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Auction sale
-
Contract of sale
-
Public auction – Auctioned
Property – Ownership of –
Damages for breach of contract
- Whether or not actioner to
delivery a five bedroom house
situate at Baatsona or open
market value of a comparable
house at the same location –
Whether or not the plaintiff is
an innocent purchaser for value
without notice who should not
suffer the negligence of the
defendant - Whether or not the
plaintiff is only entitled to
$40,000USD plus interest -
Whether or not he is entitled to
the current market value of the
house that was sold to him but
undelivered - Whether or not the
plaintiff is entitled to damages
for breach of contract
HEADNOTES
The Plaintiff
purchased a five-bedroom house
at a
public auction in 2002 that
was conducted by Adonten Mart at
the instance of the Defendants,
a leading financial institution
in the country and one of the
major players in mortgage
financing of houses. The House
that the Plaintiff purchased
from the defendants following an
advertisement of the auction
that the Defendants placed in
the local newspapers. after
having seen the advertisement on
the sale he went and inspected
the said house and found the
features all in place and
accordingly was satisfied with
the house. As a result, the
plaintiff successfully bid on
the property at the auction that
was conducted and succeeded in
securing the house with his bid
paid the price of the house, and
defendants also handed over the
property to him.
The Plaintiff however faced
resistance from the original
owner of the house, when he
attempted to move into the
house. This original owner,
successfully sued the
Defendants, the plaintiff and
the Auctioneer and claimed the
house back and retained the
rights as owner. This prevented
the plaintiff from occupying the
house he had bought with the
purpose of occupying. After the
Plaintiff failed to reach
agreement with the defendants on
the sudden turn of events, he
sued the defendants at the High
Court, Accra, the learned High
Court Judge found in favour of
the Plaintiff the Defendants
felt aggrieved and appealed the
decision of the High Court to
the Court of Appeal and weren’t
successful in their appeal
HELD
Since there has been no such
wrong application of the
principles of law involved or
the findings of fact, and
considering also that the Court
of Appeal in all material
respects confirmed the findings
and the basis of the awards made
by the learned trial Judge, it
is clear that there was no real
legal basis and justification
for the Court of Appeal to have
departed from the findings and
award of the trial court.
Accordingly, I find that there
is therefore no real, compelling
and sound reason why this court
should depart from the findings
of fact made by the learned
trial court. The intervention
made by the Court of Appeal in
my opinion was wrong and should
not be allowed to stand In
conclusion, I will allow the
instant appeal against part only
of the Court of Appeal judgment
of 16th December
2010. That part of the decision
of the Court of Appeal setting
aside the current replacement
cost of the house is accordingly
reversed and the decision of the
High Court dated 6th
February 2008 and 17th
April 2008 respectively is
upheld and restored. The
Plaintiff is therefore entitled
to the present day value of the
5- bedroom house which he
contracted for in 2002. Since
that house is now significantly
worth more than the $40,000 USD
which the Plaintiff paid in
2002, the Defendants must
provide him with money at
current open market value to
enable him purchase or build a
similar house.
STATUTES
REFERRED TO IN JUDGMENT
CASES
REFERRED TO IN JUDGMENT
Bain v Fotherhill (1874) LR7 HL
158.
Royal Dutch Airlines v Fermex
Ltd. (1989-90) 2 GLR 623 at 644
Czarnikow C. Ltd. v Koufos, The
Heron II [1966] C.A 1969 H.L
[1969] 1 A.C 350, [1967] 3 A.E.R
686
Hanna Assi (No.2) v GIHOC
Refrigeration & Household
Products Ltd. (No.2) [2007-2008]
1 SCGLR 16.
Livingstone v Raw yards Coal Co.
