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JUDGMENT
BENIN, J.A.:
The plaintiff is a
banking institution incorporated in Ghana. The 1st
defendant is a limited liability company registered in
Ghana to do business. The 2nd defendant is the Managing
Director of the 1st Defendant Company. The co-defendant
is the central bank of Ghana. Apart from the
co-defendant all the other parties at the trial court
are also parties to this appeal. The plaintiff’s case at
the trial court was very simple: that the 1st defendant
owed it some money arising from its account which it
operated with the bank. The facility which the plaintiff
granted the 1st defendant and which had resulted in the
indebtedness was guaranteed by the 2nd defendant, hence
the reliefs sought against the defendants jointly and
severally. In their statement of defence, the defendants
raised several queries against the claims by the
plaintiffs and went on to charge fraud against the
plaintiff, claiming, inter alia, that its account was
manipulated by the bank. Several issues were raised,
testified to, argued and decided upon by the trial
court. But in this appeal, one transaction only appears
to be in issue. It concerns the transfer of the sum of
FFR. 465,120 that the plaintiff transferred to Lome,
Togo, ostensibly to pay for a debt that the 1st
defendant was said to be owing a company in Togo. Indeed
that transfer was only a part of larger sums of money
the plaintiff transferred to Togo to pay for 20,000 bags
of sugar that the company in Togo had imported for the
1st defendant. There appears to be no quarrel with the
transfer to pay for the present order; the problem
relates to the transfer to pay for the existing debt.
These transfers were effected through a bank in Lome
called
Ecobank, Lome, Togo,
and were intended for the company called ETS Confidence
Line, Togo, to whom the 1st defendant was indebted. It
turned out that this particular transfer was
subsequently ordered by the co-defendant to be cancelled
and the amount involved repatriated back to Ghana, which
order was duly carried out by the plaintiff. The issues
arising out of that transfer were: (i) whether or not it
was effected with the authorisation, apparent or
implied, of the 1st defendant; (ii) whether the transfer
was regular within the relevant laws, rules and/or
regulations of banking practice in the country; (iii)
whether the court below was justified in reversing the
interest charged by the plaintiff when the transfer was
cancelled and the sum involved repatriated back to the
country.
At this stage let me
briefly recount the facts. The 1st defendant placed an
order with Confidence Line, Togo, for the supply of a
quantity of sugar. The sugar was to be imported from a
firm in Europe and delivery was to take place through
the port of Tema in Ghana. The bankers of Confidence
Line, Togo, through which payment was to be effected was
Ecobank, Togo. Before the sugar could be sent to Ghana,
Ecobank Togo sent the shipping documents covering this
transaction to the plaintiff. And this singular act,
according to the defendants, compelled them (the
defendants) to deal with the plaintiff instead of the
defendants’ own bankers, the Social Security Bank Ltd.
in Ghana. It appears the defendants did not have funds
to pay for the supply, so they entered into a credit
arrangement with the plaintiff for an amount of some
¢200,000,000.00 which the plaintiff advanced to the 1st
defendant with guarantee from the 2nd defendant. It is
necessary to recount the events culminating in this
advance and the speed at which it was done. On 20th
June, 1990, the 1st defendant opened a corporate current
account with the plaintiff, with an initial deposit of
¢200,000.00, as per Exhibit B. A day after this, to be
precise on 21st June, 1990, the 2nd defendant
surrendered the deed on his landed property to the
plaintiff as security for any money the plaintiff might
advance to the 1st defendant. Sooner than later, this
advance was made to the 1st defendant on the 27th June,
1990. Indeed the terms of this advance were contained in
an offer letter by the plaintiff dated 27 June, 1990,
which was accepted by the 1st defendant that same day.
The terms and conditions of this offer letter which the
defendants accepted provide a critical insight into our
consideration of the issue whether the transfer of funds
from the 1st defendant's account by the plaintiff was
authorised by the former, as urged by the plaintiff and
found by the trial court. These are spelt out in Exhibit
E. for its full force and effect, I propose to set out
Exhibit E. it provides:
“Dear Mr. Ofei,
This will confirm that
we are prepared to make a facility available to you
under the following terms and conditions:
BORROWER: Confidence
Line, Ltd.
