HIGH COURT, SEKONDI
Date: 31 JULY 1975
EDUSEI J
CASES REFERRED TO
(1) Croft v. Lumley (1858) 6 H.L.Cas. 672; 27 LJ.Q.B. 321; 31 L.T. (o.s.) 382; 22 J.P. 639; 4 Jur. (N.S.) 903; 6 W.R. 523; 10 E.R. 1459, H.L.
(2) Clough v. London and North Western Rail. Co. (1871) L.R. 7 Exch. 26; 41 L.J.Ex. 17; 25 L.T. 708; 20 W.R. 189; [1861-73] All E.R. Rep. 646.
(3) Fori v. Ayirebi [1966] G.L.R. 627, S.C.
(4) Lancashire Loans Ltd. v. Black [1934] 1 K.B. 380; 103 L.J.K.B. 129; [1933] All E.R. Rep. 201; 150 L.T. 304, C.A.
(5) Agyemang v. Ayarna [1975] 1 G.L.R. 149.(6) Hesse v. Accra Municipal Council [1964] G.L.R. 399, S.C.(7) Isaacs (M.) & Sons, Ltd. v. Cook [1925] 2 K.B. 391; 94 L.J.K.B. 886; 134 L.T. 286; 41 T.L.R. 647; 69 S.J. 810.
NATURE OF PROCEEDINGS
ACTION for the recovery of the balance of professional fees due and owing by the defendant to the plaintiff. The facts are fully stated in the judgment.
COUNSEL
Plaintiff in person.
Essel for the defendant.
JUDGMENT OF EDUSEI J.
The substance of the plaintiff s claim against the defendant is for the sum of 033,767.50 being the balance of professional fees due and owing by the defendant to the plaintiff. The agreement between the parties was originally verbal and it was made in late 1971 or early 1972. Subsequently the defendant reduced it into writing and it is exhibit A. Generally speaking the plaintiff s claim is founded on exhibit A, which the defendant’s predecessor and his sub-chiefs executed and sent to the Chief Lands Officer, Accra, authorising him to pay ten per cent of the compensation money due to the defendant stool to the plaintiff. A copy of exhibit
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A was sent to the plaintiff. This exhibit A is dated 20 October 1972. The plaintiff s services consisted of negotiating with the Government of Ghana for payment of adequate compensation to the stool of Nsuaem in respect of its lands which had been acquired for a rubber plantation, and also of undertaking legal services in civil litigation connected with Nsuaem stool lands on behalf of the defendant. The Government of Ghana agreed to pay to the stool of Nsuaem a total compensation of 0675,350.50. In compliance with the terms of exhibit A a sum of 033,767.50 representing five per cent of the fee agreed upon was paid to the plaintiff in November 1972, when part payment of the compensation was made to Nsuaem stool. The refusal of the defendant to pay the plaintiff his balance of professional fees provoked this action, when further compensation was made available to the Lands Department, Sekondi, for the defendant.
The defendant has in his amended statement of defence denied liability relying on the facts that the plaintiff had been paid the sum of 03,440.00 as solicitior’s fees by the Ghana Government which was adequate compensation for his services. He had also averred that before exhibit A was executed by his predecessor and his sub-chiefs on 20 October 1972, the plaintiff had been paid the said sum of 03,440.00 by the Government of Ghana in April 1970, and this fact was not disclosed to him, the defendant. Consequently the defendant says he is not liable to the plaintiff s claim, and he lodged a protest with the Lands Department, I think, against further payment out of his stool’s money to the plaintiff as fees. It does seem that the Lands Department decided that payment of professional fees between solicitors and clients in compensation matters would no longer be their concern as before. This was the result of the protest letter of the defendant dated 28 September 1973, which was sent to the Chief Lands Officer, Accra. Indeed the defendant has also counterclaimed for the return of the over-payment made to the plaintiff.
