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BAFFOE-BONNIE,J.S.C:-
The Appellant a limited
liability company involved in
the business of manufacturing
shoulder pads rented a
purpose-built cloak room from
now defunct GIHOC Footwear
Company Limited, hereinafter
called the Landlord, in 1996.
The Tenancy agreement was to
last for a period of 4 years and
it could also be determined by a
month’s notice to a party.
On 7th August 1997 as
a result of importation of heavy
machines from Germany the
Appellant sought permission for
the use of vacant spaces on each
side of the cloak room for the
installation of the machines.
This permission was granted by a
letter dated 15th
August 1997, titled ERECTION OF
TEMPORARY STRUCTURE. The fee
charged for this space was Six
hundred thousand cedis( page 92
of the record)
Upon the expiry of the term of
tenancy, a new agreement was
entered into between the
Landlord and the Appellant which
was to commence on the 1st
of August 2000 to 31st
December 2004 at a monthly rent
of Three Hundred thousand cedis(
page 105 of the record.) It must
be pointed out the renewed
tenancy was in respect of one of
the Landlord’s Warehouse and did
not include the temporal
structure built by the
Appellant.
Interestingly less than two
months after renewal of the
tenancy, the Landlord Company
was put on divesture by the
Government of Ghana its sole
shareholder acting through its
Agency, DIC. By a Daily Graphic
publication dated Monday 25th
September 2000, interested
investors were invited to make
offers for the acquisition of
one or more of the landlord’s
assets. The consultants for the
divestiture Price Water House
Coopers invited the Appellant by
a letter dated 29th
September 2000 to make bid
towards the purchase of the
property of the landlord company
which the Appellant occupied. (
Page 89 of the record). The
Appellants put in a bid but did
not hear from the Respondent.(
Page 4 paragraph 12 of Statement
of Claim.)
The Respondent, by a letter
dated the 24th of
March 2004,nine full months
before the expiry of the renewed
tenancy, notified the Appellant
that the Landlord Company has
been divested to Newark
Commercial Capital Corporation
of the Czech Republic.
Consequently their tenancy would
not be renewed when it expired
on the 31st of
December 2004. The letter
further directed the Appellant
to vacate and give up possession
of the warehouse by the end of
their tenancy. (page 91 of the
Record)
According to Appellants they
wrote a letter to the Respondent
company claiming compensation
for the temporal structures it
erected on the Landlord company
premises but the answer was in
the negative. ( page 4 paragraph
16 - 18 of the Statement of
Claim)
By a letter dated 9/12/04 the
Appellant was informed by the
new owners of the Landlord
acting through its lawful
attorney that they wish to enter
into a new agreement with the
Appellant concerning the tenancy
of the warehouse by a letter
dated, but no agreement
materialized.(Pg 94 of
proceedings)
Feeling aggrieved at the turn of
events the Plaintiff filed a
writ in the High Court Kumasi
against the Respondent claiming,
1
the Recovery of the sum of Sum
of Four Hundred and Thirty-Six
Million old Ghana Cedis being
the cost of Extension made to
the Landlord’s Company,
2
interest on the amount and
3
injunction to restrain the
Respondent its servants, agents
or anybody claiming title from
the Defendant from ejecting the
Appellant from the premises.
Judgment was given in favour of
the Appellant by the High Court
on 13/06/06. On appeal, The
Court of Appeal, on 05/03/08,
set aside the decision of
the High Court on a very
fundamental issue of whether the
Respondent was the proper party
to have been sued.
The Court of Appeal per Apaloo
J.A. concluded (at page 144),
“…..the DIC was not the proper
person to be Defendant in this
case. Accordingly we allow the
appeal and set aside the
judgment of the lower court.
The Appellant, dissatisfied with
this judgment, has appealed to
this court on five grounds.
Ground 4 reads;
“ The Court was palpably wrong
in the finding and limiting the
function of the DIC to only
Section 4(1) of PNDCL 326 and
describing the DIC as a mere
advisory tool to the Government
for the Divestiture by the State
of any of its interests in any
Statutory Corporation and also
the DIC was not the proper
persons to be the defendant in
this case.”
It is fundamental in litigation
that parties must commence
action against relevant parties
to the suit. To institute an
action against a party, one must
have a cause of action against
the defendant. Diplock L.J. in
Letang v. Cooper [1965] 1
Q.B. 232, C.A said,
"A cause of action is simply a
factual situation the existence
of which entitles one person to
obtain from the court a remedy
against another person."
