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JUDGMENT
GBADEGBE, JA.:
By his action, herein
commenced before the Circuit Court, Accra the Plaintiff
(appellant herein) claimed against the Defendant
(respondent herein) the payment of the sum of ¢7.4
million being the value of wins drawn on Lotto numbers
on 21. 10. 95. The evidence on the record is that the
respondent is engaged in the conduct of private lotto
under the provision of PNDCL 223 and as such is licensed
to operate a lotto other than that undertaken by the
Department of National Lotteries.
It appears from the
transcript that the controversy herein arose when the
respondent claiming that the appellant had not paid for
the stakes before the numbers were drawn refused to pay
the proceeds of the wins. In his evidence, the appellant
contended that he staked the numbers which were drawn
out of several to the tune of ¢482,000.00. That he did
not pay immediately, he having come to an arrangement
with the agent of the respondent, Pw1, the latter who
was to pay immediately for the stakes in order that he
refunded the same later. In his evidence he stated that
the following day i.e. 22. 10. 95, a day after the draw,
he turned up in the house of the said agent Pw1, to pay
the value. When however, he presented his wining tickets
in the expectation of receiving his proceeds the
respondent would not pay on the ground that he had
credited the stakes. Since the matter could not be
resolved, the respondent took out the writ of summons
herein claiming as herein before mentioned.
In his evidence the
respondent called the agent, Pw1 who is described in the
judgment of the lower court as a 'writer' whose evidence
was to the effect that the respondent did in fact ask
him to pay on his behalf which he did and that on the
following day, he come to make a refund of the amount to
him.
The appellant
strenuously contended at the trial that the stakes of
the respondent were credited and that when Pw1's returns
of sales were checked he had a deficit of ¢518,000.00 of
which the wining tickets in contention were part. At the
end of a full scale trial, the learned trial judge found
as a fact that the respondent, had made the requisite
payment. In his words, contained in the delivery at page
48, he expressed himself thus:
"I will prefer the
evidence of the plaintiff and Pw1, (the writer) that
plaintiff's tickets was paid for on his behalf by the
writer before the draw.
Consequently, I will
find that the plaintiff had a valid ticket which he won
on 21st October 1995. These valid tickets on the
evidence before the court entitled the plaintiff to the
amount of ¢7,440,000.00 I will therefore give judgment
to the plaintiff against the Defendant in the sum of
¢7,440,000.00. I will award plaintiff interest on the
said sum from 21st October 1995, to the date of the
judgment".
Following this, the
appellant appealed to this court. As at 14.3.97, the
sole ground filed with the notice of appeal was the
omnibus one which sought to impeach the court's finding
on the ground that it was against the weight of the
evidence. Subsequently the said ground was supplemented
with the following:
(i) that the trial
judge erred in failing to find as a fact that the
plaintiff credited the lotto:
(ii) that the trial
judge's finding that the writer paid on behalf of the
plaintiff is not supported by the evidence
(iii) that honourable
trial judge erred when he failed to find that there was
a shortage in the daily order registered on 21st October
1995 by the writer.
Before proceeding to
consider the appeal in terms of the issue which we are
to determine, I think it proper in the exercise of the
powers conferred on us under rule 31(b) of CI 19 to
correct the defect in the original ground of appeal by
substitution for the word 'ruling', judgment. I think
that the proceedings before us were based on a judgment,
the delivery of the learned trial judge having been made
after a full scale trial.
Having regard to the
fact that subject matter of the contract before us is
one of betting, I think that the same is illegal except
it is proved to have been specifically authorised or
sanctioned by law. Thus, it is important first for this
court to examine the legality or otherwise of the
transaction even though no objection was taken to the
same by either party see (1) North Western Salt Co Ltd
v. Electrolytic Alkali Co Ltd [1914] AC 461 (2) Royal
Exchange Assurance v. Sjafarskings Verga [1920] 2 KB -
384.
