DIVISION: IN THE HIGH COURT, ACCRA
DATE: 22ND MARCH, 1963
BEFORE: PREMPEH J.
NATURE OF PROCEEDINGS
ACTION for account and injunction based on a breach of contract.
COUNSEL
G. Koranteng-Addow for the plaintiffs.
E. N. Moore for the defendants.
JUDGMENT OF PREMPEH J.
In this suit the plaintiffs by their amended writ claim against the defendants for: (a) An account of all the
fish sold by the defendants from the catch made by the fishing vessel the Tito Gualdi on the 9th and 15th
November, 1962; (b) An order upon the defendants for payment to the plaintiffs of the proceeds realised
from the said sale; (c) A perpetual injunction restraining the defendants and their servants and agents from
selling any further catches made by the said fishing vessel; and (d) A perpetual injunction restraining the
defendants and their servants and agents from interfering in any way with the vessel during subsistence of
the agreement of the 29th December, 1961. And in the alternative, the plaintiffs claim £G35,000 by way
of damages for breach of contract. By their statement of claim, the plaintiffs aver that by agreement dated the 29th December, 1961, the defendants agreed to sell to them a fishing vessel, the Tito Gualdi, upon the terms and conditions therein
contained, and that on the 17th July, 1962, the said vessel arrived in Ghana and the plaintiffs started
business with it. They plead that by the said agreement, possession of the said vessel was given to them
and that they became responsible for the wages of the Italian captain and crew thereof and for their
accommodation and also the upkeep of the said
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vessel. They aver that in pursuance of the said agreement, they paid to the defendants various sums of
money totalling over £G10,603 14s. 3d. towards the purchase price of the vessel, the wages of the crew
and repairs and other incidental expenses for the running of the vessel. They maintain that in breach of the
said agreement, the defendants wrongfully sold and appropriated to themselves all the catch made by the
vessel on the 9th and 15th November, 1962, respectively, that the defendants had threatened to sell and to
appropriate to themselves further catches, and that in further breach of the said agreement, the defendants
had threatened to take away the said fishing vessel from Ghana. It is for these reasons that these
proceedings have been instituted.
By their statement of defence, the defendants deny that by the terms of the said agreement of the 29th
December, 1961, the plaintiffs were to have possession and/or control of the vessel, and they deny further
that the plaintiffs have made any payments towards the purchase price thereof. They aver that the
plaintiffs have paid to them in all the sum of £G5,617 but that amount represented the price of some
quantity of fish sold to them and also advances made by the plaintiffs towards wages for the crew under a
previous agreement of the 4th December, 1961. They plead that in respect of this payment, they have
given credit to the plaintiffs as shown in a statement of account annexed to the statement of defence, and
they claim that the plaintiffs are still indebted to them in the sum of £G5,786 being balance due for fish
supplied to them. They admit that the vessel made catches on the 9th and 15th November, 1962, and that
they sold them, but aver they did so upon the express request of the plaintiffs.
Consequently, they deny the alleged wrongful sale of the fish and they further deny the alleged threat to
take the fishing boat away from Ghana. They claim that the only agreement which regulated the disposal
of the fish caught by the vessel—the Tito Gualdi—was that of the 4th December, 1961, since the one
dated the 29th December, 1961, had been repudiated and was no longer in force; and they claim further
that since the plaintiffs had failed to fulfil their obligations under the agreement of the 4th December,
1961, they were not accountable to the plaintiffs. And by way of counter-claim, the defendants also claim
from the plaintiffs the sum of £G5,786 being balance due to them under the terms of the agreement of the
4th December, 1961, and also the sum of £G300 per day for each day during which the said vessel
became unable to carry out fishing operations by reason of the action of the plaintiffs.
On the pleadings, the issues that are raised for determination are: (a) Which of the two agreements at all
material times subsisted between the parties and governed the business transactions between them—was it
the one of the 4th December, 1961 or the one of the 29th December, 1961; (b) Whether or not it is the
defendants who committed a breach of the agreement between the parties or whether it is the plaintiffs.
In order that the case put forward by the parties may be clearly comprehended, I think it is important to
set out the following facts before proceeding to consider the evidence and the law appertaining to the
case.
