JUDGMENT

Gopal Sri Ram JCA:

[1] This appeal is directed against the order of the High Court entering judgment for the plaintiff (respondent before us) against the defendants (appellants before us) and in dismissing the first defendant's counterclaim. The factual background against which this appeal rests is as follows.

[2] Primakar Sdn Bhd ("Primakar") is an importer and dealer of motor cars. The first defendant which is a private limited company placed an order for a BMW motor car for importation into this country. The order form was signed on the first defendant's behalf by its managing director the second defendant. The first defendant then obtained finance from the plaintiff for the purchase of the car. The plaintiff purchased the car from Primakar and let it to the first defendant pursuant to a hire-purchase agreement entered into between them. The second defendant guaranteed repayment. Later, the car was seized by officers of the Royal Customs for default in the payment of the actual duty payable on the car. The first defendant then defaulted in paying the instalments due under the hire-purchase agreement. The plaintiff brought an action against the defendants to recover the sums due under the hire-purchase agreement. The defendants' defended the action on the principal grounds (i) that the plaintiff had sold a car to which it had no title; (ii) that the seizure of the car frustrated the contract so that the parties' rights should be adjusted in accordance with s. 15(3) of the Civil Law Act 1956. In addition there was a counterclaim for the loss suffered by the seizure of the car. The learned judge found for the plaintiff on both points and, as I have already said, dismissed the counterclaim.

[3] The submissions made in the court below were repeated before us. After careful consideration I am satisfied that the learned judge was right and that this appeal must fail. My reasons are as follows. In the first place, there is no doubt - as found by the judge - that Primakar was acting as the first defendant's agent for the importation of the car. Indeed, cl. 9 of the hire purchase agreement makes it clear that the importer or dealer shall be the first defendant's agent. So, if there was any obligation to ensure that all duties payable on the car to Customs were paid squarely lay on Primakar. Since Primakar failed to pay the duties such failure would bind the first defendant: not the plaintiff. It follows that on a reading of the hire-purchase agreement as a whole, there was no promise by the plaintiff that it would ensure that all duties due would be paid. In the absence of a clearly worded provision in a hire-purchase agreement imposing such an obligation, courts should not do so. For it does not accord with commercial reality that a finance provider in a hire-purchase transaction involving an imported car should be made to undertake such an onerous obligation. Hence cl. 9. The clause warranting title has no application to the facts of this case as the plaintiff did have good title to the car. It was not for want of title that the car was seized. It was seized because duties had not been paid.

[4] With that I now turn to the second point in the case, namely the issue of frustration. Although this caused me some initial anxiety I have, after considering the relevant law, come to the conclusion that the doctrine has no application to the facts of this case. The starting point is s. 57 of the Contracts Act 1950 which provides:

(1) An agreement to do an act impossible in itself is void.

(2) A contract to do an act which, after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

(3) Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, the promisor must make compensation to the promisee f