3 not w0t/ t/e %ar0ous estates w/02/ are re1erre3 to 0n t/e s2/e3ule to t/e 3ee3 :/0.0t " 16 an3 t/at t/ere was 2ons03erat0on 1or t/e 3ee3 :/0.0t " 16 e:e2ute3 .y t/e 3e1en3ant7 T/0s 3ee3 0s t/e %ery 1oun3at0on an3 t/e .as0s o1 t/e pla0nt011sI 2la0m7 T/e 3ee3 :/0.0t " 16 3ate3 t/e 2;t/ 3ay o1 June 1976 re1ers to t/e pla0nt011s as 9t/e 2re30tor9 an3 t/e 3e1en3ant as 9t/e 3e.tor79 It re20tes<(
9!H R "@ goo3s have been suppl0e3 by t/e 2re30tor to t/e estates name3 0n t/e s2/e3ule /ereto an3 t/e sums set aga0nst t/e0r respe2t0%e names 0n t/e sa03 s2/e3ule amount0ng to 3ollars one /un3re3 an3 twenty t/ree t/ousan3 an3 101ty an3 2ents s0:ty(one =412+56,6781> are st0ll 3ue an3 ow0ng to t/e 2re30tor79 9"&$ !H R "@ t/e 3e.tor /as ass'med responsibility 1or t/e payment to t/e 2re30tor o1 t/e sa03 sum o1 777 an3 /as agree3 w0t/ t/e 2re30tor to enter into this deed 0n manner /ere0na1ter appear0ng79 =T/e un3erl0n0ng 0s m0ne7>

T/e 3ee3 t/en goes on to say<(

9In pursuan2e o1 t/e said agreement an3 in consideration of t/e premises t/e 3e.tor /ere.y 2o%enants77779

It 0s o.%0ous 1rom t/e rea30ng o1 t/0s 3ee3 t/at goo3s were suppl0e3 .y t/e pla0nt011s 9to t/e estates name3 0n t/e @2/e3ule9 an3 all t/at t/e 3e1en3ant appears to /a%e agree3 to 3o was to assume respons0.0l0ty 1or t/e payment o1 412+56,6781 .e0ng t/e amount 3ue to t/e pla0nt011s 0n respe2t o1 t/ose suppl0es7 " 3o2ument 0s generally 2on2lus0%e as to t/e terms w/02/ 0t was 0nten3e3 to re2or3 .ut t/ere 0s not/0ng to stop t/e part0es 1rom re2or30ng a part o1 t/e0r 2ontra2t 0n wr0t0ng an3 lea%0ng t/e rest oral or em.o30e3 0n anot/er 3o2ument7 !/at 3011eren2e s/oul3 0t maBe w/et/er t/e oral an3 wr0tten terms are 2onstrue3 as separate agreements or as parts o1 a s0ngle 2ontra2t7 T/e 30st0n2t0on .e2omes 0mportant only w/en t/e pr0n20pal 2ontra2t 0s one w/02/ t/e law reHu0res to .e 0n wr0t0ng7 !/et/er a 3o2ument 2onta0ns all or merely a part o1 t/e terms agree3 .y t/e part0es 3epen3s 0n t/eory upon t/e0r 0ntent0on7 It /as to .e 3e203e3 o.Ce2t0%ely a22or30ng to t/e 2onstru2t0on o1 t/e 3o2ument an3 t/e surroun30ng 20r2umstan2es7 =@ee &'tton v Watling )19;-* '/ +9- at p ;6+>7 I1 t/e 3o2ument appears to /a%e .een 0nten3e3 to 3eal e:/aust0%ely w0t/ a part02ular su.Ce2t5 e%03en2e o1 a pr0or agreement on t/e same su.Ce2t5 matter w0ll stan3 e:2lu3e37 T/ere 0s a presumpt0on t/at a 3o2ument re2or30ng 2ontra2tual terms 0s 0nten3e3 to em.o3y t/e w/ole o1 t/e 2ontra2t7 T/e e:0sten2e o1 a separate 2ollateral agreement 0s o1 2ourse a 30st0n2t 0ssue w0t/ t/e .ur3en o1 proo1 on t/e party w/o seeBs to 0n%oBe 0t7 T/e test w/02/ t/e 2ourts usually apply 0n or3er to 3e203e t/e 0ntent0on o1 t/e part0es 0s to asB w/et/er t/e allege3 pr0or agreement woul3 2ontra302t t/e terms o1 t/e wr0tten 3o2ument7 =@ee (ro)n v (yrne 11- R 1+6; at p 1+69>7 In Clifford v *'rrell =1-;,> LJ '/ +96 at p +97 82 R -28 Lor3 Lyn3/urst L' sa03<
9777 t/e settle3 rule 0s t/at you may pro%e a 1urt/er 2ons03erat0on w/02/ 0s 2ons0stent w0t/ t/e 2ons03erat0on state3 on t/e 1a2e o1 t/e 3ee37 Jou 2annot .e allowe3 to pro%e a 2ons03erat0on 0n2ons0stent w0t/ 0t5 .ut you may pro%e anot/er w/02/ stan3s w0t/ 0t79

In +rith v +rith )1968* "' 2,; at p 2,9 Lor3 "tB0nson 3el0%er0ng t/e Cu3gment o1 t/e Pr0%y 'oun20l sa03<
9Parol e%03en2e was a3m0tte3 to pro%e t/at a330t0onal 2ons03erat0on was 0n 1a2t g0%en 1or t/e 3ee3 .y w/02/ t/e pla0nt011 !>$ M83 ?" at ?> was 0n3u2e3 to e:e2ute 0t5 namely an agreement .y t/e 3e1en3ant t/at /e woul3 pay to t/e pla0nt011 an annu0ty o1 )F8,,++*;6 per annum 3ur0ng /0s l01e an3 to g0%e to /0m a /ouse wort/ )F8,,++*16 a year to l0%e 0n7 @pe20102 per1orman2e o1 t/e parol agreement was 3e2ree37 T/e V02e('/an2ellor =@0r L7 @/a3well> 0n 3el0%er0ng Cu3gment 0n t/e 2ase5 lays 3own5 0n t/e op0n0on o1 t/e0r Lor3s/0ps 2orre2tly5 t/e rule o1 law upon t/0s su.Ce2t7 He sa03<

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9Rules o1 law may e:2lu3e parol e%03en2e w/ere a wr0tten 0nstrument stan3s 0n 2ompet0t0on w0t/ 0t5 .ut 0t /as long .een settle3 t/at 0t 0s not w0t/0n any rule o1 t/0s nature to a33u2e e%03en2e o1 a 2ons03erat0on a330t0onal to w/at 0s state3 0n a wr0tten 0nstrument79

"n3 t/en a33s<

9T/e rule 0s t/at w/ere t/ere 0s one 2ons03erat0on state3 0n t/e 3ee35 you may pro%e any ot/er 2ons03erat0on w/02/ e:0ste35 not 0n 2ontra302t0on to t/e 0nstrument? an3 0t 0s not 0n 2ontra302t0on to t/e 0nstrument to pro%e a larger 2ons03erat0on t/an t/at w/02/ 0s state379

"ga0n 0n *'rner v +or)ood )19,1* 1 "ll R 7;8 at p 7;9 $enn0ng L7J7 =as /e t/en was> sa03<
9T/e reason 1or t/e rule 0n Clifford %7 *'rrell 0s t/at 0n t/e ol3 3ays a nom0nal 2ons03erat0on was 0nserte3 so as to maBe t/e 2on%eyan2e or ass0gnment goo35 .ut 0t was not 0nserte3 to state t/e 2ons03erat0on w/02/ was agree3 to .e g0%en to t/e ot/er party7 T/ere was5 t/ere1ore5 no .ar to t/e proo1 o1 a 2ontra2tual 2ons03erat0on .e2ause t/e 3ee3 was not 0nten3e3 to em.o3y 0t7 T/e rule e:2lu30ng parol e%03en2e only appl0es w/en t/e part0es set 3own 0n wr0t0ng t/e terms agree37 Parol e%03en2e /as .een /el3 to .e a3m0ss0.le 0n t/e 2ase o1 t/e ass0gnment o1 property or 0n t/at o1 t/e appo0ntment o1 an attorney< +rith %7 +rith79

