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JUDGMENT
AKUFFO, JSC:
This is an appeal from the
judgment of the Court of Appeal
dated 9th December,
2005, which upheld a judgment of
the Circuit Court dated 8th
December, 2003 in favour of the
Respondents herein.
Brief Background
The Appellant is a missionary of
Korean nationality and was at
all material times resident in
the Tema Metropolitan area. The
1st Respondent is the
Pastor of the 2nd
Respondent, a church located in
Tema. According to the
Respondents, the Appellant
promised to raise funds for the
2nd Respondent whilst
on a projected trip to Korea.
Prior to his departure, the
Appellant, with the members of
the church as participants,
produced a video film, which
depicted members of the church
living in the Ashaiman Community
in abject poverty and
degradation. The purpose of the
video was to curry the sympathy
of prospective Korean
benefactors and foster their
generosity. Upon his return from
his Korean trip, the Appellant
made an open declaration to the
church that the said funds had
been so raised from a
benefactor. The Appellant,
however, did not disclose the
quantum of the monies he had
collected; nor did he hand over
any such fund to the respondent
church, but retained the same in
his own bank account. He then
used part of it to acquire the
land in dispute herein.
Subsequently, the pastor of the
church, Ben Adjei, together with
the church, acting by its
trustees, sued the Appellant in
the Circuit Court for a
declaration of title to the land
in dispute, recovery of
possession, perpetual
injunction, an order for
accounts and other orders. The
Circuit Court granted to the
Respondents the reliefs claimed,
except the one for accounts. The
Appellant, thereupon, appealed
to the Court of Appeal upon the
sole ground that the judgement
was against the weight of the
evidence. The Court of Appeal
affirmed the decision of the
Circuit Court, and dismissed the
appeal. The Appellant then
appealed to this court upon no
less than 8 grounds which for
the sake of brevity may be
summed up as follows:-
a. Taking into account the
claim and evidence in the
matter, the 1st
Respondent herein had no locus
standi in the suit and should
have been struck out as a party
thereto.
b. Since the reliefs
sought by the respondents in
their suit against the Appellant
‘involved the application of
principles of trusts or equity’,
the Circuit Court had no
jurisdiction to entertain the
claim.
c. The claim against the
Appellant was a claim by a
volunteer to enforce a promise
to make a gift and, therefore,
could not be maintained.
d. To the extent that the
promised gift related to funds
not in the possession of the
Appellant at the time of the
promise, the promise was one to
give non-existent future
property and, therefore,
unenforceable.
e. Since the promise did
not quantify how much money was
to be raised for the 2nd
Respondent, it was void for
uncertainty and, therefore,
unenforceable.
f. Since the defence was
that the money raised was for
general missionary work in
Ghana, the trial and appellate
courts erred in ‘failing to
raise and consider’ the issue of
whether the funds were raised
for such general purposes or
specifically for the 2nd
Respondent.
g. The trial and appellate
courts also erred in not
specifying whether their
conclusion that the land was
purchased in trust for the 2nd
Respondent was founded on the
centre’s ownership of the money
or on the Appellant’s abuse of
his position in the 2nd
Respondent church, to purchase
the land for any person other
than the 2nd
Respondent.
Although there was an 8th
ground set down in the notice of
appeal, the same was not touched
upon in the statement of case
and consequently we will not
take that ground into any
consideration in this judgment.
In our view, this appeal raises
the primary issue of whether or
not the Circuit Court had
jurisdiction to entertain the
action before it, and the
secondary issue of whether, if
the court had jurisdiction, it
and the Court of Appeal properly
applied the applicable
principles of law and equity in
determining the dispute.
Since jurisdiction is always a
fundamental issue in any court
action, we shall first deal with
the question of whether or not
the Circuit Court had
jurisdiction to apply principles
of trusts and equity in the
determination of matters before
it and to grant the equitable
reliefs it did. However, before
proceeding further, it is
important for us to note that it
is in this court that, for the
first time in the course of the
litigation of this matter, the
Appellant raised this question
of the trial court’s
jurisdiction. Taking into
account the nature of the claims
endorsed on the writ before the
Circuit Court, it is rather
puzzling that neither in the
Circuit Court nor in the Court
of Appeal did the Appellant
raise this matter. We deplore
such lack of diligence which
could lead to wastage of the
time and other resources of the
court and parties, since
jurisdiction is fundamental to
the validity of a court’s
judicial activity. Fortunately,
in this case, it is our view
that the Circuit Court’s
jurisdiction in the matter
before it was unquestionable.
