West African Cocoa Producers Agency Ltd V. English And Scottish Joint Co-operative Wholesale Society Ltd. (1955)

LawGlobal Hub Judgment Report – West Africa Court of Appeal

Contract—Breach ofcontract—When a party may treat a contract as at an end—
What amounts to repudiation by other party.
Practice and Procedure—Proposal to re-open case in order to assess damages.

Facts

The defendants had agreed to advance moneys to the plaintiffs to buy cocoa with. The plaintiffs sued for damages for breach of contract on the ground that the defendants had refused to make advances when required:—

(a) in regard to 1950-51, because the plaintiffs could not buy as much cocoa as they would otherwise have done as the defendants did not supply when asked the total sum agreed upon; and
(b) in regard to 1951-52, because the plaintiffs could not buy any cocoa at all owing to acts of the defendants amounting to repudiation of the contract.

The defendants denied the claims; they also counterclaimed for a sum as cost of preparing and stamping deeds of mortgage on the plaintiffs’ account, but on this there was no adjudication.

On (a): (A minor point was the amount agreed upon; the trial Judge, rightly, found in favour of the defendants.) The major point was whether the defendants had failed to advance £15,000 when asked during the mid-crop season so that the plaintiffs might make advances to farmers.

They needed the money mainly in order to give it out before the main season began in mid-September (which the parties agreed was the time it began at the earliest). From the plaintiffs’ pleadings and evidence it appeared that they had received £7,342 by the end of July, 1950, and £15,000 by the end of August: and their managing director said in evidence that he had given advances to his buyers before the main season started. The Judge held that there had been no breach of contract.

On (b) (re the 1951-52 season). On 5th May, 1951, the plaintiffs wrote asking for a mid-crop advance on the 10th, without stating the amount. The defendants wrote on the 8th: ” Advances: We have to inform you that the whole question of advances is receiving the attention of our directors. In the meantime no mid-crop advances will be made.”

The Judge held that this was a categoric refusal of mid-crop advances, and, while it left open the question of future advances, made it impossible for the plaintiffs to tell whether the defendants intended to fulfil their contractual obligations or not; he concluded that it was a repudiation of those obligations entitling the plaintiffs to treat the contract as at an end.

He thought that the evidence before him did not enable him to assses the damages and proposed re-opening the case so that the plaintiffs might lead further evidence of the damage suffered.

The main season began in mid-September or early October; some firms began making advances in J uly, others not till August or even September. There was no evidence on when the mid-crop season began that year; but the defendants’ manager said that on 5th May his impression was that the big firms had not yet started making advances.

In their appeal the plaintiffs complained against the decision on the 1950-51 season, and in regard to the 1951-52 season that the Judge had not assessed the damages; the defendants complained of the decision against them on the 1951-52 season and that the Judge had not adjudicated on their counterclaim.

Held

(1) On the pleadings and evidence it was clear that there was no foundation for the plaintiffs’ complaint that during the mid-crop season of 1950-51 the defendants withheld advances and prevented the plaintiffs from preparing for the main season.

(2) The defendants’ letter of 8th May, 1951, did not evince a determination not to be bound by their contract to make advances either for the main season or the mid season; advances for the mid-season had not begun in the trade, and the main season was far off.

The letter was no more than an intimation that pending their directors’ decision on the whole question of advances the request for an advance on the 10th May would not be met. The plaintiffs were not entitled to treat the contract as at an end, and it was they who in fact determined the contract.

Held also: The Judge ought to have adjudicated on the counterclaim of the defendants and given judgment in their favour.

Obiter: It was the plaintiffs’ duty to prove the damages alleged before closing their case; and the decision to re-open the case so that they might prove them was against principle.

Appeal of plaintiffs dismissed; cross-appeal of defendants allowed.