DOMINS FISHERIES LTD. vs. BREMEN-VEGESACKER FISCHEREI [1973] 2 GLR 490

CASES REFERRED TO

(1) Brown & Gracie, Ltd. v. F. W. Green & Co., Pty., Ltd. [1960] 1 Lloyd’s Rep. 289, H.L.

(2) Hyde v. Wrench (1840) 3 Beav. 334; 4 Jur. 1106; 49 E.R. 132.

(3) Stevenson, Jacques, & Co. v. McLean (1880) 5 Q.B.D. 346; 49 L.J.Q.B. 701; 42 L.T. 897; 28 W.R.

916.

(4) Offord v. Davies (1862) 12 C.B. (N.S.) 748; 31 L.J.C.P. 319; 9 Jur. (N.S.) 22; 6 L.T. 579; 10 W.R.

758.

(5) In re National Savings Bank Association; Hebbs’ Case (1867) L.R. 4 Eq. 9; 16 L.T. 308; 15 W.R.

754.

(6) Byrne & Co. v. Van Tienhoven (1880) 5 C.P.D. 344; 44 J.P. 667; 49 L.J.Q.B. 316; 42 L.T. 371. (7) Henthorn v. Fraser [1892] 2 Ch. 27; 61 L.J.Ch. 373; 66 L.T. 439; 40 W.R. 433; [1891-1894] All ER. Rep. 908, C.A.

(8) Ryan v. Mutual Tontine Westminster Chambers Association [1893] 1 Ch. 116; 62 L.J.Ch. 252; 67 L.T. 820; 41 W.R. 146; 9 T.L.R. 72; 37 S.J. 45; 2 R. 156, C.A.

(9) Behnke v. Bede Shipping Co., Ltd. [1927] 1 K.B. 649; [1927] All E.R. Rep. 689; 96 L.J.K.B. 325;

136 L.T. 667; 43 T.L.R. 170; 71 S.J. 105; 17 Asp. M.L.C. 222; 32 Com.Cas. 134.

(10) Hart v. Hart (1881) 18 Ch.D. 670; 50 L.J.Ch. 697; 45 L.T. 13; 30 W.R. 8.

(11) Beswick v. Beswick [1968] A.C. 58; [1967] 3 W.L.R. 932; [1967] 2 All E.R. 1197, H.L. (12) Hart v. Herwig (1873) 8 Ch.App. 860; 42 L.J.Ch. 457; 29 L.T. 47; 21 W.R. 663; 2 Asp.M.L.C. 63. (13) Claringbould v. Curtis (1852) 21 L.J.Ch. 541.

NATURE OF PROCEEDINGS

ACTION by the plaintiffs, a fishing company, against the defendants, the owners of a fishing vessel, for breach of contract of sale of the vessel.

COUNSEL

T. A. Nelson-Cofie for the plaintiffs.

P. A. Adjetey for the defendants.

JUDGMENT OF ABBAN J.

The claim of the plaintiffs, as amended, is for (a) a declaration that the defendants have by a contract sold to the plaintiffs a fishing motor vessel called The Paderborn now lying at Tema Fishing Harbour, (b) an order for specific performance of the said contract, and (c) general [p.493] of [1973] 2 GLR 490 damages for loss of use; or in the alternative, damages for breach of contract and refund of the deposit paid by plaintiffs to the defendants towards the purchase of the vessel, plus interest at the rate of ten per cent per annum.

The defendants are a foreign company and they own the motor vessel, called The Paderborn. The vessel was brought to Tema Harbour apparently for fishing under the management of two Europeans — Tandorf and Grunther Thomas. While in Ghana these two gentlemen, on behalf of the defendants, tried to sell the vessel to a Ghanaian company called Eben Fisheries Ltd., and it appears they allowed the directors of this company, or some persons connected with it, to operate the vessel for some time. One Comfort Tetteh alias Mrs. Comfort Dodoo who gave evidence in this case, as the first witness for the plaintiffs, stated that she advanced about ¢12,000.00 to those two Europeans on behalf of the said Eben Fisheries Ltd. She also spent another ¢6,000.00 in making some repairs to the vessel and in buying ice and fuel for the running of the vessel. Mrs. Comfort Dodoo said she was not one of the directors of Eben Fisheries Ltd. But the ¢6,000.00 spent on the repairs, ice and fuel, as well as the ¢12,000.00 advanced to the two gentlemen, were to be treated as a loan to the Eben Fisheries Ltd. The understanding was that the defendants would give credit to Eben Fisheries Ltd. for the total sum of ¢18,000.00 when the purchase price of the vessel was finally agreed upon. Mrs. Dodoo, being a creditor to Eben Fisheries Ltd. was exercising some control over the affairs of that company, and was probably hoping to have some interest in the vessel when it was eventually purchased by Eben Fisheries. Ltd.

