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DR S. TWUM J.S.C:
This is an appeal from the
judgment of the Court of Appeal
dated 24th March
2006. It substantially confirmed
the judgment of the High Court
against which the appeal to the
Court of Appeal was lodged. The
appellants in this Court were
the defendants in the High Court
suit and for ease of reference I
will refer to them in this
opinion as the defendants. The
respondents, who were plaintiffs
in the High Court, will also be
known as plaintiffs in this
opinion.
The History
On 20th April 1994,
the Plaintiffs filed a writ of
summons in the High Court, Tema,
against the defendants, claiming
(a)
an order compelling the
defendant to pay to the
Plaintiffs the value and loss of
profits on 6234 cartons of yams
out of the total of 7034 cartons
which defendants accepted and
took custody of with the view of
shipping the same to Plaintiffs
at Norfolk, Virginia, U.S.A. but
which said carton of yams
Defendants negligently and in
breach of duty left in the open
and were soaked by rains
rendering the same unfit for
export and which said yams
Defendants failed and/or
neglected to ship to Plaintiffs.
(b)
Interest on the sum awarded at
the rate of 32% per annum from
12/10/93 to date of payment.
Interest on the sum awarded at
the rate prevailing as at date
of judgment from 12/10/93 to
date of judgment.
The writ of summons was
accompanied by a statement of
claim. In their statement of
claim the Plaintiffs averred
inter alios as follows:-
3
“In or about October 1993, the
Plaintiffs sent a representative
to Ghana who ordered and
purchased 7034 cartons of yams
from a member of local yam
suppliers for shipment to and
sale and sale in the USA to
various distributors there.”
6. Pursuant to the agreement
aforesaid the Defendant ordered
the Plaintiff’s local
suppliers/agents, namely Alfus
(Ghana) Ltd, Ma-Kubby, Samoda
Farms Ltd, and Baafuor Senchery
Ltd, to send the yams purchased
by them for the Plaintiff to the
port of Tema by noon 9/10/93 for
loading on board the M.V. Ursus
Delmas and for onward shipment
to the United States.
12.
At about 8.00p.m. on 9/10/93
there was a heavy down-pour of
rain in and around the port of
Tema in consequence whereof the
cartons of yams belonging to the
Plaintiffs which had been left
by the Defendant sitting
uncovered in the open were
soaked and rendered unfit for
export.
14.
By reason of the matters
aforesaid the Plaintiffs
suffered damage in respect of
the value of 6234 cartons of
yams and the profits they would
have made on that quantity which
they were under contract to
supply to a number of
distributors in the United
States of America.
In consequence of the alleged
damage suffered by the
Plaintiffs they claimed the sum
of US $200,000.00 from the
Defendant for the value of the
yams and loss of profits.
The Plaintiffs did not plead how
much a carton of yam cost;
neither did they plead how much
a carton would be sold for.
It also worth mentioning that
the total filing fee paid on the
writ and statement of claim was
¢5,500.00. In my view it was no
accident that the indorsement on
the writ was as it was. I will
revert to this before I conclude
this opinion.
The defendants filed their
statement of defence and I set
down important paragraphs below.
(3) In further answer to
paragraphs 4 and 5, the
Defendants say that in October
1993, they undertook to ship
yams to the United States of
America for a number of Ghanaian
yam exporters but the Plaintiffs
were not one of them.
(6)
The defendants contend that even
if they had an agreement with
the Plaintiffs to ship any
quantity of yams to the United
States of America, which is
denied, they were not, as
shipping agents, responsible for
the care and custody of the yams
either after discharge or prior
to loading, nor is the
preparation and presentation of
the cargo alongside the vessel
their responsibility.
(9)
In further answer to paragraph
13 of the Statement of Claim,
the Defendants contend that the
Plaintiffs failed to mitigate
their losses, if any, by not
taking immediate steps to repack
the yams for shipment
immediately thereafter. Indeed,
the yams were certified by the
Ministries of Agriculture and
Health as good enough for
export.
Evidence was duly taken and on
16th December 2004
the High Court gave judgment for
the Plaintiffs. It concluded
that on the totality of the
evidence, the Plaintiff was
entitled to the reliefs being
sought. Accordingly, the Court
made an order compelling
defendants to pay to the
Plaintiffs
(a)
the value at $16.00 per carton
and loss of profit, at $40.00
per carton for 6234 cartons that
were not shipped.
(b)
Interest on the sum awarded at
the prevailing bank rate from 12th
October 1993 to date of
judgment.
(c)
Costs of ¢100,000,000 were
awarded against the Defendants.
On 17th December
2004, the Solicitors of the
Plaintiffs filed NOTICE OF ENTRY
OF JUDGMENT in which they sought
to recover from the Defendants
as follows:
(i) The value of 6234 cartons
of yams at $16.00 per carton
= $ 99,744.00
(ii) Loss of Profit @ $40 per
carton
= $249,360.00
$349,104.00
(iii) Interest on $349,104 at
the rate prevailing
(unspecified)
on date of judgment from
12th October 1993 to
date of judgment
(iv)
Cost of ¢100,000,000.00.
