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BENIN, J.A,
The High Court in
Sekondi granted an order of interim preservation of
certain equipment and vehicles in the possession of the
defendants. These items are the subject-matter of four
consolidated suits. The application was brought under
Order 50, r. 5 of the (Civil Procedure) Rules, 1954 (L.N.
140A). The Court appointed the Registrar of the Court to
be the Receiver/Manager thereof. These are the relevant
orders made by the court below:
1. “...........the
detention and preservation of the disputed machines,
vehicles and equipment now in the custody and possession
of the respondents herein.
2. I hereby further
appoint the Deputy Registrar of this Court
Receiver/Manager to manage the disputed machinery,
vehicles and equipment pending the determination of the
suits herein.
3. Both the applicants
and the respondents may apply to the Receiver/Manager
for the use of any of the items the subject matter of
this application to be let on hire to them and the hire
price to be paid into Court.
The Receiver/Manager
shall be entitled to a fee of 7½% in cash lodgment into
court from the hire of the machines, vehicles and
equipment.”
Order 50, r. 5 of the
High Court Rules under which the application was made
provides: It shall be lawful for the Court or a Judge,
upon the application of any party to a cause or matter,
and upon such terms as may be just, to make any order
for the detention, preservation, or inspection of any
property or thing, being the subject of such cause or
matter, or as to which any question may arise therein,
and for all or any of the purposes aforesaid, to
authorise any persons to enter upon or into the land or
building in the possession of any party to such cause or
matter, and for all or any of the purposes aforesaid to
authorise any sample to be taken, or any observation to
be made or experiments to be tried, which may be
necessary or expedient for the purpose of obtaining full
information or evidence.
What considerations go
into the granting of an application for an order for
preservation and/or detention? a). As decided in GARRARD
v. EDGE & Sons, (1889) 58 L.J.Ch. 397: 37 W.R. 501. C.A.
the order must be made against the person in possession
or custody of the property in dispute. See also WILDER
v. WILDER (1912). 56 S.J. 571.
b) The property must be
the subject-rnatter of the suit. Thus in SCOTT v.
MERCANTILE ACCIDENT INSURANCE CO. (1892) 8 T.L.R. 320,
the lower court made an order that certain jewellery
should remain in the custody of the police. An appeal
against this order was allowed because it was admitted
on the evidence that the property was not the subject
matter of the action, but that only a question might
arise about it in the cause or matter.
c) It was held in LENEY
& SONS, LTD. v. CALLINGHAM & THOMPSON, (1908) 1 K.B. 79
at p. 84, per Farwell, L.J. that “the question of the
exercise of the judicial discretion was always based,
and is still based, upon this, that there is property in
dispute to some interest in which plaintiff shows a
prima facie title; and preservation is ensured until the
rights of the parties can be finally determined.”
d) The case of CHAPLIN
v. BARNETT (1912) 28 T.L.R. 256 decides that the order
will be granted so long as there is something which
ought to be done to ensure the security of the property.
e) An order will be
made in order to preserve the subject-matter of the suit
from destruction; see STRELLEY v. PEARSON (1880). 15 Ch.
D. 113, where the court granted an order restraining the
defendant from ceasing to pump water out of a mine for
the sole purpose of preventing the mine from
destruction.
f) The court will also
grant an order in order to preserve the subject-matter
from depreciation physically or in value. So if it’s
established that it is necessary to do so the court will
grant it, hence an order was made in the case of NEW
ORLEANS S.S. CO. v. LONDON etc INSURANCE CO. (1909) 1
K.B. 943, that a ship lying in a port in Singapore be
brought to England for preservation there.
However an order may
not be made if it’ll cause undue hardship in carrying it
out or will serve no useful purpose. These grounds are
by no means exhaustive; other grounds may unfold due to
the particular case under consideration.
It is the plaintiffs’
case that they gave certain named equipment, vehicles
etc, called the items for short, to the defendants on
hire basis and that the latter have defaulted in meeting
the agreed hiring charges. Besides, the defendants are
also misusing the items. The defendants denied these
averments claiming a right of ownership over same. The
items in question were identified in Suit No. 14/99 in
an annexure to the statement of claim. Those in Suit No.
15/99 were identified in Annexure 2 attached to the
statement of claim. Those in Suit No. 16/99 were also
identified in an Annexure to the statement of claim.
Those in Suit No. 31/99 were identified in paragraph
13(iii) of the statement of claim. All these items are
said to be in the possession of the defendants, a fact
they do not deny, so under the authority of GERRARD v.