It is worthy of note that the
respondent has from the onset
contested the propriety of being
made parties in this case.
The Respondent is an agency of
the government set up by
DIVESTITURE OF STATE INTERESTS
(IMPLEMENTATION) LAW, 1993
(PNDCL 326). The
Object and functions of the
Respondent as found in Section
3(1)
“……is to implement and execute
all Government policies in
respect of divestiture
programmes.”
There is no where in the law
that states that the Respondent
is in “the business of
taking over distressed companies
belonging to the government”
as pleaded in paragraph 2 of
the Appellant Statement of
Claim..
Section 4(1) states:
“All recommendations of the
Committee in respect of any
divestiture under this Law shall
be submitted to the PNDC for
approval”
The Respondent’s role in the
divestiture process is therefore
purely advisory. This was
exactly the role of the
Respondent in the Divestiture of
the Landlord Company acting
through its consultants Price
Water House Coopers.
In the case of Paul Nuako
and 133 Others v. DIC
Suit No. E.3/9/2004, Duose J (as
he then was) sitting at Sekondi
High Court on 21st
June 2004 stated the legal
position correctly thus,
“As a matter of law, fact and
practice therefore the D.I.C. is
a mere advisory executive agent
of the Government of Ghana
without authority to take
decisions of a finite nature .It
is to do the pick axe and shovel
work for government…. it has no
capacity to sue and to be sued
in its own right….…As such agent
of the State, civil proceedings
against it must be instituted
against the Attorney General as
Defendant.”
Section 10 (2) of the State
Proceedings Act (Act 51)
provides:
"(2) Civil proceedings against
the Republic may be instituted
against the Attorney-General, or
any officer authorised in that
behalf by him, or any officer
specified in that behalf under
any law for the time being in
force."
In The Republic v High Court,
Accra Ex parte
'Attorney-General(Delta Foods
Lld, Interested party)
[1999-2000] I GLR 255 @ 271
Acquah JSC.(as he then was)
said,
“Section 10(2) of Act 51 uses
the phrase "may be instituted"
which shows that a plaintiff has
an option to go either against
the Attorney General or the
authorized office of the
particular State body. But then
article 88(5) of the
Constitution, 1992 categorically
directs that the
Attorney-General, and no one
else, should be named the
defendant in all civil
proceedings against the State.
In the face of article 88(5) of
the Constitution, 1992 it cannot
be doubted that suit No C495/98,
being an action against the
State, the Attorney-General and
not the minister ought to have
been made the defendant.”
In his usual flowery language
Archer JA (as he then was) said
in the case of Buobuh v
Minister of Interior [1973] 2
GLR 304, CA at page 311.
…
the plaintiff has made it clear
that his action is against the
State, he can sue only one
representative of the
State…There is no provision for
plurality of defendants…”:
In its judgment The Court of
Appeal per Apaloo JA noted;
“It became also clear that the
owner of the Company was Ghana
Government and in our view this
was an appropriate notice to the
Plaintiff as the initiator of
the suit to join the Attorney
General as Co-Defendants for and
on behalf of Government as
owners.”
We are of the opinion that
clothed with specific legal
authority to divest companies in
which the government of Ghana
had interest the DIC was not the
proper person to be defendant in
this case. Accordingly we allow
the appeal and set aside the
judgment of the lower court.”
From this quotation it is
obvious that the Court of Appeal
did not go into the merits of
the appeal. Much as we agree
that the wrong party has been
brought to court, we believe
that the Court of Appeal should
have gone further in view of
Order 4 Rule 5 of CI 47 which
reads;
(1) No proceedings shall be
defeated by reason of
mis-joinder or non-joinder of
any party; and the Court may in
any proceeding determine the
issues or questions in dispute
so far as they affect the rights
and interests of the persons who
are parties to the proceedings.