[1880] 5. App. Cas. 25, 39
CFAO v Thome [1966] GLR 107 S.C
Borkloe v Nogbordzi [1982-83]
GLR 1003
Bressah v Asante, [1965] GLR 117
Flint v Lovell [1935] 1 K.B 354,
C.A
Karam v Ashkar [1963] 1 GLR 139,
S.C
Scott v Musial [1959] 3 A.E.R
193
Achoro v Akanfela [1996-97]
SCGLR 209
Obeng v Assemblies of God
Church, [2010] SCGLR 300
Akuffo-Addo v Cathline [1992] 1
GLR 377 S.C
Gregory v Tandoh IV and Anor
[2010] SCGLR 971
Achoro v Akanfela [1996-97]
SCGLR 209
Obeng v Assemblies of God
Church, [2010] SCGLR 300
Akuffo-Addo v Cathline [1992] 1
GLR 377 S.C
Gregory v Tandoh IV and Anor
[2010] SCGLR 971
Schandorf v Zeini [1976] 2 GLR
418
BOOKS
REFERRED TO IN JUDGMENT
DELIVERING
THE LEADING JUDGMENT
JONES DOTSE
JSC:
COUNSEL
GABRIEL
PWAMANG AND RAYMOND BAGNABU FOR
THE PLAINTIFF/ RESPONDENT/
APPELLANT.
LEXKUDOZ FOR
THE
DEFENDANT/APPELLANT/RESPONDENT
______________________________________________________________________
JONES DOTSE
JSC:
This is an
appeal by the
Plaintiff/Respondent/Appellant,
hereafter referred to as the
Plaintiff against a Court of
Appeal judgment dated 16th
December, 2010 in favour of the
Defendants/Appellants/Respondent,
hereafter referred to as the
Defendants. In this regard, it
has to be noted at this stage
that the plaintiff who
instituted the suit against the
Defendants, was initially
successful in the High Court,
but the Court of Appeal reversed
the High Court decision of 6th
February 2008.
FACTS
The Plaintiff
purchased a five bedroom house
at a public auction in 2002 that
was conducted by Adonten Mart at
the instance of the Defendants,
a leading financial institution
in the country and one of the
major players in mortgage
financing of houses. The House
that the Plaintiff purchased
from the defendants following an
advertisement of the auction
that the Defendants placed in
the local newspapers had the
following features:
1.
The compound measured
approximately 120 feet by 100
feet and included space to park
cars.
2.
The house has five spacious
bedrooms and air conditioning
facilities in the sitting room
and master bedroom.
3.
The roof was made of painting
tiles whilst the floor was tiled
with porcelain tiles.
4.
The windows of the house were
aluminum sliding windows and the
doors were sliding and burglar
proof.
The Plaintiff
contended that, after having
seen the advertisement on the
sale of H/No BAE A/25 Baatsona,
Accra, he went and inspected the
said house and found the above
features all in place and
accordingly was satisfied with
the house. As a result, the
plaintiff successfully bid on
the property at the auction that
was conducted on the 12th
day of September 2002 and
succeeded in securing the house
with his bid of $40,000USD. The
Plaintiff paid the Defendants
the auction price of the house,
and Defendants also handed over
the property to him.
The Plaintiff
however faced resistance from
the original owner of the house,
(one Cyril Kofi Hayford) when he
attempted to move into the
house. This original owner,
successfully sued the
Defendants, the plaintiff and
the Auctioneer and claimed the
house back and retained the
rights as owner.This prevented
the plaintiff from occupying the
house he had bought with the
purpose of occupying.
After the
Plaintiff failed to reach
agreement with the defendants on
the sudden turn of events, he
sued the Defendants at the High
Court, Accra claiming the
following reliefs:
RELIEFS
CLAIMED BY PLAINTIFF AGAINST
DEFENDANTS AT HIGH COURT
a.
Delivery
of a five bedroom house situate
at Baatsona with the
features set out in paragraph 4
of the statement of claim.
Alternatively
The open
market value of a comparable
house at the same location
b.
Loss of rent on the house from
12th September 2002
to date of payment.
c.
Order for the payment of the
legal costs of Plaintiff in the
earlier suit.
e.
Damages
for breach of contract
DECISION OF
HIGH COURT
After trial,
the
learned High Court Judge found
in favour of the Plaintiff
and ordered as per judgment
dated 6th February
2008 that it will be appropriate
in the circumstances of the case
to order plaintiff to be paid
the current market value of
the house in the state that he
purchased it. The learned
trial Judge reasoned that, it is
only such an order that will
restore to him as near as
possible the property that he
had lost. This is what the
learned trial Judge said:
“I see this a
pure sale of landed property
transaction which has failed
because the seller, in this case
the HFC, failed to give title to
the purchaser, the defendant.
