DARKO AND ANOTHER v. BANK OF WEST AFRICA LTD. [1972] 1 GLR 242
COURT OF APPEAL
Date: 29 NOVEMBER 1971
BEFORE: SIRIBOE AND AZU CRABBE JJ.S.C. AND LASSEY J.A.
CASES REFERRED TO
(1) Neale v. Gordon Lennox [1902] A.C. 465; 71 L.J.K.B. 939; 87 L.T. 341; 66 J.P. 757, H.L.
(2) Hickman v. Berens [1895] 2 Ch. 638; 64 L.J.Ch. 785; 73 L.T. 323, C.A.
(3) Holt v. Jesse (1876) 3 Ch.D. 177; 46 L.J.Ch. 254; 24 W.R. 879.
NATURE OF PROCEEDINGS
APPEAL from a judgment of Apaloo J.S.C., sitting as an additional judge of the High Court, wherein the appellants’ action to set aside two consent judgments was dismissed. The facts are fully set out in the judgment of Siriboe J.S.C.
COUNSEL
Nii Odoi-Annan for the appellants.
Sir Edward Asafu-Adjaye (with him K. F. Asafu-Adjaye) for the respondents.
JUDGMENT OF SIRIBOE J.S.C.
This is an appeal from a judgment of Apaloo J.S.C. (as he then was), sitting as an additional judge of the High Court, Accra, on 9 November 1964. The circumstances leading to the judgment appealed from are briefly stated as follows:
On 11 March 1959 the defendant-bank (hereafter referred to as the respondents), took out two separate writs of summons against the plaintiffs (also referred to for short, as the appellants), a company called Mpotima Ltd. of which the appellants were the managing director and [p.244] of [1972] 1 GLR 242 chairman respectively and some other persons. The two writs serially numbered as suit No. 87/59 and No. 88/59, were specially endorsed for claims made for amounts due in respect of some monetary transactionsbetween the parties. In suit No. 87/59, the sum claimed was £G81,569 14s. Id. and £G11,467 11s. Id. in No. 88/59. In each case, there was interest claimed at the rate of ten per cent from 24 January up to date of judgment.
Apart from an appearance that was entered on behalf of the defendants in those two suits which were
before Smith J. no defence was filed. The reason for this, as explained by Mr. Akufo-Addo whom the
defendants engaged, was that he saw there was no defence to the claims and he so informed them. He was therefore instructed by his clients to negotiate for terms of settlement of the debts by instalments.
In the course of this, it appears hard bargain was struck on both sides. The negotiations, therefore,
dragged on for some time, and at one stage, nearly collapsed, because the respondents were insisting on another condition, requesting the appellants to execute a debenture as additional security for payment, but that was refused.
As a result, Mr. Akufo-Addo said he thought of filing a defence to gain time—but he never did.
Eventually, he managed to get agreement of the solicitors for the respondents, on terms which were
embodied in writing (exhibit 1) and later announced in court before Smith J. for judgment recorded on 22 June 1959. Exhibit 1 and the judgments (exhibit A3) recorded in pursuance thereof, are as follows: “E. Akufo-Addo, M.A. (Oxon.) Kwakwaduam Chambers, Barrister-at-Law P.O. Box 207,
Solicitor of Supreme Court of Ghana Accra, Ghana. 18th June, 1959.
My Reference: AA/B.M/93/59. Your Reference: Messrs Giles Hunt & Co., Solicitors, Thorpe Road,
Accra.
Dear Sir,
Suit No. 88/59
Bank of West Africa Ltd. .. .. .. .. Plaintiffs v. 1. Mpotima Ltd. } 2. E. K. Aboagye } 3. Kwabena Apenteng } .. .. .. .. Defendants4. Rexford Ayeh Darko } 5. Janet Esther Darko } and [p.245] of [1972] 1 GLR 242 Suit No. 87/59 Bank of West Africa Ltd. .. .. .. .. Plaintiffs v. 1. Rexford Ayeh Darko } 2.Kwabena Apenteng } 3. Edward Kofi Aboagye } 4. Mpotima Ltd } .. .. .. .. Defendants
I refer to my interview with your Mr. Hardy and Mr. Pollard on the 16th instant and to my telephonic
conversation with your Mr. Pollard on the 17th instant.