EDGE & Sons (supra), an order could be made for their
detention and preservation whilst they still remain in
the hands of the defendants.
Let me now examine what
the trial court said: “In the circumstances of the facts
in this case, I find from the affidavit evidence before
the court that the balance of convenience talks in
favour of the applicants. The applicants will suffer
hardship if the application is refused.” Thus the
court’s reasons are based on the balance of convenience
and hardship principles. The trial court had earlier
accepted that ownership of these items was vested in the
plaintiffs. So in effect the trial court was saying that
if the defendants were allowed to use the items in the
manner complained of, it would work hardship against the
plaintiffs.
It appears from the
pleadings that both parties traded in mutual accusation
of mismanagement and improper handling of the items in
question which had, at one time or the other, come into
the custody and care of either party. So they both
genuinely believe, albeit on the pleadings, that
wherever they are, the items are not receiving the due
care and attention that ought to be attached to them. In
such a scenario, an order of preservation would be
justified. The plaintiffs have shown they have an
interest in these properties. On the pleadings, serious
questions, both in law and fact, are raised concerning
ownership of these items, which both sides claim to be
their own. If at the end of the day the plaintiffs are
found to be the true owners thereof, it may be difficult
to restore them to the position whereby they’d reap full
benefit from their investment. For these reasons it
cannot be argued at this stage that the trial court was
wrong. And it would be in the interest of the parties
that these items, especially the vehicles which
depreciate with time and usage, be preserved whilst the
rights of the parties are determined. Again the
applicants herein have not succeeded in showing that the
order is working any more hardship against them than it
does against the respondents. The first order made by
the court below will therefore not be disturbed until
the appeal has been heard.
I consider next the
second and third orders of the court below in relation
to this application for stay of execution. The nature of
the orders 2 & 3 above confirm that the application
before the trial court was also for the appointment of a
receiver and manager under Order 50, r. 7 of the High
Court Rules, to administer the items in question. Much
as I would have liked to refrain from commenting on
these orders lest I should be seen to be prejudging the
substantive appeal, nonetheless I am compelled to make a
comment or two since that is the only way to give a
meaningful decision in this application, especially so
too as the applicants believe the trial court erred in
law so the appeal stands a reasonable chance of success.
Ordinarily, in an application of this nature, that is
for a stay of execution, the court will not delve into
the reasonableness or otherwise of the appeal
succeeding, but it'll not decline such an invitation if
it is urged upon it as a key ground for the application.
Generally speaking, an
application under Order 50, r. 5 is akin to asking for
an injunction, but with a difference, the difference
being that the purpose of the injunction sought here
must be to preserve the integrity of the property in
question whilst the suit proceeds. It is not an
injunction that must have the effect of managing the
property or dealing with it under a receiver and manager
situation, that properly belongs to the realm of
injunction coupled with the appointment of a receiver
and manager under Rule 7 of Order 50. But if the sole
purpose of appointing the receiver/manager is to enable
the preservation order to be effectively carried out, it
could be accepted depending upon the peculiar
circumstances of the application. The known decided
cases have all made orders for detention, preservation
or inspection without more. See cases like STRELLEY v.
PEARSON(supra); NEW ORLEANS V. LONDON INSURANCE (supra).
See also VELATI & CO. V. BRAHAM & CO. (1887). 46
L.J.C.P.415; RIDPATH & RIDPATH v. ZACHNER (1893) 9 T.L.R.
538. When it comes to applications for the appointment
of receivers/managers, the considerations are different
from those applied in applications for order of
detention and/or preservation of property. The
application before the trial court was also for the
appointment of a receiver/manager. So the court’s order
appointing the Receiver/Manager was meant to give effect
to the order granting the application for interim
preservation. Receivership involves more than mere
preservation, hence the need
For different
considerations to apply. On the face of the papers
before us I think the second and third orders are
consequential so I do see their relevance to the
application before the trial court so they would not be
stayed pending the hearing and determination of the
appeal. For that is the best way of securing the
interests of both parties herein. If at the end of the
day the defendants succeed, whatever hiring charges they
may have paid under the trial court’s order will be
there for them to collect back; they’ll have nothing to
lose. This is as against the plaintiffs who have
everything to lose if the properties are not well
managed and at the same time nothing has been derived
from their use. For these reasons the application for a
stay of execution will be rejected.
A. A. BENIN
JUSTICE OF APPEAL.
ANSAH, J.A.:
I agree.
AMONOO-MONNEY, J.A.:
I also agree. |