The Defendants were dissatisfied
with the decision of the High
Court and on 20th
December 2004, they appealed
against it to the Court of
Appeal on these grounds:-
(a)
The judgment is unreasonable and
cannot be supported having
regard to the evidence adduced
at the trial.
(b)
The learned trial judge erred in
failing to appreciate the
structure and processes of the
shipping industry in Ghana.
On 10th June 2005,
the Defendants filed the
following additional ground: ie.
“the learned trial judge’s
holding that the consignment
belonged to the Plaintiffs is
unsupported by the evidence.” On
4th January 2007, the
Defendants filed yet the
following additional grounds:
A.
The dismissal of the appellants’
contention that the respondents
failed to minimize its losses is
not supported in law.
B.
The decision of the Court of
Appeal that the appellant was
liable for the damage to the
consignment at the port was in
wrongful disregard of the laws
and customs regulating export of
goods at the port.
C.
The Court of Appeal and the
trial judge also, wrongfully
disregarded reliable documentary
evidence that established that
the quantity of yams delivered
at the port for export was 5030
cartons not 7034 cartons.
In due course, the parties filed
their respective Statements of
Case and on 24.03.06 the Court
of Appeal gave their judgment.
The Court dismissed grounds ABC
and J and allowed in part
grounds D and E. In particular,
the Court of Appeal held that
“the award of the general
damages is not supported by the
evidence on the record. On the
evidence the Plaintiff had
failed to prove the measure of
damages.” But the Court still
awarded the Plaintiffs
$200,000.00 damages.
On 5th April 2006,
the Defendants filed their
appeal to this Court against the
judgment of the Court of Appeal.
These grounds of appeal were
given in the Notice of Appeal.
(a)
The Court of Appeal erred in
affirming the findings of fact
of the trial judge, which were
not based on the evidence on the
record.
(b)
The Court of Appeal failed to
consider the custom of the port
regarding the loading and
discharge of the cargo at the
port.
(c)
The Court of Appeal erred in
making the award of damages when
it had found as a fact that the
evidence on record did not
support the award of damages.
(d)
The holding that the Plaintiffs
could not have mitigated their
losses is not supported by the
evidence.
(e)
Since the goods were damaged in
Ghana, it was wrong for the
Court of Appeal to award damages
in foreign currency.
(f)
The Court of Appeal erred in
awarding interest from 12th
October 1993 in view of its
holding that the damages awarded
included lost profits.
(g)
The Court of Appeal erred in
affirming the trial judge’s
award of costs and the further
award of costs of ¢120 million
was manifestly excessive and
unsupported by law.
I have carefully read the record
of proceedings and it is my
considered view that the appeal
raises weighty grounds. A good
starting point for dealing with
these grounds is ground (c) ie,
“the Court of Appeal erred in
making the award of damages when
it had found as a fact that the
evidence on record did not
support the award of damages.”
If this Court confirms that the
evidence on record does not
support that finding then
obviously that ground is
unanswerable. My Lords, is it
appropriate to remind ourselves
that the standard of proof here
is the balance of probabilities.
Secondly, I agree with the Court
of Appeal that it is entitled to
interfere with the findings of
fact made by the trial court if
those findings are not warranted
or are not reasonable inferences
to be drawn from the facts
established by the evidence.
Nkansah v Adjabeng & Anor
1961 GLR 465.
In its judgment the Court of
Appeal said: “It is clear from
the judgment of the Court below
that the learned trial judge did
not assess or even attempt to
assess the value of the yams;
ie. How much money the 6234
cartons of the yams would have
fetched in the USA vis-à-vis the
pleadings and evidence of the
Plaintiff itself. She simply
accepted the evidence of P.W.1
that she purchased the yams at
16 dollars per carton to be sold
in the USA at 40 dollars per
carton without assigning any
reasons for such acceptance and
without even discussing the
effect of paragraph 15 of the
statement of claim and the
receipts (exhibits E-G). All
that she said in her judgment
about that issue is as follows
at page 214 of the record of
proceedings.”
“The breach has resulted in
losses to the Plaintiff and the
defendant is liable for the
losses. I accept the Plaintiffs’
submission that the loss is the
total value of the yams, i.e. 16
dollars per carton of yams paid
to the agents and the 40 dollars
per carton being the profit that
the Plaintiff would have earned
in the United States of America
for the 6234 cartons of yams”.
The Court of Appeal continued at
p 392 “I think in the light of
the other pieces of evidence on
the record, especially the
receipts, it is clearly
unacceptable for the learned
trial judge to have simply
accepted P.W.1’s evidence on
that crucial issue without
assigning reasons, for clearly,
if the learned trial judge had
taken the trouble to critically
look at and evaluate P.W.1’s
evidence vis-à-vis paragraph 15
of the statement of claim and
the receipts (exhibits E-G as
well as exhibits K and 1) she
would no doubt have discovered
that P.W.1’s said evidence was
not supported by these
receipts”.