Jurisdiction of the Circuit
Court
In support of his ground of
appeal challenging the Circuit
Court’s jurisdiction, the main
thrust of counsel’s argument on
behalf of the Appellant was
that, even though the Courts
Act, 1993 (Act 459)(as revised)
gives the Circuit Court
jurisdiction in all causes and
matters involving the ownership,
possession, occupation of, or
title to land, this jurisdiction
does not include jurisdiction to
entertain a cause or matter the
determination of which involves
the application of rules of
equity or principles of trusts,
such as in the instant case.
Section 42(1) of the Courts Act,
which governs the civil
jurisdiction of the Circuit
Court, states that:-
“(1) The civil jurisdiction of a
Circuit Court consists of
(a) an original jurisdiction in
civil matters
(i)
in personal actions arising
under a contract or a tort, or
for the recovery of a liquidated
sum of money, where the amount
claimed is not more than one
hundred million cedis;
(ii)
in actions between a landlord
and a tenant for the possession
of land claimed under a lease
and refused to be delivered up;
(iii)
in causes and matters involving
the ownership, possession,
occupation of or title to land;
(iv)
to appoint guardians of infants
and to make orders for the
custody of infants;
(v)
to grant in an action instituted
in the Court, injunctions or
orders to stay waste, or
alienation or for the detention
and preservation of property
which is the subject matter of
that action, or to restrain
breaches of contract, or the
commission of a tort;
(vi)
in claims for relief by way of
interpleader in respect of land
or any other property attached
in execution of an order made by
a Circuit Court;
(vii)
in applications for the grant of
probate or letters of
administration in respect of the
estate of a deceased person, and
in causes and matters relating
to the succession to property of
a deceased person, who had, at
the time of death, a fixed place
of abode within the area of
jurisdiction of the Circuit
Court, and the value of the
estate or property in question
does not exceed one hundred
million cedis; and
(b) any other jurisdiction
conferred by this Act or any
other enactment.
In his statement of case,
counsel for the Appellant
contended that, had the intent
of section 42(1)(a)(iii) of the
Courts Act been to confer on the
Circuit Court equitable
jurisdiction in all land
matters, it would not have been
necessary to specify in Section
42 (1)(a)(v) that in all causes
of action to come before the
Circuit Court, it would have
jurisdiction to grant the
equitable remedy of injunction.
According to counsel, therefore,
having specified only injunction
as the remedy in equity which
the Circuit Court could grant,
it cannot be said that other
equitable remedies, such as
those arising in the law of
trusts, which were not
specifically mentioned, could be
granted by the Circuit Court
even in land disputes brought
before it. Counsel urged that
the mere existence of
jurisdiction in the Circuit
Court to deal with causes or
matters involving disputed
ownership, possession,
occupation of, and title to land
would not, without more, include
or imply jurisdiction in equity
to deal with such causes or
matters by applying equitable
principles of trusts.
Furthermore, counsel maintained
that, because there was no
specific mention of a Circuit
Court jurisdiction in equity in
the Courts Act, such
jurisdiction cannot be
reasonably implied. This,
counsel argues, flows from the
fact that before the English
Judicature Acts of 1873/1875,
the English common law courts
possessed jurisdiction to deal
with causes or matters involving
disputed ownership, possession,
occupation of, or title to land,
yet had no jurisdiction to grant
equitable relief by way of
injunction or trusts law in such
disputes. It was only by virtue
of specific statutory provisions
that the common law courts in
England became empowered to
apply principles of equity, and
grant equitable reliefs. That
being so, according to counsel,
the Circuit Court, without
express statutory power, has no
jurisdiction to apply equitable
principles of injunction and
trusts as it did in this case,
neither could such jurisdiction
be reasonably conferred upon it
by implication.
It is, however, noteworthy that
the Courts Act does not
expressly give “equitable
jurisdiction” to the High Court
either, even though counsel
conceded that the High Court has
such jurisdiction. Counsel
sought to explain the “equitable
jurisdiction” of the High Court,
in contrast to that of the
Circuit Court, on the incorrect
ground that the High Court has
unlimited jurisdiction.