Reliefs the plaintiff is
entitled to it is my view will
have to be examined from this
light. Where a defendant has
failed to make good title in
respect of a sale of land
transaction, the plaintiff’s
entitlement is a refund of the
purchase price. He is entitled
further to interest on the
amount from the date of payment
until the date refund is made to
him unless the parties intended
otherwise. Where he has been
involved in investigating title
of the land such expenses
incurred will have to be
refunded to him. This mode of
award of damages to the
purchaser was formulated in the
old case of
Bain v
Fotherhill (1874) LR7 HL 158.
The principle applied in
this case is in accord with the
purpose for the award of
damages. The purpose of damages
is to put the party who has
suffered as a result of the
breach in nearly the same
position that he would have been
had the other party not broken
the contract. In the Supreme
Court case of
Royal
Dutch Airlines v Fermex Ltd.
(1989-90) 2 GLR 623
at 644 the court stated:-
“On the
measure of damages for breach of
contract, the principle adopted
by the courts in many cases is
that of restitution in integrum
i.e. if the plaintiff has
suffered damage that is not too
remote, he must, as far as money
can do it, be restored to the
position he would have been in
had that particular damage not
occurred…..This means the
plaintiff has to be put into the
position he would have achieved
if the contract were performed,
and he is allowed to recover
damages on the basis of
returning him to the position
before the contract was made.
The amount of money adjudged to
be due to him must be assessed
as at the time the contract was
broken.”
Continuing,
the trial Judge concluded thus:
I have no
doubt that the plaintiff
suffered some damages. He bought
the property to occupy as his
residence when on retirement and
for which he paid $40,000. I
think in the first place the
plaintiff will need a house
similar to one he lost. And it
is appropriate in the
circumstances of the case to
order that he be paid a current
open market value of the house
in the state that he bought it.
It is my view that it is only
such an order that will restore
him as near as possible the lost
property”.
Based on the
orders made by the High Court in
favour of the Plaintiff and with
further orders for the Land
Valuation Board to determine the
current open market value of the
house in issue which was carried
out as a basis to be used for
the replacement cost,
the
Defendants felt aggrieved and
appealed the decision of the
High Court to the Court of
Appeal.
COURT OF
APPEAL DECISION
From the
appeal record, it is certain
that the
Defendants were successful in
their appeal. This is
because, the final orders made
by the Court of Appeal stated as
follows:-
“This court
however orders that the
defendant refunds the
Plaintiff/respondent the cedi
equivalent to this $40,000 USD
as at 2002 when the money was
paid with the prevailing
commercial interest at that
time, i.e. 2002 to date.“
The above
orders of the Court of Appeal
must be considered against the
background of what the Court of
Appeal earlier stated in the
judgment as follows:
“Nobody can
blame the Plaintiff for not
mitigating his loss as submitted
by Counsel for HFC since they
kept assuring him they would
re-possess the house and give
same back to him “but would take
time”. With this from an
institution like HFC what do
they expect the plaintiff to do,
nothing but to keep his fingers
cross and wait for them to
fulfill their word. The law and
the courts seek to do justice
and nothing else. Is it fair to
just return plaintiffs USD
40,000 to him after eight (8)
years, from 2002 to 2010,
definitely no, since that will
occasion a grave miscarriage of
justice, to say the least.
It’s our
candid opinion that
the
plaintiff is an innocent
purchaser for value without
notice
who
should not suffer the negligence
of the defendant/appellants.
Their Legal Department should
have made sure all procedures
are duly followed before they
advertise this sale to the
public. It’s not the duty of the
innocent purchaser to ensure the
right processes and procedures
are followed before the bid.
It’s a presumption that since
this is official all procedures
have been duly followed. This is
not an auction flowing out of a
judgment debt, that obliges the
judgment creditor to ensure
title and interest of the
judgment debtor in the property
so auctioned for the debt. The
negligence of HFC should not be
laid at plaintiff’s door step
but they suffer the consequence
of their negligence.
