GHANA LAW FINDER

                         

Self help guide to the Law

  Easy to use   Case and Subject matter index  and more tonykaddy@yahoo.co.uk
                

HOME          

GHANA BAR REPORT 1993 -94 VOL 3

 

Okai v Ocansey [1992 – 1993] 3 G B R 1028 – 1048  C.A

 COURT OF APPEAL

AMUAH, ADJABENG, FORSTER JJA

20 MARCH 1992

 

Contract - Breach of contract – Specific performance – Memorandum silent on term of lease and rent – Specific performance not available.

In May 1982, the plaintiff approached the 1st defendant for an extension of the lease of the disputed property granted to his late father that had expired in 1980. The 1st defendant collected ¢10,000 from the plaintiff as “advance payment for ground rent” of the disputed property. It was agreed that the details of the lease would be negotiated later. Based on that understanding, the plaintiff went into possession and renovated the premises but discovered later that the 1st defendant had let out the premises to the 2nd defendant. He therefore sued the defendants for specific performance of the agreement for the lease. The trial judge held that the payment of the ground rent and the renovations by the plaintiff constituted sufficient part performance and ordered specific performance of the agreement for a lease. The 1st defendant appealed.

Held: There was no agreement for a lease between the plaintiff and the 1st defendant because they had not agreed on essential terms such as the duration, commencement, and the rent payable. Terms that could not be implied in a lease ought to have been expressly stated or agreed upon before the court could decree specific performance. The judge therefore erred in decreeing specific performance and the appeal would be allowed. Tekyi alias Mensah v Ackon [1980] GLR 779 approved; Rawlinson v Ames [1925] Ch 96 distinguished; Donkor v Alhassan  [1987-88] 2 GLR 253, CA followed.

Cases referred to:

Campbell v Mensah [1977] 2 GLR 98, CA.

Djan v Owoo [1976] 2 GLR 401.

Donkor v Alhassan [1987-88] 2 GLR 253, CA.

Harvey v Pratt [1965] 1 WLR 1025, [1965] 2 All ER 786, 109 SJ 474.

King’s Motors (Oxford) Ltd v Lax [1970] 1 WLR 426, [1969] 3 All ER 665, [1967] 3 All ER 614, 65 LGR 457, DC.

Rawlinson v Ames [1925] Ch 96, 94 LJCh 113, 132 LT 370, 69 SJ 14.

Short v Morris (1958) 3 WALR 339.

Tekyi alias Mensah v Ackon [1980] GLR 779.

APPEAL against the decision of High Court to the Court of Appeal.

Agyare Koi Larbi for the appellant.

Odoom for the respondent.

ADJABENG JA. The plaintiff-respondent, A K Ocansey, is the son of A J Ocansey, deceased who up to 1955, had the lease of the property known as “Park Cinema”, from the father of the 1st defendant-appellant. According to the plaintiff, when his late father obtained the lease of the land, he built on it the cinema which was at first known as Ocansey Park Cinema. A J Ocansey died when the plaintiff was 12 years of age. In 1955 one Rodger Lutterodt who, the plaintiff claimed, was the manager of his late father’s cinema, took a 25-year lease of the premises in his (Rodger Lutterodt’s) own name. This lease expired in 1980. The machines for the operation of the cinema were however still at the premises although they were not being operated. In May 1982, the plaintiff approached the 1st defendant-appellant who had also succeeded his late father for what the plaintiff termed an extension of the lease granted to his late father. The 1st defendant is said to have agreed to grant him a new lease and collected ten thousand cedis from him, the plaintiff, for which the 1st defendant issued a receipt, exhibit A. Thereafter, the plaintiff said he was given a broken gate by the 1st defendant to fix at the premises. He started to renovate the place; he repaired some electrical wires and broken fixtures, fixed a new machine at the premises and made some painting and re-decoration. He however discovered later that the 1st defendant had executed a 45-year lease in favour of the 2nd defendant  with an option for renewal for 5 years at an annual rent of seventy-four thousand cedis. He challenged the 1st defendant on the turn of events and took this action against the defendants seeking an order for specific performance and perpetual injunction.

The 1st defendant denied that he had concluded any contract for the lease to the plaintiff for the premises in question. According to the 1st defendant, he took ten thousand cedis from the plaintiff as “rent for the machines in the Park Cinema, and to make the plaintiff to show interest for a new lease of the Park Cinema.” He did not discuss the terms of the lease or the rent with the plaintiff. According to the first defendant, the plaintiff did not make any effort to come to him for the details of the lease to be worked out and so he later gave out the premises to the 2nd defendant who paid him “goodwill” of five hundred thousand cedis and agreed to pay a monthly rent of two thousand cedis. The 1st defendant counterclaimed for a daily rent of two thousand cedis from October 1993 to date of judgment, and general damages for trespass.