In the long run, however, the two Europeans left Ghana without completing the negotiations for the sale of the vessel, and without refunding the amount of ¢18,000.00, either to Eben Fisheries Ltd. or to Mrs. Comfort Dodoo. They left the vessel in charge of one Mr. W. D. Lobban, an accountant in Accra, who knew of the negotiations which had taken place between the two gentlemen and Eben Fisheries Ltd. Mrs. Dodoo was not given any document to show that she had any claim or lien on the vessel, and it was obvious that she was going to have considerable difficulty in recovering the ¢18,000.00 from Eben Fisheries Ltd. as the directors of that company were, by that time, quarrelling among themselves and the company seemed to be collapsing.

It was in this dilemma that Mrs. Comfort Dodoo consulted Mr. M. in his capacity as a solicitor. She was still interested in the vessel and the defendants were still bent on selling it. Mr. M. therefore advised Mrs. Comfort Dodoo to form a company of her own and after the formation of the said company, that company should then negotiate with the defendants for the purchase of the vessel. This advice was accepted by Mrs. Comfort Dodoo. Thus, on 28 October 1970, a new company called Domins Fisheries Ltd., the plaintiffs herein, was incorporated with Mr. M., Mrs. Comfort Dodoo and Mrs. Letitia Dodoo as its directors. Mr. M. was also made the secretary of the company. The plaintiffs, as a new

[p.494] of [1973] 2 GLR 490 company, had their certificate to commence business as from 2 November 1970. But before 2 November 1970, Mr. M. had already got in touch with Messrs. Q. & B., a firm of solicitors, and had expressed the desire of the plaintiffs to purchase the vessel.

Messrs. Q. & B. were at that time acting as the solicitors for the defendants, and had even issued a writ of summons on behalf of the defendants against Eben Fisheries Ltd. and were finding it difficult to serve the directors and the secretary of that company. Following the approach made by Mr. M. a long discussion took place between Mr. M. and Mr. Q., one of the partners of Messrs. Q. & B., in the office of Mr. Q. Mr. Lobban, the local attorney of the defendants, had instructions to sell the vessel at ¢30,000.00; and on the instructions of Mr. Lobban, Messrs. Q. & B. through Mr. Q. offered the vessel to the plaintiffs, through Mr. M. for that price, namely, ¢30,000.00.

Mr. M. accepted this offer on behalf of the plaintiffs. The terms and conditions of sale and the mode of paying the purchase price of ¢30,000.00 were all agreed upon at that meeting. In pursuance of this agreement, the plaintiffs through Mr. M. paid to the defendants’ said solicitors, through Mr. Q., cash the sum of ¢2,000.00 as part-payment of the purchase price. A receipt, exhibit B, acknowledging the said payment was accordingly issued by Messrs. Q. & B. It must be noted that the payment of the ¢2,000.00 was accompanied by a covering letter written by Mr. M. This letter, dated 12 November 1970, was tendered as exhibit A. It is not disputed that the said ¢2,000.00 was tendered to Mr. Q. on 12 November 1970, but because of lack of facilities for keeping cash in Mr. Q.’s office, Mr. Q. could not accept the amount on the said 12 November. It was not until 16 November 1970, that Mr. Q. was able to receive that amount. The payment was made in the office of Mr. Q. According to Mr. M. on that very day, 16 November 1970, Mr. Q. after receiving the ¢2,000.00 reduced all the terms of the sale, already agreed upon, into writing.

In the presence of Mr. M., Mr. Q. called one of his clerks and asked him to type those terms. Mr. M. waited in Mr. Q.’s office while the typing was being done. The terms were put in the form of a letter. Mr. Q. after signing it, handed it over to Mr. M. Mr. M. then left Mr. Q.’s office. This letter is of crucial importance and it was tendered as exhibit C. It reads as follows:

“Accra, Ghana, 16 November 1970 Dear Sir, Re: The Paderborn We thank you for your letter of 19 October and your subsequent discussion with our Mr. Quist. We note your acceptance of the offer to sell the fishing vessel Paderborn to Domins Fisheries Limited for a sum of thirty thousand new cedis (N¢30,000.00) which consideration will be paid as follows:

(a) The vessel is sold in its present condition at the port of Tema.

(b) ¢3,000.00 to be paid on or before the execution of the contract of sale.

[p.495] of [1973] 2 GLR 490

(c) Balance of N¢27,000.00 to be paid by twelve (12) equal monthly instalments of N¢2,250.00 each, commencing from the end of the month following the month in which the contract of sale is executed.

(d) You will help us obtain judgment in the suit now pending in the High Court in respect of the vessel by obtaining a disclaimer duly executed by Mrs. Dodoo one of the defendants in the said suit and a member of Domins Fisheries Limited. You will also help us direct service on the secretary of Eben Fisheries.

(e) The instrument of transfer will be coupled with a mortgage of the vessel in favour of our clients to secure payment of the balance of the purchase price referred to in (c) above. The legal expenses in connection with the transfer and mortgage will be borne by your clients.

Please confirm in writing that these terms are acceptable to your clients.

Yours faithfully, for Quist & Brown (solicitors)

(Sgd.) Cromwell Quist. c.c W.D. Lobban, Esq.”

(The emphasis is mine.)

It should be observed that the second paragraph of this letter, exhibit C, was divided into sub-paragraphs, namely, (a), (b), (c), (d) and (e). The controversy, which will be seen presently, is about (c) which dealt with the payment of the balance of ¢27,000.00. This item will, hereinafter, be referred to as item 2 (c) of exhibit C.