We do not
think that trial judge erred in
holding that plaintiffs be paid
the current market value of the
property after all the principle
of restitutio in integrum is to
restore the party affected by
the breach to their original
position following a recession
of the contract between them.”
The Court of
Appeal in my opinion correctly
stated the facts and the law
when they stated further as
follows:
“In effect to
restore him to that position the
party that caused the breach has
to pay him the open market value
of the house he lost to enable
him purchase another house
similar to the one he lost.
Plaintiff’s original position
was his capacity and ability to
purchase a house the nature or
size of the subject matter. USD
40,000 cannot buy him a house
now in 2010 similar to what he
lost in 2002. We therefore
uphold the trial Judge’s finding
and would not disturb same.”
emphasis supplied
The Court of
Appeal further held in their
judgment as follows:
“On the
question whether the judgment is
against the weight of the
evidence, we have very carefully
perused, examined and assessed
and evaluated the entire
evidence on the record of
proceedings and we have come to
the conclusion that the judgment
is supported by the evidence on
record.”
However, in a
sudden turn of events, the Court
of Appeal concluded their
judgment in the following
closing terms, hence the
plaintiff’s appeal to the
Supreme Court.
“This court
however order that the defendant
refunds the plaintiff/respondent
the cedi equivalent to this USD
40,000 as at 2002 when the money
was paid with the prevailing
commercial interest at that
time, i.e. 2002 to date. In
addition, for the inconvenience
cause the plaintiff, the court
hereby award punitive cost of
GH¢5,000 to the
plaintiff/respondent against the
defendant.”
APPEAL TO
SUPREME COURT AND GROUNDS
Dissatisfied
with the decision of the Court
of Appeal, the Plaintiff has
therefore lodged this appeal to
this court with the following as
the grounds of appeal.
i.
The order of the Court of Appeal
is wrong in law against the
correct statement of the law on
quantum of damages which was
stated by the Court itself
because the order does not
restore the Plaintiff/Respondent
to the position that he would
have been but for the breach by
Defendant/Appellant; it in fact
makes him worse off.
ii.
The order is against the weight
of the evidence.
iii.
Further grounds of appeal to be
filed upon receipt of the record
of appeal.
No additional
grounds have been filed, and the
following are the issues for
determination.
ISSUES FOR
DETERMINATION
Having
perused the statement of case of
the parties, I am of the opinion
that the following two issues
are germane to the resolution of
the dispute that has arisen
between the parties before this
court.
1.
Whether
the plaintiff is only entitled
to $40,000USD plus interest or
2.
Whether
he is entitled to the current
market value of the house that
was sold to him but undelivered.
This Supreme
Court has therefore been
requested to consider relatively
straightforward contractual
matters. The facts of the case
have to be simplified thus,
that the Plaintiff purchased a
house from the Defendants, but
they did not deliver the house
as was agreed upon in the
contract
of sale.
The plaintiff
on his part lived up to his part
of the bargain in paying the
Defendants the sum of $40,000USD
at the auction for the 5-
bedroom house. How did the
Defendants live up to their end
of the bargain in ensuring that
the house the plaintiff
purchased was specifically
delivered to him?
Even though
the Defendants were prevented by
a subsequent court proceedings
by the original owner of the
house to deliver the house, it
is clear that the defendants
failed to perform due diligence
in the entire transaction, hence
their inability to deliver the
house. I am of the opinion that,
the defendants ought to have
made sure of their title before
embarking upon the auction sale.
As pace setters in mortgage
financing of housing in Ghana
and a very reputable Financial
Institution (attributes which
this court can take judicial
notice of) it is not surprising
that the plaintiff accepted the
deal and went along with the
defendants.
What beats my
imagination is that, if the
Defendants were convinced about
the genuineness of their
decision to sell the house at
the public auction, then having
lost the action instituted
against them by Mr. Hayford, the
original owner of the house,
they could have appealed against
that decision.
For example,
in the instant appeal, the
defendants lost at the trial
court, but appealed that
decision which they surprisingly
won an appeal to some extent. It
was because of their conviction
that they had a good case that
led them to successfully appeal
the trial court decision in the
instant case.