[p.317] of [1963] 1 GLR 314
On the 4th December, 1961, the plaintiffs and the defendants entered into a written agreement in which the defendants as owners of the fishing vessel known as the Tito Gualdi are therein termed the lenders and the plaintiffs as the borrowers. That document was admitted in evidence and marked exhibit A, and for the purpose of this judgment I shall hereafter refer to it as exhibit A.
I must say at the outset that I am unable to understand why that agreement was designated a lenders and
borrowers agreement because I can find nothing in it which places the plaintiffs in the category of
borrowers. On the contrary, in accordance with its terms, the defendants as owners were to run their
crew, pay for fuel and oil and other incidental expenses—save that they were bound to sell all their fish
catches exclusively to the plaintiffs. Howbeit, whether given the accurate term or not, what I have
indicated above stands out as the real purport of that agreement. I do not consider it necessary at this
stage to set out in detail the 24 clauses that it contains, but I may refer to them or any of them as and when
they become necessary in dealing with the evidence.
On the 29th December, 1961, the plaintiffs and defendants executed another agreement of quite a
different character. This one was for the purchase by the plaintiffs of the defendants’ said vessel, the Tito
Gualdi, and the plaintiffs are therein referred to as the purchasers and the defendants as the vendors. This
document was also admitted in evidence and marked exhibit B, and I shall hereafter also refer to it as
exhibit B. It is the case of the plaintiffs that this document exhibit B nullified the effect of exhibit A, and
that it is the agreement by which the parties were bound, and which regulated their subsequent business
transactions. I think it is convenient at this stage to deal with the point whether upon the execution of
exhibit B, exhibit A ceased to be of any effect.
It is a general rule of law that one of the modes in which an existing contract may be discharged is by the
same process and in the same form as that in which it was made, that is by mutual consent of the parties.
As Baron Parke said in Foster v. Dawber,1 “It is competent for both parties to an executory contract, by
mutual agreement, without any satisfaction, to discharge the obligation of that contract.” See also Goss v.
Lord Nugent 2 and Morris v. Baron & Co.3 But as was held in British & Beningtons Ltd. v. N. W. Cachar
Tea Co., Ltd.4 the intention to discharge the first contract must be clear and not be an intention merely to
vary the terms of the original contract.
In the instant case, exhibit B the agreement of the 29th December, 1961, bears a different character from
and is inconsistent with exhibit A: the obligations of the parties in each case are quite different. In my
view, it is manifestly clear that exhibit B operated as a complete extinction of the first contract exhibit A.
Now it transpired from the evidence that after
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exhibit A had been executed but before exhibit B had been executed, the defendants addressed a letter to
the plaintiffs. The original letter was not produced nor the duplicate (if there was any), but the defendants
tendered in evidence marked exhibit 1 the plaintiffs’ reply to that letter dated the 26th January, 1962, in
which reference was made to the defendants’ letter to them dated the 16th December, 1961. The contents
of exhibit 1 is a clarification by the plaintiffs of clauses 3, 5 and 6 of exhibit A.
It appears rather startling that the plaintiffs should have written exhibit 1 as they did, and that they further
discussed the terms of exhibit A after the execution of exhibit B – which for all purposes had nullified the
effect of exhibit A. The question may be asked: If exhibit A had been determined by virtue of exhibit B,
what effect can exhibit 1 have on exhibit B? My researches have not helped me, and no authority has
been cited to me that where a contract has been discharged and rendered nugatory by the effect of another
contract between the same parties – a subsequent reference by one of the parties to the terms of the
previously discharged contract can operate as such to abrogate or destroy the effect of the later contract.
I have already dealt with the point that an existing contract can only be discharged by mutual agreement and expressly by the parties by another contract or agreement in which a clear intention to discharge the
said previous contract is shown and it seems to me that if the defendants’ letter of the 16th December,
1961, had been written sometime after the execution of exhibit B, the position may have been otherwise;
but even so that would have depended upon the construction of both that document and exhibit 1 –
whether both taken together could mean mutual consent to rescind exhibit B. It follows therefore that I
am unable to accept the submission of counsel that by reason of exhibit 1 the parties must be taken to
have agreed that their subsequent business transactions should be regulated by exhibit A.