Additionally, counsel contended
that although the fused
jurisdiction of the English High
Court was derived from the
Judicature Acts, when this
jurisdiction was transplanted
into this country, it was not
extended to courts below the
High Court. Consequently, the
Circuit Court, which is a court
below the High Court, did not
have jurisdiction to entertain
the case in question inasmuch as
its determination involved the
application of principles of
equity.
Counsel also contended that the
jurisdiction given to the
Circuit Court by the Courts Act
in respect of causes and matters
involving the ownership,
possession, occupation of, or
title to land did not confer on
the court jurisdiction to
entertain causes and matters
involving the ownership,
possession, occupation of, or
title to other properties such
as money (e.g. the funds the
Appellant raised in Korea). He
argued that, since the
jurisdiction of the Circuit
Court is in causes and matters
with respect to land and not
other properties such as money,
then that part of the claim
before the Circuit Court
relating to the ownership of the
money the appellant raised in
Korea was outside the
jurisdiction of the Court,
particularly since the
determination of the ownership
of the said money had to involve
the application of equitable
principles.
The position of the law in Ghana
is well established that every
court in Ghana is a court of
both common law and equity. As
far back as 1976, the Court of
Appeal pronounced upon the
position of the law on the
fusion of jurisdiction in law
and equity, in the case of
Bou-Chedid v. Yalley
[1976] 2 GLR 258. As the
learned Archer J.A. (as he then
was) pointedly expressed
himself, at page 264 of the law
report:-
“Notwithstanding the
vicissitudes of the courts in
Ghana since they were
established about a century ago,
no one will venture to suggest
that throughout this period
separate courts have
administered the common law and
equity in Ghana. It
follows that the plaintiff as an
equitable owner in possession
can maintain an action in
trespass at common law in any
court of law in Ghana.”
The Appellant’s position on this
issue is further flawed by the
fact that, all courts of Ghana
are expected to apply the laws
of Ghana, which by virtue of
Article 11(1) of the
Constitution, comprise of :-
“(a) this Constitution;
(b) enactments made by or under
the authority of the Parliament
established by this
Constitution;
(c) any Orders, Rules and
Regulations made by any person
or authority under a power
conferred by this Constitution.
(d) the existing law; and
(e) the common law.”
Clause (2) of this article
continues by stipulating that:-
“(2) The common law of Ghana
shall comprise the rules of law
generally known as the common
law, the rules generally known
as the doctrines of equity and
the rules of customary law
including those determined by
the Superior Court of
Judicature.”
Additionally under Section 17(1)
of the Interpretation Act, 1960
(C.A. 4) it is provided that:
“17. (1) The common law, as
comprised in the laws of Ghana,
consists, in addition to the
rules of law generally known as
the common law, of the rules
generally known as the doctrines
of equity and of rules of
customary law included in the
common law under any enactment
providing for general
application.”
Hence, once the Circuit Court
has jurisdiction, under the
Courts Act, in causes and
matters in respect of land it
may, in the exercise of such
jurisdiction, apply any law in
force in Ghana, including the
common law, principles of
equity, Acts of Parliament,
customary law, etc, in the
determination thereof. Thus it
was not necessary, under Section
42 (1) of the Courts Act to make
specific mention of the Circuit
Court’s equitable jurisdiction
since such jurisdiction
necessarily flows from the
provisions of the Constitution.
Indeed such
jurisdiction has always attached
to all courts of Ghana, for the
principles of equity have, since
the inception of the Republic of
Ghana, formed part of its laws.
To paraphrase the learned Archer
J.A. (as he then was) in the
Bou-Chedid case (supra),
every court in Ghana is a court
of both common law and equity,
with jurisdiction to administer
both common law and equity. In
other words, we do not have
separate courts of common law
and courts of equity in Ghana.
Both jurisdictions are vested in
every court in Ghana. Any other
interpretation of Section
41(1)(a) of the Courts Act,
which would result in the ouster
of the Circuit Court’s
jurisdiction in equity, will
clearly be inconsistent with the
provisions of Article 11(1) of
the Constitution.
