Adisi v. Construction & Furniture Co. (W.A.) Ltd (2 GLR 42-53) [1963] GHASC 1 (17 June 1963);

ARBITRATION - Award - Application to set aside - Recorder of proceedings servant of defendant - Fact known to both parties - No objection raised - Whether sufficient ground to set aside award   Adisi v. Construction & Furniture Co. (W.A.) Ltd. of Accra   [1963] 2 GLR 42, SC

ADISI v. CONSTRUCTION & FURNITURE CO. (W.A.) LTD. OF ACCRA [1963] 2 GLR 42-53.

IN THE SUPREME COURT

17TH JUNE, 1963

ADUMUA-BOSSMAN, CRABBE AND BLAY JJ.S.C.

Arbitration—Award by arbitrator—Application to set aside—Recorder of proceedings servant of defendant—Fact known to both parties—No objection raised—Whether sufficient ground to set aside award. 

Agency—Contract—Frustration—Agent commissioned to sell business—Prevention of sale by principal—Whether contract frustrated by principal.

HEADNOTES

This was an appeal by the plaintiff against the decision of Ollennu J. (as he then was) refusing to set aside an arbitration award made between the plaintiff and the defendants.  The grounds of appeal were two, namely, that the person who recorded the proceedings at the arbitration was a servant of the defendant and as such was an interested party who was likely to record the proceedings in a [p.43]  manner prejudicial to the plaintiff but favourable to the defendant.  The plaintiff knew that the recorder was a servant of the defendant.  He did not raise any objection.  The record of proceedings was read each morning by the arbitrator and agreed upon by both the plaintiff and the defendant.  The second ground of appeal was that the defendants by their action had frustrated an agreement entered into between the plaintiff and the defendants whereby the plaintiff was to negotiate for the sale of the defendants' business.  The plaintiff alleged that the defendants by their action frustrated the negotiation being completed.

Held, dismissing the appeal:

(1) the circumstances under which an arbitration award may be set aside are where it is proved that the award was the result of corruption or fraud or that the arbitrator completely ignored the ordinary rules for the proper administration of justice.  In this case even if the allegations were true the right to object was waived by the applicant when he continued to take part in the proceedings with full knowledge of the alleged improprieties and without protest.  Hodgkinson v. Fernie (1857) 3 C.B.(N.S.) 189 at p. 202; Haigh v. Haigh (1861) 5 L.T. 507; Bignall v. Gale (1841) 10 L.J.C.P. 169 at p. 171; Re Hopper (1867) L.R. 2 Q.B. 367 at p. 375 and Re An Arbitration between Elias Underwood and the Bedford and Cambridge Railway Co. (1861) 5 L.T. 581 applied.

(2) Unless there is an express term in a contract to the contrary, in a contract of agency for the sale of property for a commission, the principal may, without the knowledge of the agent dispose of the property himself in which case the agent would not be entitled to any commission.  In this case the agent could not claim that the contract was frustrated by the conduct of the principal as he would be only entitled to earn a commission on the sale being concluded.  Luxor (Eastbourne), Ltd. v. Cooper [1941] A.C. 108, H.L.; Dennis Reed, Ltd. v. Goody [1950] 2 K.B. 277 at p. 284, C.A.; Peter Long & Partners v. Burns [1956] 1 W.L.R. 413 at p. 416; Sethia v. Partabmull Rameshwar [1950] 1 All E.R. 51 at p. 59; Scottish Navigation Co. v. Souter & Co. [1917] 1 K.B. 222 at p. 249, C.A.; Bank Line, Ltd. v. Capel & Co. [1919] A.C. 435 at p. 460, H.L. and Bentall, Horsley and Baldry v. Vicary [1931] 1 K.B. 253 cited.

CASES REFERRED TO

(1) Hodgkinson v. Fernie (1857) 3 C.B.(N.S.) 189; 27 L.J.C.P. 66; 140 E.R. 712

(2) Haigh v. Haigh (1861) 5 L.T. 507; 31 L.J.Ch. 420, C.A.