Now, the respondent's
own evidence is that he staked the numbers on a
'national banker to banker' which was in respect of a
lotto to be drawn on 21.10.95. True, it is that the
nature of the lotto was not specifically pleaded but I
do not think that this precludes this court from
examining the relevant legislations namely Act 94, and
PNDCL 223 to discern if the transaction is within the
limits of the law, and therefore enforceable. It must be
pointed out that the undertaking which the Department of
National Lotteries is enabled to conduct is different
from that of District Weekly Lotto operators and that in
particular, the latter group of licence is intended for
an undertaking conducted separately and distinctly from
the former. In section 1 (b) of Act 94 as amended it is
provided:
"The operation of any
form of lotto other than lotto operated by the
Department of National Lotteries shall be known as a
District Weekly Lotto".
The parent Act, Act 94
also creates the offence of clandestine lotto in the
following words in section 3 (1).
"A clandestine lotto,
by whatever name called and in whatever manner and under
whatever denomination it may be conducted is prohibited"
with section (2) going further to create an offence in
relation to stakes or undertakings which are clandestine
in nature, the said offence being defined in PNDCL 223
to mean "...... lotto conducted otherwise than under the
provisions of this Act.
In my view, it is clear
from the enabling legislation that to be enforceable the
transaction must be one which is sanctioned by law and
that the burden is on the one who requires the court's
aid in enforcing the same. On the nature of lotto in
terms of the applicable law, See (1) The AG v. Ramble
Enterprises Ltd. Unreported ruling of the High Court
Accra dated 16. 12.97
Coram: Gbadegbe J (as
he then was).
The simple question
which this court has to resolve turning on the nature of
the transaction is whether the transaction was within
the law? I wish to pause and say that this crucial
determination was inadvertently lost sight of by the
trial court and since this court in the exercise of its
powers of a re-hearing must ensure that judgments of
lower court are in conformity with the laws of the land,
it is important that this issue be considered.
See (1) Asare v.
Brobbey [1971] 2 GLR 331.
I have examined the
evidence and come to the view that the contract before
us was one which violated the enabling law; in
particular it was by its nature a "clandestine lotto
within the meaning of sections 3 of Act 94, as defined
in PNDCL 223. It being so, it is a transaction which
should be struck down as void and one from which neither
party derived any specifically enforceable rights. I
have taken the said view of the facts firstly by
resorting the judicial notice as provided under section
9 of the Evidence Decree in view of the usage of the
words "national banker to banker" a word which means
that the stakes were drawn on the operations of the
Department of National Lotteries which is normally done
on Saturdays as distinct from the licences, which the
appellant obtained to conduct a District Weekly Lotto. I
wish to state that judicial notice is often taken by
courts of facts which are notorious within the
jurisdiction, they being of common knowledge among
reasonable men. In the Mc Cormick on Evidence, the
learned authors in the 2nd Edition @ para 329 provides
thus: "The oldest and plainest ground for judicial
notice is that the fact is so commonly known in the
community as to make it unprofitable to require proof
and so certainly known as to make it indisputable among
reasonable men. "The basis of this is said to be rooted
in common sense as was said in Harper v. Killiun, 345,
S.w.2.d 309, 311 ("Tex. Civ. 1961) thus: "The doctrine
of judicial notice is one of common sense. The theory is
that, where a fact is well known by all reasonably
intelligent people in the community, or its existence is
so easily determinable with certainty from unimpeachable
sources, it would not be good sense to require formal
proof". I think this explains why section 9 of the
Evidence Decree enables the court to take judicial
notice of issues at any stage of the proceedings even
without an invitation from the parties.
I need also say from
common knowledge that the 21st of October 1995 was as
said from the evidence and confirmed by calendars a
Saturday and that as the evidence disclosed, the draw
being on a Saturday at 5pm, it must have been a draw
conducted by the Department of National Lotteries under
Act 94 which is normally done live on GTV and watched by
all who sit by their television at the time. Clearly
form the evidence without resort to any surrounding
circumstances, the draw was one which the respondent is
prohibited from staking and the appellant also
prohibited from conducting; thus it is illegal with the
result that nothing of consequence flows from it at
least in a court of law. see (1) Schandorf v. Zeini
[1976] 2 GLR 418 @ 430.