I confirm that the parties by their solicitors have agreed as follows:
1. That judgment be entered for the plaintiff in the two suits for the amounts claimed on the two writs herein. 2. That in respect of suit No. 88/59 the balance due thereon is approximately; £G6,000 and that the defendants will pay £G3,000 to the plaintiffs before the 22nd instant and will pay the balance by the 30th September, 1959. 3. That in respect of suit No. 87/59 the defendants will satisfy the claim by monthly instalments in the following manner, that is to say, the defendants will pay £G1,500 a month beginning from 31 st October 1959 for six months and thereafter the defendants will pay £G3,000 a month until the sum of £G81,569 14s.11d. (subject as hereunder) is fully paid. 4. That the plaintiffs shall be entitled to costs in respect of suit No. 88/59 amounting to plaintiff’s
out-of-pocket expenses plus 75 guineas counsel’s costs and in respect of suit No. 87/59 amounting to
plaintiff’s out-of-pocket expenses plus 150 guineas counsel’s costs. 5. That the above-mentioned terms shall be announced in court on the 22nd instant and shall be entered upon the court’s record to form part of the judgments to be entered herein. 6. That the plaintiffs will give consideration to the defendants’ (in suit No. 87/59) request for a reduction of the bank charges included in the sum claimed.
Yours faithfully,
(Sgd.) E. Akufo-Addo.”
“Exhibit A3 22nd June 1959. In the High Court of Justice, Ghana, Eastern Judicial Division held at V’borg, Accra on Monday the 22nd day of June, 1959, before His Lordship, Mr. Justice H. C. Smith. 87-59. [p.246] of [1972] 1 GLR 242 Bank of West Africa v.
Darko & Others. Pollard for plaintiffs. Akufo-Addo with him Quashie Idun for first, third and fourth defendants. Court: Case settled on terms that judgment be given against first, third and fourth defendants in the sum of £G84,736 7s. 4d. Agreed that settlement will commence on 31 October 1959 — at the rate of £G1,500 per month for the first six months, and thereafter at the rate of £G3,000 a month. Default of any one payment, making the whole sum immediately due and owing. Pollard: Judgment for the plaintiffs against the first third and fourth defendants in the foregoing terms (with
costs—£G21 2s. outlays and 150 guineas counsel). (Sgd.) H. C. Smith Judge 88/59.
Bank of West Africa v. Mpotima & Others Pollard for plaintiffs Quashie Idun for first, second and fourth defendants. Note: The other defendants have not been served. Pollard: Settled on terms—first, second and fourth defendant submit to judgment in the amount of £G5,043 12s. To be paid by 30th September 1959.
Judgment for plaintiffs for £G5,043 12s. against first, second and fourth defendants. Costs (outlays; £G21 3s. and counsel 75 guineas). To be paid by 30/9/59.
(Sgd.) H. C. Smith. Judge.” A few days thereafter, that is after the announcement in court, the first appellant took to Mr. Akufo-Addo, one live sheep in appreciation of his efforts made on their behalf. This was followed later by payment of some part of the amounts adjudged due.
However, on 14 November 1962 something dramatic happened. The appellants, after waiting for almost two years and nine months from the date of the entry of the consent judgments, issued out a writ of summons against the respondents to set aside the said judgments. The grounds alleged in their claims were “deceipt, and/or misrepresentation or collusion and/or without authority of the plaintiffs.” [p.247] of [1972] 1 GLR 242 This was the case that went before Apaloo J.S.C. where the appellants contended that the terms of the settlement were not what they instructed their counsel to bargain for them. Theirs, as they alleged, was for him to get the ledger charges amounting to about £G44,000 or £G47,000 in suit No. 87/59 reduced. In addition, counsel was instructed to secure the release of certain title deeds belonging to the appellants but held by the respondents. They further alleged that in suit No. 88/59, counsel was instructed to submit to judgment in the sum of £G5,043 as the amount then due and owing by Mpotima Ltd. A few other terms were also mentioned, such as that parties should bear their own costs.
Thus, it seems the determination of the case turned on the credibility of the two sides to the dispute—as the learned judge said: “The central point in this case is really a short one which does not admit of a great deal of elaboration. The question which I must eventually answer is: Were the terms embodied in Mr. Akufo-Addo’s letter of 18 June 1959 and subsequently recorded as the judgment in the two suits authorised by the plaintiffs? I answer that question positively in the affirmative and having so answered it, cadit quaestio. There must be an end of this case.” Thereupon, he gave judgment for the respondents with costs of 200 guineas inclusive.