On 23 November 1970, Mr. M. wrote a letter, exhibit D, confirming the plaintiffs’ acceptance of the offer. But in the said letter, Mr. M. requested three months’ moratorium before the commencement of payment of the said instalments. As hitherto, that letter was not posted. It was handed over by Mr. M. to Mr. Q. in the office of Mr. Q. Mr. M. in exhibit D enclosed a cheque for ¢1,000.00 as further part-payment of the purchase price. The cheque was drawn in the name of Mr. Lobban. Mr. Q. passed on the cheque to Mr. Lobban who cashed it. There seemed to have been silence about the three months’ moratorium asked for by Mr. M. The silence was eventually broken when on 28 December 1970, Mr. Q. wrote the letter, exhibit E. Mr. M. on 5 January 1971 replied to the defendants’ exhibit E in the following manner:

“Accra, Ghana, 5 January 1971 Dear Sirs, SALE OF THE FISHING VESSEL PADERBORN Ref. Yours No. Mise/LA/V of 28 December 1970.

I refer to your letter under reference and confirm that item (c) of your letter of 16 November 1970 is acceptable to my clients.”

[p.496] of [1973] 2 GLR 490

This letter of 5 January 1971 exhibit F, was delivered by hand by Mr. M. at the offices of Messrs. Q. & B. on the same 5 January 1971. In his evidence, Mr. M. said he gave the letter to one of the clerks of Messrs. Q. & B. who answered to the description of one Abagrie, the defendants’ first witness. But the next day, that is 6 January 1971, Mr. Q. called Mr. M. to the offices of Messrs. Q. & B. and told Mr. M. that the defendants were no longer going to sell the vessel to the plaintiffs, because the defendants through the West German Embassy in Ghana, had concluded a contract to sell the vessel to the Ghana Government, and that letters of intent were exchanged between the defendants and the Ghana Government as far back as 30 December 1970. On the following day, 7 January 1971, Mr. Q. wrote exhibit G in reply to Mr. M.’s letter of 5 January 1971. In this exhibit G, Mr. Q. re-stated what he, Mr. Q. had told Mr. M. on 6 January 1971. Thereafter, Mr. M. consulted Nelson-Cofie, Esq., a legal practitioner of Accra, and instructed him to take up the matter with the solicitors for the defendants, Messrs. Q. & B. A series of correspondence was exchanged between the plaintiffs’ new solicitor and Messrs. Q. & B. The plaintiffs, insisting that the defendants’ conduct in selling the vessel to the Ghana Government amounted to a breach of contract, brought the present action.

Now the defendants’ case. Mr. Q. of Messrs. Q. & B. represented the defendants in this action and he gave evidence for and on behalf of the defendants. In the circumstances, I will, hereinafter, refer to him as the defendants’ representative. Since Mr. M. also represented the plaintiffs and gave evidence on their behalf he will, henceforth, be referred to as the plaintiffs’ representative.

The evidence given by the defendants’ representative differed from that of the plaintiffs’ representative only in detail. At least, up to the stage where exhibit C was written there was not much difference. The defendants’ representative said the terms of the contract offered by the defendants were those stated in exhibit C, and that the plaintiffs’ representative by his letter, exhibit D, accepted all the terms except item 2 (c). He alleged that the three months’ moratorium requested by the plaintiffs amounted to a counter-proposal and this was rejected by Mr. Lobban, the attorney of the defendants, and that the said rejection was verbally communicated to the plaintiffs’ representative long before 28 December 1970. He explained that it was the plaintiffs’ representative who asked that the rejection should not be communicated in writing as the plaintiffs were going to apply to the Agricultural Development Bank for a loan to pay the whole balance of ¢27,000.00. Enquiries made by the defendants’ representative revealed that the plaintiffs had in fact applied for the said loan. But for some time the representative never heard from the plaintiffs’ representative about the said loan. So on 28 December 1970, the defendants’ representative reduced the verbal rejection of the said counter-proposal into writing as contained in exhibit E, and sent it to the plaintiffs’ representative. Nothing was heard from the plaintiffs’ representative thereafter. But on receiving the information that the defendants had sold the vessel to the Ghana Government, the defendants’

[p.497] of [1973] 2 GLR 490 representative said he invited the plaintiffs’ representative to his office on 6 January 1971. In the office, the defendants’ representative told the plaintiffs’ representative about the said sale to the Ghana Government, and added that since he was not sure of the position, a cable had been sent to West Germany by Mr. Lobban for verification, and if the said sale was confirmed, the defendants’ representative would advise the defendants to pay some compensation to the plaintiffs’ representative for the work the plaintiffs’ representative had so far done in the negotiations.

