Mendekia v Beresford-Cole (CIV APP 12 of 1972) [1973] SLCA 6 (11 July 1973)

SECTION 40 MENDEKIA v. BERESFORD-COLE, 1972-73 ALR S.L. 321 C.A. before him, for depriving him of his costs out of the estate. A piece of the respondent's evidence referred to by the learned judge in his judgment is not only curious but telling. The respon dent said: "I am of the opinion that it is desirable for letters of admin- 5 istration to be gran ted to me instead of the Administrator- General in the light of previous court proceedings I have referred to. It is because although I bought property from the deceased she did not transfer the same to me, that I am of the opinion that. it is desirable for letters of administra- 10 tion to be granted to me." I, for my part, taking all the circumstances into consideration, would deprive the respondent of his costs out of the estate and order that he bears his own costs in this court and the courts b~ow. 15 Order accordingly. MENDE KIA v. BERESFORD-COLE Court of Appeal (Percy Davies and Tejan, JJ. A. and Rowland Harding, J.): July 11th, 1973 (Civil App. No. 12/72) [ 1] Agency-characteristics of relationship-relationship exists when ''principal" authorises "agent" to represent him and affect his legal relations with third parties: The relationship of agency exists between two persons when one, the principal, expressly or impliedly authorises the other, the agent, to represent him and affect his legal relations with third parties (page 329, line 27- page 330, line 5). [ 2] Building Contracts, Architects and Engineers-damages-measure of damages-difference between agreed price and actual cost of completing contract work: The measure of damages for failure by a contractor to complete a building or engineering contract is the difference between the agreed contract price and the actual cost of completing the contract work (page 334, lines 15-20). [ 3] Building Contracts, Architects and Engineers-implied terms-time of performance-time not of essence in absence of contrary express words if not of essence, employer's remedy for late completion damages not repudiation: In the absence of express words making time of the essence of a building contract the contractor's failure to complete work within the time specified will not amount to such a breach as would release the employer from the contract although it may entitle him to damages (page 332, lines 15-20).

[ 4] Contract-damages-measure of damages-breach of building contract difference between agreed price and actual cost of completing contract work: See [2] above. [ 5] Contract- .. ·frustration-contract not frustrated if more onerous but only if nature of work altered-provision for frustration by delay not appli cable when delay wholly abnormal: The mere fact that as a result of an unexpected tum of events the obligations of one of the parties to a con tract are made more onerous than he anticipated is not sufficient to invoke the doctrine of frustration unless the unforeseeable event actually alters the nature of the work to be done, although if provision is made for the suspension of the contract in the event of delay, it is read as limited to normal moderate delay and does not extend to an inter ruption that is so abnormal as to differ in kind from anything that could have been contemplated (page 333, lines 4-32; page 333, line 36 -page 334, line 5). [ 6] Contract-implied terms-building contracts-time not of essence in absence of contrary express words--if not of essence employer's remedy for late completion damages not repudiation: See [ 3] above. [ 7] Documents-interpretation-document to be interpreted as a whole words construed as they stand but context and object of agreement to be considered when determining intention of parties: Although it is a rule of interpretation that words should be construed as they stand, the context and object of the agreement should also be considered when determining the intention of the parties (page 330, lines 29-40).

[8] Time-performance-building contracts-time not of essence in absence of contrary express words: See [3) above. The appellant brought an action against the respondent in the High Court for damages in respect of losses arising from the res pondent's failure to complete a building contract. The respondent counterclaimed for the expenses incurred by him over and above the agreed contract price paid to him by the appellant. The appellant bought a plot of land from the respondent who agreed to build four flats on it for him. An agreement was ex ecuted and the appellant paid to the respondent the total agreed cost of the building work, which was to be completed in six months. The agreement referred to the respondent as the appel lant's agent but nothing else in the document gave the respondent authority to affect the appellant's legal position in relation to a third party. The respondent engaged a contractor to carry out the work but he failed to complete the building in the time stipulated; the appellant agreed to allow a further month for the work, but it was still not completed. The respondent then told the appellant that