As an appeal is by way of
rehearing the Court of Appeal,
in our respectful view, was
wrong to have given a judgment
that sought to defeat the entire
proceedings by reason of a
misjoinder. It should have gone
ahead to exercise its power
granted under Order 4 Rule 5(2)
when it realized that the
Attorney-General was the proper
party to have been sued. The
said Order 4 Rule 5(2) reads:
(2) At any stage of proceedings
the Court may on such terms as
it thinks just either of its own
motion or on application
(a) order any person who has
been improperly or unnecessarily
made a party or who for any
reason is no longer a party or a
necessary party to cease to be a
party;
(b) order any person who ought
to have been joined as a party
or whose presence before the
Court is necessary to ensure
that all matters in dispute in
the proceedings are effectively
and completely determined and
adjudicated upon to be added as
a
party.
We would therefore order that
Attorney General be substituted
for the respondent and the case
decided on its merits.
From the facts of the case
earlier recounted, the main
claim of the appellant is that,
as tenants of the respondent,
they made some improvements to
the property, to their knowledge
and with their consent and that,
having been denied the right to
purchase the property when it
was put on divestiture they are
entitled to compensation to the
tune of 436million cedis. Citing
the case of Quagraine v Adams
1981 GLR 601, counsel
submitted that if the
respondents are not made to
recompense them while taking
advantage of improvements made
in the property that will amount
to unjust enrichment. Thus the
action is based on the equitable
Doctrine of Unjust Enrichment.
With all due deference to
learned counsel, there are
several flaws in this argument.
The case of Quagraine v Adams
which counsel cited is clearly
distinguishable from this one.
In this case, even though the
appellant effected the
structural changes to the
knowledge of the respondent and
with its consent, clearly, the
structural changes were effected
primarily for its personal use
and benefit rather than a desire
to improve the value of the
property. It converted an
otherwise empty space into ware
houses for its personal use.
That it was for his benefit
alone is evidenced by the fact
that, this “improved” premises
did not attract any increased
rent payable. Apart from the
one-off payment of 600 thousand
cedis for the ‘empty space for
the erection of the temporary
structure’ there was no evidence
of any further payments for this
improved structure. Again, as
was rightly noted by the Court
of Appeal, the plaintiff did
not, or failed to demand any
compensation from the land lord
for any alterations which he had
effected during its first
tenancy. Or better still, if the
plaintiff did not demand
compensation for the structural
alteration, in situations like
this, the normal thing would
have been to off set the money
expended on the alteration
against any future rent payable.
But this was not the case. The
appellant wholly occupied the
‘improved’ premises for 6 years,
enjoying the benefits of this so
called improvement without
paying rent commensurate with
the improved status, and when it
was asked to leave it raises
unjust enrichment. For a person
coming to court for an equitable
remedy the applicants hands are
very ‘unclean’
Our final comment on the unjust
enrichment is in respect of the
sum being claimed. By its
sponsored valuation report the
appellant claims to have
improved the value of the cloak
room to the tune of 436 Million
Cedis. So it says the respondent
must be made to disgorge it if
it wants to have the property in
its improved state. Here again
the hollowness of this argument
becomes clearer when viewed
against the background of how
much the property was eventually
valued at. Indeed the property
ie the cloak rooms, were valued
26 MILLION CEDIS each; the
valuation did not take into
account the warehouse said to
have been built there. The
property was valued and sold as
a cloakroom, far lower than the
amount the appellant is said to
have expended on the structural
alterations. So wherein lies the
unjust enrichment which must be
disgorged. Indeed since the
property was sold as a cloakroom
which was purpose built, the
purchaser may have to expend
some more money to re-alter the
structure. So it could be argued
this conversion rather caused a
diminution in the value of the
property!
We do not believe that, the
appellant made a case for unjust
enrichment and therefore appeal
is dismissed.
P.
BAFFOE-BONNIE
JUSTICE OF THE SUPREME COURT
I agree: ATUGUBA,J.S.C.
W. A.
ATUGUBA
JUSTICE OF THE
SUPREME COURT
I also agree: AKUFFO
(MS),J.S.C.
S. A. B. AKUFFO (MS)
JUSTICE OF THE SUPREME COURT
I also agree: ANSAH,J.S.C.
J. ANSAH
JUSTICE OF THE SUPREME COURT
I also agree: DOTSE,J.S.C.
J. V. M. DOTSE
JUSTICE OF THE SUPREME COURT
COUNSEL:
M. Y. ASARE BEDIAKO FOR THE
PLAINTIFF/RESPONDENT/APPELLANT.
ASAKKUA AGAMBILA FOR THE
DEFENDANT/APPELLANT/RESPONDENT |