The defendants’ representative further alleged that the next day after this meeting, that is, 7 January 1971, he returned to his office from court at about 11.00 a.m. and saw the plaintiffs’ letter, dated 5 January 1971, exhibit F, on his desk. The defendants’ representative denied having received exhibit F before 6 January 1971. He said when he saw exhibit F he suspected that exhibit F was written by the plaintiffs’ representative after the meeting of 6 January 1971; so he made enquiries as to the time the letter was supposed to have been delivered in the office. But all the clerks in his office, including Abagrie, the defendants’ first witness, denied any knowledge of it. The defendants’ representative, in the circumstances, thought a trick had been played by the plaintiffs’ representative. He said he suspected that the plaintiffs’ representative who had access to the office might have sneaked into the office unnoticed and placed exhibit F on the desk. The defendants are therefore contending that so far as they are concerned, the letter exhibit F, purporting to accept item 2 (c) of exhibit C, was written after the offer to sell the vessel had been withdrawn, and the said withdrawal had been verbally communicated to the plaintiffs’ representative at the meeting of 6 January 1971. Consequently, there had never been any concluded contract between the defendants and the plaintiffs.

One of the issues set down for trial was whether the plaintiffs as at 29 October 1970, had legal status to engage in any business. It is clear that the plaintiff company was incorporated on 28 October 1970 and that this fact was published in the Ghana Commercial and Industrial Bulletin (No. 7 of Friday, 8 January 1971). So that as at 29 October 1970, the plaintiffs had legal capacity to enter into binding agreements.

The most important questions, however, are these: When was the offer to sell the vessel made; and was the offer accepted; and if it was accepted, when was it accepted? In the first place, I have no difficulty in finding that at all material times, the defendants intended to sell the vessel for ¢30,000.00 to any willing buyer, and that Mr. W. D. Lobban, who was the defendants’ lawful attorney in Ghana, had the full authority of the defendants to dispose of the vessel at that price. I also find that Messrs. Q. & B. a firm of solicitors in Accra, were instructed by Mr. Lobban, with the knowledge and consent of the defendants, to find a purchaser. It was in pursuance of the said instructions that the said solicitors, Messrs. Q. & B., acting through the defendants’ representative, entered into negotiations about the vessel with the plaintiffs’ representative. It is also not disputed by the plaintiffs that exhibit C contained all

[p.498] of [1973] 2 GLR 490 the terms of the offer made by the defendants. But were those terms, constituting the offer, accepted by the plaintiffs at an time before the said 6 January 1971, the date on which the defendants’ representative verbally communicated to the plaintiffs’ representative the intention of the defendants to sell the vessel to the Government of Ghana?

A great deal, I think, depends on the interpretation which should be put on the letter, exhibit D, written by the plaintiffs’ representative in reply to the letter of offer, exhibit C. Learned counsel for the defendants contended that the plaintiffs, by their letter, exhibit D, did not accept the terms of the offer in their entirety. Counsel ably argued that the said letter, exhibit D, accepted all the terms of the offer but one, namely, item 2 (c) of exhibit C, which item stated that the balance of ¢27,000.00 should be paid “by twelve equal monthly instalments of ¢2,250.00, payment to commence from the end of the month in which the contract of sale was executed.” Counsel submitted that there was a paragraph in the plaintiffs’ said letter, exhibit D, which modified this item 2 (c) of exhibit C. He further submitted that the said modification did not only amount to a rejection of the said item 2 (c) but also to a counter-offer which was rejected by the defendants’ letter of 28 December 1970: see exhibit E.

Before I go further, I will set out the portion of exhibit D which, according to the defendants, amounted to a rejection and a counter-offer. It reads as follows:

“Accra, Ghana 23 November 1970 Dear Sir, SALE OF THE FISHING VESSEL PADERBORN I refer to your letter No. Misc/LA/V dated 16 November 1970 and reply as follows:

My clients agree to paragraphs 2 (a) and (b).

With regard to paragraph 2 (c) my clients agree to pay the balance of the purchase money in 12 equal monthly instalments but request a three month moratorium before the commencement of the payment of the instalments as the vessel is in need of urgent repairs at the dry-dock.”

The letter, exhibit D, then went on to accept paragraphs 2 (d) and 2 (e) of exhibit C and then ended thus:

“And please find herewith Domins Fisheries cheque No. BD/2 65001 for N¢1,000.00 (one thousand new cedis) for the balance of the deposit of N¢3,000.00 in compliance with paragraph 2 (b) of your letter under reference. The cheque is made payable to W. D. Lobban as agreed upon. Please acknowledge receipt.”

I think the plaintiffs’ letter, exhibit D, must be read in the light of the previous negotiations, during which all the terms as contained in the defendants’ letter, exhibit C, were verbally accepted by the plaintiffs. It was after the parties had agreed on all those terms and there had been

[p.499] of [1973] 2 GLR 490 consensus ad idem that the said terms were reduced into writing by the defendants’ representative. As a mater of fact, by the time the defendants’ representative wrote exhibit C, the defendants had already received the sum of ¢2,000.00 from the plaintiffs and had issued a receipt, exhibit B. On this receipt it was clearly stated that the amount was “for the purchase of F.U. Paderborn.” So that all that the defendants, by their letter, exhibit C, wanted from the plaintiffs was documentary evidence of the said verbal acceptance. It is against this background and in the light of all the other documents involved in the case, that the plaintiffs’ letter, exhibit D must be construed.

