COURT OF APPEAL, ACCRA
Date: 20 JANUARY 1975
APALOO ANIN AND KINGSLEY-NYINAH JJ A
CASES REFERRED TO
(1) Bromley v. Jefferies (1700) 2 Vern. 415; 1 Eq.Cas.Abr. 18; Prec.Ch. 138; Freem.Ch. 245; 23 E.R. 867.
(2) Douglas v. Baynes [1908] A.C. 477; 78 L.J.P.C. 13; 99 L.T. 599; 24 T.L.R. 896, P C.
(3) Short v. Morris (1958) 3 W.A.L.R. 339.
(4) Maddison v. Alderson (1883) 8 App.Cas. 467; 52 L.J.Q.B. 737; 49 L.T. 303; 31 W.R. 820; 47 J.P. 821, H.L.
NATURE OF PROCEEDINGS
APPEAL from a judgment of the High Court (Anterkyi J.) decreeing specific performance of a sale of land to the plaintiff by the defendant. The facts are set out in the judgment.
COUNSEL
J. K. Agyemang for the appellant.
No appearance for the respondent.
JUDGMENT OF ANIN J.A.
Anin J.A. delivered the judgment of the court. On 2 December 1974, we allowed this appeal from the judgment of Anterkyi J. sitting at the High Court, Accra, dated 27 July 1970, and reserved our reasons. We now give these reasons.
By his writ of summons, the plaintiff (the respondent herein) claimed against the defendant (the appellant herein):
“(a) an order for the specific performance of a ‘partly-performed’ agreement for the sale by the defendant of his plot of land at Adabraka measuring 120 feet by 60 feet for the sum of 02,000; alternatively
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(b) the sum of 0100 being part payment of purchase price;
(c) damages;
(d) an order of injunction restraining the defendant from selling the said plot of land to any [other] person or carrying on any building operations thereon.”
The plaintiff s case as appearing in the statement of claim is that in 1964 the defendant offered to sell to him his plot of land at Adabraka for the sum of 02,000. He, the plaintiff, accepted the defendant’s offer and agreed to buy the plot for the said sum. Pursuant to the said agreement he paid the sum of 0100 as part-payment of the purchase price to the defendant in December 1964. The balance of 01,900 was due and payable “upon the execution of the necessary documents of conveyance by the defendant to the plaintiff.”
Up to the date of the action (26 November 1968) the defendant had failed, not only to execute the deed of conveyance, but also to collect the balance of the purchase price from the plaintiff. By a letter dated December 1967, the defendant stated that upon the advice of his children, he had decided to call off the proposed sale of his plot. Thereafter the defendant commenced building operations on the plot in breach of the alleged contract of sale.
In his statement of defence, the defendant denied having sold his plot of land to the plaintiff. He disclosed that negotiations for the sale of his land, which were started in 1964, were never completed owing to “unnecessary delay, by the plaintiff.” The purchase price had neither been agreed upon nor been paid. He had received the sum of 0100 as financial help at the start of the negotiations in 1964; and he had “promised to deduct this amount from the price to be agreed upon when the proposed sale materialised.” Not having sold his plot, he claimed to be entitled to use it as he pleased.
The main issues agreed upon by the parties in the summons for directions and set down for trial were, first, whether or not there was a valid contract for the sale of land between them; and secondly whether or not the price for the land was agreed upon by the parties.
In his evidence-in-chief, the plaintiff completely departed from his pleadings in at least one material respect, namely, the issue of an agreed purchase price. He testified as follows:
“In 1964 I happened to see the defendant at Adabraka and I did enter into a transaction with him it was one relating to purchase of land at Adabraka . . . I was the purchaser and he was the vendor in this transaction. We did not agree upon any amount but he said I should give him an advance of £G50 or £G100 and I paid to him £G50 and the defendant gave me a receipt for it (exhibit A) . . . I told the defendant that he had been selling land to other people at high purchase prices, and so in my case he should consider the price at which he would sell the land to me, and if I found it moderate I would pay. I was prepared to buy the land at £G300 if he would offer it for that price. We did not
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agree upon the price; I told him that he should write to me later about the price at which he was offering the land for sale. The defendant left but failed to write to me at all, save that he wrote to me saying that his children and the rest of his family had advised him not to sell the land any more.”
(The emphasis is mine.)
Under cross-examination, the plaintiff reiterated that he did not agree upon the purchase price with the defendant. He further stated that “the defendant had intended to sell the plot to other people for N01,500, but I did not conclude that the defendant was going to sell it to me at that price.” Nevertheless he insisted that there was a valid agreement for the sale of that land in respect of which specific performance ought to be decreed in his favour. After tendering three documents, including exhibit A (a temporary receipt for £G50) the plaintiff closed his case.
