Agreement for commission on amount of Judgment-Champerty­ Maintenance.

In an action for an amount claimed by the plaintiff as commission for the recovery of debts due to the defendants it was held by the Judge of the Circuit Court of Ashanti that the agreements for the recovery of such commission were champertous, and judgment was therefore given in favour of defendants.

HELD that although the English Common Law as to Champerty and Maintenance was in force in Ashanti, the agreements upon which this action was brought were not champertous. The appeal was therefore allowed.

C. F. Hayfron-Benjamin for the Plaintiff-Appellant. J. G. Addo for the Defendants-Respondents.

The following judgments were delivered :-

HORNE J.

This is an appeal from a judgment of the learned Circuit Court Judge on the ground that it is wrong in law.

In the Court below the plaintiff claimed to be entitled to £337 8s. Id. as commission calculated on the amounts for which judgment had been given against certain debtors of the defendant company. The defendant company contended that the commission could only be calculated upon the actual amounts recovered under the judgments. The learned Judge found that two agreements dated respectively the 22nd of March, 1923, and the 13th of May, 1931 were in existence, the latter varying the former, and that under them the sum of £3 5s. was due, but held that the agreements between the parties was of a champertous character and therefore unenforceable; he gave judgment for the defendants company. The question is whether he was right in law in so 'holding Illegality was not pleaded as a defence to the action but the Court will not enforce a contract which is illegal or arises out of an illegal transaction if the illegality is disclosed on the plaintiff's own evidence and it appears that the plaintiff was implicated in it, see Scott v. Brown, (1892) 2. Q.B. 724.

Counsel for the plaintiff-appellant attempted to demonstrate that the learned Judge was wrong on the ground that champerty, not being prosecutable as a common law misdemeanour in this Colony, the contract or transaction could therefore not be illegal. He also submitted that in the alternative the transaction was not champertous on the ground that the plaintiff had an int8rest.

Now section 11 of the Criminal Code provides that no person shall, except as in the next succeeding section pr8vided, be liable to punishment by the common law, or in any other manner otherwise than in accordance with the provisions of the Code, for any act done within the jurisdiction of the Court.

The next succeeding section, section 12 sub-section (1) says ;­" Nothing in this code shall affect-

(1) the liability to trial and punishment of a person for at offence against any statute other than this code.

The exception in section 11 therefore saves any statutor) offences. "

In Leake on Contract, 8th Edition page 553, the law is state< in the following terms :- The maintenance of a civil suit of another without having any interest in the suit, and so as to cause special damage, and champerty or the purchase of an interest in th suit of another in consideration or for the purpose of maintaining it, are offences at common law; and they are further prohibited b: statutes which for the most part are declaratory of the common law

A number of these statutes were referred to in the case 0 Neville v. London Express Newspaper Co. (1919) A.C. 368. A lis of them is given in Lord Phillimore's speech at page 426, and the: are carefully reviewed in Lord Shaw's judgment, and his revie^l of them shows that a person who made a pactum de quota lites, i.champerty, was liable under them to criminal punishment. of these statutes 3 Edw. 1. c. 25 and 28 Edw. 1. c. 11 are shown i Archbold as being still in force. Of the others, 4 Edw. III. c. 1: 1 Rich. II. c. 4, and 7 Rich. II. c. 15 are printed in the Revise Statutes. They are in force in England now and were thereof in force in 1874, the date given in section 14 of the local Supreme Court Ordinance.

The statutes are statutes of general application and are i force in the Colony by section 14 Supreme Court Ordinance according to section 17 thereof local circumstances permit ..

In my opinion such agreements are illegal in the sense that the< involve an act prohibited by statute in force by virtue of the Supren Court Ordinance and the Ashanti Administration Ordinance.