(3) Bignall v. Gale (1841) 10 L.J.C.P. 169; 133 E.R. 980

(4) Re Hopper (1867) L.R. 2 Q.B. 367

(5) Re An Arbitration between Elias Underwood and the Bedford and Cambridge Railway Company (1861) 5 L.T. 581

(6) Crossley v. Clay (1848) 5 C.B. 581; 136 E.R. 1006

(7) Champsy Bhara & Co. v. Jivraj Balloo Spinning & Weaving Co. Ltd. [1923] A.C. 480; 129 L.T. 166; 39 T.L.R 253, P.C.

(8) Luxor (Eastbourne), Ltd. v. Cooper [1941] A.C. 108; [1941] 1 All E.R. 33, H.L.

(9) Dennis Reed, Ltd. v. Goody [1950] 2 K.B. 277; [1950] 1 All E.R. 919, C.A.

(10) Peter Long & Partners v. Burns [1956] 1 W.L.R. 413; [1956] 2 All E.R. 25

[p.44]

(11) Hirji Mulji v. Cheong Yue Steamship Co. [1926] A.C. 497; [1926] All E.R. Rep. 51, P.C.

(12) Prickett v. Badger (1856) 1 C.B. (N.S.) 296; 140 E.R. 123

(13) George Trollope & Sons v. Martyn Bros. [1934] 2 K.B. 436; 152 L.T. 88, C.A.

(14) George Trollope & Sons v. Caplan [1936] 2 K.B. 382; [1936] 2 All E.R. 842, C.A.

(15) Howard Houlder & Partners Ltd. v. Manx [1923] 1 K.B. 110; 128 L.T. 347

(16) Sethia v. Partabmull Rameshwar [1950] 1 All E.R. 51, C.A.

(17) Scottish Navigation Co. v. Souter& Co. [1917] 1 K.B. 222; 115 L.T. 812, C.A.

(18) Bank Line, Ltd v. Capel & Co. [1919] A.C.435; [1918-19] All E.R. Rep. 504, H.L.

(19) Bentall, Horsley and Baldry v. Vicary [1931] 1 K.B. 253; 170 L.T. Jo. 515

NATURE OF PROCEEDINGS

APPEAL from a refusal of Ollennu J. (as he then was) sitting in the High Court, to set aside an arbitration award of J. S. Manyo-Plange, Esq. and dismissing the plaintiff's claim against the defendant, reported in [1962] 1 G.L.R. 30.

COUNSEL

Asafu-Adjaye, Snr. for the appellant.

Quashie-Idun for the respondents.

JUDGMENT OF CRABBE J.S.C.

This is an appeal from a refusal of Ollennu J. (as he then was) sitting in the High Court, Accra, to set aside an award of J. S. Manyo-Plange, Esquire (sole arbitrator) dismissing the applicant's claim against the defendants.

The main grounds on which the applicant sought to impugn the award in the High Court were (1) misconduct on the part of the arbitrator and (2) error of law on the face of the award.

The basis of the court's jurisdiction to set aside awards of arbitrators is set out in a statement of Williams J. in Hodgkinson v. Fernie.1 He said:

"The law has for many years been settled, and remains so at this day, that, where a cause or matters in difference are referred to an arbitrator, whether a lawyer or a layman, he is constituted the sole and final judge of all questions both of law and of fact . . . The only exceptions to that rule, are, cases where the award is the result of corruption or fraud, and one other, which, though it is to be regretted, is now, I think, firmly established, viz. where the question of law necessarily arises on the face of the award, or upon some paper accompanying and forming part of the award.  Though the propriety of this latter may very well be doubted, I think it may be considered as established."

[p.45]

Other cases in which the principles upon which the court sometimes acts when considering applications to set aside awards is Haigh v. Haigh,2 where Turner L.J. said:

"Then as to the other grounds on which his case is rested, it is to be observed, in the first place, that an arbitrator being a judge selected by the parties, and chosen to decide without appeal, this court has nothing to do with any mere error in judgment on his part.  The parties have chosen him to be their judge, and have agreed to abide by his determination; and by that determination, if fairly and properly made, they must be content to be bound; but, on the other hand, arbitrators, like other judges, are bound, where they are not expressly absolved from doing so, to observe in their proceedings the ordinary rules which are laid down for the administration of justice; and this court, when called upon to review their proceedings, is bound to see that those rules have been observed.  The difficulty which the court has to encounter in determining a question of this nature is not as to the principles by which its decision ought to be governed; but in determining whether what has been done falls within the range of the arbitrator's judgment, or contravenes the rules which ought to be observed in collecting the materials on which that judgment is to be exercised."

