–
[APPEAL AND CROSS APPEAL]
WEST AFRICAN COCOA PRODUCERS AGENCY LIMITED OF NSAWAM
V.
ENGLISH AND SCOTTISH JOINT CO-OPERATIVE WHOLESALE SOCIETY LIMITED OF ACCRA
THE WEST AFRICAN COURT OF APPEAL, HOLDEN AT ACCRA, GOLD COAST
4TH DAY OF MARCH, 1955
W.A.C.A. Appeal No.20/54
2PLR/1955/23 (WACA)
OTHER CITATION(S)
2PLR/1955/23 (WACA)
(1955) XIV WACA PP. 690-695
LEX (1955) – XIV WACA 690-695
–
BEFORE THEIR LORDSHIPS:
FOSTER-SUTTON, P.
COUSSEY, J.A.
HEARNE, J.A.
–
BETWEEN:
CROSS APPEALS
WEST AFRICAN COCOA PRODUCERS AGENCY LIMITED OF NSAWAM — Appellant
AND
ENGLISH AND SCOTTISH JOINT CO-OPERATIVE WHOLESALE SOCIETY LIMITED OF ACCRA — Respondent
–
ORIGINATING COURT(S)
Appeal by the plaintiffs and cross-appeal by the defendants arising from the decision of the Supreme Court of the Gold Coast, Eastern Judicial Division, Accra in suit No. 149/1952
–
REPRESENTATION
Dr. J. B. Danquah — for the Plaintiffs
Akufo Addo — for the Defendants
–
ISSUE(S) FROM THE CAUSE(S) OF ACTION
COMMERCIAL LAW — CONTRACT:– Breach of contract — When a party may treat a contract as at an end — What amounts to repudiations by other party
PRACTICE AND PROCEDURE ISSUE(S)
ACTION:- Proposal to re-open case in order to assess damages
–
CASE SUMMARY
The defendants had agreed to advance moneys to the plaintiffs to buy cocoa with. The plaintiffs sued for damages for breach of contract on the ground that the defendants had refused to make advances when required:-
(a) in regard to 1950-51, because the plaintiffs could not buy as much cocoa as they would otherwise have done as the defendants did not supply when asked the total sum agreed upon; and
(b) in regard to 1951-52, because the plaintiffs could not buy any cocoa at all owing to acts of the defendants amounting to reputation of the contract.
The defendants denied the claims; they also counterclaimed for a sum as cost of preparing and stamping deeds of mortgage on the plaintiffs’ account, but on this there was no adjudication.
On (a): (A minor point was the amount agreed upon; the trial Judge, rightly, found in favour of the defendants.) The major point was whether the defendants had failed to advance £15,000 when asked during the mid-crop season so that the plaintiffs might make advances to farmers. They needed the money mainly in order to give it out before the main season began in mid-September (which the parties agreed was the time it began at the earliest). From the plaintiffs’ pleadings and evidence it appeared that they had received £7,342 by the end of July, 1950, and £15,000 by the end of August: and their managing director said in evidence that he had given advances to his buyers before the main season started. The Judge held that there had been no breach of contract.
On (b) (re the 1951-52 season). On 5th May, 1951, the plaintiffs wrote asking for a mid-crop advance on the 10th, without stating the amount. The defendants wrote on the 8th:
“Advances: We have to inform you that the whole question of advances is receiving the attention of our directors. In the meantime no mid-crop advances will be made.”
The Judge held that this was a categoric refusal of mid-crop advances, and, while it left open the question of future advances, made it impossible for the plaintiffs to tell whether the defendants intended to fulfil their contractual obligations or not; he concluded that it was a repudiation of those obligations entitling the plaintiffs to treat the contract as at an end. He thought that the evidence before him did not enable him to assess the damages and proposed re-opening the case so that the plaintiffs might lead further evidence of the damage suffered.
The main season began in mid-September or early October; some firms began making advances in July, others not till August or even September. There was no evidence on when the mid-crop season began that year; but the defendants’ manager said that on 5th May his impression was that the big firms had not yet started making advances.
In their appeal the plaintiffs complained against the decision on the 1950-51 season, and in regard to the 1951-52 season that the Judge-had not assessed the damages; the defendants complained of the decision against them on the 1951-52 season and that the Judge had not adjudicated on their counterclaim.
–
DECISION(S) OF THE WEST AFRICAN COURT OF APPEAL
Held (dismissing the Appeal of plaintiffs while allowing the cross-appeal of defendants) that:
(1) On the pleadings and evidence it was clear that there was no foundation for the plaintiffs’ complaint that during the mid-crop season of 1950-51 the defendants withheld advances and prevented the plaintiffs from preparing for the main season.