When pleadings closed, summons for directions were as usual taken and the agreed issues set down for hearing. On the day the summons for directions were filed the plaintiff also filed a motion seeking an order of the court to set down for arguments some points of law raised on the pleadings which, in his opinion, would substantially dispose of the case. This application was made under Order 25, rr. 2 and 3 of the High Court (Civil Procedure) Rules, 1954 (L.N. 140A). I must remark that the points set down for legal argument were almost identical with the issues set out in the summons for directions. I think it is necessary to set down the points for legal argument; they are the following:
(1) Whether or not the defendant is not estopped from denying the validity of the agreement between the plaintiff and defendant.
(2) Whether or not the letter dated 19 March 1974, from Dr. Tawiah Ocran written at the instance of the defendant did not affirm the said agreement thereby estopping the defendant from denying its validity.
(3) Whether or not the defendant by his unequivocal acts and conduct affirmed the said agreement after acquiring knowledge of non-disclosure in August 1973, thereby losing his right of rescission or
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avoidance and was thereby estopped from denying the validity of the agreement.
(4) Whether or not the defendant after acquiring knowledge of non-disclosure in August 1973, is not guilty of acquiescence and laches and thereby being estopped from denying the validity of the agreement of 20 October 1972.
(5) Whether or not the defendant’s conduct after August 1973, does not amount to a fraud on the plaintiff and whether the defendant is not estopped by his said conduct from claiming a rescission, revision, avoidance or invalidation of the agreement with the plaintiff.
(6) Whether the defendant’s conduct amounts to a threat to break the agreement with the plaintiff.
(7) Whether, in the alternative, the defendant has not broken his agreement with the plaintiff.
(8) Whether the defendant is not estopped from making his counterclaim.
(9) Whether there was a duty of disclosure on the part of the plaintiff.
(10) Whether or not the plaintiff is not entitled to his claim (a), (b) and (c) as amended.
In order that there must be some clarity of thought about the ruling I am about to give I think I shall take the above points in a certain order. Firstly, I shall deal with issue (9), whether there was a duty of disclosure an the part of the plaintiff. I shall next consider issues (2), (3), (4) and (5) together. Thirdly, I shall consider issue (1), and fourthly I shall concentrate on issues (6) and (7) together and lastly I shall give consideration to issues (8) and (10), also together.
I now come to consider whether or not there was a duty of disclosure on the part of the plaintiff. The pleadings quite clearly show that the sum of 03,440.00 was paid to the plaintiff in April 1970, and the oral agreement parties as to the ten per cent professional fees was entered into in 1971 or early 1972. This was reduced into writing and it is exhibit A. dated 20 October 1972. The relationship the plaintiff and the defendant was that of solicitor and client and a fiduciary relationship therefore existed between them. Here the plaintiff had received the sum of 03,440.00 from the Government of Ghana as a result of work done for the defendant in relation to his stool lands and, though the plaintiff says it was a conventional fee normally paid by government, I think it was only fair that the defendant should have been informed of this fact. It was encumbent on the plaintiff therefore to have made a full disclosure of the material fact about the payment to him of the sum of 03,440.00. I hold therefore that there was a duty on the part of the plaintiff to have disclosed to the defendant that he had received a sum of 03,440.00 before the agreement between them was entered into. This settles issue (9) above.
