MEDZ-MOROUKIAN v. HAROUTUNIAN [1963] 2 GLR 7

DIVISION: IN THE HIGH COURT, ACCRA

DATE: 4TH JUNE, 1963

BEFORE: AKAINYAH J.

 

CASES REFERRED TO

(1) Bonney v. Findlay (1924) D.Ct. ‘21-’25, 98

(2) Beckham v. Drake (1849) 2 H.L. Cas. 579

(3) Tay v. Walkden & Co., Ltd. (1925) D.Ct. ‘21-’25, 176

(4) Loeb v. Nasser (1937) 3 W.A.C.A. 227

(5) Haroutunian v. Medz-Moroukian [1962] 2 G.L.R. 94

NATURE OF PROCEEDINGS

ACTION for wrongful dismissal of employee by the employer.

COUNSEL

J. B. Quashie-Idun for A. Djamson for the plaintiff.

P. Anteson for Ofori-Atta for the defendant.

JUDGMENT OF AKAINYAH J.

In this action the plaintiff’s claim is for: (1) The sum of £G100 salary in arrears and owing by the defendant to the plaintiff. (2) The sum of £G73 10s. being expenses incurred by the plaintiff by reason of the defendant’s failure to supply the plaintiff with transport from the 4th December, 1961, to the 30th April, 1962. (3) Damages for the breach of the contract of service between the defendant and the plaintiff limited to £G5,000.

By a letter dated the 6th June, 1961 (exhibit A), the defendant (the proprietor of the firm of Leon Haroutunian) made a positive offer to the plaintiff in Manchester, England, in the following terms: “As you remember before leaving Manchester, in our office we had opportunity together to talk about business, especially for our Accra business and we mutually expressed ideas. If I am not mistaken, during our conversation you said that you were willing, should the opportunity arise, to be prepared to manage our Accra business, providing conditions offered are acceptable to you; for this matter I promised you that I would write upon my arrival in Accra.

I have intention that for Accra there is need for a trustworthy and capable person to manage the business. With pleasure I would give you this opportunity, having in mind your experience in Africa and my own trust in you. If you are still of the same mind and willing I will give you the conditions hereunder: Monthly salary—£G100 (one hundred pounds) per month. Accommodation—Allowance of £G30 per month if you do not live in our house. We will bear travelling expenses, medical expenses and transport expenses in Accra. Period of tour—24 months. After this period finishes upon condition that all is satisfactory you will be entitled to a bonus. This bonus amount will depend on the result of the business. I would like the person who takes over our Accra business to look after our business and not to take part in any other. I do not think it is necessary to write about business because you have been in Nigeria for a long time and you know everything. The person who is head of our business will do his best to look after the interest of the firm. May be it is necessary to mention that food and clothing expenses are your responsibility. I hopethat the above information will be sufficient to present clearly my idea. If I have forgotten to mention anything, write without hesitation and I will gladly reply.

[p.9] of [1963] 2 GLR 7

If you think these details are sufficient, I will be thankful if you will advise me at the earliest opportunity, that conditions offered are satisfactory or not.

I would suggest that if you find this satisfactory you come first, and afterwards bring your wife. Awaiting your letter.”

By a letter dated the 11th June, 1961, the plaintiff accepted the said offer and merely suggested that a formal agreement should be drawn up embodying the terms and conditions agreed upon. By his letter dated the 16th June, 1961, the defendant assured the plaintiff that when he arrived in Accra, a formal agreement would be prepared and signed. By a subsequent correspondence, the defendant agreed also to pay the travelling expenses of the plaintiff’s wife from England to Accra and return. In pursuance of the said agreement, the plaintiff arrived in Ghana on the 30th July, 1961, and assumed duty on the next day. He was provided with accommodation and a car and was paid a salary of £G100 a month in terms of the agreement. A few days after the plaintiff’s arrival, the parties took physical stock of the goods in the wholesale store and the plaintiff signed the relative stock lists and took over the business as from the 13th August, 1961. On the 23rd August, 1961, the defendant left for England and Europe. The plaintiff’s duties as manager of the defendant’s business were as follows: (1) to sell wholesale goods, receive shipment or take delivery of goods (textile and sundry); (2) to pay money into the bank and transfer money to the United Kingdom; (3) to supervise the staff; and (4) general control of the business. The defendant returned to Ghana on the 4th December, 1961, took the car away from the plaintiff and set up his office in the wholesale store. The plaintiff was however given lifts to and from his office only. When he complained that he was paying heavily for the hire of taxi and that he wanted a car, the defendant denied that he was liable to provide him with transport for his private use. On several occasions, when the firm’s car was not available to take the plaintiff to his office, he was permitted to hire a taxi and charge the fare to the defendant’s account.