In Brown & Gracie, Ltd. v. F. W. Green & Co., Pty., Ltd. [1960] 1 Lloyd’s Rep. 289, the House of Lords in construing the respondents’ cable purporting to accept the offer of the appellants took into consideration not only that “which was commercially reasonable” but also all the correspondence and documents which had been exchanged between the parties, as well as “the previous course of dealings” between them. The question raised by the principal appeal in that case was whether a cable sent by the appellants on 26 October 1949, accepting the respondents’ offer to supply beans but with the words “provided shipment strictly to contract” constituted a binding contract. The appellants contended, among other things, that there was no acceptance, for the cable, apart from being ambiguous, introduced a new term upon which there was no agreement. Lord Reid, in the course of his judgment, at p. 296 said:

“The sole question now in the case is whether a cable sent by the appellants to the respondents on Oct. 26, 1949, was an acceptance of all material terms of an offer by the respondents, or whether it contained a new term and was, in effect, a counter-offer which never was accepted. That cable must be read in light of the previous course of dealings between the parties.”

He also said at p. 298:

“I would therefore hold, on the documents and correspondence, that the words ‘strictly to contract’ did not prevent the cable of Oct. 26 being an acceptance of the previous offer and concluding a binding contract between the parties.”

(The emphasis is mine,)

Having regard, therefore, to all the surrounding circumstances of the case, and particularly to exhibits A and B, as well to the previous negotiations that had already taken place between the defendants and the plaintiffs, it seems to me that the plaintiffs’ said letter, exhibit D, amounted to acceptance. Exhibit D accepted all the terms of the offer including the said item 2 (c). If the plaintiffs had intended not to accept item 2 (c), as is being contended by the defendants, the plaintiffs would not have enclosed the cheque for ¢1,000.00 to complete the payment of the deposit of ¢3,000.00. The defendants, having accepted the said deposit in pursuance of the terms of the agreement, could not turn round to say that there was no acceptance of their offer in its entirety.

[p.500] of [1973] 2 GLR 490

However, even if it is conceded that the plaintiffs’ exhibit D did not wholly accept item 2 (c) of exhibit C, and no contract was therefore concluded on 23 November 1970, I will, nevertheless hold that that paragraph in exhibit D, which dealt with item 2 (c), did not amount to a rejection and that the offer, as contained in the said item 2 (c) was still open after 23 November 1970, and could thereafter be accepted, because all that the plaintiffs said in that controversial portion of their exhibit D, and which I have already quoted above, amounted to this: we accept your offer to pay the balance of ¢27,000.00 by twelve equal monthly instalments and we would like to know whether you are prepared to give us some indulgence as to the time when the payment of the said monthly instalments should begin. To my mind, there was nothing specific by way of a rejection and a counter-offer in that statement. There is a world of difference between a counter-offer and a request for information.

In the well-known case of Hyde v. Wrench (1840) 3 Beav. 334, the court held that an offer to buy a farm for £950 in reply to an offer to sell for £1,000 was a refusal followed by a counter-offer. But where the offeree is seeking further information or simply making an enquiry as to whether the offeror will modify his terms, as in the case herein, he is not necessarily making a counter-offer: see Stevenson, Jacques, & Co. v. McLean (1880) 5 Q.B.D. 346. In the latter case, the question was whether the correspondence between the parties amounted to a contract. The defendant contended that the telegram sent by the plaintiffs on Monday morning in reply to the defendant’s offer, as contained in the defendant’s telegram of Saturday, was a rejection of the defendant’s offer and a new proposal on the part of the plaintiffs and consequently, the defendant had a right to regard the plaintiffs’ said telegram as putting an end to the original negotiation. Lush J. in his judgment at pp. 349-350 said:

“Looking at the form of the telegram, the time when it was sent, and the state of the iron market, I cannot think this is its fair meaning. The plaintiff Stevenson said he meant it only as an inquiry, expecting an answer for his guidance, and this, I think, is the sense in which the defendant ought to have regarded it.”

The view that the defendants’ offer was still open, even after 23 November 1970, is clearly supported by the defendants’ own letter, exhibit E, written on 28 December 1970. In exhibit E, the defendants were still insisting that the plaintiffs should confirm their acceptance of that item 2 (c) of exhibit C. I will quote exhibit E in extenso:

“Accra, Ghana 28 December 1970 Dear Sir, SALE OF THE FISHING VESSEL PADERBORN We refer to your letter of 23 November and your subsequent discussion with our Mr. Quist. Our clients’ attorney in Ghana Mr. W. D. Lobban, will forward a receipt for your cheque for ¢1,000.00

[p.501] of [1973] 2 GLR 490 to you in due course. Our instructions are to inform you in answer to your request in paragraph 3 of your letter, that our clients cannot agree to a three month moratorium before the instalment payments commence.

Kindly confirm, therefore, that item (c) of our letter of 16 November is acceptable to your clients.

Yours faithfully, For: Quist & Brown (solicitors)

(Sgd.) Cromwell Quist”

(The emphasis is mine.) In the face of this letter, especially the last sentence thereof, how can it be argued that the defendants regarded their offer as closed, after receiving the plaintiffs’ letter, exhibit D. The question then is, was the offer which was still open after 23 November 1970, ever accepted by the plaintiffs?