FACILITY: Secured
overdraft line.
AMOUNT: The cedi
equivalent of FFR 2,941,120 plus ¢66 million (approx.
total amount, ¢240 million.)
LENDER: Ecobank
Ghana Limited.
PURPOSE: To finance
sugar import of 20,000 50kg. bags of white crystal EEC
No. 2 sugar from ETS Confidence Line, Lome and to
provide for all ancillary handling and duty expenses
associated with the above sugar import.
LOAN ADVANCES: Starting
at 24% per annum and increasing by ½% per annum every 2
weeks after the close of this facility.
FACILITY FEE: 1% flat
on ¢66 million of facility (¢660,000) payable in arrears
(latest date is at the expiration of facility).
EXPIRATION: The
facility will expire on 30/9/90 unless renewed by
lender.
SECURITY: 1. A lien on
the 20,000 50kg bags of sugar imported.
2. Mortgage on Mr.
Ofei's house at East Legon (value unknown)
SPECIAL CONDITIONS: 1.
Satisfactory agreement among Ecobank, Confidence Line
Ltd. and SGS Ghana, for SGS to provide collateral
bonding service.
2. All SGS'S service
charges shall be charged to the account of the borrower.
MISCELLANEOUS: Borrower
shall be responsible for all disbursements and legal
fees and expenses incurred in documenting this
facility.”
These terms and
conditions were to be spelt out in a detailed written
agreement and executed by the parties. The 1st
defendant, as said earlier, accepted these terms and
conditions. The record shows that a formal agreement was
drawn up and executed on July 5, 1990, that is Exhibit
1. One thing is certain: the defendants do not dispute
that certain payments were made to them pursuant to this
agreement.
From Exhibit E, no
mention is made that the plaintiff was also to pay for
any prior existing indebtedness of the 1st defendant to
Confidence Line, Togo, or for that matter any creditor
of the 1st defendant. Where then did the plaintiff
obtain the 1st defendant's authorisation to pay money to
Confidence Line, Togo, through Ecobank, Togo, for a debt
existing prior to the agreement to purchase the 20,000
bags of sugar? I'll refer to the trial court's decision
on this issue and then go on to find out whether it is
supported on the evidence.
The trial court
referred to Exhibits D & E, and concluded that it is
“not true as intimated by the defendants that they were
compelled to accept the financial facility from the
bank.” Exhibit D is a deed of indenture in which
reference is made to the security of a house provided by
the 2nd defendant for money to be advanced to the 1st
defendant by the plaintiff. I entirely agree with this
conclusion, for there is no basis to suggest the 1st
defendant be compelled to enter into this agreement. I
need not go into any details. The trial court then
considered Exhibit 1, which, as I said, was duly
executed by the parties. It seems the terms and
conditions of Exhibit 1 were slightly altered from those
contained in the initial offer—Exhibit E—which the
defendants had accepted. In Exhibit 1 the amount of the
facility had been reduced from ¢240 million to ¢200
million. And apart from paying for the 20,000 bags of
sugar that had been placed on order, the facility was
also extended to cover the payment of an existing debt
owed by the 1st defendant to Confidence Line, Togo. The
total foreign exchange involved amounted to FFR.
2,941,120.00 made up as follows: FFR. 2,476,000.00 to
pay for the fresh import of sugar; and FFR, 465,120.00
to pay for the existing debt. It is the latter payment,
which is in issue here.
It must be observed
that all this while, the Ecobank, Togo, which was to
receive payment for and on behalf of Confidence Line,
Togo, had surrendered all the relevant documents on the
import to the plaintiff, thereby placing the plaintiff
in the position of a collecting bank: that is, the
plaintiff was to receive the payment for the fresh sugar
import from the 1st defendant and transmit same to Togo.