My Lords, assuming that
the point on which this delivery has so far turned which
was raised by the court itself is one which is in error,
there is also the ground of appeal which raises the
question whether or not by crediting the stakes and
paying for the same a day after the draws were
announced, the respondent had actually made a stake
within the contemplation of the contract? In my
thinking, a stake cannot be done on credit with the
payment being effected after the draw. I think that this
is clear from the nature of the game of lotto and the
ordinary meaning of the word 'stake' which is money, etc
risked or gambled on the unknown result of a future
event" see Oxford Learners Dictionary, 4th Edition page
1247. In my view, the 'future event' in this context was
the draw, therefore for one to have validly made a
stake, the payment should have been made before the draw
is made. Where as in this case, the respondent relies on
credit which he paid on the day following the draw, I
think that he had not provided effective consideration
for the numbers on which he had gambled and that he
cannot rely on the evidence of the writer, the lotto
agent. Pw1, that he would make the payment in order that
he refunds the same later. I have patiently and
carefully considered the evidence of Pw1 and I think
that it was one which was offered collusively and out of
self-interest; the truth of the matter being that the
respondent to this appeal made the payment after the
draw and that before then he had not done that which at
law would have amounted to a stake. I note that this
version of the facts which I have accepted differs from
the finding of the trial judge that the stake was paid
for by Pw1 on behalf of the respondent, but in my view
having regard to the evidence of a shortage in the
returns of Pw1 and the evidence of a prompt challenge to
the tickets belonging to the respondent on the ground
that they were not paid for as well as that of Pw3 on
the non-payment in the absence of evidence from the
said Pw1 tending to indicate how else the shortage came
about the reasonable inference to be drawn from the
circumstances is that the tickets credited by the
respondent were part of the shortage of ¢518,000.00, his
being ¢482,000.00. It is important to observe that since
receipt for such stakes are not issued as in ordinary
business but the value of the amount paid is entered on
the ticket this court must take a view of the
transaction which is protective not only of the staker
but the undertaker as well and in my opinion the view
of the facts accepted by the trial court was clearly
unreasonable in that it does not seek to reinforce the
fundamental nature of games of chance particularly
lotto, and it being so I think that this provides this
Court with a legitimate ground for intervention by
setting aside the said unreasonable and or wrong finding
and substituting in its place a finding that the stakes
were not paid for by the respondent before the draw. To
hold otherwise in my view would be defeatist of what
games of chance are and open the door to others to
assert that they had staked on credit. I think that this
is a view which the courts should not countenance for if
the question were asked: would such persons have paid if
they lost, I think the obvious answer is no.
Alternatively, I also think that in a similar manner the
undertakers or the operators cannot enforce the payment
for the stakes against them if they lost.
The result clearly is
that the respondent, cannot be enabled to rely on
payment made after the draw to enforce the transaction.
I think such a payment if accepted was too late in the
day and cannot operate retrospectively to regularise the
credited stakes and consequently the transaction is one
which ought not to be enforce. The result is that the
additional grounds (i) and (ii) of the instant appeal,
succeed, and the judgment of the lower court is set
aside and in place thereof this court enters a judgment
dismissing the respondent's case. The appeal is
therefore allowed.
Since the parties have
done that which constitutes an offence as herein before
mentioned under Act 94 and PNDCL 223, I believe that the
justice of the matter would require that they bear their
own costs. The costs allowed by the lower court are also
set aside and if paid should be refunded forthwith.
N. S. GBADEGBE
JUSTICE OF APPEAL
OWUSU-ANSAH, JA:
The plaintiff is a
lotto customer of a sub-agent of the Defendant Lotto
operator.
On the 21/10/95 which
happened to be a Saturday the plaintiff staked sports
lotto from the Defendant Lotto Writer.
It appears that the
plaintiff, at the time of staking the lotto, had no
money to pay for the ticket and so he entered into a
private deal with the lotto writer, who promised to pay
on his behalf.
The writer then issued
out the ticket to the plaintiff without receiving
payment for the ticket.
When the lotto was
drawn later that Saturday evening, at 5.00 p.m. two of
the plaintiff's numbers (5-82) were drawn, whereupon the
plaintiff proceeded to claim his winnings. The five
numbers staked as a matter of interest were
31-82-5-41-34. Out of which 82-5 dropped. It is
contended that when the amount collected by the Pw1 (the
writer) was being paid to the Agent it was short by
¢518,000.
The Defendant refused
to pay the plaintiff as a result of which the plaintiff
sued the Defendant Company claiming per his writ as
amended. He claimed:
(a) An Order or
specific performance against the Defendant to pay
plaintiff cash value of ¢7,440,000 being the total
amount of winnings he made on the lotto draw of the 21st
of October 1995.