After a further analysis of the
judgment in the court below the
Court of Appeal concluded
without my equivocation
whatsoever that “on the
evidence, the plaintiff had
failed to prove the measure of
damages”. I could not put it
better than that. The famous
dictum of Ollenu J in
Majolagbe v. Larbi, 1959 GLR
190 at 192 readily springs to
mind, ie “where a party makes an
averment in his pleadings which
is capable of proof in a
positive way and it is denied,
that averment cannot be
sufficiently proved by just
mounting the witness box and
reciting on oath without
adducing some sort of
corroborative evidence.” As the
Court of Appeal rightly pointed
out, the USA dollars is not of
legal tender in Ghana.
In conclusion, the Court of
Appeal delivered the judgment of
the trial Court the following
coup de grace; ie in my view
therefore if the learned trial
judge had critically examined
and analysed the evidence about
the price per carton of the yams
vis-à-vis the evidence available
on the receipts tendered, the
only conclusion she ought to
have come to, would have been
that PW1’s evidence was not only
uncorroborated but that it
lacked credibility and was
fatally unreliable.”
This holding damaged the
Plaintiffs’ case. But it did not
go the whole hog. What exhibits
E to G showed was that the
Plaintiffs did not pay any money
at all for the yams in
questions. In Exhibit E, Alice
Kuma, on behalf of MA Kubby
Enterprises, acknowledged
receipt of $20,000.00 USD for
2000 cases of yams to be shipped
by November 10, 1993 as a
deposit from Ibraham Keita. It
was dated 14th
October 1993.
In Exhibit F, Alhaji Busari, on
behalf of Alfus (Gh) Ltd
acknowledged receipt of $80,000
from Ibraham Keita,
representative of Food
Distributors International, as a
deposit towards purchase of 8000
cases of yams to be shipped
bi-weekly.
Exhibit F1 (P.236) was dated
14th December 1993
and the same Alhaji Busari
claimed to have received
$72,500.00 from Mr Sam Safo,
President, Food Distributors
Int. Ltd, for yams supplied.
Exhibit G (p 237) Baafuor
Sencherey Ltd is recorded as
having received from Ibraham
Keita on behalf of Food
Distributors Int. the sum of
$64,000 being advanced payment
for 4000 cases of Puna yams to
be exported immediately … This
was dated 13th
October 1993. (The shipment was
due on 9th October
1993).
Exhibit H dated 14th
December 1993 (p 238) was for
$8000.00 cash and $2000.00
cheque. The purpose of the
payment is not disclosed on the
exhibit at all.
Yet at page 65, last but one
line, when P.W.1 was asked “Now
let us go back, how much did you
pay each of these agents” for a
box of yams?” she replied: “on
the average we paid sixteen US
dollars per case”. Again at p 76
P.W 1 said: “we have bills of
receipts to show that we have
paid for these things.” These
receipts are the exhibits
discussed above. That was
certainly not true and in my
view it justified the statement
made by the Court of Appeal that
PW1’s evidence lacked
credibility and was fatally
unreliable”.
Another serious flaw in the
judgment of the trial judge was
that she accepted that the
Plaintiff’s loss was the total
value of the yams; ie “40
dollars per carton, being the
profit that the Plaintiff would
have earned in the United States
of America for the 6234 cartons
of yams.” (see page 214) Where,
as in this case, the commodity
is for resale, the loss to the
Plaintiff is not the value of
the commodity. Apart from the
capital employed, the only loss
is the profit – ie what profit
the Plaintiff would have made if
it had had the yams in the USA
and sold them. The profit will
be the total value of yams sold
less such matters as freight,
handling charges, selling
expenses, cost of yams
purchased, customs duties, etc.
So when the learned trial judge
accepted $40.00 per carton as
the Plaintiff’s profit – she
obvious proceeded on a wrong
basis and the award was
therefore so obviously excessive
that it could not represent a
true estimate of the loss
suffered by the Plaintiffs.
One other matter that would
influence the Plaintiffs’
alleged profit would be the
quantity of yams delivered to be
exported. Once again, a
substantial portion of the
evidence was ignored by the
learned trial judge. The P.W.1
simply repeated the figure of
7034 as the cartons of yams
delivered. The Plaintiff
tendered no delivery notes or
acknowledgement of receipt by
the defendants. It did not call
any of the alleged agents who
were said to have delivered the
yams.