The appeal therefrom to this court has been argued on the following two grounds:
“(1) That the learned judge erred in failing to consider adequately all the surrounding circumstances which tended to affect the weight to be attached to the evidence of the witnesses for the defendants. (2) That having regard to the evidence the judgment cannot be supported.”
Learned counsel’s submissions in support of the above were that there was a definite tilt in favour of Mr. Akufo-Addo and Mr. Quashie-Idun, because the learned trial judge took into consideration their
professional background, whereas there was no evidence before him to justify the considerable weight being attached to their veracity.
With regard to exhibit 1, it was seriously argued that all the six clauses set out therein, were the terms
upon which the appellants instructed their counsel Mr. Akufo-Addo to consent to judgment. Failure to incorporate the sixth clause in the judgment, therefore, they contended, amounts to the fact that Mr. Akufo-Addo did not act according to his instructions, and his clients, the appellants, were thereby not bound by the compromise.
Both Mr. Akufo-Addo and his junior at the time, in the person of Mr. Quashie-Idun, had interest in the case—so argued counsel for the appellants, since, as he put it, if it was held that the two lawyers then acting for the appellants went beyond the scope of their authority, they would be liable in negligence to their clients. In the circumstances, the submissions [p.248] of [1972] 1 GLR 242
continued, the learned judge should have considered that aspect of the case, and not only the impeccable personal background of the two gentlemen.
The evidence that at a certain stage Mr. Akufo-Addo gave written instructions for adjournment to be
obtained with a view to filing a defence, was held to be an admission on his part, contrary to what he had earlier said, that there was no defence to the claims against the appellants.
The cumulative effect of the foregoing submissions is that the appellants are not bound by the
unauthorised acts of their solicitors in the settlements reached, upon which the consent judgments were entered on 22 June 1959.
Of the number of cases cited in support of that contention were these two, mostly stressed by counsel, Neale v. Gordon Lennox (1902) 87 L.T. 341 and Hickman v. Berens (1895) 73 L.T. 323.
Referring to the former, counsel for the respondents drew a distinction between that and the present one by submitting that in the instant case, there was no limitation on the authority of Mr. Akufo-Addo, nor was there communication to the respondents of any limited authority. Consequently, counsel, argued, there was no good ground shown to set aside the judgments.
It seems to me that no one who has had the opportunity of reading the cases cited, together with the
present one, would fail to appreciate dissimilarities between them on matters of importance on which the decisions turned. In Neale v. Gordon Lennox (supra) which was an action for damages for Libel and slander, Neale gave her consent to her counsel for the case to be referred to an independent person, upon certain terms which were embodied in writing signed by her, and handed to her counsel, who failed to proceed on the terms stipulated therein.
Upon the order of the court being made for the reference without a statement by counsel for the defendant withdrawing all imputations as to Neale’s character which was one of the terms upon which she consented to the reference, she on leaving the court, immediately informed her solicitor that she objected to the order without the statement being made. She accordingly requested that the action be restored to the list for trial before a judge and a special jury.
She succeeded before the Lord Chief Justice upon a motion brought to that effect, but on appeal, the Court of Appeal reversed the decision of the Lord Chief Justice. She therefore appealed to the House of Lords, whose decision may be summarised as appearing in the headnote of that case thus:
“Where counsel has authority from his client to agree to a reference upon certain conditions, and he
disregards such limitations and agrees to an order of reference unconditionally, the court will not enforce such order against the wish of the client.”
So that whereas in Neale’s case, the written terms were not acted upon fully, in the present case, they
were. Again, the objection taken by Neale against the terms announced contrary to her written
instructions, was [p.249] of [1972] 1 GLR 242 timeous, unlike the appellants who waited for about two years and nine months after the consent judgments before bringing an action to set them aside.
Even if their version of the evidence that they became aware of the terms of the judgments in May or June 1960 is accepted as the truth, that does not explain the delay up to 14 March 1962 before they sued. To say the least, their conduct in that regard for which they gave no satisfactory explanation, taken together with the presentation of the sheep to Mr. Akufo-Addo, and the payment of some amounts to the respondent in part-satisfaction of the judgment debt, completely demolishes any claims they made in their suits. Properly considered, the inference deducible from their behaviour thus recounted is that the appellants were well aware of the compromise and the judgments, and that their present action is nothing but an afterthought.