According to the plaintiff, he and the defendant checked all moneys received and paid out at the end of December 1961 and discovered a surplus of £G32. The defendant did not challenge that statement. It was also not denied by the defendant that, not only did he set up his office in the wholesale store over which the plaintiff assumed absolute control on the 13th August, 1961, but he actually interfered with the day to day running of the business. In the absence of the plaintiff on business at the bank or import licensing office, he, the defendant sold goods to customers. During the Christmas holidays of 1961, he had the keys of the wholesale store for three-and-a-half days from the afternoon of Saturday until the morning of Wednesday. He sold some 5,000 or 6,000 yards of printed cotton to O. K. Stores, Kumasi, during the period. On Sundays he was in the habit of selling goods to some Hausa men. He frequently sent the plaintiff out on business and had the custody of the safe key because he [p.10] of [1963] 2 GLR 7 also used the safe. This unsatisfactory state of affairs certainly gave rise to uneasiness, therefore, the plaintiff remarked one day that he was out frequently and that the business was being managed by the defendant. To that remark the defendant asked the plaintiff, “Don’t you trust me?” At the end of March 1962 the parties started physical stocktaking and completed it in April, a few days before Easter. The plaintiff says that there was no deficit but the defendant says there was a shortage of £G701 6s. 8d. and he has counter-claimed for that sum in this action. No stock lists were tendered in evidence.

In his address to the court, learned counsel for the defendant conceded that on the counter-claim, the proof of shortage did not reach the standard which would be required of U.A.C. Ltd., U.T.C. Ltd. and the other big commercial firms; but contended that it established that there was a shortage due to the negligence of the plaintiff, and invited the court to have regard to the accounting system of the petty traders such as the Kwahus, Accra Makola women, Syrians and Lebanese.

With respect to learned counsel, I am unable to appreciate the effect of his contention. It seems to me that he is saying that although the defendant did not prove the alleged shortage, I should nevertheless find that there was such shortage and that I can so find by looking at the accounting system of the petty traders named by him. There is no evidence as to the accounting system of the said petty traders and I do not know what it is. At all events, it is unnecessary to consider the system of petty traders because the defendant is not one of them. He described himself as a general merchant carrying on business in Ghana and in Manchester. The head office of his business is in 73, Whitworth Street, Manchester; and his Ghana accounts are made up by chartered accountants in England. I cannot regard such a business as petty trading.

In any case, counsel did not cite any authority for what I consider to a novel proposition, that there is one standard of proof in the case of the big firms and another in the case of the petty traders. I know of no such proposition nor of any authority which lends any support to it. In my view, the extent of a party’s business is not the test of proof. If a party fails to prove facts which lead to the rational conclusion that his allegation is true, he is bound to fail. I am satisfied that the defendant failed to prove the alleged shortage. Upon the evidence I find as a fact that there was no deficit. Even if there was any shortage at all, the undisputed facts are such that the plaintiff cannot be held liable because he ceased to be in absolute control of the defendant’s business as from the month of December 1961 when the defendant established his office in the wholesale store.

The defendant admitted that for refusing to sign the deficit and surplus account and admit liability for the alleged deficit of £G701 6s. 8d. the plaintiff’s appointment was terminated with effect from the 30th April, 1962. Although no reason was given in the letter of termination dated the 28th April, 1962, the defendant gave two reasons in this court viz., (1) unsatisfactory conduct towards customers and the staff, especially

[p.11] of [1963] 2 GLR 7 the African staff; and (2) refusal to accept responsibility for the shortage discovered during his employment. The defendant further admitted that the plaintiff’s salary for the month of April 1962 had not been paid.