It is noteworthy that whilst one
may speak of the jurisdiction of
a court in a cause or matter, or
as to the original, appellate or
supervisory jurisdiction of a
court, we do not speak of the
jurisdiction of a court as to
which of the laws of Ghana it
has the power to apply in a
cause or matter competently
before it. Hence, as an example,
even in the lowest court, it is
expected that the provisions of
the Constitution be observed and
adhered to, although there are
applicable limitations as to
proceedings to enforce or
interpret the Constitution. Thus
although in the enforcement of
an individual’s fundamental
rights and freedoms enshrined in
Chapter 5 of the Constitution,
article 33 gives original
jurisdiction to the High Court,
it does not mean that in
determining a matter before it a
District Court may not apply a
relevant provision of the
Constitution to uphold human
rights or freedoms.
Finally, on the issue on
jurisdiction, counsel argued
that since the jurisdiction of
the Circuit Court under section
42(1)(a)(iii) of the Courts Act
is over causes and matters with
respect to land and not other
properties such as money, then
that part of the claim before
the Circuit Court, relating to
the ownership of the monies the
Appellant raised in Korea, was
outside the jurisdiction of the
Court. The Respondents did not
make any direct claim for the
recovery of any monies
(liquidated or otherwise) from
the Appellant, although the
Circuit court does have
jurisdiction under section
42(1)(a)(i) in actions for
recovery of a liquidated sum.
Admittedly, in order for the
court to determine the issue of
title the court made findings
relating to the ownership of the
funds with which the land was
purchased. However, it is our
view that, in the circumstances
of this case, counsel’s
contentions in this connection
are irrelevant since the issue
arose collaterally and it was
necessary for the court to
determine it in the course of
determining the issue of title
to the land. Indeed, this does
not raise any jurisdictional
question whatsoever.
In conclusion, therefore, the
Circuit Court had jurisdiction
to entertain the Respondents’
action.
Capacity of the first Respondent
In Ground One of the Notice of
Appeal, the Appellant challenged
the locus standi of the pastor
of the 2nd Respondent
church to be party in the case.
The Court of Appeal reached the
conclusion that, on the evidence
on record, the beneficial
ownership or interest in the
property and/or funds in
question vested in the 2nd
Respondent, and no one else. As
is clear from the record, the 2nd
Respondent is a company limited
by guarantee and incorporated
under the Companies Act, 1963
(Act 179)(as revised). As a
result, pursuant to Section 24
of the Companies Act, it has all
the powers of a natural person
of full capacity. As such, it is
a fully-fledged legal entity,
with a personality separate from
the natural persons forming it,
and with capacity to sue and be
sued in its own name. In law,
the members of a company have no
direct proprietary rights over
its assets, the company being
the sole owner of its assets
(see Majdoub & Co. Ltd. v. W.
Bartholomew & Co. Ltd. [1962] 1
GLR 122). Since it is patent
from the record that the subject
matter of the action was being
claimed as the Church’s asset
rather than the joint property
of the church and the 1st
Respondent, there was no reason
why the 1st
Respondent should have been
included as a co-claimant. From
the record, Pastor Ben Adjei
really has no business in the
suit, since he does not make any
claim of interest or right in
the subject matter of the suit.
The 2nd Respondent
church is capable of handling
its own litigation and the 1st
Respondent is an unnecessary
party.
Under Order 4 Rule 5(2) of
the High Court (Civil Procedure)
Rules, 2004 (CI 47) the
trial court has the power, at
any stage of the proceedings,
either suo motu or on
application, to ‘order any
person who has been improperly
or unnecessarily made a party or
who for any reason is no longer
a party or a necessary party to
cease to be a party’. Since,
by virtue of Section 2(4) of the
Courts Act, this court has the
power, in an appeal before us,
to make orders that the lower
court could have made, we hereby
order the 1st Respondent struck
out of the action and
accordingly, he ceases to be a
party herein.
The 1st Ground of
Appeal thus succeeds, although,
effectively, it does very little
to advance the Appellant’s case
since the removal of the 1st
Respondent as party to the
matter does not in any way
affect the proceedings in the
case up to now viz-a-viz the
rights and interests of the
rightful parties therein.
