Damages - Negligence - Chattel - Total wreck of, - Whether inflation and market trends relevant in assessment of pre-accident value.

Damages - Negligence - Chattel - Loss of profit may be awarded for reasonable period only.

In assessing damages against the appellant for negligently damaging the respondent’s taxi cab the trial judge awarded ¢220,000 for the pre-accident value of the taxi cab, even though the respondent had claimed only ¢180,000 in the writ, on the basis of inflation and “supply and demand in the market”. Additionally he awarded damages for loss of use from the date of the writ to the date of judgment. On appeal the appellant contended that the court erred in awarding the higher amount suo motu; and that the award for loss of use ought to have been for a reasonable period only.

Held - (1) It was not an inflexible rule of law that in the assessment of damages, for damage to chattels, the courts must take into account such matters as inflation and the unavailability of the chattel concerned on the market.

(2) Where an income-earning vehicle was damaged beyond economic repairs, the period for which loss of profit was recoverable was a reasonable time depending on the circumstances of each case. What was a reasonable time was an issue of fact determinable from the circumstances of the particular case. West African Bakeries v Miezah [1972] 1 GLR 78 applied.

Cases referred to:

Ballmoos v Mensah [1984-86] 1 GLR 725, CA.

Borkloe v Nogbedzi [1982-83] GLR 1103, CA.

Bressah v Asante [1965] GLR 117, SC.

Hayfron v Egyir [1984-86] 1 GLR 682, CA.

Karam v Ashkar [1963] 1 GLR 138, SC.

Liesboch Dredger v SS Edisson [1933] AC 449, 102 LJP 73, 149 LT 49, 49 TLR 289, 38 Com Cas 267, 18 Asp MLC 380, [1933] All ER Rep 144, HL.

The Clyde (1856) Sw 23, 5 LT 121, 42 Digest (Repl) 948.

West African Bakeries v Miezah [1972] 1 GLR 78, CA.

APPEAL from the award of damages in the High Court.

Boadu for the appellants.

Hammond for the respondent.

LUTTERODT JA. On the 19th of April 1986, the first appellant ran a City Express Services Tata bus GV 5710 he was driving into the respondent’s taxi cab. The latter therefore caused his solicitors to issue a writ against not only the actual tortfeasor, that is the first appellant, but his masters the owners of the vehicle, the second appellants, who in law are vicariously liable for all torts committed by their servant in the course of his employment. Because the vehicle became a total wreck, he sought damages for the pre-accident value of the vehicle which he himself set at ¢180,000. He also asked for general damages for loss of use at ¢3,000 per diem calculable from the date of the accident to the date of judgment.

The judgment delivered on 14th June 1988 went in favour of the respondent who was awarded the sum of ¢220,000 as damages for the pre-accident value of the vehicle, as well as ¢2,000 per diem for loss of use for a six-day week and which was to be calculated from the date of the issue of the writ to the date of judgment.

This did not please the appellants and so they caused their solicitors to file a notice of appeal setting forth two grounds of appeal. Both of them related to the quantum of damages awarded. This appeal turned on only two original grounds. Consequently, at the hearing, they did not, as is clearly borne out by the grounds of appeal, challenge the learned judge’s findings on the issue of liability. Their quarrel lay with the quantum of damages awarded. Firstly then, it was urged on behalf of the respondent that when by his own endorsement he had stated the pre-accident value of the damaged chattel as ¢180,000, the court ought not suo motu to have awarded him the sum of ¢220,000 for the purpose.

The respondent’s counsel in defence of the learned trial judge’s stand, referred us to Borkloe v Nogbedzi [1982-83] GLR 1103 and urged that it was perfectly legitimate for the trial judge to have increased the sum claimed by the innocent party as the value of his damaged property.

It is not open, as a matter of course, to an appellate court to interfere with a trial judge’s assessment of damages. The circumstances under which an appellate court could disturb such assessments and so vary them has been clearly spelt out in a number of cases, the most well-known being the following: Karam v Ashkar [1963] 1 GLR 138, Bressah v Asante [1965] GLR 117; Ballmoos v Mensah [1984-86] 1 GLR 725, Hayfron v Egyir [1984-86] 1 GLR 682. Thus an appellate court would do so where the court acted upon wrong principles of law, where the court misapprehended the facts in issue or where the court made an erroneous estimate of the amount to be awarded.

