Contract – Written – Variation –
Written contract may be varied
orally or in writing.
Detinue – Chattel – Wrongful
possession – Plaintiff assigning
vehicle to defendant as security
– Deed of assignment empowering
defendant to seize and sell
vehicle – Wrongful seizure
actionable in detinue not
conversion.
Damages – Special – Proof –
Estimate of cost of repairs not
admissible.
Damages – Detinue – Mitigation –
Plaintiff instituting action
five and half years after
accrual of cause of action –
Delay unreasonable.
The defendant granted to the
plaintiff a loan secured by the
assignment of the plaintiff’s
seven vehicles. Subsequently the
parties agreed that the
plaintiff would sell those
vehicles in order to substitute
a new one as security. Upon the
purchase of the new vehicle it
was registered in the joint
names of the parties. The
defendant subsequently seized
the vehicle for the alleged
default of the plaintiff. The
plaintiff sued for damages five
and half years later and the
defendant counterclaimed for
¢2,322,159.17 then owing. The
trial judge found for the
plaintiff and awarded as damages
the claim as endorsed and
pleaded, ie ¢21 million as
special damages and ¢3 million
as general damages.
On appeal to the Court of Appeal
the defendant argued that
damages for conversion was the
market price of the chattel at
the date of seizure and loss of
use for a reasonable period,
which the plaintiff ought to
have mitigated. In reply,
counsel for the plaintiff
submitted that the plaintiff’s
claim was for detinue, not on
conversion. He submitted further
that the seizure of the new
vehicle unlawful as it was never
assigned to the defendant. Upon
the sale of the vehicles listed
in the deed of assignment,
counsel contended further, the
deed of assignment was spent and
the right of seizure conferred
on the defendant ceased.
Held:
(1) An agreement in writing
might be varied and or altered
orally or in writing. The new
vehicle was assigned to the
defendant by agreement in
substitution for the seven
vehicles listed in the deed of
assignment. Clearly the parties
intended to vary the security in
the deed of assignment. Berry
v Berry [1929] 2 KB 316,
Motor Parts Trading Co v Nunoo
[1962] 2 GLR 195, Morris v
Baron & Co [1918] AC 1,
Levy & Co v Goldberg [1922]
1 KB 688 referred to.
(2) Under the deed of assignment
the defendant was entitled to
seize and sell the vehicle by
public auction or private
treaty. The wrongful exercise of
such right would give the
plaintiff a right of action in
conversion and not detinue. For,
the right to sell, if exercised
would transfer title to the
purchaser and the defendant
could not be answerable in
detinue. The award for
conversion would be set aside.
James v Woodall Duckham
Construction Co Ltd [1969] 2
All ER 794 CA referred to.
(3) The damages for conversion
was the market value of the
chattel at the date of seizure
and reasonable amount for loss
of profit. The award of damages
was plainly wrong as the
plaintiff did not prove the
special damages awarded. In the
particulars of loss in the
statement of claim the plaintiff
did not indicate the basis for
the loss. The cost of repairs
was stated as an estimate, not
the expenditure. In law an
estimate was not claimable as
special damages. Special damages
must be strictly proved but the
plaintiff failed to prove the
special damages claimed. R T
Briscoe (Ghana) Ltd v Boateng
[1968] GLR 9, Yeboah v
Kwakye [1972] 2 GLR 39, CA,
Ahey Ltd v Arthur
[1987-88] 1 GLR 19, Zacca v
CFAO (1969) CC 156, CA,
West African Bakery v Miezah
[1972] 1 GLR 78, CA referred to.
(4) The plaintiff was enjoined
to mitigate his loss. A period
of one month from date of
seizure was reasonable to issue
a writ of summons to test the
legality of the seizure. The
commencement of action after
five and half years without
explanation was unreasonably.
James v Woodall Duckham
Construction Co Ltd [1969] 2
All ER 794, CA, Ahey Ltd v
Arthur [1987-88] 1 GLR 19,
CA, Zacca v CFAO (1969)
CC 156, CA, West African
Bakery v Miezah [1972] 1 GLR
78, CA referred to.
Cases referred to:
Ahey Ltd v Arthur
[1987-88] 1 GLR 19.
Bannerman v Fretete Odomankoma
Jewellery Ltd
[1989-90] 1 GLR 534, CA.