It appears to me that after the defendants’ representative had received exhibit D, there was further discussion between the plaintiffs’ representative and the defendants’ representative. I find that during that discussion the plaintiffs’ representative verbally communicated to the defendants’ representative, the plaintiffs’ confirmation of the acceptance of the said item 2 (c). In any event on the receipt of the defendants’ exhibit E, whose contents have just been set out above, the plaintiffs on 5 January 1971, wrote exhibit F, confirming their acceptance of the said item 2 (c); and this letter, exhibit F, was delivered and received in the office of the defendants’ representative on the same 5 January 1971. I believe that the plaintiffs’ representative handed over that letter to Abagrie, the defendants’ first witness, who placed it on the desk of the defendants’ representative. I do not think the plaintiffs’ representative “slipped” into the office of the defendants’ representative unobserved, and put the said letter on the desk of the defendants’ representative. This allegation of “slipping” into the office of the defendants’ representative was a mere suspicion and there was no evidence to substantiate it. I find it difficult to accept Abagrie’s evidence that he never received exhibit F. I will, briefly, refer to a portion of the evidence of the defendants’ representative, under cross-examination:

“Q. Did Mr. Mingle at any time describe to you the clerk in your office to whom he delivered exhibit F?

A. Mr. Mingle has described this clerk to me personally in oral conversation.

Q. Never in writing?

A. I cannot remember.

Q. When Mr. Mingle described this clerk to you, what did you do?

A. I could easily recognise the clerk he was referring to, and this is Mr. Abagrie; and I asked Mr.

Abagrie again, if he had received this letter, exhibit F, and he said no.”

[p.502] of [1973] 2 GLR 490 (The emphasis is mine.)

It is clear from the last answer that the defendants’ representative questioned Abagrie, at least on two occasions about the letter exhibit F. Yet Abagrie, under cross-examination, said nobody except the plaintiffs’ representative, Mr. M. questioned him about it. This is what Abagrie said:

“I was asked by Mr. Mingle about a letter he came to deliver to me personally for Mr. Quist which I denied.

Apart from this enquiry I have not been questioned by anybody about the delivery of this letter in the office.”

I accept the evidence of the defendants’ representative that he did question Abagrie about this letter. That is, apart from the enquiry made by the plaintiffs’ representative, the defendants’ representative also questioned Abagrie about this letter, exhibit F, but Abagrie refused to tell the defendants’ representative the truth. When Abagrie saw that the defendants’ representative was very angry about this letter, Abagrie realised that there was some trouble in the air, and in order to save his skin, he decided to tell lies to the defendants’ representative about the letter. Throughout the negotiations between the representatives of the parties, letters which were not posted but were delivered by hand were received without signing a messenger’s receipt book. In other words, the letters which were exchanged between the representatives of the parties and were delivered by hand were not accompanied by a messenger’s receipt book. So that it was not surprising that the plaintiffs’ representative did not carry a messenger’s receipt book with him when he called at the office of the defendants’ representative to deliver the letter exhibit F.

I therefore find that the letter, exhibit F, was properly delivered in the office of the defendants’ representative on 5 January 1971, and it was received by the clerk, Abagrie, in the normal course of his duties as a clerk, for and on behalf of the defendants’ representative; and on the said date of 5 January 1971, the offer to sell the vessel to the plaintiffs had neither been rejected by the plaintiffs nor revoked by the defendants. Consequently, as I have already stated, even if it is conceded that exhibit D did not amount to acceptance of item 2 (c) in its entirety, the fact still remained that the said item 2 (c) was eventually accepted by exhibit F, and the said acceptance was properly communicated to the defendants’ representative on 5 January 1971, in accordance with the mode prescribed by the defendants’ representative in the last paragraph of exhibit C. The fact that the defendants’ representative might not have read exhibit F, until some time after the meeting of 6 January 1971, is beside the point. There was express intimation from the defendants’ representative that the confirmation of the acceptance should be in writing and that was what was done by the plaintiffs’ representative. Also it was within the contemplation of the parties that the letter of acceptance could either be posted or delivered by hand. The plaintiffs’ representative chose the latter course. I am therefore of the view that the delivery of the letter, exhibit F, in that office was sufficient communication of the acceptance.

[p.503] of [1973] 2 GLR 490

Thus, even if the defendants’ contention that the plaintiffs’ letter of 23 November 1970, exhibit D, never concluded a contract is tenable, I will still hold that a valid contract was eventually concluded on 5 January 1971. The defendants’ representative in fact appreciated that if it was found that that letter, exhibit F, was delivered in his office, on 5 January then there was a valid contract. Under cross-examination the defendants’ representative said:

“Q. So if after your enquiry you found that the letter, dated 5 January 1971, was in fact delivered on the same day, then the defendants would be bound to perform their part of the contract?

A. If I had discovered that the letter was delivered on 5 January 1971, then of course the defendants would be bound to hand over the boat to the plaintiffs.”

