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JUDGMENT
AKUFFO, J.S.C:
I have been privileged to see
beforehand the erudite opinion
of my brother Mr. Justice Adzoe,
J.S.C. and, for the reasons
stated therein, I am in full
agreement with him that the
appeal must succeed and the
decision of the Court of Appeal
be set aside.
I will therefore limit this
opinion to the issue, raised in
paragraph (c) of the additional
grounds of appeal, regarding the
proper period over which the
interest awarded should remain
exigible. In its amended
counterclaim, filed on May 04,
1988, the appellant claimed an
amount of ¢58,213.04 as the sum
due for maintenance services
previously rendered to the
respondent, together with
interest thereon at the Bank
rate prevailing at the date of
judgment, from 20th December
1984 up to the date of final
payment. The trial court, after
finding the said amount as being
justly due and payable by the
respondent, however, awarded
interest thereon up to the date
of the judgment, i.e., 16th May
1990. According to the
appellant, taking into account
the time lapse between the
judgement of the trial court and
that of the Court of Appeal, the
latter, in upholding the
counterclaim ought to have
varied the trial court's order
and awarded the interest to be
calculated from 20th December
1984 to the date of final
payment at the prevailing bank
rate.
Since there was no contract
between the parties stipulating
the payment of interest on any
amount arising from the services
of the appellant, the trial
judge, correctly, based his
order on the provisions of the
Courts (Award of Interest)
Instrument,, 1984 (LI 1295),
which reads as follows:—
"Where in any civil case or
matter the Court makes an order
for the payment of interest on
any sum due to the plaintiff
other than any sum claimed by
the Plaintiff under Order 13
rule 3 of the High Court (Civil
Procedure) Rules, 1954 (LN 140A)
the rate at which such interest
shall be payable shall be the
Bank rate prevailing at the time
the order was made by the Court,
but no compound interest shall
be awarded."
However, it is clear that the
only factor governed by this
statue is the rate of interest
to be applied to the sum due.
Thus, the time span over which
the interest should be
calculated is left to the
discretion of the Court and
should, therefore, be determined
by the dictates of the
circumstances of the matter. As
was stressed by Brobbey, J.A.,
in his dissenting opinion in the
Court of Appeal, discretion must
be exercised judicially and
whether or not discretion has
been properly exercised must be
ascertainable from the reasons
given for the exercise or the
basis for the discretion. In
deciding to order the interest
to be payable up to the date of
the judgement, the trial judge
appears to have relied upon the
decision of the High Court in
Holland West Africa et al V. Pan
African Trading Company et al.
[1976] 2 GLR 179, wherein
Edusei, J, awarded interest with
effect from the date the cause
of action arose up to the date
of the judgement of the trial
court. That case, however, had
nothing to do with ascertainment
of the date on which the
calculation of interest ceases
and the learned Edusei, J., like
the trial judge in the matter
herein, did not give any
particular reason for deciding
that the interest cease on the
date of his judgement.
The underlying principle for the
award of interest is now well
settled and was spelt out by
Lord Denning MR, in the
celebrated case of Harbutt's
Plasticine Ltd V. Wayne Tank and
Pump Co. Ltd. [1970] 1 All ER
225 at page 236, as follows:—
"... the basis of an award of
interest is that the defendant
has kept the plaintiff out of
his money; and the defendant has
had the use of it himself. So he
ought to compensate the
plaintiff accordingly."
(See also Jefford V Gee [1970] 1
All ER 1202, wherein the English
Court of Appeal was guided by
this principle.) In the earlier
case of London, Chatham and
Dover Railway Co. V. South
Eastern Railway Co [1893] AC
429, Lord Herschell LC had put
the matter even more graphically
as follows:—
"... when money is owing from
one party to another and that
other is driven to have recourse
to legal proceedings in order to
recover the amount due to him,
the party who is wrongfully
withholding the money from the
other ought not in justice to
benefit by having that money in
his possession and enjoying the
use of it, when the money ought
to be in the possession of the
other party who is entitled to
its use. Therefore, if I could
see my way to do so, I should
certainly be disposed to give
the appellants, or anybody in a
similar position, interest upon
the amount withheld from the
time of action brought at all
events."
Clearly this is the same
principle guiding LI 1295. That
being the case, since the
appellant's claim for interest
related to a commercial debt
owed by the respondent, which
debt, as far as the record
shows, remains unpaid up to now,
it stands to reason that such
interest continue at least until
the date of final judgement, if
not the date of final payment.
Otherwise, if the respondent
does not settle the amount due
immediately after the entry of
judgement, what justice will the
appellant have received from the
courts for the respondent's
unjustifiable withholding and
use of the money all these
years?
Moreover, in May 1990 when the
trial judge made his order, the
prevailing Bank rate of interest
applied by the court was 30% per
annum and the average rate of
exchange between the Cedi and
the US Dollar was ¢275.00 to
US$1.00 Eleven years down the
line, the applicable rate of
interest may be put at 45%, per
annum and the average rate of
exchange is ¢7,200.00 to
US$1.00. These factors clearly
demonstrate the extent to which
the value of the appellant's
money has eroded over the period
that it had not only been
deprived of the ownership of the
money but also the use of it. In
his dissenting opinion in the
Court of Appeal, Brobbey, J.A.,
who was of the view that the
interest be exigible until the
date of final judgement,
expressed himself on this issue
as follows:—
"Another policy reason why
interest should be ordered
exigible to the date of final
judgement is this:
In a country like ours with
rapid rate of inflation, if a
person is ordered to pay money
and payment is not made
immediately, or within a
reasonable time, the value of
the amount ordered to be paid
will trifle into insignificance
with the effluxion of time, for
instance a debt of five million
Cedis in 1988 which was not paid
till 1995 will be worth about
half that amount in 1995. A
ruling that interest should be
paid only up to the date of
judgement of the trial Court
will amount to this: If the
debtor can avoid the creditor
for some time after that
judgement has been delivered, he
will be better off. A ruling to
that effect will therefore
encourage debtors not only to be
evasive and therefore bad
debtors, but will do injustice
to the creditor who will not
only continue to be deprived of
his money and the use of it, but
also cause that creditor to
suffer unduly from the effects
of inflation resulting in
reduction of the value of the
money, for as long as the debtor
can put off payment of the trial
court's judgement. An effective
means of putting off payment of
the amount ordered is to pursue
litigation in our courts.
However seemingly hopeless the
appeal may be, the debtor will
be encouraged to pursue it
because knowing how lengthy
appeals in this country take to
be concluded, by the time the
case reaches the Supreme Court,
the debt would have been
swallowed by inflation....... It
is my view that the courts owe
it as a duty to discourage
litigation and encourage the
debtors to honour their
obligations or pay their debts
but not to encourage them to be
evasive and litigious."
I wholeheartedly endorse this
view. However, it is my humble
opinion that we must go even
farther, in order to give full
effect to the aforesaid
underlying principle.
Consequently, since the trial
judge gave no specific reasons
for his order, the same may be
varied and I believe this court
owes it as a duty to the
appellant, and to creditors in a
similar position, to order,
firstly, that the interest on
the amount owed must run on the
amount due, or the reducing
balance thereof, up to and
inclusive of the date of final
payment. Secondly, by virtue of
Section 2(4) of the Courts Act,
1993 (Act 459) this court has
all the powers vested in the
High Court by the Constitution
and any other law, which
includes LI 1295. In the
circumstances therefore, it
stands to reason that, in order
to give the appellant a just and
equitable recompense for the
respondent's unlawful
withholding and use of its
money, the rate of interest
applicable to the amount due
must be that currently
prevailing. I am fortified in
this view by the recent decision
delivered by this court in the
case of Waseem Attieh V Koglex
Ltd. et als, unreported S.C.
judgement in suit no. C.A.
3/2000, dated May 09, 2001,
wherein interest was awarded "at
the current bank rate" from 1st
may 1990 up to the date of final
payment.
It needs to be noted, however,
that the Bank of Ghana no longer
fixes a specific bank rate of
interest. As such therefore,
these days, the prevailing rate
of interest differs from bank to
bank. The only bench mark that
influences interest charged by
individual banks, is the rate of
interest payable by the Bank of
Ghana on its 90-day Treasury
Bills; presently, this is 45%.
Clearly, therefore, this is the
rate of interest that must be
applied in this case. At the end
of the day, the appellant, as
creditor, must be seen to have
been placed in the same position
it would have been in had the
respondent, as debtor, settled
its debts in due time.
Finally, I wish to add that,
given the fiscal realities that
have prevailed in this country
over the past two decades and
the recalcitrance of too many
debtors in the fulfilment of
their obligations, it would
augur well for the country if LI
1295 were amended to give the
Court the power to award
compound interest. Compounding
interest on debts is, perhaps,
the only effective mechanism,
which will allow the amount due
to grow in line with inflation,
provided the correct rate of
interest is also employed.
Economic development depends, to
a large extent, on healthy
financial interaction and
transaction; these, in turn,
cannot exist without
credibility. It is only when
participants in business live up
to their legal obligations, and
cease using the processes of the
courts to evade financial
responsibilities that this
country can finally launch
itself firmly on the road to
economic success. Where money is
unjustly withheld, then the
creditor must be seen to have
been justly recompensed by the
debtor for the unjust use of
other people's money. Any system
that tends to encourage, debtors
to shirk their responsibilities
benefits no one but such
delinquent debtors, and poor
debt servicing in the business
sector only fans, further, the
flames of inflation. It seems to
me that if the consequences of
delinquency were made less
appealing than they are now,
then the attraction of needless
protracted litigation would be
significantly reduced.