Relative Positions of Appellant
and 2nd Respondent
In arguing Ground 3 of the
Notice of Appeal, counsel for
the Appellant contended that the
Appellant was merely a
“gratuitous promissor” and, as
such, he was not accountable to
the 2nd Respondent,
which is a “bare
promissee/volunteer”, having
furnished no consideration for
the promise made to it. However,
this is not borne out by the
record. The pre-departure
promise to raise the said money
in Korea was made expressly by
the Appellant to the church. It
is also on record that the said
money was raised in the name of
the church. Again, it is on
record that the said money was
given by a philanthropist, one
Rev. Yei Jae Im, rather than the
appellant raising the said money
from his own efforts. More
significantly, there is
unchallenged evidence on the
record that the Appellant, on
his return from Korea, made an
open declaration to the 2nd
Respondent (i.e. before a whole
congregation of the church, an
assembly of God with all the
liturgy that went with it) that
the said money had been so
raised for the benefit of the
church. The foregoing will
certainly not make the appellant
a mere “gratuitous promissor” in
law.
The 2nd Respondent
cannot be said to be a “bare
promissee” in law either. The
2nd Respondent was entitled in
law to have legitimate
expectation, based on the
pre-departure promise the
Appellant made assuring it, that
the monies to be raised were for
its benefit. Thus, when the
Appellant made the open
declaration to the church, after
his return from Korea, that the
said money had been raised, the
2nd Respondent was
entitled in law to have the
settled assurance that the said
money had been so raised for its
benefit. Clearly then, counsel’s
description of a
“promissor-promissee”
relationship between the parties
in the terms of an ordinary
contract is unacceptable. The
role or position of a very
important player, the
philanthropist in the person of
Rev. Yei Jae Im, would be
completely glossed over if we
were to take the simplistic
view, advocated by counsel, that
the relationship between the
parties is one of a bare and
unenforceable
“promissor-promissee” agreement.
In reality, what we have here is
a tripartite relationship
involving a philanthropist, the
Appellant and the 2nd
Respondent. This situation
simply does not fit a
relationship between a promissor
and a promissee in an ordinary
contract. The relationship that
fits the tripartite situation
presented by the facts of this
case is to be found, not in
contract law but, in the
equitable doctrine of trusts.
According to B. J. da Rocha and
C. H. K. Lodoh, in their book ‘Ghana
Land Law and Conveyancing’ (2nd
Edition) at pages 105-106,
trust is a concept in equity
whereby one person (called “the
trustee”) holds the nominal or
legal title in property which
has been made available to him
by another person (called “the
settlor”) for the benefit of
some other person (called “the
beneficiary”). In this case, it
is clear that the
philanthropist, Rev. Yei Jae Im,
who provided the money, is “the
settlor” (the one who created
the trust). The 2nd
Respondent, for whose benefit
the money was provided, is “the
beneficiary” (the cestui que
trust). The Appellant, who in
equity stands between the
settlor and the beneficiary, is
“the trustee”. The true position
of the Appellant is, in equity,
that of a trustee, not a
“gratuitous promissor”. The 2nd
Respondent is the beneficiary
under the trust and not a “bare
promissee”.
Regarding counsel’s contention
that the 2nd
Respondent was, in equity, a
volunteer, Philip H. Pettit in
his book ‘Equity and the Law
of Trusts’ (5th
Edition) at page 87 explains
the term “volunteer as”
follows:-
“A beneficiary under a trust is
a volunteer unless either he has
provided valuable consideration
in a common law sense, or he is,
as it is said, within the scope
of the marriage consideration.”
Osborn’s Concise Law Dictionary
(8th Edition) at
page 345 defines a volunteer
as a person who is an object of
bounty under a will or
settlement as opposed to one who
gives valuable consideration.
Therefore, a volunteer under a
trust is a beneficiary who has
provided no valuable
consideration in respect of the
trust and who is not within the
confines of marriage.
The significance of a volunteer
in the law of trusts is seen in
terms of whether the trust is
completely or incompletely
constituted. A trust is
completely constituted when the
trust property is vested in the
trustees for the benefit of the
beneficiaries. The classic
statement of the law as to what
is meant by complete
constitution (or perfect
creation) of a trust is to be
found in the judgment of Turner
LJ in the leading case of
Milroy v. Lord (1862) 4 De GF &
J at pages 274-275 of the
report as follows:
“…in order to render a voluntary
settlement valid and effectual,
the settlor must have done
everything which, according to
the nature of the property
comprised in the settlement, was
necessary to be done in order to
transfer the property and render
the settlement binding upon
him.”
