Elluah v. Ankumah [1968] GLR 795, Holding 2 @ 798, H.C.

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Owusu J. The plaintiff’s claim is for the specific performance of an oral agreement for the assignment by the defendant to the plaintiff of all that piece of land lying in the North Chapel Hill Estate at Takoradi and bounded on the north by a road, on the east by plot No. 110, and on the west by plot No. 107 together with uncompleted premises thereon at a value of N¢4,000.00.

The defendant was formerly in the employment of the Ghana National Trading Corporation hereafter called G.N.T.C. as a store-keeper. In pursuance of an oral agreement made during the month of January 1968, the amount of N¢4,000.00 was to be paid to the district manager of the G.N.T.C. in satisfaction of a debt due and owing by the defendant to the G.N.T.C. On or about 18 January 1968, the plaintiff made an initial payment of N¢2,000.00 to the district manager of the said corporation in the presence of the defendant and other officers of the said corporation, and the assignment was to be completed on the full payment of the total purchase price of N¢4,000.00. The original document of title to the said land was deposited by the defendant with the district manager, Mr. N.D.C. Korney, to be collected by the plaintiff upon the full payment of the amount. A document was prepared by the plaintiff’s solicitor in furtherance of the oral agreement. The plaintiff has paid the full amount of N¢4,000.00 to the said corporation; she has collected the original document of title from the district manager and has signed the deed of assignment, but the defendant has refused and refuses to take any steps towards the completion of his part of the said agreement.

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The defendant avers, inter alia, that at no time has he verbally or otherwise agreed to assign his interest in the property described in the statement of claim to the plaintiff nor was he present when the sum of N¢2,000.00 or any sum at all was paid to the G.N.T.C. as alleged. The defendant states further that the documents of title in respect of the property were surrendered to the manager of the corporation, Takoradi, as security for the sum owed to the said corporation when the defendant was about to travel out of Takoradi. The defendant further states that on hearing that the plaintiff had paid certain sums into the defendant’s account at the G.N.T.C., he on 14 March 1968 addressed a letter to the plaintiff advising herthat she had not been authorised by him to make such payments. Similarly, the defendant addressed a letter to the district manager warning the said manager of the impropriety of receiving sums of money from the plaintiff towards the liquidation of the amount owed to the corporation by the defendant.

The plaintiff called Mr. Korney, the district manager, and Mr. D.K.A. Azzu, textiles manager, both of the G.N.T.C., Takoradi, as witnesses in support of her case. She further tendered exhibits A, a stamped lease between the Republic of Ghana and John KwekuAnkumah, the defendant herein, exhibit B, the building plan, exhibits C, C1–6 being receipts for payments made by her to the G.N.T.C., and exhibit D the assignment, the subject-matter of this suit. The defendant on the other hand called one Kofi Tetteh, a foreman of the Public Works Department as the only witness for the defence. Notwithstanding the factthat both Mr. Korney and Mr. Azzu are employees of the G.N.T.C., and as such interested parties in thissuit, they both exhibited the qualities of perfect gentlemen; they were each vehemently cross-examined and I am of the opinion that each stood the test of a truthful witness. In any event I shall not find it easy to disbelieve either evidence.

It is indeed difficult to reconcile the defendant’s evidence-in-chief with his answers to cross-examination. He portrayed himself either as a man of little intelligence or a person determined to tell calculated lies. He never agreed to sell the building at all, he states, yet he agreed, when approached by Mr. Korney, to discuss the sale with some purchasers; he never went to the G.N.T.C. district manager’s office at Takoradi with Madam Essie Elluah, yet he agreed to discuss his confidential affairs in the presence of this lady. The defendant’s first and only witness is a perjured individual. The evidence of the plaintiff in my judgment appears reasonably probable and on the facts alone she might be entitled to the grant of the equitable remedy of specific performance: see Miller v. Ministry of Pensions [1947] 2 All E. R. 372 at p. 374 per Denning J. (as he then was).

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But notwithstanding the preponderance of evidence in favour of the plaintiff, the whole transaction smacks of some suspicion. The document deposited with the district manager, i.e. exhibit A, was recited in exhibit D, the assignment which according to the plaintiff’s own admission was prepared before the completion of the payment by her. He who comes to equity must come with clean hands. Under the second schedule, paragraph (2) (h) of the original lease, exhibit A, the lessee, i.e. the defendant herein, covenants not without the previous consent in writing of the Government of the Republic of Ghana to assign, underlet, mortgage at law or in equity, pledge, charge or part with the possession of the saiddemised premises or any part thereof or any building or buildings or grant any interest therein. No such consent has even now been obtained.

This consent in writing is a condition precedent, and the failure to obtain it vitiates the whole contract between the plaintiff and the defendant. Suppose the court allows the claim for the specific performance and the Government refuses to exercise its discretion under the lease to give the consent in writing, what would be the effect of the order of the court? No court would make an order which is incapable of beingenforced otherwise it would make a mockery of justice: see Asante v. C.F.A.O. (1956) 2 W.A.L.R. 177, W.A.C.A.

Further difficulty arises when one considers the provisions of the Contracts Act, 1960 (Act 25). Neither counsel directed his attention to these provisions and particularly to sections 11 and 14 (1) and (2) of the Act. The defendant never pleaded that the contract was void under section 14 (1) or (2) of Act 25. The court shall, therefore, consider Order 19, r. 16 of the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A), and the decision of Apaloo J.S.C. (as he then was) in the case of Bassil v. Kabbara [1966] G.L.R. 102, S.C. before arriving at any decision. Section 11 of Act 25 provides:

“11. Subject to the provisions of any enactment, and to the provisions of this Act, no contract whether made before or after the commencement of this Act, shall be void or unenforceable by reason only that it is not in writing or that there is no memorandum or note thereof in writing.”