As matters
stand now, when and where it
mattered most, the defendants
abandoned the plaintiff and left
him to his fate.
Before I deal
with the two legal issues
identified supra, I wish to
observe by reiterating the point
that despite the fact that the
Court of Appeal varied and or
reversed the High Court
decision, both courts all
affirmed the fact that
the
plaintiff is entitled to damages
for breach of contract. The
question then is what is the
quantum of damages that the
plaintiff is entitled.
Whilst the
High Court held that the
Plaintiff is entitled to present
day value of a 5-bedroom house
with similar specifications to
the one purchased by the
plaintiff, the Court of Appeal
held that the plaintiff is only
entitled to $40,000USD plus
interest accrued since the
purchase of the house in 2002.
These are the two conflicting
decisions that this court is
presently faced with upholding
one over the other.
RESOLUTION OF
THE ISSUES IDENTIFIED
Since any
attempt to deal with the
identified issues will dovetail
into each other, I have decided
to lump the two issues together
in the discussions and analysis
herein. I believe it is fairly
well settled that where
appropriate, the “principle of
restitutio in integrum” shall
apply in cases of breach. What
then would be the position which
the plaintiff would have been
but for the breach and for which
reason he needs to be restored?
The Court of
Appeal in my opinion correctly
identified and dealt with this
problem in the following
statements:-
“In effect to
restore him to that position the
party that caused the breach has
to pay him the open market value
of the house he lost to enable
him to purchase another house
similar to the one he lost.
Plaintiff’s original position
was his capacity and ability to
purchase a house the nature or
size of the subject matter
$40,000USD cannot buy him a
house now in 2010 similar to
what he lost in 2002. We
therefore uphold the trial
Judge’s finding and would not
disturb same.”
As I observed
earlier, the Court of Appeal
correctly stated the principles
based upon an understanding of
the facts on record. However,
the order made by the Court runs
counter to their reasoning and
understanding of the said
principles. The Court of Appeal
missed the point when it ordered
that the Defendant Bank should
pay to the Plaintiff the cedi
equivalent of $40,000 USD with
interest, simpliciter without
taking into account the loss of
the Plaintiff in enjoying the
house he purchased in 2002.
What happened
to the Court of Appeal’s own
observation that the party that
caused plaintiff the breach has
to pay him the open market value
of the house he lost in order to
enable him purchase another
house similar to the one he had
lost? The Court of Appeal really
did a somersault in their
analysis and conclusion reached
in the matter. The facts of this
case, as correctly stated by the
trial High Court, clearly
establish the fact that, the
plaintiff must be paid
sufficient damages by way of
compensation to enable him
purchase a similar house.
However, with
the orders they made, and taking
into account the fluctuations in
the building industry, it is
certain that, the plaintiff
cannot purchase a similar house
with the sum of $40,000 USD in
2010, whilst the amount was paid
for the original purchase in
2002. Even with interest
charges, judicial notice can be
taken of the fact that with the
rate of inflation from 2002 up
to the present single digit
inflation, the plaintiff has
been dealt a devastating blow by
this Court of Appeal order.
In my
respectful opinion, this was an
error and ought to be reversed
by this court.
It appears
that the Court of Appeal
accepted the Defendant Bank’s
contention that it must only
return the $40,000 USD plus
interest to the plaintiff in
order to return the plaintiff to
his original position, and this
to me is unreasonable, does not
make sense and is also
illogical.
Why do I say
so? This is because the
defendant entered into a
contract with the Plaintiff and
the object of the contract was
the 5-bedroom house with the
amenities stated supra being
handed over to him.
Secondly, the
price that the plaintiff paid
for the house is incidental to
the object of the contract,
which is the 5-bedroom house.
Thirdly, it
has to be noted that, housing
markets are known to fluctuate
and the said markets can
therefore be unstable whilst the
house may have been worth
$40,000USD in 2002 that is
clearly no longer the case, that
house is worth considerably more
today than it was years ago.
Fourthly,
since the contract between the
parties was for a house, to
direct that the plaintiff
recover his money plus
commercial interest would work a
lot of injustice on the
plaintiff. Without taking into
consideration the present day
value of the type of house.