It may be true, as contended by the defendants, that as far back as 30 December 1970, they were trying to conclude an agreement with the Government of Ghana, and they were, as from that 30 December 1970, no longer minded to sell the vessel to the plaintiffs. This conduct of the defendants, no doubt, amounted to an intention on their part to withdraw or to revoke their offer to the plaintiffs. But, that intention was never communicated to the plaintiffs or brought to their knowledge before the plaintiffs “confirmed” their acceptance on 5 January 1971. A revocation of an offer ought to be communicated to the offeree. If this is done before acceptance, the offeror will not incur any legal liability: Offord v. Davies (1862) 12 C.B. (N.S.) 748 and In re National Savings Bank Association; Hebb’s Case (1867) L.R. 4 Eq. 9. If, however the notice of the revocation of the offer does not reach the offeree before the acceptance, the revocation will be ineffective: see Byrne & Co. v. Van Tienhoven (1880) 5 C.P.D. 344 and Henthorn v. Fraser [1891-4] All E.R. Rep. 908, C.A.

In Henthorn’s case, the letter of offer was handed over to the plaintiff on 7 July 1891, and on 8 July at 3.50 p.m. a letter accepting the offer, on the plaintiff’s behalf, was posted by the plaintiff’s solicitor. This letter was received on the same day of 8 July at 8.30 p.m. which was after office hours. On the same day 8 July, a letter had been sent to the plaintiff, withdrawing the offer of 7 July. This letter was posted between 12 and 1 p.m. and was received by the plaintiff at 5.30 p.m. In an action by the plaintiff for specific performance of the contract, it was held that in the circumstances of the case it must have been within the contemplation of the parties that the plaintiff would communicate his acceptance by post and, therefore, the contract was complete as soon as the letter of acceptance was posted; the withdrawal was too late, and the plaintiff was entitled to a decree of specific performance. Lord Herschell in the course of his judgment at p. 910 said:

If the acceptance by the plaintiff of the defendant’s offer is to be treated as complete at the time the letter containing it was posted, I can entertain no doubt that the society’s attempted revocation of the

[p.504] of [1973] 2 GLR 490 offer was wholly ineffectual. I think that a person who has made an offer must be considered as continuously making it until he has brought to the knowledge off the person to whom it was made that it is withdrawn.”

(The emphasis is mine.)

After referring to a number of authorities the learned Lord continued:

“The grounds upon which it has been held that the acceptance of an offer is complete when it is posted have, I think, no application to the revocation or modification of an offer. These can be no more effectual than the offer itself, unless brought to the mind of the person to whom the offer is made.”

In the same case, Kay L.J. at p. 913, observed:

“As to the acceptance, if it was contemplated that it might be sent by post, the acceptor, according to the judgment of Lord Cottenham in Dunlop v. Higgins ( (1848) 1 H.L. Cas. 381), has done all that he was bound to do by posting the letter. But this cannot be said as to the notice of withdrawal. That was not a contemplated proceeding. The person withdrawing was bound to bring his change of purpose to the knowledge of the other party, and as this was not done in this case till after the letter of acceptance was posted, I am of opinion that it was too late.”

(The emphasis is mine.)

The plaintiffs, in the case herein, were informed of the agreement with the Ghana Government, for the first time, on 6 January 1971, and only after the said item 2 (c), which was supposed to be the only outstanding item, had already been accepted by the plaintiffs. I therefore hold that before the meeting at the office of the defendants’ representative on 6 January 1971, there was a valid and enforceable contract to sell the vessel to the plaintiffs, and that the purported revocation of the offer by the defendants’ representative at that meeting was ineffectual.

It now remains to consider the remedy which is appropriate in the circumstance of this case. The plaintiffs are claiming a decree of specific performance, and damages for loss of use; or in the alternative, damages for breach of contract. The defendants have strongly contested that the remedy of specific performance is not available to the plaintiffs. They further contended that the plaintiffs have not suffered any loss so to entitle them to damages; and that all that the plaintiffs are entitled to is their deposit of ¢3,000.00 which the defendants are ready and willing to refund as money paid for a consideration which has totally failed.

The contract here is one for the sale and purchase of a chattel, and it is a kind of which the courts have habitually granted specific performance where damages are inadequate as a remedy. That is, specific performance has always been regarded as supplementry to the common law remedy of damages and is discretionary. In the oft-cited case of Ryan v. Mutual Tontine Westminster Chambers Association [1893] 1 Ch. 116, C.A. Kay. L.J. at p. 126 observed:

[p.505] of [1973] 2 GLR 490

“This remedy by specific performance was invented, and has been cautiously applied, in order to meet cases where the ordinary remedy by an action for damages is not adequate compensation for breach of contract.

The jurisdiction to compel specific performance has always been treated as discretionary, and confined within well-known rules.”