Berry v Berry
[1929] 2 KB 316, [1929] All ER
Rep 281, 98 LJKB 748, 141 LT
461, 45 TLR 524.
Bressah
v Asante
[1965] GLR 117, SC.
James v Woodall Duckham
Construction Co Ltd
[1969] 2 All ER 794, [1969] 1
WLR 903, 113 Sol Jo 225, CA.
Karam v Ashkar
[1963] 1 GLR 138, SC.
Levey & Co v Goldberg
[1922] 1 KB 688, 91 LJKB 551, 28
Com Cas 244, 127 LT 298, 38 TLR
446.
Morris v Baron & Co
[1918] AC 1, 87 LJKB 145, 118 LT
34, HL.
Motor Parts Trading Co v Nunoo
[1962] 2 GLR 195.
R T Briscoe (Ghana) Ltd v
Boateng
[1968] GLR 9, CA.
West African Bakery v Miezah
[1972] 1 GLR 78, CA.
Yeboah v Kwakye
[1972] 2 GLR 39, CA.
Zacca v CFAO
(1969) CC 156, CA.
APPEAL to the Court of Appeal
against the judgment of the High
Court.
Joe Reindorf
(with him Miss Ankrah)
for the appellant.
Dr Seth Twum for the
respondent.
LAMPTEY JA.
In July 1988, Adu Boahen
(hereinafter called the
plaintiff) sued the Bank for
Housing and Construction
(hereinafter called the
“defendant”) and claimed the
following reliefs as per his
amended writ of summons:
“(1) ¢25,000,000 damages for the
wrongful detention of the
plaintiff’s vehicle No ARA 1359
whereof ¢21 million represents
special damages and the balance,
general damages.
(2) An injunction to restrain
the defendant or its agents or
servants from selling, disposing
of or in any way dealing with
the said vehicle without the
consent of the plaintiff.
(3) An order for the delivery by
the defendant to the plaintiff
of the said vehicle.”
The writ of summons was not
accompanied by a statement of
claim; one was filed some six
days later. The cause of action
was founded on the seizure by
the defendant of the said
vehicle sometime in July 1983.
The defendant omitted to file
its statement of defence on
time. In due course and with
leave of the court the defendant
filed its statement of defence
on 18 October 1988. The
defendant resisted the claim put
forward by the plaintiff.
Briefly put, the defendant
countered that it lawfully
seized the said vehicle and was
therefore not liable to the
plaintiff in damages. It
therefore counterclaimed for
¢2,322,159.17 being the sum
plaintiff owed on 9 October 1988
and two other reliefs which I
need not reproduce here.
The case was fought on the
merits. On 22 January 1991 the
plaintiff obtained judgment
against the defendant “for the
reliefs endorsed on his amended
writ of summons with ¢21 million
as special damages and ¢3
million as general damages.” The
defendant was aggrieved by the
judgment and appealed to this
court.
Before us, learned counsel for
the defendant argued grounds
(d), (e), (f) and (g) together.
These grounds of appeal dealt
with the issue whether the said
vehicle was assigned to the
defendant by the plaintiff. He
submitted that on the undisputed
evidence before the trial court,
the said vehicle was assigned to
the defendant by
the plaintiff. He took this
court through the evidence
before the court and showed that
the new vehicle was substituted
for the seven vehicles listed in
exhibit A. He submitted that
exhibit A was varied by
agreement between the parties to
that effect. He submitted that
the defendant’s right to seize
the vehicles in case plaintiff
defaulted as contained in
exhibit A was lawfully
exercised. The trial judge erred
in law when he held the seizure
was unlawful.
In reply, learned counsel for
plaintiff submitted that the
seizure of the new vehicle was
unlawful. He contended that the
new vehicle was never assigned
by the plaintiff to the
defendant because it was not
listed as one of the vehicles in
exhibit A. He argued that
exhibits 1 and 2 did not amend
and could not have amended
exhibit A so as to include the
new vehicle. He contended that
there must be evidence of
intention on the part of the
parties to amend or vary the
terms of exhibit A. In the
instant case, there was no
evidence to that effect. He
submitted that as soon as all
the vehicles listed in exhibit A
were sold with the knowledge and
consent of the defendant,
exhibit A became a spent force,
in other words it did not have
any force or effect in law, and
was not enforceable. The
defendant therefore did not have
power to seize the new vehicle.