Fifthly,
since the specific house is no
longer available, the only just
course of action left for the
defendants is to provide the
Plaintiff with monetary
equivalent that would enable him
to purchase a similar house. The
cost or the quantum of this
house must be based on the
current market value of similar
houses, as was rightly held and
determined by the High Court and
the Court of Appeal itself.
Finally, this
Supreme Court must for good
public policy reasons such as
the need to value legal
instruments or contractual
transactions and thereby
emphasise the concept or
principle of stability of
contracts.
It was in
2002 that the plaintiff and the
Defendants entered into the
contract for the purchase of the
5- bedroom house. Ten years down
the line that object has become
a mirage, and it will be a
travesty of justice to say at
this moment that the contract is
worth only $40,000, and not the
actual value of a 5 –bedroom
house which was the very object
of the contract. Such a conduct
I dare say would run counter to
the notion of stability of
contracts.
Perhaps it
will not be out of place at this
juncture to reiterate the fact
that, if it is desirable for
people to use contracts in the
business world to regulate and
control their dealings with one
another, then it is the duty of
the law courts to give teeth to
these contracts to enable them
bite and bite very hard when the
contracts are honoured in the
breach by the parties.
It has
recently been stated that there
are some babies who have very
strong teeth who can bite very
hard. If that is so, then adults
who enter into legally
enforceable contracts, conscious
of the consequences whenever
there is a breach must be held
accountable for any such lapses.
If the law
courts are not careful in
providing adequate remedies
whenever a breach of contract
like the instant case occurs,
then there is likely to be the
risk that parties may play into
the theory of “efficient
breach”. For instance, if
the Defendant bank, was for
example dissatisfied with the
price that it received from the
plaintiff for the house, it
could simply breach the contract
because this would be more cost
effective than honouring it.
Luckily, this
is not the reason in the instant
case. However, there is the need
for the courts, especially a
final and appellate one at that
to send clear message that
contracts shall be honoured more
in their observance than in
their breach.
Considering
all the above factors and
principle, the only logical and
reasonable thing to do is that,
the defendants owe the plaintiff
a 5-bedroom house (or its
present day monetary
equivalent), and unless such a
decision is given by the courts,
the very usefulness of contracts
as legal instruments could fall
into disrepute.
In analyzing
the facts of this case with the
legal principle of “restitutio
in integrum” it is perhaps
necessary to do some comparative
studies into some other common
law jurisdictions.
In Canada for
example, even though the remedy
of “restitutio in integrum” is
provided in tort law, it’s
corresponding remedy in the law
of contract is “expectation
damages”which is a very powerful
remedy. By the application of
this principle, not only will an
individual be restored to the
original position whenever there
has been a breach of contract,
but the individual who suffered
the loss is also entitled to the
profit of which they have been
deprived arising as a result of
the breach of the contract.
In essence,
expectation damages goes beyond
simply restoring an individual
to their original position, but
it also provides them with their
lost expected profits.
In the United
Kingdom as well, expectation
damages are recognised for
breach of contract. See case of
Czarnikow C. Ltd. v Koufos, The
Heron II [1966] C.A
affirmed sub nom
1969
H.L [1969] 1 A.C 350, [1967] 3
A.E.R 686, which is a
case that is very well known and
applied to illustrate principle
of remoteness of damages, can
also be applied in this instant.
In the said case, the English
Court of Appeal held that
plaintiff was entitled to loss
of profits that resulted when a
vessel carrying sugar arrived
later than it was contractually
obligated to.
Applying the
above principles to the facts of
the instant case, it would mean
that the plaintiff would be
entitled not only to the current
market value of the 5 bedroom
house, but also to the lost rent
that could have accrued since
2002 when he purchased the
house.
For this type
of award to be made, the
plaintiff must have pleaded the
necessary evidence and also lead
evidence on it. Indeed, the
Court of Appeal was spot on the
issue when it stated in the
judgment as follows:-
“It’s trite
learning that, it’s not the duty
of the trial court in civil
cases to make the case for the
parties. The courts duty is to
evaluate the evidence before it,
see whether the parties have
established their cases or not,
and if it did then the court is
obliged to enter judgment for
that party on the preponderance
of probabilities. The court
enters judgment for the party
for what it asked for and not to
give him what the court thinks
he needs”(sic) (page 109 of
record).