Now on the 3rd May, 1962, the plaintiffs wrote another letter to the defendants marked exhibit 2 in which
they shortly stated, “This is to state that the Fish & Meat Company Limited, Accra, Ghana – have no
desire to buy the boat the Tito Gualdi. Awaiting for your early arrival. Thank you.” It has not been
disputed in any way that exhibit 2 is an agreement of sale, but what has been again contended is that by
exhibit 2 the plaintiffs had virtually repudiated the said contract of sale, and that the only contract that
was then left open to the parties and which in fact governed their later transactions was exhibit A; but
whatever the force of that argument, I shall proceed now to deal with the law appertaining to the effect of
exhibit 2 on the contract.
There is no doubt that by exhibit 2—the plaintiffs had expressed a clear intention to renounce the contract
of sale—that is exhibit B—but it is a well settled principle of law that the renunciation of a contract by
one of the parties before the time for performance has come does not of itself put an end to the
contract—for there must be two parties to a rescission; but it discharges the other if he so chooses, and
entitles him
[p.319] of [1963] 1 GLR 314
at once to sue for a breach. The other party if he pleases may refuse to accept the renunciation, and may
treat the notice of intention as inoperative in which case the contract remains in existence for the benefit
and at the risk of the parties. See Hochster v. De la Tour 5 and also Johnstone v. Milling.6
This is what appears to have happened in the instant case. Although the plaintiffs had clearly expressed
their intention not to carry on with the contract for the purchase of the vessel, the defendants without
accepting such renunciation nevertheless brought the vessel to Ghana arriving at Tema Port on the 17th
July, 1962, and without evidence on their part of any further discussion with the plaintiffs, they started
immediately to carry out fishing operations with the vessel till about the 14th November, 1962, when
proceedings herein were commenced.
The question may be asked: Can it be said that the circumstances in the instant case are similar to those
in Johnstone v. Milling already referred to, and can it be said that when the defendants’ vessel arrived in
Ghana the only subsisting contract that was still open between the parties was that of exhibit B? I am
prepared so to hold that in so far as the defendants had not taken advantage of the plaintiffs’ notice of
intention to renounce that contract but at the same time I feel that the last phrase of exhibit 2 raises a
pertinent question. “Awaiting your early arrival.” What can this phrase mean? These words—it must be
observed—appear after the plaintiffs had expressed their intention to renounce the contract of sale exhibit
B, and having done so, what else were they awaiting?
After very careful consideration of this part and of the entire purport of exhibit 1, I think it is right for me
to have to consider whether the subsequent business transactions carried out by the parties are consistent
either with the terms of exhibit A or exhibit B. In this regard I bear in mind the plaintiffs’ version that
subsequent to exhibit 2 upwards to the arrival of the vessel in Ghana, the defendants did agree that their
transaction should be governed by exhibit B. In order to resolve this issue it is necessary to look to the
evidence of the parties to see how they reflect upon the terms and provisions of either exhibit A or exhibit
B.
As I have already indicated, the only right to which the plaintiffs were entitled in connection with exhibit
A was that the defendants were bound thereunder to sell exclusively to them all the fish catches of the
Tito Gualdi. The plaintiffs had no exercise whatsoever of any other rights or control over the vessel, nor
had they any responsibilities towards the management and running of the vessel—such rights being
vested exclusively in the defendants. I shall now examine some of the most significant clauses of exhibit
A in relation to the evidence adduced.
According to clause 8 of exhibit A the purchase of fuel and oil and gas for the running of the vessel was
the sole responsibility of the defendants, but there is abundant uncontradicted evidence that for the entire
period that the vessel operated in Ghana, the plaintiffs paid for all
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those requirements, ie. fuel, gas and oil. Again according to clause 7 the responsibility for the upkeep of
the vessel and the maintenance of the crew was the defendants’. I shall deal first with the maintenance of
the crew.