(2) The defendants’ letter of 8th May, 1951, did not evince a determination not to be bound by their contract to make advances either for the main season or the mid-season; advances for t)le mid-season had not begun· in the trade, and the main season was far off. The letter was no more than an intimation that pending their directors’ decision on the whole question of advances the request for an advance on the 10th May would not be met. The plaintiffs were not entitled to treat the contract as at an end, and it was they who in fact determined the contract.
(3) The Judge ought to have adjudicated on the counterclaim of the defendants and given judgment in their favour.
Obiter: It was the plaintiffs’ duty to prove the damages alleged before closing their case; and the decision to re-open the case so that they might prove them was against principle.
Cases cited:-
(1) Rhymney Ry. Co. v. Brecon Ry. Co. (1900), 83 L.R. 111.
(2) Rubel Bronze and Metal Co. Ltd. v. Vos (1918), 1 K.B. 315.
(3) Mersey Steel Co. v. Naylor (1884), 9 App. Gas. 434.
(4) Ratcliffe v. Evans (1892), 2 Q.B. 524.
–
–
MAIN JUDGMENT
The following judgment was delivered:
HEARNE, J.A.
In suit No. 149/1952 of the Supreme Court of the Gold Coast, Eastern Judicial Division, Accra, the plaintiffs sued the defendants for £25,000 damages, alleging breaches of contract by the latter during the 1950-51 and 1951-52 cocoa seasons. The learned trial Judge held that the plaintiffs’ case failed in respect of the alleged breach of contract in 1950-51 and they have appealed. He held, on the other hand, that the defendants committed a breach of their contract with the plaintiffs in 1951-52 though, for reasons which will appear later, he did not assess the damages flowing from the breach-his failure to do so is an additional ground of complaint by the plaintiffs-nor make any finding in regard to the defendants’ counterclaim. The defendants have also appealed.
It is common ground that exhibit “H”, a letter dated the 8th March, 1950, and addressed by the defendants to the plaintiffs, set out the conditions on which the former agreed to supply to the latter moneys on loan, to be secured by mortgages of property approved by the defendants, for the purchase of cocoa by the plaintiffs.
In paragraph 10 of their writ of summons the plaintiffs averred that “the defendants by reason of their refusal to make advances of loan to the plaintiffs for the purchase of cocoa when required and by the withdrawal of the loan from the plaintiffs at a time most needed by the plaintiffs, contrary to the agreement between the defendants and the plaintiffs, have caused the- plaintiffs to suffer considerable damage and loss of business and good will during the seasons of 1950-51 and 1951-52 … “
Counsel agreed at the trial that in respect of the year 1950-51 the claim of the plaintiffs was for “damages for breach of contract suffered by the plaintiffs owing to the plaintiffs being unable to purchase as much cocoa as they would otherwise have done by reason of the defendants’ failure to supply, when required, the total sum agreed to be advanced”; and that in respect of the year 1951-52 the claim of the plaintiffs was for “damages sustained by the plaintiffs’ inability to purchase any cocoa at all owing to acts by the defendants amounting to repudiation of the contract”, I shall deal in the first place with the former.
It is to be noted that while the plaintiffs in paragraph 10 of their writ of summons (supra) merely alleged that the defendants, in breach of contract, had refused “to make advances of loan to the plaintiffs” in the year 1950-51, in their reply to the defendants’ statement of defence, they further alleged that the defendants had wrongfully made deductions “from the amount due to the plaintiffs for cocoa purchases” (paragraph 9). At the hearing of the appeal counsel for the plaintiffs did not address any arguments to us suggesting that the defendants had committed a breach of contract in making certain deductions from moneys due to the plaintiffs, as distinct from refusing to make advances to the plaintiffs. While, therefore, this question does not arise for consideration, it is difficult on the facts to see how the conduct of the defendants in making the deductions which they admittedly did can be regarded as a breach. At the end of September, 1950, the plaintiffs were in debt to the defendants in the sum of nearly £49,000 (exhibit 5). The plaintiffs bad not cleared their “outstanding by the end of the last main crop season”, and in exhibit T2 dated the 20th November, 1950, the defendants proposed to reduce the plaintiffs’ indebtedness by deducting “from the payments (due by the defendants to the plaintiffs) against the plaintiffs’ cocoa declarations”, the sum of £20,000 during the months of December, 1950 and January, 1951. In exhibit T2 the defendants did not propose to stop making advances to the plaintiffs during these two months or at any time, and there is no evidence that they did. On these facts it would appear that counsel for the plaintiffs was well advised to leave the matter alone as he did.