In the instant case, there was a
binding contractual relationship
created by exhibit A between the
plaintiff and the defendant. The
view of the plaintiff was that
as soon as the seven vehicles
were sold by him, the deed of
assignment, exhibit A, ceased to
have any legal effect. In other
words, exhibit A became
unenforceable, because it was no
longer of any legal force and
effect.
For the defendant, it was argued
that exhibit A was varied and or
amended. It was binding on the
parties.
I must first observe that as a
broad statement of law, an
agreement in writing may be
varied and or altered by an oral
agreement or by agreement in
writing. Thus in Berry v
Berry [1929] 2 KB 316 the
court held that an agreement in
writing to vary the terms of a
separation deed was enforceable.
The court held further that the
subsequent agreement may be
written or oral. I am not
unmindful of the law that an
agreement in writing can only be
varied by a subsequent agreement
in writing. On this same issue I
refer to Phipson’s The Law of
Evidence 9th ed at page 599
as follows:
“When a transaction has been
reduced into or recorded in
writing either by requirement of
law, or agreement of parties,
extrinsic evidence is, in
general, inadmissible to
contradict vary, and to or
subtract from the terms of the
document.”
This broad statement is subject
to exceptions. It means and can
only mean that in appropriate
cases, extrinsic evidence is
admissible to vary the terms of
a written document. See on this
Motor Parts Trading Co v
Nunoo [1962] 2 GLR 195 at
198 per Blay JSC. The question
that arises in the instant case
is whether the case is one of
variation of the terms of an
agreement in writing or a
rescission? The test was laid
down by Lord Dunedin in
Morris v Baron & Co [1918]
AC 1 at page 5 in the following
language:
“There should have been made
manifest the intention in any
event of a complete extinction
of the first contract, and not
merely the desire of an
alteration however sweeping, in
terms which leave it still
subsisting.”
Simply put, do the changes go to
the very root of the contract?
If the answer is yes, then it is
a case of rescission. I find
assistance in the passage
following from paragraph 1243 of
Chitty on Contracts Vol 1
23rd ed:
“Where one party has induced the
other party to accede to his
request, the party seeking the
concession will not be permitted
to repudiate the waiver and to
set up the original terms of the
agreement.”
Again in Levey & Co v
Goldberg [1922] 1 KB 688 the
court on the facts before it
held that the forbearance by the
plaintiffs at the request of the
defendant did not constitute a
variation but a waiver, and that
the plaintiffs were entitled to
maintain their action.
In the instant case, the issue
that arises for determination
was whether the parties by their
subsequent conduct intended to
bring to an end the terms of the
assignment evidenced by exhibit
A or merely to vary its terms?
The evidence of the plaintiff
showed that he was permitted by
the defendant to sell the seven
vehicles listed in exhibit A on
condition that he applied the
proceeds of sale in purchasing
one vehicle. It was abundantly
made clear to the plaintiff that
the interest of the defendant as
a co-owner or joint owner must
be made apparent and manifest by
the act of registering the
vehicle in the joint names of
the parties. In exhibit 1 the
defendant made it clear and
beyond dispute that vehicle ARA
1359 had been assigned to it by
the plaintiff. I now reproduce
that passage as follows:
“Joint Registration of Vehicle
We shall be grateful if you
could comply with the
instructions in the attached
letter from our customer Mr Adu
Boahen and register the said
vehicle with the under-mentioned
particulars thus: BHC/Adu
Boahen. The vehicle has been
assigned to this defendant as
security for facility granted to
Adu Boahen.” (My emphasis.)
If as pointed out that in
exhibit 2 the plaintiff himself
wrote to the Chief Licensing
Officer that vehicle No ARA 1359
be registered in the joint names
of the defendant and Adu Boahen,
it is difficult to appreciate
the contention of counsel for
plaintiff that it was never
assigned to the defendant. The
evidence does not support such
submission. The evidence of DW1
that he did not recall that the
vehicle was assigned to the
defendant is exposed as not
being the truth of the matter.
Exhibit 1 made it clear that it
was assigned to the defendant by
the plaintiff as security for
the debt owed by the plaintiff
to the defendant. The submission
that it was never assigned to
the defendant is not borne out
by the evidence before the
court. I find that the vehicle
No ARA 1359 was assigned to the
defendant by agreement between
the parties.