Indeed P.W.1 admitted at page 69
that she did not examine all the
7034 cartons. When the yams got
wet, the defendants commissioned
Marine Mutual Services to
examine the yams and issue a
survey report on them. This
report was tendered in evidence
as Exhibit 2. At page 8 of the
report (p.259) a summary of the
yams delivered is given as
follows:
Quantity per Shipping
Advice
- 5030 cartons
Quantity per
Sound
- 4610 cartons
Quantity per
Discrepant
- 412 cartons
Average
Loss
8.19%
The report gave a break-down of
the suppliers and the quantity
each supplied. The report
further pointed out at p8
thereof, that Messrs Fredham
Business Machine Ent. And Messrs
Baafuor Sencherey Ltd provided
Dry and clear cartons and
repacked the sound and dry
tubers of fresh yams, selected
from the partly wet damp cartons
for shipment. Baafuor Senchery
exported 800 cartons to the
Plaintiff and Fredham Business
Machine Ent. Exported 394
cartons of yams to Universal
Export Import.
The point being made here is
that the figure consistently
bandied about by P.W.1 and the
figures given in Exhibit 2
differed substantially and the
learned trial judge was under a
duty to consider the 2 sets and
determine which to accept. The
learned trial judge simply
accepted P.W.1’s evidence hook,
line and sinker with the result
that the Notice of Entry of
Judgment (p 217) was based on
6234 cartons at a total of
$56.00 (ie. 16 + 40) per carton.
These figures were clearly
inflated and not proved.
It is against this background,
particularly the trenchant
criticism of the judgment of the
learned trial judge by the Court
of Appeal that I consider the
decision of the Court of Appeal
varying the damages awarded the
Plaintiff’s from $349,104.00 to
$200,000.00 as seriously flawed.
It has been said that an
appellate court is entitled as a
trial court judge to assess the
damages which it thinks proper
to award on the facts found. But
in this case, it is clear to me
that their Lordships in the
Court of Appeal incorrectly
applied or failed to apply the
correct principles governing
such as assessment. They took
into consideration such
irrelevant matters as the demand
letter written by the
Plaintiffs’ solicitors (Exhibit
K) or (Exhibit 1), the demand
letter written by the Plaintiffs
to the defendants, both of which
were self-serving and written
after the event, in my view, for
the purposes of influencing the
outcome of any possible
litigation. Further, the
averment in paragraph 15 of the
statement of claim which their
Lordships themselves found had
not been made out by the
defendants, cannot be a proper
matter to enter into an
assessment of damages. Without
meaning to be disrespectful to
their Lordships, their award can
properly be described in the
legal sense, (not in a
perjorative sense) as perverse.
It will be recalled that at page
395 of the record, their
Lordships had held that on the
evidence the Plaintiff had
failed to prove the measure of
damages. The Plaintiffs’ counsel
had stated quite unequivocally
that their clients’ claim was
general damages and not
special damages. At page 365,
they wrote: “we concede that
paragraph 15 of the statement of
claim only mentioned the amount
of $200,000.00 and failed to
plead the full extent of the
loss. However, in this case, the
Respondent did not ask for
special damages. The
$200,000 was stated in the
nature of general damages.”
The filing fee of ¢5,500.00 paid
by the Plaintiffs was only
appropriate to a claim for
general damages. One cannot
plead general damages, pay small
filing fees and then proceed to
enlarge one’s claim for specific
sums.
The authorities are clear on the
distinction between special and
general damages. I myself had
occasion to dilate on it in the
case of Youngdong Industries
Ltd vrs RoRo Services
(2005-2006) SGGLR 816 at 839.
In the Court of Appeal, Learned
Counself for the Plaintiff
referred to the dictum of my
noble and respected senior,
Adade JSC, in the case of Royal
Dutch Airlines KLM & Another v
Farmex (1989-90) 2SCGLR 623 at
633 where he said: “special
damages must be specifically
pleaded and specifically proved.
But the rule does not imply that
if one claims general damages
only, one cannot lead evidence
of specific damages as a
foundation for an award of
general damages. After all, in
coming to a decision as to how
much general damages to award,
the court needs some guidance as
to financial loss.” He submitted
that the Defendant had every
opportunity to cross-examine
P.W.1 on the actual loss. This
submission was rejected by the
Court of Appeal. I only wish to
say that Mr Justice Adade’s
dictum was clearly overbroad.
General damages is such as the
law will presume to be the
natural or probable consequence
of the defendant’s act. It
arises by inference of the law
and therefore need not be proved
by evidence. The law implies
general damage in every
infringement of an absolute
right. The catch is that
only nominal damages
are awarded. Where the Plaintiff
has suffered a properly
quantifiable loss, he must plead
specifically his loss and prove
it strictly. If he does not, he
is not entitled to anything
unless general damages are also
appropriate. Whatever evidence
the Plaintiff gave of its
alleged loss, the Court of
Appeal held that on the evidence
brought by the Plaintiff, it
failed to prove the measure of
damages.” I indorse that finding
and will consider the quantum of
nominal damage if any, to be
awarded the Plaintiff anon.
The next ground of appeal for
our consideration is as follows:
“The holding that the Plaintiffs
could not have mitigated their
losses is not supported by the
evidence.”