MENDEKIA v. BERESFORD-COLE, 1972-73 ALR S.L. 321 C.A. he had spent Le7000 on the construction work in excess of the contract price and asked him to pay this additional amount before the building was handed over. After various delays and an attempted compromise, during which the building remained unfinished, the appellant instituted 5 the present proceedings against the respondent claiming the estimated cost of completing the work, loss or rents resulting from the delay in completion and the amount of the professional fees paid to a quantity surveyor for the assessment of the cost of completion. 10 The respondent counterclaimed for the amount spent by him on construction in excess of the contract price. The High Court (During, J.) found that the relationship be tween the parties was that of principal and agent and that their agreement did not constitute a contract. He dismissed both the 15 claim and counterclaim. On appeal the appellant contended that the trial judge erred in law in holding that the document executed by the parties did not constitute a valid contract. He maintained that a contractual relationship did exist, that the respondent's failure to complete 20 in the agreed time constituted a breach of its terms and that the appellant was therefore entitled to damages for breach of contract. In reply the respondent argued that the relationship between the parties was that of principal and agent and the document merely a receipt for the money paid by the appellant. There was in those 25 circumstances no breach of contract by the respondent entitling the appellant to damages. The respondent further argued that his failure to complete the building work was in any case due to the rising costs of labour and materials and the court considered whether in these circumstances the contract could be said to have 30 been frustrated, with the consequence of releasing the respondent from his undertakings. For procedural reasons, the respondent's appeal against the dismissal of his counterclaim was held to be not properly before the court. 3 5 The appellant's appeal was allowed and the respondent ordered to pay damages for breach of contract. Case referred to:

(1) British Movietonews Ltd. v. London & District Cinemas Ltd., [ 1952] 40 A.C. 166; [1951] 2 All E.R. 617.

(2) Davis Contractors Ltd. v. Fareham U.D.C., [1956] A.C. 696; [1956] 2 All E.R. 145, applied.

(3) Mertens v. Home Freeholds Co., [1921] 2 K.B. 526; (1921), 125 L.T. 355, applied.

(4) Parkinson (Sir Lindsay) & Co. Ltd. v. Commrs. of Work, [1949] 2 K.B. 632; [1950] 1 All E.R. 208, dicta of Asquith, L.J. applied.

(5) Smith v. Lucas (1881), 18 Ch. D. 531; 45 L.T.

460. Minah for the appellant; Marcus-Jones for the respondent. TEJAN, J.A., delivering the judgment of the court: This appeal is against the judgment of During, J. dated April lOth, 1972. The facts in the case are that some time in 1968, the appellant went to the respondent who sold two properties to him. One property was a house at the Maize, Wilberforce and the other was a plot of land ~t Kissy By-Pass. The appellant's case is that when he bought the land at Kissy By-Pass, the respondent, who represented himself as a contractor, volunteered to erect a build ing on the land for the appellant. In order to assure the appellant that he was a building contractor, the respondent showed to the appellant several houses which he alleged that he built. He also pointed out some men whom he said, were his workmen. On the faith of this assurance, the appellant agreed that the respondent should build a house for him on the land, and he then told the respondent that he had with him the sum of Le14,000. The res pondent told the appellant that the sum of Le14,000 was not enough to build a big house which could be let at a profit. At the suggestion of the respondent, the appellant agreed that the respon dent should build certain blocks of flats and other buildings as described in a plan submitted to the appellant by the respondent. An agreement for the buildings was then executed. After the execution of the agreement the appellant paid the sum of Le14,000 to the respondent and later paid the sum of LelO,OOO, making a total sum of Le24,000, the agreed cost of the buildings. The appel lant made it known to the respondent that he intended to let out the houses, the building of which the respondent failed to complete in accordance with the terms contained in the agreement dated December 3rd, 1968, which is as follows: ''Received the sum of Le14,000 (fourteen thousand leones) from Sahr Lebbie Mendekia Esq., farmer, of 27 Yaradu Road,