The trial court found that following the execution of
Exhibit 1; the plaintiff released all the shipping
documents to the defendants. The court also found that
the plaintiff transferred the total sum of FFR
2,941,120.00 to Ecobank, Togo. These findings are
supported on the evidence. The court added that these
sums “were transferred to Togo in line with the credit
agreement, Exhibit One Going by the terms of Exhibit
One, the transfer of the amount of FFR. 2,476,000.00
covering the value of the sugar imported cannot be
unlawful. By Exhibit One, the 1st defendant was aware
that that money had to be paid into the account of
Confidence Line, Togo, with Ecobank, Togo upon receipt
of the documents covering the sugar import.” There is no
problem with this transfer. The problem is with the
transfer that was later repatriated upon the order of
the co-defendant.
This is the sum of
FFR465, 120.00 transferred to Ecobank, Togo ostensibly
to pay for a debt owed by the 1st defendant to
Confidence Line, Togo, on a previous sugar import. The
trial court held that this transfer was irregular. I
shall talk about this shortly. Even a cursory reading of
Exhibit 1 does not indicate that the plaintiff was to
transfer funds to Togo; it only talks about an advance
made by the plaintiff to the 1st defendant of certain
sums of money. But it does appear that by releasing the
shipping documents to the defendants, the parties knew
and very well understood that this should be done
against payment, thereby entitling the plaintiff to
transfer funds from the 1st defendant's account to pay
for the import as well as the existing debt, the very
purpose for which the advance was made under Exhibit 1.
This view finds support from the 2nd defendant himself.
This is what he said in his evidence-in-chief. “The
unique purpose of the facility was to pay for 20,000
bags of sugar valued at FFR. 2,476,000.00. Then pay for
a previous import valued at FFR. 465,120.00. Both
amounts totaling FFR, 2,941.120.00 were to be paid
directly to our suppliers' account with Ecobank,
Togo...The M. D. of the bank (plaintiff) confirmed that
all the three debits were utilised to purchase auction
funds at the Bank of Ghana and the French Francs had
been transferred to our suppliers account in Lome. I
believed the M.D. of the bank that our suppliers’
account in Lome had been credited with the amounts they
bought from Bank of Ghana...I went to Lome to cheek the
supp1iers’ account and even though they said the money
had been transferred since 31-7-90 and 15-8-90, not a
single French Franc had been credited to our suppliers’
account up to the 25/9/90.” (The emphasis is mine.)
These facts were not in any dispute. The defendants’
only complaint therefore was that the transfer had not
actually reached their suppliers’ account as agreed.
Their complaint was not that they had not authorised the
plaintiff to transfer these sums of money from their
account to Lome. In effect the defendants were
complaining that there was no transfer at all. And by
Exhibit 1, clause (e), interest was awardable only upon
actual sums disbursed.
What was the
plaintiff’s response? The plaintiff’s representative,
Mr. Nartey, rejected the claims by the plaintiff. For
this purpose he tendered a fax—Exhibit N—received from
Ecobank, Togo. This fax shows that the total sum of FFR.
2,941,000.00 plus interest thereon was received before
the maturity date of 25-9-90 and had been credited to
the account of the defendants’ suppliers in Togo. There
is no indication as to what date this fax was sent, but
it was surely sent after 6th August, 1991, since it was
in response to one from the plaintiff dated the 6th of
August, 1991. There was no advice letter or slip issued
by Ecobank, Togo, to Confidence Line, Togo, that it had
indeed credited the latter's account with these sums of
money. Nor did it produce any statement of account
showing when, if at all, the credits were effected. On
the other hand, the defendants tendered in evidence
statements of account from Confidence Line, Togo,
showing that as at 31st December, 1990, these sums had
not been credited to its account in Togo. These are
Exhibits 5, 5A and 5B, even though these sums were
supposed to have been transferred and credited before
the maturity date of 25/9/90, as per Exhibit N.
The inferences to be
drawn from the accepted facts are these: the plaintiff
had the defendants’ authorisation to transfer the two
sums of money to Togo to credit the account of
Confidence Line, Togo. The transfer was duly made to
Ecobank, Togo, but, for reasons, which do not appear on
the record, the amounts were not credited to the account
of Confidence Line, Togo at least as at December 31,
1990. The trial court’s conclusion that the moneys were
credited to the account of Confidence Line, Togo, is not
supported by the evidence. On this same issue, as late
as 30th January, 1992, Confidence Line, Togo, wrote to
the plaintiffs—see Exhibit 26—complaining that its
account with Ecobank, Togo, had never been credited with
the sum of FFR. 465,120, and had never received any such
advice from its bankers. The inference from this letter
is that the sum of money to pay for the fresh import had
been credited to its account. So the position was that
there was something going on between the two sister
banks which was unknown to the defendants; because the
money transferred to Togo was not credited to the
appropriate account as agreed upon, yet the plaintiff
did not explain, notwithstanding the defendants’
complaint.