(The emphasis is mine.)

This should have been the section under which the plaintiff should place much reliance for her claim. But section 14 (1) and (2) of the same Act also provides:

“14. (1) Any agreement made before or after the commencement of this Act whereby a person (hereinafter in this Part called ‘the guarantor’) guarantees the due payment of a debt or the due

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performance of any other obligation by a third party shall be void unless it is in writing and it is signed by the guarantor or his agent, or is entered into in a form recognized by customary law.

(2) Any promise or representation made after the commencement of this Act, relating to the character or credit of any third person with intent that that third person may obtain . . . money . . . from the person to whom the promise or representation is made, shall be void unless it is in writing and is signed by the party to be charged therewith or his agent.”
(The emphasis is mine.)

These two subsections create the difficulty. The undertaking by the plaintiff, Madam Essie Elluah, to pay the debt of the defendant to the G.N.T.C., a third party, and to have the defendant’s property assigned to her is, in my view, a guarantee caught by the provisions of section 14 (1) of Act 25. Even if the plaintiff’s undertaking is not a guarantee as known in law, this is a promise from the defendant to the plaintiff relating to the credit of the G.N.T.C., a third party, that that third party G.N.T.C. may obtain money from Madam Essie Elluah to whom the promise was made, and this promise is caught by the provisions of section 14 (2) of Act 25.

In arriving at this conclusion I took into consideration the plaintiff ‘s own paragraph (4) of the statement of claim which reads:

“(4) In pursuance of the oral agreement the sum of N¢4,000.00 was to be paid to the district manager of Ghana National Trading Corporation in satisfaction of a debt due and owing by the defendant to the Ghana National Trading Corporation.”

The contract which the plaintiff claims is part-performed is dependent upon another contract, a promise to pay the debt of the defendant to a third party, the G.N.T.C. which contract, in my view, is void ab initio. This void contract (not voidable contract) is the tree and if it falls it must fall with its branches.

It must be mentioned that section 4 of the Statute of Frauds, 1677 (29 Ch. 2, c. 3), insofar as it relates to any contract or sale of land was repealed by the Contracts Act, 1960: see section 19 and the Schedule to Act 25. Thus a court of equity in this Republic will not allow failure to satisfy the requirements of section 4 of result in fraud.

But this was not a transaction involving only the plaintiff and the defendant; there was a third party, the G.N.T.C, and the transaction is governed by section 14 (1) and (2) of the Contracts

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Act, 1960 (Act 25). The law then is in conflict with equity, and where law and equity conflict the law prevails.

Order 19, r. 16 of the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A) provides inter alia:

“The defendant . . . must raise by his pleading all matters which show the action . . . not to be maintainable, or that the transaction is either void or voidable in point of law, and all such grounds of defence . . . as if not raised would be likely to take the opposite party by surprise, or would raise issues of fact not arising out of the preceding pleadings, as, for instance, fraud, Statute of Limitations, release, payment, performance, facts showing illegality either by statute or common law, or Statute of Frauds.”

When a contract is void it is void ab initio; this must be distinguished from a voidable contract which isvalid until steps are taken to declare it void. The transaction between Essie Elluah, J. K. Ankumah and the G.N.T.C. is void and the fact that the defendant did not plead the same cannot resuscitate it. In Bassil v. Kabbara (supra) the contract was unenforceable and not illegal per se.

In the present case (before this court) the land at Takoradi is held by Ankumah on a tenancy agreement with the Government of the Republic of Ghana which contains a covenant on the part of Ankumah not to assign. Notwithstanding this covenant the plaintiff says the property has been assigned to her. This document was put in by the plaintiff herself and even though not pleaded by the defence the covenant is part of the plaintiff’s evidence. Furthermore, as already pointed out, the whole contract offends the provisions of the Contracts Act, 1960 (Act 25), s. 14 (1) and (2). It is, therefore, clear that the contract is illegal and the court cannot make itself a party to the illegality.

For the reasons above I find it extremely difficult to grant the request of the plaintiff for the equitable remedy of specific performance. The observation of Lord Macnaghten in Reddaway v. Banham [1896] A.C. 199 at p. 221, H.L. may be relevant at this stage:

“But fraud is infinite in variety; sometimes it is audacious and unblushing; sometimes it pays a sort of homage to virtue, and then it is modest and retiring; it would be honesty itself if it could only afford it. But fraud is fraud all the same; and it is the fraud, not the manner of it, which calls for the interposition of the Court.”

The G.N.T.C. is a government establishment and apart from its own solicitors and legal advisers it has at its disposal the host of legal men

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in the Attorney-General’s Office. To get the defendant to put with his documents in the way he did is fraud; for the district manager was determined to collect the debts by fair or foul means without any reference to his legal advisers. The G.N.T.C, therefore, should not be allowed to take advantage of such illegal practices to collect its debts.

It is, therefore, ordered that:

(1) Madam Essie Elluah should surrender all the documents (except the assignment) collected from the district manager, G.N.T.C., Takoradi, back to the G.N.T.C. for the refund of the N¢4,000.00 paid by her to the G.N.T.C. (with interest at five per cent).

(2) The G.N.T.C. may on the receipt of the documents take any appropriate legal steps to recover the debt from J. K. Ankumah, the defendant herein, together with any interest paid to Madam Essie Elluah. Equity does nothing in vain. No order as to costs.

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