The trial judge found that the receipt, exhibit A, issued by the 1st defendant for ten thousand cedis paid by the plaintiff, showed that the amount paid was “an advance payment for ground rent on the lease of Park Cinema.” According to the trial judge, “it also shows that details of the lease would be worked out later.” The judge was of the view that “the payment of ten thousand cedis ground rent by the plaintiff to the 1st defendant, going into possession of the Park Cinema, making alteration, carrying out repair works and renovation of the place is sufficient part performance on the part of the plaintiff.” The trial judge therefore held that “there was an agreement for a lease between the plaintiff and the 1st defendant and in pursuance of the agreement for a lease there was sufficient part performance on the part of the plaintiff. I will also hold that this is a case of part performance, and equity will grant specific performance.” The judge cited the case of Rawlinson v Ames [1925] Ch 96 to support his decision. The 1st defendant’s counterclaim was dismissed on the ground that he did not adduce evidence in proof thereof. The judge however made the following order:

“On these facts I will order that the plaintiff should pay the monthly rent which Rodger Lutterodt or Ivy Barnor was paying to the defendant whichever is higher from 26 May 1982 up to the date of judgment until a new lease agreement is entered [into] between the plaintiff and the 1st defendant.”

The 1st defendant appealed to this court on a number of grounds, the main one being ground (c), and this was the only ground argued. This ground charged that the trial judge erred in granting specific performance of an alleged lease, which did not exist. Counsel for the 1st defendant-appellant argued that before the equitable doctrine of part performance could be invoked, there should have been a pre-condition, namely, an agreement or contract between the parties. Counsel submitted that without the existence of a concluded agreement or contract the doctrine of part performance could not have been invoked as the court could not ask the parties to work out the details of the agreement as the judge did in this case. On this, counsel referred us to Gibson’s Conveyancing, 20th edition, page 57, and the Conveyancing Decree 1973 (NRCD 175). According to counsel the trial judge himself found that the terms of the lease in this case had not been agreed upon. Counsel submitted that since the duration of the term and the rent payable had not been agreed upon, and since these matters could not be inferred from the receipt, exhibit A, it could not be said that there was an agreement for a lease. The judge, counsel submitted, was therefore wrong in granting specific performance.

There is no doubt in my mind that the arguments advanced against the grant by the trial judge of specific performance in this case are quite weighty. In my view, counsel for the respondent has not offered any convincing arguments against those canvassed above. His submission that the receipt, exhibit A, is a sufficient document showing clearly the intention of the appellant to grant a lease to the respondent seems to suggest that counsel for the respondent also fell into the same error that the trial judge had fallen. They both thought that an intention to grant a lease was the same as an agreement for a lease. Exhibit A only states that the ten thousand cedis paid was an “advance payment for ground rent on the lease of Park Cinema. Details to be worked out later.” The 1st defendant-appellant said in his evidence that he was waiting for the respondent to come to him so that they could work out these details, that is, agree on the details, for example the duration of the lease (whether 25, 30, or 50 years), the rent payable, etc. According to the appellant, the respondent did not make the effort to come to him for these important matters in respect of the lease to be discussed and agreed upon. No doubt, without an agreement on the duration of the lease, the time for its commencement, and the rent payable, it cannot be said that “there was an agreement for a lease between the plaintiff and the 1st defendant” as the trial judge held. At page 126, paragraph 2, of Gibson’s Conveyancing,  21st ed is the following passage which I find most instructive:

“In the case of a contract to grant a lease the memorandum must state (in addition to the names of the parties, the description of the property, the rent and any special terms agreed) the length of the term and the date of its commencement. There are no implied terms covering the length of the lease and the date of its commencement, so that in default of any express terms on these matters the agreement would be too uncertain to amount to a contract.”

Again at page 127 of the same book, paragraph 2, is this passage:

“Price of rent. The memorandum must either state the consideration expressly or indicate how it is to be ascertained… For example, an agreement to sell at a ‘fair price’ or a ‘fair valuation’ is sufficiently precise; so is an option to re-new a lease ‘at a rent to be fixed having regard to the market value.’ But an option for a lease ‘at such rental as may be agreed upon between the parties’ was held to be void for uncertainty.”    

