KOGLEX LTD vs. FIELD [1997-1998] 2 GLR 203

CASES REFERRED TO

(1) Ndoley v Iddrisu [1979] GLR 559, CA.

(2) Madison v Alderson (1883) 8 App Cas 467; 52 LJKB 737; 49 LT 303, HL.

(3) Steadman v Steadman [1974] 2 All ER 977; [1974] 3 WLR 56; 118 SJ 480, HL. (4) Deegbe v Nsiah [1984-86] 1 GLR 545, CA.

(5) Adu v Atta [1984-86] 1 GLR 646, CA.

(6) Lartey v Bannerman [1972] 2 GLR 438.

(7) Branca v Cobarro [1947] KB 854; [1947] 2 All ER 101; 63 TLR 408, CA.

(8) Cohen v Neesdale Ltd [1982] 2 All ER 97; (1982) 263 EG 437.

(9) Quaye v Mariamu [1961] GLR 93, CA.

(10) Smallwood v Sheppards [1895] 2QB 627; 64 LJQB 727, 73 LT219.

(11) Ungley v Ungley [1876] 4 ChD 73; aff’d (1877)5 ChD 887; 46 LJ Ch 854; 37 LT52. (12) Addison v A/S Norway Cement Export Ltd. [1973] 2 GLR 151, CA.

(13) Punjabi Brothers v Namih [1962] 2 GLR 46, SC.

APPEAL from the majority decision of the Court of Appeal dismissing the appellant’s appeal from the decision of the trial High Court in an action filed by the appellant for inter alia specific performance of an agreement for a lease.

Ayikoi Otoo for the appellants.

Ray Kakraba-Quashie for the respondent.

Hayfron-Benjamin J. This appeal is of very small compass. In my respectful opinion, Lamptey JA had, in his dissent, discussed fully and competently dealt with the issues raised [p.205] of [1997-1998] 2 GLR 203 on the evidence and I am in full agreement with his reasoning and conclusions.

In the High Court, the learned judge virtually accepted the plaintiffs’ claim that there was a binding agreement capable of being specifically performed. The learned High Court judge wrote: “From the evidence I am satisfied that there were negotiations between the parties for a lease of the plot on the Ring Road and that the rent which was agreed at ¢200,000 had been paid by the 5 September 1985; the duration was to be for a term of 20 years, with an option for another ten years. An agreement had been reached about insurance and property taxes.”

(The emphasis is mine.) The learned High Court judge, however, contrived to find fault with what he himself had concluded could be a valid negotiation for a lease by reference to a “hand written memorandum” which, on the evidence, was attached to exhibit C (a letter dated 11 September 1985 by the defendant’s solicitors to the plaintiffs) and continuing that the point so raised in that “handwritten memorandum does not appear to have been discussed or resolved.”

As it turned out, that point was, as had been set out in the memorandum paragraph 4(ii) which states: “our client proposes that the destruction or damage contemplated herein ought to exclude those resulting from any wrongful commission or omission by you or your agent.” (The emphasis mine.) This objection was in my respectful opinion meaningless. In the face of the clear finding by the judge in the High Court that, “agreement had been reached about insurance and property taxes;” it was not open to the learned judge to quibble about a clause which would exclude the lessees from “any wrongful commission or omission by them or their agents.” In my respectful opinion, the learned High Court judge should have found for the plaintiffs.

Nor was this all. In the Court of Appeal, the majority of their lordships found for the defendant. Counsel for the plaintiffs (the appellants) submitted that there was indeed part performance of the oral contract for the lease – a fact which the learned High Court judge accepted. Counsel further argued that there had been compliance with section 23 of the Conveyancing Decree, 1973 (NRCD 175). Further, learned counsel argued that indeed, contrary to the learned High Court judge’s observation, there was

[p.206] of [1997-1998] 2 GLR 203 consensus on all the terms and that: “The memorandum attached was also discussed and consensus reached.”

I have to observe here that learned counsel for the defendant had no answer to the plaintiffs’ submissions. However, the majority of their lordships in the Court of Appeal embarked on their own enquiry and thereby put forward a new case on which the parties had not addressed them. Forster J A writing the lead judgment stated:

“The crux of the matter however is whether as between the parties they intended that exhibits A and B create a final and enforceable agreement. Were the parties ad idem? Was it agreed either expressly or impliedly that they should be bound by the terms of exhibits A and B as conclusive between them?”

In a similar situation in Ndoley v Iddrisu [1979] GLR 559, CA, the memorandum was constituted by a receipt which contained the following: “I Charles Ndoley . . . have this 10 January1973, agreed with or entered into a building contract with Alhassan Iddriu.” The identity of the property, part-payment and purchase price were specifically stated, and there was no other evidence expressing or implying that the agreement was provisional only. The Court of Appeal upheld the judgment of the trial court decreeing specific performance.

Forster JA, in the instant case, would have been right and would have agreed with the dissenting view of Lamptey JA had he not proceeded to make inconsequential excuses for denying the plaintiffs their right to specific performance of the agreement. As it happened, his lordship relied on exhibits A and B—receipts for the payment of money acknowledged by the defendant and in particular two expressions in exhibit A: “balance of five hundred thousand cedis (¢500,000) to be paid immediately the agreement is completed and signed; and in exhibit B: “total balance to be paid is now four hundred thousand cedis(¢400,000) on the signing of the lease agreement between . . .” His lordship contrived to put an interpretation on these expressions cited above and concluded that: “It was therefore an agreement subject to contract.”

