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Broken promises
08/11/2005 The Star Articles of
Law with Bhag Singh
In life many things are said and sometimes what is said is perceived to be a
promise made by one person to another. More so when these are social and not
business relationships.
Statements may be made and it can be difficult to determine whether these
were serious statements to be relied upon or mere utterances in order to
make casual or polite conversation.
However, it can happen that sometimes one party may take seriously what has
been said by another as a promise to be relied on and acted upon. There may
not be a similar intention on the part of the other party.
When the promise is not kept, there is disappointment on the part of the
party who had taken it seriously, and a dispute arises. When is a promise to
be treated as serious and when is it not to be taken seriously?
A reader wrote in about a former live-in lover whom she had assisted
financially. After they had parted, she continued to lend him money.
She met the man after he had just left his wife. As she was alone, they
decided to live together. He was unemployed and broke, having lost most of
his savings gambling in the share market when the recession of 1997 hit. She
even lent him RM 3,000 to pay for the deposit and rental of an apartment.
And they lived together for seven years.
She had to hold various jobs to earn enough money to lend him to pay for the
house rent, daily expenses and his club bills. He had promised that he would
repay all her loan when he withdraws his EPF in 2005. He played golf every
day. All in she lent him RM138,000.
Now he has withdrawn his EPF totalling RM 800,000 and he refuses to return
the loan amount due. When asked, he told her to wait until he had settled
all his debts with the other creditors first. Then he started to avoid her
and refused to take her calls. Finally he accused her of harassing him,
threatening to report her to the police as if he was the victim.
Our reader wants to know whether she has any chance of recovering the money
as she has no written proof. The reader has consulted a lawyer, and made a
police report.
In such matters, it is hard to predict the outcome in terms of the chances
of winning. Whilst there is nothing in writing, it does not necessarily mean
that the money cannot be recovered. The outcome will also depend on the
circumstances of the case.
Any decision made by the court depends on the evidence adduced which in this
case will inevitably be oral. In this case it will also be extremely
contradictory as both parties will deny what the other says and assert to
the contrary.
Yet faced with a claim the court will have to make a decision, and in this
connection, have to listen to the witnesses and decide who is telling the
truth and come to a conclusion.
Apart from the fact that the parties will be in total disagreement with each
other, there is another situation that has to be confronted. And this is
with regard to the intention to create legal relations.
In law where a binding arrangement is sought to be created there must be an
intention to create legal relations.
If there is no intention to create legal relations then what has been done
by one party for another cannot lead to the creation of rights that can be
enforced.
Thus if specific sums were handed to the other party or given to a third
party on his behalf with the clear understanding that it would be a loan, it
would be recoverable. Of course, assertion will no doubt also be an oral one
but subject to the credibility element, its acceptance would favour the
party who gave the loan.
On the other hand, one party may have felt generous at an earlier point in
time and undertaken to shoulder household expenses in the expectation that
at some future time, the other party would reciprocate the generosity
extended in time of need.
When, however, the other party does not reciprocate as expected, it is then
not possible to apportion the expenditure incurred earlier and treat that as
a debt on account of a loan. This would be on the basis that when these
expenses were incurred, there was no intention to create any legal relation.
If this be the case, then of course such amount would not be recoverable. In
such circumstances it would amount to bringing into existence a contract by
working backwards, when in fact there was no such intention to do so at the
time when the activity and expenditure took place.
Such occurrences are not uncommon when parties are involved in social and
more so emotional relationships.
In such circumstances much is done by way of showing generosity and kindness
in the hope that the relationship will flourish and mature into a more
formal matrimonial arrangement and things will fall into place.
When this does not happen and the relationship turns sour, there is often an
inclination to turn the clock back and try to turn retrospectively a social
arrangement into a formal contract. |
