- Arthur Leopold Coulls died on 8 June 1960, having made a will by which he appointed Bagot’s Executor and Trustee Co Ltd (“Bagots“) to be his executor and trustee.
- Mr Coulls entered into a contract with O’Neil Constructions Pty Ltd (“O’Neil“) to quarry a part of his land. In exchange, O’Neil was to pay royalties to Mr Coulls and his wife, Mrs Doris Coulls, as joint tenants.
- The wife’s only part to play had been to append her signature to the contract document.
- When Mr Coulls died, Bagots sought to determine whether O’Neil was required to pay the royalties to the estate or to Mrs Coulls.
- Was O’Neil required to pay the royalties to Bagots or to Mrs Coulls?
- The High Court held by majority that the wife was not a party to the contract.
- McTiernan, Taylor and Owen JJ held that the wife was not a party, however Taylor and Owen JJ agreed that if Mr Coulls had been a party the fact that it was her husband who had provided the consideration would not have been an impediment to her.
“It must be accepted that, according to our law, a person not a party to a contract may not himself sue upon it so as directly to enforce its obligations. For my part, I find no difficulty or embarassment in this conclusion. Indeed, I would find it odd that a person to whom no promise was made could himself in his own right enforce a promise made to another. But that does not mean that it is not possible for that person to obtain the benefit of a promise made with another for his benefit by steps other than enforcement by himself in his own right : see the recent case of Beswick v. Beswick (1966) Ch 538 . I would myself, with great respect, agree with the conclusion that where A promises B for a consideration supplied by B to pay C then B may obtain specific performance of A’s promise, at least where the nature of the consideration given would have allowed the debtor to have obtained specific performance. I can see no reason whatever why A in those circumstances should not be bound to perform his promise. That C provided no part of the consideration seems to me irrelevant. Questions of consideration and of privity are not always kept distinct. Indeed, on some occasions when lack of privity is the real reason for not allowing a plaintiff to succeed on a promise not made with him, an unnecessary and irrelevant reason is given that the plaintiff was a stranger to the consideration; that is to say, that he was not merely not a party to the agreement but was not a party to the bargain. In Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge &Co. Ltd. (1915) AC 847 privity was not lacking because it was assumed, but the promise made by the defendant to the plaintiff was as between them gratuitous. But in this case whether the promise was made by the company to the deceased alone or to the deceased and the respondent, it was not as between promisor and promisee a gratuitous promise.”
(Barwick CJ (in dissent) at )
The full text is available here: https://jade.io/j/?a=outline&id=65995
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