HASHAM v ZENAB

Specific performance and cessation of contract on grounds of mistake, are both viable arguments for either continuation of contractual obligations, or the cessation of a transaction for reasons non-detrimental to both contractees; however, both approaches rely upon the honesty and accountability of at least one party, should the courts take a view to upholding either of them.

In this instance, a Gujarati widower entered into an agreement to convey a determinate plot of land for an agreed sum, yet immediately after signing the disposition she tore up the document and refused to continue with the transaction, on grounds that she had been misled as to the size of the plot, and the identity of the individual to whom the purchaser was planning to sell it to.

During initial litigation in the Supreme Court of Kenya, her argument for the fraudulent misrepresentation was based upon her limited grasp of the English language; and so, she had elected a representative to be present with her at the time of signing.

However, it was also argued that no mention had been given as to the size of the plot; which in the first instance, was alleged to be half an acre and not the two acres contained within the conveyance; a fact discovered only after the signing.

When cross-examined, the respondent was proven to have falsified the statement; and so, her witness was accused of perjury, whereas the appellant contested that during preliminary talks, the proposed plot was described as two acres and not the half-acre suggested.

The contract itself was signed in the presence of a third party; however, the respondent also relied upon the contention that at no point during an earlier meeting did anybody translate the contents of the contract, despite the appellant claiming that not only did he explain it, but that the respondent’s cousin had also clarified its contents to her.

It was likewise argued by the appellant that the respondent tore up the contract, not because of the plot variation, but upon the knowledge that the land was to be resold to an individual she disliked; however, this was also proven to be untrue after lengthy cross-examination and questioning of oral evidence.

Upon summation, the trial judge awarded in favour of the appellant, despite reservations around the integrity of both parties; and so, when presented to the Court of Appeal of East Africa, the Court took issue with the reliability of the appellant’s statements and proceeded to reexamine the facts, before reaching the same conclusion as the lower court.

Taken finally to the House of Lords, it was noted that vol. 2 of ‘Williams on Vendor and Purchaser’ clearly illustrated that:

“[A]s a rule, either party to a contract to sell land is entitled to sue in equity for specific performance of the agreement. This right is, in general, founded on a breach of the contract, but not in the same manner as the right to sue at law. The court has no jurisdiction to award damages at law except in case of a breach of the contract; while the equitable jurisdiction to order an agreement to be specifically performed is not limited to the cases in which at law damages could be recoverable.”

Which translated that when contracting parties hold a good account of themselves throughout their dealings, equity would provide sufficient weight as to instigate specific performance.

Yet, on this occasion neither party had been anywhere near as truthful as a court would rightfully expect; and so, on this principle it was impossible to uphold the appeal, nor enforce the equitable rights of the appellant, or those forwarded by the respondent.

Hence, the appeal was dismissed, while the House reminded the parties that:

“In equity all that is required is to show circumstances which will justify the intervention by a court of equity.”

SCRIVEN BROS & CO. v HINDLEY & CO.

Negligence and mistake, are two elements of contract law which conflict as between vendor and purchaser, particularly when the former is unreasonably applied to the buyer.

In this very brief but notable case, the issue in hand turns upon the overpayment for a product at auction.

Typical of the period, many agricultural products were imported for domestic use as the temperate weather of foreign countries provided for larger tonnage and lower prices; and so, on this occasion the subject matter was Russian industrial grade hemp, which while grown widely across the UK, remained their largest export at the time, and was a much sought after commodity.

Contrastingly, tow is a by-product of hemp, and thus sold at a much lower price, often for use as upholstery stuffing and other secondary purposes.

However, when a dockside auctioneer put out large bales of both hemp and tow, the samples shown to potential bidders were easily confusable.

To make matters worse, the two consignments were given similar lot names, therefore the possibility of bidding in error was high.

On this occasion, the purchaser had recruited a manager to bid on his behalf; at which point, he had placed similar bids on both items on the assumption that he was buying hemp.

To his further detriment, the auction programmes failed to distinguish the lots; and so, only those who had the foresight to inspect them beforehand were spared the embarrassment of overpaying for items of lower market value.

When the purchaser discovered his managers error, he sued the auctioneers for misrepresentation upon the principle of ‘ad idem’ (which is parties not in agreement to the nature of a contract); who themselves counter-sued for negligence on the part of the manager.

In the original trial, it was found that there could be no evidence of a contract as per the principle of disagreement, and that no grounds of negligence existed in the absence of any duty of care by the manager to examine the lots prior to bidding.

When brought before the Court of the Kings Bench, it became apparent despite a number of opposing facts, that the auctioneers had been recent victims of fraud, thus were simply looking to pass on the loss to another unsuspecting buyer.

And so, irrespective of any argument that the onus of inspection fell to the buyer’s representative, it was found that a contract could not be found to exist where no agreement had been settled between the vendor and the purchaser

Hence, the court awarded for the defendants, while reminding the parties that:

“A buyer when he examines a sample does so for his own benefit and not in the discharge of any duty to the seller.”