COURT OF APPEAL, ACCRA
Date: 21 APRIL 1975
APALOO KINGSLEY-NYINAH AND ANNAN JJA
NATURE OF PROCEEDINGS
APPEAL from a judgment of the High Court, Sekondi, dismissing the appellant’s claim for short payment under written contracts for the sale of logs. The facts are sufficiently stated in the judgment of Apaloo JA.
C. F. Hayfron-Benjamin for the appellant.
E. V. O. Dankwa for the respondents.
JUDGMENT OF APALOO J.A.
The appellant is a timber contractor and the respondents, a limited liability company (hereinafter called the company), were exporters of timber logs and lumber. The latter was in liquidation at the date of the writ. Between 1960 and 1962 the appellant sold to the company, various species of timber by weights at prices agreed between them. It is common ground that this timber was paid for.
At some time in 1964, the appellant claimed that he had been short paid for the logs and sought to recover the alleged short payment from the company. This claim was rejected. In 1965, the appellant issued a writ which, as amended, was for “050,626.81 being the balance due and representing the difference between the measurements of logs . . . in accordance with regulations published in the supplement to Ghana Gazette (No. 35) dated 26 April 1958.”
The appellant put the basis of his claim squarely on legislative provision. The parties entered into a written contract and unless it can be said that the statutory provisions on which the appellant relies clearly override the agreement of the parties, the rights and obligations of the parties must be sought for in the four corners of the contract.
The company resisted the claim on the ground that in so far as any legislation impinges on the contract, it was obeyed but that it provided no basis for the claim which the appellant made. It said the weight of the logs which the appellant sold to the company, was ascertained and agreed upon after the volume of the logs was obtained by use of the measure required by the regulations, namely, the “Hoppus” measure. And that aside of ascertaining “the volume of timber in the round,” those regulations have no bearing on the contract. In any event, the company says that inasmuch as the claim involves a disputation of the correctness of the accounts submitted to the appellant by itself, such claim was barred by a provision of the contract. The company says in the alternative, if the effect of the regulations was to make the contract illegal, both parties being in pari delicto, the appellant was not entitled to recover.
As to whether the regulations have the effect which the appellant attributed to it, the learned judge did not speak with a clear voice. He seems to have thought that the regulations did not become part of the contract although his reasoning on this score is none too clear. But he was satisfied that the appellant was barred by a clause of the contract from prosecuting the present claim. Although he did not find that the contract was rendered illegal by the regulations, he held that if such was
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in fact the case, inasmuch as the appellant accepted payment for the logs with full knowledge of the breach of the regulations, he was not entitled to recover.
The appellant complains that this decision was erroneous and invites us to reverse it on two grounds, namely, first, that the judge put a wrong interpretation on the Trees and Timber (Measurement) Regulations, 1958, and therefore concluded that the transaction between the parties was illegal; secondly, the judge erred in law in holding that the appellant was barred by time from maintaining the action.
The appellant relied, for the success of his action on two regulations, the, first of which, namely, the Trees and Timber (Measurement) Regulations, 1958 (L.N. 139), reg. 2 (1) which provides that:
“In any sale, contract, bargain or dealing entered into after the 21st day of April, 1958 the only measure that shall lawfully be used for computing or expressing the volume of timber in the round shall be the Hoppus measure and any such sale, contract, bargain or dealing in which the Hoppus measure is not so used shall be void.”
It was not the appellant’s case that such measure was not used in computing the cubic content of the logs. If indeed such measure were not used, the contract would have been avoided by the regulations and no rights capable of enforcement could have arisen. Both parties maintained a common position on this, namely, that the mandatory requirement of this regulation was met. Indeed the appellant argued that inasmuch as this measure was used, the judge’s finding of illegality was wrong.
As it turned out, the legislative provision on which the appellant took his stand, is the Trees and Timber (Control of Measurement) Regulations, 1960, (L.I. 23), reg. 2 which provides that:
“Any transaction whatsoever affected by the provisions of the Trees and Timber (Measurement) Regulations, 1958, shall not be deemed to be valid unless a certificate of measurement in the form set out in the Schedule to these Regulations has been issued by the Chief Conservator of Forests or any person authorised by him.”