At the trial, the Defendants
gave substantial evidence of
their fruitless attempts to
persuade the Plaintiffs to
mitigate their loss soon after
the rains. The Plaintiffs led
evidence to show that the yams
were left in the open by the
Defendants or persons working
for them whilst goods were being
off-loaded from the ship for the
yams to be put on board. The
reason why the yams were not put
on board earlier was that the
off-loading took more time than
had been estimated. It was said
that rain clouds gathered around
7.45pm and at that time it was
clear that it was going to rain
but the defendants did not rush
in tarpaulins to cover the yams
and that about 8pm, the rains
came, beat upon the yams for a
period of about 2 hours. In
consequence, the cartons became
wet and unusable. From these
facts, the Plaintiffs claimed
that the yams could not longer
be exported.
The evidence is that soon
thereafter P.W.1 took the view
that the yams were no longer fit
for export and instructed the
yam exporters not to touch them
when the defendants tried to
persuade them to procure fresh
cartons and repack them for
export. Alhaji Busari the
Plaintiffs’ representative took
the view that the consignment
was no longer his property and
therefore he had no
responsibility for them.
The defendants disputed the
Plaintiffs’ claim that the Yams
were no longer fit for export
and appointed Marine Mutual
Services to conduct an
examination on the yams and
report their findings. The
survey report is at page 252 to
page 261 of the record. In a
detailed report the Marine
Mutual Services company
recommended that the wet or damp
cartons and paper wrappers
should be changed and their
contents of fresh yams restuffed
into clear cartons to avoid rot
or decay as a result of
dampness.
They summarized their findings
as follows:
Quantity per shipping
advice 5030 cartons
Quantity per
sound
4610 cartons
Quantity
discrepant
412 cartons
The report further showed that
on 11th October 1993,
Baafuor Senchery Ltd provided
dry and clean cartons an
repacked the sound and dry
tubers of the fresh yams
selected from the partly wet or
damp cartons for shipment. 800
cartons were exported to the
Plaintiffs. A further 1200
cartons were taken away (see
page 125). Another exporter did
a similar repacking and exported
394 cartons of fresh yams. This
company was called Universal
Export and Import.
The report concluded that even
as at 1st November
1993, when the final inspection
was conducted some 4610 cartons
were in apparent good condition.
Even though the 800 cartons were
exported by Baafuor Sencherey
Ltd, in apparent disregard of
the instructions by P.W.1 that
the yams should not be touched,
later the Plaintiffs approbated
that shipment. That was covered
by Exhibit C, the Bill of
Lading. There is no evidence
that Baafuor Senchery Ltd was
notified that any of the yams
were bad. P.W.1 admitted that at
no time did she actually inspect
the contents of the 7034 cases
of yams she claimed were
delivered by their exporter
agents.
P.W.1 further testified that wet
yams could not be exported. When
she was challenged by counsel
for the defendants that it was
not wet yams that the surveyors
recommended should be exported,
she now said under American law,
any agricultural product coming
from abroad had to be fumigated
with Methyl Bromide. She said if
wet yams were fumigated with
Methyl Bromide, they would rot.
Learned counsel objected that
that was a material fact which
had to be pleaded, but in our
view, the learned trial judge
wrongly over-ruled him. In any
event, the recommendation by
Marine Mutual Service was that
the 4013 cartons were dry yams
which could be exported. Nobody
contemplated that wet yams would
be exported. At page 79, P.W.1
was asked: “You are saying yams
dried, put in fresh cartons can
still be wet?” Her answer was
“Yes!”.
There is evidence on record that
the vessel was delayed two
further days for people who
wanted to export their yams to
do so. However, as counsel for
the defendants put it, because
P.W.1 had instructed the
so-called exporters not to touch
them, nobody took advantage of
the opportunity apart from
Baafuor Senchery Ltd and
Universal Export and Import.
Counsel further suggested that
the yams could be dried and
resold on the local market.
P.W.1’s answer was they expected
the yams to arrive in America in
good condition.
It is against this factual
background that I proceed to
examine the defendant’s claim
that Plaintiff failed to
mitigate their loss.
In the High Court, the learned
judge said: “Plaintiff has led
sufficient evidence to convince
me that for the Plaintiff to
have gone through the additional
procedure of drying the yams
repacking them into dry cartons,
re-stuffing and relashing them
for loading unto the vessel
would have been an exercise in
futility and would be seen as
making excessive demands on the
plaintiff, which in the
circumstances would be
unreasonable.” She then
dismissed the defendants plea of
mitigation. (See page 215 of the
record)
The Court of Appeal correctly
stated the law on mitigation of
damage.
It is on the facts that in my
view, the Court of Appeal got it
completely wrong. It said: “In
the present case the evidence of
the record shows that there were
no opportunities open to the
plaintiff to take to mitigate
its losses. They could neither
dry the yams and repack them for
export nor arrange for the sale
of the yams locally. One may ask
“Why not”? The reasons given by
the Court of Appeal for coming
to that conclusion are clearly
untenable.
In the first place, as I have
pointed out above, the ship was
delayed for two days to enable
the Plaintiff take steps to
mitigate its losses. Baafuor
Sanchery Ltd did exactly that.