Although the issue as to whether or not the parties entered into a binding contract was not raised in the pleadings, counsel for the defendant raised it in his address. He contended that there was no complete agreement and that the terms agreed upon by the parties in their correspondence should be regarded merely as a tentative agreement subject to a formal agreement being drawn up. I do not accept that contention.

I hold that the parties concluded a legally binding agreement and that both of them merely expressed a desire to have it drawn up as a matter of form. On the question of leave, the parties were never ad idem,therefore that issue was not part of the agreement and cannot affect the validity of the clear terms agreed upon. Both counsel cited a number of authorities and made profuse use of Halsbury’s Laws of England. I do not think it is necessary for me to examine in detail all the cases cited by learned counsel. I have decided to follow the ratio decidendi in Bonney v. Findlay.1 In that case as in this case, the defendant agreed in writing on the 30th November, 1922, to employ the plaintiff as his agent at Winneba, for a period of five years at a salary of £G20 per month. No provision for the termination of the agreement was included in the terms of the said agreement. In pursuance of the said agreement, the plaintiff assumed duty as agent. The business at Winneba did not prove to be a financial success, therefore on the 27th February, 1924, a letter was written by the defendant to the plaintiff, by which the plaintiff was given one month’s notice to terminate the said agreement. On the 4th March, 1924, stock was taken and when the accounts were gone into a deficit of £582 1s. 3d. was discovered. The plaintiff claimed for his salary for the period and damages for the wrongful termination of the said agreement. The defendant also counter-claimed for the shortage. It was held that2:

“An agreement in writing to serve as an Agent of a Mercantile business, in which the term of service is for a fixed period, with no provision for the termination thereof, cannot be terminated by the employer, before the expiration of the said period, except on the ground of misconduct, and, there being no proof of misconduct, the agent is entitled to recover damages from his employer. (Turney v. Goldsmith, L.R., Q.B., 544, and Taylor v. Caldwell, L.J., Q.B. (1863), 164 at page 166, followed).

A master may plead, in justification of the discharge of a servant, an act of misconduct occurring during the course of his employment, though the servant was dismissed on other grounds, and even although the master, at the time of the dismissal of the said servant, was unaware that such misconduct had existed. (The Boston Deep Sea Company v. Ansell, (1888), 39, Ch.D., 339, following Ridway v. Hungerford Market Company (1835), 3 A. & E., 171).”

[p.12] of [1963] 2 GLR 7

I hold therefore that the plaintiff’s contract of service for a fixed period of 24 months with no provision for the termination thereof, could not be properly terminated by the defendant before the expiration of the said period except on the ground of misconduct. The defendant is entitled to plead, as indeed he has done, acts of misconduct occurring during the course of the plaintiff’s employment although he dismissed him on other grounds. The evidence led in support of the defendant’s charge of misconduct against the plaintiff and by which the defendant sought to justify the plaintiff’s dismissal was given by the defendant himself, and by the second, third, fourth and fifth witnesses who gave evidence on behalf of the defendant. I watched their demeanour and I have no hesitation in rejecting as wholly untrue the allegations made by the defendant and his third witness against the plaintiff.

The rest of the witnesses agreed that whenever the plaintiff shouted, if at all, there was good reason for doing so. For example, when the plaintiff gave instructions to the labourers to do a piece of work, they sometimes delayed in doing the work or absented themselves from duty. The plaintiff then shouted at them to do their work. I am satisfied that upon the evidence before me the charge of misconduct has not been proved. I find as a fact that the conduct of the plaintiff was at all material times consistent with that of a person in a managerial position who was bound to maintain some discipline and that whatever he did was in the best interest of the defendant’s business, and was not blameworthy. Having found that the plaintiff’s conduct was unimpeachable, I hold that his dismissal was wrongful and he is entitled to damages.