(b) An order of the
Court for the recovery of an amount of ¢7,440,000 being
the total amount of lotto won from the Defendant Co.
(c) Interest on the
said amount at the current Bank Rate from the 21/10/95
the date of judgment - not the date of payment (it is
noted!). At the close of pleadings the following issues
were set out for trial:
(1) Whether or not the
plaintiff staked the following numbers: 31-82-5-41 and
34 from the Defendant lotto company.
(2) Whether or not out
of the numbers staked plaintiff won by the following
numbers 82-5
(3) Whether or not the
tickets won were valid by the Rules of the game.
(4) Whether or not the
plaintiff is known to the Defendant as somebody who won
the Defendant's lotto on the 21-10-95.
After hearing the
evidence the Court held that the tickets issued out to
the Plaintiff, though credited, were paid for on behalf
of the plaintiff by the writer. The Court therefore gave
judgment for the plaintiff and allowed his claim as
endorsed on his writ of summons, and awarded interest on
the said amount from the 21/10/95 until the date of
final payment. Costs assessed as ¢250,000. Thus making a
total of ¢12,712,000.00 altogether.
The Defendant Company
now appeals against the said judgment.
The main grounds of
appeal are as follows:—
(a) "That the trial
judge erred in law in failing to find as a fact that the
plaintiff credited the Defendant/Appellant lotto.
(b) That the trial
judge's findings that the writer paid on behalf of the
plaintiff is not supported by the evidence.
(c) That the Hon. Trial
Judge erred when he failed to find that there was a
shortage in the daily sales registered on the 21/10/95
by the writer.
(d) That the Ruling is
against the weight of evidence.
(e) Additional grounds
to be filed on receipt of either the judgment or the
record of proceedings".
The Appellant indicated
in his written submission filed on the 26/10/99 that he
intended to limit himself to the first two grounds only.
With respect to ground
one, it was submitted on behalf of the Appellant that
"instead of the Court determining the issue of payment
as the tickets changed hands, to ascertain whether there
was any consideration for the tickets staked by the
plaintiff, the trial judge was concerned with whether or
not the money was paid at all."
The emphasis was thus
misplaced according to the Appellant.
In regard to the second
ground, it was submitted on behalf of the appellant that
the evidence of the plaintiff was that "he went to the
writer's house to pay for the ticket on Sunday morning
which was a day after the draw of the lotto numbers".
In response to ground
one, the Respondent submits that the evidence of Pw1 was
clear and unambiguous and proves that he paid for the
tickets before the draw and the announcement of the
result. He quotes extensively from the judgment and
concludes that the issue as to whether the plaintiff had
paid for his ticket through Pw1 before the draw, was
settled when Dw1 gave evidence for the Defendant, adding
that Dw1 cannot be believed.
In relation to ground 2
it was submitted that the appellant had not been able to
demonstrate in his statement the error complained of
against the trial judge, and further that there had not
been any sufficiently convincing evidence that there was
a shortage directly attributable to or linked with, the
booklets from which the plaintiff did obtain his
tickets. It was also said that the plaintiff credited
the lotto in contravention of the rules of the Defendant
Company.
It is clear that the
basic issues of fact forming the main grounds of appeal
were never raised at the Application for Directions
stage as envisaged by the Rules of Court. It appears
that the Court did not advert its mind to them at all.
Indeed, there would appear to be an abdication of
responsibility for proper Directions, hence the apparent
confusion as to what were the real issues before the
Court and the inability to separate the chaff from the
seed.
In any event, by not
clearly focussing on, or giving undivided attention to
the issues in the case the trial court disabled itself
from an objective assessment of the evidence. The
purported findings of fact in favour of the plaintiff
can hardly be supported by the evidence as a whole.
It is idle to stress
the Rule that it is not the function of an Appellate
court to disturb a finding of fact.
To this Rule, however,
there are exceptions including but not limited to:
1. The Rule as stated
in the case of Blunt v. Blunt 1943 AC. 517 at 578.
2. Where the so-called
findings of fact are not supported by the evidence on
record.
3. The trial judge's
unjustified omission to consider the evidence as a whole
or at all. [Nkrumah v. Atta (1972) 2 GLR 13.