No evidence was tendered by the
Plaintiffs to establish the
effect of the so-called Methyl
Bromide on yams. After all, the
800 cartons actually exported
would be subject to this Bromide
if indeed there was such
regulation.
It is also not correct to
suggest that the yams were in
the custody and control of the
defendants and so out of the
reach of the Plaintiffs. It was
the very same defendants who
were urging the Plaintiffs to
repack the yams in new dry
cartons. That was not an
unreasonable request. It is
worth pointing out that yams are
not gari or salt or sugar which
is destroyed when soaked. In
this case the yams were wet but
sound. The skin could be dry in
a day or two. In my view the
Plaintiffs could arrange to sell
the yams locally, even at the
Tema port or its environs. The
very people who delivered them
could do that. That is what
Sancherey Ltd did. It carried
some 1200 cartons of yams away
and I do not accept the contents
of the ex post facto
letter which came into the
evidence suggesting that they
were to be dumped.
The real reason why the
Plaintiffs behaved the way they
did was the warning by P.W.1 to
its so-called agents not to
touch the yams. The professional
evidence on record was that the
yams could be dried and
repackaged. Neither that
exercise nor the sale of the
yams locally could be described
as an exercise in futility.
When the Court of Appeal stated
that it could not dismiss
entirely the award of the
general damages, it was simply
following the law.
But that law does not allow a
Plaintiff to recover damages to
compensate him for loss which
would not have been suffered if
he had taken reasonable steps to
mitigate his loss. (See Per Lord
Haldane in British
Westinghouse Electric and
Manufacturing Co v. Underground
Electric Railway Co. of London
(1912) AC 673 of 680. So
that for example where a seller
of goods fails to deliver, the
buyer must go into the market at
the relevant time to buy
substitute goods. If he fails to
do so he cannot recover any
further loss that he may suffer
because the market continues to
rise or because he is deprived
of the opportunities of making a
profit out of the use or resale
of the goods. See Hussey vrs
Eels (1990) 2QB 227 @ 233.
On the same principle a
wrongfully dismissed employee
must make reasonable effort to
find a comparable job.
Where the Plaintiff is proved to
have failed to take a reasonable
opportunity of mitigating his
loss, he is only entitled to
nominal damages. See
Brace v Calder (1895) QB
253.
Conclusion
I have said earlier on the issue
of compensation for general
damages that the Plaintiffs are
only entitled to nominal
damages. Again, the law is
that where the Plaintiff has
failed to mitigate his loss
where there were reasonable
opportunities for doing so he is
only entitled to nominal
damages. I hold that the
appeal succeeds on the two
grounds I have discussed. I
will set aside the orders of the
High Court and the Court of
Appeal for the payment of
substantial damages to the
Plaintiff and award them
$25,000.00 nominal damage. The
Plaintiff/Respondent, Food
Distribution Inc., who was given
$25,000.00 nominal damages will
have his costs assessed at ¢25
million cedis.
DR. S. TWUM
JUSTICE OF THE SUPREME COURT
DR. S. K. DATE-BAH
JUSTICE OF THE SUPREME COURT
PROF. T. M. OCRAN
JUSTICE OF THE SUPREME COURT
S. K. ASIAMAH
JUSTICE OF THE SUPREME COURT
SOPHIA ADINYIRA (MRS.) J.S.C:
The facts are fully set out in
the judgment of Dr Twum J.S.C
and there is no need to repeat
them. It is a well-established
principle in law that in a claim
for damages for breach of
contract the party to the
contract who is not guilty of
such breach is to be placed
financially, in the position he
would have been if the contract
has not been breached. He is
therefore compensated for the
damage, loss or injury he has
suffered through that breach.
The basic principles for measure
for damages in breach of
contract have been well laid out
in the judgment just read. I
therefore concur with the
conclusion reached by him that
the respondent is entitled to
nominal damages occasioned by
the breach of contract.
However on the issue whether
the respondent was under a duty
to mitigate its losses, I wish
to express my own opinion.
In assessment of damages a
court has to take into account
whatever the plaintiff has done
or has the means of doing to
minimize his loss. Cockburn
C.J. in Frost v. Knight [1872]
L.R. 7 Exch. 111 put it this
way:
“In assessing the damages for
breach of performance, a jury
will of course take into account
whatever the plaintiff has done,
or has the means of doing, and,
as a prudent man, ought to have
done whereby his loss, has been,
or would have been diminished.”
This principle is also
applicable to torts. It was
applied in the case of R.T.
Briscoe (Ghana) Ltd. v. Boateng
[1968] G.L.R. 9, where the
appellants wrongfully seized the
respondent's tractor and lorry.
The respondent tried
unsuccessfully to procure
alternative substitutes of the
same type of vehicles and had to
hire a caterpillar at £G30 per
diem. The prevailing hiring rate
of the wrongfully detained
vehicles was £G10 per diem. In
an action against the appellants
for damages for wrongful
seizure, the trial judge gave
judgment for the respondent. It
was contended on behalf of the
appellants, on appeal that the
respondent acted unreasonably in
procuring the more expensive
caterpillar as a substitute and
that he was entitled only to the
prevailing hiring rate of the
wrongfully detained vehicles.