I must now determine whether the
vehicle was assigned on any term
or condition. On the undisputed
evidence before the court, the
defendant permitted and
consented to the sale of all the
seven vehicles listed in exhibit
A on condition that a new
vehicle is purchased and
assigned to the defendant. The
clear intention of the parties
was to substitute the seven
vehicles with the new vehicle on
the same terms and conditions
spelt out in exhibit A. In my
view, the parties did not intend
to abrogate exhibit A. The clear
intention was to vary exhibit A
on the issue of security for the
debt. That the plaintiff
recognised the interest of the
defendant in the said vehicle is
borne out by the following
testimony he gave the court:
“I had problem with the tyres
for the trailer. I kept the
defendant informed of this
development. I went to the
defendant at its Head Office in
Accra and contacted the managing
director himself. He asked me to
put everything in writing. I
wrote in April, 1983.”
If the vehicle had not been
assigned to the defendant why
should the plaintiff approach
the defendant when he had
difficulty in buying tyres for
the said vehicle? In my opinion,
there was clear intention and a
subsequent agreement to vary the
agreement, exhibit A which the
plaintiff in his
evidence-in-chief described and
referred to as the “first
agreement.” This was what the
plaintiff stated: “After I
signed the first agreement, I
continued to make payments to
the defendant.”
The plaintiff was aware and knew
that after he had executed
exhibit A, he entered into
another agreement, a second
agreement, with the defendant.
It is not open to him on his own
admission that he did not by the
“second agreement” assign the
new vehicle to the defendant.
The pieces of evidence to which
I have made reference clearly
showed that the new vehicle was
assigned to the defendant by the
plaintiff and on the same terms
and conditions as contained in
exhibit A, I so find. The trial
judge erred in the conclusion he
reached. That conclusion was not
supported by the evidence before
him. That ground of appeal
succeeds.
The defendant appealed against
the quantum of damages awarded
the plaintiff by the trial
judge. Learned counsel for the
defendant submitted that the
trial judge applied the wrong
principles of law in assessing
the quantum of damages awarded
the plaintiff. He submitted that
the claim of the plaintiff was
founded on the tort of
conversion and damages fell to
be considered and determined as
such. He submitted that the
measure of damages was the
market price of the chattel, the
“articulator head” at the date
of seizure. He submitted further
that the plaintiff was enjoined
to mitigate his loss in the
circumstances in which he found
himself. He contended that on
the evidence before the court,
the value of the “articulator
head” was stated as ¢50,000 and
loss of use was ¢70,000 per diem
for a reasonable period.
In reply, learned counsel for
the plaintiff submitted that the
claim of the plaintiff was
founded and based on detinue and
not on conversion. He submitted
that the trial judge applied the
correct principles of law in
quantifying the damages based on
a case of detinue. In support of
this submission, he referred to
and relied on the case of
Yeboah v Kwakye [1972] 2 GLR
39 at holding (1). See also R
T Briscoe (Ghana) Ltd v Boateng
[1968] GLR 9 at pages 18 and
19. There can be no doubt that
the plaintiff’s claim was based
and founded on the tort of
detinue as made clear in his
writ of summons. It is therefore
necessary and desirable to
ascertain and determine the true
nature of the action before the
trial court.
The plaintiff held the defendant
and himself out as the joint
owners of the vehicle, ARA 1359.
Under and by virtue of clause 4
of exhibit A, the defendant had
the right and power “to seize
the vehicle and after the
expiration of seven days from
the date of seizure may sell the
vehicle by public auction or
private contract. In my opinion
the exercise by the defendant of
its right and power under clause
4 of exhibit A gave the
plaintiff a right of action in
conversion and not one in
detinue. It is clear that a
right in the defendant to sell
the vehicle if exercised after
seven days pursuant to exhibit A
clause 4 transferred title and
ownership, prima facie, to the
purchaser for valuable
consideration. The defendant
would not in such circumstances
be answerable in detinue. The
defendant would be liable in
conversion. In my opinion
therefore, the exercise of its
power under clause 4 of exhibit
A made the defendant answerable
in conversion. The measure of
damages must accordingly be
governed by the established
principles pertaining to that
specie of claim. The cases of
R T Briscoe v Boateng [1968]
GLR 9 and Yeboah v Kwakye
[1972] 2 GLR 39 offer tremendous
assistance on this subject. In
the later case the Court of
Appeal held that:
“(1) In an action for conversion
the plaintiff is ordinarily
entitled to the value of the
chattel at the date of the
conversion as well as damages
for loss of profits during the
period between the date of
wrongful seizure and date of
conversion. The date of formal
demand and refusal being used as
evidence of the date of
conversion.”