It seems therefore that apart from corruption or fraud a departure from the ordinary rules for the proper administration of justice constitutes a breach of duty on the part of the arbitrator, and may amount to such misconduct as will justify the setting aside of an award.

"Misconduct" is, of course, used in its legal or technical sense in which it is known in the law relating to arbitrations as denoting irregularity, and not, as counsel for the applicant-appellant emphasized, any moral obliquity or anything of that sort.

The misconduct alleged in this case was the employment by the arbitrator of a recorder who was an employee of the defendants and who by reason of her interest in the defendants' business recorded the proceedings in a manner prejudicial to the applicant but favourable to the defendants.

The first objection with regard to the recorder was that the record of proceedings contained "deliberate and calculated perversion" of statements actually made by the applicant in the course of the proceedings.  But these charges were denied by the defendants whose managing director swore to an affidavit in which he deposed as follows:

“3. That I was present at all the sittings of the arbitration, and before evidence was heard on each day, the previous day's proceedings were read over by the arbitrator and counsel on both sides.

4. That neither the plaintiff, nor his counsel took any objection against any of the proceedings that were supplied to them daily, and I am advised by counsel that the arbitrator and counsel for both parties accepted the same as being correct.

5. That further to the above-mentioned facts, the arbitrator himself had a notebook in which I saw him take his own notes on some questions and answers."

[p.46]

These facts stated by the managing director appear to me to be amply corroborated by the applicant himself when he deposed as follows in paragraph 4 of his affidavit:

"An important statement was made by the arbitrator on the 22nd September, 1961, with reference to omissions discovered by him from the record of proceedings of the 20th September, 1961, in regard to very important questions' put by him to the defendants' witness, Mr. Read, and answers given thereto.  The arbitrator expressed surprise at counsel for not calling his attention to the said omissions after reading copies of the proceedings supplied them."

It seems to me plain beyond dispute that the applicant had full knowledge, throughout the proceedings, of the omissions and distortions about which he now complains, or at least he must have been aware of these objections on the 22nd September, 1961, when the arbitrator himself called attention to certain omissions in the record of proceedings.

If this objection is well-founded then the obvious course opened to the applicant was to protest against the conduct of the recorder and withdraw or to continue to conduct his case in the proceedings before the arbitrator under such protest.  The applicant in this case did neither of these things.  A party to an arbitration cannot be allowed to lie inactive and indecisive so as to obtain the benefit of an award if it is in his favour and to have it set aside if it is against him. Thus in Bignall v. Gale3 Tindal C.J. said:

"In coming to a determination upon this case, I cannot get rid of what makes a great impression upon my mind, that the defendant for three weeks knew of every objection which has now been urged to this award, and gave no notice of his intention to dispute it on those grounds.  He knew, on the 17th of December, these witnesses had been examined in his absence.  What right had he then to lie by, with this grievance dormant in his own bosom, and now dispute, for the first time, the validity of the authority which has been exercised?"

In my judgment even if these allegations are true the right to object was waived by the applicant when he continued the proceedings with full knowledge of the alleged improprieties and without protest.

The second ground on which the charge of misconduct is founded is stated in paragraph 12 of the applicant's affidavit and it is in these terms:

"The arbitrator was fully aware, from the very beginning of taking evidence, I am informed and verily believe, that the lady recorder was a secretary to the defendants and therefore must be interested in the proceedings in so far as her employers were concerned and, quite naturally, to my detriment."

At first blush this would appear to be a very grave charge because arbitrators are required to conduct their proceedings according to the principles of justice and "must not do anything which is not in itself fair and impartial." However, counsel for the applicant was unable to show how the arbitrator was, or could have been influenced, by the recorder.

[p.47]

No doubt if the arbitrator knew that the recorder was an employee of the defendants it would be improper for him to have employed her; but it is not every kind of impropriety in conduct that affords grounds for setting aside an award.  Thus in Re Hopper,4 Cockburn C.J. said:

"I would observe that we must not be over ready to set aside awards where the parties have agreed to abide by the decision of a tribunal of their own selection, unless we see that there has been something radically wrong and vicious in the proceeding . . .”