Lassey J.A.in dismissing the
appeal held at pages10 to 11
that:
“The judge had evidence before
him that the respondent had made
inquiries at the appropriate
garages from which the Fordson
tractor and G.M.C. lorry were
obtainable, but could not get
suitable alternative vehicles at
less expense there or
elsewhere. The respondent was
therefore under an obligation to
act reasonably and to take
immediately such steps as might
be reasonable in order to
mitigate the loss which he
otherwise would have suffered;
and when he decided to use the
caterpillar for his business so
long as it was available for use
and no other vehicles of
comparable size were available
it could hardly be said that he
acted unreasonably in the
particular circumstances. I do
not think that the appellants'
counsel's contention against the
judge's finding in this regard
could be right. No other
vehicle of the same class as the
respondent's equipment was
offered to the respondent by the
appellants. It is in my opinion
quite immaterial whether the
caterpillar was too costly as a
substitute for the Fordson
tractor and the G.M.C. lorry.
What matters is that those
vehicles were unobtainable
whilst the respondent's timber
felling business must go on”
In the appeal before us counsel
for the appellant argued that
the respondent is under a duty
to mitigate its loss and failing
that the trial and appellate
courts respectively ought to
have limited the award of
damages. He referred to the case
of British Westinghouse
Electric and Manufacturing Co.
v. Underground Electric Railways
Co. of London [1912] A.C. 673 at
689 where Lord Haldane said:
“The fundamental basis is thus
compensation for pecuniary loss
naturally flowing from the
breach; but this first principle
is qualified by a second which
imposes on a plaintiff the duty
of taking all reasonable steps
to mitigate the loss consequent
on the breach, and debars him
from claiming any part of the
damage which is due to his
neglect to take such steps.”
The appellant formulated this
argument in ground (d) of his
ground of appeal that: (d) the
holding that the plaintiff could
not have mitigated its losses is
not supportable by the
evidence.” He stated further in
his additional ground of appeal
(A) that: “The dismissal of the
appellant’s contention that the
respondent failed to minimize
its losses is not supportable by
law”
On the issue of mitigation, the
trial court held at page 215 of
the record that:
“However the onus is on a
defendant to show that a
plaintiff failed to mitigate.
Plaintiff has led sufficient
evidence to convince me that for
the plaintiff to have gone
through the additional procedure
for drying the yams, repacking
them into dry cartons,
re-stuffing and re-lashing them
for loading unto the vessel
would have been an exercise in
futility and would be seen as
making excessive demands on the
plaintiff, which in the
circumstances would be
unreasonable. I will accordingly
dismiss the defendant’s
mitigation plea.”
At the Court of Appeal their
Lordships also correctly stated
the law that the burden of proof
lies on the appellant to show or
prove that the respondent failed
or refused to take steps to
mitigate its losses. They
referred to the cases of
Payzu v. Saunders [1919] 2 K.B.
581 at 585 C.A., Roper v.
Johnson [1873] L.R.S.CP. 167 at
181-182 and Attisogbe v.
Post and Telecommunications
Corporation [1995-96] G.L.R.
582.
The court however held per
Kanyoke J.A. at page 396 of the
record that:
“In the present case the
evidence on the record shows
that there were no opportunities
open to the plaintiff to take to
mitigate its losses. They could
neither dry the yams and repack
them for export nor arrange for
the sale of these yams locally.
I understand the inability of
the plaintiff to dry, repack and
export the yams because of the
trade agricultural legislative
restrictions in the USA
concerning such cargo. I can
also understand why the
plaintiff could not resell these
yams on the local market though
these yams had been certified by
the Ghana ministries of
Agriculture and Health to be in
good condition. The reason
simply is that the plaintiff was
no more in control of the 6,234
cartons of yams. These cartons
of yams were in the custody and
control of the defendant and the
risk had passed to the
defendant. I think therefore
that the plaintiff had no
opportunity to take steps to
mitigate its losses. I think
that the defendant had not fully
discharged its burden to prove
that the plaintiff had an
opportunity to take steps to
mitigate its losses but it
failed to do so. The plaintiff
did act reasonably and prudently
in the circumstances in failing
to mitigate its losses.”
The reasoning of the Court of
Appeal can be summarised as
follows that the respondent had
no opportunity to take steps to
mitigate its losses, due to (i)
the trade agricultural
legislative restrictions in the
USA concerning such cargo, and
(ii) the fact that respondent
was no more in control of the
6,234 cartons of yams.
I have a bit of difficulty to
accept the reasoning of their
lordships. The “trade
agricultural legislative
restrictions in the USA”
referred to above do not forbid
the export of yams that had been
wet, dried and repacked for
export. From PW1’s own evidence,
the trade agricultural
legislative restrictions in the
USA only required that and I
quote: “any agricultural product
coming form abroad must be
fumigated… and the chemical that
is used is Methyl Bromide. If
you fumigate wet yams with
Methyl Bromide they will rot.”