Now adverting to the case of Hickman v. Berens (supra) the important difference between that and this case is that at the trial of the former, it became obvious that counsel on both sides to the suit settled on terms entirely different from what each had in mind as having been agreed to by the other. In other words, counsel were not ad idem with regard to the subject-matter of the compromise, each having a different view in his mind as to the meaning of the compromise at the time it was signed. In those circumstances, when the matter went on appeal, the court unanimously held that the compromise ought to be set aside, as not binding on the plaintiff’s counsel, or his client.
The position is not the same in the present case. Here we have the case of counsel, who after being
consulted by clients who placed before him all the relevant facts and circumstances in suits brought
against them, and upon consideration, came to the conclusion that they have no defence and so informed them. He was then instructed by them to negotiate for terms to settle the debts by instalments which he did, and succeeded in getting the agreement of his colleagues for the respondents to those terms embodied in writing to the knowledge of his client, at least, the first appellant, who was alleged to have given the figures of the amounts and so forth. The terms were later announced in court; again it is alleged, in the presence of the first appellant, who, of course, denied this. It seems to me, therefore, that as to the terms, counsel on both sides to this suit, unlike Hickman v. Berens (supra), were ad idem. There was no question of each side thinking it was compromising on terms different from the other. Hickman v. Berens (supra), therefore, does not, in my opinion, help the appellants.
What appears clear on the face of the record is that an attempt was made by the appellants to get rid of the compromise, because, it turned out to be, pecuniarily, very onerous to them. But that, as Rigby L.J. said in Hickman v. Berens (supra) at p. 327: “ought not to be entertained, or, at any rate, it ought not to succeed.” [p.250] of [1972] 1 GLR 242 In my view, the main issue for determination by the learned trial judge was the extent of authority given by the appellants and the other defendant to their counsel in the negotiations for settlement. On that issue, the learned judge preferred the evidence of counsel to that of the clients. He did so, after considering the evidence, both oral and documentary, made available to him at the trial. The result of my consideration of all that, together with the submissions made to us, does not in any way justify me in coming to a conclusion contrary to what he did.
Upon the question of the extent of the authority given by a client to his counsel to compromise a litigation to which the client is a party, it has been held that the court will accept the statement of counsel if made from his place at the bar, without requiring it to be made on oath: Holt v. Jesse (1876) 3 Ch.D. 177, approved of in Hickman v. Berens (supra).
Thus, there appears to be a stronger point in the instant case, where the evidence relating to the extent of counsel’s authority to negotiate was not only given on oath by him, but was also subjected to rigorous cross-examination on behalf of the appellants. Its acceptance by the learned judge cannot, in the circumstances, be said to be based merely on the impeccable or professional background of counsel who gave that evidence which, in substance, was the argument for the appellants. Before concluding this judgment, it is perhaps necessary to say something briefly about the sixth clause in exhibit 1 about which so much capital has been made by the appellants. Mr. Akufo-Addo’s evidence on this states: “The bank [i.e., the respondents] finally agreed that if the plaintiffs carried out faithfully the terms agreed upon and announced in court, they would consider reducing the ledger fees. It was not part of the terms to be announced.”
An examination of exhibit 1 shows that the agreed terms to be announced stopped at clause 5. Clause 6, therefore, as explained by Mr. Akufo-Addo, means no more than that the consideration to reduce the ledger fees, would depend upon the appellants fulfilling their obligations on the terms agreed upon, that is to say, by paying something substantial towards their indebtedness. That does not constitute part of the compromise.
Then on the question of the release of certain documents the appellants’ own first witness, Mr. da Rocha, had this to say. He was consulted by the appellants some time towards the end of 1959 to request the respondents to return to them certain documents of title held by the respondents. He called for photostat copies and upon perusal, advised the appellants that he did not think they were entitled to recover them, as it appeared the guarantee the appellants gave to the respondents was a continuing one.
That was precisely the advice Mr. Akufo-Addo said he gave to the appellants who went to see him some time after the compromise judgment and part-payment of the debt. He accordingly suggested that they should [p.251] of [1972] 1 GLR 242 take another opinion, and it seems Mr. da Rocha was the one they consulted. That also cannot, be said to form part of the compromise as Mr. Akufo-Addo said.
For the reasons given, I am of the opinion that this appeal fails and is accordingly dismissed with costs of N¢133.00 for the respondents.
JUDGMENT OF AZU CRABBE J.S.C.
I agree.
JUDGMENT OF LASSEY J.A.
I also agree.
DECISION
Appeal dismissed.
S. A. B.