No doubt, the equitable principle of part performance can be invoked where there is a contract but this contract does not satisfy the law because it is not in writing. Osei-Hwere J, in the case of Tekyi alias Mensah v Ackon [1980] GLR 779 fully set out and explained correctly the circumstances and conditions under which the equitable principles of part performance and specific performance can be invoked and applied in this country. I quote fully holdings (1) and (2) of that case, where it was held:

“(1) an action for specific performance would be excluded under the Statute of Frauds 1677 (29 Cha 2 c 3), unless there was a signed writing or memorandum of the contract or agreement. The memorandum or writing would not be complete unless it contained all the essential terms of the agreement which were: (a) the names of the parties; (b) the description of the property to be transferred; (c) the purchase price of the property; [I would add here, the rent in the case of a lease]; and (d) the signature of the party to be charged therewith or that of some other person he had lawfully authorised to sign. The provisions of the Conveyancing Decree 1973 (NRCD 175) s 2(a), which have impliedly replaced section 4 of the Statute of Frauds, were not different from those of the statute. In the present case, the document alleged to have been made to cover the sale foundered, and failed to qualify as a note or memorandum of agreement within the meaning of section 4 of the Statute of Frauds as it was silent on the essential term of purchase price. Djan v Owoo [1976] 2 GLR 401 and Short v Morris (1958) 3 WALR 339 cited.

(2) The conditions which must co-exist for the court to grant specific performance of an oral contract so as to take the case out of the Statute of Frauds were: (a) the acts of part-performance must be such as not only to be referable to a contract such as that alleged but to be referable to no other title; (b) they must be such as to render it a fraud in the defendant to take advantage of the contract not being in writing; (c) the contract to which they refer must be such as in its own nature was enforceable by the court; and (d) there must be proper parol evidence of the contact which was let in by acts of part-performance. In the present case, the act of part-performance on which the plaintiff relied was that he had, since the grant was made, occupied the land and made farms thereon. The plaintiff’s occupation of the land, and his farming thereon did not necessarily indicate that the land had been sold to him as that conduct might be consistent with a lease or even a licence. Campbell v Mensah [1977] 2 GLR 98 CA cited.”

In the present appeal before us, it is sufficient to say that the evidence has not established that a contract or agreement for a lease had been concluded by the plaintiff and the appellant. The plaintiff’s own evidence and the receipt, exhibit A, which he tendered in evidence, show clearly that the essential terms of the lease had not been agreed upon. As has been stated earlier, these are terms which cannot be implied in a lease. They must be expressly stated or agreed upon. If the receipt had stated all these essential terms, the court could rightly have decreed specific performance or enforcement thereof. That was the case in Donkor v Alhassan {1987-88] 2 GLR 253 at 257 where this court held that

“... [the receipts], exhibits A and B, showed the payment of money by the respondent to the appellant for the transfer of the appellant’s interest in the house, both had been signed by the appellant, and were clear as to the intention of the parties. They therefore satisfied the requirement of the law.”

That is not the case in the present appeal. It must be observed also that the English case of Rawlinson v Ames supra on which the trial judge relied is, with respect, not applicable to the facts of the present case before us. In the English case, the court clearly found that there was a contract between the parties for the lease of the plaintiff’s house which was reconstructed on the instructions and directions of the defendant. The court therefore held that the re-construction of the house on the instructions of the defendant, and some other acts done by the plaintiff constituted part performance of the contract they had concluded, and so the defendant must be ordered to perform her part of the said contract. The situation in the present case is quite different. Here, as explained, no contract for the lease had been concluded. The trial judge in the circumstances had no business ordering the parties to conclude the contract. His duty was to order the enforcement of the contract if, indeed, one had been concluded. None had been concluded. The judge was therefore wrong in decreeing specific performance of a contract for a lease which had not been concluded. The appeal succeeds; and it is allowed.

As regards the submission that the appropriate rent to be paid by the respondent must be determined, it must be remarked that it is unfortunate that the respondent has not found it necessary and or convenient to work out with the appellant the rent he should pay for his occupation of the premises since May 1982 up to date. He seems to be happy with staying in somebody’s commercial premises for ten years without attempting to take steps to pay the appropriate rent. I think that the appropriate order must be made for the determination of the appropriate rent for the period as the order made by the trial judge that a rent fixed in 1955 should be the rent the respondent should pay is most unfair. It ought to be set aside. I think however that the trial judge was right in dismissing the appellant’s counterclaim. That order therefore ought to stand.

AMUAH JA. I agree.

FORSTER JA. I also agree.

Appeal dismissed.

Kizito Beyuo, Legal Practitioner

 
 

Legal Library Services        Copyright - 2003 All Rights Reserved.