In my respectful opinion, his lordship, on the evidence, could not so conclude. The sentences or expressions in the two exhibits could not be construed without reference to the evidence on record. On the record the dialogue proceeded in the following

[p.207] of [1997-1998] 2 GLR 203 manner with the defendant under cross-examination:

“Q Did you make a proposal to the plaintiffs to insure the promise?

A Yes.

Q And they agreed to do so?

A Yes.

Q Were all these things which you mentioned in exhibit C discussed?

A Yes Q And after that everybody agreed in the issues in the attachment to exhibit C?

A Yes, with my lawyer’s consent.

Q Was it not after that you instructed your lawyer to go and prepare the agreement for signature?

A I gave the agreement to my lawyer to go through. First of all, they did not agree to give me the four rooms.

Q After all these things you gave instructions to your lawyer to go and prepare an agreement for signature?

A I did, but no agreement was signed.

Q Did you not give your lawyer a week to finish the agreement and bring it to you for signature?

A Yes. The lawyer said it would take time.”

Then, in obvious explanation of the expressions to which his lordship took exception, the defendant still under cross-examination stated: “Q As far as you know the money was advance payment of rent by the plaintiffs? A Yes till final agreement.”

In the face of these admissions, it is difficult to see how any such expressions could mean that the “agreement was subject to contract.” With the greatest respect to Kpegah JA (as he then was), his lordship compounded the error into which Forster JA had fallen when he wrote in support that: “The issue in this case is whether there is a concluded and enforceable contract between the parties to ground and grant an order for specific performance. I entirely agree with the conclusions reached by my brother Forster JA that there is no concluded contract between the parties.”

(The emphasis is mine.) It seem to me that their lordships were confusing form with content. I have taken the liberty of examining some of the English cases cited by Forster JA in his contention that the

[p.208] of [1997-1998] 2 GLR 203 agreement was “subject to contract.” The phrase “subject to contract” occurs in English conveyancing practice and, in the view of the learned editor of Cheshire and Fifoots’ Law of Contract (9th ed), at page 35, the phrase is used in agreements for the sale of land and “normally operates to protect the buyer since it provides time for investigation of title and survey of the premises.” It is a topic which occurs in connection with the formation of contracts and is totally irrelevant to a consideration of the requirements of specific performance of contracts. The learned editor refers to an English Law Commission report and on the same page, supra, in a footnote states: “The subject to contract practice is quite independent of the legal requirement that a contract for the sale of land be evidenced in writing though the two may interact.” (The emphasis is mine.) I am in total agreement with this view. Clearly then, when, as in this case, there are receipts constituting the memorandum in which money has passed and the receipts have been signed by the vendor, such memorandum cannot be said to be evidence of “an agreement subject to contract.” To accept such a proposition would be tantamount to the court lending its aid to a practised fraud. The whole concept of agreements subject to contract is therefore for the benefit of the buyer and not a loophole through which a vendor could wriggle out after taking the benefit of the contract.

In the instant appeal, the unsuspecting may confuse issues by relying on the fact that upon the evidence and the exhibits only part-payment of money had been made. The reason for such payment had been offered by the defendant herself. The learned editor of the treatise on The Law of Contract referred to supra, contends that: “If there is one proposition on which all the books and cases have agreed on it is that payment of money is not by itself a sufficient act of part performance.” This principle took its rise in English law from the dictum of Lord Selborne in the case of Maddison v Alderson (1883) 8 App Cas 467 at 478-479, HL where the law lord stated: “It may be taken as now settled that payment of purchase money is not enough; and judges of high authority have said the same even of payment in full.”

However, the recent English case of Steadman v Steadman [1974] 2 All ER 977, HL shows that Lord Selborne’s statement represented too simple a view of the principles of part performance. The facts of the Steadman case: The husband and wife were joint owners of a house which had been the family home. The wife

[p.209] of [1997-1998] 2 GLR 203 left the husband and obtained maintenance orders in favour of herself and the child of the marriage. The husband fell into arrears in paying the wife’s maintenance. An oral agreement was reached by which the wife was to transfer her interest in the house to the husband for £1,500; the wife would agree to the discharge of the maintenance made in her favour; the husband would pay £100 of the arrears and the wife would consent to the discharge of the balance. The agreement was revealed to the justices and the relevant parts of it approved by them. The husband duly paid the £100 and his solicitors sent a draft form of transfer to the wife’s solicitors but the wife refused to proceed. The British law lords held (with one dissent) that there were sufficient acts of part performance to render the contract enforceable. The divergence of views expressed by their lordships and the consequent denuding of Lord Selborne’s statement (supra) have been clearly set out by the editor of the treatise on The Law of Contract referred to supra at p 199 thereof thus:

“On other questions that there were important differences of opinion. Lord Reid and Viscount Dilhorne thought of probabilities that establish some contract between the parties but Lord Salmon thought the acts must establish that there was a contract concerning land. Lord Simon reserved his position on this question. Viscount Dilhorne and Lord Simon thought the oral recital of the agreement before the magistrates was an act of part performance but Lord Reid was very doubtful of this. Lord Reid, Viscount Dilhorne and Lord Simon all thought the sending of the draft deed of transfer was an act of part performance while Lord Salmon regarded both the statement to the magistrates and the sending of the deed of transfer as part of the surrounding circumstances which explained the payment of the £100.”

Clearly, the English law on the effect of payment or even part payment of money and the principles of part performance are in a state of flux and afford no guide for the determination of our conveyancing practices.