So only the two banks
knew where precisely the lodgement was being held. The
position then was that the plaintiff did not carry out
the terms of the defendants’ authorisation. That alone
entitled the defendants to treat the agreement as
abrogated and therefore will not be liable to pay for
service not rendered.
I'll move on to the
next question whether the trial court was justified in
its holding that the transfer of the sum of FFR.
465,120.00 were irregular. As stated earlier, the
co-defendant ordered that this sum of money be
repatriated back to Ghana. This order was complied with
by the plaintiff. The trial court did not assign any
reason why it considered the transfer irregular, apart
from saying the co-defendant ordered its repatriation.
From the pleadings of the co-defendant, it ordered the
repatriation because the 1st defendant failed to submit
all the relevant documents concerning that transaction
to it contrary to laid down regulations. And they
averred that “it was the failure of the defendants to
provide the relevant documents that made the transfer
irregular.” At the material time, the co-defendant was
engaged in selling foreign exchange by auction. And for
that purpose it had published certain guidelines—Exhibit
T—to regulate, participation in the exercise. By Regn.
8.4 thereof, all relevant documents evidencing the
particular transaction for which foreign exchange had
been acquired were to be submitted to the co-defendant
within 14 days of the transaction. The co-defendant's
decision on any violation of these regulations was
final. The defendants failed to submit the documents
covering their indebtedness to Confidence Line, Togo,
for which the sum of FFR.465,120.00 was transferred to
Ecobank, Togo, by the plaintiff. It was the contention
of Counsel for the plaintiff that it was the defendants’
failure to submit the documents to them for onward
transmission to the co-defendant that resulted in the
latter cancelling the transfer and ordering its
repatriation. This failure to submit the documents to
the co-defendant is what has been described by the
co-defendant as making the transaction irregular, which
term was also followed by the trial court. If that is a
term used in banking practice to describe the given
scenario as irregular, so be it. It should not be given
any narrow, technical, legalistic meaning. The import of
the regulation was that if within 14 days of the foreign
exchange transaction the relevant documents have not
been transmitted to the co-defendant, it is entitled to
characterise the transaction as irregular and go on to
impose any sanction it deemed expedient. Whatever
description was given to a default under the regulation
8.4 was of no moment. And this was what precisely
happened here. Thus the court's acceptance and reliance
on the term ‘irregular’ in describing the entire process
causes no harm if it's understood in the sense as used
by the bankers. And in my view that is the sense in
which it must be understood. Lawyers should not be
allowed to read technical legal meaning into what
otherwise appears to be a simple banking procedure. So
by saying the transaction was irregular all that the
co-defendant and the trial court were saying was that
the defendants failed to submit the documents to the
co-defendant within 14 days following the purchase of
the foreign exchange that was transferred to Togo. It
was this default by the defendants that led to the
irregularity, which thus compelled the co-defendant to
order the repatriation of the transferred funds. There
is thus no merit in the first ground of appeal and it's
accordingly dismissed.
The second ground of
appeal states that since the trial court found the
transfer was authorised by the defendants, it erred in
holding it was irregular. I am at a loss what counsel
meant by this. Is counsel saying that once an act is
authorised to be done, it necessarily means it is a
regular act? They are two clearly distinguishable
matters, which even any English dictionary will confirm.
In this case the defendants authorised the transfer, but
its performance was irregular in terms of the
co-defendant's regulations—Exhibit T. There is thus
nothing wrong with the trial court's conclusion. Indeed
this ground of appeal is otiose and inconsequential.