4. Where the rejection
of jurisdiction of the trial court disabled the judge
from evaluating the evidence.
At page 12 of the
Record the plaintiff states inter alia" I had some
numbers, but I had no money. The writer offered to pay
on my behalf. He has a taxi. I told him I would pay him
back when I make sales. Later I paid to him. The writer
agreed to stake for me. He gave me the tickets..."
It is significant to
note that the date or day of payment was omitted from
his evidence in chief.
However, he only said:
"Later I paid him" the cross-examination makes
interesting reading:
Q. 21st October 1995,
which day was it?
A. Saturday.
Q. what time did the
writer approach you
A. I did not look at my
time, but it will be around 12'0 clock to 1 p.m.
Q. When did you pay the
money to the writer
A. Sunday morning.
Cross-examination
continued the next day when the plaintiff was asked:
"You know the National
Banker to Banker the sellers close at 5.0' clock on
Saturday".
A. Yes.
Q. And you will agree
that at the time you paid for the coupon (on Sunday) the
draw had already come out (on Saturday)
A. Yes.
Quite obviously, they
were referring to the National Lotto. I think in any
case that the court can take judicial notice that at the
present moment, it is only the National Lotto that is
drawn at 5 p.m. on Saturday.
When it was suggested
to him that the writer never paid any thing on his
behalf, he said: "he paid," although he was not present
when the money was allegedly paid by the writer; he was
informed later according to him.
Needless to say, this
was a bare assertion, a bone without any flesh.
In the light of the
evidence from the horse's own mouth quoted above in
extenso, it is difficult to see how the trial court
could conclude that
"The plaintiff and his
witness Pw1 maintain that the tickets were paid for
before the draw and that the payment was made by the
writer for the Plaintiff".
Added to this is the
evidence of Pw2. He said"...because the plaintiff
credited the Lotto there was a shortage; which shortage
indicates that the Plaintiff did not pay for his
tickets, neither did Pw1 pay on his behalf". The fact
that this shortage occurred has not been denied. And
there is no evidence that any other tickets were unpaid
for. It is thus fair to infer on the balance of
probabilities that the plaintiff and/or the Pw1 did not
pay for the ticket but credited them in contravention of
the Rule.
The plaintiff's case as
a whole provides a fertile matrix of contradictions. It
is as surprising as it is unsupportable for the court to
"prefer the evidence of the plaintiff and Pw1 the writer
that the plaintiffs tickets were paid for on his behalf
by the writer before the draw. "I find myself
regretfully unable to find any evidence to that effect.
The plaintiff himself
never offered any evidence of payment beyond his bare
assertion that he paid the money to Pw1 on the following
Sunday after the draw, on the previous Saturday.
There is overwhelming
evidence on record to show that Pw1 never paid the money
on behalf of the plaintiff either on the Saturday or at
all.
Quite apart from the
recorded shortage there is the evidence of the Police
Officer as well as the evidence of Pw1 that the
plaintiff and Pw1 both admitted that the tickets were
actually credited, and were never paid for, to the
operator.
In the circumstances,
my view is that there is total failure of consideration
and therefore no contract was formed on the basis of the
credited tickets.
It is trite law that
the plaintiff must win by the strength of his own case
rather than by the weakness of the Defence.
These principles would
apply whether or not Pw1 is regarded, or regarded
himself, as Agent for the plaintiff or for the Defendant
in accepting to pay for the tickets. It would appear
that there was a conflict of interest, he really could
not play a dual role! Pw2 provides further evidence of
the apparent non-payment for the relevant tickets.
The witness states: at
page 27 of the record paragraph 10: "when I asked Dan
about the credit, Dan did not tell me anything". (Dan is
Pw1) Dan also asked the plaintiff why he told Management
that he credited the coupon. Management did not pay
because the plaintiff credited the coupon."
The evidence of Pw3 the
Police Officer who investigated the matters was that the
tickets were submitted to the Defendant Company without
money. In other words, they were unpaid for.
In the light of the
totality of the evidence I am unable to share the
conclusion of the trial court. It is in fact any body's
guess whether the amount of ¢482,000 allegedly credited
by the plaintiff would have been paid by him the
following Sunday if his two numbers had not dropped the
previous Saturday.