It is not in dispute that the sale of the logs was a transaction contemplated by the 1958 regulations. It is also common ground that in the various sales contracts into which the parties entered, log measurement certificates within the intendment of these regulations were issued. The only question is: what object were these certificates intended to serve? According to the evidence, the log measurement certificate shows “details on log ends, the species, the dimensions of the log, the Hoppus content, conversion factor and the tonnage.” It must be for some reason and not for no reason that the law requires the issue of this certificate. Unless any benefit results to the public or any mischief is prevented by it, it is unlikely that the legislature would deny validity to a private contract alienating timber without the official certificate decreed by L.I. 23.
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The appellant says the object of this provision is to make the details entered on the certificate part of any private contract of sale and that the weight of the logs shown on this certificate must be deemed the basis on which any private contract of sale is entered into. The appellant’s contention is understandable. If the details on the log measurement certificate were not part of the contract, the very substratum of his action would have gone. The one great difficulty of this contention, is that the regulations said nothing of the sort. A court of law must be chary of holding that the legislature intends to interfere with the freedom of contract unless its intention is manifested in clear words. It would perhaps be remarkable if the legislature were to intend that the dimensions of the log and other details stated on the log measurement certificate were to be binding as between private individuals but that they are free to contract as to the most important item in a contract of sale, namely, the price.
The company says that the legislative instrument in question (i.e. L.I. 23), was not intended to be incorporated into private contract. It was intended, it says, to regulate the exportation and transportation of logs so that appropriate revenue could be exacted. That this is a more likely object of the regulations, is shown by the evidence of the Timber Inspector of the Forestry Department who gave evidence on behalf of the appellant. He said “the forestry officers do not fill in the conversion factor and the tonnage.” The omission of the tonnage on this certificate is significant because timber is normally sold by weight. The reason why this apparently important item is normally omitted from the certificate, was explained by the witness. This is how he put it:
“The then Chief Conservator of Forests directed in writing that since export duty was charged on the Hoppus content, the details on the log measurement certificate should be without tonnage, as that was not required by the Customs Department and who ever wanted the tonnage should work that out himself.”
Thus, the Chief Conservator of Forests, the official entrusted with the issuing of this certificate and who, in the ordinary course of things, would be most knowledgeable about the object of L.I. 23, seems to have thought that the main object of this regulation, was to ensure the correct payment of customs duty. Regulation 3 of the said regulations shows that another public agency is also interested in the issue of this certificate, namely, the Railway Administration, because the regulation enacts that: “The payment of freights on logs transported shall be computed by reference to a certificate of measurement.” Regulation 4 of the regulations then imposes criminal penalties on any person who transports by rail or exports a log without a certificate of measurement being “first had and obtained.”
Although, the log measurement certificate does not, according to the evidence, state the tonnage, the Railway Administration which charges freight by the tonnage has a laid down criterion for determining this.
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It determines it by dividing the Hoppus content with an official divisor technically called “conversion factor.” It follows that nothing is lost by the omission of either the “conversion factor” or the tonnage on the log measurement certificate. The Customs Department is not interested in the tonnage per se of logs exported. The Railway Administration which is, has an objective method of determining this. Nevertheless, section 158 (c) of the 1950 Railway Official Tariff No.1 provides that: “The Administration is not responsible as between the buyer and seller for the weight of goods declared by the seller.” This means that the buyer and seller of logs can agree on tonnage of logs not necessarily corresponding with that independently ascertained by the Railway Administration which is also interested in tonnage for its own purposes. I think the conclusion is inescapable that the legislature did not intend that the Trees and Timber (Control of Measurement) Regulations, 1960, shall be incorporated into contracts for the sale of logs between private individuals. Neither the language of the regulations nor an examination of its object bear out the appellant’s contention.
That being the position, as I conceive it, to sustain this action, the appellant must show that they contracted on the basis that the weight entered on the log measurement certificate became part of the contract of sale. This is a matter of evidence and no such testimony was forthcoming from the appellant. All he was able to say was, that in respect of a large number of sale contracts, the weight shown on the log specification sheets on which the invoice was based, was a little short of what appears on the log measurement certificate. He instanced one (exhibit A1) where whereas the weight shown on the log specification sheet is recorded as 8 tons, 4 cwts., it is shown in the log measurement certificate as 8 tons, 8 cwts., 2 quarters, a shortfall of 4 cwts., 2 quarters.
The evidence of the actual contract between the parties spoke a language. It is that the measurement and weight of the logs were actually ascertained by the representatives of the parties. These were recorded on what was called harbour tallies or log specification sheets; these contain the price per ton and were duly signed by the parties’ agents. It is on the strength of these documents, that the appellant was paid for the logs, payments he received without demur for the best part of five years. The fact that the official log measurement certificate did not enter into the bargain, is shown by the fact that the appellant admitted he did “not compare the log measurement certificate with the log specification sheet at the time.”