In 1973, with the promulgation of the Conveyancing Decree, 1973 (NRCD 175), English conveyancing practices ceased to apply within our municipality. The memorandum to NRCD 175 stated that: “In response to the national need for methods of transfer that are reliable, simple, cheap, speedy and suited to the

[p.210] of [1997-1998] 2 GLR 203 circumstances of . . .” True, the passage quoted above was in relation to the need to expedite the recording of customary oral transfer of land. But the tenor of the whole Decree and an earlier similar statement in the memorandum attest to the very attributes, which NRCD 175 demands in respect of customary and other transfers. Thus, within our municipality, the issue is whether any agreement for the sale or transfer of land satisfies the requirements of NRCD 175. It must be appreciated that many of the conditions and covenants which were previously set out in extenso in conveyances of land are now statutorily implied. Thus, in Deegbe v Nsiah [1984-86] 1 GLR 545, CA where the plaintiff, a legal practitioner, sued the defendant for specific performance, their lordships of the Court of Appeal, while dismissing the appeal, nevertheless established the principle that for a plaintiff to suceed in an action for the specific performance of an agreement for the sale of land, he must comply with section 2 of NRCD 175. Then again in Adu v Atta [1984-86] 1 GLR 646 at 651-652, the Court of Appeal held that:

“. . . the principles which have always guided the courts of equity to decree specific performance, have been clearly and expressly stated in Snell’s Principles of Equity (26th ed), 664 in these words: “for a plaintiff to obtain specific performance he must have shown himself ready, desirous, prompt and eager.”

There is ample evidence on record of the plaintiffs’ desire and readiness to fulfill their part of the contract. The plaintiffs put workmen on the plot and commenced work but were in my view, unlawfully stopped because in the defendants own words, “they were trespassers.” The reason for the defendant’s sudden about-turn was clear from the record. A Mr Grant had promised her more money and she wanted to renege on the agreement. The plaintiffs sued immediately. Hence the present appeal.

In Lartey v Bannerman [1972] 2 GLR 438 at 442, Sarkodie J stated the principle succinctly when he held, inter alia, that:

“Specific performance is an equitable remedy and it is in general readily granted to enforce against a defendant the duty of doing what he agreed by contract to do provided certain conditions are satisfied. These are the contract is valid in form, has been made between competent parties and is unobjectionable in its nature and circumstances . . .”

[p.211] of [1997-1998] 2 GLR 203

The Lartey case (supra) was decided before the passage of the NRCD 175 but the principle enunciated could well apply to post-NRCD 175 agreements for the sale or transfer of land. In my respectful opinion, in our municipality the essential requirements of a specifically enforceable agreement are that (a) it must be in writing signed by the vendor; (b) there must be agreement as to price; and (c) the parties must be ad idem as to the property the subject-matter of the agreement. A statement therefore that in the instant case “there was no concluded contract between the parties” was patently erroneous. In my opinion, exhibits A and B together satisfied the requirements of NRCD 175 and the plaintiffs were entitled to specific performance of the agreement. I think Lamptey JA dealt more than adequately with the reprehensible conduct of Lawyer Owusu-Yeboa in regard to the conclusion of the agreement. It was this lawyer’s ineptitude which has largely provoked this litigation.

In the result, I will allow the appeal, set aside the judgment of the Court of Appeal and the High Court and in their places enter judgments in favour of the plaintiffs in both courts, decreeing specific performance of the agreement.

Ampiah JSC. I have had the privilege of reading beforehand, the opinion of my learned brother Charles Hayfron-Benjamin JSC and I am in agreement with him that the appeal should be allowed.

The claim of the plaintiffs in the action was for:

“(1) an order for specific performance, and (2) injunction restraining the defendant from preventing plaintiffs’ use of the premises for the period of the lease.”

The defendant resisted the claim and counterclaimed for:

“(i) General damages for trespass; and (ii) ¢2,000,000 special damages, being damages caused to the defendant’s property as a result of the trespassing activities of the plaintiffs, their agents and workmen.”

The High Court dismissed the plaintiffs’ claim and the Court of Appeal by a majority of two to one affirmed the High Court’s decision, dismissing the plaintiffs’ claim. This appeal is from the decision of the Court of Appeal.

Surprisingly, both the High Court and the Court of Appeal failed to deal with the counterclaim by the defendant. There was

[p.212] of [1997-1998] 2 GLR 203 no appeal, however, against this failure. The facts in this case have been dealt with exhaustively in the judgments of the High Court and the Court of Appeal, and in some of the reasoned opinions of my learned brothers and sister in this court. I have no intention to repeat or restate these facts save that whenever appropriate, would refer to them in my opinion.

The High Court judge in his judgment observed that:

“As 1 have said there is no agreement for a lease for all the terms have not been agreed upon between parties. And it is not the duty of the court to conclude an agreement for the parties when they have failed to do so themselves.”

The court below thus agrees that there was some agreement on some of the terms of the lease but that there was no final agreement on the terms. The controversial term which seems to have given rise to the rejection of the plaintiffs claim, was stated by the defendant’s solicitor as follows: “Our client proposes that the destruction or damage contemplated herein ought to exclude those resulting from any wrongful commission or omission by you or your agents.”: see exhibit 1, para 4(ii) of the proposals made by the defendant to the typewritten and signed proposals of the plaintiffs-company. The typewritten proposals were undated, but the proposals by the defendant (handwritten) were dated 11 September 1985. Exhibit C was a letter from the defendant’s solicitor to the managing director of the plaintiff-company. This letter was dated 11 September 1985. It was this letter which invited the parties to a meeting to discuss the terms of the lease. Part of that letter states:

“Our client has further instructed us to invite you and all directors of your said company to a meeting on Saturday 14 September 1985 at 1 pm at her residence, house No 10, 2nd Ringway Close, Osu in Accra . . .”