ADZOE, J.S.C.:
In July, 1977 the Respondent
company purchased from the
Appellant company an IBM Copier
II Machine for an amount of
¢33,000.00. That same month the
Appellant company installed the
machine for the Respondents in
Cape Coast. It is quite clear
that up to about 1984 the
engineers of the Appellant
company serviced the said
machine for the Respondents, but
thereafter the Appellants
declined to do any further
servicing. The Respondents claim
that when the machine broke down
again in February, 1986 they
made several demands on the
Appellants to effect the
necessary repairs but the
Appellants wrongfully refused to
do the repairs which resulted in
the Respondents' inability to
function in their business. They
claimed they suffered loss.
Accordingly, on 17th March, 1987
the Respondents sued the
Appellants at the High Court
claiming as follows:
(i) Specific Performance of an
(oral) agreement between the
Plaintiff Company and the
Defendant Company made in 1977
for an After Sale Service of the
Plaintiff company's IBM Copier
II Machine "on call basis".
They also claimed ¢1,205,000.00
special damages representing
loss of income, interest on the
said amount at the rate of 25%
from 1st April, 1986 to the date
of final judgment, and also
mesne profits, plus interest
thereon.
The Respondent took pains to set
out in their statement of claim
various particulars of the
alleged oral agreement. I need
to set out two paragraphs of the
statement of claim in order to
make for a clear appreciation of
the basis of the Respondents'
claims.
Paragraph 4 of the statement of
claim reads:
"Previously to the supply of the
said IBM copier Machine by the
Defendant company to the
Plaintiff company, it was agreed
that the Defendant company would
provide an exclusive maintenance
service, designated as After
Sale Service and for a fee
and/or "On Call Basis" and also
for a fee."
In paragraph 7 of the statement
of claim the Respondents alleged
as follows:
"7. The Plaintiff company avers
that it accepted the offer to
buy the said IBM Copier II
machine upon the clear
undertaking that it is trade
policy of the defendant company
that its products are serviced
and maintained exclusively by
the defendant company or its
appointed agents for whom the
defendant company on various
occasions as shall be noted in
paragraph 11, 12 and 13 of the
Plaintiff company's letter dated
28/11/1985 ... and letter dated
30/6/86."
The Appellants denied having
made any oral agreement with the
Respondents; they claimed that
the Respondents declined to
enter into a maintenance service
agreement with the Appellants
and insisted that whatever
maintenance service they
rendered to the Respondents was
on a case by case basis under a
scheme described as "On Call
Basis" which did not create any
standing contract binding the
Appellants. In effect the
Appellants claimed that they
were not bound by any contract
which the Respondents could call
upon them to specifically
perform.
The trial High Court found that
there was no enforceable
contract between the parties and
dismissed the Appellants' claim.
But the Court of Appeal reversed
that judgment by a majority
decision of 2-1 and held the
Appellants liable to the
Respondents' claims, and the
Appellants have therefore come
before this court for a final
determination.
The original grounds of appeal
before us are:
1. The judgment is against the
weight of evidence on record.
2. The Court of Appeal erred in
rejecting findings of fact made
by the trial High Court which
had had the benefit of observing
the demeanour of witnesses, and
substituting its own findings of
fact and thereby occasioning
substantial miscarriage of
justice to the
Defendant/Respondents/Appellants.
3. Further grounds of appeal
have been filed, but in my
opinion the original ground one
is enough to decide the matter.
They plead in relief that we set
aside the judgment of the Court
of Appeal and restore the
judgment of the trial High
Court.
It is clear that the Respondents
based their claim on what is
known as the principle of
promissory estoppel. Some call
it equitable estoppel. Denning,
J. (as he then was) expressed it
in the case of Central London
Property Trust Ltd. vrs. High
Trees House Ltd. (1947) KB. 130
where it was held that:
"Where parties enter into an
arrangement which is intended to
create legal relations between
them and in pursuance of such
arrangement one party makes a
promise to the other which he
knows will be acted on and which
is in fact acted on by the
promisee, the court will take
the promise as binding on the
promisor to the extent that it
will not allow him to act
inconsistently with it even
although the promise may not be
supported by considerations in
the strict sense..."
In the several decisions which
followed the High Trees Case,
the principle saw significant
amplification's on its terms of
application. And in the case of
Evenden vrs. Guildford City
Football Club (1957) 3 All E.R.
269, Lord Denning, now as Master
of the Rolls, at page 273 of the
Report said that the principle
applies whenever the
representation is made "whether
of fact or law, present or
future which is intended to be
binding, intended to induce a
person to act on it and he does
act on it".
In the case of Combe vrs. Combe
(1951) 1 All E.R. 767 the same
Lord Denning reviewed the cases
and observed:
"In none of these cases was the
defendant sued on the promise,
assurance or assertion as a
cause of action in itself: he
was sued for some other cause,
for example, a pension or a
breach of contract, and the
Promise, assurance or assertion
only played a supplementary
role, an important role, no
doubt, but still a supplementary
role. That is, I think, its true
function. It may be part of a
cause of action, but not a cause
of action in itself".
It is thus clear from the
authorities that a party who is
relying on the principle of
promissory estoppel must make
out a clear case that such a
promise was made intended to be
binding, intended to induce him
to act on it and that he in fact
acted on it. I think that such
alleged promise or
representation forms a vital
part of the cause of action and
must be proved. In all the
decided cases in which the
principle was applied the
promise or representation is
established as having been made.
it is not a matter of conjecture
and speculation. Where it is to
be inferred, the facts must
exist which justify the
inference. Chitty on Contracts
is emphatic that to bring the
principle into operation "the
promise or representation must
be clear, or unequivocal, or
precise and unambiguous". See
25th Edition: Vol. 1 pp.
119-200. I am not be understood
as saying that the promise or
representation must be express;
it may be implied where the
course of the negotiations
between the parties justify it.
But the promise or
representation cannot be a
matter of mere speculation.
It is also clear from the
authorities that if the promise
or representation was indeed,
made, the promisee must show
that the promise or
representation influenced his
conduct. To my mind, it seems
therefore that the principle
will not apply if it is shown
that a party's conduct was not
influenced by the promise. As
stated in the case Societe
Italo-Belge (1981) 2 Lloyd's
Rep. 695, 701, for the principle
to apply the promisee must be
shown to have altered his
position in reliance on the
promise so that it will be
inequitable to allow the
promisor to act inconsistently
with it.
The case of Evenden vrs.
Guilford City Association
Football Club Ltd (1957) 2 All
E.R. 269 which I have already
referred to and to which the
majority judgment in the Court
of Appeal also referred may give
us a clear illustration of the
points I have tried to
highlight. The facts of the case
can be stated briefly:
Mr. Evenden was employed as a
groundsman at the football
ground at Guilford. He was
employed by the Guilford
supporters Club and worked with
them from August, 1955 up to
October, 1968. The supporters
club paid him. In 1968 there was
a re-arrangement whereby he
ceased to be employed by the
supporters club; instead of the
supporters club, the football
club itself employed him to do
the same job that he did for the
supporters club. During the
changeover from the supporters
club to the football club a
definite agreement was made to
the effect that Mr. Evenden's
service should be regarded as
unbroken. In 1974 he was
dismissed by reason of
redundancy and the question was
whether he was entitled to
redundancy payment from 1955 or
from 1968 when the football club
took him on. Lord Denning
applied the doctrine of
Promissory estoppel and held
that the football club was bound
to pay the benefits from 1955.
The case, he said:
"... falls within the principle
of Central London property vrs.
High Trees House Ltd. At the
meeting of October, 1968 there
was a clear representation by
the football club that Mr.
Evenden's employment would be
treated as continuous. That
representation was intended to
be binding and intended to be
acted upon. He did act on it. He
did not claim from the
supporters' club the redundancy
payment to which he would
otherwise have been entitled
from the club. Six months later
his claim against the
supporters' club was barred by
lapse of time. It would be most
unfair for the football club to
go back now on that
representation. They must be
bound by it in the Industrial
Court and elsewhere."
Now, the question raised by
ground I of the appellants'
appeal could be put this way:
Did the evidence before the
trial court support the finding
made by the Court of Appeal that
the Appellants were bound in law
to repair the machine sold to
the Respondents within the
framework of the doctrine of
promissory estoppel? The
appellants say that the finding
made by the Court of Appeal is
against the weight of evidence.
The crux of the Respondents'
case as pleaded in the Statement
of Claim is that before they
purchased the machine "it was
agreed that defendant company
would provide an exclusive
maintenance service, designated
as 'After Sale Service' for a
fee and/or 'On Call Basis' and
also for a fee".
The appellants denied this
averment and contended in
paragraph 16 of the Statement of
Defence that it was "12 months
after the sale when the warrant
period had expired" that they
asked the Respondents to enter
into a maintenance service
agreement with them but the
Respondents declined to enter
into any such agreement. I
understand the "warrant period"
to mean that the Appellants had
undertaken or guaranteed that
for a period of 12 months after
the delivery of the machine they
would repair or replace it, if
necessary. Certainly it does not
appear that it is any such
warranty which the Respondents
rely on because their case is
that the agreement to repair the
machine was for "life services"
promised by the appellants.
Their representative who
testified before the High Court
said in his evidence that he
bought the machine from the
company "because of the 'life
services' it was to give to me
and because of after sales
services promised me by their
Sales Manager with whom I had
discussions prior to the
purchase". On the other hand he
also told the Court that:
"Before the machine was
installed the defendants gave me
two specific instructions with
regard to its maintenance,
namely maintenance agreement or
after call service".