"lso see ,chal -am v -a.a /a0im &'sain /han +2 I" 11+ an3 &aniff'nnissa v +ai0'nnissa +- I" -,7 =Eor 2omments on t/e Cu3gment o1 t/e Pr0%y 'oun20l 0n &aniff'nnissa v +ai0'nnissa +- I" -, see M /rishnayya v Mahammed 1aleb Sahib "IR 19+6 Ma3 8,9 an3 Mohammad *a2i /han v 3ang Singh "IR 19+, "ll ,29>7 T/ere was some 2orrespon3en2e .etween t/e part0es .e1ore :/0.0t " 16 was e:e2ute3 .y t/e 3e1en3ant7 It 0s well Bnown t/at w/en a prom0se 0s arr0%e3 at .y means o1 2orrespon3en2e an3 t/e 10nal 3o2ument e:e2ute3 0s t/e result o1 negot0at0ons pre2e30ng 0t t/e w/ole 2orrespon3en2e 2an .e 2ons03ere3 to 3eterm0ne w/at t/e prom0se 0s7 In su2/ a 2ase t/ere 0s no Huest0on o1 %ary0ng t/e terms o1 a 3o2ument .ut o1 3eterm0n0ng w/at t/e 20r2umstan2es were un3er w/02/ t/e 3o2ument 2ame 0nto .e0ng7 It was 1or t/at reason t/at I allowe3 oral e%03en2e to .e le3 an3 pro3u2e3 0n t/0s 2ase5 e%03en2e w/02/ went .eyon3 t/e 1our 2orners o1 t/e 3ee3 0n Huest0on7 It was 2onten3e3 .y t/e learne3 2ounsel 1or t/e pla0nt011s t/at 2ons03erat0on ment0one3 0n t/e 3o2ument = :/0.0t " 16> was not one o1 t/e terms .ut a mere re20tal o1 1a2t w/02/ 2oul3 .e 2ontra302te3 or %ar0e3 un3er pro%0so =a> o1 se2t0on 92 o1 t/e %03en2e Ar30nan2e7 @e2t0on 92 o1 t/e %03en2e Ar30nan2e pro%03es t/at<
9!/en t/e terms o1 any su2/ 2ontra2t5 grant or ot/er 30spos0t0on o1 property5 or any matter reHu0re3 .y law to .e re3u2e3 to t/e 1orm o1 a 3o2ument5 /a%e .een pro%e3 a22or30ng to se2t0on 91 o1 t/0s Ar30nan2e5 no e%03en2e o1 any oral agreement or statement s/all .e a3m0tte3 as .etween t/e part0es to any su2/ 0nstrument or t/e0r representat0%es 0n 0nterest 1or t/e purpose o1 2ontra302t0ng5 %ary0ng5 a330ng to5 or su.tra2t0ng 1rom 0ts terms79

It 0s t/ere1ore 2lear t/at oral e%03en2e to %ary t/e terms o1 any agreement 0s w/olly 0na3m0ss0.le 0n e%03en2e unless t/e 2ase 1alls un3er one o1 t/e pro%0sos to se2t0on 927 Pro%0so =a> to se2t0on 92 o1 t/e %03en2e Ar30nan2e lays 3own as 1ollows<
9"ny 1a2t may .e pro%e3 w/02/ woul3 0n%al03ate any 3o2ument or w/02/ woul3 ent0tle any person to any 3e2ree or or3er relat0ng t/ereto? su2/ as 1rau35 0nt0m03at0on5 0llegal0ty5 want o1 3ue e:e2ut0on5 want o1 2apa20ty 0n any 2ontra2t0ng party5 t/e 1a2t t/at 0t 0s wrongly 3ate35 want or 1a0lure o1 2ons03erat0on5 or m0staBe 0n 1a2t or law79

Un3er pro%0so =a> e%03en2e may .e a33u2e3 as to )ant or fail're o1 2ons03erat0on7 T/0s 0s5 /owe%er5 totally 30st0n2t 1rom t/e amo'nt or nat're o1 2ons03erat0on7 I1 t/e amount or nature o1 2ons03erat0on 2oul3 .e pro%e3 .y oral e%03en2e to .e ot/er t/an t/at state3 0n t/e 3o2ument5 t/ere seems no reason w/y t/0s was le1t out 1rom pro%0so =a>7 " statement 0n a 3o2ument t/at a 2ons03erat0on /as .een pa03 no 3ou.t 0s a re20tal 0n a 3ee3 an3 3oes not 2onst0tute one o1 t/e terms o1 t/e 2ontra2t .ut t/e amount o1 2ons03erat0on 0s 2erta0nly a term o1 t/e 2ontra2t 0n a sale 3ee3 an3 t/ere1ore 0t 2annot .e open to a party to pro%e a %ar0at0on 0n t/e amount o1 2ons03erat0on7 'ons03erat0on 0s un3ou.te3ly a term ( an3 a %ery 0mportant term ( 0n a

Page 7 2ontra2t o1 sale7 " sale 3ee3 may ment0on a 2ons03erat0on 1or t/e trans1er o1 t/e property7 " 3ee3 o1 g01t may ment0on t/at t/e term o1 t/e trans1er o1 t/e property 0s t/at t/ere 0s no monetary 2ons03erat0on7 In a 3ee3 o1 g01t 0t 0s not open to a party to pro%e t/at alt/oug/ t/e terms o1 t/e 3ee3 say t/ere was no monetary 2ons03erat0on5 st0ll t/e term was 3011erent 1rom w/at was state3 0n t/e 3o2ument an3 t/at t/ere 0n 1a2t was a monetary 2ons03erat0on 1or t/e 3o2ument7 It amounts to 2ontra302t0ng an 0mportant term o1 t/e 3ee37 I1 t/e statement as to t/e 2ons03erat0on .e taBen as a re20tal o1 a 1a2t se2t0on 92 0s not attra2te37 I1 0t .e taBen as t/e re20tal o1 a term5 t/e agreement m0g/t 2ome un3er pro%0so =a> to se2t0on 92 01 t/at pro%0so 0s appl02a.le7 I1 t/ere 0s any am.0gu0ty as to t/e 2ons03erat0on state3 0n t/e 3o2ument5 oral e%03en2e 2an .e g0%en to 2lear up t/e am.0gu0ty7 In Shore v Wilson 9 'l D E0n +,, at p ,+2 - R ;,6 T0n3al '7J7 sa03<
9T/e general rule I taBe to .e5 t/at w/ere wor3s o1 any wr0tten 0nstrument are 1ree 1rom am.0gu0ty 0n t/emsel%es an3 w/ere e:ternal 20r2umstan2es 3o not 2reate any 3ou.t or 301102ulty as to t/e proper appl02at0on o1 t/ose wor3s to 2la0mants un3er t/e 0nstrument5 or t/e su.Ce2t matter to w/02/ t/e 0nstrument relates5 su2/ 0nstrument 0s always to .e 2onstrue3 a22or30ng to t/e str02t pla0n 2ommon mean0ng o1 t/e wor3s t/emsel%es an3 t/at 0n su2/ 2ase e%03en2e dehors t/e 0nstrument 1or t/e purpose o1 e:pla0n0ng 0t a22or30ng to t/e surm0se3 or allege3 0ntent0on o1 t/e part0es to t/e 0nstrument 0s utterly 0na3m0ss0.le7 I1 0t were ot/erw0se no lawyer woul3 .e sa1e 0n a3%0s0ng upon t/e 2onstru2t0on o1 a wr0tten 0nstrument nor any party 0n taB0ng un3er 0t 1or t/e a.lest a3%02e woul3 .e 2ontrolle3 an3 t/e 2learest t0tle un3erm0ne3 015 at some 1uture per0o35 parol e%03en2e o1 t/e part02ular mean0ng w/02/ t/e party a110:e3 to /0s wor3s or o1 /0s se2ret 0ntent0on 0n maB0ng t/e 0nstrument or o1 t/e o.Ce2ts /e meant to taBe .ene10t un3er 0t m0g/t .e set up to 2ontra302t or %ary t/e pla0n language o1 t/e 0nstrument 0tsel179