But what is the result of his failure to disclose? The defendant after knowledge of this fact could either affirm the agreement so that it became binding on both of them, or he might repudiate it and bring an action for rescission. What did the defendant do here? According to exhibit D
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(which must be considered in conjunction with exhibit C, the letter of request from the plaintiff to the defendant) the defendant became aware of the payment of the said sum of 03,440.00 to the plaintiff in August 1973. Armed with this knowledge the defendant on 28 September 1973, protested to the Lands Department about the payment of 033,767.50 to the plaintiff. However, he did not attempt to rescind the contract, and I shall try to examine the pleadings and the exhibits to determine whether the defendant affirmed the agreement or not by any unequivocal acts. On 18 March 1974, the defendant instructed an Accra solicitor, Dr. Tawia Ocran to write to the plaintiff. In that letter (exhibit E) reference was made to the professional fees of ten per cent for the plaintiff and there was a complaint that the plaintiff has requested for additional sums of money before he, the plaintiff, would take up a land dispute that had arisen between the defendant stool and Kokofrey stool. Nothing was said about the 03,440.00 in that letter. The letter, exhibit E, is referred to in paragraph (19) of the reply. The plaintiff replied to exhibit E and denied demanding extra fees but rather said that the sum of 050.00 was required for filing expenses in court. This sum of 050.00 was in fact mentioned in exhibit E. The reply of the plaintiff is exhibit F. In fact the plaintiff filed a writ of summons on behalf of the defendant stool against the Kokofrey stool on 25 March 1974, and this is referred to in paragraph (15) of the statement of claim and is admitted in paragraph (9) of the statement of defence. This is supported by exhibit G, a letter written by the defendant himself to the plaintiff on 18 April 1974, in which he informed the plaintiff that he, through a bearer, had directed service of the writ of summons on the Kokofrey stool. In this exhibit G, the defendant did not say anything about the sum of 03,440.00, nor did he show any indication about repudiation of exhibit A, the agreement. It is interesting to note that the defendant concluded his letter (exhibit G) thus, “I very much count on your usual co-operation and assistance, please,” and the defendant himself signed the said letter.
Again on 3 May 1974, the defendant in his own handwriting sent a letter to the plaintiff, and in this letter (exhibit H) the defendant was referring to some proceedings and a judgment which he collected from the National Archives in Accra concerning a case which, apparently, the plaintiff was handling for the defendant stool. This letter, exhibit H, together with the proceedings and judgment were sent to the plaintiff through the defendant’s own linguist. This letter (exhibit H) the defendant said, “I will call at your office in order to know from you what next I should do. Thanks,” and again the defendant signed it himself. There is nothing stated in this exhibit H about any attempt to repudiate exhibit A or the oral agreement. Exhibit H is referred to in paragraph (20) of the reply.
It is quite evident therefore that the defendant, since he became aware of the non-disclosure of the fact of payment of 03,440.00 to the plaintiff in August 1973, did certain unequivocal acts by letters to the plaintiff which clearly showed that he was affirming the agreement. I am here referring to the exhibits in the form of letters written by the defendant
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himself and his solicitor, Dr. Ocran, to the plaintiff. Thus in Croft v. Lumley (1858) 6 H.L.Cas. 672 at p. 705, Bramwell B. expressed the principle in lucid terms thus:
“The common expression, ‘waiving a forfeiture’, though sufficiently correct for most purposes, is not strictly accurate. When a lessee commits a breach of covenant, on which the lessor has a right of re-entry, he may elect to avoid or not to avoid the lease, and he may do so by deed or by word; if, with notice, he says, under circumstances that bind him, that he will not avoid the lease, or he does an act inconsistent with his avoiding as distraining for rent, (not under the statute of Anne) or demanding subsequent rent, he elects not to avoid the lease; but if he says he will avoid, or does an act inconsistent with its continuance as bringing ejectment he elects to avoid it. In strictness therefore the question in such cases is, has the lessor, having notice of the breach, elected not to avoid the lease? Or has he elected to avoid it? Or he has made no election?”
All this, I think, mutatis mutandis, is applicable to the election not to avoid a contract. In this case the exhibits mentioned above showed an affirmation on the part of the defendant of the oral agreement and exhibit A. The statement just quoted was afterwards textually adopted as a correct enunciation of the law on the estoppel rule in Clough v. London and North Western Rail. Co. [1861-73] All E.R. Rep. 646 at p. 651 where Mellor J. said:
“Consequently, we agree with what seems to be the opinion of all the judges below, that if it can be shown that the London Pianoforte Co., at any time after knowledge of the fraud, either by express words or by unequivocal act affirmed the contract, their election has been determined forever.’
