GHANA LAW FINDER

                         

Self help guide to the Law

  Easy to use   Case and Subject matter index  and more tonykaddy@yahoo.co.uk
                

HOME          

GHANA BAR REPORT 1994 -95 VOL 2

 

Bank for Housing and Construction  v Boahen [1994 - 95] 2 G B R 655 – 649  C A

COURT OF APPEAL

LAMPTEY, ESSIEM, BROBBEY, JJA

2 JUNE 1994

 

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

 
 

Legal Library Services        Copyright - 2003 All Rights Reserved.