So following the
characterisation of the transaction as irregular, and
the order to repatriate same to Ghana, was the plaintiff
justified in retaining the interest charged for the
transferred sum, which was debited to the 1st
defendant's account? That is the subject of Ground 3
wherein the plaintiff contends that having held that the
defendants authorised the transfer to Togo, the trial
court erred in holding that the defendants were entitled
to a reversal of interest charged by the plaintiff on
the sum of FFR.465, 120.00. The defendants contend that
the money never reached its destination, as agreed, so
it was wrong to charge any interest against them. The
plaintiff is saying that since it was the default of the
defendants by not providing the documents that resulted
in the repatriation, the plaintiff was justified in
retaining the interest that had been charged to the
account after the transfer. The trial court's reason for
ordering a reversal of the interest was because the
transaction itself was declared irregular by the
co-defendant.
There are several
facets to this issue. To begin with, it was the
defendants who authorised the transaction so they would
be bound to pay interest thereon as stated in Exhibit 1.
Next, the irregularity complained of by the co-defendant
leading to the repatriation order was brought about by
the defendants themselves who failed to deliver the
relevant documents to the plaintiff for onward
transmission to the co-defendant. Thus it could be
argued that having created the situation whereby the
transaction had been declared irregular, the defendants
should be held responsible for the consequences of their
inaction. But there is yet another aspect of this
matter. The plaintiff and its principal, the Ecobank,
Togo, have been found not to have credited the account
of the defendants’ suppliers in Lome, namely, Confidence
Line, Togo, with the sum of FFR. 465,120.00, as agreed
upon between the plaintiff and defendants. So the
plaintiff was in breach of the agreement by
non-performance. Or could we talk of a failure of
consideration on the part of the plaintiff? It is my
view that so long as the plaintiff had not discharged
its obligations by getting the money to the account of
defendants' suppliers, which act the defendants had no
way of controlling, the plaintiff could not claim any
benefit by way of commission or interest on this
transfer. If the money had reached the account of
defendants’ suppliers as stipulated under their
agreement but had been repatriated as a result of the
defendants’ default in providing them with the
documents, then in such a situation the plaintiff would
have performed its side of the bargain thereby entitling
them to recover whatever they were entitled to. The
plaintiff could not be entitled to any benefit for any
part of the money that did not reach its anticipated
destination. It is for this reason that I agree that the
interest levied on this sum of FFR.465, 120.00 should be
reversed. I reject this ground of appeal accordingly.
In the result I'll
dismiss the appeal by the plaintiff. There was a cross
appeal by the defendants. This was based on the
dismissal of certain reliefs the defendants had sought
against the plaintiff by way of a counter-claim. I
propose to consider them seriatim in the manner as
argued before this court.
Relief (a)—General
Damages.
(i) The defendants’
contention was that the plaintiff, as banker, breached
its contractual and fiduciary duties to the defendants
resulting in damage. The charge is based on the fact
that the plaintiff is said to have opted to protect the
interest of Ecobank, Togo, as against that of the
defendants. The evidence on record is that the plaintiff
was acting as the collecting bank in place of Ecobank,
Togo. They were also the defendants’ bankers, albeit for
the purpose of this transaction. So Counsel charges the
plaintiff with conflict of interest. I do not see
anything in law or on the facts which precluded the
plaintiff from acting in such dual capacity. It was for
Counsel to highlight any loss or damage that this has
caused the defendants. It’s not enough to merely accuse
the plaintiff of acting in a dual capacity thereby
creating a conflict of interest.
(ii) Counsel referred
to the mandate for opening of the account with the
plaintiff which, he said, provided that for foreign
exchange transactions only certain officers of the 1st
defendant could give authorisation. These included the
2nd defendant only. But according to Counsel the FFR.
465,120.00 was transferred without any such
authorisation. Counsel's submission, I am afraid, flies
in the face of the evidence of the 2nd defendant himself
which I have quoted earlier in this judgment in which he
had stated the plaintiff was to transfer this sum of
money to their suppliers' account in Lome.
(iii) Counsel said the
transfers made by the plaintiff to Togo were in breach
of Exhibit 1 under which the 1st defendant rather than
the plaintiff undertook to ensure the use of the
overdraft for the stated purpose. I must only point out
that this is also contrary to the same evidence of the
2nd defendant, which I quoted earlier. In other words,
the defendants had, as it were, compromised their rights
under the agreement and endorsed the transfer of funds
from their account to Togo; their only complaint, as I
said earlier, was that the money was not deposited in
the accounts of their suppliers.
