G. A. Adu V. A. O. Makanjuola (Trading As Proprietor And Managing Director Of The United Development Trading Company) (1944)

LawGlobal Hub Judgment Report – West African Court of Appeal

Mining contract—Ambiguity—Effect of public policy—Minerals Ordinance (Cap. 93).

Facts

Respondent with two others registered themselves in 1933 as the United Development Trading Company, which in April, 1942, owned a prospecting right. In that month Appellant and Respondent agreed orally to prospect and mine under the name United Development Trading Company of which Respondent was owner and manager ; Appellant to be manager of mining venture. On 20th October, 1942, they signed an agreement that Respondent should withdraw from the mining business and that Appellant shall carry it ” alone personally in the name of and holder of Prospecting Right “. On 21st November, 1942, a Prospecting Right was issued to ” G. A. Adu . . . . on behalf of the United Development Trading Company “. On 19th May, 1943, Respondent, as manager of United Development Trading Company, wrote a letter to the authorities indicating that Appellant’s Prospecting Right was on behalf of United Development Trading Company. Appellant regarded this letter as a breach of the agreement of 20th October, 1942, which, he claimed, Put an end to the interest both of the Respondent personally and the United Development Trading Company in the mining venture and made him sole owner, and sued for damages ; Respondent argued that only his personal interest ceased and that Appellant was to continue as agent of the United Development Trading Company in the mining venture. The trial Judge dismissed the suit on the grounds (1) that there had been no oral agreement as the parties were not ad idem and (2) that the agreement was in avoidance of s. 9 of the Minerals Ordinance. On appeal :-

Held

that there was a patent ambiguity in the agreement itself, and that if the true interpretation were that claimed by the Appellant, viz.: that the United Development Trading Company’s interest should cease, then the agreement was void as being against public policy since it contemplated a deceit on the mining authorities.

For these reasons the appeal is disMissed with costs assessed at 15 guineas.