MENDEKIA v. BERESFORD-COLE.1972-73 ALR S.L. 321 C.A. Koidu Town, Kono District in the Eastern Province of Sierra Leone being part payment of the sum of Le24,000 (twenty four thousand leones) for the costs of construction of a two-storey building with boys' quarters and a car port on 1907 acres of land situated off Kissy By-Pass Road, Kissy 5 Village,_ as more fully described and delineated on the Director of Surveys and Lands Plan LS. 1070/68 dated November 28th, 1968 to be build and constructed with the best labour and materials available within a maximum period of 6 (six) calendar months from the date hereof; the said 10 structures to contain the following: Two-Storey Building: Four self-contained semi-detached flats: Ground Floor: Flat No. 1 -lounge and dining room, two bedrooms, one bath and water closet, kitchen: Estimated 15 unit cost- Le4,400; Flat No. 2 -lounge cum dining room, three bedrooms, one bath and water closet, kitchen: Estimated unit cost - Le4,400. First Floor: Flat No. 3- -lounge cum dining room, two 20 bedrooms, one bath and water closet, kitchen: Estimated unit cost- Le4,400; Flat No. 4 -lounge cum dining room, three bedrooms, one bath and water closet, kitchen: Estimated unit cost - Le6,600. 25 Boys' Quarters & Car Port: Boys' Quarters - two bedrooms, one water closet and shower; car port - covered accommodation for four cars: Estimated unit cost - Le200. Exigencies - Le800 30 Total costs - Le24,000 I, Sahr Lebbie Mendekia aforesaid, for myself, my heirs and successors in title do hereby contract and agree with my agent George Beresford-Cole, Real Estate Agent, of 23 Liverpool Street, Freetown, Sierra Leone to pay to him the 35 balance of Le10,000 (ten thousand leones) in full, on or before but not later than February 28th, 1969 for the fulfilment of the purpose hereinbefore contained." When the respondent failed to complete the buildings within the period stipulated in the agreement he requested the appellant 40 to give him a further month within which further period he could

complete the buildings. The respondent was given the requested one month but he still failed to complete the building. He then told the appellant that he had spent the sum of Le7 ,000 out of his own pocket. When the appellant demanded the key to the 5 buildings, the respondent refused to hand over the key to him. The respondent said that he would hand over the key after the appellant had refunded the sum of Le7 ,000. The respondent's case is that in the latter part of 1968, a police officer by the name of Y andeman introduced the appellant 10 to him for the purpose of buying property. The appellant bought one property at the Maize, Wilberforce and a plot of land off the Kissy By-Pass Road. In the process of doing business, the respon dent and the appellant became friendly, and while on that friendly basis, the appellant wanted to know who built the respondent's 15 houses at Goderich and Liverpool Street. The respondent told the appellant that he designed and supervised the buildings with local contractors. The appellant then said he wanted a building erected on the plot of land he bought from the respondent, and that he wanted a similar design to the respondent's building at Liverpool 20 Street. The respondent advised the appellant to build flats instead. The appellant agreed to build the flats and the respondent under took to supervise the building of the flats. On December 3rd, 1968, the appellant made part payment to the respondent of the sum of Le14,000 for the building of the flats. The appellant and 25 the respondent then made a rough estimate of costs and agreed on the unit value of the various items that were to be included in the construction. The appellant being illiterate, a police officer, Y andeman, acted on his behalf. The respondent, after signing the agreement said he engaged a contractor by the name of Mr. 30 F.J. Turner of 30 Benjamin Lane, for the construction of the flats. In June 1969, because of rising costs, the respondent realised that he could not comply with the terms and conditions of the agreement. The respondent wrote a letter to the appellant through Yandeman and in October 1969, the respondent received a letter 35 from the appellant's solicitor. In the same month of October 1969, the respondent replied to the solicitor's letter. Later the respondent saw the appellant in his office. The appellant told the respondent that he did not like litigation and said that he would return to Kono to see how best he could raise money for the 40 completion of the buildings. Some time after, the appellant came again to the respondent's office, and suggested that the building