In Re Hopper (supra) two parties referred certain disputes to two arbitrators and an umpire. After all the evidence had closed and nothing remained but for the umpire to make up his mind and make his award one of the parties who was an innkeeper invited the two arbitrators, the umpire, and his own attorney to dinner at his inn.  They all dined together in the absence of the other party or anyone on his behalf.  The matters of reference were mentioned, and the umpire became completely intoxicated and was obliged to spend the night at the inn.  He eventually made an award in favour of the party who invited him to his house.  In dealing with this conduct of the umpire in a judgment on an application to set aside the the award Cockburn C.J. said5:

"No doubt all this was extremely improper and unbecoming.  It is to be very much regretted that anyone who has to exercise judicial functions should place himself in the position of appearing under an obligation to one of the parties, even in respect of hospitality; because a person who has to administer justice should be above suspicion, and therefore I cannot help regretting that that course of proceeding should have been adopted. But the question is, whether upon that ground we should set aside the award.  If it could be made clear that the object of Wrightson, one of the parties, in inviting the arbitrators and umpire to go and partake of the hospitalities at his house, had been to corrupt the umpire, or if we could see that the hospitalities thus bestowed upon the umpire had that effect, and had in any way influenced the award that he made, I quite agree that would be a very sufficient reason for setting aside this award, or at all events for refusing to enforce it summarily; but I cannot believe, looking at all the circumstances, that the object and intention of Wrightson was to corrupt the umpire, and I do not see the slightest reason for supposing that the umpire was in any way influenced by the hospitality he had received."

In another case Re An Arbitration between Elias Underwood and the Bedford and Cambridge Railway Company,6 the attorney to one of the parties to a reference under the Lands Clauses Consolidation Act, 18457 who had appeared as advocate for such client before the arbitrator was consulted by the arbitrator and assisted him in drawing up the award, and charged for the same in his bill of costs sent in to the arbitrator and by him claimed from the opposite party.  An application to set aside the award on [p.48] the grounds of misconduct by the arbitrator was refused by the court, Earle C.J. who delivered the judgment of the court said8:

“The course which has been pursued by the arbitrator in this case is one which I, as judge, highly disapprove of, because it creates a just ground of suspicion and dissatisfaction to the parties, lest the person appointed to judge and decide impartially between them has been swayed one way or the other by the interference of the attorney of one of the parties.  I repeat, that it is conduct calling for an expression of strong disapprobation.  At the same time I see nothing in the present case to lead me to the conclusion that the decision come to by the arbitrator on the question before him was influenced by the proceedings of the attorney."

In this case there is no suggestion of any improper relationship between the recorder and the arbitrator who himself took notes of the evidence.  On the contrary the applicant admits that on the 22nd September, 1961, the arbitrator himself called attention to some serious omissions discovered by him in the record of proceedings and expressed surprise that counsel for the applicant had not called his attention earlier to these omissions.  Surely, how could any reasonable man say that such arbitrator was likely to be influenced by the recorder?  Mere suspicion that the arbitrator was, or could be, influenced is no ground to induce the court to interfere; there must be something more than that: see Crossley v. Clay.9

In my judgment both Re Hopper (supra) and Re An Arbitration between Elias Underwood and the Bedford and Cambridge Railway Company (supra) are much stronger cases than this present one because the misconduct in each was more serious.  I cannot in all the circumstances of this case come to the conclusion that the arbitrator was in any way influenced by the recorder.

The learned judge of the court below gave a very careful consideration to the misconduct alleged and his views are contained in the following passage from his judgments10:

"Thus if the complaint had been that by employing the particular recorder the arbitrator disabled himself from dealing with any of the matters referred to him, it could be said that the said employment constituted misconduct.  Again if there were reasonable grounds to show that the employment of the particular recorder resulted or even could result in the arbitrator obtaining some information from the recorder outside the evidence led before him, e.g., if the arbitrator held private discussions of the record of proceedings with the recorder in the absence of the parties or any of them,  that act of private discussion, would amount to misconduct.  But the mere employment of the recorder to take the proceedings with nothing more, is in my opinion, not misconduct to warrant the award being set aside."

I find myself in entire agreement with the views of the learned judge and in this appeal nothing has been urged to persuade me that he was wrong.