She said her company has had
such an experience before, so
she could not have dried and
repackaged and exported the wet
yams as they would eventually
rot. This may be a reasonable
explanation for not exporting
the wet yams.
However this was not the only
option left for the respondent
to minimize its loss. The
respondent had the other option
to sell the yams on the local
market. In the normal course of
commerce and business, it is
reasonable and common sense to
expect the respondent to have
acted prudently and allowed its
agents or suppliers to sell the
yams on the local market. The
quality of yam is not affected
if wet. Yam is not a soluble
commodity like sugar, the value
of which would depreciate
considerably, if wet. Nor is it
like cement, which no one will
like to buy or stock when it is
wet unless he is going to mix it
immediately for use since it
would cake and be of no use. At
a much later date after the
events in this case, the
Ministries of Agriculture and
Health certified that these yams
were still in good condition. It
is my considered opinion that
the wet yams could have been
sold on the local market without
much effort of going through the
process of pre-drying. It is not
unusual for exporters to sell
their perishable goods on the
local market when there is no
available freight transport. Yam
has a very ready market in Accra
and Tema.
The Court of Appeal’s reasoning
that the respondent could not
sell the yam on the local market
was not due to the fact that
there was no ready market for
them but that the respondent had
no control over the yams. The
flaw in this reasoning is that
contrary to what the learned
judge held, the legal title in
the goods still remained in the
appellant. The yams were still
the property of the respondent
despite the fact that they had
been stacked in preparation for
loading at the port and the
defendants had failed to load
them on the ship.
Counsel for the respondent
acknowledged that the respondent
was obliged to mitigate its loss
but that it was not under any
obligation to do anything than
in the ordinary course of
business. He added that it was
the duty of the appellant to
prove that the respondent failed
to mitigate its loss but the
respondent failed to discharge
this onus. He referred to the
case of Attisogbe v. Post and
Telecommunications Corporation.
Supra.
Counsel’s submission is a sound
proposition of the law, and it
was the duty of both the trial
court and the appellate court to
assess the evidence before it
whether the defendant had
discharged this onus. Counsel
for the appellant on the other
hand submitted that the holding
that the plaintiff could not
have mitigated its losses is not
supportable by the evidence.
Is there such evidence? From the
cross examination of PW1, I find
that there is sufficient
evidence that the appellant
asked the respondent to salvage
some of the yams for export as
one of her suppliers by name
Senkyire had done so and had
exported 800 cartons but she
refused. It was clear that she
was not prepared to touch the
wet yams nor allow her suppliers
to touch the yams.
At pages 80 to 81 of the
record, when PW1 was pressed
further in cross -examination
that:
“Keddy: My Lord I don’t know
that. I was talking about
mitigation and she is talking of
something else. You see what
I am saying Miss Harrington is
that if your suppliers have been
allowed to take the yams, dry
them and sold them on the local
market they could have cut down
any losses that [Emphasis
mine]
Briggette: But when we
delivered the yams to port in
care of Delmas, they were in
excellent condition for export.
So what you are suggesting is
that we would still have
sustained losses because of the
negligence on the part of
Delmas.” [Emphasis mine]
There is no doubt that the
respondent would have incurred
losses by selling the yams in
Ghana instead of selling them
for profit at a higher price in
dollars in the USA. However it
is reasonable to expect that a
plaintiff might spend money in
mitigating its loss, and the law
recognizes that by compensating
a plaintiff for such extra loss
or expense. “Where a plaintiff
incurs loss or expense by taking
reasonable steps to mitigate the
loss resulting from the
defendant’s breach the plaintiff
may recover this further loss or
expense from the defendant” See
Chitty on Contracts vol.1
par 1482, and R.T. Briscoe
(Ghana) Ltd. v. Boateng
supra. I therefore agree with
the submission by counsel for
the appellant that the fact that
the respondent would have
incurred extra losses did not
absolve it from mitigating its
losses.
From the evidence I find that
the appellant has been able to
discharge the onus that the
respondent could have reasonably
minimized its losses but it
refused. I find that the refusal
by the respondent to allow its
suppliers and agents to collect
and sell the yams on the local
market to be unreasonable in the
circumstances. Accordingly, I
hold that both the trial and
appellate court erred in holding
that the appellant had not fully
discharged its burden to prove
that the respondent had an
opportunity to take steps to
mitigate its losses but it
failed to do so. Since the
respondent failed to minimize
its loss, the quantu
The respondent is therefore
entitled to nominal damages
only.
S. O. A. ADINYIRA (MRS)
JUSTICE OF THE SUPREME COURT
COUNSEL:
Mr. Justin Amenuvor for
Appellants.
Mr. Ace Annan Ankuma with Ms.
Brenda Aikins for Respondents
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