According to the defendant, it was sometime in May 1985, after the death of her husband in 1984, that Mr Erawoc, the first plain tiff witness, the managing director of the plaintiff-company, came to see her “in connection with my husband’s death and my property.” The receipts for the rent advance—exhibits A and B—were dated 4 September 1985 and 5 September 1985 respectively. That was some days before the parties sat down at a meeting to discuss the various terms proposed by either side. The last meeting of the

[p.213] of [1997-1998] 2 GLR 203 parties on the agreement was on 14 September 1985. It was at this meeting that all the terms—the proposals from each side—were discussed and ironed out. It was after this meeting that the defendant asked her solicitor to prepare and submit a document containing the final terms agreed upon, for her signature. A close look at the proposals from both sides would show that the proposal: “our client proposes that the destruction or damage contemplated herein ought to exclude those resulting from any wrongful commission or omission by you or your agents . . ..” was a proposal which arose from the plaintiffs’ proposal in paragraph (4) (ii) and it must necessarily have been part of the terms for discussion, for paragraph (4) (ii) of the plaintiffs proposals talked of destruction or damage to the property. The defendant’s proposal talked of the “. . . destruction or damage contemplated.”

It was natural that the defendant’s paragraph (4) (ii) would be discussed; but it cannot be denied that on 14 September 1985 the parties had finally come to an agreement on the terms of the lease This conclusion is supported by the defendant’s own evidence. Under cross-examination, the defendant said:

“Q Were all these things which you mention in exhibit C discussed?

A Yes.

Q And after that everybody agreed on the issues in the attachment to exhibit C?

A Yes, with my lawyer’s consent.

Q Was it not after that you instructed your lawyer to go and prepare the agreement for signature?

A I gave the agreement to my lawyer to go through. First of all they did not agree to give me the four rooms.

Q After all these things you gave instructions to your lawyer to go and prepare an agreement for signature?

A I did, but no agreement was signed.

Q Did you not give your lawyer a week to finish the agreement and bring it to you for signature?

A Yes. The lawyer said it would take time.

Q Where is the agreement?

A I have not got any.”

(The emphasis is mine.) The lawyer failed to prepare the lease as requested The next time the plaintiff heard from him was his [p.214] of [1997-1998] 2 GLR 203 letter of 30 September 1985 (exhibit E) in which he stated among other things:

“No such contract or agreement has as yet been reached or completed and the payment of rent in itself is not and cannot establish a lease or a tenancy agreement by whatever name called. In any case, we are required by our instructions to inform you, and we hereby do so that our client is no longer interested in any further negotiations regarding your client’s offer to take a lease of the said premises . . .”

This letter was in response to one written for and on behalf of Mr Michael Majid, the managing director of the plaintiff-company.

From the evidence on record, as stated above, the solicitor’s letter (exhibit E) is obviously an afterthought designed to reintroduce a term which had already been dealt with—either accepted or rejected—as an excuse for the lawyer’s inactivity and apparent delay in the preparation of the lease which his client, the defendant, had requested him to complete in a week; only to avoid the lease as is apparent in the letter. For, according to the defendant herself: “all the things in exhibit C had been discussed.” At the time of the letter, exhibit E, there was a concluded agreement which required evidence in writing to enable the parties sign. There was payment in advance; possession by the plaintiff—the court having failed to find the possession of the plaintiff as trespassing—and there was the rehabilitation of the property after the payment of ¢40,000 to the plaintiff for the damage caused to the property by the Meridian Industries Ltd. The agreement was therefore on the facts specifically enforceable.

Section 1 (1) of the Conveyancing Decree, 1973 (NRCD 175) states:

“1 (1) A transfer of an interest in land shall be by a writing signed by the person making the transfer or by his agent duly authorised in writing unless relieved against the need for such a writing by the provisions of section 3.”

And section 3 (2) of NRCD 175 provides, “3. (2) Sections 1 and 2 shall be subject to the rules of equity including the rules relating to unconscionability, fraud, duress and part-performance.”

[p.215] of [1997-1998] 2 GLR 203

I am not unaware of the principle that the payment of money is not by itself a sufficient act of part performance. Two reasons given for this proposition are, firstly, that payment of money is completely equivocal both as to whether there is a contract and as to its nature; and secondly that the money would be recoverable if the contract was not performed: see Madison v Alderson (1883) 8 App Cas 467 at 479.

This proposition is now considered as too simple a view by the English House of Lords in Steadman v Steadman [1974] 2 All ER 977. In that case, the husband and wife were joint owners of a house which had been the family house. The wife left the husband and obtained maintenance orders in favour of herself and the child of the marriage. The husband fell into arrears in paying the wife’s maintenance. An oral agreement was reached by which the wife was to transfer her interest in the house to the husband for £1,500; the wife would agree to the discharge of the maintenance made in her favour; the husband would pay £100 of the arrears and the wife would consent to the discharge of the balance. The agreement was revealed to the justices and the relevant parts of it approved by them. The husband paid the £100 and his solicitors sent a draft form of transfer to the wife’s solicitors but the wife refused to proceed. The House of Lords held (Lord Morris of Borth-Y-Gest dissenting) that there was sufficient acts of partperformance to render the contract enforceable. Divergent opinions appear in the majority decision but one proposition that seems clearly established is negative, viz, it can no longer be stated that mere payment of money is never a sufficient act of part performance. Probably the payment, say purchaser’s deposit or payment of rent advance, will continue to be regarded as usually equivocal but as capable of being rendered persuasive by the surrounding circumstances. Looking at the facts in this case and the conduct of the parties, would hold that the payment of the rent advance was an act of part performance.