[p.49]

The next ground of appeal is on the question of law and it is stated in these terms:

"The defendants having interfered with the people with whom the plaintiff was negotiating under the mandate given by the defendants, the learned trial judge erred in his ruling that the contract was not frustrated by the contact which the opposers made with the firms in question through a person who they believed, as stated in the letter exhibit Q, was assisting the applicant in the negotiations for a purchaser of their business, could not in any way so strike at the root of their agreement with the applicant, and be entirely beyond what was contemplated as to frustrate the performance of the contract'."

In order to succeed on this ground it must be shown that this is an error of law which appears on the face of the award.  In Champsey Bhara & Co. v. Jivraj Balloo Spinning & Weaving Co. Ltd.,11 Lord Dunedin who delivered the opinion of the Board of the Judicial Committee of the Privy Council said as follows:

"An error in law on the face of the award means, in their Lordships' view, that you can find in the award or a document actually incorporated thereto, as for instance a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous."

The error of law complained of here does not form the basis of the entire award but only in so far as it affects the applicant's third claim.  In considering the question of law that arose in this claim the arbitrator posed the following pertinent and vital question:

"The agreement was that the plaintiff earns the commission only on a concluded sale.  There having been no sale, even if plaintiff's negotiations were frustrated as alleged, is the plaintiff entitled to a commission?”

On the authority of Luxor (Eastbourne), Ltd. v. Cooper,12 the arbitrator had no hesitation in answering the question in the negative.  In my judgment the arbitrator was perfectly right, for as Denning L.J. (as he then was) pointed out in Dennis Reed, Ltd v. Goody13:

"When a house-owner puts his house into the hands of an estate agent, the ordinary understanding is that the agent is only to receive a commission if he succeeds in effecting a sale; but if not, he is entitled to nothing.  That has been well understood for the last 100 years or more: see Simpson v. Lamb per Jervis C.J., and Prickett v. Badger, per Williams J. The agent in practice takes what is a business risk: he takes on himself the expense of preparing particulars and advertising the property in return for the substantial remuneration—reckoned by a percentage of the price—which he will receive if he succeeds in finding a purchaser: see Luxor (Eastbourne), Ltd. v. Cooper."

[p.50]

In Peter Long & Partners v. Burns14 Lord Goddard C.J. also said:

"It has been laid down clearly and concisely by the Court of Appeal that the general understanding involved in the employment of a house or property agent to sell property is that he is to be remunerated only if the sale goes through, so that the vendor will receive the purchase price out of which he will pay the commission.  That is the general principle, which applies in the absence of special circumstances or special terms."

It was however contended by the applicant at the court below that this principle does not apply where the agent was deprived of his commission by an act of the employer which frustrated the purpose of the contract.

By the doctrine of frustration the court infers a term for the discharge of the contract in the event which has occurred, if this is in accordance with the presumed intention of the parties. The principle has been stated in simple but apparently definite language by the Judicial Committee of the Privy Council in Hirji Mulji v. Cheong Yue Steamship Co.15 where it was stated that:

"The doctrine of frustration rests upon a term or a condition implied in the contract.  In contemplation of law the parties, if they had anticipated and had taken into consideration the events which ultimately frustrated the object of their adventure, would have made provision for it, and, again in contemplation of law, the legal operation of those events upon the contract is the very thing for which that term would have provided.  Hence, in implying that term to give a foundation for a legal conclusion, the law is only doing what the parties really (though subconsciously) meant to do themselves."

There seems to be some support for the contention of the applicant-appellant in Prickett v. Badger,16 which established the general proposition that where an agent is employed at an agreed commission to sell land and succeeds in finding a person able and willing to purchase at the stipulated price, but the employer refuses to sell and rescinds the agent's mandate, then a term ought to be implied that the agent is entitled to sue on a quantum meruit for his work and labour on the ground that the performance of the contract was frustrated by the wrongful act of the employer.  This principle of implied term in commission agreements was applied in George Trollope & Sons v. Martyn Bros.17 by the Court of Appeal (Scrutton L.J. dissenting) and unanimously recognised in George Trollope & Sons v. Caplan.18