(The emphasis is mine.)
Again, it has been said that:
“Where a party has the right, and is under the duty, to choose between two alternative and mutually inconsistent courses or attitudes, whether in relation to a business transaction, or in litigation, his silence or inaction may be deemed tantamount to a declaration to the opposite party of his intention to adopt, and be bound by, the course or attitude chosen, and to reject the other, by which tacit election he may be estopped from afterwards resorting to the abandoned course or attitude.”
See Spencer Bower and Turner on Estoppel by Representation (2nd ed.), p. 51, para. 62. This is where even silence or inaction may amount to an estoppel but a fortiori, in this case, there were positive acts which indicated that the defendant elected to affirm the agreement, exhibit A. There can be no dispute that the defendant did unequivocal acts by his letters to the plaintiff to indicate that the agreement between them was still subsisting. Having thus affirmed the agreement, the defendant cannot now be heard to say that the agreement, exhibit A, does not bind him. He is estopped by
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his acts and conduct from repudiating the validity of exhibit A. I have thus disposed of issues (1), (2), (3), (4) and (5) supra.
Learned counsel for the defendant has contended in his arguments that, having regard to the relationship the parties, there was undue influence exercised over the defendant when exhibit A was written and executed by the defendant’s predecessor and his sub-chiefs. I do not think that in view of the state of the pleadings and exhibit A itself this plea is sustainable to the benefit of the defendant. Undue influence means any influence by which the exercise of free and deliberate judgment is excluded at a time when some interest or benefit is given to another by someone over whom such influence was exercised. In so far as exhibit A is concerned it was prepared in the Nsuaem chief s house by the stool clerk of Nsuaem. The Ohene of Nsuaem and three of his sub-chiefs signed exhibit A whilst the other sub-chiefs, who were illiterates, made their marks after the contents had been read and interpreted to them in the Twi language by R. B. Sampson, the stool clerk. I refer to the certificate at the back of exhibit A. And this was in conformity with section 4 of the Illiterates’ Protection Ordinance, Cap. 262 (1951 Rev.). The signatories are therefore bound by it: see Fori v. Ayirebi [1966] G.L.R. 627, S.C. A copy of exhibit A was sent to the plaintiff whilst the original went to the Chief Lands Officer, Accra. It cannot be said therefore that exhibit A, ex facie, was executed as a result of pressure exercised by the plaintiff on those who signed it. Even if it was true that exhibit A was the outcome of undue influence, it has not been pleaded. Nowhere in the statement of defence or counterclaim has the defendant pleaded any undue influence and asked that exhibit A be set aside on that ground. Since a contract procured by undue influence is voidable only, it was encumbent on the defendant who relied on this defence to set it out in his pleadings, especially in his counterclaim, with a plea that exhibit A be set aside. The particulars of the alleged undue influence must be given so that the plaintiff becomes aware of the facts constituting the undue influence: see Lancashire Loans Ltd. v. Black [1934] 1 K.B.380, C.A., also Agyemang v. Ayarna [1975] 1 G.L.R. 149. See also Order 19, r. 6 of the High Court (Civil Procedure) Rules, 1954 (L.N. 140A). This has not been done and yet the defendant, since 28 September 1973, when he wrote, or caused a letter to be written, to the Lands Department, has been free to have independent advice from his new solicitors who filed his statement of defence and counterclaim on his instructions. From 28 September 1973, he was a free and independent person.
The subsequent conduct of the defendant who represents the Nsuaem stool in this action manifested an intention to uphold the validity of the said agreement, and his failure to avoid it after the so-called influence had ceased (and this was when the defendant protested to the Chief Lands Officer by his letter of 28 September 1973), made him lose his right of rescission. Indeed he was free to rescind exhibit A, if he so wished but he elected to affirm it. He thus lost his right of rescission. “A contract procured by undue influence is voidable, not void. It cannot be avoided after
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affirmation, expressed or implied.” See Law of Contract by Cheshire and Fifoot (3rd ed.), p. 258.