The court of first instance had no difficulty in identifying the case as one in equity. It was not disputed that the property, the subject-matter of the action, belonged to the defendant. it is also not in dispute that the plaintiff through its representative approached the defendant for a lease of the property, though at one stage, the defendant seemed to have disputed the one with whom she had contracted! The evidence also shows that there were negotiations of some sort on the proposed lease and that the

[p.216] of [1997-1998] 2 GLR 203 defendant received a total of ¢200,000 as rent advance, which up to the date of the judgment had not been refunded. Also the plaintiff has, in view of the alleged damage caused to the property by the Meridian Industries Ltd, paid to the defendant, ¢40,000 which amount has also not been refunded. What the parties, by the judgment of the court below, do not seem to agree on is whether or not there was a concluded agreement.

Apart from the issue as to the uncertainty in the terms of the lease, the defendant claimed that she never gave possession of the property to the plaintiffs and that the plaintiffs’ occupation of the property and the attempt at the rehabilitation of the property were unlawful acts for which she was entitled to damages for trespass. As stated earlier in my opinion, neither the court below nor the Court of Appeal pronounced on the counterclaim by the defendant. And the defendant, not having appealed on that issue, it would be presumed that there was no evidence of unlawful acts by the plaintiff; in other words, the plaintiffs entry on the land and the rehabilitation thereof could not be acts of trespass and that the plaintiff was lawfully put in possession of the property.

From the majority judgment of the Court of Appeal, it does not appear the court concerned itself very much with the terms which allegedly remained an undiscussed proposal whose absence made the agreement unconcluded. The court took its own view of the matter and dwelt on the receipts which were issued to the plaintiff for the rent advance paid. The court held that the receipts created a “subject to contract” condition and therefore there was no concluded contract capable of being enforced specifically. The court observed:

“Exhibits A and B were prepared by the plaintiffs themselves They were expressed to be subject to contract. The phrase used in exhibit A, ie “immediately the agreement is completed and signed” are the crucial words that manifest an intention that the parties were not to be bound until a formal agreement had been entered into.”

In support of its contention, the court referred to the case of Winn v Bull (1877-78) 7 ChD 29 at 32 in which Jessel MR said:

“It comes, therefore to this, that where you have a proposal or agreement made in writing expressed to be subject to a formal contract being prepared, it means what it says: It is subject to and dependent upon a formal contract being prepared”

[p.217] of [1997-1998] 2 GLR 203 They also referred to several other authorities on agreements “subject to contract” being prepared. With due deference to the majority of the Court of Appeal, I think the interpretation placed on the words used in exhibits A and B and the decision given in the cases referred to cannot be acceptable. In exhibit A, the words used were: “. . . now, rented to Koglex Ltd the balance of Five hundred thousand cedis (¢500,000) to be paid immediately the agreement is completed and signed.” And the words in exhibit B read: “Total balance to be paid is now Four hundred thousand cedis (¢400,000) on the signing of the lease agreement.” (The emphasis is mine.) The lease was for ten years at a rent of ¢10,000 per month. A rent advance of ¢600,000 was to be paid for the first five years. The plaintiff paid ¢100,000 on the first day for which exhibit A was issued. Another ¢100,000 was paid on the second day for which exhibit B was issued. As demonstrated earlier in my opinion, the agreed terms of the lease had been concluded and the defendant being satisfied had asked her solicitor to prepare the lease for signing. The two receipts—exhibits A and B—issued earlier than the date of the discussions on the terms, concerned only the payment of the rent advance. The first receipt—exhibit A—acknowledged payment of part of the agreed rent advance leaving a balance of ¢500,000. The second receipt (exhibit B) acknowledged another payment of rent advance, leaving a balance of ¢400,000. This was what was to be paid on the date of signing the lease; it did not require any further terms of the lease; the question of “subject to contract” did not arise! It is a common practice that full payment of any agreed amount is often made on the date the written agreement is signed; this does not call for new terms to be included in the already discussed and agreed terms. Such statements as, “the keys would be handed over when the document is signed,” “lessee or purchaser would be put into possession as soon as the document is signed or full payment is made” etc, in my opinion, do not create new terms in the agreement; they are only formalities. The introduction of the words “subject to contract” into the case was unfortunate; that was not the case for the defendant. It’s introduction by the court denied the plaintiffs their duly acquired rights under the agreement.

In Branca v Cobarro [1947] KB 854, the Court of Appeal in England held (reversing the decision of Denning J (as he then was) that on the true meaning of the words “. . . This is a provisional agreement until . . . ” the agreement remained effective until the

[p.218] of [1997-1998] 2 GLR 203 fully legalised agreement was drawn up and signed. The drawing up and signing of the fully legalised agreement was not a condition of the agreement entered into so as to prevent there being a concluded agreement meanwhile. The facts of this case were that by an agreement dated July 1946, the defendant agreed to sell to the plaintiff a mushroom farm for £5,000 of which £500 was paid by way of deposit. The agreement contained the following clause: “This is a provisional agreement until a fully legalised agreement, drawn up by a solicitor and embodying all the conditions herewith stated, is signed.” The plaintiff, having repudiated the agreement, brought proceedings to recover the deposit on the ground that there was no concluded agreement. He failed.

In Cohen v Neesdale Ltd [1982] 2 All ER 97, the words “subject to contract” had been expressed at the initial stages of negotiations and even after the terms had been discussed and concluded, the final letter had used the words “subject to contract.” My Lord, Cumming-Bruce LJ found the behaviour of the landlords in that case bad but could do nothing to help the tenants because the words “subject to contract” and “without prejudice” had been used expressly.