I w0ll at a later stage 0n t/0s Cu3gment 3eal w0t/ t/e Huest0on w/et/er t/ere was any 2ons03erat0on ot/er t/an t/e 92ons03erat0on9 re1erre3 to 0n t/e 3ee3 :/0.0t " 16 an3 w/et/er t/at 92ons03erat0on9 was a mere re20tal 0n t/e 3ee37 !>$ M83 ?" at ?@ "22or30ng to P7!71 t/e 3e1en3ant /a3 a personal a22ount an3 an estates a22ount7 T/ese two a22ounts were 2onsol03ate3 only a1ter 1;t/ "ugust 19767 :/0.0t #28 0s t/e personal a22ount o1 t/e 3e1en3ant7 "n e:am0nat0on o1 :/0.0t #28 re%eals t/at t/e 3e1en3ant /a3 on 1st January 1989 a 3e.0t .alan2e o1 4,52-87697 An 29t/ &o%em.er 1989 t/0s 3e.0t /a3 .een .roug/t 3own to 4177;6 an3 on t/e same 3ate /0s a22ount s/ows a 2re30t .alan2e o1 415;8;7;-7 "t any rate t/e amount 3ue 1rom t/e 3e1en3ant on /0s personal a22ount as on 1st "pr0l 1976 was 48569-7;8 as s/own 0n :/0.0t #287 T/0s su0t 0s .ase3 on :/0.0t "16 an3 t/e s2/e3ule to t/at 3ee3 maBes no ment0on o1 t/e 3e1en3antIs personal a22ount7 T/e pert0nent Huest0on w/02/ ar0ses 0s t/at 01 t/e pla0nt011s were 3eal0ng only w0t/ t/e 3e1en3ant an3 not t/e %ar0ous estates an3 looBe3 only to t/e 3e1en3ant 1or payment5 w/ere was t/e ne2ess0ty to /a%e separate estates a22ounts7 P7!71 a3m0ts t/at t/ere was an a22ount 1or ea2/ estate re1erre3 to 0n t/e s2/e3ule to :/0.0t "167 He 1urt/er a3m0ts t/at t/e 3e1en3ant was pa03 2omm0ss0on 1or 0ntro3u20ng t/ose estates as the c'stomers of the plaintiffs7 It o.%0ously meant t/at t/e 3e1en3ant was 0ntro3u20ng .us0ness o1 t/ose estates to t/e pla0nt011s an3 0t was t/ose estates w/02/ were t/e 2ustomers o1 t/e pla0nt011s7 T/e pos0t0on o1 t/e 3e1en3ant as 1ar as suppl0es to t/ose estates were 2on2erne3 was merely t/at o1 a 2omm0ss0on agent7 %en 01 /e pla2e3 or3ers on .e/al1 o1 t/ose estates5 t/e pla0nt011s were 1ully aware t/at t/e 3e1en3ant was a2t0ng only as an agent an3 not as a pr0n20pal7 T/e Huest0on o1 an un30s2lose3 pr0n20pal also 303 not ar0se7 T/e pla0nt011s 2ont0nue3 to sen3 statements o1 a22ount to t/e estates 0n Huest0on7 T/at 0tsel1 0s 0n302at0%e o1 t/e 1a2t t/at t/e pla0nt011s looBe3 to t/e estates an3 not t/e 3e1en3ant 1or payment an3 t/at 0n supply0ng goo3s t/ey were 3eal0ng w0t/ t/e estates an3 not t/e 3e1en3ant7 In%o02es were prepare3 .y t/e pla0nt011s an3 t/ey 2onta0ne3 t/e names o1 t/e pla0nt011sI 2ustomers to w/om suppl0es were ma3e7 T/ese suppl0es may no 3ou.t /a%e .een ma3e at t/e reHuest o1 t/e 3e1en3ant .ut /ow 2oul3 t/at alone sa33le /0m w0t/ l0a.0l0ty 0n respe2t o1 t/ose suppl0es 01 /e was only an agent 1or t/e part0es7 It may .e true t/at t/e statements o1 a22ount were sent .y t/e pla0nt011s as a matter o1 rout0ne as 0t were to t/e a33resses g0%en at t/e /ea3 o1 t/e 0n%o02es .ut t/e 0n%o02es t/emsel%es were prepare3 .y t/e pla0nt011s7 In any 2ase t/at 0s /ar3ly any e:planat0on o1 t/e pla0nt011sI 1a0lure to 3e.0t t/e a22ount o1 t/e 3e1en3ant 01 w/at was agree3 an3 un3erstoo3 was t/at t/e suppl0es were ma3e to t/e 3e1en3ant an3 to /0s a22ount alone7 In 1a2t t/e e%03en2e s/ows t/at t/e pla0nt011s 303 not t/0nB o1 e%en sen30ng to t/e 3e1en3ant 2op0es o1 t/e statements o1 a22ount w/02/ t/ey 1orwar3e3 to t/e estates7 Goo3s may /a%e .een suppl0e3 to t/e estates at t/e reHuest o1 t/e 3e1en3ant7 T/e statements o1 a22ount sent to t/e

Page estates 303 not 30s2lose t/e 2omm0ss0on t/e 3e1en3ant was ent0tle3 to7 T/0s aga0n 0s a 2lear po0nter t/at t/e pla0nt011s looBe3 to t/e estates 1or payment7 "s 1ar as t/e 3e1en3ant was 2on2erne3 /0s only 0nterest was t/e 2omm0ss0on /e was go0ng to earn7 T/e reason g0%en .y P7!71 t/at statements o1 a22ount were not sent to t/e 3e1en3ant .e2ause t/e pla0nt011sI system o1 a22ounts was me2/an0se3 0s not only 1a0nt an3 1ee.le .ut e:tra%agantly 1ool0s/7 T/e Huest0on 0s w/et/er apart 1rom t/e 3ee3 sue3 upon 0s t/ere any e%03en2e 0n wr0t0ng w/02/ ten3s to 0n302ate t/at at or .e1ore t/e t0me t/e suppl0es were ma3e .y t/e pla0nt011s to t/e estates t/e 3e1en3ant /a3 /el3 /0msel1 out as t/e person l0a.le to t/e pla0nt011s 1or t/ose suppl0es7 I1 t/e 3e1en3ant was t/e pr0n20pal 3e.tor t/roug/out t/e per0o3 o1 suppl0es /0s 2onsent to t/e 2onsol03at0on o1 a22ounts was not ne2essary at all an3 t/e 2onsol03at0on o1 t/ose a22ounts s/oul3 /a%e .een a %ery easy pro2ess7 T/e statement sent to t/e estates 3o not state e%en 0n .ra2Bets 9"/2 3e1en3ant79 :/0.0t #1 0s a letter wr0tten .y t/e 3e1en3ant on 26t/ June 19897 T/e se2on3 an3 t/0r3 paragrap/s o1 t/0s letter s/ow t/at up to t/at t0me t/e pla0nt011s were 3eal0ng w0t/ t/e estates an3 t/at was t/e 9system9 un3er w/02/ suppl0es were ma3e7 :/0.0t #+ an3 #; also po0nt t/e same way7 In :/0.0t #2; t/e 3e1en3ant says 9T/e amount w/02/ 7 o)e to your 2ompany /as not .een 0n2lu3e3 7779 T/e 3e1en3ant t/us was tell0ng t/e pla0nt011s t/at t/ey /a3 not 0n2lu3e3 0n t/e s2/e3ule to t/e 3ee3 w/at was 3ue an3 ow0ng .y /0m to t/e pla0nt011s7 "ga0n :/0.0t P1 0s %ery s0gn0102ant7 T/e 10rst t/ree paragrap/s o1 t/at letter rea3<(
9I re1er to your %0s0t to your @erem.an o1102e on Tues3ay5 1-t/ &o%em.er 1989 an3 to your 2on%ersat0on w0t/ me w0t/ regar3 to t/e o'tstanding acco'nts by the estates w/o are un3er my "gen2y7 "s you wante3 a guarantee 1or t/e amount o)ed by all t/e estates, my agency w0ll un3ertaBe to 2olle2t 1rom t/e states 2on2erne3 an3 pay to yo' as I /a%e .een 3o0ng s0n2e Ee.ruary 198-79 9In t/e meant0me5 as reHueste3 .y you 1or a se2ur0ty an3 suret0es5 I /a%e 30s2usse3 t/e matter w0t/ t/e persons w/o w0ll .e my g'arantors an3 t/ey /a%e all suggeste3 t/at I s/oul3 3raw up a legal 3o2ument77779

I /a%e no 3ou.t t/at t/e pla0nt011s were 3eal0ng w0t/ t/e estates an3 t/ose estates alone were l0a.le to t/e pla0nt011s7 T/e pla0nt011s were an:0ous to .r0ng a.out a 2/ange so t/at t/ey 303 not /a%e to looB to t/e estates 1or payment an3 2oul3 /ol3 t/e 3e1en3ant alone respons0.le 0n respe2t o1 suppl0es ma3e to t/ose estates7 T/0s 2/ange was soug/t to .e .roug/t a.out .y t/e e:e2ut0on o1 t/e 3ee3 :/0.0t "16 .ut pr0or to t/at t/e 0ntent0on o1 t/e part0es an3 t/e system pre%a0l0ng was t/at t/e estates alone were respons0.le to t/e pla0nt011s 1or payment7 I 3o not 2ons03er 0t ne2essary to m0nutely go 0nto all t/e 2orrespon3en2e an3 3o2uments pro3u2e3 0n t/0s 2ase7 I 2annot 10n3 t/e pos0t0on ot/erw0se t/an I /a%e state3 a.o%e7 In re( e:am0nat0on P7!71 303 say t/at 0t was t/e 3e1en3ant w/o tooB p/ys02al 3el0%ery o1 t/e goo3s e0t/er 0n /0s own transport or 0n a transport nom0nate3 .y /0m an3 t/at /e name3 a 3est0nat0on w/ere goo3s were to .e 3el0%ere37 T/0s5 I t/0nB5 was only an 0mpro%ement on t/e earl0er statement o1 t/e w0tness an3 an a1ter( t/oug/t7 In any 2ase t/e plea30ngs are Hu0te 2lear t/at t/e goo3s were suppl0e3 to t/e estates7 T/e more 301102ult Huest0on 0n t/0s 2ase 0s t/e Huest0on o1 2ons03erat0on7 @e2t0on 2 =a>5 =.> an3 =2> o1 t/e 'ontra2ts =Malay @tates> Ar30nan2e 19,6 3e10nes a 9proposal95 a 9prom0se95 a 9prom0sor9 an3 a 9prom0see97 @e2t0on 2=3> o1 t/e sa03 Ar30nan2e 2onst0tutes w/at may .e 2alle3 t/e Bey to t/e 3o2tr0ne o1 92ons03erat0on9 !>$ M83 ?" at ?! un3er our law as appl02a.le 9w0t/0n t/e Malay @tates only79 It st0pulates t/at 01<(