But counsel for the appellant points to the latter’s evidence that on the invoices sent by the company to the appellant, is rubber-stamped the words: “These logs have been sold in accordance with regulations published in supplement to Ghana Gazette (No. 35) dated 26 April 1958,” and that this is an admission by the company that it bought the logs in accordance with these regulations. It was answered for the company that the regulation referred to was revoked by L.N. 388 of November 1958 and
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that since these sales took place between 1960 and 1962, the alleged admission have no legal validity, I think the reply to the contention is as unsound as the contention itself.
True, the Trees and Timber (Measurement) Regulations, 1958 (L.N. 139) of 26 April 1958 were revoked by the Trees and Timber (Measurement) Regulations, 1958 (L.N. 388) of November 1958, but the revocation in no way affects the contention, if indeed it had merit. This is because the later regulation repeats verbatim the earlier prohibitory provision of the earlier one. Both regulations by regulation (1) provide for the Hoppus as the exclusive standard measure for determining the cubic content of the logs; both in regulation 2 (3) prescribe penalties for determining the measure other than as laid down by the regulations. The only difference between these regulations is in the schedule which lays down the mechanics for obtaining the Hoppus measure.
In my opinion, the all-sufficient answer to the appellant’s submission on the rubber-stamped words, is that they add nothing to his case. Indeed in so far as they state facts, they represent an accurate factual picture of events. Clearly on this, both parties are in accord, namely, that the Hoppus measure was used to determine the “volume of the timber in the round.” As the law provides that any transaction in timber in which this measure is not used shall be void, it seems to me to make business sense for the contract documents to state that this mandatory regulation was complied with. In my opinion, the appellant failed to make good his claim to additional payment over and above the contract price and as this is the learned judge’s conclusion, this appeal crumbles.
I think this is sufficient to conclude this appeal in the respondents’ favour. But the latter also successfully raised against the appellant an issue of limitation. Such plea was not based on any statute of limitation but on a provision of the contract. Clause 2 (f) of the contract (exhibit 1) provides that:
“Any accounts submitted by the company shall be deemed to be a true and complete record of all transactions between the timber contractor and the company up to the date of the said accounts unless the same are challenged by the timber contractor in writing within a period of seven (7) days after the delivery to him by the company.”
The evidence is that the transactions in question took place between 1960 and 1962. Each month, accounts were supplied by the company to the appellant. He at no time disputed them. The very first time he made a claim against the company, which involves a disputation of the correctness of the accounts, was in 1964. The company therefore relied on this clause as a bar to the claim. The learned judge acceded to this contention and held that inasmuch as the claim was made in breach of clause 2 (f), the action was barred by time.
This conclusion is questioned on the ground that the clause was procedural only and that as the issue involves the taking of accounts,
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the parties cannot be barred by mere inability to challenge the accounts, when presented. It is said that in any event, as there were errors in the accounts, it would be contrary to public policy to rely on the limitation imposed by the clause.
As to the factual question whether there were errors in the accounts, the evidence negatives that. The appellant said he received the accounts regularly. He found no fault with them. The present claim was made not because any errors were detected in the accounts, but because the appellant claimed that the company was bound by the force of statute to pay him for far more tonnage than they agreed upon. But even if there were errors, fraud apart, I cannot see how he can, in the face of the clause in question, competently reopen the accounts. In any case, I fail to see how the categorization of the clause as procedural rather than substantive affect the matter. The question was whether the appellant was bound by the limitation embodied in the clause. It seems sound business sense that question relating to accounts be finalized at an early date. Business cannot be conveniently carried on if accounts presented and accepted as correct can be re-opened at an indefinite time afterwards when invoices, debit notes and kindred documents may have been lost or destroyed. Prudent men of business are entitled to provide against this by contract. I see nothing repugnant to public policy about that. On this issue, I wholly endorse the judge’s reasoning.
Although I do not share the main reasoning on which the judge founded his decision, I concur in the result which he reached and would accordingly dismiss this appeal.
JUDGMENT OF KINSLEY-NYINAH J.A.
I agree.
JUDGMENT OF ANNAN J.A.
I also agree.
DECISION
Appeal dismissed.
S. Y. B.-B.