The statement is qualified
further by the following passage
from Prof Street’s text book on
The Law of Torts (4th ed)
at page 45.
“Once a claim for conversion has
accrued to the plaintiff, it is
not open to him to delay the
issue of his writ and thereby
base his action on a subsequent
demand and a refusal the duty to
mitigate damages operates.”
On the issue of the duty of a
plaintiff to mitigate the
damages, I refer to the English
case of James v Woodall
Duckham Construction Co Ltd
[1969] 2 All ER 794, CA.
James v Woodall Duckham
Construction Co Ltd [1969] 2
All ER 794, CA. In that case,
the plaintiff on 17 March 1962
fell about 30 to 35 feet owing
to negligence of the defendants.
He suffered severe pain in his
head, back, leg, arms and neck
from the time of the accident
onwards. In June 1963, the
plaintiff’s neuro-surgeon
reported to the plaintiff’s
solicitors that he did not think
that the plaintiff’s pain could
be expected to clear until his
action for damages for his
injuries had been settled,
following which he did not think
there would be any persisting
serious disability. The writ was
issued on 25 June 1964 and the
action was not tried until 26
June 1968. The trial judge
awarded plaintiff £11,267. 8s.
6d damages being £5,267. 8s. 6d
net loss of earnings from the
date of accident to the trial,
plus £2,500 for future loss of
earnings. On appeal by the
defendants, the court held that:
“…the damages would be reduced
to £4,500 because the
plaintiff’s writ should have
been issued promptly after the
receipt of his surgeon’s opinion
of June 1963 and the action have
been pursued with ordinary
diligence thereafter: had this
been done the action would have
been tried early in 1965, and
the plaintiff would have been
back in his old job soon
afterwards; accordingly the
damages would be limited to loss
of earnings for the period from
the accident to the date when
had the action been tried early
in 1965, the plaintiff would
have returned to work.”
As per Salmon LJ at page 797:
“If in these circumstances a
plaintiff sits back and thereby
prolongs the period during which
he is unable to earn anything,
he cannot expect to recover
damages from a defendant in
respect of the period during
which, he the plaintiff, has
delayed his return to work …
What we have to consider is the
loss which he would have
suffered between the date of the
accident and when the action
should have come on for trial.”
Again in Ahey Ltd v Arthur
[1987-88] 1 GLR 19 the Court of
Appeal held that :
“In assessing the consequential
loss in the instant case regard
was to be had to what was
reasonable and not to the date
the action was determined in the
court below. In the contract the
parties had agreed the contract
was to be completed within ten
months. On the evidence the
defendants had completed 40
percent of the building. And
since building materials were
available on the market, it
followed that if the plaintiff
had the means and were minded to
do so, she would have been able
to complete the building within
six months. Therefore, she was
entitled to loss of rents for
only that period.”
See also Zacca v CFAO
(1969) CC 156, CA, West
African Bakery v Miezah
[1972] 1 GLR 78, CA cited. In
the instant case, the trial
judge fell into grave error when
he held that the action of the
plaintiff was one in detinue. I
have given reasons to show that
the pleadings and the evidence
before him supported an action
in conversion. The trial judge
applied the wrong principles of
law in quantifying the special
and general damages he awarded
the plaintiff. The awards must
be set aside. On the facts
before the trial court, if the
plaintiff had succeeded, (I have
found that he failed to prove
his claim) he was entitled to
the market value of an
articulator head as at the date
of seizure and reasonable and
fair amount for loss of profit.
