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JUDGMENT
ESSILFIE-BONDZIE, J.A.:
This is an appeal from
the decision of the Circuit Court Accra dated 10th April
1997. The judgment dismissed the plaintiff claim for an
order for ejectment from and recovery of possession of
H/No. A383/20 Dansoman Estates Accra the plaintiff’s
claim for Mense Profits was also dismissed. The
defendant however obtained judgment against the
plaintiff on his counter-claim.
The plaintiff is the
maternal uncle of the defendant. The defendant who is
resident in Germany wrote to the plaintiff some time in
1981 and his elder sister that they should find him
accommodation at home. The plaintiff then an employee of
Ghana Broad-casting Corporation had acquired from the
State Housing Corporation a housing unit at Dansoman and
was paying by installment on monthly basis.
Upon the receipt of the
letter the plaintiff decided to give the said Dansoman
house to his nephew (the defendant) because he had built
a new house at North Kaneshie. In his letter offering
the Dansoman house to him the plaintiff asked the latter
to send him ¢5,000.00 for the construction of a
reservoir in the house since water was very scarce in
Dansoman. The defendant directed the plaintiff to a
sister who gave ¢5,000.00 to the plaintiff on his
behalf. On the receipt of the ¢5,000.00 from the
defendant the plaintiff did not use the money for the
construction of a reservoir again but used the money to
pay off the outstanding price of the house. As agreed
the plaintiff moved to his new house at North Kaneshie
in early January, 1982. The defendant came down and
lived in the said Dansoman house at an agreed rent.
After some time the plaintiff requested for vacant
possession. In paragraphs 3 of his statement of claim,
the plaintiff pleaded as follows
"(3) The plaintiff on
or about January, 1993 gave the defendant notice to quit
and deliver the said premises to the plaintiff for the
personal occupation of the plaintiff by 31st August,
1993."
As on the 6th January,
1994 when the plaintiff issued his writ of summons
against him the defendant had not vacated the premises
hence the reliefs claimed in the action.
In this appeal the
plaintiff/appellant (who will hereinafter be referred to
as the appellant) has challenged the judgment of the
trial court as contained in the NOTICE OF APPEAL on the
following grounds.
(a) The Trial Judge
erred in law by holding that the defendant/respondent is
a joint owner of plaintiff/appellant's house No. A
383/20 at Dansoman and thereby giving defendant the
right to stay but perpetually in plaintiff/appellant's
said house and directing plaintiff only to pay visits to
the House.
(b) The Trial Judge's
judgment was wrong in law and was one sided for the
evaluation of the relevant evidence given at the trial
for his consideration and this has occasioned discourage
of justice.
(c) The Trial Judge
misdirected himself by refusing to consider the effect
of plaintiff/ appellant's senility, pension, dwindled
income and paucity of means as reasonable grounds for
claiming recovery of his premises rented to the
defendant/respondent.
(d) The Trial Judge was
palpably in error when in the face of the
defendant/respondent’s own admission he gave a
refundable financial help of ¢5,000.00 to the
plaintiff/appellant, the judge nevertheless concluded
that money debt was money held in constructure trust by
plaintiff/appellant for the defendant/respondent.
In dismissing the
appellant's claim for recovery of possession the learned
trial judge made the following findings his judgment:
"Plaintiff has failed
to prove to the satisfaction of the court that he
reasonably needs vacant possession for his personal
occupation. The fact that plaintiff owns this house is
not enough proof, the court can not therefore make an
order in this case and therefore plaintiff claim based
on (SIC) personal possession fails."
He also said
"The plaintiff also
says that defendant is in arrears of rent, defendant is
on record as having said that he has been paying his
rent at the Rent Control Office ever since he and
plaintiff appeared there some time in 1993. This has
not been denied by the plaintiff. It is different thing
if the plaintiff has been refusing to go for his money.
But certainly the defendant cannot be said to be in
arrears of rent since by his assertion (that) he has
been making payments into court. Plaintiff's claim for
arrears of rent is not tenable."
After a careful
scrutiny of the record of proceedings, I am satisfied
that there are enough evidence on record to support the
findings and the decision of the learned trial judge to
dismiss the appellant’s claim in its entirety. For it
is now settled that the appellate court would not
disturb the findings of fact made by a trial court
unless there is no evidence to support such findings or
there is no basis for the court's decision.