According to the said clause 7 of exhibit A, the plaintiffs had no obligation at all to accommodate the
Italian captain and crew of the vessel, but this the plaintiffs did. They provided them with well furnished
accommodation from the time the boat arrived until the institution of these proceedings. The defendants
sought to argue that the place was let out to them, but they failed to satisfy me as to why they never paid
the rents for the period. Having regard to the wages of the captain and crew, the defendants maintained
that those were paid by them, but then they qualified that and stated as follows:
“At times the plaintiffs made payments for the maintenance of the boat and the crew, but they made such
payments with money belonging to the defendants. By that I mean this: If the plaintiffs were to pay £G500
for fish supplied, I would ask them to pay me just £G400 and that they should use the balance for the
maintenance of the boat and crew.”
Now this is evidence which I consider too far fetched to be believed. P.W.1 has impressed me as a
witness of truth and I accept his evidence that it was the plaintiffs and not the defendants who paid for the
wages of the captain and crew during the period and that in all the plaintiffs paid the sum of £G1,650 for
wages for the Italian captain and crew, and £G440 for the Ghanaian crew. It is my view that in regard to
all of these payments the defendants are taking advantage of the fact that they issued no receipts to the
plaintiffs.
In answer to cross-examination the defendants stated as follows: “Q. Did you ever issue a receipt for any
amount paid to you by the plaintiff? A. No. Q. Why is that? A. Because the plaintiffs never asked for
receipts for payments made to me.”
The question of the maintenance of the boat includes principally the need for its dry docking. On the
evidence I have no hesitation at all in holding that payment for such maintenance was made by the
plaintiffs because a receipt which was put in by the defendants themselves marked exhibit 11 testifies to
that. Again according to clause 16 of exhibit A the defendants were to supply the fish in wooden or carton
cases which were to bear their special labels. That presupposes that they had to provide their own cases
but they have admitted that all the cases for fish delivered to the plaintiffs were provided by the plaintiffs
themselves, and there is abundant evidence by the plaintiffs and on their behalf—which I accept—that the
plaintiffs spent £G2,247 towards the cost of the empty wooden cases used for packing the fish. There is
then also the uncontradicted evidence that the plaintiffs bore all the expense for the ice blocks used in the
cold room of the vessel, and that they paid the harbour dues.
[p.321] of [1963] 1 GLR 314
Now if it were true that during the operation of the vessel the parties were governed by the terms of
exhibit A, how could the defendants suffer the plaintiffs to place themselves in a position as if they were
in complete control of and were managing and running the vessel themselves—which fact is borne out by
their acts to which I have already referred? I cannot imagine what clearer evidence can be needed to show
that exhibit A was completely excluded from these transactions. I feel fortified in this view because
according to exhibits C, D and E, the Tito Gualdi was licensed in the name of the plaintiffs as owner—to
purchase the boat on hire terms—which fact was to the knowledge of the defendants when the vessel
arrived in Ghana and afterwards when the licence was renewed.
According to paragraph 7 of the agreement of sale exhibit B the plaintiffs were to obtain and acquire a
permit to enable the vessel to operate in Ghana waters and the obtaining of exhibits C, D and E was in my
opinion in accordance with the strict interpretation of that paragraph. I find therefore in these
circumstances that the agreement which at all times subsisted between the parties and which governed
their business transaction is the agreement of sale, exhibit B, I find also from the facts to which I have
already referred that the plaintiffs were in fact in effective possession and control of the vessel, and that
they were responsible for its management and running; and although the term possession or control was
not so expressly stated in exhibit B it is my view that that must be implied.
It has been urged upon me to accept the defendants’ version that throughout the operation of the boat,
they sold the fish catches to the plaintiffs for which the plaintiffs paid leaving a balance of £G5,786 but I
am not prepared to accept that submission—because not a single copy of any debit note was produced in
order to support such a contention, nor was a ledger book produced to show record of sales and payments,
and what balance was due.
It is true that the defendants filed a statement of account annexed to their statement of defence but what
weight can I attach to that in the absence of debit notes and a ledger from which one can properly
presume that the figures in the statement of account were collected. This statement of account impresses
me as a paper drawn up by heart for the purpose of this case. Consequently, I do not accept the
defendants’ evidence that they supplied fish to the plaintiffs for cash and/or that the plaintiffs are
indebted to them in the alleged sum of £G5,786.