According to da Rocha and
Lodoh’s ‘Ghana Land Law and
Conveyancing’ (supra), a
trust may be completely
constituted in two ways:
(a)
by the settlor conveying
the property to the trustees; or
(b) by the settlor declaring
himself to be a trustee for the
intended cestui que trust.
Until the property is conveyed
to the trustee or the settlor
declares himself as a trustee
for the intended cestui que
trust, the trust is incompletely
constituted. The effect of an
incompletely constituted trust
is that, only beneficiaries who
have given value (not
volunteers) can enforce it and
the court will only perfect the
trust in favour of the one who
has given value, following the
maxim: “Equity considers as done
that which ought to be done”.
The position, as stated in Re
Adlard [1964] Ch 29 and Ellison
v. Ellison (1802) 6 Ves. 656 at
662, is that equity will not
perfect an imperfect trust in
favour of a volunteer.
The effect of a completely
constituted trust, however, is
that, the beneficiary may
enforce it whether or not he has
given value. In his book
Equity and the Law of Trusts
(supra), Philip Pettit states at
page 89 as follows:
“If the trust is completely
constituted, the fact that a
cestui que trust is a volunteer
is irrelevant: he is just as
much entitled to enforce the
trust as a cestui que trust who
has provided consideration.”
The contrast between a
completely and an incompletely
constituted trust as regards
volunteers is clearly depicted
in the case of Jefferys v.
Jefferys (1841) Cr & Ph 138.
In that case, a father, by a
voluntary settlement, conveyed
certain freehold estates to
trustees in trust for the
benefit of his daughters. The
conveyance was complete. He
further covenanted to surrender
certain copyhold estates to the
trustees in trust for the
benefit of the same daughters.
The mode of conveyance of
copyholds was by surrender and
admittance. The conveyance in
respect of the copyhold estates
was, however, incomplete.
Subsequently, he devised part of
the same estates to his widow
who, after his death, was
admitted to some of the
copyholds. It was held that, as
to the freeholds, the trust in
favour of the daughters was
enforceable by them, since the
trust was completely constituted
by the complete conveyance
thereof to the trustees. But, as
to the copyholds, the trust was
not complete and, therefore, it
was unenforceable by the
intended beneficiaries, namely
the daughters.
From the facts of the instant
case, it appears that the church
has not given any valuable
consideration in respect of the
trust. Counsel may, therefore,
be right in referring to it as a
volunteer under the trust. The
position is that equity does not
assist a volunteer (see
Ellison v. Ellison) (supra).
However, this position is true
only when the trust is
incompletely constituted. Where
the trust is completely
constituted, it does not matter
whether or not the beneficiary
is a volunteer (see Re Adlard)
(supra).
From
the evidence on record, it is
very clear that the
philanthropist, Rev. Yei Jae Im,
completely vested the funds
raised in Korea (the subject
matter of the trust) in the
appellant as trustee, which
funds the appellant even kept in
his own bank account as the
legal owner. The trust in
question is, therefore,
completely constituted. Thus,
whether or not the 2nd
Respondent is a volunteer in
equity is irrelevant, the trust
having been completely
constituted or perfected. The
trust is, therefore, enforceable
by the 2nd
Respondent. Accordingly, Ground
Three of the appeal fails.
Nature
and Type of Trust Created
In connection with the 4th
and 5th Grounds of
appeal, Counsel’s arguments were
entirely based on the assumption
that the trust created is an
express trust. An express trust
requires the “three certainties”
of intention, subject matter and
objects to be valid. A trust can
be express or implied (resulting
or constructive) and, where it
has a public character, it can
be a charitable trust in which
case the cy-pres doctrine can be
applied to save the trust from
failing. The facts of this case
do not support the creation of
an express trust. The facts
clearly support the creation of
a constructive trust (an implied
trust). In the case of Saaka
v. Dahali [1984-86] 2 GLR 774,
at page 784, the learned
Taylor JSC explained
constructive trust as follows:
"A constructive trust arises
when, although there is no
express trust affecting specific
property, equity considers that
the legal owner should be
treated as a trustee for
another. This happens, for
instance, when one who is
already a trustee takes
advantage of his position to
obtain a new legal interest in
the property, as where a trustee
of leaseholds takes a new lease
in his own name. The rule
applies where a person, although
not an express trustee, is in a
fiduciary position…A person
receiving property subject to a
trust ....becomes a constructive
trustee if ... although he
received it without notice of
the trust, he was not a bona
fide purchaser for value without
notice of the trust, and yet,
after he had subsequently
acquired notice of the trust, he
dealt with the property in a
manner inconsistent with the
trust."