1a> 1.> 12> 13>

at t/e 3es0re o1 t/e prom0sor5 t/e prom0see or any ot/er person5 /as 3one or a.sta0ne3 1rom 3o0ng or prom0ses to 3o or a.sta0ns 1rom 3o0ng somet/0ng5 su2/ a2t or a.st0nen2e or prom0se 0s 2alle3 a 2ons03erat0on 1or t/e prom0se7

In t/e @tates w/ere t/e 'ontra2ts Ar30nan2e 0s appl02a.le 0t 0s o.%0ous t/at a un0lateral 3e2larat0on 0s not enoug/ to maBe a 2ontra2t an3 t/at no Huest0on o1 a 2ontra2t un3er seal ar0ses unless t/e matter 0s 2o%ere3 .y se2t0on 28=a> o1 t/e 'ontra2ts Ar30nan2e7 'lause =g> o1 se2t0on 2 aga0n enun20ates t/at an agreement not en1or2ea.le .y law 0s %o037 In ot/er wor3s an agreement 2an .e a 2ontra2t only w/en 0t 0s en1or2ea.le .y law7 In 1a2t t/e wor3 0mpl0es a %al03 2ontra2t an3 unen1or2ea.le agreements 2annot .e 2ontra2ts7 I1 t/e agreement 0s en1or2ea.le 0t .e2omes a 2ontra2t .ut not so 01 0t 0s unen1or2ea.le7 T/e 2ontra2tual o.l0gat0on

Page 9 must .e su2/ as 0s en1or2ea.le .y law7 It must .e a legal o.l0gat0on an3 not merely moral5 so20al or rel0g0ous7 In -ann 4 Other 56ec'tors of Mary &'ghes v 7sabella &'ghes, ,dministratri6 of 3 &'ghes in 5rror 7 TR +,6? 161 R 161; =note> Lor3 '/0e1 #aron @Bynner sa03<
9It 0s un3ou.te3ly true t/at e%ery man 0s .y t/e law o1 nature .oun3 to 1ul10l /0s engagements7 It 0s eHually true t/at t/e law o1 t/0s 2ountry suppl0es no means5 nor a11or3s any reme3y5 to 2ompel t/e per1orman2e o1 an agreement ma3e w0t/out su11020ent 2ons03erat0on? su2/ agreement 0s n'd'm pact'm e6 ='o non orit'r actioA an3 w/atsoe%er may .e t/e sense o1 t/0s ma:0m 0n t/e 20%0l law5 0t 0s 0n t/e last ment0one3 sense only t/at 0t 0s to .e un3erstoo3 0n our law7777 "ll 2ontra2ts are5 .y t/e laws o1 nglan35 30st0ngu0s/e3 0nto agreements .y spe20al0ty an3 agreements .y parol? nor 0s t/ere any su2/ t/0r3 2lass as some o1 t/e 2ounsel /a%e en3ea%oure3 to ma0nta0n5 as 2ontra2ts 0n wr0t0ng7 I1 t/ey .e merely wr0tten an3 not spe20al0t0es5 t/ey are parol5 an3 a 2ons03erat0on must .e pro%e379

In t/e 2ase o1 Wigan v 5nglish 4 Scottish 8a) 8ife ,ss'rance ,ssociation )1969* 1 '/ 291 at p 297 ParBer J7 o.ser%e3<
9It appears to me to .e reasona.ly 2lear t/at t/e mere e:0sten2e o1 a 3e.t 1rom ,B to (B 0s not su11020ent %alua.le 2ons03erat0on 1or t/e g0%0ng o1 a se2ur0ty 1rom ,B to (B to se2ure t/at 3e.t7 I1 su2/ a se2ur0ty 0s g0%en5 0t may o1 2ourse .e g0%en upon some e:press agreement to g0%e t0me 1or t/e payment o1 t/e 3e.t5 or to g0%e 2ons03erat0on 1or t/e se2ur0ty 0n some ot/er way5 or5 01 t/ere .e no e:press agreement5 t/e law may %ery rea30ly 0mply an agreement to g0%e t0me7 It may not .e a 3e10n0te t0me5 .ut to 1or.ear 1or some 0n3e10n0te t0me 0n 2ons03erat0on o1 t/e se2ur0ty .e0ng g0%en7 "n3 1urt/er t/an t/at5 01 t/ere 0s no e:press agreement5 an3 no agreement 2an .e 0mpl0e3 at t/e t0me an3 un3er t/e 20r2umstan2es at an3 un3er w/02/ t/e 0n3enture g0%0ng t/e 1urt/er se2ur0ty 0s e:e2ute35 yet 01 t/at se2ur0ty .e 2ommun02ate3 to a person w/o 2oul3 ot/erw0se sue on t/e 3e.t5 an3 on t/e strengt/ o1 t/at se2ur0ty /e 3oes 0n 1a2t 1or.ear to sue on t/e 3e.t5 /e 3oes g0%e t/at t0me w0t/ t/e o.Ce2t o1 se2ur0ng w/02/ t/e se2ur0ty 0s presuma.ly g0%en5 an3 t/en I t/0nB 0t appears on t/e 2ases t/at t/ere 0s su11020ent 2ons03erat0on5 t/oug/ 0n a sense 0t 0s an e6 post facto 2ons03erat0on5 1or t/e se2ur0ty w/02/ 0s g0%en7777 It seems to me5 t/ere1ore5 t/at t/ere 0s no aut/or0ty aga0nst5 an3 a great many aut/or0t0es 0n 1a%our o15 t/e propos0t0on t/at 0n or3er to /a%e a 2ons03erat0on 1or a 1urt/er se2ur0ty t/ere must .e an agreement5 e:press or 0mpl0e35 to g0%e t0me or some 1urt/er 2ons03erat0on5 or else t/ere must .e an a2tual 1or.earan2e w/02/ e6 post facto may .e2ome t/e 2ons03erat0on to support t/e 3ee379

'lause =3> o1 se2t0on 2 o1 t/e 'ontra2ts Ar30nan2e postulates t/at the promisor m'st "desire" the act of forbearance7 T/e 1a2ts 0n t/e 2ase o1 -a.a of 9en2atagiri v Sri /rishnayya -ao (ahad'r "IR 19;- P' 1,6 at p 1,, are summar0se3 0n t/e /ea3note o1 t/e 2ase as 1ollows<
9 ,, t/e pla0nt011Is 1at/er .y a letter ga%e an un3ertaB0ng to t/e 3e1en3antIs natural 1at/er t/at /e woul3 supply money 1or t/e l0t0gat0on 01 t/e 3e1en3antIs a3opt0on was 2/allenge37 In pursuan2e o1 t/0s un3ertaB0ng , a3%an2e3 mon0es to t/e 3e1en3ant 1rom t0me to t0me 1or t/e e:penses o1 l0t0gat0on an3 a1ter t/e 3eat/ o1 , t/e pla0nt011 also 303 t/e same t/0ng7 @u.seHuently t/e 3e1en3ant on reHuest o1 t/e pla0nt011 e:e2ute3 t/e su0t prom0ssory note 1or t/e total amount a3%an2e3 1or t/e l0t0gat0on5 an3 0t was st0pulate3 t/ere0n t/at 01 t/e l0t0gat0on was 3e203e3 aga0nst t/e 3e1en3ant 0n t/e Pr0%y 'oun20l t/e pla0nt011 woul3 not en1or2e t/e note7 T/e l0t0gat0on en3e3 0n 1a%our o1 t/e 3e1en3ant an3 t/ere1ore t/e pla0nt011 sue3 t/e 3e1en3ant on t/e pronote7 T/e 3e1en3ant 3en0e3 /0s l0a.0l0ty an3 2onten3e3 t/at t/e pronote was %o03 1or want o1 2ons03erat0on79