Thus apart from the promise
before the sale and the supply,
there was also an agreement
after the supply but before the
installation. According to the
evidence, therefore, the
respondents purchased the
machine because they relied on
the pre-sale promise by the
appellants that they would
service the machine throughout
its full life span of operation,
and when the machine arrived
they were asked to choose
between two options of
agreement. On that evidence the
Court of Appeal rightly, in my
view, came to the conclusion
that
"the plaintiff's case is not
dependent solely on the per call
service per se, but more
importantly the pre-sale
agreement or promise by the
defendants' Sales Manager to the
effect that the company would
provide exclusive after-sale
maintenance."
Let me deal first with the
alleged pre-sale promise or
agreement because it is the main
issue which involves the
doctrine of promissory estoppel
which the respondents rely on.
They say it is the pre-sale
agreement or promise which
induced them to buy the machine.
Without that promise they would
not have bought it.
I am unable to find any evidence
in support of respondents'
contention. It is one thing
pleading a cause and repeating
it in Court, and another thing
providing evidence in support of
the causes so pleaded. It is a
common rule of evidence that
except in certain special
circumstances, a party who
relies on a fact must prove it.
Section 14 of the Evidence
Decree, 1975, (NRCD 323)
provides that the burden of
persuasion as to the existence
of a fact lies on the party to
whose case the fact is
essential. In their effort to
establish the pre-sale agreement
or promise the respondents
sought to rely on certain
letters, particularly Exhibit I
and Exhibit B. Exhibit I was a
letter dated 16/4/86 and written
by the appellants to the
respondents. It was a reply to
some letters from the
respondents in which they
(respondents) had complained
that the appellants did not
serve them with a certain
notice. The appellants in
Exhibit I simply sought to tell
the respondents that they
(respondents) were not entitled
to that notice. The relevant
portion of that letter, Exhibit
I stated:
"You complained you were not
notified. I informed you the
letters were targetted to
customers we had contracts with
us for maintenance. You did not
have maintenance agreement hence
we did not have any agreement to
cancel."
Exhibit B from the respondents
also merely complained about the
appellants' refusal to go to
Cape Coast to inspect the
machine. Its contents were to
the effect that the machine had
broken down and some
instructions appeared on the key
board which read:
"If the light does not go out
call IBM services."
According to the letter the
respondents had telephoned the
appellants on 30/7/82, and
expected appellants to send an
engineer; it was because the
engineer did not go to the
respondents that they were
writing Exhibit B to the
appellants. Referring to the
directive which appeared on the
machine, Exhibit B continued as
follows:
"This directive was the reason
for our telephone call to your
engineering department on Friday
July 30, 1982.... The purpose of
writing this letter is to
inquire from you why we have to
wait for your engineer to have
another job in Cape Coast before
our request is attended to. You
will agree with us that we have
promptly honoured all bills sent
to us to enable us have your
confidence in our 'call service'
with you."
Quite clearly these letters do
not make out any agreement or
promise or representation which
can form the basis for the
operation of the doctrine of
promissory estoppel as decided
by the authorities or as
provided for in Section 26 of
the Evidence Decree (NRCD 323).
The Court of Appeal heavily
relied on the fact that the
appellants were "the
manufacturers of the machine",
the fact that "it was new on the
Ghanaian market", the fact that
"it was rare and expensive" and
the direction "call IBM Service"
as sufficient grounds for the
conclusion that the Sales
Manager of the appellants was
likely to assure a prospective
purchaser of exclusive
after-sale services, and
observed that "the defendants
could not have certainly enticed
their customers without such
exclusive after-sale service
assurance". That is stretching
the law to a point of absurdity.
What the law looks for is the
outward manifestations of an
agreement, not speculation. As
is stated by Anson in his book
"The Law of Contract" (25th
Edition at p. 12):
"Agreement is not a mental state
but an act, and as an act, it is
a matter of inference from
conduct. The parties are to be
judged, not by what is in their
minds, but by what they have
said or written or done."
I hold that the respondents did
not establish the pre-sale
agreement or promise and that
the conclusion reached by the
Court of Appeal is not clearly
supported by the evidence.
The matter does not end there,
however. The respondents also
relied on what the parties call
"per call" service agreement and
in my judgment we must examine
the scope and legal effect of
that agreement. This is how the
respondents put it.
"The explained maintenance
agreement to mean entering into
an agreement whereby I pay a
specific sum of money so that
whenever the machine was faulty
they would come down and service
it. The after-call service meant
whenever the machine was faulty
I would call upon them to come
and service it and after the
service I would pay them upon
presentation of their bill."
The evidence indicates that the
respondents did not enter into
the maintenance agreement. They
opted for the per call service
agreement. The appellants also
admit that they serviced the
machine on per call basis. The
trial judge held that the per
call agreement did not
constitute a standing or
permanent contract binding on
the appellants to attend to
every call made by the
respondents. I agree with the
learned trial judge. As Lord
Buckmaster observed in the House
of Lords in the case of May and
Butcher vrs. R (1934) 2 K.B. 17
"It has long been a
well-recognized principle of
contract law that an agreement
between two parties to enter
into an agreement in which some
critical part of the matter is
left undetermined is no contract
at all."
It is unfortunate that the Court
of Appeal ignored this aspect of
the respondents' claim. My
understanding of the per call
arrangement, is that the
contract negotiations under it
will start when the respondents
call on the appellants to come
and repair the machine. In
contract law that will be an
offer. The appellants might or
might not agree to do the job
depending on such negotiations
as they might have with the
respondents with regard to such
matters as the cost involved,
availability of materials and
other charges. If the two
parties come to an agreement on
all essential issues and the
appellants agree to do the work,
there is then in law an
acceptance which will constitute
the negotiations into a
concluded bargain called a
contract. Each offer and
acceptance will be a separate
contract and no one of such
contracts will bind the
appellants to continue servicing
the machine until doomsday. If
it is so, then the appellants
have not been shown to be in
breach of any contract and the
respondents' claim must be
dismissed. That is the
inevitable conclusion on the
facts and I do not see any
justification for the
conclusions reached by the Court
of Appeal.
It may be observed that the
respondents believed that the
contract or promise they claimed
to have been made by the
appellants could be found in the
letters exchanged between them
and the appellants. It was not
easy to find it. Most of those
letters said very little in
favour of the respondents' case,
and rather cumulatively
emphasised the appellants'
denial of a contract. The rule
is that where a court has to
find a contract in
correspondence, and not in any
one particular document, the
entire set of correspondence
which passed between the parties
must be taken into
consideration. In Thomas Hussey
vrs. John-Payne & Anor. (1879) 4
App. Case 311, Earl Cairns, the
Lord Chancellor said at p. 316:
"The second requisite in this
case he proposes to supply
through the medium of letters
which passed between the
parties, and it is one of the
first principles applicable to a
case of the kind that where you
have to find your contract, or
your note or your memorandum of
the terms of the contract in
letter, you must take into
consideration the whole of the
correspondence which has passed.
You must not at one particular
time draw a line and say 'we
will look at the letters up to
this point and find in them a
contract or not, but we will
look at nothing beyond'. In
order to fairly estimate what
was arranged, if anything was
agreed between the parties, you
must look at the whole of that
which took place and passed
between them."
I would uphold the appellants'
contention that the conclusion
reached by the Court of Appeal
is not supported by the evidence
and allow the appeal.
I find it necessary to make a
brief observation about the
additional ground (b) filed by
the Appellants. The argument
urged on this ground is that
even if there was an enforceable
agreement in existence binding
on the Appellants to service the
machine, it was wrong for the
Court of Appeal to have granted
an order of specific performance
to the Respondents who had
failed to pay for services
rendered to them by the
Appellants in fulfilment of that
contract. The answer provided by
the Court of Appeal to the
Appellants' contention is this:
"Now the defendants further
contend that assuming the 'Per
Call' service was binding on
them, the plaintiff breached, or
released them of their
obligation by first, their
failure to settle the
outstanding bill of
¢58,213.04... The trial judge
held that ..(this) released the
defendants of their obligations
if even the per call service is
accepted to be binding on the
defendants. Now the law is that
a contract is not discharged
automatically by breach unless
the party not in breach elects
to treat the breach as a
repudiation of the contract."
The learned judges therefore
held that the nonpayment of the
bill could not release the
appellants from their obligation
under the per call agreement.
With due deference to their
Lordships, I think their
conclusion was in error. It must
be borne in mind that specific
performance is an equitable
relief. It is exceptional in its
character, and a Court has the
discretion either to grant it or
to refuse it. That discretion is
exercised on fixed principles.
One such principle is that a
plaintiff who seeks specific
performance of a contract must
show that he is ready and
willing to perform his own
obligation under the contract,
and any failure on his part, or
breach of his own obligation is
a bar to his claim for specific
performance. (Vide Halsbury's
Laws of England 3rd Edition,
Volume 36, paragraph 391).
This principle of contract law
is quite different from the
principle of repudiation which
the Court of Appeal relied on.
Finally, I would touch briefly
on the issue of the interest
exigible on the debt of
¢58,213.04 due from the
Respondents to the Appellants.
The Appellants contend that the
order to pay interest should
have been varied by the Court of
Appeal to run up to the date of
payment of the debt. In their
counterclaim what the Appellants
asked for was interest until the
date of final judgment. The
trial judge assessed it at
¢95.595.75 as at the date of the
High Court judgment on 16/5/90.
The majority opinion of the
Court of Appeal accepted that
the High Court was right in
awarding interest but did not
consider varying it. They did
not consider raising it because
the point was not taken before
them. The Appellants now seek a
variation for an order that the
interest be made to run up to
the date of payment. It is
strange that the Appellants have
not seen it fit to settle this
indebtedness even after the
Court of Appeal judgment. The
debt is certainly of very little
value to the Appellants on
today's financial market and it
is may opinion that in order to
do justice to the Appellants,
the variation sought by the
Appellants must be granted. I
order that the interest be paid
at the prevailing bank rate from
20/12/84 up to the date of final
payment.
