LAW AND COMMERCE
Singapore legal system has dealt with the issue of consideration, and in particular, how it has attempted to reconcile Williams v Roffey and Foakes v Beer. By and large, the Singaporean system has followed the examples set out by English case law, applying consideration in a very similar way to the United Kingdom. However, there are three distinctions that need to be drawn. (i) Williams v Roffey – A Limited Application The principle in Williams v Roffey was almost immediately applied by the Singaporean courts in the months following the ruling. However, the Courts have expressed their reservations on extending the principle too far, instead preferring to apply it modestly and conservatively. In the case of Sea-Land Service Inc v Cheong Fook Chee Vincent,23 for example, the Singaporean Court of Appeal referred to Williams v Roffey twice as a ‘limited exception’24. Carter, Phang and Poole25 suggest that this was an attempt to limit the ambit of Williams v Roffey to cases where the other party’s promise was to pay more. In Gay Choon Ing v Loh Sze Ti Terence Peter (“Gay Choon Ing”),26 the Court of Appeal was even more explicit in lamenting the ‘very practical difficulties’27 generated by Williams v Roffey. Andrew Phang JA in the Court of Appeal was clearly concerned that ‘Williams has, by introducing the concept of a factual benefit or detriment, led... to a practical redundancy’28 in the sense that it may have made consideration too easy to find. As we will see later in this article, this is not wrong per se, but is undesirable in the absence of an alternative doctrine to replace consideration. (ii) Clear Separation between Foakes and Williams The Singaporean Court of Appeal in Gay Choon Ing also drew a clear line between Williams v Roffey and Foakes v Beer, making clear that Williams v Roffey was to be applied to cases where the promisee attempted to ‘enforce a promise by the promisor to pay more’.29 Foakes v Beer, on the other hand, was to apply to ‘the 23
[1994] 3 SLR 631.
24
ibid 634-635.
25 J W Carter, A Phang and J Poole, ‘Reactions to Williams v Roffey’ (1995) 8 JCL 248. 26
[2009] 2 SLR(R) 332.
27
ibid [100].
28
ibid [101].
29
ibid [102].
attempt by the promisee to enforce a promise by the promisor to take less’30. The Court noted that there was ‘no legal impediment from the perspective of precedent preventing the Singapore courts from extending the reach of Williams’31, although it stopped short of outright stating that this was preferable. Given that the Courts have had opportunities in subsequent cases to extend Williams v Roffey but have hitherto declined to do so, it seems likely that a clear separation will be maintained, at least for the time being. (iii) Potential Substitutes for Consideration It might seem counter-intuitive that the Singaporean Court of Appeal might apply Williams v Roffey conservatively and yet consider how consideration should be broadened or abolished in the same ruling. Yet this apparent contradiction might be explained on the grounds that the Courts were seeking to maintain ‘a legal mechanism... that will enable the courts to effectively and practically ascertain which promises ought to be enforceable’.32 It is not useful to say that Williams v Roffey should be extended, or that consideration should be abolished altogether, without first examining what alternative doctrines might take its place. One possibility considered by the Court of Appeal in Gay Choon Ing was that ‘the alternative doctrine of economic duress might well prove to be an appropriate replacement for the doctrine of consideration itself’33. In Singaporean law, the doctrine of economic duress operates to invalidate a contract where there has been (i) pressure amounting to compulsion of the will of the victim and (ii) such pressure is illegitimate.34 Thus, it seems possible that in cases of possible extortion - such as when a debtor pressures a creditor to accept less than what he is owed - the doctrine of economic duress might serve to protect creditors from being strong-armed into exploitative agreements, even if the doctrine of consideration were removed altogether. However, the Court of Appeal’s enthusiasm for economic duress was not necessarily shared by the wider academic community. Goh Yihan35 points out that it is first 30
ibid [102].
31
ibid [106].
32
ibid [117].
33
ibid [107].
34 240.
Tam Tak Chuen v Khairul bin Abdul Rahman [2009] 2 SLR(R)
35 Goh Yihan, ‘Compromising on Consideration in Singapore: Gay Choon Ing v Loh Sze Ti Terence Peter’ (2009) 23(1) CLQ 11.
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