@0r Ma3/a%an &a0r5 3el0%er0ng t/e Cu3gment o1 t/e Pr0%y 'oun20l5 sa03<
9It was also argue3 t/at s0n2e t/e su0t prom0ssory note states 0ts I2ons03erat0onI t/e respon3ent s/oul3 not 0n law .e allowe3 to plea3 t/at 0t 0s not supporte3 .y 2ons03erat0on7 T/e argument appears to .e .ase3 on a m0sun3erstan30ng o1 t/e real nature o1 respon3entIs plea7 !/en /e 3en0es l0a.0l0ty un3er t/e note /e 0s not to .e un3erstoo3 as say0ng t/ere 0s no 2ons03erat0on? w/at /e says .e0ng t/at t/ere 0s 2ons03erat0on .ut /e w0ll s/ow t/at 0t 0s past 2ons03erat0on w/02/5 not /a%0ng mo%e3 at t/e I3es0reI o1 t/e prom0sor5 iBeB /0msel15 3oes not 1all w0t/0n se2t0on 25 'l7 =3>5 'ontra2t "2t7 He 0s not pre2lu3e3 1rom 3o0ng so .y any pro%0s0on or pr0n20ple o1 law7777 &o 3ou.t t/e respon3ent presse3 t/e appellant to 1urn0s/ t/e ne2essary 1un3s .ut 0n 3o0ng so /e was only asB0ng /0m to g0%e e11e2t to /0s gran31at/erIs un3ertaB0ng 2onta0ne3 0n t/e letter o1 29t/ January7 T/e0r Lor3s/0ps a22ept t/ese 10n30ngs7 T/e result 0s t/at 0t 2annot .e /el3 t/at t/e a3%an2es o1 money were ma3e at t/e I3es0reI o1 t/e respon3ent w0t/0n t/e mean0ng o1 se2t0on 25 'l7 =3>5 'ontra2t "2t79 9It also 1ollows 1rom t/e 10n30ngs t/at se2t0on 2,5 'l7 =2>5 'ontra2t "2t 2annot .e rel0e3 upon 0n support o1 t/e appellantIs 2ase7 To 0n%oBe t/e a03 o1 t/at pro%0s0on 0t must .e s/own t/at t/ere was a prom0se .y t/e respon3ent to I2ompensateI t/e appellant or /0s 1at/er 1or somet/0ng w/02/ /a3 .een alrea3y 3one .y t/em I%oluntar0lyI 1or /0m7 T/e 10n30ngs o1 t/e 'ourts w/02/ t/e0r Lor3s/0ps /a%e a22epte3 s/ow t/at t/e moneys w/02/ /a3 .een a3%an2e3

Page 16
were not a3%an2e3 to t/e respon3ent I%oluntar0lyI .ut .e2ause o1 t/e un3ertaB0ng7777 T/ey also s/ow t/at 0n e:e2ut0ng t/e prom0ssory note t/e respon3ent was not prom0s0ng to 2ompensate t/e appellant 1or somet/0ng w/02/ /a3 .een 3one 1or /0m %oluntar0ly7 It 1ollows t/at t/e sa03 prom0ssory note 0s not supporte3 .y 2ons03erat0on79

It t/us 1ollows t/at to 2onst0tute goo3 2ons03erat0on un3er t/e 'ontra2ts =Malay @tates> Ar30nan2e t/ere must .e an a2t5 a.st0nen2e or prom0se on t/e part o1 t/e prom0see or some ot/er person at the desire of the promisor7 T/e 2la0m 2an .e goo3 only 01 t/e prom0see a2ts5 a.sta0ns or prom0ses to 3o somet/0ng 0n pursuan2e o1 t/e prom0se7 :2ept 0n t/e 2ase o1 negot0a.le 0nstruments an3 trusts 0t appears to .e t/e rule t/at 2ons03erat0on s/oul3 mo%e 1rom t/e prom0see7 T/e 'ontra2ts =Malay @tates> Ar30nan2e 19,6 2learly re2ogn0ses past 2ons03erat0on =see se2t0on 28=.> an3 se2t0on 2=3>>7 T/e wor3s 0n 2lause 2=3> o1 se2t0on 2 9/as 3one or a.sta0ne3 1rom 3o0ng9 su11020ently 0n302ate t/0s7 " 1or.earan2e to e:er20se a legal r0g/t 0s goo3 2ons03erat0on7 7f at the instance of the debtor t/e 2re30tor 1or.ears to sue5 t/ere 0s su11020en2y o1 2ons03erat0on7 !>$ M83 ?" at C# Eor.earan2e may .e e:press or may .e 0mpl0e3 1rom t/e 20r2umstan2es7 T/e 1or.earer s/oul3 g0%e up somet/0ng o1 %alue t/e real0ty o1 w/02/ s/oul3 .e measure3 .y t/e state o1 /0s Bnowle3ge an3 not .y t/e state o1 t/e law as 0t ult0mately 0s 1oun3 to .e7 T/e wor3s 9/as 3one or a.sta0ne3 1rom 3o0ng or 3oes or a.sta0ns 1rom 3o0ng or prom0ses to 3o or to a.sta0n 1rom 3o0ng9 0n 2lause =3> o1 se2t0on 2 o1 t/e 'ontra2ts =Malay @tates> Ar30nan2e 19,6 0n302ate t/e w03e am.0t o1 t/e 3e10n0t0on o1 92ons03erat0on79 Past 2ons03erat0on5 unl0Be 0n nglan35 0s Hu0te %al03 0n t/at part o1 our 2ountry w/ere t/e 'ontra2ts Ar30nan2e 0s appl02a.le7 In 5ast)ood v /enyon 11+ R ;-2 at p ;-8 Lor3 $enman '7J7 re1err0ng to t/e 3o2tr0ne o1 moral o.l0gat0on sa03<
9In3ee3 t/e 3o2tr0ne woul3 ann0/0late any ne2ess0ty 1or any 2ons03erat0on at all 0nasmu2/ as t/e mere 1a2t o1 g0%0ng a prom0se 2reates a moral o.l0gat0on to per1orm 0t7 T/e en1or2ement o1 su2/ prom0ses .y law5 /owe%er plaus0.ly re2on20le3 .y t/e 3es0re to e11e2t all 2ons20ent0ous engagements5 m0g/t .e atten3e3 w0t/ m0s2/0e%ous 2onseHuen2es to so20ety? one o1 w/02/ woul3 .e t/e 1reHuent pre1eren2e o1 %oluntary un3ertaB0ngs to 2la0ms 1or Cust 3e.ts7 @u0ts woul3 t/ere.y .e mult0pl0e35 to t/e preCu302e o1 real 2re30tors79

Un3er t/e 'ontra2ts =Malay @tates> Ar30nan2e t/e 3o2tr0ne o1 pre2e3ent moral o.l0gat0on 0s re2ogn0se3 only 0n t/e sp/ere o1 prom0ses to pay a .arre3 3e.t7 @e2t0on 28=2> o1 t/e 'ontra2ts Ar30nan2e pro%03es 1or t/0s7 Eor .earan2e 0n%ol%es t/e 1orgo0ng o1 t/e e:er20se o1 a legal r0g/t7 T/e 2ons03erat0on l0es 0n t/e 3etr0ment to t/e party w/o /as a r0g/t to resort to 2ourt an3 t/e 2orrespon30ng .ene10t to t/e ot/er party w/o 0s sa%e3 1rom legal pro2ee30ngs e%en t/oug/ su2/ .ene10t .e 1or a s/ort t0me7 T/e pr0n20ple o1 moral o.l0gat0on to pay t/e 3e.t was re1erre3 to 0n t/e 2ase o1 Sada -am v Saha0ada -am "IR 19+; La/ 7-97 In t/at 2ase Rang0 Lal J7 sa03<
9It 0s well esta.l0s/e3 t/at w/ere a 2re30tor releases /0s 3e.tor an3 a22epts a new 3e.tor 0n /0s pla2e5 t/e release o1 t/e or0g0nal 3e.tor 1urn0s/es a goo3 2ons03erat0on 1or t/e new 2ontra2t79

T/e learne3 Cu3ge 0n t/at 2ase 303 not say t/at a moral o.l0gat0on 2onst0tute3 a goo3 2ons03erat0on alt/oug/ t/e /ea3note o1 t/e 2ase 0n302ates t/at7 "ll t/at t/e learne3 Cu3ge sa03 was t/at t/e 3e1en3ant must also /a%e felt a moral o.l0gat0on to pay t/e 3e.t .e2ause /e /a3 enCoye3 t/e .ene10t o1 0t Co0ntly w0t/ /0s 3e2ease3 .rot/er7 !/ere a 2ustomer 0s 2alle3 on .y /0s .anBers to g0%e se2ur0ty for money d'e from him on a loan a22ount an3 /e .y a letter agrees to g0%e se2ur0ty an3 su2/ a letter 2onta0ns a l0st o1 t/e goo3s w/02/ t/e 2ustomer agrees to /ypot/e2ate against the loan acco'nt .ut su.seHuently re1uses to 3el0%er t/e 3o2uments relat0ng

