SUPREME COURT, ACCRA
DATE: 21ST DECEMBER, 1962
BEFORE: SARKODEE-ADOO, MILLS-ODOI AND BLAY, JJ.S.C.
CASE REFERRED TO
Gascoigne v. Gascoigne [1918] 1 K.B. 223; 118 L.T. 347
NATURE OF PROCEEDINGS
APPEAL from a judgment of Charles, J. delivered in the High Court, Accra, in consolidated suits No. 161/59 and 290/59. Both suits were dismissed. The appellants appealed in respect of suit 290/59 only.
The facts are fully set out in the judgment of the Supreme Court.
COUNSEL
A. W. Dove (with him Armah) for the appellants.
M. T. Afutu-Nartey for the respondent.
JUDGMENT OF BLAY J.S.C.
Blay J.S.C. delivered the judgment of the court. The appellants in this suit against the respondent herein claimed (a) the sum of £G57 as one month’s arrears of instalment due and owing in respect of bus No. AF 7988; (b) £G5,000 as damages for breach of contract and (c) an injunction to restrain the respondent from going into execution in respect of a judgment obtained by the defendant against the appellants. The appellants based their claim on an agreement entered into between them and the respondent made on the 27th May, 1959, and admitted in evidence as exhibit F or L. The respondent, while not denying that he signed the agreement, contended that the said written agreement did not contain
[p.196] of [1962] 2 GLR 195
all the terms agreed upon between the parties, and that there was a collateral oral agreement that the appellants would deliver to him as his absolute property one Mercedes car No. AE 8080 as part of the consideration for the agreement. He also contended that this so-called collateral oral agreement was not inserted in exhibit F or L because the appellants wanted to evade payment of income tax on the amount involved in the transaction. Paragraph 3 of his statement of defence reads as follows:
“3. The defendant avers that the plaintiff decided not to pass the transaction regarding the Mercedes car AE 8080 through the firm’s account books so as to evade income tax. Hence this part of the agreement was made an oral collateral transaction, which was fraudulently omitted from the written agreement.”
He further contended that because the appellants refused to hand over the Mercedes car AE 8080 he in turn repudiated exhibit F or L on which the appellants rely for their claim. Paragraphs 4, 5 and 6 of the statement of defence read as follows:
“4. The defendant says also that after the signing of the alleged agreement, the said Renault bus AF 7988 was alone transferred to him, and when he called three weeks later to collect the said Mercedes car AE 8080, the plaintiff refused to hand it over, asserting that it was not part of the agreement.
5. On the ground of the plaintiff’s anticipatory breach of the agreement the defendant also refused to sign the hire-purchase agreement in respect of Renault bus AF 7988 and so repudiated the entire agreement. The plaintiff has since demanded and re-taken possession of the said Renault bus AF 7988.
6. The defendant contends that owing to the plaintiff’s fraud there is no effective agreement which could possibly have been breached by execution, which also has now been satisfied in full.”
To appreciate the appellants’ case against the respondent and the defence thereto it is necessary to examine in some detail the evidence adduced at the trial. From the record it is clear that the following facts were proved and/or admitted: On the 17th April, 1959, the respondent obtained judgment in the sum of £G1,447 together with costs of 45 guineas as against the appellants. On the 20th April, 1959, the appellants filed notice of appeal against the said judgment, and applied to the court for a stay of execution pending the hearing and determination of the appeal. This application was heard by Gwira, Commissioner of Assize and Civil Pleas, as he then was, and was refused on the 4th May, 1959. The appellants thereupon applied to the Court of Appeal for stay of execution and the application was granted. In the meantime further and other proceedings had been instituted between the parties by and against each other in the High Court, additional to the appeal proceedings pending in the Court of Appeal. Whilst these proceedings were pending in the various courts, one Fatal, who appears to be a friend of both parties, intervened and suggested a settlement of all the disputes standing between the parties. Consequently the respondent on the 26th May, 1959, wrote two letters one to Mr. Toutoungi who appears to be the manager of the appellants and another to the appellants. These letters were tendered in evidence at the hearing and marked exhibits H and J respectively. Exhibit H reads as follows:
“Dear Mr. Toutoungi,
Under the following conditions, I will agree to finish all cases between us pending in the court for the following cars Nos. AE 8080, AE 6565 and AE 6000.
