Better think before you give

It is best to consider all the implications and consequences before you make an offer to anyone.

PEOPLE often regret something that they have done, but they can’t always reverse what they have done.

For example, a person may be talking to a friend who is having difficulties raising RM25,000 for a downpayment on an apartment, and may agree to give him a personal loan so that he can proceed with the purchase.

However, after further reflection, the person may feel that it is not a good idea at all and change his mind. Can the friend, who is now disappointed, turn around and take action against him for refusing to grant him the loan which he had agreed to?

I am sure many a reader would take the view, and rightly so, that no action can be taken for the change of mind about granting the loan as promised.

This would be for the simple reason that it was, in all likelihood, a casual statement and therefore not meant to be binding.

Even though agreements can be made orally, it would not be an agreement that would be enforceable because nothing was agreed to as to when the loan was to be given, when and how it was to be repaid and whether any interest was to be paid.

However, such may not be the case when what is done is in a more definite form. An example of such a situation is set out in a letter from a reader:

“This is regarding a bungalow bought in December 2012 by my husband, who was a widower during his two-year relationship with his ex-girlfriend.

He bought a bungalow in Shah Alam for investment purposes after being advised by the ex-girlfriend that it was a good buy. The property was fully paid for by him with his personal cheques.

My husband broke off with the girlfriend in April 2013 and married me in January 2014. His ex-girlfriend won’t let go of the property which has her registered as “half-share owner”. Can we take legal action against her?”

This is, of course, quite a different situation as compared to a bare statement about giving a property or item to another. Here, not only has the husband agreed to give a half-share to his then girlfriend, but the half-share has also been registered in her name.

The hurdle in this case would be that the rights of a registered owner of land are indefeasible except in certain specific circumstances, which are provided for in the National Land Code 1965.

Section 340 of the National Land Code 1965 provides that “the title or interest of any person or body for the time being registered as proprietor of any land, or in whose name any lease, charge or assessment is for the time being registered, shall be with exceptions indefeasible”.

Thus the law goes on to say that the title or interest of any such person or body “shall not be indefeasible in any case of fraud or misrepresentation to which the person or body, or any agent of the person or body, was a party or privy or where registration was obtained by forgery, or by means of an insufficient or void instrument ....”

In the situation referred to earlier, the parties were in a relationship. A half-share was registered in the name of the other woman, the girlfriend. At that time, they may even have been contemplating marriage.

Anyway, there is no suggestion made by the reader that there was any element of fraud, misrepresentation or forgery or that any instrument used was void or insufficient.

Therefore the position, in my mind, would be that the former girlfriend has acquired a legal right that would be indefeasible.

However what if the property had not been registered in the girlfriend’s name but there was a written document, call it an agreement, by the husband to give a half-share to her, the girlfriend? Then the position would have been different and there would be room for argument.

If there was a change of mind on the part of the husband, the girlfriend could contend that it was a binding agreement and seek to enforce it. However the counter-argument to that would be based on the absence of “consideration” – payment or benefit. This is because for a contract to be enforceable, it must be supported by lawful considera-tion.

So the question would be whether lawful consideration passed from the girlfriend to the husband and if so, what was the consideration? From what has been disclosed, they were in what would, in our society, be considered an illicit or immoral relationship.

The law does allow a contract to be enforceable even though there is no consideration, but where there is natural love and affection. Such love and affection is recognised between husband and wife, parent and child and maybe even brother and sister.

Where a couple have lived together for two years and even bought property in their joint names, there likely would have been natural love and affection. However, if this was accepted to be so, would the Court enforce the agreement?

I am reminded of a case many years ago where an architect and air hostess lived together in his apartment and out of which relationship a child was born. He promised to give his partner the apartment. This promise was in evidence and undenied.

Eventually they separated and the architect refused to give her the apartment, so she sued him. A question arose as to whether there was lawful consideration for his promise. The law requires lawful consideration – but there is no lawful consideration if the Court regards it as immoral or opposed to public policy.

For her to succeed there would be a need to show that there was natural love and affection. This there probably was, but would the Court enforce the agreement?

Here the next hurdle would be whether consideration was lawful. Under our law, consideration would not be lawful if the Court regarded it as immoral or contrary to public policy.

In this case I do not know what the outcome was because the case does not appear to be reported, or it could be that there may have been a compromise which resulted in the Court case being discontinued. However the above discussions highlight the issues involved.

Any comments or suggestions for points of discussion can be sent to [e-mail]. The views expressed here are entirely the writer’s own.