(iv) Counsel's
contention is that the plaintiff was in breach of
contractual duty by debiting the 1st defendant's account
with the sums transferred without notifying them
(defendants) in good time. And moreover, those sums were
not credited to the suppliers' account. I think that
since the defendants had authorised the transfer, as
found already, failure to notify them in good time
causes no harm. The plaintiff has already suffered the
penalty for its failure to credit the suppliers’ account
by having the interest it took being reversed on the
order of the court. Moreover the 1st defendant's account
was credited with the amount that was repatriated from
Togo.
(v) The plaintiff is
accused of transferring money to pay for 474 (out of the
20,000) bags of sugar, which never reached the 1st
defendant. I think this loss has been taken care of
already when the trial court found that the defendants
and co-defendant had reached a settlement whereby the
latter paid the former for this loss. There is no
specific appeal against this so as to compel this court
to investigate again whether in fact such a settlement
was reached.
(vi) This relates to
the failure to disclose to the defendants the rate at
which the plaintiff purchased the foreign exchange which
it transferred to Togo. I should think that the
authority to transfer funds to Togo to pay for sugar
imported from an EEC country, implied an authority to
purchase foreign exchange from the appropriate agency,
which at the time was the co-defendant. It was by
auction so the defendants would not have any control
over where to secure the foreign exchange and at what
rate. So the failure to disclose the rate could be
excused so long as the plaintiff exercised the
discretion which it had in the matter properly. The
defendants did not succeed in showing that the plaintiff
cheated them in this transaction or unjustly benefited
from the auction market.
(vii) The plaintiff is
accused of unjustifiably holding on to the 2nd
defendant’s title deeds even though the 1st defendant
did not owe the plaintiff. I think at the time the writ
was issued the plaintiff genuinely believed the
defendants owed them so much. It was the court, which
reversed the interest. The title deeds were used as
security for the advance and so long as any part of it
remained unpaid the plaintiff was at liberty to hold on
to them. When did the defendants completely pay off
their indebtedness to the plaintiff? When did the
plaintiff release the title deeds to them after they had
completed the re-payment, if at all? Did they make a
demand for their release which the plaintiff refused?
Did the refusal, if at all there was one, cause any harm
to the defendants? There was the need to establish
wrongful detention in the first place. If this was
established, the defendants would be entitled to some
damages, even if nominal, even if the wrongful detention
caused them no harm. Proof of harm may enhance the
quantum of damages that may be awarded. But there is no
sufficient evidence to establish these questions raised.
(viii) This is a
legitimate and valid point raised; that is, after the
sum of FFR. 465,120.00 had been repatriated from Lome
and its cedi equivalent had been credited to the
plaintiff by the co-defendant, the former failed to
credit same to the account of the 1st defendant
immediately or within a reasonable time. The relevant
testimony of the 2nd defendant was that the co-defendant
credited the cedi equivalent of the sum repatriated to
the plaintiff's account on 27-2-92. But it was not until
7 May, 1992, that the plaintiff credited the 1st
defendant's account with it. A letter from the
co-defendant—Exhibit 14—and the plaintiff’s advice
slip—Exhibit 15—were tendered in support. However
inefficient or busy the banking system might be, it
should not take more than three working days to credit a
customer's account with an amount that has arrived for
his credit. I'll therefore uphold this relief and hold
that the trial court erred in not granting the relief.
The plaintiff unjustifiably held on to the 1st
defendant's money thereby depriving them of the use of
it. The plaintiff will therefore be ordered to pay
damages in the sum of ¢ 2million to the 1st defendant,
taking into account the fact that the plaintiff must
have secured interest thereon for lending it out which
is their normal business to do. In other words, the
plaintiff received profit on this sum at the expense of
the customer. The amount involved being ¢19,542,109.83
is also taken into account.
Relief (e) This is
another way of re-arguing the previous point raised that
the transfer was unauthorised. This time the argument is
that the debits in the 1st defendant's account were
unauthorised and so should be reversed. But these debits
were the same or some of the amounts that were taken out
in order to purchase the foreign exchange. Or is the 1st
defendant saying that the amount with which the account
was overdrawn was not utilised for its own purposes?