See the case of Wassem Attieh
vrs. Koglex Ltd. (unreported)
decided by this Court on
9/5/2001.
In the result, the appeal
succeeds. The judgment of the
Court of Appeal is set aside.
The High Court judgment is
restored subject to the
variation as to the exigible
interest contained in this
judgment.
ATUGUBA, J.S.C.:
The facts of this appeal have
been amply related by my
brethren, I will therefore
repeat them only where
necessary.
The
plaintiff/appellant/respondent's
(hereinafter referred to as the
plaintiff) case was for:—
"(i) Specific performance of an
(oral) Agreement between the
plaintiff/company and the
defendant/company made in 1977
for an After Sale Service of the
plaintiff/company's IBM Copier
II Machine "On Call Basis".
(emphasis supplied).
(ii) The sum of ¢1,205,000.00
Special Damages being loss of
income for 200 working days at
the rate of ¢5,000.00 per diem
as from 24h March, 1986 through
28th February, 1987.
(iii) Interest on the said sum
of ¢1,206,000.00 at the rate of
25% per annum from 1st April,
1986 to the date of final
judgment.
(iv) Mesne profits as from 1st
March, 1987 up to the date of
final judgment at the rate of
¢5,000.00 per diem."
Paragraph 4 of the plaintiffs'
statement of claim avers:
"Previously to the supply of the
said IBM Copier Machine by the
defendant/company to
plaintiff/company, it was agreed
that the defendant/company would
provide an exclusive maintenance
service, designated as "After
Sales Service" and for a fee
and/or "On Call Basis" and also
for a fee (emphasis supplied).
I should have thought subject to
what I will hereinafter say,
that the after sales service
agreement, if otherwise certain
as to its essential terms,
constituted in itself another
contract which was collateral to
the sale agreement over the IBM
copier machine. See SOWAH VRS.
BANK FOR HOUSING & CONSTRUCTION
(1982 - 83) G.L.R. 1324 S.C. The
plaintiff must have regarded the
after sale service agreement as
a collateral contract, hence its
endorsement on its writ of
summons for
"Specific Performance of an
(oral) Agreement ... for an
After Sales Service of the
plaintiff/company's IBM Copier
machine "On Call Basis".
(emphasis supplied).
That being so I should have
thought that notions of
promissory estoppel did not
arise.
Indeed the genesis of the
doctrine of promissory estoppel
was aimed at curing the defect
of a promise made in the course
of an existing contractual
relationship which was not
supported by consideration. In
their erudite book, Cheshire,
Fifoot & Furmston's Law of
Contract, (13th ed) the learned
authors state at pages 100 -
101, concerning the famous
decision of Denning, J. (as he
then was) in Central London
Property Trust Ltd. Vrs. High
Trees House Ltd. (1947) K.B.
130, as follows:—
"The reasoning of the learned
judge is interesting. He agreed
that there was no consideration
for the plaintiffs' promise to
reduce the rent. If, therefore,
the defendants had themselves
sued upon that promise, they
must have failed. Their claim
would have depended upon a
contract of which one of the
essential elements was missing.
But where the promise was used
merely as a defence, why should
the presence or absence of
consideration be relevant? The
defendants were not seeking to
enforce a contract and need not
prove one. Was there, then, any
technical rule of English law
whereby the plaintiffs could be
prevented from ignoring their
promise and insisting upon the
full measure of their original
rights? At first sight, the
doctrine of estoppel would seem
to supply the answer. By this
doctrine, if one person makes to
another a clear and unambiguous
representation of fact intending
that other to act on it, if the
representation turns out to be
untrue, and if that other does
act upon it to his prejudice,
the representer is prevented or
'estopped' from denying its
truth. He cannot, as it were,
give himself the lie and leave
the other party to take the
consequences. The doctrine would
meet admirably the situation in
the High Treescase but for one
difficulty. In 1854 in Jordan v.
Money, a majority of the House
of Lords held that estoppel
could operate only on a
misrepresentation of existing
fact. Upon this basis it was
improper to apply it where, as
in the High Trees case, a party
sought to rely on a promise of
future conduct.
To avoid this difficulty,
Denning, J. sought to tap a
slender stream of authority
which had flowed in equity since
the judgment of Lord Cairns in
1877 in Hughes v. Metropolitan
Rly. Co."
I shall return to the question
of promissory estoppel later. Is
the said collateral agreement
enforceable? I should think not.
It is trite law that for an
agreement to pass for an
enforceable contract it must be
certain, at least, as to its
essential terms. A collateral
contract has no special status.
As stated by Lord Moulton in
Heilbut, Symons & Co. v.
Buckleton (1913) A.C. 30 at 47,
a collateral contract
"is in every sense of the word a
complete legal contract. It is
collateral to the main contract,
but each has an independent
existence, and they do not
differ in respect of their
possessing to the full the
character and status of a
contract."
The agreement to provide the
after sale service "for a fee",
simpliciter, is ambiguous. Thus
in the said Cheshire, Fifoot and
Furmston's Law of Contract, at
page 44 a reference is made to
"... the tensions created by the
law's demand for a minimal
degree of certainty before it
will classify an agreement as a
contract. Since most contracts
are not negotiated by lawyers,
it is all too easy for the
makers to fail this test,
particularly as legal and
commercial perceptions of
certainty may well diverge. So a
lawyer would regard an agreement
that goods are to be supplied at
a reasonable price as prima
facie sufficiently certain but
would have much more doubt about
an agreement 'for a price to be
agreed between us.' Many
businessmen would be much
happier with the second
agreement than the first."
(emphasis supplied).
Apart from the element of fee,
it is quite clear that though
the plaintiff claims that the
agreement was concluded in 1977,
the parties kept on haggling
over its terms long afterwards.
Thus in Exhibit 6 at page 126 of
the record the following is
stated:
"IBM GHANA
June 28, 1978.
Hasnem Enterprises,
P. O. Box 500,
Cape Coast.
Dear Sir,
REPAIR OF COPIER, II
Thank you for your letter Ref.
HE/OE/IBM/78/9 of June 27, 1978.
We wish to confirm that our
conversation on the telephone
touched on terms to be covered
by your letter requesting us to
come and service your machine,
since you have elected to pay
for services rendered on each
occasion of such service.
Your letter is only asking us to
come and render services that
does not include your commitment
to pay for parts used and
expenses Incurred such as
travel, meals and accommodation
(if it becomes necessary).
We are sorry that without this
commitment we shall find it
difficult to render the services
required.
We hope to receive the requisite
directives from you as early as
possible to enable us undertake
the services you require.
Yours faithfully/truly,
(sgd) S.A. Coleman
OPCE Field Manager."
The again at page 124 of the
record Exhibit 4 states as
follows:
"HASNEM ENT. Ltd.,
P. 0. Box 500,
Cape Coast.
February 25, 1985.
The Branch Manager,
IBM World Trade Corp.,
Mobil House,
Liberia Road,
P, 0. Box 1507,
Accra.
Dear Sir,
We acknowledge receipt of your
letter dated January 7, 1985,
with the enclosure of your 1985
personal diary for which we
thank you.
We have also received your
invoice No. 46124281 dated
19-12-84 for the sum of
¢58,213.04. Action is being
taken to remit you our cheque in
settlement of the Invoice.
The undersigned called at your
office twice on Wednesday, 13th
instant but could not meet you
for discussion on your DP
Products.
We would be most grateful if you
could please arrange to meet the
undersigned on Wednesday, 27th
instant in your office between
9.00 a.m. and 9.4 5 a. m.
On the matter of our Memory
typewriter which you returned to
us without service for lack of
spare parts, we would be most
grateful if in future you could
please avail us with your
Overseas address from where we
could be served when we place an
order."
It is clear therefore that the
parties did not reach an
enforceable agreement in 1977.
The principle of promissory
estoppel does not dispense with
the requirement of certainty
either. This was made clear per
Lord Hailsham L.C. in WOODHOUSE
AC ISRAEL COCOA LTD. V. NIGERIAN
PRODUCE MARKETING LTD. (1972)
A.C. 741 H. Lat 755 when he
said:
". . .to give rise to an
estoppel, representations should
be clear and unequivocal, and if
a representation is not made in
such a form as to comply with
this requirement, it normally
matters not that the representee
should have misconstrued it and
relied upon it." (emphasis
supplied).
Founding themselves on this
case, Cheshire, Fifoot and
Furmston's Law of Contract
states at page 104 as follows:
"Finally, it is settled that
there must be a promise, either
by words or by conduct, and that
its effect must be clear and
unambiguous." (emphasis
supplied).
Apart from this, estoppel,
including promissory estoppel,
is a shield and not a sword.
In Combe v. Combe (1951) 2 K.B.
215 at 220 Denning L.J. (as he
then was) said:
"In none of these cases was the
defendant sued on the promise,
assurance or assertion as a
cause of action in itself; he
was sued for some other cause,
for example, a pension or a
breach of contract, and the
promise, assurance or assertion
only played a supplementary
role, - an important role, no
doubt, but still a supplementary
role. That is, I think its true
function. It may be part of a
cause of action but not a cause
of action itself. " (emphasis
supplied).
I think it is in this sense that
Cheshire, Fifoot and Furmston's
Law of Contract states at page
103 that
"The doctrine operates only by
way of defence and not as a
cause of action." (emphasis
supplied).
They however clarify this at
page 104 to the effect that the
metaphor in Combe v. Combe,
supra, that the doctrine must be
used as a shield and not as a
sword "should not be sloppily
mistranslated into a notion that
only defendants can rely on the
principle. There is no reason
why a plaintiff should not rely
on it, provided that he has an
independent cause of action. So
if upon the facts of Hughes v.