Even though I
agree to a large extent with the
above statement, I think it is
fairly now established that on
the principle of doing
substantial justice, the court
may in some circumstances grant
a party reliefs it did not ask
for, provided the grant of that
or those reliefs will help
achieve substantial justice to
the case and bring litigation to
an end between the parties. See
case of
Hanna Assi (No.2) v GIHOC
Refrigeration & Household
Products Ltd. (No.2) [2007-2008]
1 SCGLR 16.
In the
instant case, although the
plaintiff did raise the issue of
lost profits due to the rents
which could have accrued to him
had the contract to purchase the
house not failed, on the
totality of the facts of this
case, has the plaintiff led
compelling evidence that he is
entitled to lost profits in the
nature of accrued or lost rents?
The evidence
on record suggests that the
plaintiff intended to live in
the said house upon his
retirement, but until that
event, he could have rented it
and gotten some profit. To date,
there is no evidence that the
plaintiff has retired. The
Plaintiff failed to lead
sufficient evidence on loss of
rents.
What is very
clear from the facts of this
case, and from which none of the
parties can depart from or deny
is that, the Defendants sold a
house to the plaintiff they did
not have valid title to.
Flowing from
the above, it follows that, the
Defendants, and not the
Plaintiff should bear the
damages that have resulted from
selling the house to the
Plaintiff, as the Plaintiff was
unwillingly drawn into this
transaction.
I have
adverted my mind to the
statement of case filed by
learned Counsel for the
respective parties. What is
clear from the legal issues
raised is that, once the deal
has gone bad, the Defendants
cannot rely on their
carelessness to avoid the legal
ramifications of breaching its
contractual obligations.
Accordingly,
the plaintiff ought to be put in
the position he would have been
but for the inability of the
Defendants to deliver the house
to him. See case of
Livingstone v Raw yards Coal Co.
[1880] 5. App. Cas. 25, 39
where Lord Blackburn stated
the principle of
“restitutio
in integrum” compensation should
be that sum of money which will
put the party who has been
injured in the same position as
he would have been if he had not
sustained the wrong for which he
is now getting his compensation
or reparation.”
I have also
considered notable Ghanaian
authorities relevant to the
issues germane in this case like
the following:
1.
CFAO v Thome [1966] GLR 107 S.C
2.
Borkloe v Nogbordzi [1982-83]
GLR 1003
In all the
above cases, the central theme
running through them is that,
in cases where there has been
total failure, the measure of
damages is the current market
value principle and if that was
not easily ascertainable, then
the cost of replacement
principle would be used.
This is
especially important in view of
the fact that both the trial
High Court and the Court of
Appeal found that the Defendants
lured the Plaintiff into
entering a contract for the sale
of the house which was
subsequently declared by a court
of competent jurisdiction to be
invalid. Both courts also accept
that the plaintiff is entitled
to damages.
Similarly,
this court has also held that an
appellate court will not and
should not disturb the award of
damages by a trial court unless
it can be shown that the award
was based on wrong principles of
law or that, the trial court
completely misapplied the facts
of the case to the awards it
published.
See cases
like
1.
Bressah v Asante, [1965] GLR 117
2.
Flint v Lovell [1935] 1 K.B 354,
C.A
3.
Karam v Ashkar [1963] 1 GLR 139,
S.C at 149
where the Supreme Court
made
reference to the judgment of
Morris L.J in the English case
of
Scott v Musial [1959] 3 A.E.R
193 at 195.
Since there
has been no such wrong
application of the principles of
law involved or the findings of
fact, and considering also that
the Court of Appeal in all
material respects confirmed the
findings and the basis of the
awards made by the learned trial
Judge, it is clear that there
was no real legal basis and
justification for the Court of
Appeal to have departed from the
findings and award of the trial
court.
Accordingly,
I find that there is therefore
no real, compelling and sound
reason why this court should
depart from the findings of fact
made by the learned trial court.