It goes without saying
that Lotto is a game of chance. And like most games of
chance, it is likely to be open to fraud and abuse. The
fact that the Tesano Police got involved in this case
at least smacks of suspicion of fraud though there was
no evidence beyond reasonable doubt in support of fraud.
In my judgment under no circumstances should the holder
of credited ticket be in a position to sue for winnings
in respect of the credited tickets unless there is an
unambiguous written agreement to the contrary.
In all cases there must
be incontrovertible evidence that payment therefor was
made to, or received by an accredited agent on behalf of
the Lotto operator before the draw. Crediting a lotto
ticket cannot be in the best public interest; indeed, it
can be said to be contrary to public policy. In my view,
the practice must be discouraged, if in fact it is as
prevalent as it seems.
It is noted that at the
tail end of the evidence of Pw2, counsel stated as
follows:
"I called the witness,
having earlier interviewed her and convinced myself that
she had full knowledge of the case. Presently her
evidence is hostile to us. I am compelled to apply that
she be considered a hostile waste". With respect, not
having full knowledge of a case is different from being
hostile.
BY COURT:—
Application granted:
And this without any indication as to why the witness
was hostile when she had not given a shred of evidence
detrimental or damaging to the plaintiff's case.
Of course, a hostile
witness is a witness who proves adverse to the party
calling him or her, especially if the evidence in court
differs materially from his or her written statement
(Page 43 of the Record)
In Lanquaye v. The
Republic [1976] 1 GLR 1 it was held that to treat a
witness as a hostile witness the Court first has to form
an opinion that the witness is adverse to the party
calling him.
The fact that the
witness's evidence is unfavourable to the party calling
him does not necessarily make the witness adverse or
hostile. With leave of the court, counsel may then
cross-examine him or attack his credibility. Presumably
the court was exercising its discretion under section 72
of the Evidence Decree 1975 (NRCD 323) in which event
the condition thereof must have been satisfied.
The effect of treating
a witness as a hostile witness is to render his evidence
nugatory, i.e. futile or inoperative. Yet the Court
appears to have, not considered, but relied heavily on
the evidence.
Said the learned
Circuit Judge at 43 line 15: "...Before Counsel applied
to treat the witness as a hostile witness, even though
she had not offered any evidence adverse to that of the
plaintiffs case yet her prevarication and hesitation in
testifying gave a clear indication that she may embark
on a course adverse to the plaintiff's", with respect
that is not the acid test, and I cannot sanction it.
He goes on: "The Court,
therefore, granted the application. At the end of her
evidence through cross-examination by the plaintiff's
counsel, what stood out from her evidence was that on
the 21st October 1995, there was a win of ¢7.4 m. The
plaintiff went to claim the amount but he was refused
payment because he told the Defendant that he credited
the ticket. Why the plaintiff was not being paid she
said because of a shortage of ¢500,000.00 Agyiri made to
her...". With respect this approach leaves a lot to be
desired as the learned judge cannot approbate and
reprobate.
There is no law which
compels a party to a civil action to call all material
witnesses especially if he is aware that the interests
of such witnesses conflict with his own, and that it is
unlikely that they would give evidence favourable to
him.
In case of doubt, it is
well established that the party who asserts must lose as
in this case. This was the view of the Court of Appeal
in the case of Abakam Efiana Family v. Mbabido Efiana
Family [1950] GLR 362 at 364.
Another aspect of the
matter to which the court did not advert its mind is the
issue of Agency
Of course the concept
of Agency is of vital importance in all areas of
commercial activity. Without it dealings would become
cumbersome, expensive and impractical.
The central core of
agency is the relationship it denotes; labels used by
the parties are of only minor importance.
Agency can be created
in a variety of ways. The three principal ones are
express agreement, implied agreement, and operation of
law. I think the courts would generally prefer to look
for the intentions of the parties to see if they
intended to create an Agency relationship.
It is common knowledge
that the power that an agent has to bind the principal
depends on the agent's authority-whether express,
implied or ostensible.
There is no doubt in
this case that Pw1 having been appointed a Lotto seller
was a sub-agent of the Agent of the Defendant Company.
There is evidence on record that as such he had
specifically been instructed not to sell tickets on
credit. As an Agent he was under a duty not to exceed
the authority granted by the principal, i.e. the proper
Agent acting on behalf of the lotto operator.