That is the only time they can complain.
Relief (f). This has
been dealt with under Relief (a) viii above, so I need
not waste any more time on it, except to say the order
made thereunder is equally applicable here. No fresh
award will therefore be made.
Relief (i) Declaration
that all the transfers are irregular and unauthorised.
These issues have also been dealt with already when I
was considering the grounds of appeal raised by the
plaintiff.
The cross-appeal will
therefore be dismissed except the damages awarded under
Reliefs (a) viii and (f).
GBADEGBE, JA,:
I have had the benefit
of the judgement delivered by my brother Benin JA and I
much say that I am in entire agreement with the
conclusions reached on the appeals before us.
I wish, however to make
an observation in respect of the order joining the Bank
of Ghana in the course of the action in the court below
as a co-defendant. Although the record of proceedings
before us does not have the proceedings of the exact
date on which the order was made it appears that the
same was made by the court on the 5th of April 1993
pursuant to a notice of motion by the defendants. (see
in particular para 3 of the Defendants’ affidavit in
support of an application for judgement dated 1.6.93).
Again, the record clearly describes the said party as a
co-defendant. In my view, having regard to the fact that
from the proceedings there was nothing by way of
coterminous interest between the defendant and the bank,
the order for joinder as a Co-defendant was in error. In
fact, the proper thing which the defendant ought to have
done was simply to have joined the said bank as a
defendant to their counter-claim. I think the effect of
the rules when a party makes a counter-claim against the
plaintiff and seeks to have the said counter-claim or
any relief connected therewith along with another person
who is not a party to the proceedings is to simply add
the said party to his counter-claim. It repays for this
purpose to quote in extenso the provisions of order 15r
2(i) & (ii) of LN 140A as amended by LI.
1129.
“(1) where a defendant
to an action who makes a counter-claim against the
plaintiff alleges that any other person (whether or not
a party to the action) is liable to him along with the
plaintiff in respect of the subject matter of the
counter-claim, or claims against such other person any
relief relating to or connected with the original
subject-matter of the action, then subject to such 5(2),
he may join that other person as a party against whom
the counter-claim is made.
(2) where a defendant
joins a person as a party against whom he makes a
counter-claim, he must add that person's name to the
title of the action and serve on him a copy of the
counter-claim.”
The limitation placed
on the rule i.e. 6(1) by 5(2) only relates to the
discretion of the court in appropriate cases in ordering
separate trials where as a result of a counterclaim, a
person not a party to the action is joined as a
defendant by the counterclaim.
I think the point to be
noted here is that a counter-claim by a defendant which
must of necessity involve the plaintiff to be a
competent action which requires the determination of the
claim contained in the counter-claim or part thereof
along with some other person already not a party to the
action is a separate action which does not require the
court's aid in determining who the defendants to such an
action may be apart from the plaintiff. This error and
or defect in the proceedings in my view does not
occasion a fundamental irregularity such as to render
the proceedings ineffective. See (1) Omane vs. Poku
[1972]
1 GLR 295.
This aside, it appears
that by the express provisions or order 15r 6(1) of the
High Court rules LN. 140A as amended by LI 1129, the
proceedings subsequent thereto are not defeated and or
vitiated by the said misjoinder.
Accordingly, in the
exercise of the powers conferred onus by rule 31(b) of
CI. 19, let the record be amended in relation to the
Bank of Ghana by substituting defendant in place of the
co-defendant wherever the same appears in the transcript
before us. I think it proper also to set aside the
processes resulting in the order of joinder.
Additionally, I think
that the usage of final for the orders which were made
by the trial judge after the judgement was intended
actually to be “supplementary orders” and as such I
hereby correct the said defect in the proceedings. Let
the record as regards the said word also be amended
accordingly.
N. S. GBADEGBE
JUSTICE OF APPEAL
COUNSEL
ADUAMA OSEI FOR
PLAINTIFF/APP/RESPONDENT
FELIX NTRAKWAH FOR DEFENDANT/RESPONDENT/APPELLANT |