It is my view that the
appeal against the dismissal of the appellant claim was
misconceived. This view point, was conceded by learned
counsel for the appellant when he abandoned grounds (b)
and (c) in the notice of appeal which implied that the
appellant had withdrawn his appeal against the dismissal
of his claim as endorsed on the writ of summons. It was
a wise decision and the court endorses it.
The remaining grounds
of appeal on the notice of appeal after the withdrawal
of grounds (b) and (c) are grounds (a) and (b) which
challenged the judgment obtained by the
defendant/respondent (who will hereinafter also be
referred to as the respondent) on his counter-claim. A
look at the appellant written submission by his counsel
indicates that the appeal was solely against the trial
judge’s decision on the respondents counter-claim.
In his counter-claim
the respondent was claiming the following:
(a) A DECLARATION that
in the light of the plaintiff’s own self-confession that
(he plaintiff) had used or diverted the defendant's
money of ¢5,000.00 (five thousand cedis) from the
construction of an agreed reservoir into payment for the
full purchase price of Estate house having the present
House number A383/20, 1st Close Dansoman Estate Accra
then worth ¢5,800.00 (five thousand eight hundred cedis),
the defendant by operation of the equitable destrine of
Tracing became an equitable Joint Owner of the property
with an undivided share of ¢5,000.00/5,800.00 to
defendant and also with a Heritable Right of
Survivorship to EITHER PARTY and that by reason of such
equitable joint ownership the plaintiff's demand for
immediate possession must be refused and substituted for
or with an order that Defendant shall maintain the
plaintiff with a reason- able sum of money every month
for life.
(b) PERPETUAL
INJUNCTION . . . . . . . . . . . . . . . .
The import of the
counter-claim is that the respondent was asking for a
declaration that he was a joint owner of the House
subject of the suit. The record shows that the
respondent based his claim, on the evidence of the
appellant that when he decided to rent his house to the
respondent for a rent of ¢3,000,00 a month, he wrote the
respondent asking him to send him ¢5,000.00 for the
construction of a reservoir in the house as water
was scarce in Dansoman. The respondent (and sent they
requested.) On the receipt of the ¢5,000.00, according
to the appellant’s own admission he did not use the
money for the construction of the reservoir but used it
to pay balance on his house. It was therefore the
respondent's contention that since the appellants had
used the ¢5,000.00 in the payment of the substantial
part of the purchase price of the house he is a joint
owner of the house.
The evidence tendered
by the respondent shows that he went to live in the
appellant’s Dansoman house in 1981 as a tenant. This
was after he had sent the ¢5,000.00 to the appellant to
assist him to build a reservoir. He paid the rent of
¢300.00 until as a result of a complaint he lodged with
the Rent Officer, the rent was reduced from ¢300 to
¢150. He continued to pay this rent until 14th January,
1994 when the appellant instituted an action to eject
him from the house. The evidence reveals that until
1994 the respondent never made any claim that he was a
joint owner of the house he was occupying as a tenant.
Under cross-examination by counsel for the appellant the
respondent admitted that he gave the ¢5,000.00 to the
appellant as a loan. He said as follows under
cross-examination.
"Q. Was the money you
gave the plaintiff a loan
A. It was a loan. He
wanted to get the money.
Q. Since you came back
from Germany have you demanded a refund of the loan.
A. I have not demanded
a refund."
Now if the respondent
himself has admitted that he had lived in the house not
only as a tenant who paid rent from 1981 to 1994 but has
also admitted that the ¢5,000.00 he gave the appellant
sometime before 1981 was a loan where then was the
evidence on which the learned trial judge relied to
conclude that the respondent is entitled to an equitable
interest in the house by way of joint ownership "and he
must be given it as he is entitled to it" the respondent
did not say that he asked the appellant to use the money
to buy the house for him. So even if the appellant had
admitted that he diverted the money which he had asked
of defendant for the construction of a reservoir to pay
off the hire-purchase on the house, that ipso facto
would not make the respondent a joint owner of the
house. There was no bases for giving the respondent
judgment on his counter-claim and I so hold. Since the
appellant has not denied receiving ¢5,000.00 from the
respondent the latter's remedy is to sue for the
recovery of the said amount with interest from the date
it was received. It is my judgment that the learned
judged erroneously came to the conclusion that the
respondent is part owner of the house. The judgment
given in favour of the respondent on his counter-claim
is set aside. And the appeal is allowed.
