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Coulls v Bagots Executor & Trustee Co Ltd

High Court (1967) 119 CLR 460

Overview

Mr Coulls entered into a contract to allow O’Neil Constructions to quarry part of his land. In exchange, O’Neil was to pay royalties to Mr Coulls and his wife as joint tenants. Following Mr Coulls’ death, his executor (Bagots) sought to determine whether O’Neil was required to pay the royalties to the estate or to Mrs Coulls. 

A majority of the High Court held that the royalties were payable only to the estate on the ground Mrs Coulls was not a party to the contract. In discussing the issue of consideration, a majority of judges (concurring with Barwick CJ) concluded that where a promise is made to joint promisees then either promisee can enforce even though consideration only moved from one.

Facts

Mr Coulls entered into a contract to allow O’Neil Constructions to quarry part of his land. In exchange, O’Neil was to pay royalties to Mr Coulls and his wife as joint tenants. Following Mr Coulls’ death, his executor (Bagots) sought to determine whether O’Neil was required to pay the royalties to the estate or to Mrs Coulls. 

Held (High Court)

Chief Justice Barwick

Mrs Coulls was intended to be a party to the document – the promise to pay made by O’Neil was made to both Mr & Mrs Coulls. The position is:

(a) A promise by A made to B & C for consideration to pay B & C.

(b) In such a case, A cannot question whether the consideration moved from both B & C or only one of them. The promise was not a gratuitous promise

(c) Such a promise is enforceable only if B &C are parties to the action to enforce it. B could not sue alone.

(d) If C would not join the action, B could join C as defendant. However, judgement would be for a payment to B & C.

(e) If B would not join, C could sue, joining B as a defendant