In his evidence, the defendant admitted having in 1964 discussed the possibility of selling one of his plots to the plaintiff, but denied reaching any agreement on the purchase price with him after waiting vainly for three years. He denied that the sum of £G50, which he took from the plaintiff in 1964 and for which he issued a temporary receipt (exhibit A), represented part payment of an agreed purchase price. It was a financial assistance which was given to him at his request, and was to be refunded later, as and when the purchase price of the plot had been agreed upon. As he explained under cross-examination:
“I was to refund the £G50 stated on exhibit A to the plaintiff if we later agreed upon the price of the land and he paid me the price. I deny that this £G50 was a deposit for the price of the land; if it were so I would have stated on exhibit A the balance of the purchase price.”
Faced with this kind of evidence, the learned trial judge surprisingly found that there was a binding contract of sale between the parties and proceeded to enter judgment for the plaintiff by decreeing specific performance and injunction in his favour.
In this appeal learned counsel for the defendant-appellant invited us to set aside the judgment appealed from on the main ground that the learned trial judge erred in decreeing specific performance since there was no valid and binding contract between the parties. We entirely agree that the evidence did not disclose a valid or binding contract of sale between the parties; and that the learned trial judge clearly erred in holding otherwise.
In the first place, the evidence highlighted above shows as clearly as can be that the parties did not agree upon the purchase price of the res vendita, if we may assume for the moment the existence of an offer to sell a particular plot of land. From the plaintiff s own testimony, it is apparent that no agreement was reached about the purchase price. Unfortunately, in his review of the evidence, the learned judge erroneously held that in cross-examination the defendant stated that “he had agreed on the
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price as being £G1,000.” The record of proceedings, in fact, attributes the opposite answer to the defendant: “I deny that the plaintiff being a friend of mine I discussed with him and agreed upon the price of the land as £G1,000.” From the whole of the evidence, it is abundantly clear that both parties denied categorically and unambiguously that any purchase price was agreed upon.
The price is a material term in every contract of sale; and unless the price is ascertained by the contract or machinery is provided for its ascertainment, the contract is incomplete and cannot be enforced. Thus in the old case of Bromley v. Jefferies (1700) 2 Vern. 415, where a vendor agreed to sell to a purchaser for a sum less by so much than any other purchaser would give, it was held that there was no contract capable of enforcement, since the price was neither ascertained nor ascertainable. And in the leading case of Douglas v. Baynes [1908] A.C. 477, P.C., specific performance was refused of a contract between the plaintiff and the defendant, by which the latter agreed to transfer to the former a farm in Transvaal on which deposits of tin ore had been found in consideration of 3,700 shares of £5 each in a syndicate to be formed for the “purpose of developing” the same as mining property, the 3,700 shares to represent the plaintiff s holding in a syndicate of 12,000 shares. The ratio decidendi was that the price to be paid by the plaintiff was wholly uncertain. It was to consist of shares in a syndicate whose purpose of development there was no evidence to define, either as to the nature and extent of the operations contemplated or as to what the parties meant by it, the value of the shares depending upon the adequacy of working capital which was neither ascertained nor ascertainable: see [1908] A.C. 477 at p. 485, P.C.
A similar conclusion was reached in the local High Court case of Short v. Morris (1958) 3 W.A.L.R. 339, where specific performance was not decreed of an agreement which was complete save as to price. In that case, which is on all fours with the present one, the plaintiff, a Cape Coast legal practitioner sought specific performance of an agreement relating to the sale of land. He adduced in evidence a document signed by the defendant and another in the following terms (see p. 341 of the report):
“We the undersigned, G. B. Arthur-Johnson and Winnefred Arthur-Johnson alias Mrs. Morris hereby acknowledge receipt of the sum of £97 (ninety-seven pounds) by way of advance on the purchase-price of out joint property at J. P. Brown Street which we have agreed to sell to him after agreement on the purchase price which Mr. J. B. Short has put at £G850 as against our demand for the sum of £1,000.”
It appeared in evidence that the plaintiff subsequently offered, orally to pay the £1,000 demanded by the defendant but this was refused by the latter. It was held by Adumua-Bossman J. (as he then was) inter alia (a) that on the evidence, including that of the above-quoted memorandum, no complete agreement was ever reached between the parties, and that there
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was thus nothing that could be enforced by the court: (b) that the memorandum did not evidence a concluded agreement to sell even at a price to be ascertained, and the parties could not in fact agree on a price; (c) that even if agreement had ultimately been reached between the plaintiff and defendant as to price, this was not disclosed by the memorandum, which to satisfy the requirements of the Statute of Frauds, 1677 (29 Cha. 2, c. 3), s. 4, must disclose all material terms of the agreement.