Metropolitan Rly. Co, the
landlord had gone into
possession, putting the tenant
into the position of plaintiff,
the result would surely be the
same. On such facts the tenant's
cause of action would be the
lease and the doctrine would
operate to negative a possible
defence by the landlord that, he
was entitled to forfeit. As
Spencer Bower says: 'Estoppel
may be used either as a
minesweeper or a minelayer, but
never as a capital ship.'
(emphasis supplied).
Now the facts in Hughes v.
Metropolitan Rly. Co., (1877) 2
App. Cases 439 at 448 were that,
in October 1874 a landlord gave
his tenant six months' notice to
repair the premises. If the
tenant failed to comply with it,
the lease could be forfeited. In
November the landlord started
negotiations with the tenant for
the sale of the reversion, but
these were broken off on 31
December. Meanwhile the tenant
had done nothing to repair the
premises. On the expiry of six
months from the date of the
original notice the landlord
claimed to treat the lease as
forfeited and brought an action
of ejectment. The action failed.
Lord Cairns said at page 448 of
the Report:
"It is the first principle upon
which all Courts of Equity
proceed, that if parties who
have entered into definite and
distinct terms involving certain
legal results - certain
penalties or legal forfeiture -
afterwards by their own act or
with their own consent enter
upon a course of negotiations
which has the effect of leading
one of the parties to suppose
that the strict rights arising
under the contract will not be
enforced or will be kept in
suspense, or held in abeyance,
the person who otherwise might
have enforced those rights will
not be allowed to enforce them
where it would be inequitable
having regard to the dealings
which have thus taken place
between the parties." (emphasis
supplied).
The doctrine of promissory
estoppel has undergone expansion
and refinements. It is not
limited to only contractual
relationships. In DURHAM FANCY
GOODS LTD. V. MICHAEL JACKSON
(FANCY GOODS) LTD. (1968) 2 Q.B.
839 at 84, Donaldson, J.
commenting on the statement of
Lord Cairns quoted, supra, said:
"Lord Cairns L.C. in his
enunciation of the principle
assumed a pre-existing
contractual relationship between
the parties, but this does not
seem to me to be essential,
provided that there is a
pre-existing legal relationship
which could in certain
circumstances give rise to
liabilities and penalties. "
(emphasis supplied).
This principle was approved by
Denning M.R. in EVENDEN V.
GUILDFORD CITY ASSOCIATION
FOOTBALL CLUB LTD. (1975) 1 Q.B.
917 at 924 when he said:
"Mr. Reynolds referred us,
however, to Spencer Bower and
Turner, Estoppel by
Representation, 2nd ed, (1966),
which suggests at page 340 -
342, that promissory estoppel is
limited to cases where parties
are already bound contractually
one to the other. I do not think
it is so limited: see Durham
Fancy Goods Ltd. V. Michael
Jackson (Fancy Goods) Ltd.
(1968) 2 Q. B. 839, 847. It
applies whenever a
representation is made, whether
of fact or law, present or
future, which is intended to be
binding, intended to induce a
person to act upon it and he
does act upon it," (emphasis
supplied) and I should warn, not
necessarily to his detriment.
But for all this, the doctrine
of promissory estoppel has been
liberalised into a cause of
action in certain jurisdictions,
such as the United States and
Australia, see footnote 4 of
page 104 of Cheshire, Fifoot and
Furmston's Law of Contract, 13th
ed. It would however, seem that
in England and Ghana it can only
be used indirectly as a cause of
action where the plaintiff has
an independent cause of action,
as already stated supra, or as a
direct cause of action in the
limited situations of
proprietary estoppel. Thus in
QUIST V. GEORGE (1974) 1 G.L.R.
1 where a wife allowed her
husband, the defendant to build
a private hospital on her land,
Abban J. (as he then was), held
at page 14, in reference to the
defendant's counterclaim,
"I have no doubt that the kind
of estoppel which is available
to the defendant in the present
case, is more than a shield. In
other words, it can also be a
sword by which the person in
possession may, in certain
circumstances, compel the
conveyance to him of the legal
estate." (emphasis supplied).
Abban, J. however, on the facts
of that case, declined the
remedy of specific performance
by conveyance of the legal
estate to the defendant but
rather gave him a lease of 25
years. Similarly Cheshire,
Fifoot and Furmston's Law of
Contract states in footnote 5 as
follows:
"It seems that proprietary as
opposed to promissory estoppel
may in some cases support a
cause of action. See Crabb v.
Arun District Council [1976] Ch.
179, [1975] 3 All E.R. 865."
(emphasis supplied).
This is the position, even
though, as stated in footnote 1
at page 103 of Cheshire, Fifoot
and Furmston's Law of Contract,
'In Crabb v. Arun District
Council (1976) Ch. 179 at 193,
(1975) 3 All E. R. 865 at 875,
Scarman L.J. did not find the
distinction between proprietary
and promissory estoppel
valuable." (emphasis supplied).
Even if this view is accepted it
would still mean only a limited
class of promissory estoppel,
more conveniently known as
proprietary estoppel, could be a
direct sword rather than a
shield.
There is no element of
proprietary estoppel in this
case and the agreement of after
sales service being wholly
collateral to the original
contract of sale of the IBM
Copier Machine the plaintiff
could not and did not base its
action in this case on the
latter
"as an independent cause of
action"
to enable him use promissory
estoppel, as a sword rather than
a shield. His action therefore
fails.
In conclusion I hold that the
plaintiff in this case ought to
fail because in so far as its
action can be said to sound in
contract it lacks the requisite
certainty of terms to qualify
for enforcement by the courts,
and in so far as it is said to
be based on promissory estoppel
it is also misconceived for
uncertainty. It is further
misconceived for being a sword
rather than a shield.
For these reasons I concur in
the allowance of the appeal.
AMPIAH, J.S.C.:
I have read beforehand, the
opinion of my learned brother,
Lamptey, J.S.C. and am in
agreement with him that in so
far as the appeal relates to the
claim of the
Plaintiff/Respondent, it should
fail. I would however agree with
my learned Sister Akuffo whose
opinion on the counterclaim I
have had the privilege to read
beforehand, that the appeal
should succeed on the question
of interest and that on the
counterclaim, the Appellant
should be entitled to interest
on its claim from the 20th
December, 1984 to the date of
final payment of the judgment
debt.
LAMPTEY, J.S.C.:
On the 17th March, 1987 Hasnem
Enterprises Limited (hereinafter
called Hasnem) sued I.B.M. World
Trade Corporation (hereinafter
referred to as I.B.M.) and
claimed in particular “specific
performance of an oral agreement
between Hasnem and I.B.M. made
in 1977 for an after sale
service of Hasnem’s I.B.M.
Copier II Machine on call
basis”. Hasnem also claimed
consequential reliefs against
I.B.M. The claim was resisted by
I.B.M. In its statement of
defence, I.B.M. counterclaimed
against Hasnem the sum of
¢58,213.04 being amount due to
I.B.M. in respect of maintenance
services rendered by IBM to
Hasnem on Hasnem’s Copier II
Machine.” On the pleadings
before the trial court, the
substantive issue the court was
called upon to determine was
whether or not there was
concluded in 1977 an oral
agreement between Hasnem and
I.B.M. to the intent and effect
that I.B.M. should service and
maintain Hasnem's Copier II
Machine on call basis.
The trial judge dismissed the
case of Hasnem and entered
judgment for IBM on its
counter-claim. Aggrieve and
dissatisfied by the judgment
Hasnem appealed to the Court
Appeal. The main complaint made
by Hasnem against the judgment
of the trial judge was that it
could not be supported by the
evidence on record.
The Court of Appeal by a
majority (2-1) decision set
aside the judgment dismissing
the claim and case of Hasnem.
Judgment was entered for Hasnem.
The Court dismissed the appeal
by Hasnem against the
counterclaim and affirmed the
judgment in favour of I.B.M. on
its counterclaim. I.B.M. was
dissatisfied with the majority
decision of the Court of Appeal
and appealed to this court on
the following grounds:
"(a) the judgment was against
the weight of evidence on
record.
(b) the Court of Appeal erred in
rejecting findings of fact made
by the trial court which had the
benefit of observing the
demeanour of witnesses, and
substituting its own findings of
fact and thereby occasioning a
substantial miscarriage of
justice,"
In due course, Solicitors acting
for I.B.M. filed additional
grounds of appeal and argued
them to form part of the
statement of case.
The first observation I must
make is that Hasnem did not
claim a "legal" contract or
agreement. The claim of Hasnem
was founded on the rule of
equity; in this particular
instance, "specific
performance". The 1992
Constitution provides at article
11(2) as follows:
"11(2) The common law of Ghana
shall comprise the rules of law
generally known as the common
law, the rules generally known
as the doctrine of equity and
the rules of customary law
including those determined by
the Superior Court of
Judicature".
In my view, it would be palpably
wrong to apply principles and or
rules other than those generally
known as the doctrines of equity
in considering the case of
Hasnem. The majority of the
Court of Appeal adverted to this
issue when Acquah, J.A. (as he
then was) stated the law to be
applied as follows:
"The principal has been
described as a principle of
justice and equity, and is
extended to cover conduct. Thus
in Morgate vrs. Twitchings
(1975) 3 All E.R. 314 at 323
Lord Denning explained
'....... when a man by his words
or conduct has led another to
believe in a particular state of
affairs he will not be allowed
to go back on it when it would
be unjust or inequitable for him
to do so'. "
The learned judge went further
to explain the true position of
parties in such circumstances as
follows:
"The principle is that a promise
intended to be binding, intended
to be acted upon, and in fact
acted on should be binding. This
principle which Lord Denning
prefers to call promissory
estoppel in a number of his
cases include Evenden vrs.