Specific performance, being an equitable remedy, shares with other remedies the quality of being discretionary. But discretion is a science, not to act arbitrarily according to men’s wills and affections, so the discretion which is to be exercised here is to be governed by the rules of law and equity which are not to oppose, but each in its turn, to be subservient to the other. In suits for specific performance, the cause of action is not a breach of the contract, which alone will give rise to an action at law for damages, but it is the duty considered in equity to be incumbent on the defendant of actually doing what he promised to perform. Accordingly, a breach of contract by one party is not necessarily a condition precedent to a grant of specific performance in favour of the other party: see Williams on Contract of Sale of Land, p 132. The court in the exercise of its discretion must look at the totality of the facts and evidence adduced. If on the totality of the evidence, there seems to be fraud or unfairness on the part of one of the parties, the court must weigh the evidence against that party and exercise its discretion in favour of the other. In the instant case, it is clear that the defendant (landlady)has behaved badly. There is evidence that the defendant had contracted with another person to lease the property to that person at a higher rent. The defendant

[p.219] of [1997-1998] 2 GLR 203 has also kept all the advanced rents paid to her by the plaintiff. An amount of ¢40,000 which is alleged to be payment towards the damage caused to the property by Meridian Industries is still with the defendant; the amount was supposed to pave the way for negotiations on the property to be leased. All these acts were acted upon by the plaintiff with the honest belief that the defendant had accepted to lease the property to the plaintiff. And, since according to the defendant, all was done that was necessary to be done, save the formal signing of the agreement as documented, it would be unfair, and nigh fraudulent, to deny the plaintiffs the right they have acquired under the agreement.

I would in the circumstances allow the appeal, set aside the judgments of the High Court and the Court of Appeal and give judgment for the plaintiff on the reliefs sought by it on the writ of summons.

Adjabeng JSC. In this appeal against the majority decision of the Court of Appeal dismissing the appellants’ appeal and affirming the trial High Court’s decision, the only ground of appeal canvassed is that: “Their lordships failed to adequately evaluate the evidence on record.” The majority decision of the Court of Appeal was that there was no concluded or enforceable contract between the parties for which specific performance could be decreed. The plaintiffs had sued for:

“(a) An order for specific performance of an agreement to give the plaintiffs a lease of certain land on the Ring Road, Accra; and (b) an injunction to restrain the defendant from interfering with the plaintiffs’ use of the land while the lease subsisted.”

After reviewing the evidence, the trial court found as follows:

“From the evidence, I am satisfied that there were negotiations between the parties for a lease of the plot on the Ring Road and that the rent was agreed at ¢10,000 a month of which ¢200,000 had been paid by 5 September 1985; the duration was to be for a term of 20 years, with an option for another ten years . . . ”

However the point raised by the defendant on the handwritten memorandum does not appear to have been discussed or resolved.

[p.220] of [1997-1998] 2 GLR 203

The following is what is set out in the memorandum, paragraph 4(ii): “Our client proposes that the destruction or damage contemplated herein ought to exclude those resulting from any wrongful commission or omission by you or your agents.”

In view of the previous history of the land of which Mr Erawoc was aware, it was necessary to come to a conclusion about this point. There is no evidence that the parties reached an under standing about this point. Earlier in its judgment, the trial court stated as follows:

“Messrs Erawoc and Madjoub have said that the agreement had been concluded and all that remained was the preparation of a document evidencing the agreement that had been reached. The handwritten memorandum attached to exhibit C raised points for discussion on the proposed lease submitted by Mr Erawoc. The commentary on paragraph 4 (ii) of the proposed lease has a question mark by it. It does not appear from the plaintiffs’ own showing that any decision was taken on it.”

Consequently, the trial court concluded as follows:

“As I have said, there is no agreement for a lease for all the terms have not been agreed upon between the parties. And it is not the duty of the court to conclude an agreement for the parties when they have failed to do so themselves. In view of the foregoing, the plaintiffs’ claim is dismissed.”

On appeal to the Court of Appeal, the court, by a majority of two to one, dismissed the appeal and affirmed the trial court’s conclusion that the parties had not concluded an agreement for a lease. It is against this decision that the plaintiffs have appealed to this court on the only ground that the justices in the majority failed to adequately evaluate the evidence on the record.

It is not clear what the plaintiffs mean when they talk of the failure by their lordships in the Court of Appeal to adequately evaluate the evidence on the record. Is it not normally the trial court which evaluates the evidence adduced before it and makes findings of fact thereon? As was held by our former Supreme Court in Quaye v Mariamu [1961] GLR 93 at 95, SC:

“This court can only do justice between the parties if it is satisfied that the foundation has been laid by the trial judge whose duty it is to resolve the primary facts. Once the facts

[p.221] of [1997-1998] 2 GLR 203 are found an appellate court is in as good a position as a trial judge to draw inferences or conclusions from those facts; but it cannot embark on this task unless the facts are resolved.”

In the instant matter, the trial High Court judge weighed the evidence adduced before him and made the appropriate findings. He found that all the terms of the lease had not been agreed upon by the parties. The trial judge supported this finding by the comments made in paragraph 4(ii) of the handwritten memorandum of the defendant’s solicitor on the plaintiffs’ draft lease, exhibit C. There is no evidence to show that agreement had been reached on the issue raised in the said memorandum.

Also, as the trial judge found in his judgment, the first plaintiff witness, the plaintiffs’ chief negotiator, admitted under cross-examination that the defendant’s lawyer was, after the meeting on 14 September, “to write the final agreement.” Indeed, a careful reading of the evidence in this case cannot fail to convince one that a final agreement on the lease had not been reached by the parties. Exhibit D, the letter from the plaintiffs’ solicitor, and exhibit E, a reply from the defendant’s solicitor, all show clearly that an agreement had not been concluded by the parties. And this state of affairs has forcefully been confirmed by the fact that the defendant would not tolerate the entry on the land by the plaintiffs and their workers. The defendant drove them from the land twice. If an agreement had indeed been reached as the plaintiffs claim, the defendant would not have driven them out. She even went as far as to the police: see Smaliwood v Sheppards (1895) 2 QB 627 and Ungley v Ungley [1876] 14 ChD 73 at 76.