Dealing with the question of whether the defendants had failed to supply the plaintiffs “when required with the total sum agreed to be advanced” the Judge addressed himself to two points. One was whether the total sum agreed to be advanced was £35,000 as the defendants asserted or £37,000 odd as the plaintiffs asserted. The other was whether the defendants had failed to advance moneys when required by the plaintiffs during the mid-crop season. Exhibit H is silent on the subject of mid-crop advances, and the plaintiffs’ managing director agreed that the mortgages, which provide for advances of money “for the purchase of cocoa”, “refer only to the main season”. It was, nevertheless. apparently assumed at the trial that failure on the part of the defendants to provide the plaintiffs with moneys in order to enable them to make advances to farmers during the mid-crop season, would be a breach of contract as distinct from· a mere departure from policy based on a “custom of the trade” as the defendants’ manager regarded it (exhibit 02). For the purpose of this appeal I shall proceed on the assumption made in the Court below.
“As to whether the amount to be advanced was £37,000 odd or £35,000 I am quite satisfied,” the trial Judge said, “that the latter figure is the correct one.” Counsel for the plaintiffs did not seriously argue that that finding of .fact was wrong. In my opinion no good reason has been advanced to indicate why we should disagree with it, while the plaintiffs’ managing director himself stated in evidence that “our net advance was £1,000 in excess of the agreed advance of £35,000.”
On the subject of the advances required by the plaintiffs for the mid-crop season the Judge said “the plaintiffs have led no evidence whatever to prove what amount they required on any particular date to carry out their 1950-51 contract “. I agree with counsel who appeared for the plaintiffs at the hearing of the appeal that in saying this the Judge misdirected himself. While in exhibit L2, dated the 13th May, 1950, the plaintiffs merely indicated that they may require an additional £15,000 (the word “additional” suggests that they had already received some advance for the mid-crop season), in exhibit M2 dated the 26th June, 1950, they specifically asked for “£5,000- more about early July”. In his evidence the plaintiffs’ managing director did not however, apart from tendering M2, refer to the sum of £5,000 for which the plaintiffs had asked in that exhibit. His position was that the plaintiffs “had asked for £15,000 for the mid-season and they (the defendants) agreed to that sum (but) this money came too late”. “We needed this money,” he said, “at the end of June.”
It would follow by implication from this evidence that the £15,000 ”required by the plaintiffs” for the mid-crop season had not been received by the end of June, but there is no direct evidence as to when the money was in fact received, nor can it be inferred from the correspondence. On the 26th July, 1950, the defendants’ manager informed the plaintiffs that the head office had rejected their request for a further mid-crop advance of £5,000 (exhibit 01). The manager, however, had recommended that the decision should be reviewed (exhibit 02) and exhibit P2 dated the 10th August, 1950, clearly indicates that by that date the defendants had agreed to advance, not merely the additional £5,000 asked for in M2, but £15,000 “including the outstanding from last season”. When was the £15,000 which the plaintiffs had admittedly received actually received by them? The truth, as it appears to me, is to be found in the admissions the plaintiffs’ managing director was constrained to make in cross-examination. In paragraph 5 of the plaintiffs’ reply to the defence it was stated that “the outstanding at the end of the 1949-50 season was £5,000”. In cross-examination the managing director agreed that at the end of July, 1950, the indebtedness of the plaintiffs had risen to £12,342, and “by the end of August, 1950, to £20,000”. By the end of July, 1950, the plaintiffs had, therefore, on their own pleadings and own admissions, received £7,342 and by the end of August, 1950, £15,000. The advances which the plaintiffs required in the mid-crop season were required in the main “to have money to give to farmers before the main season begins”. Had the advance of £15,000 been received in time for this purpose? The answer is to be found in the evidence of the plaintiffs’ managing director. “I had given advances,” he said, “to my buyers before the main season started.” In my opinion the claim of the plaintiffs, I quote from paragraph 6 of the writ of summons, that “during the mid-crop season the defendants withheld advances of loan required by the plaintiffs thus preventing them from making requisite preparations for the 1950-51 main season according to custom of the trade” is without foundation, and certainly no damages were proved. The Judge was accordingly right in dismissing the claim based upon an alleged breach of contract in the 1950-51 season.
I now tum to the appeal of the defendants from the Judge’s finding that they had committed a breach of contract in the 1951-52 season. His finding was based on the interpretation he placed on W2, a letter written to the plaintiffs by the defendants in these terms: “Advances. We have to inform you that the whole question of advances is receiving the attention of our directors. In the meantime no mid-crop advances will be made.” It is dated 8th May, 1951.
The Judge held (1) that “W2 categorically refuses mid-season advances” and (2) that while “it leaves open the question of future advances “, the plaintiffs on the receipt of W2 were unable to tell “whether the defendants intended to fulfil their contractual obligations or not”. He then concluded that “W2 amounts to a repudiation by defendants of their contractual obligations, entitling the plaintiffs to treat the contract as at an end”.