But the decision in Prickett v. Badger (supra) was not followed in later cases.  Thus in Howard Houlder & Ltd. v. Manx Isles Steamship Company,19 a shipbroker had effected a charter-party which contained an [p.51] option to the charterer to purchase the ship for £125,000, and the shipbroker was entitled to a commission on that sum if the option was exercised.  The option was, unfortunately for the shipbroker, not exercised, but the shipowners and the charterers entered into a new agreement with which the brokers had nothing to do that the vessel should be sold to the charterers for £65,000.  It was held by McCardie J. that the brokers could not claim their commission on either the £65,000 or on a quantum meruit.  He said that20:

"It is a settled rule for the construction of commission notes and the like documents which refer to the remuneration of an agent that a plaintiff cannot recover unless he shows that the conditions of the written bargain have been fulfilled.  If he proves fulfilment he recovers.  If not, he fails. There appears to be no halfway house, and it matters not that the plaintiff proves expenditure of time, money and skill."

In Luxor (Eastbourne), Ltd. v. Cooper (supra) Lord Wright thought the judgment of McCardie J. in Howard Houlder & Partners Ltd. v. Manx Isles Steamship Co. Ltd. (supra) was right whilst the House disapproved the principle adumbrated in George Trollope & Sons v. Martyn Bros. (supra).

In my view the judgment in Luxor (Eastbourne), Ltd. v. Cooper21 is decisive against the contention of the applicant.  In that case the agent was employed by the principal to sell a certain property, the agreement being that the agent should receive a commission on the completion of sale to any purchaser whom he could introduce.  He introduced a suitable purchaser, but the principal refused to sell.  The agent therefore sued the principal for breach of contract, his contention being that in law there was an implied term in the agreement that the principal would not without just cause prevent the agent from earning his commission.  The House of Lords held that when a contract provides a commission payable to house agents is to be payable "on the completion of purchase" then it is not earned until the purchase is in fact completed, and there is no implied term that the employer will not dispose of the property himself or otherwise act so as to prevent the agent earning his commission.

In his judgment Lord Wright considered at some considerable length the question whether the principal of a commission agent is liable for damages for breach of an implied term.  He refused to read such a term into the contract and said that22:

"The commission agreement is, however, subordinate to the hoped for principal agreement of sale.  It would be strange if what was preliminary or accessory should control the freedom of action of the principal in regard to the main transaction which everyone contemplates might never materialize. I cannot think that a property owner can be held, in virtue of a commission contract like this, to have bound himself by mere implication to complete the sale or to pay damages to the agent.  Express words are in my opinion necessary to effect this result. Indeed the stipulation `payment [p.52] on completion of purchase' is in my opinion contradictory of the implication that there is to be payment, even in the shape of damages, in the event of the sale not being completed."

Later he observed that23:

"Thus when it is said in the present case that the appellants prevented the respondent from completing the contract it must be shown that the appellants broke some term of the contract between them and the respondent.  The appellants cannot be held liable on the ground of prevention where all that happened was that they did, or omitted to do, something which as between themselves and the respondent they were free to do or omit to do. I question if there is any exception to this principle, but I am clear that there is no exception material to this case.  Since, in my opinion there was no such implied term as the respondent claims, there can be no case of prevention rendering the appellants liable."

 A contract of agency is, like any other contract, construed according to its terms.  There is a general presumption that parties to a contract have expressed in it every essential term, and terms will not be imported into it which the parties have not expressed.  But the court will give effect to the intention of the parties if this was only expressed defectively or there was an omission of something because it seemed too obvious to express.

The true legal position of a commission agent vis-a-vis his principal was summarized by Lord Wright in these words24:

"In the case of the commission agent, to whom payment is dependent on completion or the like condition, the principal does not promise that he will complete the contract for reasons which I have explained.  His only promise is that he will pay commission if the contract is completed.  There is no promise to pay a reasonable remuneration if the principal revokes the authority to the agent.  And it is a further objection to a claim on a quantum meruit that the employer has not obtained any benefit.  The agent has earned nothing until the event materializes.  It may seem hard that an agent who has introduced a potential purchaser, able and willing to complete, should get nothing for what he has done, if, during the negotiations, the principal decides not to complete, according to his own pleasure and without any reason which quoad the agent is a sufficient excuse.  But such is the express contract . . . The agent in practice takes what is a business risk."