The intervention made by the
Court of Appeal in my opinion
was wrong and should not be
allowed to stand.
This Supreme
Court has in many decisions held
that, unless findings of fact
made by the trial court and
concurred in by the first
appellate court, were found to
be perverse, and not supported
by evidence on record, a second
appellate court, like this court
will not interfere, vary or
depart from such findings. See
cases of:
1.
Achoro v Akanfela [1996-97]
SCGLR 209
2.
Obeng v Assemblies of God
Church, [2010] SCGLR 300
3.
Akuffo-Addo v Cathline [1992] 1
GLR 377 S.C
4.
Gregory v Tandoh IV and Anor
[2010] SCGLR 971
On the basis
of these authorities I find it
difficult to accept the Court of
Appeal interference in the
findings made by the trial
court.
Before I
conclude this judgment, there is
one small matter that I feel
bound to comment upon. This is
the submission by learned
Counsel for the Defendant’s that
a High Court had declared the
transaction between the
plaintiff and defendants for the
sale and purchase of the house
at the auction as null and void
and therefore defendants should
not be held liable for the
breach. Learned counsel then
referred to the case of
Schandorf v Zeini [1976] 2 GLR
418 to support his
contention. I have apprised
myself of the above decision and
am of the view that, the said
case does not apply at all.
In the
Schandorf v Zeini case, what
the Court of Appeal stated in
unequivocal terms was that,
to be material such that the
courts would deprive a plaintiff
of it’s assistance, the
illegality complained off must
form the basis of the
plaintiff’s claim for relief. In
otherwords, the claim must be
founded on the illegal act. It
is however clear that the
plaintiff in the instant case
has not founded his action on
any act of illegality
perpetuated by him. The said
case is therefore not
applicable. The facts are
different
What must not
be lost sight of is that, the
Defendants before they placed
the advert in the papers must
have been deemed to have done
their own due diligence. In any
case, the transaction was not an
illegal one, but only that the
Defendants in their indecent
haste to recover their money
failed to take the necessary
legal steps that would have
enabled and empowered them to
have transferred good and valid
title to the plaintiff.
Considering
the relative strengths and
weaknesses of both parties in
the transactions that have
culminated in these proceedings,
the Defendants no doubt were in
a better position to ensure that
it actually had title to the
property it had sold at the
auction. The Defendants as I
indicated in this judgment, are
lead and major players in the
Financial, Housing and Mortgage
market.
Having
therefore advertised publicly in
a national daily for the auction
sale, the plaintiff, no doubt
would have been convinced by the
huge pedigree of the Defendant
in the sector. The contention of
illegality by Defendants against
Plaintiff in the transaction
therefore does not hold.
CONCLUSION
In
conclusion, I will allow the
instant appeal against part only
of the Court of Appeal judgment
of 16th December
2010.
That part of
the decision of the Court of
Appeal setting aside the current
replacement cost of the house is
accordingly reversed and the
decision of the High Court dated
6th February 2008
and 17th April 2008
respectively is upheld and
restored.
The Plaintiff
is therefore entitled to the
present day value of the 5-
bedroom house which he
contracted for in 2002. Since
that house is now significantly
worth more than the $40,000 USD
which the Plaintiff paid in
2002, the Defendants must
provide him with money at
current open market value to
enable him purchase or build a
similar house.
[SGD] J. V. M. DOTSE
JUSTICE OF THE
SUPREME COURT
[SGD] J. ANSAH
JUSTICE OF THE SUPREME
COURT
[SGD] S. O. A.
ADINYIRA [MRS.]
JUSTICE OF THE
SUPREME COURT
[SGD] ANIN YEBOAH
JUSTICE OF THE
SUPREME COURT
[SGD]
V. AKOTO BAMFO [MRS]
JUSTICE OF THE
SUPREME COURT
COUNSEL;
GABRIEL
PWAMANG AND RAYMOND BAGNABU FOR
THE PLAINTIFF/
RESPONDENT/APPELLANT.
LEXKUDOZ
FOR THE
DEFENDANT/APPELLANT/RESPONDENT.
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