Agreement to make lease-specific performance of contract- Appeal from variation between offer and acceptance-offer and counter-offer -time as of the essence of the contract.

   The 1st defendant agreed verbally to lease certain premises to the plaintiff.

The plaintiff subsequently wrote to the 1st defendant setting out the terms of this agreement and the 1st defendant replied stating that the plaintiff's letter had. contained the substance of the agreement. The learned trial Judge held that there was a substantial variation between the conditions given in one letter and the details given in the reply. This variation consisted in the fact that, in the plaintiff's letter, it was stated that the agreed rent was to be paid" after execution of the legal document," while, according to the 1st defendant's reply, the rent was to be paid" immediately the lease was executed." There was a delay in executing the lease owing to the fact that the first instrument prepared did not contain the boundaries and measurements of the premises. The plaintiff did not send the agreed rent to the 1st defendant until some weeks after he had sent the amended instrument for execution. In the meantime, the 1st defendant had received a better offer from the 2nd defendant. He therefore signed a lease of the premises to the 2nd defendant before the agreed rent which was cabled by the plaintiff from Accra was available to him at Freetown. The learned trial Judge held that there was a clear indication of intention on the part of the 1st defendant that time should be of the essence of the contract, and it would appear that he held that the plaintiff should have sent the agreed rent to the 1st defendant at the same time as he sent the lease. He also held that there was no concluded agreement between the parties as the original letters contained an offer and a counter-offer and not an offer and an acceptance.

Held: That there was a valid contract between the parties and that there was no unreasonable delay on the part of the plaintiff in tendering the agreed rent.

Held Further: That there was no evidence that time was to be of the essence of the contract.

Judgment of Court below reversed. Claim for specific performance of contract refused but case remitted to the Supreme Court for assessment of damages against the 1st defendant.

A. Sawyerr for Appellant.

K. A. Bossman for 1st Respondent.

No appearance by or for 2nd Respondent:.

The following joint judgment was delivered :-

WEBB, C.]., SIERRA LEONE, BUTLER LLOYD, AG.C.J., NIGERIA AND STROTHER-STEWART, J.

 

The plaintiff's claim in this action was for "Specific performance of an agreement entered into between the plaintiff and the defendants on the 17th July, 1937, whereby the defendants agreed to lease the premises known as Lucetta House in Selwyn Market Street, Accra, to the plaintiff for a period of twenty years at a rental of £200 a year." There were also claims for a declaration that any subsequent ·lease or agreement between the defendant Cole and the defendants, Messrs. Bardawil & Co., is void as against the plaintiff, and, in the alternative, for damages. It is plain that the indorsement on the writ is most carelessly drawn in speaking of an agreement between the plaintiff and the defendants, because it was never suggested at any stage of the proceedings that there had been any agreement other than one between the plaintiff and the defendant Cole.

The learned Chief Justice dismissed the action on the ground that" there was no concluded agreement on the 17th July," (though it is obvious that he considered that there was a contract made upon some later date), and he came to this conclusion because he considered that" there was a very substantial variation between " the terms of the plaintiff's written offer of the 17th July and the first defendant's written reply thereto."

With great respect I cannot agree with the view of the nature and effect of these two letters. The plaintiff's letter begins: " confirming our verbal conversation this morning I agree to lease from you the land, etc., subject to the following conditions ..... ", and the defendant's letter begins: "I acknowledge receipt of your letter of 17th instant which contains the substance of the verbal agreement mutually agreed upon in respect of the proposed leasing of my property .... the details of which are as follows .... ". In my judgment it is impossible to regard these letters as an offer and a counter-offer, which the plaintiff accepted later by having a draft lease prepared and submitted to the defendant Cole. On the contrary the letters seem to me to make it very plain that there was already, as the defendant Cole puts it, " a verbal agreement mutually agreed upon," the terms of which the parties say they are now "confirming." Nor, indeed, can I see any material difference between the" conditions" given in the one letter and the "details" in the other. The substantial variation found by the learned Chief Justice is that according to the plaintiff's letter the three years' rent in advance was to be paid" after execution of the legal document," while according to Cole's it was to be paid" immediately the lease is executed." In my opinion these two expressions taken in connexion with the context mean precisely the same thing: it cannot be suggested that, if Cole had written simply agreeing to the terms of the plaintiff's letter, the latter could have been heard to contend that he was at liberty to pay the rent in advance at any time that he chose-rent in advance means rent paid before the term commences -or that he could insist on the execution of the lease without payment of it. There were no pleadings, but the opening state­ments of the respective counsel make it plain that they considered that on the 17th July there was no difference between the parties but that a contract had been concluded between them, and the  sole issue fought was as to whether the plaintiff had paid, or tendered payment, of the three years' rent in due time.

             It appears that a lease embodying the terms of the contract, was drawn up, signed by the plaintiff, and sent to the defendant Lloyd. Ag. Cole at Freetown. It was returned to the plaintiff in September merely because it did not contain the boundaries and measurements of the property demised, and accordingly a fresh lease containing these particulars, but otherwise in identical terms, was prepared, signed by the plaintiff and sent to the defendant Cole, who appears to have received it about the end of September, and he actually signed it on the 12th or 14th November. In the meantime the defendant Cole had received another, and a better, offer for the premises from the second defendants. This fact was communicated to the plaintiff, who cabled to Cole on the 6th November" expect £600 next week Barclays by Cable." The money in fact was not available in Freetown until the 30th November, but on the 19th the defendant Cole's son and agent in Accra wrote to the plaintiff that he had received by cable instructions to give Bardawil (who was tenant of part of the premises) notice to quit on 31st December, and adding "Please therefore remit the six hundred pounds immediately." On the 2lith November, however, the defendant Cole signed a lease of the premises to the second defendants, though the plaintiff was only informed of this on the l0th December.

The argument for the defendants, which was accepted by the learned Chief Justice, was that" from the nature of the contract and the surrounding circumstances there was a clear indication of an intention by the first defendant that time should be of· the essence of the contract," meaning, according to Counsel for the defendant Cole, that the plaintiff should, when he sent the lease to Freetown, have also sent the £600 to an agent there so that at any moment it could be paid over in return for the lease duly executed.

In my judgment this is not so: if it were, then in every open contract of sale time is of the essence of the contract, because every open contract assumes that payment of the consideration will be made upon the execution of the conveyance. In the present case, in my opinion, so far from there being evidence that the parties intended that time was to be of the essence of the contract, no time at all was fixed for completion, and, so far as concerns any inference from the surrounding circumstances, as vacant possession could not be given until the 31st December, there can have been no immediate hurry for the execution of the lease. All that the contract means, in my view, is that the defendant Cole was not bound to execute, that is to say, to deliver, as well as sign, the lease until the plaintiff was ready to pay the rent in advance, and, conversely, the plaintiff was not bound to pay until Cole had executed the lease. And it Seems to me to be plain that the defendant Cole so regarded the position, for eleven days after he had received the cable saying that the money would be available " next week," he cabled to his son to give Bardawil notice to quit. It is therefore clear that on the 19th November, he still regarded the plaintiff as not being in default, and the contract as being a subsisting contract. It is possible that he might have made time of the essence of the contract by serving upon the plaintiff notice that the lease had been signed and was ready for delivery, and that unless payment was tendered within a reasonable time he would treat the contract as at an end. Equally, if there had been a wholly unreasonable delay on the part of the plaintiff in tendering payment, the defendant Cole might have treated this as an abandonment of the contract. But, in my opinion, it is impossible to hold that a delay from the 6th November to the 30th, and, still less, a delay from the 19th to the 30th can be regarded as an abandonment of the contract by the plaintiff.