 To succeed therefore in this case on his second ground of appeal the applicant must show that his contract with the defendants contained express words indicating a prohibition against interference by the defendants with prospective buyers who were already in direct negotiation with him.  In the alternative he must show that this is a proper case in which the court ought to imply a term of prohibition.  However, in Sethia v. Partabmull Rameshwar25 Jenkins L.J. advised the following caution:

"One thing, I think, is clear about implied terms.  I do not think that the court will read a term into a contract unless, considering the matter from [p.53] the point of view of business efficacy, it is clear beyond a peradventure that both parties intended a given term to operate, although they did not include it in so many words."

There are two reasons why I think that the applicant's case does not fall within the doctrine of frustration. The first is that if the applicant's contention were upheld he would be entitled to such general damages as the law will presume to be the direct natural or probable consequence of the act complained of; that is to say, the commission which he would have received if the defendants' conduct had not prevented him from earning it.  Such a result in my view would be inconsistent with the express term that commission was only earned on a concluded sale.

My second reason is that it must have been obvious to the applicant that the contract did not hamper the principal making his own independent arrangements to sell his property to any person willing to buy.  The parties must therefore have contemplated the event as it happened and should have made with respect to that contingency an express provision of prohibition.  Their deliberate omission to guard against such an eventuality that was present to their minds raises the inference that they were content to run the risk of the frustration caused by the event that happened. In the words of A. T. Lawrence J. in the Scottish Navigation Co.'s case26 approved by Lord Sumner in Bank Line, Ltd. v. Capel & Co.27:

"No such condition should be implied when it is possible to hold that reasonable men could have contemplated the circumstances as they exist and yet have entered into the bargain expressed in the document."

In Bentall, Horsley and Baldry v. Vicary,28 the principal appointed estate agents as "sole agents" to sell property upon the terms that five per cent commission shall be payable if they introduced a purchaser.  The principal himself sold privately to a purchaser and the agents sued the principal for damages for breach of contract.  In giving judgment for the principal McCardie J. made the following pertinent observations that29:

"It is to be noted that the contract contains no express words at all indicating a prohibition against a sale by the defendant himself.  If the parties intended such a prohibition nothing would have been easier than to insert the appropriate words."

In my judgment the applicant failed to show such an intention of prohibition in the contract, and on the authorities I am satisfied that the learned judge of the court below was right in rejecting his contention that the purpose of the contract was frustrated by what the defendants did.

For the above reasons I would dismiss this appeal.

JUDGMENT OF ADUMUA-BOSSMAN J.S.C.

I agree.

JUDGMENT OF BLAY J.S.C.

I also agree.

DECISION

Appeal dismissed.

 K. T.

FOOTNOTES

1 (1857) 3 C.B. (N.S.) 189 at p. 202; 140 E.R. 712 at p. 717.

2 (1861) 5 L.T. 507 at p. 509, C.A.

3 (1841) 10 L.J.C.P. 169 at pp. 171-172; 133 E.R. 980 at p. 983.

4 (1867) L.R. 2 Q.B. 367 at p. 375.

5 Ibid. at pp. 374-375.

6 (1861) 5 L.T. 581.

7 8 & 9 Vict., c. 18.

8 (1861) 5 L.T. 581 at p. 582.

9 (1848) 5 C.B. 581; 136 E.R. 1006.

10 [1962] 1 G.L.R. 30 at p. 32.

11 [1923] A.C. 480 at p. 487, P.C.

12 [1941] A.C. 108, H.L.

13 [1950] 2 K.B. 277 at p. 284, C.A.

14 [1956] 1 W.L.R. 413 at p. 416.

15 [1926] A.C. 497 at p. 504, P.C.

16 (1856) 1 C.B.(N.S.) 296, 26 L.J. (C.P.) 33.

17  [1934] 2 K.B. 436, C.A.

18  [1936] 2 K.B. 382, C.A.

19  [1923] 1 K.B. 110.

20  Ibid. at pp. 113-114.

21  [1941] A.C. 108, H.L.

22  Ibid. at pp. 138-139, H.L.

23  Ibid at pp.148-149 H.L.

24  Ibid at p.141, H.L.

25  [1950] 1 All E.R 51 at p. 59, C.A.

26  [1917] 1 K.B. 222 at p. 249, C.A.

27  [1919] A.C. 435 at p. 460, H.L.

28  [1931] 1 K.B. 253.

29  Ibid. at p. 258.