At page 14 of the
record of proceedings Pw1 describes himself as a
"sub-agent of Asare Original Pay All." That being the
case, it seems to me to be rather odd to say the least,
that he Pw1 and the plaintiff should enter into an oral
agreement that he Pw1 would use his own money to pay the
operator for the credited lotto tickets on behalf of the
plaintiff. This potentially could, and in this case
actually did, result in a conflict of interest to the
extent that he could also be regarded as an "agent" for
the Plaintiff - albeit for a limited period only. The
practice whereby the money is agreed to be paid by the
Agent to himself on behalf of a third party should as
already indicated be discouraged. In the words of Pw1
himself "He (the plaintiff that is) told me that he had
no money. I told him I would pay for him...
I therefore agreed to
stake for him..."
This inevitably could
provide an open - ended avenue for fraud. So much for
the evidence. There is also the issue of legality.
These views have been
predicated upon the assumption that the transaction
could be properly entered into. The defence that a
contract is a wager or illegal within the meaning of the
law should, as a general rule, be pleaded, and the facts
which are relied upon to bring the transaction within
the relevant legal provision should also be stated.
Sadly that was not so in this case.
In all cases, however,
the Court in my view, can itself, take notice of any
illegality of the contract, on which the plaintiff is
suing, if it appears on the face of the contract, or
from the evidence brought before it, by either party,
and even though the Defendant has not pleaded the
illegality as in this case. This is not surprising
because I do not think that it would have been in the
interest of either party in the long run.
This view is amply
supported by a number of respectable authorities
including:
Gadge v. Royal Exchange
Assurance [1900] 2 QB 214, and the case of Snell v.
Unity Finance Co Ltd. [1964] 2 QB 203.
Where the contract is
not Ex facie illegal, the question of illegality will
depend upon the surrounding circumstances. I have in
mind the National Weekly Lotto Act 1961 Act 94 as
amended by National Weekly Lotto (Amendment Law 1989
PNDCL 223 Section 1 provides: "With a view to raising
revenue it shall be lawful for the ministry to conduct a
National Weekly Lotto" the Section 2 (1) states:
"Any Lotto, otherwise
than a lotto promoted and conducted under the provisions
of this Act, shall be unlawful"
(2) Any person who
contravenes the provisions of the preceding sub-section
commits an offence and shall be liable on summary
conviction to a fine not exceeding two hundred pounds or
to imprisonment for a term not exceeding two years or to
both such fine and imprisonment".
Section 3 (1) provides:
A clandestine lotto, by
whatever name called and in whatever manner and under
whatever denomination it may be conducted, is
prohibited".
Section 3 (2)
"Any person undertaking
a clandestine lotto or collecting stakes therein, and
any person aiding or abetting the same in any way,
commits an offence and shall be liable on summary
conviction to a fine of not less than fifty pounds and
not exceeding two hundred pounds or to imprisonment for
a term of not less than six months and not exceeding two
years."
Section 3 (3)
"Any person laying
stakes in a clandestine lotto not being an accessory
commits an offence and shall be liable on summary
conviction, to a fine of not less than five pounds and
not exceeding twenty pounds."
The Act itself does not
define "LOTTO" But the Oxford Reference Dictionary
defines it as a Game by chance by means of which money
is raised by selling numbered tickets and giving prizes
to the holders of numbers drawn not called at random,
the outcome of which is governed by chance.
In my opinion, any
other lotto based on the results of the National Lotto
draws for the time being at 5pm on Saturdays is prima
facie illegal as being clandestine under S. 2(1) of the
Act unless the operator produces some authority granted
by or on behalf of the Minister.
Looked at in its proper
perspective, this case would appear to be within the
ambit of the provisions of this Act. I do not consider
that the categories of contracts that are illegal or
contrary to public policy are closed.
It seems to me that Act
94 has a dual purpose; first, section 1 itself provides
"with a view to raising of revenue it shall be lawful
for the Minister to conduct a National Weekly Lotto."
The Act can only make sense if it is read as permitting
only the Minister to conduct a National Weekly Lotto.
It may not be
inappropriate to point out that the Act itself appears
to depict a masterpiece of absolute ambiguity in parts.