It is now the turn to consider whether the plaintiff did any work for the defendant to merit his fees. In this regard I refer to paragraphs (15) and (17) of the statement of claim which were admitted by the defendant in paragraph (9) of the statement of defence. Paragraph (15) states:
“On the instructions of the defendant a writ was filed by the plaintiff against the Kokofrey stool on 25 March 1974, in the suit L.S. 6/74 which after pleadings had been settled was on 15 July 1974, referred to the Stool Lands Boundary Commissioner. The defendant was accordingly informed by letter dated 24 July 1974, from the plaintiff.”
And paragraph (17) runs thus:
“Further, following a complaint by the defendant on 22 October 1974, in respect of trespass on Nsuaem lands the plaintiff wrote a letter of warning to the Abura stool on 23 October 1974, and that a copy of the reply of the Obene of Abura dated 11 December 1974, was on the same day sent to the defendant.”
Again in paragraph (8) of the statement of claim the plaintiff averred that “in accordance with the defendant’s instructions the plaintiff finally got the government to agree to pay the defendant a total compensation of 0675,350.00 (six hundred and seventy-five thousand, three hundred and fifty cedis) for the total area of land acquired from the defendant.” This averment in paragraph (8) of the statement of claim which actually indicates the main work the plaintiff was required to do was not specifically denied by the defendant. This paragraph is deemed, therefore, to have been admitted, notwithstanding the general denial that is set out at the end of the statement of defence. See Hesse v. Accra Municipal Council [1964] G.L.R. 399, S.C., where Order 19, rr. 14, 18 and 20 of the High Court (Civil Procedure) Rules, 1954 (L.N. 140A), were applied. It is also averred in paragraph (19) of the statement of claim that:
“Upon further representation by the plaintiff to the Chief Lands Officer, Accra, early this year and as a result of subsequent interviews with relevant officials in the Ministry of Finance, Accra, a further compensation payment was agreed to be made to the defendant. On 31 October 1974, the plaintiff was requested to call at the Lands Department, Accra, in the afternoon to collect a letter covering a treasury draft for an amount of 121,563.00 (one hundred and twenty-one thousand, five hundred and sixty-three cedis) comprising, inter alia, the defendant’s share of 39,509.95 (thirty-nine thousand, five hundred and nine cedis ninety-five pesewas) and the balance of the plaintiff’s fees of 033,767.50 (thirty-three thousand, seven hundred and sixty seven cedis fifty pesewas) to take to the Regional Lands Officer, Sekondi.”
To this averment the defendant’s answer in paragraph (13) was thus: “The defendant is not aware of the averment in paragraph (19) of the statement of claim. What the defendant knows is that the government
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decided to pay the total compensation by instalments and the payment made on or about 31 October 1974, was part of the general instalments.”
In my judgment the answer does not deny what the plaintiff says in his paragraph (19). If the defendant is not aware of the averment in the said paragraph (19) it does not follow that what is contained therein is not correct. Even if it was the government’s decision to pay compensation money in instalments, it was through the efforts of the plaintiff (as asserted in paragraph (19)) that it was paid at the time it was paid — 31 October 1974, and not at a later date. Since there is no denial of the averment in paragraph (19) of the statement of claim, the defendant’s answer being evasive and not answering the points of substance is taken as an admission. The said paragraph shows that the plaintiff performed some work in the compensation matter for the defendant. After all the time for payment of compensation money in such circumstances is very important, and I believe the defendant would wish to receive his monetary compensation as soon as possible and, if he could therefore get a lawyer who would fight out his claim with the government agencies concerned and get it quickly, it would be his undoubted pleasure. These paragraphs(8), (15), (17) and (19) of the statement of claim which are admissions plainly support the plaintiff s case that he performed his side of the bargain and the failure of the defendant to carry out his part by refusing to pay him the balance of the agreed fees constituted a breach of the agreement which was set out in paragraph (9) of the statement of claim but not denied in the statement of defence. This also is an admission. This oral agreement was later reduced into writing and is exhibit A, dated 20 October 1972. It is referred to in paragraph (10) of the statement of claim and paragraph (3) of the statement of defence but the latter is not a denial of paragraph (10). The defendant has not pleaded non est factum. As a matter of fact, Mr. Essel, counsel for the defendant, in his arguments, conceded that his client’s defence to exhibit A was not a plea of non est factum, but he was relying on undue influence. I have dealt with this later defence already. Even if the plea of non est factum were available to the defendant, he had by his subsequent conduct adopted the agreement, exhibit A, as his document and he could not rely on this. He would thus be estopped. It is not surprising that defence counsel said he was not relying on the plea of non est factum.
