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C-Corp Ltd v Tekulu [2011] SBCA 18; CA-CAC 19 of 2011 (25 November 2011)

JUDGMENT OF THE COURT

1. This is an appeal by C-Corp Limited ("C-Corp") against an order of Faukona J on 6th July 2011 giving Belani Tekulu ("Purple Investment"), the Respondent, judgment for $1,282,400 on its counterclaim, to be off-set against his judgment for $2,401,900 in favour of C-Corp on the claim, resulting in an order for Purple Investment to pay C-Corp $1,119,500 as the balance of its claim. C-Corp maintains that the Judge should have dismissed the counterclaim and awarded it the whole of its claim.
   
2. The claim and counterclaim arose out of a course of dealing between the parties from about August 2007 to May 2008 in the trading and export of cocoa. The Judge found that the course of dealing had its origin in an oral agreement or agreements, the exact contractual nature and the terms of which were uncertain.
   
3. The Judge heard much detailed evidence going as to the precise nature of the parties' relationship and the state of account between them over that ten months' period. There was also unchallenged evidence that on 1st May 2008 the parties agreed that all outstanding obligations and advances were consolidated into "a new agreement" of that date. The agreement was consigned to writing in a document signed by both parties confirming that "the outstanding balance Purple Investment owes C-Corp" totaled $2,401,900, the very amount claimed by C-Corp against Purple Investment for the trading period in question.
   
4. The 1st May 2008 written agreement contained no provisions for payment of commission or reimbursement of Purple Investment's expenses, and there was no written evidence suggesting an entitlement to commission. These were matters at the heart of Purple Investment's counterclaim and the subject of much anxious enquiry by the Judge for implied terms governing their dealings. That search led him to conclude that they had a principal/agent relationship for which it was necessary to imply Purple Investment's entitlement to reasonable commission and reimbursement of local expenses to give it efficacy.
   
5. As Mr Andrew Radclyffe, for C-Corp, maintained, the Judge wrongly implied such terms, as they were not reasonably necessary for the efficacy of the contractual relationship, whatever it was. More importantly, he pointed to the 1st May 2008 written agreement, submitting that its identification of the state of account between the parties of $2,401,900 at that date provided C-Corp with a defence of accord and satisfaction to Purple Investment's counterclaim, whether or not the calculation of that outstanding balance included an entitlement of Purple Investments to commission or expenses.
   
6. Mr Andrew Nori supported the Judge's search for and implication of terms of entitlement of Purple Investments to commission and expenses into the parties' contractual relationship, maintaining that the principal/agency relationship was the most apt, and, as such would call for such terms.
   
7. In the Court's view, the written agreement of 1st May 2008 left no room for reliance by Purple Investments on such implied terms. As Mr Radclyffe rightly submitted, if there were any such terms the express terms of the written agreement of 1st May 2008, one of accord and satisfaction, replaced or superseded them.
   
8. Accordingly, Appeal allowed so as to quash the order of the Judge awarding Purple Investment $1,282,400 on its counterclaim, and substitutes an award of $2,401,900 on C-Corp's claim for that made by him.
   
9. C-Corp should have its costs of the appeal and before the Judge.
   

Sir Robin Auld P
President of the Court of Appeal

Hon J Hansen JA
Member of the Court of Appeal

G Ward JA
Member of the Court of Appeal