MENDEKIA v. BERESFORD-COLE,1972-73 ALR S.L. 321 C.A. and land should be sold by the respondent, and that after the sale, the sum of Le24,000 already paid by him plus the sum of Le2000, the cost of the land, should be paid to him out of the proceeds of the sale. The respondent asked the appellant to put in writing his suggestion. In consequence of this, the respondent received a 5 letter dated December 29th, 1969 from the appellant's solicitor. The respondent replied to it. After an interchange of letters between the respondent and the appellant's solicitor, a writ of summons was ultimately issued. In the amended statement of claim the appellant claimed- 10 "(1) Special damages: (a) Le17,455 which is the estimated cost of com pleting the said building, boys' quarters and car port; (b) Le4,800 representing loss of rent from June 3rd, 1969 to February 29th, 1971, i.e. 20 months at 15 Le240 per month (i.e. four flats at Le60 per month per flat) and still continuing; (c) Le500 being professional fees for valuing the un finished work on the said building.

(2) General damages. 20

(3) Costs." The respondent also filed a statement of defence and counter claim. In his judgment, During, J. dismissed the claim and counter claim, and it is from this judgment that the appellant has now 25 appealed to this court on the following grounds: ( 1) That the learned trial judge erred in law in holding that the document dated December 3rd, 1968, does not constitute a valid contract.

(2) That the verdict is unreasonable and cannot be supported 30 having regard to the evidence before the court. The respondent also filed a respondent's notice asking that the decision of the court below should be varied by an order that the appellant should pay to the respondent the claims on the counterclaim on the following grounds: 3 5

1. That the learned trial judge having found against the plaintiff on his claim ought to have upheld the defendant's counterclaim because: (a) There was sufficient evidence in support of the counterclaim in respect of the various sums alleged to have been expended 40 by the defendant on the premises, which evidence remained

unshaken and incontroverted throughout the whole of the case. (b) There was no necessity in law or in fact for the defendant to obtain the prior permission of the plaintiff before expending 5 these monies. (c) That by holding otherwise the plaintiff is inequitably and unjustly enriching himself at the expense of the defendant.

2. That on the balance of the probabilities the evidence of the defendant and his witnesses was the more credible and ought to 10 have been upheld as a sufficient discharge of the burden of proof cast upon the defendant in respect of the said counterclaim. On March 20th, 1973 when this appeal came before this court, Mr. Minah, counsel for the appellant submitted that the court ought not to hear the respondent's appeal on the ground that it 15 was not properly before the court. After having heard arguments from both counsel, the court decided that the respondent having failed to comply with r.20(1) and (2) now r.l7(1) of the Sierra Leone Court of Appeal Ru1es, 1973 the respondent's notice was not properly before the court. 20 In arguing Ground 1 of the appeal, Mr. Minah, after reviewing the basic essentials necessary for the creation of a contract, main tained that the document dated December 3rd, 1968 created a contractual relationship between the appellant and the respondent. In referring to the document in his judgment, During, J. said: 25 "I have read Exhibit C carefully and I hold that on a true construction of the whole paper writing, it does not contain a contract as alleged by the plaintiff in his statement of claim. The relationship between the plaintiff and the defendant as disclosed in the paper writing was one of principal and agent 30 in my judgment, on a true and proper interpretation of the document and moreso on the evidence before me." Dr. Marcus-Jones replied at length to the argument of Mr. Minah. Before I deal with the arguments presented by Dr. Marcus Jones I think it is necessary to state that on May 16th, 1973 when 35 Dr. Marcus-Jones was to complete his argument, he was absent from court. [The learned justice of appeal explained what had occurred and continued:] The court, having considered certain factors apparent at the time ruled that in the circumstances the respondent's case was regarded as closed. 40 However, in answer to Mr. Minah, Dr. Marcus-Jones insisted