It is quite plain that the admissions to which I have already referred indicate that the plaintiff has performed his side of the bargain and the failure of the defendant to pay him his second instalment of fees in November 1974, constituted a breach of contract—exhibit A. I refer to paragraphs (22), (23) and (24) of the plaintiff s statement of claim which were not denied. These paragraphs contain the demands made for the payment of the plaintiff s fees and the defendant turned a deaf ear to them. Indeed on 31 October 1974, the Chief Lands Officer, Accra, sent a letter (exhibit J) enclosing a treasury draft No. 5-6179 dated 30 October 1974, for 121,563.00 to the Regional Lands Officer, Sekondi, with a copy of the said letter (exhibit J) to the plaintiff. This sum of money represented the next instalment of compensation for the Nsuaem stool and others. The
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disbursement in exhibit J shows that the plaintiff is entitled to 033,767.50 as legal fees. It is quite clear that the Chief Lands Officer in apportioning this sum for the plaintiff, no doubt, was acting on exhibit A which the defendant sent to him in 1972, but in view of the letter of protest dated 28 September 1973, he could not effect payment direct to him. I have thus considered issues (6) and (7) supra. I wish to say that the plaintiff abandoned his claim (a) leaving claims (b) and (c).
Mr. Essel referred me to the case of Isaacs (M .) & Sons, Ltd. v. Cook [1925] 2 K.B. 391 and contended that the circumstances surrounding the execution of exhibit A and the writing of exhibit J would require evidence to be heard and therefore the case should be allowed to proceed to trial. I accept the principle deducible from the case cited to me—that Order 25, rr. 2 and 3 of the High Court (Civil Procedure) Rules, 1954 (L.N. 140A), should not be adopted in respect of matters where by reason of obscurity either of law or fact, a trial is necessary to determine certain issues at stake. In so far as exhibit J is concerned (the letter from the Lands Department, Accra) it is not so material to the matter in issue. Any decision on that letter does not affect the claim of the plaintiff. It does not help the defendant either. With regard to exhibit A, it is quite clear that a trial will not be of any assistance to the defendant. Even if the circumstances surrounding the execution of exhibit A show that it was procured by undue influence as contended by counsel, it is clear from the pleadings and the exhibits attached thereto (which were not denied) that the defendant after he became a free person affirmed exhibit A, the execution of which was the main bone of contention between the parties. I do not think that any further light will be thrown upon the matters set down for arguments at a trial. There is nothing obscure about the points of law raised, and there is no important fact that requires to be established by evidence.
In my opinion the points of law argued substantially dispose of the case under Order 25, rr. 2 and 3 of L.N. 140A and the plaintiff is entitled to his claim of 33,767.50. However, the defendant is also entitled to the sum of 3,440.00, which the plaintiff holds on his behalf. I would therefore give judgment for the plaintiff against the defendant for 30,327.00 (i.e. 33,767.50 less 3,440.00). I assess the costs at 01,000.00.
In view of what is said in this judgment the defendant’s counterclaim fails and it is dismissed with 500.00 costs.
DECISION
Judgment for the plaintiff.
SO.