There is no doubt in my mind, therefore, that the trial judge’s finding that the parties had not agreed on all the terms of the lease and therefore there was no enforceable agreement between them is amply supported by the evidence on record. The confirmation of that finding by the Court of Appeal cannot, therefore, be faulted.

There is, however, another important aspect of the matter which, in my view, was not highlighted or emphasised in the two courts. That is, the nature of the reliefs sought by the plaintiffs. The two reliefs claimed are specific performance and an injunction. These are equitable and not legal remedies. Counsel for the defendant, however, touches on this issue in his statement of case. In his statement, counsel submits as follows:

[p.222] of [1997-1998] 2 GLR 203

“My lords, the enforcement of the equitable principle of specific performance is discretionary and the court would have to take into account all the circumstances of the case, including for example the conduct of the plaintiff as in this case when the plaintiff-appellant did not wait for the contract to be concluded before he entered the property and further misrepresented to the defendant-respondent that he wanted the property for himself and his wife and started development.”

In The Law of Real Property by R E Megarry and H W R Wade, (2nd ed), p 128, s 3, under the main heading Equitable Remedies, and the sub-heading, Discretionary nature of equitable remedies, is the following:

“A further distinction between law and equity lay in the matter of remedies. In general, if a legal right was infringed, the person injured was entitled as of right to a legal remedy, either an order for the recovery of his land or damages . . . A plaintiff seeking an equitable remedy, on the other hand, had no right to anything at all; equitable remedies were discretionary, and even if the plaintiff proved his case, equity might refuse to give any assistance if for example, his claim was trivial or it would be inconvenient or unconscionable to grant an equitable remedy.”

Also, at p 555 of the same book, from the last but one line to p 556, line 5, on the subject of what constitutes a sufficient part performance, the learned authors state as follows:

“Thus it would clearly be fraudulent for a defendant who has received payment to set up the statute as a defence, yet it is well settled that the mere payment of money is not by itself a sufficient act of part/performance. In such cases equity has regard to the practical consequences of enforcing the contact and; it is easy enough to re-instate the plaintiff by returning his money.”

(The emphasis is mine.) Again, it must be emphasised that the doctrine of part performance cannot avail a plaintiff unless he can establish a contract “certain and definite in its terms” between the parties. At the same p 556 of the same book, the authors state that:

[p.223] of [1997-1998] 2 GLR 203

“The court requires clear evidence, whether parol or otherwise, that there was a contract certain and definite in its terms between the parties. The court will not assist the plaintiff if there was no final contract, matters being still in the state of negotiations. No amount of what would otherwise be part performance will render certain a contract which is void for uncertainty or make into an agreement that which is not an agreement at all (such as an agreement ‘subject to contract’).”

It is clear, therefore, that the reliefs sought by the plaintiffs, being equitable remedies, were within the discretion of the trial judge to grant or not to grant. The trial judge exercised his discretion against the grant of the reliefs. The exercise of the judge’s discretion was neither challenged in the Court of Appeal nor in this court. This court cannot, therefore, interfere.

Also, there is ample evidence in support of the trial judge’s findings. The majority of the Court of Appeal was therefore right in affirming those findings. Consequently, this court has no right to disturb the majority decision of the Court of Appeal. The appeal must accordingly fail.

Atuguba JSC. The majority in the Court of Appeal held that the agreement reached between the parties in this case was subject to contract and, as no such contract was concluded, the plaintiff could not sue for specific performance. On a full review of the facts of this case, I agree with that view which is also shared by my learned and respected brother Adjabeng JSC in his judgment which I have been privileged to read beforehand. It is quite evident that the parties intended that what should bind them as a contract was a written agreement signed by both sides and nothing else.

The plaintiff stressed the fact that all the terms of the agreement were thrashed out at the meeting of 14 September 1985. But the crucial matter to consider is not whether the terms of the agreement were settled but rather, when those terms were intended to have contractual effect? As said earlier (supra) the parties, on the facts of this case, intended only a written and signed agreement to bind them as a contract.

At page 25, between lines 7-19 and 31-36 of the record, the first plaintiff witness (the plaintiffs’ managing director) summed up the contractual scenario resulting from the famous meeting of

[p.224] of [1997-1998] 2 GLR 203

14 September 1985 as follows: “We discussed the handwritten memo paragraph by paragraph. Decisions were taken on all the issues raised . . .” But for all that: “The defendant’s solicitor and our solicitor took notes and the defendant’s solicitor said he would draw up the final agreement for us to sign.”(The emphasis is mine.) When the plaintiffs workers were sacked from the land (to be leased to it) after the said proceedings of the 14 September 1985, the plaintiffs were in no doubt that it was because no written agreement had been produced and signed. In the circumstances, the logical reaction of the plaintiffs was, as stated by the first plaintiffs witness at page 26 lines 8-9, as follows: “We instructed our solicitor to write a letter demanding the agreement.” (The emphasis is mine.) Similarly, at page 53 of the record, between lines 22-24, the defendant testified that: “It was agreed that my lawyer Owusu Yeboah would draw up another agreement. My lawyer gave them one week to draw up the agreement. We were to meet after that.” (The emphasis is mine)

The first defence witness, who was intimately connected with the transaction, had no illusions about the fact that the famous negotiations of 14 September 1985 were subject to contract. At page 78 of the record, between lines 14-20, he testified under cross-examination as follows:

“Q At the meeting of 14 September 1985 the first and second plaintiff witness agreed with the defendant for a lease of twenty years with an option of renewal for ten years?