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That you will give me one Renault bus for the sum of £G798 under the hire-purchase system for fourteen months instalment. Plus an amount of £G98 compensation.
I will be very grateful if you will confirm the above-mentioned conditions and we start fresh business. Please if you agree, cause your solicitor to make all necessary steps in dropping all cases before the court.
Yours faithfully,
(Sgd.) E. A. Nunoo.”
And exhibit J reads as follows:
“Dear Sirs,
I would like to put the following condition before you for your immediate consideration and approval, concerning the full settlement of the court case involving car No. AE 8080, and car No. AE 6565, and the court case involving car No. 6000.
If you will accordingly agree to this my humble suggestion, I will be more pleased and willing to put full settlement for the said two cases pending at the court:
(a) I will agree to make full settlement and cancel the court case involving car No. AE 8080 and car No. AE 6565 accordingly.
(b) I will agree to make full settlement and cancel the court case involving car No. AE 6000.
(c) That both parties, I and your company to give immediate instructions to our lawyers to take the necessary steps to deem the said two cases cancelled as null and void.
(d) Your company to compensate me with the sum of ninety eight pounds (£G98).
(e) Your company have to give me under hire-purchase system one (1) Renault bus at a monthly instalment of fifty-seven pounds (£G57) per month for fourteen (14) months and a hire-purchase agreement will be signed by me accordingly.
By agreeing to my suggestion and conditions, I will have no more claims or case to make about the said two court cases, and everything will be started as fresh business between ourselves.
I will be thankful if you could give this matter your immediate consideration.
I remain,
Yours faithfully,
(Sgd.) E. A. Nunoo.”
The appellants by their letter of the 27th May, 1959, exhibit K, accepted the respondent’s proposals for a settlement and an agreement was signed on the same day by the parties—exhibit F or L. After the signing of exhibit F or L the appellants in pursuance thereof let to the respondent one Renault bus on hire-purchase at £G798 payable by monthly instalments of £G57 for fourteen months (exhibit A or G). They also made available to the respondent the sum of £G98 which was used in payment of the insurance premium on the bus. The appellants also withdrew and discontinued their appeal proceedings before the Court of Appeal and all other actions instituted against the respondent in other courts and the respondent did likewise. The respondent was unable to pay the monthly rent reserved by the terms of the hire-purchase agreement, exhibit A or G, when it fell due and he returned the bus to the
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appellants as he was entitled to do and thereby terminated the operation of the hire-purchase agreement. He, however, contended that he terminated the hire-purchase agreement because the appellants had failed to honour the collateral oral agreement to hand over to him Mercedes car No. AF 8080.
The respondent next filed a motion in court praying for the withdrawal or cancellation of the notice of discontinuance given by him in respect of his suits against the appellants, exhibit R2. The result of this application does not appear in the record of proceedings before this court. However, the respondent took out a writ of fi. fa. to enforce payment of his original judgment now that the appellants had been induced to withdraw and discontinue their appeal proceedings against the same.
The appellants having endeavoured in vain to obtain an order to set aside the writ of fi. fa. paid the judgment debt and costs into court in order to release their properties from attachment. And the respondent promptly withdrew the amount deposited.
The learned trial judge accepted the above facts as proved and/or admitted and it is obvious that but for the respondent’s plea of the admitted of an oral collateral agreement not embodied in the written agreement, the appellants’ case would have been unanswerable. The learned judge, however, held that in his view there was an oral collateral agreement between the parties and that the appellants procured the signature of the respondent to exhibit F or L by fraud since they had no intention of carrying out this collateral agreement. He therefore dismissed the appellants’ claim in whole and awarded costs fixed at 50 guineas against them.
Before this court, counsel for the appellants has argued with force and we think with some justification, that “because the written agreement entered into by both parties to discontinue the several actions pending in the court and the court below was complete . . . the judge erred in law in admitting extrinsic evidence to vary its terms.” He contended that as the terms of exhibit F or L emanated in the first place from the respondent, he cannot be heard to say that the written agreement did not contain all the terms agreed upon by the parties. The law as to the admission of extrinsic evidence where there is a written agreement is stated in Phipson on the Law of Evidence, (9th ed.), at p. 599 as follows:
“When a transaction has been reduced into, or recorded in writing either by requirement of law, or agreement of the parties, extrinsic evidence is, in general, inadmissible to contradict, vary, add to or subtract from, the terms of the document.”