So much for Counsel's first submission. It is, however, sufficient: for the decision of this appeal to say that an agreement f maintenance and champerty is illegal whether the same is a criminal offence or not. Because every champerty is a maintenance thou! every maintenance is not a champerty. The common law, subject to local Ordinance, is in force in the Colony and Ashanti. J common law, apart from any question of crime, maintenance is tort actionable on proof of special damage. Neville v. Lond, Express Newspaper Co., (1919) A.C. 368, so decides. And in the case Lord Finlay L.c. quotes and adopts the words of Coke in 1 Institutes, viz :--champerty is a form of maintenance and  when the person maintaining another takes as reward a share the property in dispute. But what is maintenance? "It is easier" said Fletcher Moulton, L.J. in British Cash and Parcel Conveyors Ltd. v. Lamson Store Service Co. Ltd. (1908) J.K.B. at page 1014, " to say what maintenance is not than what is main­tenance." But, he adds, once a contract of maintenance is established it is incapable of being enforced whether it is a tort or a crime.

And on that point Rees v. de Bernardy, (1896) 2 Ch. 437 may be usefully referred to. That case decides that in order to render an agreement void on the ground that it is in the nature of champerty, it is not necessary that it should amount strictly to champerty as a punishable offence. Although the learned Lord Justice thought definition of maintenance difficult, it appears from the speeches of the learned Lords in Neville v. London Express Newspaper Co. (1919) A.C. 367 that certain elements are essential to create the tort :-(1) assistance given in the prosecution of suits which the party must bring on his own bottom and at his own expense, (2) encouragement of another to bring an action, and (3) a hindrance or disturbance of common right to the delay or distortion or withholding justice.

In Neville v. London Express Nenpaper Co. Lord Shaw at page 414 says the test of maintenance is the test of the quality of the act itself as it bears upon the attainment of justice in the particular case, and that the test of either tort or offence is primarily whether it contains that quality which is essential both by statute and the common law. I fail to perceive anything of that character in these agreements. It is beyond belief that any of the debtors sued could show that he had suffered any special damage by reason of anything done by the plaintiff-appellant under these agreements. There is nothing here of encouragement by, or assistance given by the plaintiff-appellant to the defendants-respondents, aiding them to bring suits which they ought to bring on their own bottom and at their own expense.

There was no selling of information on which the action maintained could be founded as in Rees v. de Bernardy (ut supra), nor could the defendants-respondents in this case claim relief in a Court of equity from the agreements. It must be noted that there are no legal practitioners allowed in Ashanti, and the Court rules provide for parties being represented by an agent or servant.

There is no maintenance in this case, and the mere fact that the plaintiff-appellant was to be remunerated by commission does not make it so. The object of the law is to prevent persons officiously intermeddling in suits, and to prevent persons who would not be responsible, if unsuccessful, from being assisted in litigation. The forbidden conduct is said to be contra bonos mores and the prohibition is given effect to either by criminal prosecution, action for damages, or by the Court refusing to enforce a contract involving such forbidden conduct. That object will not, in my opinion, be defeated by these agreements being held to be legal. The appeal should therefore be allowed.

DEANE, C.]. THE GOLD COAST COLONY.

I concur. The appeal will be allowed and the judgment of the lower Court set aside. Judgment will be entered for the plaintiff - appellant for £3 with costs in the Court below. There will be no order as to costs in this Court.

MACQUARHlE, J.

This is an appeal from the judgment of the Circuit Court, Ashanti, dismissing the claim of the plaintiff-appellant against the, defendants-respondents in the circumstances stated below.

Tte plaintiff's claim reads as follows :-" The plaintiff claims from the defendants the sum of £337 8s. Id. being balance of commission due to plaintiff as per agreement dated the 22nd of March, 1922." ,\ "statement of commission account of C. H. Smith" appears which is evidently intended as a S~3.tement of particulars, showing the names of debtors, and amounts due, in respect of which he claims (page 2 of the record).

At the hearing (page 18) the claim was, on his application amended as follows "being amount due for work done as per agreement dated the 22nd of March, 1923, and on subsequent verbal agreement of the 2nd of October, 1930."