A There was no agreement.

Q I also put it to you that the rent of the lease was agreed at ¢10,000 a month.

A It could be when it is confirmed by the agreement.”

(The emphasis is mine.) There is no doubt that what the first defence witness would regard as “the agreement” was a written lease. Thus at page 79 of the record, between lines 7-21, he further testified under cross-examination as follows:

“Q Can you remember that after the discussion of all the issues the defendant asked her solicitor to prepare the formal lease embodying the original lease submitted by the first plaintiff witness and the decision taken on the defendant’s proposals as contained in exhibit C for the joint signature of the defendant and the plaintiff?

[p.225] of [1997-1998] 2 GLR 203

A At that meeting what we discussed and the instructions given by the defendant to her lawyer had not received implementation before the people started working on the property.

Q I am putting it to you that the instructions the defendant gave to her solicitor was to prepare a formal lease.

A have said so several times.”

(The emphasis is mine.) It is plain from all the foregoing that the first defence witness was not referring to a merely formal lease but to a formal lease which would then have the character and force of a contract.

Even exhibit D, written by the plaintiffs solicitor to the defendant’s solicitor when the defendant decided not to grant the plaintiff a lease of the disputed property, confirms that no conclusive contract had been reached by the parties. Whilst in the one breath claiming that such a contract had been reached by the parties, he nonetheless stated in paragraph 6 thereof as follows:

“Be that as it may, 1 am under instructions to kindly request you to expedite action on the preparation of the tenancy agreement so that matters can be resolved before Monday, 30 September 1985. My client and his partner are ready to meet with your client (if there is such a need for any such further meeting) for resolving any further issues which your client possibly may think remains unresolved.”

(The emphasis is mine.) It is quite clear that the door of negotiations as to the terms of the proposed contract was not yet closed Indeed, in paragraph 4 of the said letter the plaintiffs’ solicitor succinctly summed up the position of the parties after the 14 September 1985 meeting as follows: “Thereafter the parties were to sign the final tenancy agreement.” (The emphasis is mine.)

If what was to be signed should constitute “the final tenancy agreement” between the parties, how then could there be a final tenancy agreement before that? And if there was not yet a final tenancy agreement, there could not be an enforceable contract.

If, however, the parties had intended that the negotiations of the 4 September 1985 should constitute a contract which was merely to be reduced into writing in a more permanent form, then such writing would not originate but merely evidence a pre-existing contract. And subsequent failure to commit the same into writing

[p.226] of [1997-1998] 2 GLR 203 would be immaterial. Such was the situation in Addison v A/S Norway Cement Export Ltd [1973] 2 GLR 151 at 176, CA where Annan JA said:

“It seems to be clear then on the evidence of both parties that the parties intended a settlement and that they did reach an agreement amounting to a settlement.

As to the legal effect of that settlement there is no doubt that the evidence clearly demonstrated that it was the intention of the parties that whatever settlement was reached should have effect as a contract between the parties. I do not think that it is open to anyone to canvass that there was no contract between the parties or that the agreement reached at the settlement was meant to take effect only upon a written contract being signed by the parties. It is true a release was to be prepared but then on the evidence it seems clear to me that the release took its authority from a preceding oral contract and which the release was to record.”

(The emphasis is mine.) Although review proceedings were taken on the decision of the ordinary bench of the Court of Appeal in that case, I have not been able to lay hands on the final outcome thereof; but I cannot imagine that the principle of formation of contract, deducible from the statement of Annan JA quoted (supra), could be controverted.

The intention of the parties in the present case is the diametrical converse of that of the parties in the Addison case (supra). In this case the concluded negotiations of 14 of September 1985 were to take their contractual authority from a written and signed state, not otherwise.

It is well settled that if an agreement has the trappings of a certain legal effect, but there are indications that it was not intended to have such effect, the courts will not hold otherwise, in contrariam of the parties’ actual intent. Thus in Punjabi Brothers v Namih [1962] 2 GLR 46 at 52, SC, Adumua-Bossman JSC, delivering the judgment of the Supreme court, said:

“And as Lord Evershed, MR explained in Marcroft Wagons Ltd v Smith [1951] 2 KB 496:

‘Until in the present century, the Rent Restrictions Act came into play, the law broadly speaking necessarily inferred, when exclusive possession was granted to one of the property of another at a rent payable to that other, that a

[p.227] of [1997-1998] 2 GLR 203 tenancy had been created. The law did not recognise that those conditions were compatible with any other kind of relationship . . .

It is clear that the parties definitely intended to exclude this possible inference, by such expressions in the agreement (exhibit G) as: ‘permit the said Punjabi Brothers to occupy the said premises rent-free’ . . . and ‘this agreement does not and is not intended to establish . . . the relationship of landlords and tenants.’ . . . I am of the opinion therefore that it would not be right to appropriate to the agreement any term such as payment of consideration for the occupation for the fixed period of three months, which would tend to give the agreement the semblance of a tenancy.”

Similarly, there may be a natural legal tendency to pass the negotiations of 14 September 1985 in the present case for a concluded contract, they having features that would seem to be necessarily incompatible with any other effect than that of an enforceable contract. But I have already alluded (supra) to some of the facts which in this case militate against an inference of a concluded and enforceable contract.

In the Court of Appeal, Forster JA assembled in his judgment several English authorities on the effect of negotiations subject to contract, and I need not repeat them here but they confirm my conclusion in this case.

I would also dismiss the appeal.

Akuffo JSC. I also agree that the appeal should be dismissed.

Appeal dismissed.

LSNA