Guildford Football Club (1975) 3
All E.R. 269 applies:
'Whenever a representation is
made whether of fact or law,
present or future, which is
intended to be binding, intended
to induce a person to act upon
it and he does act upon it'."
The statement does not admit of
any ambiguity. I must point out
that the conditions or terms of
the promise need not be put down
in writing. The operative words
are promises made and, further,
evidence of conduct which
unequivocally and
incontrovertibly are consistent
with the promises.
In arguing original ground one
on the notice of appeal, learned
Counsel or IBM submitted that
Hasnem failed to prove the
existence of the oral agreement
between it and I.B.M. on the
evidence before the trial court.
He reproduced extracts selected
from the documents tendered in
evidence and sought to establish
that the claim of Hasnem was not
proved by these. In reply,
counsel for Hasnem contended
that the evidence adduced by
Hasnem proved and established a
contract for service and
maintenance of the machine. He
argued the contract was not one
for the supply of goods. He
recited the pieces if evidence
in support and proof of Hasnem's
case.
In the address filed by counsel
for I.B.M. before the trial
judge the thrust of the case for
I.B.M. as put forward was
founded on and proved by Exhibit
"1". This was how the argument
was presented by counsel for
I.B.M.:
"Submits that the Plaintiffs
claim fails altogether so long
as the same is stated on Exhibit
"1". Then he proceeded to the
conclusion—
'submits that the fact that
defendants were from time to
time servicing plaintiff's
machine does not lead
irresistibly to an enforceable
contract between the parties'."
I note that in his address in
reply, Counsel for Hasnem did
not advert to the evidence
contained in Exhibit "1", nor
did he comment on it. The trial
judge dutifully heeded the
invitation by Counsel for I.B.M.
and seriously considered the
evidential value of Exhibit "1".
In considering the case of
Hasnem, the trial judge
expressed himself as follows:
"Now to the plaintiff's claims
against the defendants, I shall
take the numerous correspondence
between the parties which the
plaintiff relied on as
constituting binding legal
agreements."
After due and critical
examination and evaluation of
the "numerous correspondence",
he concluded that the numerous
correspondence did not create a
binding contract between the
parties.
The majority of the Court of
Appeal considered and evaluated
all the evidence including the
evidence of PW1 and DW1 and held
that Hasnem proved the oral
agreement it entered into with
I.B.M. in 1977. In his
judgement, Acquah, J.A. (as he
then was) recited in great
detail the pieces of evidence
which weighed with him in
arriving at his decision when he
expressed his opinion as
follows:
"Now there is no dispute that
the Plaintiff did buy the I.B.M.
Copier II Machine from the
defendant and that the
defendants are the manufacturers
of the said machines. There is
also no dispute that the only
maintenance services offered by
the defendants to their
customers are either maintenance
agreement or per call service;
and that from 1977, when the
plaintiff bought the machine,
the defendants provided per call
service maintenance to the
plaintiff up to at least 1984".
.
The above passage drew attention
to evidence on record, which the
trial judge failed and or
omitted to advert to in his
judgment. In addition to the
above matters, the trial judge
had before him evidence from PW1
which dealt at great length with
oral communication in 1977
between PW1 and a Mr. Osei
before he, PW1, agreed to buy
and Mr. Osei agreed to place an
order from outside Ghana for
Copier II Machine for Hasnem.
The case of I.B.M. was concluded
without evidence which
contradicted or disputed the
oral agreement of 1977. Mr. Osei
was not called to assist the
trial court. The omission of
failure of the trial judge to
advert to this incontrovertible
evidence from PW1 destroyed the
finding he made. The Court of
Appeal was right in examining
the evidence before it and
coming to its own conclusion.
The opinion of Brobbey, J.A. on
this issue expressed in his
dissenting judgment cannot be
supported in law because it was
not based on evidence on record.
On this issue he stated as
follows:
"Assuming that there was any
oral contract for call service
the agreement came into being
in, 1977 when the machine was
bought."
In my humble opinion, the
appellate judge was not called
upon to make an assumption and
or to guess anything. His plain
duty was to evaluate the
evidence on record and make
findings of fact. Again the
appellate judge fell into error
when he expressed the opinion
following:
"A contract to repair that
machine must have a definite
time limit. It could not be
argued that the agreement was
permanent when the machine
itself did not have a permanent
life."
With great respect to the
appellate judge, the case of
Hasnem was a fairly simple one,
namely, an oral agreement
entered into in 1977 to the
effect that so long as the
Copier II was serviceable and
unless and until it was written
off as useless and
counter-productive, I.B.M. would
service and maintain it, and
payment made after servicing.
The trial judge and appellate
dissenting judge, with respect,
misdirected themselves when they
considered evidence, which was
not on record and relied on and
made assumptions in this matter.
They each erred in the view they
expressed that—
"such an agreement which was not
specific as to the period of
termination was determinable
after a reasonable
notice........ In his (trail
Judge's) estimation ten years
was reasonable. That ten years
suggestion was point of time in
respect of which the parties or
at least the appellants
witnesses should have
testified".
I have not understood the case
of Hasnem to be that it had
sought an order of specific
performance of an oral agreement
for a duration of ten years
between the parties commencing
in 1977. The evidence on record
does not support the finding by
the trial and dissenting
appellate judges, namely that
the contract or agreement, the
subject-matter in dispute was
for a period of ten years. The
finding by the dissenting
appellate judge expressed as
follows:
"I am of the view that the
appellant's claim for specific
performance failed because if
that claim were valid the
question understandably arose
was how long would that specific
performance last-for-ever"
was not supported by evidence on
record. I have sought to show
that both the trial judge and
the dissenting appellate judge
misdirected themselves on the
evidence before the court; in
particular, the essential terms
and conditions of the oral
agreement entered into in 1977
between Hasnem and I.B.M. In my
view, the oral evidence of PW1
in relation to what transpired
in 1977, which was not
controverted nor disputed by
evidence from DW1 proved and
established the case of Hasnem.
Learned counsel for I.B.M.
submitted that since I.B.M.
sought an equitable relief it
must come to equity with clean
hands, mindful of the maxim that
he who comes to equity must do
equity. I agree that that is a
correct statement of law. He
agreed with Brobbey J.A. in his
dissenting opinion expressed as
follows:
"The respondent (I.B.M.) was a
business organisation. Having
performed services which had not
been paid for how on earth did
the appellant expect it to
continue to render more service?
The point of relevance is that
until the appellant paid for the
services already rendered, the
respondent had no reason to
believe that future services
would be paid for."
I am amazed at the view of the
evidence taken by the appellate
judge. At paragraph 7 of the
amended statement of defence
I.B.M. averred in part as
follows:
"7....... each service call
could only be considered as an
independent request for services
and the same was fulfilled on
the basis of availability of
spare parts and the appropriate
man power"
The defence put forward did not
include the term or condition
"subject also to the payment for
outstanding bills." It is rather
the honest business managing
director, PW1 who stated that
payment for bills for services
rendered was a term and
condition of the oral agreement.
In any case, the evidence before
the court was that I.B.M. had
stopped offering service from
1984 and was not prepared and in
a position to offer service and
maintenance on I.B.M. Copier II
Machines. I find that the
opinion expressed by the
dissenting appellate judge was
not supported by the evidence on
record. He fell into grave error
when he stated that I.B.M. could
justifiably refuse to offer
service and maintenance to
Hasnem on the ground that Hasnem
failed and or refused to pay
I.B.M. bills remaining unpaid.
The defence put forward was that
I.B.M. would attend to service
and maintain the machine of
Hasnem "on the basis of
availability of spare parts and
the appropriate man power". The
appellate dissenting judge
failed and omitted to consider
this important defence put
forward by I.B.M. and came to
the wrong decision on this
issue.
Before the trial court, the
parties put in evidence numerous
documents. The trial judge as
well as the appellate judges
examined and considered some
only of these documents. Since a
ground of appeal complained
about the weight the majority
judges attached to these
documents, I must address the
issue raised here. It is
important in doing so to pay
attention to the dates on each
document and relate it to the
evidence on record touching upon
the oral agreement entered into
between Hasnem and I.B.M. in
1977. The exercise will assist
the court in appreciating and
understanding the case of each
party. I start with Exhibit, 'A'
which in part read as follows:
"
June 11, 1982
The Country Manager,
I. B. M.
Dear Sir,
As you are aware our I.B.M.
Copier II Machine was delivered
to us on Tuesday, August 16,
1977.
We write to kindly arrange for
your Copier Engineer to be in
Cape Coast on Monday, August 16,
1982 to service the Copier
Machine thoroughly for us.
x
x
x x
We are by this letter asking you
to kindly note the following
dates as our Standing Order
Dates for your Copier Engineer
to be in Cape Coast to service
our machine.
November 16: February 16:
May 16: August
16
of every year .........."
In his testimony before the
trial court, PW1 the Managing
Director repeated the contents
of Exhibit 'A'. I note that
I.B.M. failed and or omitted to
put in evidence the reply it
sent to Hasnem. In my opinion,
Exhibit 'A' was evidence of an
earlier and prior arrangement or
agreement between the parties as
to dates on which Hasnem
expected I.B.M. to attend on it
to service and maintain the
Copier II machine. I am of the
view that I.B.M. should have
obliged Hasnem with the common
courtesy of a reply to Exhibit
'A' stating clearly that I.B.M.
was under no obligation to
Hasnem in the matter.
The second letter Hasnem wrote
to I.B.M. is Exhibit 'B' dated
August 1982. I produce the
following passage from Exhibit
'B':
August 14 1982
"On Friday, July 30 1982, the
undersigned ....... reported to
your Engineering Department
indications on our I.B.M. Copier
II Machine—
"The indications were—
(1) The end P.C. light was on.