Incidentally, in the instant case, quite apart from the failure of the parties to reach agreement as to price, the alleged agreement for the sale of land was not in writing, neither was there a memorandum or note thereof in writing as is required by section 11 of the Contracts Act, 1960 (Act 25), and see in this connection section 19 and the Schedule to Act 25, which continued in being section 4 of the Statute of Frauds, 1677, in so far as it relates to any contract for sale of lands, and makes such a contract for sale of land void or unenforceable if it is not in writing or there is no memorandum or note thereof in writing. The only material document tendered by the plaintiff was exhibit A, the temporary receipt, which was in the following terms:
“Temporal [sic.] Receipt
Receipt from Mr. S. K. Antwi [i.e. the plaintiff herein] the sum of fifty pounds (£50) being part payment of the cost of plot 120 ft. x 60 ft. to be sold to him.
(Sgd.). J. G. Asare [i.e. the defendant herein]
1 December 1964.”
(The emphasis is mine). Exhibit A failed to state the purchase price, which is a material term of the alleged contract of sale of land, and which ought accordingly to have been disclosed therein, in order to satisfy the requirements of the Statute of Frauds, s. 4, as preserved in its limited scope by section 19 and the Schedule to Act 25. It would also be noticed that the words in italics in exhibit A (“plot . . . to be sold”) show clearly that at the date of the document there had been no completed sale of the plot of land. Neither did the rest of the evidence on record disclose the subsequent conclusion of the alleged contract of sale. In the event, the plaintiff s, claim ought to have been dismissed on the simple ground that the court cannot decree specific performance of an inchoate agreement; and that, where it is sought to enforce such a decree, the court must be satisfied inter alia that there is a concluded contract in fact which is neither uncertain nor vague.
The plaintiff s claim ought also to have been dismissed on the further ground of uncertainty of the subject-matter. The evidence shows glaringly that the parties were not ad idem about the subject-matter of their inchoate agreement of sale. The defendant apparently owned several plots of land at Adabraka, some of which he had sold to interested parties at prices regarded by his friend, the plaintiff, as exorbitant. The latter expressed interest in acquiring one of these plots from him provided the price was right. Despite overtures of friendship, exchange of visits, and amiable
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discussions between the parties over a period of three years, no definite offer to sell a particular plot of land, whether described by metes and bounds, or otherwise made identifiable, was in fact made by the defendant to the plaintiff. Both parties appear to have assumed that once agreement was reached on a fair purchase price, one of the defendant’s vacant Adabraka plots would be released for sale. The evidence reveals a curious situation where the parties attempted to negotiate the price first before turning their attention to the identity of the plot— a classic case of putting the cart before the horse! According to the defendant landowner, “the plaintiff told me he would like to buy one of my plots… I agreed to sell to him a plot, but we did not agree upon any price… until 12 December 1967 when I wrote him a letter (exhibit C) calling off the negotiations.” It is true the present litigation was sparked off when the defendant landowner started building operations on his land (unidentified in the evidence of both parties) and the plaintiff challenged the defendant’s right to deposit building materials on land over which he, the plaintiff, claimed to have previously exercised such acts of ownership as weeding and the erection of a kiosk thereon. Nevertheless the evidence about the identity of the subject-matter of their alleged agreement of sale was conspicuous for its absence. The documents tendered by the plaintiff in support of his case (exhibits A, B, C) contained such vague and nebulous references as “plot 120 ft. x 60 ft. to be sold” (exhibit A); “I do not know whether you have hinted someone about the plot” (exhibit B); and “my sons called me before some elderly man to reconsider my decision of selling my plot” (exhibit C). Nowhere in the evidence of either side is a description given of a particular plot as being the subject-matter of the alleged contract of sale. The rule is that the court does not decree specific performance of an agreement unless its terms are certain and unambiguous so that the obligations of the parties are clearly ascertained: see Douglas v. Baynes (supra).
From the foregoing analysis, it is apparent that the parties to this action merely entered into negotiations for the sale of an undefined plot of land which did not however mature into a binding, concluded or definite contract. The evidence does not disclose that they were ad idem about either the price or even the subject-matter. No firm offer of a selling price was made by the defendant, which was capable of acceptance by the plaintiff. The latter simply invited the defendant landowner to suggest a moderate price for the sale of his land; that is, he extended to him an invitation to treat; but no firm offer was forthcoming from the landowner after a lapse of three years. On the state of the evidence as summarised above, it cannot be said that the defendant made a legal “offer” in the sense that he expressed a willingness to agree to sell an identified or identifiable plot of land to the plaintiff-respondent at a fixed price with the intention that his offer shall become binding as soon as it was accepted by the offeree. In the circumstances, we hold that there was no concluded contract capable of being enforced by a decree of specific performance and that the learned trial judge erred in holding otherwise.