Page 11 to t/e goo3s5 t/e 3e1en3ant 2annot say t/at t/ere was no 2ons03erat0on 1or t/e letter g0%en .y /0m an3 t/at t/e 2ourt 2annot en1or2e 0t7 In *he ,lliance (an2 v (room 82 R 8+1 at p 8+2 0t 0s o.ser%e3<
9It appears to me t/at5 w/en t/e pla0nt011s 3eman3e3 payment o1 t/e0r 3e.t5 an35 0n 2onseHuen2e o1 t/at appl02at0on t/e 3e1en3ant agree3 to g0%e 2erta0n se2ur0ty5 alt/oug/ t/ere was no prom0se on t/e part o1 t/e pla0nt011s to a.sta0n 1or any 2erta0n t0me 1rom su0ng 1or t/e 3e.t5 t/e e11e2t was t/at t/e pla0nt011s 303 0n e11e2t g0%e5 an3 t/e 3e1en3ant re2e0%e35 t/e .ene10t o1 some 3egree o1 1or.earan2e? not5 0n3ee35 1or any 3e10n0te t0me5 .ut5 at all e%ents5 some e:tent o1 1or.earan2e7 I15 on t/e appl02at0on 1or se2ur0ty .e0ng ma3e5 t/e 3e1en3ant /a3 re1use3 to g0%e any se2ur0ty at all5 t/e 2onseHuen2e 2erta0nly woul3 /a%e .een t/at t/e 2re30tor woul3 /a%e 3eman3e3 payment o1 t/e 3e.t5 an3 /a%e taBen steps to en1or2e 0t7 It 0s %ery true t/at5 at any t0me a1ter t/e prom0se5 t/e 2re30tor m0g/t /a%e 0ns0ste3 on payment o1 /0s 3e.t5 an3 /a%e .roug/t an a2t0on? .ut t/e 20r2umstan2es ne2essar0ly 0n%ol%e t/e .ene10t to t/e 3e.tor o1 a 2erta0n amount o1 1or.earan2e5 w/02/ /e woul3 not /a%e 3er0%e3 01 /e /a3 not ma3e t/e agreement79

+'llerton v :rovincial (an2 of 7reland )196+* "' +69 at p +1+ was anot/er 2ase 0n w/02/ a 2ustomer o1 t/e .anB w/en presse3 .y t/e .anB un3ertooB .y letter to 3epos0t a t0tle 3ee3 as se2ur0ty 1or t/e o%er3ra1t7 He 3epos0te3 t/e t0tle 3ee3 .ut t/e .anB 303 not reg0ster t/e 2/arge an3 /e a1terwar3s mortgage3 t/e estate to t/e appellants w/o reg0stere3 t/e 2/arge w0t/out any not02e o1 t/e pr0or 2/arge7 "t page +1+ Lor3 Ma2nag/ten sa03<
9My Lor3s5 t/0s po0nt seems to me to .e settle3 .y aut/or0ty7 In su2/ a 2ase as t/0s 0t 0s not ne2essary t/at t/ere s/oul3 .e an arrangement 1or 1or.earan2e 1or any 3e10n0te or part02ular t0me7 It 0s Hu0te enoug/ 01 you 2an 0n1er 1rom t/e surroun30ng 20r2umstan2es t/at t/ere was an 0mpl0e3 reHuest 1or 1or.earan2e 1or a t0me5 an3 t/at 1or.earan2e 1or a reasona.le t0me was 0n 1a2t e:ten3e3 to t/e person w/o asBe3 1or 0t7 T/at propos0t0on seems to me to .e esta.l0s/e3 .y t/e 2ase o1 ,lliance (an2 %7 (room to w/02/ my no.le an3 learne3 1r0en3 Lor3 L0n3ley re1erre3 yester3ay5 an3 ot/er 2ases5 among w/02/ I may ment0on Oldersha) v /ing =1,7 R 21+> w0t/ t/e o.ser%at0on on t/at 2ase an3 t/e 2ase 0n Dre)ry an3 Smale, .y #owen L7J7 0n Miles %7 ;e) <ealand ,lford 5state CoB an3 I may a33 t/at t/e propos0t0on seems to .e goo3 sense79

In Miles v ;e) <ealand ,lford 5state Co =1--8> +2 '/ $ 288 at 2-9 #owen L7J7 sa03<
9@peaB0ng .roa3ly5 w/at /as to .e 3eterm0ne3 0s5 0n my op0n0on5 w/et/er t/ere was at a 2r0t02al moment any 1or.earan2e to press a real 2la0m on t/e part o1 t/e 2ompany5 or o1 t/e 30re2tors o1 t/e 2ompany5 w/o /a3 ample powers un3er t/e0r art02les o1 asso20at0on to a2t 1or t/e 2ompany5 an35 01 so5 w/et/er su2/ 1or.earan2e was .roug/t a.out .y t/e e:press or 0mpl0e3 reHuest o1 Mr7 Grant5 an3 0n 2ons03erat0on o1 /0s guarantee7 " %alua.le 2ons03erat0on may5 o1 2ourse5 e0t/er 2ons0st o1 some r0g/t5 0nterest5 pro10t5 or .ene10t w/02/ a22rues to one party5 or some 1or.earan2e5 or 3etr0ment5 or loss5 or respons0.0l0ty5 w/02/ 0s g0%en to or un3ertaBen .y t/e ot/er7 !e /a%e to see /ere 0n t/e 10rst pla2e w/et/er t/ere was 1or.earan2e prom0se35 0n w/02/ 2ase t/e prom0se woul3 .e t/e 2ons03erat0on 1or t/e guarantee5 or w/et/er t/ere was an a2tual 1or.earan2e g0%en at t/e reHuest o1 t/e guarantor 0n return 1or somet/0ng79

Eor.earan2e 2an .e 0n1erre3 1rom surroun30ng 20r2umstan2es w/ere5 1or e:ample5 t/e pla0nt011 0n 2ons03erat0on o1 t/e prom0se to e:e2ute a reg0stere3 sale 3ee3 3es0sts 1rom su0ng t/e 3e1en3ant5 t/ere 0s su11020ent 2ons03erat0on 1or t/e agreement e:e2ute3 .y t/e 3e1en3ant7 "s state3 earl0er t/e wor3s 9su2/ a2t or a.st0nen2e or prom0se9 0n 2lause =3> o1 se2t0on 2 maBe 0t 2lear t/at t/e a2t o1 1or.earan2e or prom0se 0s 2ons03erat0on pro%03e3 0t 0s 3one at t/e 3es0re o1 t/e prom0sor7 Un3er se2t0on 28=.> o1 t/e 'ontra2ts Ar30nan2e 0t must .e s/own t/at w/at was 3one .y t/e pla0nt011 was 3one 1or t/e prom0sor7 @e2t0on 28=2> 2o%ers only t/e 2ase o1 a person w/o woul3 .e l0a.le to pay .ut 1or l0m0tat0on .arr0ng t/e su0t7 !>$ M83 ?" at C In /ali :rasad *e)ari v -a.a Sahib :rahlad Sen =1-89> 11 #engal Law Rep 111 at p 122 t/e Pr0%y 'oun20l sa03<
9777It /a3 .e2ome t/e esta.l0s/e3 pra2t02e o1 t/e 2ourts 0n In30a5 0n 2ases o1 2ontra2t5 to reHu0re sat0s1a2tory proo1 t/at 2ons03erat0on /a3 .een a2tually re2e0%e3 a22or30ng to t/e terms o1 t/e 2ontra2t? an3 t/at 0t /a3 ne%er .een /el3 t/ere t/at a 2ontra2t ma3e un3er seal o1 0tsel1 /as 0mporte3 t/at t/ere was a su11020ent 2ons03erat0on 1or t/e agreement7 T/e latter propos0t0on seems to .e 0n30sputa.le79