The defendants pleaded that the agreement was for one year only and had lapsed and that a subsequent written agreement was made dated the 13th of May, 1931, but that no amount had been collected by plaintiff ..

The plaintiff's evidence as to the amount claimed is based upon a document-Exhibit "c" -which states a list of "cases pending," including the three specified in the plaintiff's" statement of particulars" to which I have referred above, with the following memorandum at the foot, signed by both parties, and dated 13th May, 1931, viz. " It is understood that the commission of 25 per cent will only be paid by the firm to Mr. Smith when any amount will be paid by the above debtors, and this agreement is made for the above dp.btors only, and new transaction will require a new agreement."

The plaintiff endeavoured to add to this agreement a verbal agreement, denied by the defendants, which in my opinion is inadmissible as varying the written agreement.

The verbal agreement of 2nd October, 1930, alleged in the claim is deposed to by plaintiff but does not include these debts, which are clearly dealt with by the written agreement of 13th May 1931.

It appears that the total amount received by the defendants in respect of these debts is £13. The learned Judge's decision was that the agreements sued upon were "champertous and therefore illegal," and he accordingly dismissed the claim.

He refers for his reasons to his judgment in another case which has been before this Court at this sitting. The facts in this case, however, are certainly different.

Two questions now arise for decision-are these agreements illegal as being champertous, and therefore unenforceable? and secondly, does the law on this subject apply to Ashanti ?

It will be convenient to deal with the second question first.

The law in force in Ashanti is that as set forth in sections 14 to 19 of the Supreme Court Ordinance of the Gold Coast Colony, see section 7 of the Ashanti Administration Ordinance. Does this law include the English law as to champerty?

J think there can be no doubt that section 11 of the Supreme Court Ordinance does include the English law as to maintenance and champerty. But section 11 of the Criminal Code has been referred to as excluding it on the ground that under it no one is punishable for maintenance or champerty under the criminal la\\-. Even assuming that this were so, this enactment is no more than a statement that no person shall be punished for any act unless provided for by the code. To my mind such a provision cannot exclude from the English common law in civil matters a part of it which makes agreements unenforceable on a ground which is not based on the criminal law imposing punishments but on a principle underlying the enforcement of contracts, viz., that it is contrary to public policy to enforce contracts which are champertous. The mere fact that the parties to such contracts cannot be punished by the criminal law, assuming, as stated above, that this were so, is not, in my opinion, ground for saying that their contracts are free from any objection as to their legality. For example, a contract may be illegal, and therefore unenforceable, as being in restraint of trade, although no one is criminally punishable. In my opinion therefore, section 11 of the criminal code does not exclude the law as to maintenance and champerty from the " common law" which is to be enforced in civil matters by the Supreme Court and therefore in this case.

The first question then remains to be answered-are these agreements champertous?

What are these agreements in essence, Le. the agreements of the 22nd of March, 1923, and the 13th of May, 1931? The plaintiff agrees to do certain work (which he is supposed and no doubt intended to be authorised to do by the first agreement) in the recovery of debts due to the defendants, in consideration of payment based upon the amount for which judgment might be obtained according to the plaintiff, on the amount paid in according to the defendants. Any expenses necessary for the purpose such as Court fees, travelling expenses of the plaintiff outside Kumasi, are borne by the defendants. The plaintiff is-as between the parties at least, and apparently in the eyes of the Court-authorised to conduct cases in Court. In this connection, I would refer to Order 11 inSchedule 2 to the Supreme Court Ordinance; particularly to rule 3 and the use of the word" agent," The word is not used in rule !, but I am inclined to think that the words" any servant, clerk" would include the plaintiff here. The" good or sufficient cause" is within the discretion of the Court, which we must take it was used in the cases in question in his favour-or rather in favour of the defendants in the cases in which the plaintiff appeared.