(2) After moving the P.C. switch
to 2, the call Key Operator and
end PC lights were still on.
(3) The instruction on your
"Key Operator" Instruction
reads—
"If the light does not go out,
call I.B.M. Service".
From the material, it cannot be
disputed that the "Key Operator
Instructions" imposed a binding
undertaking given to every
purchaser of that machine that
I.B.M. in the circumstances in
which Hasnem found itself, that
is, "if the light does not go
off "to promptly send an
employee with the requisite
expertise to attend Hasnem or
the purchaser. This instruction
would be deemed breached by
Hasnem or a purchaser if that
company called on a person other
than an engineer from I.B.M. The
reply from I.B.M. to Exhibit 'B'
was put in evidence as Exhibit
''2'. It read in part as
follows:
"All calls placed with our
engineering department are
scheduled and our customers are
handled on "first come first
served". As a remote customer
without Maintenance Agreement,
you are expected to pay all
charges for calls made on you".
I do not understand this reply
to mean that Hasnem was not a
customer of I.B.M. The reply
made it clear beyond dispute
that Hasnem was a customer. That
Hasnem must take its place in
the queue in the matter of
servicing and that Hasnem must
pay for services after the same
had been rendered. The reply,
Exhibit '2', from I.B.M. did not
advise Hasnem to look else where
for an engineer for purposes of
carrying out the repair
occasioned by the fact that "the
lights did not go off" on its
machine. The letter Exhibit '2'
was written and signed by the
Branch Manager of I.B.M. a Mr.
J.E.A. Quansah. On this same
giving evidence for I.B.M., Mr.
Abraham Amoah, DW1 stated as
follows:
"We were servicing plaintiff's
Copier II Machine. When they
called us on the telephone or
sent somebody we received the
request and depending on the
resources available we undertook
to honour the invitation or
call".
DW1 thus confirmed the existence
of the oral agreement.
DW1 did not provide any evidence
to support the claim that on
particular occasions I.B.M.
refused or rejected a call from
Hasnem to service the Hasnem
Copier II Machine.
At this point it is desirable to
advert to Exhibit '6' which was
referred to in his statement of
case for I.B.M. Learned counsel
argued as follows:
"....... in fact the evidence on
record supports the defendants
position that there was no
binding standing agreement
between the parties and that
each service call was considered
and accepted or rejected by the
defendants on its own merits."
I therefore looked for evidence
on record including Exhibit '6'
in the light of the submission
that between 1977 and 1984
I.B.M. rejected calls from
Hasnem to attend and service the
Copier II machine. The evidence
before the trail court was that
I.B.M. did not breach the oral
agreement to service and to
maintain the - Copier II machine
entered into between the parties
in 1977. There was no evidence
on record that I.B.M. rejected
any call from Hasnem and failed
or neglected to attend to
service and maintain the copier
II machine. In my view learned
counsel for I.B.M. misconceived
the case before the court when
he based himself on Exhibit '6'
and argued as follows:
"There is for example Exhibit
'6', which ..... stated:
"Your letter is only asking us
to come and render services;
that does not include commitment
to pay for parts used and
expenses incurred such as travel
meals, an accommodation (if it
becomes necessary) .... )"
This argument does not and
cannot support and prove the
submission that I.B.M. had a
right or power to reject a call
by Hasnem to offer on I.B.M.,
service and maintenance of the
customer's machine. The clear
and plain position of I.B.M. was
a readiness and a willingness to
attend all calls of Hasnem
subject only to the conditions
clearly spelt out above. Indeed
the case of Hasnem was not that
I.B.M. must service and maintain
the Copier II Machine free of
charge. I therefore find that
the evidence contained in
Exhibit '6' does not support the
case and claim of I.B.M. on that
issue.
On this issue the evidence of
DW1 left the trial court in no
doubt as to the real reason or
excuse from I.B.M. for its
refusal to service a customer's
machine in the following words—
"If a customer fails to pay our
bills we refuse to honour his
calls for service in future,
though we make effort to collect
the money"
This is an admission that I.B.M.
was willing and ready to provide
maintenance services. According
to DW1 this policy of I.B.M. was
made clear to its customers. DW1
put in evidence Exhibit '7'. I
must necessarily draw attention
to the fact that Exhibit '7'
bears the date 14th October 1983
and not referable to an event in
1977. In the instant action,
Hasnem sued I.B.M. for breach of
an oral agreement entered into
between the parties in 1977 and
not one entered into in 1983. In
any case and indeed Exhibit '7'
contained the statement—
"Please be assured of our prompt
attention at all times"
which in my opinion was further
evidence supportive of the
existence of the contract to
offer service and maintenance to
Hasnem.
This was an undertaking given to
Hasnem by the Customer
Engineering Manager of I.B.M. a
Mr. Abraham Amoah in 1983 namely
the readiness and willingness of
I.B.M. to offer prompt service
to Hasnem and all customers
subject always to payment for
the services so rendered.
The above conclusion is also
supported by evidence contained
in Exhibit 'C' dated 30th June
1986 sent by Hasnem to I.B.M.
which in part reads as follows:
"When the machine was purchased,
we were given an Assurance of
"After Sale Service" and whether
we entered into "Maintenance" or
operated on "Per Call" service
with your outfit, the said
I.B.M. Copier II Machine has
always been maintained by your
outfit".
I must point out that Exhibit
'C' is consistent in substance
with the Exhibit '7', which as I
have indicated elsewhere in this
opinion was written in October
1983. I reproduce the following
evidence from Exhibit 'C',
"The points raised in your
letter (dated April 16 1986)
under reply are indeed very
interesting. One fact we would
want you to bear in mind is that
Hasnem Enterprises Limited
bought an I.B.M Copier II
Machine from your outfit.
Whether the Copier II Engineer
has left I.B.M. or not that is
not Hasnem Enterprises Limited
concern. Our concern is that our
I.B.M. Copier Machine is
maintained...."
The evidence contained in
Exhibit 'C' was completely and
totally ignored by the trial
judge, especially when I.B.M.
did not offer any evidence to
contradict the serious
statements of fact supplied by
Hasnem for due consideration by
the trial court. Indeed Hasnem
expressed what it believed was
the agreement between it and
I.B.M. in Exhibit 'C' as
follows:
"If at the time of purchase of
the I.B.M. Copier Machine II you
have made us to understand that
at a certain stage we shall have
to maintain the said I.B.M.
Copier II Machine ourselves, we
are sure to have discarded the
idea of buying it.....
As you are fully aware, I.B.M.
machines are serviced by
specially trained people with
specialist tools and parts
provided by I.B.M. World Trade
Corporation. Please tell us the
wayside or street side mechanic
who will easily and expertly
service I.B.M. Copier II
Machine".
The above piece of evidence from
Hasnem in my opinion established
the case of Hasnem that there
was at the date of the purchase
an agreement by I.B.M. to
service and maintain the
machine. I have not found
evidence from I.B.M. that it
turned down or refused to
service and maintain the Copier
II Machine between 1977 and
1986. The evidence of DW1
Abraham Amoah was not in my
view, an answer to the hard
facts stated by PW1. DW1 stated
as follows:
"Sometime in 1977 the
plaintiff's bought an I.B.M.
Copier II Machine from the
defendants. I am not aware the
defendants told plaintiff they
(defendants) would be
exclusively responsible for the
servicing of plaintiffs
machine".
PW1 in his evidence named one
Mr. Osei the Sales Manager of
I.B.M. as the person who
negotiated the sale and purchase
with him. It does not lie in the
mouth of Amoah to give the
evidence he gave above. He did
not say he was present when
Hasnem bought the machine even
though he stated that he had
worked for I.B.M. since 1968. In
1977, DW1 was not the Sales
Manager of I.B.M. DW1 described
himself as Customer Engineering
Manager. DW1 did not claim he
had worked as a Sales Manager
for I.B.M. in 1977.
Be that as it may, DW1 testified
on 22nd March 1990 as follows:
"The plaintiffs did not enter
into any service maintenance
agreement of any form oral or
written with defendants".
The case of Hasnem was that it
entered into an oral agreement
with I.B.M. The trial court
should have rejected the above
piece of evidence as worthless,
since DW1 was not present to
witness that transaction; namely
the evidence of PW1 dealing with
and concerning the -
pre-purchase discussion; that is
to say, the placing of the order
for the machine; the delivery
and fixing of the machine in
Cape Coast and the verbal
guarantees and assurances made
to Hasnem at that time in 1977.
I agree and accept the trial
judge's rejection of DW1's
answer on the issue of the
"green light not going off".
This was what DW1 told the trial
court under cross-examination:
"Note: Witness shown Exhibit 'B'
and under 3 "if the light does
not go out, call I.B.M.
service"; he explains it means
the person should call a service
engineer, that is somebody who
is knowledgeable about the
I.B.M. product/machine. And
apart from I.B.M., there are
other individuals who are
trained and knowledgeable about
the produce".
Clearly this answer was on the
face of it dishonest. From 1977
up to 1986 the evidence before
the trial court was that only
I.B.M. had serviced and
maintained the machine Hasnem
bought from I.B.M. In my view
DW1 was not truthful to the
court in the matter of what a
purchaser of a Copier II Machine
should do if the lights on the
machine do not go off. The
clear and simple instruction
from the manufacturer was "call
I.B.M. engineer". A reasonable,
prudent purchaser and owner
would and must call the I.B.M
engineer. I totally reject the
interpretation of the trial
judge when he stated thus—
"But the crucial question is,
did this (call IBM Engineer) per
se create a binding contract
legally enforceable against
I.B.M. .....
Therefore I am of the view that
"call I.B.M. Service" should be
read to mean that if the user
has an existing maintenance
agreement or service agreement
with I.B.M. he should call on
the I.B.M. if the lights do not
go off. That will do justice to
the parties, case".