The learned author gives the grounds for exclusion as follows:
(1) “That to admit inferior evidence when the law requires superior would be to nullify the law; and . . .
(2) that when the parties have deliberately put their agreement into writing, it is conclusively presumed between themselves and their privies that they intend the writing to form a fun and final statement of their intentions, and one which should be placed beyond the reach of future controversy, bad faith, or treacherous memory.”
In the present case it seems to us that the respondent has been guilty of bad faith in that having induced the appellants to withdraw their appeal against a judgment of doubtful merit, and in respect of which a stay of execution had been granted by the appeal court, he turned
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round to enforce that judgment on the pretext that his signature had been obtained by fraud in the circumstances already referred to in this judgment.
We admit that there are exceptions to the exclusion rule above stated and that the existence of fraud is one of the exceptions. Also that the burden of proof where fraud is alleged is always on the party who alleges it. That it is also in all cases a question of fact to be decided by the jury. It follows therefore that in this case where the trial judge had expressed himself in the following words, “I have no hesitation in finding that A. Ashkar procured the signature of E. A. Nunoo to the contract exhibit F by means of fraud,” we would have been reluctant in rejecting that finding of fact, if the learned judge had been justified in law in admitting extrinsic evidence of the alleged fraud. Now what was the evidence of the respondent in proof of the alleged fraud? In his evidence-in-chief he deposed as follows: “A. Ashkar told me he wanted our verbal agreement to be put in writing and A. Ashkar gave me a pen and paper and A. Ashkar dictated the terms of the verbal agreement and I wrote it down. A. Ashkar omitted some of the terms of the verbal agreement so I pointed them out to him. I told A. Ashkar that it was agreed that I was to buy bus No. AF 7988 under hire-purchase agreement and was to be given £G300 credit in lieu of car No. AE 6565 and I told him he omitted to mention this. I also told him that it was agreed that my car No. AE 8080 was to be returned after it was repaired and he also omitted to mention this. When I pointed these omissions out to A. Ashkar, he told me that if these terms were to be recorded in the written agreement then they would have to be recorded in the hire-purchase agreement in respect of the bus No. AF 7988 as well as in his cash book and this would expose him to pay income tax on the extra amount so I should not worry with those omissions and I should rely on his record. I agreed to this.”
Under cross-examination he repeated the same evidence. It is clear therefore from his evidence that the respondent was a party to a transaction which was a fraud on the revenue of the country. That being the case we are of the opinion that the respondent cannot be heard to assert a fraud to which he was a party, see Gascoigne v. Gascoigne1(1) and the cases therein cited. In that case Lush, J. in delivering the judgment of the court said as follows2(2): “Now, assuming that there was evidence to support the finding that the defendant was a party to the scheme which plaintiff admitted, but without deciding it, what the learned judge has done is this: He has permitted the plaintiff to rebut the presumption which the law raises by setting up his own illegality and fraud and to obtain relief in equity because he has succeeded in proving it. The plaintiff cannot do this; and, whether the point was taken in the County Court or not, this Court cannot allow a judgment to stand which has given relief in such circumstances as that.”
We are therefore of the view that the learned judge was wrong in law in admitting extrinsic evidence of the kind he did admit to rebut the presumption of law that exhibit F or L contained all the terms agreed upon by the parties.
In the result, we would allow the appeal. The judgment appealed from together with the order as to costs is set aside. In lieu thereof there will be judgment for the appellants in the sum of £G57 claimed as a
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month’s arrears of rent due and owing under the hire-purchase agreement. As we are of opinion that judgment ought to have been entered for the plaintiffs and the issue as to damages has not been tried we have no alternative but to remit the case to the court below with a direction to enquire as to the measure of damages payable by the defendant to the plaintiffs.
The appellants will have their costs in this court fixed at £G97 11 s. 6d. and in the court below to be assessed at the subsequent hearing. Any costs paid by the appellants in pursuance of the order of the trial court should be refunded to them forthwith.
Court below to carry out.
DECISION
Order accordingly.
J. D.