Also, da Rocha and Lodoh, in
Ghana Land Law and Conveyancing
(supra) explains constructive
trust at page pages 117-118 as
follows:
“A constructive trust is a trust
which arises independently of
the intention of the parties but
it is imposed by equity because
the circumstances demand that
the person holding the title to
the property should be
considered as a trustee. This
trust usually arises by
operation of equity where a
fiduciary relation exists. A
trustee or a person in a
fiduciary relationship is not
permitted to profit from his
position….”
From the foregoing, the
essential ingredients of a
constructive trust may be stated
as follows:
a. There must be no
express intentions of the
parties to create a trust (this
is because the intentions of the
parties are totally irrelevant;
there being no requirement for
an express trustee as in express
trusts, neither is there a
requirement for the parties to
be ad idem as in the law of
contract).
b. There must be in
existence a fiduciary
relationship.
c. The fiduciary
relationship must specifically
be in the context of trust such
as to make the fiduciary a
trustee in equity.
The above ingredients are all
borne out by the facts of this
case. The Appellant is not an
express trustee, for there is
nothing on record as to his
intentions to be a trustee. It
is on record, however, that the
Appellant kept the funds,
donated in Korea for the benefit
of the 2nd
Respondent, in his own bank
account as the legal title
owner. He, therefore, stands in
a fiduciary position because he
became a nominal owner or
controller of something that
does not belong to him, and
which he had collected in the
name of the church. According to
Osborn’s Concise Law
Dictionary (supra) a
fiduciary is a person who holds
a position of trust in relation
to another and who must,
therefore, act for that person’s
benefit such as a solicitor in
respect of his client. Inasmuch
as, in this case, a trust
(completely constituted) was
created, the Appellant became a
fiduciary who is a trustee in
equity over the funds, which he
used the name of the church to
raise in Korea, for the benefit
of the 2nd Respondent Church.
The Appellant, therefore, held
the funds in question on a
constructive trust for the 2nd
Respondent. A valid trust had
been created and, therefore, it
is enforceable.
Conclusion
Having arrived at the foregoing
conclusions, the remaining
grounds of appeal become quite
superfluous. A person in a
fiduciary position is not
permitted to profit from his
position (see Re Biss [1903]
2 Ch 40). The general
principle, as stated in the
locus classicus case of Re
Diplock’s Estate [1947] Ch 716
at pages 744-745, is that
whenever there is or has been a
fiduciary relationship, the
beneficial owner of an equitable
interest in property may trace
it into the hands of anyone
holding the property, except a
bona fide purchaser for value
without notice whose title is,
as usual, inviolable.
Once it is not a bona fide
purchaser for value without
notice who has acquired the land
in dispute, the money raised in
Korea for the benefit of the 2nd
Respondent is traceable in
equity to any hand whatsoever
and in any form it, or part
thereof, has been used to
acquire. Therefore, whatever has
been acquired by any monies that
are proven to be part of the
funds from Korea is deemed to be
for the benefit of the church.
This is a matter of law and
there was no need for either the
Circuit Court or the Court of
Appeal to make any particular
finding in that regard.
Consequently, except in respect
of ground one of the appeal, we
uphold the judgment of the Court
of Appeal and hereby dismiss the
appeal.
S. A. B. AKUFFO(MS)
( JUSTICE OF THE SUPREME COURT)
I
agree
DR. S. K. DATE-BAH
( JUSTICE OF THE SUPREME COURT)
I
agree
S. O. A. ADINYIRA (MRS)
( JUSTICE OF THE SUPREME COURT)
I
agree
ROSE OWUSU (MS)
( JUSTICE OF THE SUPREME COURT)
I agree
J.V.M. DOTSE
(JUSTICE OF THE SUPREME COURT)
COUNSEL:
JAMES AHENKORAH FOR THE
APPELLANT WITH GEORGE AMAGYEI.
CHARLES MBEAH FOR THE
RESPONDENTS.
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