A. ESSILFIE-BONDZIE
JUSTICE OF APPEAL
AFREH, J. A.:
I also agree that the
appeal should be allowed and I only want to say a few
things mainly about the question of constructive trust.
The appellant claims
against the respondent ejectment from and recovery
possession of H/No. A 383/20, Dansoman Estates, Accra
and Mensa Profits. The simple facts of the case are that
the respondent after several years sojourn in Germany
decided sometime in 1981 to return home for good. He
wrote the appellant, who was the uterine brother of
defendant’s mother, about accommodation. As it happened
the appellant was preparing to quit his house in
Dansoman, the house in dispute, for a bigger house in
Kaneshie. He offered to rent it to the defendant. The
offer was accepted and a rent of ¢300.00 a month was
agreed. The defendant returned home on 9th December,
1981. He stayed for a few weeks with the plaintiff at
Dansoman before the plaintiff moved to his new house at
Kaneshie.
For a few years
relations between uncle and nephew were cordial. Then
it soured—about rent, the defendant’s desire to install
burglar-proof, enjoyment of fruit trees in the house,
and other matters. The plaintiff took the defendant to
the rent office to recover his house. The defendant in
turn asked for reduction in rent, which he claimed, the
rent officer granted. Apparently, the plaintiff was not
satisfied with the performance of the rent office, so he
did not pursue the matter there. Instead he instituted
proceedings in the Circuit Court. After a trial
lasting about 18 months the court presided over by Mr.
(now Justice) B. O. Tetteh gave judgment in favour of
the defendant. It is from this judgment that the
instant appeal has been brought.
Of the four grounds of
appeal the most important is the first ground and I
intend to deal mainly with it in this judgment. It
reads:
“The Trial Judge erred
in law by holding that The defendant/respondent is a
joint owner of plaintiff/appellant’s house No. A 383/20
at Dansoman and thereby giving defendant the right to
“stay put perpetually, in plaintiff/appellant’s said
house and directing plaintiff only to pay visits to the
house”
From the evidence on
record, and especially the evidence of the respondent
himself there can be no doubt that the money given by
the respondent to the appellant was intended to be a
refundable financial assistance or, simply, a loan. It
is also clear from the evidence of the respondent what
the money was intended for. He testified inter alia:
"In (plaintiff's)
letter, he said I should bring him (plaintiff) money
about ¢5000.00; and that he was going to use ¢4,000.00
to defray the remaining cost of the Dansoman house.
Plaintiff said he bought the premises for ¢6,000.00 in
1971. And that as at 1981, he had only paid ¢2,000.00
remaining ¢4,000.00 to be paid to the Housing
Corporation; and that ¢1,000.00 would be used for the
construction of a reservoir for me. I asked plaintiff to
contact my elder sister for that amount because I had an
account with her. I returned home on 9th December,
1981."
He also emphasised in
his evidence that the only portion of the money the
plaintiff misapplied was ¢1,000.00. When asked
"According to you plaintiff has not misapplied the
¢4,000.00" he answered "No". The judge therefore
seriously erred when he held or thought the plaintiff
had misapplied ¢5,000.00 since it was at complete
variance with the evidence before him.
It was also totally
wrong for the judge to impose a constructive trust on
the plaintiff in respect of the ¢4,000.00. It was a
simple loan to the plaintiff for his own use, that is,
to pay off the remainder of the purchase price for the
house. He made that clear to the defendant and the
defendant agreed to lend the money to him on that
basis. It is difficult to see how any type of
trust—express, secret, implied, resulting or
constructive or whatever can arise in such
circumstances.
It is difficult to
understand the basis on which a constructive trust could
be established in respect of the ¢1,000.00. The
plaintiff said he needed it to build a reservoir for the
house at Dansoman because at that time there was lack of
water in the area. But, according to the trial judge's
own finding "later on he got to know that the water was
still very scarce. So he abandoned the whole idea of the
construction of the reservoir”
The respondent himself
described the ¢1,000.00 as a financial assistance or
loan. It is clear from the evidence on record that the
appellant did not conceal his decision to abandon the
construction of the reservoir, and the reasons therefor,
from the respondent.
The respondent agreed
to go and stay in the house without the reservoir. He
stayed therefore 12years without asking for the return
of the ¢1,000.00 or complaining that the appellant had
cheated him by failing to construct the reservoir.