And the Minister, for
the avoidance of doubt as for clarification, may be
called upon to exercise his powers under section 11 of
the Act. That is of course Act 94.
Section 11 provides
that the Minister may by legislative instrument make
Regulations for a bewildering variety of matters such
as:
a. The Administration
of the Lotto.
b. The number of Lotto
offices authorised to receive stakes;
c. The day, the hour,
and the method of conducting the Lotto and its
periodical drawings as well as the persons who shall be
present at a drawing of the Lotto.
d. The stakes that may
be laid on the result of the draw.
e. The amount of prizes
to be distributed and the conditions under which prizes
may be paid.
f. The manner and the
conditions in or under which stakes may be accepted;
g. The issue and sale
of tickets.
To mention just a
few!!!
Secondly the intent of
the Act is not only to raise revenue but also to protect
the public.
In the former case the
relevant contract may not itself be necessarily
prohibited. In the latter case, however, it may be
implicitly prohibited.
The facts of this case
certainly suggest that it is what in popular parlance is
often referred to as "Banker to Banker" contract which
is prohibited, although this point has not been
canvassed by either counsel. It was alluded to at page
14 of the Record proceedings by plaintiff himself.
I am satisfied that the
instant contract falls within the ambit of the Act and
that it is prohibited in so far as the operator does not
operate his own system but relies on the draw of the
National Lotteries to determine his own results without
authority or licence - a loss of revenue to the
Government.
It was Devlin J, (as he
then was) who in the fullness of his wisdom pointed out
in the case of St. John Shipping Corpn. v. John Rank
Ltd. [1957] 1 QB. 267 at 283 - 287 that "distinction
which has an important bearing upon the consequences of
illegality is that disregard of a statutory prohibition
may render the contract either illegal as formed or
illegal as performed".
The learned judge Lord
Devlin goes on: "A contract is illegal as formed if its
very creation is prohibited. In such a case the contract
is void ab initio.
It is a complete
nullity under which neither party can acquire any
rights, whether there is an intention to break the law
or not.
A contract is illegal
as performed if, though lawful in its formation, it is
performed by one of the parties in a manner prohibited
by statute.
The learned judge
continued: "When the contract is lawful in its inception
but is executed illegally the position of the party
responsible for the infraction of the statute is clear.
All contractual rights and remedies are witheld from
him".
I am inclined to share
the conclusion by Lord Devlin that "Commercial life is
nowadays hedged in by so many statutory regulations that
it would scarcely promote the interests of justice to
drive the plaintiff from the seat of judgment merely
because he has committed a minor transgression".
In my view, however,
the illegality of the contract as performed in this case
can even be based on public policy. No allowance is made
for innocence.
Even a contract that is
ex facie lawful will be unenforceable by the plaintiff
as a rule if his intention is to exploit it for an
illegal purpose as appears to be the case here.
In Gordon vs.
Metropolitan Police Commissioner [1910] 12 KB 1080, Lord
Justice Buckley at page 1098, neatly summarised the
consequences where the contract is illegal at its
inception.
Said the learned Judge:
"The general principle founded on public policy, is that
any transaction that is tainted by illegality in which
both parties are equally involved is beyond the pale of
the law. No person can claim any right or remedy
whatsoever under an illegal transaction in which he has
participated. "Ex turpi causa non oritur actio".
The Court is bound to
veto the enforcement of a contract once it knows that it
is illegal whether the knowledge comes from the
statement of the guilty party or from outside source.
This view is supported by scrutton L.J in Re Mahmoud and
Ispahani 1921 2 KB 716 at 729.
Obviously no money can
pass by virtue of such a contract itself if this arises
ex turpis causa and if both parties are in pari delicto.
Ignorance of the law
that Banker to Banker is prima facie unlawful is
immaterial to the claim in the event of a win,
notwithstanding that it has not been pleaded. The court
can take judicial notice of the law.
On the evidence, the
law and in all the circumstances of this case, it is my
judgment that this appeal should be allowed, and the
judgment of the trial Circuit Court set aside for the
reasons given. It will be wrong to let the judgment
stand. Costs allowed in lower Court set aside.
No order as to costs.
P. K. OWUSU-ANSAH
JUSTICE OF APPEAL
COUNSEL
*vdm* |