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The learned judge again fell into error when he held that “it must be that the receipt by the defendant of the amount of £G50 in exhibit A must have been in relation to a particular plot the defendant intended to sell to Asare for £G1,000, and it must be deemed to be the subject of this suit “ There is no justification from the evidence either oral or documentary for this deduction which, with respect, is unfounded and illogical. The express words of exhibit A do not warrant such a far-fetched conclusion. Besides, the evidence discloses no nexus between the defendant’s alleged transaction with one Asare and the abortive negotiations between the parties herein. The defendant’s alleged transaction with Asare is res inter alios acta, and is totally irrelevant to the alleged contract of sale in issue between the parties herein.
Furthermore, it was patently wrong for the learned judge to hold, in the teeth of evidence to the contrary, that “it is clear from the evidence that the defendant upon exhibit A had agreed to sell a plot of land to the plaintiff.” The plaintiff himself in his evidence-in-chief stated that there was no agreement as to price and that he “was prepared to buy the land at £G300 if the defendant would offer it for that price.” (The emphasis is mine.) There was not a tittle of evidence to show that any particular plot of land was in fact offered to the plaintiff for either the sum of £G300 contemplated by him or for the sum of £G1,000 (or 02,000) pleaded in both the writ of summons and the statement of claim.
It is well established that the payment of a part of the purchase money is not sufficient part performance of a contract for the sale of land, since “the payment of money is an equivocal act, not (in itself), until the connection is established by parol testimony, indicative of a contract concerning land”: see per the Earl of Selborne L.C. in Maddison v. Alderson (1883) 8 App.Cas. 467 at p. 479, H.L. Consequently, it cannot be deduced from exhibit A (temporary receipt for £G50 paid by the plaintiff), without more, that the payment of £G50 was made as part performance of a concluded contract of sale of land. The plain language of exhibit A does not even warrant such a construction; neither is the act of paying the sum of money exclusively referable to the alleged “partly performed” contract set up by the plaintiff.
It only remains now to dispose of another serious error in the judgment. In the course of his judgment, Anterkyi J. observed that,
“the parties being Ghanaians, intended the contemplated sale and purchase to be controlled by the customary law either by the Ga custom of purchase—from the point of view of the plaintiff or by the Akan custom of sale from that of the defendant or by the Ga custom only upon the undenied fact that the land is situate at Accra.”
We would first comment that the learned judge was at this juncture departing completely from the pleadings, the issues settled in the summons for directions and the evidence adduced; and was constructing a new and inconsistent case for the parties. The action was based squarely on the well-known equitable doctrine of specific performance. Neither the
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pleadings nor the evidence in this case evinced any intention on the part of the parties that their transaction should be determined according to any system of customary law, be it Akan or Ga. On the contrary, the plaintiff clearly sought inter alia the equitable reliefs of specific performance and injunction and pleaded part performance and the defendant’s persistent failure to execute a deed of conveyance. Both the pleadings and evidence leave us in no doubt whatsoever that the parties intended that their transaction—such as it was—should be regulated by the common law and equity and not by the customary law of sale.
In any event, the statutory rule quoted by the learned judge in support of his dictum, namely, paragraph 64 (1), r. 2 of the Courts Decree, 1966 (N.L.C.D. 84) (now repealed and replaced by the more elaborate rules contained in section 49 of the Courts Act, 1971 (Act 372)), enacted that:
“Subject to Rule 1, where an issue arises out of a transaction the parties to which have agreed, or may from the form or nature of the transaction be taken to have agreed, that such an issue should be determined according to the common law or any system of customary law effect should be given to the agreement.”
In other words, the rule provides that (subject to rule 1) the parties to a transaction are free to regulate either the whole or part of their transaction by either the common law or customary law, and that the court should give due effect to their agreement (if any) to regulate their transaction by either the common law or customary law as the pleadings and evidence in a particular case may indicate. The evidence and pleadings in this case overwhelmingly pointed to the common law as the mutually intended determinant system of law for the transaction; and it is our considered opinion that the learned judge erred in holding otherwise.
Under our customary law of sale of land, the following essential elements must be established: (1) competent contracting parties; (2) mutual assent of such parties; (3) the marking out or inspection of the land and its boundaries, and if necessary the planting of boundary trees or fixing of boundary marks; (4) valuable consideration; and (5) the payment of trama (earnest money) to the vendor—see Sarbah’s Fanti Customary Laws (2nd ed.), pp. 86-87. On the facts of this case, it is clear that the second, third, fourth and fifth ingredients of a valid customary sale of land were all absent. In the event, the learned judge erred in holding that there was such a valid customary sale of land.
It was for the above reasons that we allowed the appeal herein.
DECISION
Appeal allowed.
J. D.