The power and right of an
appellate court to interfere
with the trial court’s
assessment of damages was
re-stated by the Court of Appeal
in Bannerman v Fretete
Odomankoma Jewellery Ltd
[1989-90] 1 GLR 534 thus:
“An appellate court would only
interfere with the trial court’s
assessment of damages if
satisfied that the judge had
acted on a wrong principle of
law or had misapprehended the
facts or had for those or other
reasons made a wholly erroneous
estimate of the damages
suffered. See Karam v Ashkar
[1963] 1 GLR 138, Bressah
v Asante [1965] GLR 117,
SC.”
In his evidence before the trial
court, the plaintiff did not
state the purchase price of the
articulator head. He testified
that he sold the seven vehicles
listed in exhibit A for a total
sum of ¢750,000 (seven hundred
and fifty thousand cedis). It
was the case of the plaintiff
that he added some money to this
amount to enable him pay for the
second-hand articulator head. He
failed and or omitted to state
the amount of money he added.
That the articulator head was a
second-hand one was supported by
exhibit C, the report of the
engineer appointed by the State
Insurance Corporation to
inspect, examine and report on
the condition of the vehicle. At
the bottom of this report
appeared this recommendation:
“defective parts to be replaced
to make the vehicle roadworthy.”
It will be seen from exhibit C
that the vehicle was not
roadworthy as at 9 September
1988. In his evidence on 9 June
1989, the plaintiff testified
that it will cost ¢4.5 million
(four million, five hundred
thousand cedis) to repair the
vehicle to make it roadworthy.
On the quantum of damages, the
trial judge repeated what the
plaintiff had averred in his
pleadings and referred to
exhibit D and concluded as
follows:
“I therefore enter judgment for
the plaintiff for the reliefs
endorsed on his amended writ of
summons with 21 million cedis as
special damages and 3 million
cedis as general damages.”
The approach of the trial judge
was clearly and plainly wrong.
The plaintiff did not by his
evidence prove special damages
amounting in sum to ¢21 million
(twenty-one million cedis). In
stating the particulars of loss
and damage under paragraph 6(1)
of his statement of claim, the
plaintiff did not indicate how
he calculated and arrived at the
number of days for each of the
five and half years between 1983
and 1988. The amount
representing cost of repairs was
stated as an estimate and was
therefore not the actual amount
spent on repairs. In law the
plaintiff cannot claim this
estimated amount as special
damages because he was not
entitled to it; even if the
action was one in detinue.
Special damages must be strictly
proved. In the instant case, the
plaintiff failed to prove the
special damages he had claimed.
The trial judge misdirected
himself on the law on proof of
special damages. He gravely
erred in the award of special
damages he made. The award must
be set aside. I do so
accordingly.
In my opinion, the plaintiff was
entitled to the market price of
a second hand articulator head
as at the date of seizure if he
had succeeded on his claim. The
evidence on record was that he
realised ¢750,000 cedis from the
sale of the seven vehicles. In
this country prices of goods and
services appreciate rather than
depreciate with time. I would in
the circumstances award the
plaintiff ¢1.2 million as the
market price of a second hand
(not brand new) articulator head
as at the date of seizure.
On the issue of loss of
earnings, the evidence of
plaintiff was not helpful.
Though he testified he made
trial runs, he did not indicate
what he was paid for the
journeys he made. He did not
therefore adduce evidence of
what he earned per trip to and
from Accra. He however testified
that he commenced his contract
with the Cocoa Marketing Board
in June 1983. The vehicle was
seized in July 1983; meaning
that the vehicle worked for
about one month. The plaintiff
at paragraph 6(1) of his
statement of claim pleaded that
the vehicle earned ¢5,000 per
diem in 1983. The plaintiff did
not indicate when he demanded
the return to him of the
vehicle. In law he was enjoined
to mitigate his loss. In my
opinion a period of one month
from date of seizure was
reasonable period within which
the plaintiff should issue a
writ of summons to test the
legality of the seizure. On the
evidence before the court, the
plaintiff waited for a period of
five and half years before he
commenced action. The plaintiff
did not explain the unreasonably
long delay of five years, six
months. I would award for loss
of use ¢5,000 per diem for 30
working days, being in total
¢150,000. In conclusion, if I
was wrong in dismissing the
action and the plaintiff was
entitled to judgment, I award
the total of ¢1,350,000 as
special damages.
ESSIEM JA.
I agree.
BROBBEY JA.
I also agree.
Appeal allowed.
S Kwami Tetteh, Legal
Practitioner |