On the contrary since I have found that the transactions of the parties were governed by exhibit B and that
the plaintiffs had complete possession and control and management of the vessel and made such expenses
and discharged such obligations as are incidental to such possession and control, I hold that all the fish
catches of the vessel belonged to the plaintiffs and that no question could arise as to the sale to them of
such fish by the defendants.
Having regard to the question of part payment of the purchase price of the boat, the defendants’ case is a
total denial of any such payment. By the terms of exhibit B the first part payment was not due till the
[p.322] of [1963] 1 GLR 314
29th December, 1962, but it is the plaintiffs’ case that they nevertheless paid to the defendants that
amount of £G5,000 which is included in the total sum of £G10,605 14. 3d. which they have paid out since
the vessel arrived in Ghana.
It is true that some of these payments were made by cheques and that none was earmarked specifically
towards the purchase price, but although this might appear a startling situation to shrewd businessmen, it
is no more a strange incident having regard to the way the parties in the instant case carried out their
business which involves such risks to both sides. The defendants as I have already indicated—admitted
that they gave no receipts at all to the plaintiffs in respect of all payments made to them—be it by cash or
by cheque—and as a glaring example of the looseness of their business—due to lack of receipts—the
defendants admitted receipt of heavy sums of money which they failed to include in the statement of
account which they filed. This being the position, I do not see how I can feel justified to say that I
disbelieve the evidence of the part payment of the purchase price just because the cheques were not so
earmarked.
I have taken into consideration the evidence of the bank representative as to the value of the cheques paid
to the defendants, and the amounts paid for wages of the crew of the boat, and the empty cases and other
sums of money paid in cash to the defendants by the plaintiffs, and I am inclined to accept the plaintiffs’
evidence that they have paid in all the sum of over £G10,605 14s. 3d. as alleged by them out of which
£G5,000 constitutes the first instalment of the purchase price of the boat in accordance with paragraph 5
of exhibit B.
I have now to consider the question of the sale of the fish by the defendants on the 9th and 15th
November, 1962. The defendants’ contention is that the plaintiffs expressly requested them to sell the
catches on those two dates because they had not been able to make payment of the previous supplies, but
since I have held that all the fish catches of the vessel belonged to the plaintiffs, that defence becomes an
absurdity. Consequently I am unable to accept the defendants’ evidence that they had such authority from
the plaintiffs, and I find therefore that the sale by them of the catches of the 9th and 15th November,
1962, was wrongful, and that in doing so the defendants were in breach of the agreement exhibit B and
that they are accountable to the plaintiffs.
I have carefully considered the evidence as to the taking away of the vessel from Ghana. There is no
dispute that the relation of the parties at a certain stage became very strained, and in all the circumstances
I accept the plaintiffs’ evidence that the defendants had purposed to take away the vessel from Ghana. I
feel fortified in this view—because the defendants have impressed me that they could do things in the
way the liked—caring little for the consequences—having regard to their high-handed and defiant
conduct in removing the injectors from the vessel after an interim injunction order had been made by this
court restraining the parties from interfering with the vessel.
[p.323] of [1963] 1 GLR 314
I am satisfied in the result that the plaintiffs have established their claim and are entitled to succeed in this
action, and that the defendants’ counter-claim must fail. There shall therefore be judgment for the
plaintiffs and against the defendants for: (a) An order upon the defendants to render account to the
plaintiffs of all the fish catches made by the Tito Gualdi on the 9th and 15th November, 1962, which were
wrongfully sold by the defendants, and to pay to the plaintiffs the proceeds realised from the said sale;
and (b) A perpetual injunction by which the defendants and their servants and agents are hereby forthwith
restrained from interfering with the plaintiffs’ possession and control of the vessel the Tito Gualdi and
from dealing with it in any way during the subsistence of the agreement of the 29th December, 1961.
I accordingly do dismiss the defendants’ counter-claim. I award the plaintiffs in all 500 guineas costs.
DECISION
Judgment for the plaintiffs.
[Reported by S. A. BROBBEY, ESQ., Barrister-at-Law]