In the course of his judgment in Bonney v. Findlay,3 Michelin J. said, “In the case of Beckham v. Drake, 2 H.L.C., 579, the rule was thus expressed by Erle, J.:— ‘The measure of damages for the breach of contract now in question, is obtained by considering what is the usual rate of wages for the employment here contracted for, and what time, would be lost before a similar employment could be obtained. The Law considers that employment in any ordinary branch of industry can be obtained by a person competent for the place and that the usual rate of wages for such employment can be proved, and that when a promise for continuing employment is broken by the master, it is the duty of the servant to use diligence to find other employment’.”

He continued4:

“In the more recent case of Addis v. Gramophone Company Ltd. [1909] A.C. 488, it was held by the House of Lords that,’Where a servant is wrongfully dismissed from his employment, the damages for the dismissal, cannot include compensation for the manner of the dismissal, for his injured feelings, or for the loss he may sustain from the fact that the dismissal in itself makes it more difficult for him to obtain fresh employment.’“ [p.13] of [1963] 2 GLR 7

Smyly C.J. considered the rule laid down in Beckham v. Drake5 in the case of Tay v. Walkden & Co., Ltd.,6 and said,

“In Macdonell’s Law of Master and Servant, the deduction is drawn from the above cited case that only nominal damages can be recovered, if the servant dismissed could have at once obtained similar employment. Macdonell v. Marston (1884), 1 C. & E. 281. I have therefore to ask myself, ‘could the plaintiff have at once obtained similar employment?” In my opinion, he could not have done so under local conditions.”

In Loeb v. Nasser7 Kingdon C.J. (Nigeria) said,

“I see no reason to quarrel with the basis of assessment, viz. a year’s salary having regard to the special circumstances of this case, namely the facts that plaintiff is a stranger in a strange country and may have difficulty in returning to Las Palmas, the place of his engagement, owing to the Spanish Civil War.” I have referred to that case because the plaintiff in this case is a stranger and was employed in Manchester, England. The evidence shows that in anticipation of serving the defendant for the full period of 24 months, the plaintiff sold his house in Manchester to the knowledge of the defendant. Ghana immigration regulations prevent the plaintiff from seeking fresh employment. When he was wrongfully dismissed, the plaintiff continued to occupy the defendant’s house and commenced this action. In July 1962, the defendant sued the plaintiff in this court for recovery of possession and mesne profits: see Haroutunian v. Medz-Moroukian8 in which judgment was given against him for £G250 arrears of rent from May 1962 to September 1962 and 25 guineas costs. The plaintiff has been permitted by the immigration authorities to remain in Ghana only to prosecute this action and he lives on charity. On the issue as to whether or not the defendant is liable to bear the plaintiff’s transport expenses, the simple meaning of the plain words in exhibit A is to be adopted. I therefore construe the words, “We will bear travelling expenses, medical expenses and transport expenses in Accra . . . but food and clothing expenses are your responsibility” in exhibit A to mean that the defendant would bear all the plaintiff’s travelling expenses, medical expenses and transport expenses in Accra for all purposes and not limited to expenses while he was on business but would not be responsible to feed and clothe him. I reject the narrow meaning given by the defendant to the said clear and unambiguous words because that meaning would defeat the clearly expressed intention of the parties.

I accept the plaintiff’s evidence that he paid the sum of £G73 10s. as transport expenses from the 4th December, 1961, to the 30th April, 1962, which is ten shillings a day. The plaintiff has already spent thirteen months in this country prosecuting this case without being able to look for any employment. In my opinion, it would take him another four months to

[p.14] of [1963] 2 GLR 7 obtain fresh employment in England. He has neither been paid the agreed allowance £G30 a month in lieu of accommodation from the date of his dismissal, nor his transport expenses which is £G15 a month from the month of May 1962. He was rightfully occupying the house which was provided for him on assumption of duty when the defendant purporting to have dismissed him brought an action against him and ejected him.

After careful consideration of all the circumstances of the case I will give judgment for the plaintiff for:

(a) £G100 being salary for April 1962; (b) £G73 10s. transport expenses from the 4th December, 1961, to 30th April, 1962; and (c) £G2,422 general damages and costs of 250 guineas inclusive of 200 guineas counsel’s costs.

DECISION

Judgment for the Plaintiff.

K. T.