The instruction indicated on the
machine is plain and does not
require interpretation by the
trial judge. The trial judge
erred when he introduced and
added a fresh term and condition
to the instruction, that is,
"that the user of the machine
must have an existing
maintenance agreement or service
agreement" with I.B.M. In my
view it would be unwise for
Hasnem not to call upon I.B.M.
engineer if the light fails to
go off. The instruction was
directed at any and every person
who owned a Copier II Machine
whether or not such an owner had
any agreement written or oral
with I.B.M. If I.B.M. failed and
or neglected to respond to a
call to attend on any person
whose copier II machine
experienced a fault that the
lights do not go off the conduct
would no doubt give the owner a
cause of action against I.B.M.
In the majority judgment of the
Court of Appeal Acquah, J.A. (as
he then was) stated his opinion
as follows:
"if the trial judge had
critically adverted his mind to
this prior promise by Mr. Osei
of exclusive after-sale service
vis-a-vis the indications the
I.B.M. Copier II Machine itself
gives in the event of a fault to
wit call I.B.M. Service
Engineer, he would have
discerned the source of the
binding nature of the per call
service".
He concluded thus:
" ....... it does not lie in the
mouth of the defendant to go
back on that promise. As Apaloo,
J.A. (as he then was) said in
Sasu vrs. Ayaduala (1973) 1 GLR
221 at 225:
"A party should be held to any
act or statement which it would
be unconscionable to permit him
to deny."
The learned judge also cited
S.26 of the Evidence Decree 1975
(Act 323) to buttress his
conclusion. He was right in
doing so.
I find further support for my
conclusion that the trial judge
misdirected himself on the case
put forward by Hasnem from the
following passage from his
judgment:
"It is the case of the plaintiff
that I.B.M. products are
exclusively maintained and
serviced by I.B.M. or their
appointed agents. That is a
trade policy or custom. The
defendants denied these facts."
.................
I have carefully read through
the statement of claim filed by
Hasnem. I did not find that
Hasnem would rely on "trade
policy or custom" of I.B.M. The
case of Hasnem before the trial
judge was in part to be found in
the evidence of PW1 thus:
" ...... I expressed an interest
to purchase the machine called
I.B.M. Copier II from I.B.M.
Because of its high cost
I.B.M.'s Sales Manager by name
Mr. Osei told me they would have
to order for one from the United
Kingdom for me and I agreed".
I have found evidence on record
that indeed and in truth I.B.M.
placed an order for the said
machine. PW1 told the trial
court:
"they (IBM) placed an order for
me and when the machine arrived
the defendants came and
installed it in my office in
Cape Coast".
What PW1 related to the court
was what actually took place in
1977. In order not to leave the
court in any doubt, PW1
testified further as follows:
"Before the machine was
installed the defendants gave me
two specific instructions with
regard to its maintenance. They
explained maintenance agreement
to mean entering into an
agreement whereby I pay a
specific sum of money, so that
whenever the machine was faulty
I would call upon them to come
and service it. The after call
service meant whenever the
machine was faulty I would call
upon them to come and service it
and after the service I would
pay them upon payment of their
bills".
The above constituted what PW1
understood to be the obligations
respectively of the seller and
the purchaser. This evidence was
not disputed by I.B.M. Indeed
PW1 explained further in his
evidence-in-chief the true
position in 1977 at the date and
time the Copier II was installed
when he stated as follows:
"......... they (Mr. Osei) told
me that irrespective of which
option I took, they would give
me satisfactory after sales
service because it was a very
expensive machine costing
¢33,000.00 at the time (1977)
and that I was the fifth person
in the country to have purchased
one in Ghana".
In order to complete the course
of dealing between Hasnem and
I.B.M. in the matter of the
maintenance of Copier II
beginning August 1977, PW1
testified as follows:
"I started using the machine and
anytime it broke down I either
telephone or sent somebody to
tell them defendants and
immediately they came and
repaired it and sent the bills
which I satisfied ........"
In my view the undisputed and
unchallenged evidence from
Hasnem proved and established
its case; that from 1977 up to
1984 I.B.M., pursuant to the
oral agreement entered into with
it in 1977 serviced and
maintained the Copier II Machine
Hasnem purchased from that
company. I must also point out
that I.B.M. did not produce a
shred of evidence before the
trial court to establish that a
company, other than I.B.M., also
serviced and maintained Hasnem's
Copier II Machine during the
period 1977 and 1984. I find
that the trial judge misdirected
himself on the issue for
determination when he formulated
same thus:
"There are issues involved here
namely whether or not I.B.M.
products are exclusively
maintained and or serviced by
I.B.M. or their accredited
agents ......"
With great respect to the trial
judge, the subject matter before
him was an I.B.M. II Machine.
He was not entitled to consider
and determine an oral agreement
about "I.B.M. products". His
conclusion expressed in the
language following:
"The plaintiff's own admission
makes it abundantly clear and I
find that it is not a trade
practice or policy of defendants
or is there any custom or usage
whereby products of defendants
are exclusively maintained and
or serviced by them", cannot
therefore be supported.
The I.B.M.'s letter dated
23-4-1982 and written by Mr.
J.E.A. Quansah and put in
evidence as Exhibit '2'
destroyed the conclusion reached
by the trial judge on the issue
of trade policy or custom of
I.B.M. The judgment based in
part on this finding cannot be
supported.
I cannot conclude this judgment
without pointing out that in my
humble view the trial judge
misdirected himself on the
defence put forward. In fine,
I.B.M. denied and disputed that
it agreed orally with Hasnem to
service and maintain the Copier
II Machine. The case is put
forward was in conflict with
that pleading in the statement
of defence. The evidence of DW1
illustrated his conclusion.
"I work with defendants as its
General Manager in Ghana. In
1986 the defendants were not
serving I.B.M. machines any
longer..... The last time we
officially worked on plaintiff's
machine was in September 1984".
The evidence in my view is an
admission of the case of Hasnem
that up to 1984 I.B.M serviced
and maintained his copier
machine but stopped and
neglected to do so because as a
company it had stopped that
particular business for good.
Briefly put, I.B.M. was no
longer in that time of business.
But before this close down,
I.B.M. had continued to service
and maintain the copier II
machine brought by Hasnem from
it. This in 23 April 1982. Mr
Quansah wrote in his capacity as
I.B.M. Branch Manager to Hasnem
in part as follows.
"As a remote customer without
Maintenance Agreement you are
expected to pay all charges for
calls made on you ...... We
endeavour to treat all our
valuable customers equally)
........ Please be assured that
despite the constraints on human
material resources we will
endeavour to provide an
indiscriminate level of service.
Yours faithfully,
J.E.A. Quansah
Branch Manager."
Thus evidence painted the true
picture of the business
relationship between Hasnem and
I.B.M. from 1977 up to August
1982.
In his statement of case,
counsel for I.B.M. lamented the
fact the Court of Appeal imputed
dishonest conduct to IBM when it
stated that:
"................ it would be
the height of dishonesty on the
part of the defendants to fault
the plaintiff from seeking
services from Mr. Amoateng, if
Mr. Amoateng was I.B.M. on his
own" He argued that the I.B.M.
refused to the services rendered
by C.T.S. as evidence confirming
the absence of any binding
exclusive agreement, and the
freedom of Hasnem to service
their machine whatever they
chose. The argument of counsel
for I.B.M. overlooked the pieces
of evidence on record. These are
(1) that up to 1984 I.B.M.
serviced and maintained the
copier II Machine the
subject-matter before the court;
(2) that I.B.M. sent a circular
sometime in 1984, that it no
longer would service and
maintain copier II Machines;
(3) that the copier II Machine
on the face of it warned and
instructed the owner in
possession of copier II Machine"
to call IBM Engineer" and
(4) that the refusal of I.B.M.
to service and maintain Hasnem's
copier II Machine provoked the
instant action.
I agree entirely with the
conduct of Hasnem in the effort
it made to mitigate its
financial loss by resorting to
C.T.S. for its services. That
conduct is consistent with that
of reasonable and shrewd
businessman. By that conduct,
Hasnem must not be understood as
having abandoned its right to
sue I.B.M. for breach of an oral
agreement entered into between
the parties in 1977. When the
evidence on record is examined
in this light, it will be seen
that the fact that Hasnem in its
hour of desperation and
frustration turned to C.T.S. to
service and maintain its machine
contract was not to be seen as
not entered into the 1977 oral
between it and Mr. Osei acting
for and with full authority for
I.B.M. I am satisfied that the
decision of the majority of the
Court of Appeal was supported by
the evidence on record.
I.B.M. to whom Hasnem owed
¢58,213.04 for service and
maintenance sought to defend the
action on the other ground that
Hasnem owed it. I think that the
fact that Hasnem owed I.B.M. is
not a lawful excuse for it to
refuse to service and maintain
the said machine for the simple
reason that failure to pay for
services rendered was not an
agreed term for terminating the
oral agreement. The undisputed
evidence on record was that
Hasnem would pay for service and
maintenance of the machine.
I.B.M. did not adduce evidence
before the court to show and
establish that it I.B.M. had the
legal right to withhold service
and stop maintenance of Copier
II Machine in respect of which
there was unpaid bill or bills.
In this case, the reasons for
the failure or inability on the
part of the I.B.M. to service
and maintain were as I have
recited above. In the special
circumstances and on the
uncontroveted evidence Hasnem
proved and established its case.
It was entitled to judgment on
its claim. I will accordingly
dismiss the appeal. I will
affirm the majority decision of
the Court of Appeal.
COUNSEL
Aduama Osei for the Appellant
Kuenyehia for the Respondent
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