Page 12 In t/e 2ase o1 3M Wotherspon 4 Co 8td v &enry ,gency &o'se )1982* MLJ -8 @u110an J7 =as /e t/en was> 3ealt w0t/ a num.er o1 2ases un3er se2t0on 2,=2> o1 t/e In30an 'ontra2t "2t 2orrespon30ng to se2t0on 28=.> o1 t/e 'ontra2ts =Malay @tates> Ar30nan2e 19,65 an3 /el3 t/at an a2t 3one at t/e suggest0on o1 anot/er was not 3one %oluntar0ly an3 t/at 0t 2oul3 .e sa03 to /a%e .een 3one %oluntar0ly only 01 0t was 3one out o1 oneIs own 1ree w0ll or 2/o02e an3 not at t/e suggest0on o1 anot/er7 ="lso see D'rga :rasad v (aldeo 4 Others ILR + "ll 221>7 In t/e 2ase o1 Manna 8al v *he (an2 of (engal ILR 1 "ll +69 0t was sa03 .y t/e 2ourt<
9!e 3o not Hu0te un3erstan3 t/e Cu3geIs argument as to t/e .ene10t w/02/ t/e appellant 3er0%e3 1rom t/e .anB0ng transa2t0on7 It 3oes not appear t/at /e /a3 re2e0%e3 any port0on o1 t/e h'ndis w/en 30s2ounte3? .ut5 assum0ng t/at /e /a3 3one so5 an3 a3m0tt0ng t/at un3er t/e 20r2umstan2es /e was l0a.le on t/e h'ndis, ne0t/er t/e ante2e3ent .ene10t5 nor t/e e:0st0ng l0a.0l0ty5 nor t/e ant020pate3 a3%antage to w/02/ t/e Cu3ge allu3es5 woul3 2onst0tute a 2ons03erat0on as 3e10ne3 0n t/e 'ontra2t "2t7 To 2onst0tute a 2ons03erat0on as 3e10ne3 0n t/at "2t t/ere must .e an a2t5 a.st0nen2e or prom0se on t/e part o1 t/e prom0see or some ot/er person at t/e 3es0re o1 t/e prom0sor7 An t/e 1a2ts 1oun3 t/ere was no su2/ a2t5 a.st0nen2e5 or prom0se5 an3 t/ere1ore t/ere was no 2ons03erat0on 1or t/e mortgage5 an3 t/e 2ontra2t 0s %o037 An t/0s groun3 we must allow t/e appeal5 an3 re%ers0ng t/e 3e2rees o1 t/e 'ourts .elow so 1ar as t/ey 3e2ree t/e 2la0m5 we must 30sm0ss t/e su0t w0t/ 2osts79

In t/e 2ase o1 ;ana2 -am v Mehin 8al ILR 1 "ll ;-7 t/e /ea3note says<
9!/ere ; a3%an2e3 money to / on a .on3 /ypot/e2at0ng /Is property5 an3 ment0on0ng M as surety 1or any .alan2e t/at m0g/t rema0n 3ue a1ter real0Kat0on o1 /Is property5 M .e0ng no party to /Is .on3 .ut /a%0ng s0gne3 a separate surety(.on3 two 3ays su.seHuent to t/e a3%an2e o1 t/e money5 /el3 t/at t/e su.seHuent surety(.on3 was %o03 1or want o1 2ons03erat0on un3er se2t0on 127 o1 t/e In30an 'ontra2t "2t79

It /as .een /el3 0n t/e 2ase o1 -amas)amy :andia *halavar v ,ndhappa Chettiar =1986> 18 Ma3 LJ Rep ;22 t/at se2t0on 2, o1 t/e In30an 'ontra2t "2t 0s e:/aust0%e7 I1 t/e wor3s 0n a 3o2ument are 2lear an3 unam.0guous t/ere 2annot .e any room to 1all .a2B upon suppos0t0ons an3 suppose3 0ntent0ons o1 t/e part0es7 "3%an2es ma3e on t/e re2ommen3at0on o1 a person are not su11020ent 2ons03erat0on 0n law 1or + su.seHuent prom0se .y /0m guarantee0ng t/e0r payment7 @ee M'th'2ar'ppa M'dali v /athapp'dayan )191;* Ma3 LJ Rep 2;9? )191;* M!& 7687 T/e 2ase o1 t/e 8i='idator, (agha Co-operative Society v Debi Mangal :rasad Sinha 4 Others "IR 19+7 Pat ;16 was 20te3 .y t/e learne3 2ounsel 1or t/e pla0nt011s 1or t/e propos0t0on t/at w/ere a person states 0n a letter wr0tten .y /0m to t/e 2re30tor t/at /e s/all .e respons0.le 1or t/e payment o1 t/e 3e.t 3ue to su2/ 2re30tor 1rom anot/er person5 t/e person wr0t0ng t/e letter stan3s 0n t/e pos0t0on o1 a pr0n20pal 3e.tor an3 not a surety7 T/e 1ull 1a2ts o1 t/e 2ase are not to .e 1oun3 0n t/e report7 It5 /owe%er5 appears t/at one Muns/0 Muna Lal .orrowe3 some money 1rom t/e #ag/a 'o(operat0%e @o20ety on .e/al1 o1 $e.0 Mangal Prasa3 @0n/a7 t/e 10rst 3e1en3ant7 T/e 10rst 3e1en3ant /a3 wr0tten a letter to t/e 1ollow0ng e11e2t to t/e #ag/a 'o(operat0%e @o20ety<
90n o.e30en2e to your letter777 I .eg to state t/at I /ol3 respons0.le mysel1 regar30ng t/e payment o1 t/e 3ues aga0nst Muns/0 Muna Lal5 a mem.er o1 t/e #ag/a 'o(operat0%e @o20ety79

!ort J7 0n t/0s 2ase sa03<

9T/e letter 0s t/en s0gne3 .y 3e1en3ant 17 It 0s rat/er 301102ult to as2erta0n 1rom t/e pla0nt e:a2tly w/at t/e 2ase o1 t/e pla0nt011 0s< !/et/er 0t 0s a 2ase o1 3e1en3ant 1 .e0ng a surety5 w/et/er 3e1en3ant 1 was to .e looBe3 upon as a pr0n20pal 3e.tor5 or w/et/er Muns/0 Muna Lal was to .e looBe3 upon as t/e pr0n20pal 3e.tor7 #ut one matter 0s per1e2tly 2lear an3 t/at 0s t/at t/e letter o1 -t/ @epem.er 1927 3oes not put 3e1en3ant 1 w/o wrote t/e letter 0n t/e pos0t0on o1 a surety? /e .e2omes .y t/at letter on 0ts proper 2onstru2t0on t/e pr0n20pal 3e.tor w/ate%er t/e pos0t0on may /a%e .een pr0or to t/e 3ate upon w/02/ t/e letter was wr0tten79

It 3oes not appear 1rom t/e Cu3gment w/et/er t/e Huest0on o1 t/e e:0sten2e o1 any 2ons03erat0on .etween t/e 10rst 3e1en3ant an3 t/e pla0nt011 was e%er ra0se3 or gone 0nto 0n t/at 2ase7 "ga0n t/e 2ase o1 1h'lam

Page 1+ &'ssain v +aiya0 ,li "IR 19;6 Au3/ +;8 was rel0e3 upon .y t/e 2ounsel 1or t/e pla0nt0117 T/at5 /owe%er5 0s a 2ase un3er se2t0on 127 o1 t/e In30an 'ontra2t "2t7 In t/e 2ourse o1 t/e Cu3gment T/omas '7J7 an3 L0aul Hassan J7 sa03<
9Anly two po0nts /a%e .een urge3 .y t/e learne3 2ounsel 1or t/e appellants5 namely =1> t/at t/e surety .on3 was w0t/out 2ons03erat0on an3 2annot t/ere1ore .e en1or2e3 an3 =2> t/at t/e guarantee 0n Huest0on relate3 only to t/e per0o3 o1 one year .eg0nn0ng 1rom t/e 3ate o1 t/e .on35 or 1rom t/e 3ate o1 t/e lease7 "s regar3s t/e 10rst po0nt5 we are 2learly o1 op0n0on t/at 0n %0ew o1 se2t0on 1275 'ontra2t "2t5 t/e surety .on3 2annot .e /el3 to .e w0t/out 2ons03erat0on7 T/at se2t0on 2learly lays 3own t/at anyt/0ng 3one5 or any prom0se ma3e 1or t/e .ene10t o1 t/e pr0n20pal 3e.tor5 may .e a su11020ent 2ons03erat0on to t/e surety 1or g0%0ng t/e guarantee777 T/e wor3 93one9 0n se2t0on 127 s/ows t/at past .ene10t to t/e pr0n20pal 3e.tor 2an .e goo3 2ons03erat0on 1or a .on3 o1 guarantee79

T/e0r Lor3s/0ps t/en went on to Huote 1rom t/e 2ase o1 /ali Charan v ,bd'l -ahman "IR 191- P' 228 w/ere 3eal0ng w0t/ t/e Huest0on o1 la2B o1 2ons03erat0on T/e0r Lor3s/0ps o1 t/e Pr0%y 'oun20l /a3 sa03<
9T/0s was an 03le 3e1en2e7 T/ere was ample 2ons03erat0on 1or t/e .on3? anyt/0ng 3one5 or any prom0se ma3e 1or t/e .ene10t o1 t/e pr0n20pal5 may .e a su11020ent 2ons03erat0on to a surety 1or g0%0ng a guarantee79