Considering the general fairness of the transaction involved in the instant case, should the defendants be directed to perform the contract specifically, without giving them the option of retaining the motor vessel on payment of damages? The plaintiffs have done all that is required of them by the terms of the contract. They have made part-payment of ¢3,000.00 as requested by the defendants, and they are ready and willing to pay the balance of the purchase price in accordance with the terms of the agreement. They have spent not less than ¢2,000.00 in repairing the vessel: see exhibit L. One of the directors of the plaintiff-company Mrs. Comfort Dodoo, before the plaintiff-company was incorporated, had spent some ¢18,000.00 on the vessel, ¢12,000.00 of which have been advanced, on behalf of Eben Fisheries Ltd., to Tandorf and Grunther Thomas, representatives or directors of the defendant-company. It was the difficulties this director, Mrs. Comfort Dodoo, was going to encounter in recovering her said ¢18,000.00 that motivated the formation of the plaintiff-company; and the purchase of this particular vessel was one of the primary objects of the plaintiff-company. It can therefore be seen that this vessel, The Paderborn, is of special interest and value to the plaintiffs. In any case, it is likely that the plaintiffs may not easily get its kind from another source.

In my opinion, the foregoing are compelling grounds upon which I can exercise my discretion and grant an order for specific performance in favour of the plaintiffs. Indeed, justice demands that such an order should be made, as damages, in the particular circumstances of this case, will not be adequate compensation. In Behnke v. Bede Shipping Co., Ltd. [1927] 1 K.B. 649, Wright J. ordered specific performance of a contract for the sale of a ship called The City. In reading his judgment at p. 661 the learned judge said:

“In the present case there is evidence that the City was of peculiar and practically unique value to the plaintiff … A very experienced ship valuer has said that he knew of only one other comparable ship, but that may now have been sold. The plaintiff wants the ship for immediate use, and I do not think damages will be an adequate compensation. I think he is entitled to the ship and a decree of specific performance in order that justice may be done.”

In Hart v. Hart (1881) 18 Ch.D. 670 at p. 685, Kay J. stated the principle as follows, “when an agreement for valuable consideration between two parties has been partially performed, the Court ought to do its utmost to carry out that agreement by a decree for specific performance.” It may be mentioned that this dictum of Kay J. was approved by the House of [p.506] of [1973] 2 GLR 490

Lords in the recent case of Beswick v. Beswick [1968] A.C. 58 at pp. 83, 89 and 97, H.L. per Lord Hodson, Lord Pearce and Lord Upjohn respectively. Furthermore, the fact that The Paderborn is a foreign vessel should not deter the court from making the order for specific performance. It will be recalled that the court in Hart v. Herwig (1873) 8 Ch.App. 860 per Mellish L.J. at p. 866 expressed a view to the effect that not only could specific performance of a contract for the sale of a ship be decreed, but also that it was the most appropriate remedy even where the ship was a foreign ship.

The basis of the defendants’ refusal to proceed with the contract was that they had entered into a valid and binding contract for the sale of the vessel to the Ghana Government since 30 December 1970; but the evidence has revealed that there was no such contract. Truly, the Government of Ghana was interested in the vessel and was in the process of negotiating with the defendants. But as soon as the Government became aware of the present dispute, it backed out of the said negotiations. Thus it is clear that on 20 January 1971, when the present writ was issued, and on 2 February 1971, when this court made an order for interim injunction, restraining the defendants from having anything to do with the vessel pending the outcome of the suit, the vessel had not in fact been sold to any person. The ownership of the vessel was still in the defendants. The vessel is presently in Ghana and is in the custody of this court. Consequently, the defendants will also have no problem in giving physical possession thereof to the plaintiffs.

There is one observation which I must make. I am not unaware that in the course of his evidence, the defendants’ representative said the vessel has now been sold to two Danish gentlemen. Whether the said sale has in fact taken place or not, it is irrelevant in this action, since it is obvious that the so-called sale must have taken place later in time than the contract of the plaintiffs; and specific performance would still have been the appropriate remedy even if there had been a transfer of the vessel to the said two Danish gentlemen. In Claringbould v. Curtis (1852) 21 L.J.Ch. 541, specific performance of a sale of a barge, called The Providence, was decreed by the Master of the Rolls, in spite of the fact that the vendor had transferred the barge to a third party, a Mr. Smerden, for nearly a year before the date of the contract on which it was sued.

In addition to specific performance, the plaintiffs, as I have already stated, claimed damages for loss of use. I doubt whether the plaintiffs are entitled to make such a claim. At any rate, even if such a claim can properly be made, the damages will have to be estimated with reference to some evidence. But the plaintiffs did not lead any evidence to show the extent of loss occasioned by the defendants’ delay in performing their part of the contract. Nowhere in their evidence did the plaintiffs even allege that they have incurred damage by non-performance of the contract. I therefore hold that the claim for loss of use is not only speculative, but also misconceived. Accordingly, that claim will be dismissed.

[p.507] of [1973] 2 GLR 490

However, for the reasons already given above, the declaration sought and the order for specific performance will be made. That is, judgment will be and is hereby entered for the plaintiffs for a declaration that by a contract the fishing motor vessel, called The F.U. Paderborn, has been sold to the plaintiffs by the defendants. In the circumstances, I decree that the defendants should specifically perform their part of the said contract.

The plaintiffs are entitled to their costs which I assess at ¢650.00 inclusive.

DECISION

Judgment for the plaintiffs.

Decree for specific performance granted. S. Y. B.-B.