Charles J. This is an application made under rule 1 of Order 14 for leave to sign judgment for the sum of £G17,748 14s. being the amount claimed by the plaintiffs from the defendant for value of equipment and cash advances given to the defendant against supply of logs which the defendant failed to supply.
The defendant opposes this application and is relying on the defence filed on his behalf on the 5th March, 1962. Paragraph 5 of the defence reads as follows:
“While the defendant was performing his obligation under the contract, namely, still supplying logs exclusively to the plaintiffs at prices agreed by the plaintiffs, legislation came into force which declared Ghana Timber Marketing Board the sole buyer of Ghana wawa and redwoods. The performance of the said contract was thus rendered impossible and subsequently both the plaintiffs and defendant were discharged by frustration.”Page 265
By section 9 of an executive instrument, No. 87 of 1960 dated the 23rd February, 1961, it was provided that: “The Board shall purchase all timber offered which is graded as suitable for export.”
“Timber” is defined in the said instrument as follows: “timber means Wawa (Triplochiton Scleroxylon)”. By executive instrument No. 92 of 1961, dated the 12th June 1961, “timber” is defined as follows: `”timber”’ means any species of timber whether log or lumber,” By regulation 1 of legislative instrument, No. 130 of 1961 (Trees and Timber (Control of Export Logs) Regulations, 1961) the Ghana Marketing Board was made the sole exporter of logs in Ghana and regulation 5 makes it an offence for anyone to contravene the provisions of this regulation.
If the defendant can rightly contend that his contract to supply the logs has been frustrated by legislation then it behoves me to consider the legal effect of the Contracts Act, 1960.1(1) The insufficiency of the rules of the common law governing the consequences of frustration was clearly established by the Fibrosa case2 so the English Parliament considered it expedient to enact the Law Reform (Frustrated Contracts) Act, 19433(3) to make provision for an equitable apportionment of prepaid moneys. The Contracts Act, 1960, hereinafter referred to as “the Act” is almost in parimateriawith the Law Reform (Frustrated Contracts) Act, 1943, except for some slight variations and omissions. The contract between the plaintiffs and defendant is one to which section 1, subsections (1), (2), (3) and (4) of the Act are relevant for the purpose of deciding this matter.
“(1) Where a contract to which this Part applies has become impossible of performance or been otherwise frustrated and the parties thereto have for that reason been discharged from the further performance of the contract the following provisions of this section shall, subject to sections 2 and 3 of this Act, have effect in relation thereto.
(2) Subject to subsection (3), all sums paid or payable to any party in pursuance to the contract before the time when the parties were so discharged (in this Part referred to as “the time of discharge”) shall, in the case of sums so paid, be recoverable from him, and in the case of sums so payable, cease to be so payable.
(3) Where a party has incurred expenses before the time of discharge in, or for the purpose of, the performance of the contract, the Court may allow him to recover or to retain out of any sum received by him under the contract, amount (if any), not exceeding the expenses so incurred or the total sum payable to him under the contract, such as the Court may consider just having regard to all the circumstances of the case.
(4) In estimating, for the purposes of the foregoing provisions of this section, the amount of any expenses incurred by any party to the contract, the Court may, without prejudice to the generality of those provisions, include such sums as appear to be reasonable in respect of overhead expenses and in respect of any work or services performed personally by that party.”
Under section 1 (2) of the Act the plaintiffs will be entitled to recover from the defendant any sums paid by them subject to deduction for any reasonable expenses incurred by the defendant as contemplated by subsection (3). Counsel for the defendant nevertheless submitted that if there has been a total failure of consideration the party who has paid money can recover, but not where there has been partial failure of consideration. This was the harsh rule laid down in Strokes v. Hill4 according
to which the loss lies where it falls. But in Cantiare San Rocco S.A. v. Clyde Shipbuilding & Engineering Co. Ltd5 Lord Shaw characterised such a rule as a maxim “which works well enough among tricksters, gamblers and thieves”.
Under the provisions of section 1 (3) of the Act the court is empowered to allow a party to recover reasonable expenses incurred by him “in the performance of the contract” as appears to the court to be just having regard to all the circumstances of the case. It is therefore necessary to determine whether the expenses claimed were incurred “in performance of the contract”, and if so whether they are reasonable. But this latter issue can only be determined after hearing evidence. According to the contract as alleged by the defendant he was given cash advances and equipment to supply logs. It is true that the defendant claims to have incurred expenses in the performance of the contract but the plaintiffs did not benefit thereby, nor could the defendant honestly contend that he would suffer a loss, because if he did incur the expenses in the performance of the contract he must have obtained logs which he could have sold to the Ghana Timber Marketing Board.
I therefore hold that the expenses claimed by the defendant are unreasonable and are not such as were contemplated by the Act. Moreover I consider it to be most unjust to allow any expenses as claimed.
If such expenses are to be allowed this will amount to unjust enrichment of the defendant as he has not suffered any loss. There is nothing to prevent the defendant from operating his concession and supplying the Ghana Timber Marketing Board with logs.
Counsel for the defendant also contended that a letter written by the defendant to the Ghana Timber Marketing Board in which he authorised the Board to pay 20 per cent of all sums due to him by the Board is an agreement which estops the plaintiffs from suing for the amount. I hold that the letter, a copy of which was produced, was only an arrangement by the defendant to pay off his debt which was acknowledged by him in writing and which acknowledgment has not been put in issue or questioned.
For these reasons I grant the application and enter judgment for the plaintiffs in the sum of £G17,748 14s., and seventy-five guineas costs inclusive of fee to counsel.