In t/e same 2ase "IR 19;6 Au3/ +;8 t/e learne3 Cu3ges went on to say<
9Un3er se2t0on 127 o1 t/e "2t 0t 0s not ne2essary t/at t/e t/0ng 3one or t/e prom0se ma3e 1or t/e .ene10t o1 t/e pr0n20pal 3e.tor s/oul3 .e at t/e 3es0re o1 t/e surety an3 t/at t/at se2t0on /as 0mpl0e3 0n 0t some su2/ e:press0on as Inotw0t/stan30ng anyt/0ng 2onta0ne3 0n se2t0on 2=3> o1 t/e "2tI5 1or5 ot/erw0se5 t/ere was no nee3 to ena2t se2t0on 127 0nasmu2/ as anyt/0ng 3one or any prom0se ma3e 1or t/e .ene10t o1 t/e pr0n20pal 3e.tor5 01 3one or ma3e at t/e 3es0re o1 t/e surety woul3 2learly 2ome un3er se2t0on 2=3>79

T/e pla0nt011sI 2la0m aga0nst t/e 3e1en3ant5 /owe%er5 0s as a pr0n20pal 3e.tor an3 not as a surety7 @e2t0on 28 o1 t/e 'ontra2ts =Malay @tates> Ar30nan2e 19,6 ena2ts< !>$
9"n agreement ma3e w0t/out 2ons03erat0on 0s %o035 unless(

M83 ?" at C$

=a> 0t 0s e:presse3 0n wr0t0ng an3 reg0stere3 un3er t/e law =01 any> 1or t/e t0me .e0ng 0n 1or2e 1or t/e reg0strat0on o1 su2/ 3o2uments5 an3 0s ma3e on a22ount o1 natural lo%e an3 a11e2t0on .etween part0es stan30ng 0n a near relat0on to ea2/ ot/er? or unless =.> 0t 0s a prom0se to 2ompensate5 w/olly or 0n part5 a person w/o /as alrea3y %oluntar0ly 3one somet/0ng 1or t/e prom0sor5 or somet/0ng w/02/ t/e prom0sor was legally 2ompella.le to 3o? or unless =2> 0t 0s a prom0se5 ma3e 0n wr0t0ng an3 s0gne3 .y t/e person to .e 2/arge3 t/erew0t/5 or .y /0s agent generally or spe20ally aut/or0se3 0n t/at .e/al15 to pay w/olly or 0n part a 3e.t o1 w/02/ t/e 2re30tor m0g/t /a%e en1or2e3 payment .ut 1or t/e law 1or t/e l0m0tat0on o1 su0ts79

T/e pla0nt011s 0n or3er to su22ee3 must e0t/er s/ow t/at t/ere was 2ons03erat0on 1or t/e e:e2ut0on o1 t/e 3ee3 :/0.0t "16 or .r0ng t/e0r 2ase un3er 2lauses =a>5 =.> or =2> o1 se2t0on 28 o1 t/e 'ontra2ts =Malay @tates> Ar30nan2e7 "22or30ng to P7!71 t/e 3e1en3ant sent a post 3ate3 2/eHue w0t/ ea2/ or3er an3 t/at 01 su2/ a 2/eHue 303 not a22ompany t/e or3er t/e pla0nt011s woul3 not supply goo3s to t/e estates7 I1 t/at was so5 t/e pla0nt011s s/oul3 /a%e 0n t/e0r possess0on 2/eHues amount0ng to 412+56,67817 P7!71 1urt/er went on to say t/at 0t was t/e 3e1en3ant /0msel1 w/o wante3 to sen3 a post 3ate3 2/eHue w0t/ ea2/ or3er7 I am not prepare3 to an3 3o not .el0e%e P7!71 on t/at7 &o reasona.le man putt0ng /0msel1 0n t/e pos0t0on o1 t/e 3e1en3ant woul3 l0Be to taBe upon /0msel1 t/e onerous an3 r0sB1ul tasB o1 pla20ng an or3er w0t/ t/e pla0nt011s an3 a22ompany0ng 0t w0t/ a post 3ate3 2/eHue5 espe20ally w/en I /a%e alrea3y 1oun3 as a 1a2t t/at t/e pla0nt011s looBe3 1or an3 e:pe2te3 payments 1or t/e suppl0es 1rom t/e estates an3 not t/e 3e1en3ant unt0l t/e 3ee3 :/0.0t "16 was e:e2ute37 Eurt/ermore 01 t/e /an30ng 0n o1 post 3ate3 2/eHues was t/e 0n%ar0a.le pra2t02e a ment0on o1 0t was .oun3 to /a%e 1oun3 a prom0nent pla2e 0n t/e 2orrespon3en2e .etween t/e

Page 1; part0es an3 0n t/e 3ee3 :/0.0t "16 0tsel17 In my %0ew t/ere was no ne2ess0ty or use o1 t/e 3ee3 :/0.0t "16 01 t/e pla0nt011s were t/e /ol3ers o1 t/e 2/eHues totall0ng 412+56,67817 "t t/e t0me :/0.0t "16 was e:e2ute3 t/e pla0nt011sI 3e.tors were t/e estates an3 not t/e 3e1en3ant7 T/ere 2oul3 t/en .e no 1or.earan2e to sue as aga0nst t/e 3e1en3ant7 I 3o not t/0nB P7!71 was at all 1ranB w/en /e sa03 t/at t/e 3e1en3ant 1ully un3erstoo3 t/at t/e pla0nt011s 0nten3e3 to an3 2oul3 taBe legal a2t0on aga0nst /0m on t/e 2/eHues7 T/e pla0nt011s Bnew5 an3 I 3o so /ol35 t/at t/e 3e1en3ant was an agent 1or t/e estates an3 was not a2t0ng as a pr0n20pal 0n respe2t o1 t/e suppl0es ma3e to t/e estates7 T/e %ar0ous estates7 an3 not t/e 3e1en3ant5 .e0ng t/e 3e.tors5 I 1a0l to un3erstan3 /ow any o1 t/e 2lauses o1 se2t0on 28 o1 t/e 'ontra2ts Ar30nan2e 2an .e sa03 to .e appl02a.le7 T/e su0t 0s not on t/e 2/eHues7 @ome o1 t/e 2/eHues m0g/t /a%e .een 30s/onoure3 .ut t/at 0s ne0t/er /ere nor t/ere 0n as 1ar as t/e 0ssue o1 t/e e:0sten2e o1 2ons03erat0on 1or t/e e:e2ut0on o1 :/0.0t "16 0s 2on2erne37 %en 01 t/e 3e1en3ant was aware t/at /e 2oul3 .e sue3 on t/e 2/eHues unless /e e:e2ute3 t/e 3ee3 :/0.0t "165 su2/ a Bnowle3ge alone woul3 not 2onst0tute 2ons03erat0on 1or t/e 3ee3 e:e2ute35 a 3ee3 w/02/ maBes no re1eren2e w/atsoe%er to t/ose 2/eHues I 10n3 t/at as 1ar as t/e 3e1en3ant was 2on2erne35 t/e 3ee3 :/0.0t "16 was e:e2ute3 .y /0m ne0t/er 1or any past 2ons03erat0on5 nor 0n respe2t o1 any 1or.earan2e to sue /0m 1or t/e suppl0es ma3e to t/e estates5 nor 0n 2ons03erat0on o1 any prom0se to supply /0m goo3s on 2re30t 0n 1uture7 In s/ort t/e 3ee3 was w0t/out 2ons03erat0on as un3erstoo3 0n our law7 T/e 1a2t t/at t/e 3ee3 0s un3er seal maBes no 3011eren2e w/atsoe%er7 "ll t/at t/e 3e1en3ant 2an .e sa03 to /a%e un3ertaBen was a moral o.l0gat0on an3 no more7 Ha%0ng 2ome to t/e 2on2lus0on an3 t/e 10n30ng t/at t/ere was no 2ons03erat0on 1or t/e e:e2ut0on o1 t/e 3ee3 :/0.0t "165 0t 0s now unne2essary 1or me to say w/et/er 2ons03erat0on 2oul3 .e pro%e3 .y parol7 I /a%e taBen all t/e e%03en2e5 wr0tten an3 oral5 0nto 2ons03erat0on7 T/e pla0nt011sI su0t 0s 2onseHuently 30sm0sse3 w0t/ 2osts7 Ha%0ng now /a3 t/e t0me an3 t/e opportun0ty to g0%e t/0s matter ser0ous t/oug/t an3 2ons03erat0on I5 0n 1a2t5 am o1 t/e %0ew t/at 0n t/e l0g/t o1 t/e e%03en2e an3 t/e aut/or0t0es I s/oul35 0n t/e 10rst 0nstan2e5 /a%e 1oun3 0n 1a%our o1 t/e 3e1en3ant on t/e prel0m0nary 0ssue t/at t/e statement o1 2la0m 30s2lose3 no 2ause o1 a2t0on7 3'dgment for the defendantB @ol020tors< Shearn, Delamore 4 CoA ; -amachandran7