The respondent claimed
that the appellant undertook to build a reservoir for
him but failed to do so and that was why he was claiming
to be a joint owner of the house. He was wrong. The
appellant never undertook to construct a reservoir for
respondent. His intention was to construct a reservoir
for the house which belonged to him. The reservoir was
intended to be a permanent part of the house. If it had
been built it would have belonged to the appellant alone
because it would have been part of a house he owned
alone. The defendant would have had no proprietary
interest, legal or equitable, in it. In failing to
build it he did nothing unconscionable that would make
equity to impose any form of trust, including
constructive trust, on him.
It has been said that:
"the constructive trust
imposed by law is not capable of precise definition and
is continually developing. For the present it is
sufficient to say that a constructive trust is a trust,
which is imposed by equity in order to satisfy the
demands of justice and good conscience"
See Snell's Equity 29th
Edition (1990) at, 192. The fact that it is developing
does not mean that every failure to fulfil a promise or
breach of contract should lead to the imposition of a
constructive trust. The circumstance that may give use
to constructive trust are now well-known and established
and should not be added to without strong reasons.
A constructive trust
may arise:
(i) where a trustee or
person in a fiduciary position makes an Unauthorised
profit from the trust or his position;
(ii) Where a person not
being appointed a trustee knowingly and wrongfully
receives Trust property or assist others to do so, and
(iii) Where a person
is guilty of personal fraud.
(iv) It may also arise
where a specifically enforceable contract for the sale
of land is made. The purchaser becomes the owner of the
land in equity and the vendor becomes a constructive
trustee for the purchaser.
(v) Also a mortgage who
holds a surplus in his hands after selling the mortgaged
property under his power of sale may become trustee of
the surplus.
In many jurisdictions
the constructive trust has been used as a remedy for
many cases of unjust enrichment. This may be a good
idea. But for the movement it may be prudent for us to
follow the approach in England where:
"The constructive trust
has in general remained essentially a substantive;
institution ownership must not be confused with
obligation, nor must the relationship of debtor and
creditor be converted into one of trustee and cestui que
trustee"(Emphasis mine)
See Snell's Equity 29th
Edition p. 197. I have underlined the last part of this
quotation because it is so apt in this case: the judge
converted the relationship of debtor and creditor into
one of trustee and cestui que trust. And that was wrong.
The judge failed
adequately to consider the appellant's defense to the
respondent's counter claim. The most formidable was the
defence that the claim was statute-barred or that the
defend had slept too long on his rights. He admitted in
evidence that he never demanded a refund of the loan he
gave to the appellant. Indeed it was not until after
the appellant had started to give evidence in the court
below that it occurred to the respondent defendant to
make a counter claim in respect of the ¢5,000.00 of all
things he claimed an equitable remedy a claim to the
house as a joint owner, what the judge called tracing.
In my opinion it was a
spurious and stale claim and the judge should have
dismissed it as completely unmeritorious.
As for the order of
tracing there were no grounds for it. There was no
property of the defendant's in the hands of the
plaintiff, in identifiable form, for the defendant to
follow or trace. At worst the plaintiff only owed the
defendant a sum of money defendant freely lent to the
plaintiff. The remedy for it is a simple action for
debt, not a claim for a half interest in a house the
plaintiff had owned several years before the debt
arose. The house was not bought with trust money of
which the respondent was the beneficiary. It was not
acquired by the plaintiff in circumstances where in
equity he should have acquired it for the defendant, the
plaintiff had acquired it about twenty years before he
asked defendant to lend him ¢4,000.00 to enable him to
pay off the remainder of the purchase price. The
defendant therefore had no basis, in law and equity, to
claim any propriety interest in the house.
The plaintiff was never
the constructive trustee of the money the defendant lent
to him; the defendant never acquired any interest in the
house because appellant failed to construct a water
reservoir as he had intended to do with the ¢1,000.00;
and the defendant never became and is not a joint owner
of the house in dispute.
The appeal must be
allowed.
D. K. AFREH
JUSTICE OF APPEAL
SAPONG J. A.
I agree.
J. D. SAPONG
JUSTICE OF APPEAL
COUNSEL
NII APONSAH FOR
RESPONDENT.
MR. ADEAKU FOR
APPELLANT. |