With respect to the Judge the plaintiffs were not entitled to treat the contract “as at an end”, merely because they were in doubt, if they were, as to whether the defendants intended to perform their part of the contract. Doubts by one party regarding the intention of the other party do not entitle the former to regard the latter as having abrogated the contract. In the world of business this would lead to utter confusion. On the contrary the law on the subject is that when one party to a contract alleges that the other party to the contract has refused to perform his part of the contract and claims to be entitled to treat it as at an end, he most show that the other party has evinced an absolute and unequivocal intention of renouncing and repudiating the contract or, as it was put in Rhymney Ry. Co. v. Brecon Ry. Co. (1) “an intention no longer to be bound by the contract “.
In Rubel Bronze and Metal Co. Ltd. v. Vos (2), McCardie, J., after referring to “the leading case of Mersey Steel Co. v. Naylor (3)” and other cases, said, “in every case the question of repudiation must depend on the character of the contract, the number and weight of the wrongful acts or assertions, the intention indicated by such acts or words, the deliberation or otherwise with which they are committed or uttered, and on the general circumstances of the case. If the matters alleged to constitute a repudiation are contained in written documents, then it is for the Court to determine whether such documents evince a determination not to be bound by the contract “. Elsewhere in his judgment he said, “a deliberate breach of a single provision of a contract may, under special circumstances, and particularly if the provision be important, amount to a repudiation of the whole bargain “.
In my opinion it is quite impossible to say that the defendants’ letter “evinced a determination not to be bound” by their contract to make advances to the plaintiffs either for the main season or the mid-crop season.
In regard to the former, what were “the general circumstances of the case”? The defendants had not “closed down business” with the plaintiffs at the end of the 1950-51 season as, it was agreed, “they were at liberty to do”. They still held the plaintiffs’ mortgages: “There had been no quarrel” at the close of the 1950-51 season, as the plaintiffs admitted. It appears from the-evidence that the time when advances were made for the main season differed as between different firms, and that at the earliest they were not made before July, though in the case of J. Lyons and Company they were not made till August or September. Can “the intention indicated by the words” used by the defendants on the 8th May, 1951, be that they were not prepared to make any advances at all for the main season which, it was agreed at the hearing .of the appeal, normally starts in mid-September or early October? Clearly, in my opinion, they cannot be given this meaning.
In regard to the latter there is no precise evidence as to when the mid-crop season started in the year 1951-52. The only evidence is that of the manager of the defendants who said that” on 5th May, 1951, my impression was that the big firms had not yet started making advances “. On that date the plaintiffs in exhibit W1 stated that a mid-crop advance, the amount of which was not mentioned, was required by them “on the 10th instant”, and to this letter the defendants replied on the 8th May, 1951 (W2). I am quite unable to agree with the Judge that W2 contained “a categoric refusal to make mid-season advances”. It was no more than an intimation that pending consideration by the directors of the whole question of advances, the local manager was not complying with the plaintiffs’ request for an advance “on the 10th instant”. In my view the plaintiffs themselves determined the contract with the defendants (Y2) and their action was misconceived.
I have said that the Judge did not assess the damages the plaintiffs had suffered in consequence of the breach by the defendants, as found by him, of the contract in 1951-52. The view he took was that on the evidence before him he could not assess the damages, and he proposed to re-open the case in order that the plaintiffs might lead further evidence of the damage they had suffered. In Ratcliffe v. Evans (4) at 532 Bowen, L.J., said, “As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable … To insist upon less would be to relax old and intelligible principles”. It is difficult to appreciate upon what principle the Judge acted when he decided to re-open the case to enable the plaintiffs to prove the damages alleged to have been suffered by them, as they should have done and, in my opinion, had not adequately done before closing their case. But the point is of no importance if the view I have taken that there was no breach of contract in 1951-52 is right.
I have also said that the Judge did not adjudicate upon the counterclaim of the defendants of £73 10s. 0d. This sum represented the cost of preparation and stamps of the deeds of mortgage on the plaintiffs’ account and the defendants are clearly entitled to it.
I would dismiss the appeal of the plaintiffs and allow the appeal of the defendants with costs fixed at £67 4s. 0d. The result of the appeals is that the suit of the plaintiffs must stand dismissed, and that judgment thereon as well as on their counterclaim of £73 10s. 0d. be entered in favour of the defendants with taxed costs.
–
FOSTER-SUTTON, P.
I concur.
–
COUSSEY, J. A.
I concur.
Appeal of plaintiffs dismissed; cross-appeal of defendants allowed.
–