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 |