In his ruling, the learned trial judge found that the evidence before him established the pre-accident value of the car at ¢180,000. But in spite of the positive finding of fact he went on to say that “considering the inflationary value of the cedi and supply and demand in the market, I am of the view that ¢220,000 will be reasonable”. We will find then that he justified this “unilateral” increase to ¢220,000 which is some ¢40,000 more than the plaintiff himself has asked for, on the following grounds: inflationary value of the cedi and demand in the market.

The question which has agitated my mind is, was he right in doing so or had he, in making the award, applied wrong principles of law? I have read the full judgment of the Court of Appeal’s decision in the case of Borkloe v Nogbedzi [1982-83] GLR 1103. It is true the trial judge in assessing damages did not merely rely on the actual pre-accident market value of the chattel but took into consideration such matters as inflationary trends and other market forces. He felt these would operate to increase cost. The appellate court commended his approach and so refused to vary the award he made and which was certainly higher than the pre-accident market value of the damaged chattel. But we will find that the Borkloe case never laid down any inflexible rule of law, namely that in the assessment of damages in actions for damage to chattels, the courts must take into account such matters like inflation and other market forces like the unavailability of the chattel concerned on the market. The decision went that way because the evidence clearly showed that the company which usually produces the type of goods which were damaged had been out of production for some three years before the accident and had no materials to produce a similar tanker for the victim of the tort. In other words, that similar tanker was unobtainable on the market. That is why the learned justices of appeal referred in their judgment to this portion of the trial judge’s judgment “it is true that the pre-accident market value of a chattel affords a guide to the measure of compensation when and only when a similar chattel can be obtained in the open market”. It follows that it is not in all cases that the rule of law which was sought to be established in the Borkloe case and which allows a court to take into consideration such factors as inflation and other market forces ought to apply.

A careful reading of the plaintiff’s evidence shows he assigned his inability to secure another vehicle not to the inflationary trend of the cedi, nor to the unavailability of similar vehicles on the market, nor even to the fact that he is impecunious, a fact which in any case would not have rescued him, for on the authority of West African Bakeries v Miezah [1972] 1 GLR 78, 80 a plaintiff’s impecuniousity is of no moment. He simply gives as his reason for not securing a replacement vehicle the fact that his vehicle has not been repaired! What a reason to give when he himself in his evidence has described the vehicle as having been damaged beyond repairs! I think the plaintiff has simply refused to do what the law does expect him to do, that is, take reasonable steps to minimise his losses and so secure an alternate vehicle.

Be that as it may, the record does show that he led no evidence either through himself or his witnesses to establish the unavailability of such vehicles on the market. On the contrary, I do not think seriously speaking he could have put up any such plea namely, that there are no similar vehicles on the open market, for our markets are now flooded with vehicles for sale. So also, we have no evidence from the plaintiff of the rate of inflation. On the contrary his own witness who examined the wrecked vehicle assessed its pre-accident value (and I believe it could only have been its market value) at ¢180,000 and never indicated in what way inflation was likely to affect the value so assessed in the immediate future.

In these circumstances, particularly when plaintiff himself has disclosed in his writ and so has claimed as the value of the chattel ¢180,000 bearing in mind that the normal measure of damages in destruction cases is the market value of the goods destroyed at the time and place of destruction. See The Clyde (1856) Sw 23, 24; Liesboch Dredger v SS Edisson [1933] AC 449, 459. I am of the view the learned trial judge’s assessment of the pre-accident value of the vehicle was wrong, it being based on wrong principles of law and the same in my humble view ought to be set aside.

Since an appeal is by way of rehearing I would substitute what I think from the evidence is the correct sum to be awarded. I assess this at ¢180,000.

Secondly, it was argued by the appellant’s counsel that it was clearly wrong for the damages for loss of use to be awarded from the date of the accident to date of judgment. Counsel was of the opinion that in such claims for loss of user profits, the innocent party was only entitled to loss of use for a reasonable period only. That is to say, a court assesses what in its view is a reasonable time within which he could have purchased another vehicle in replacement of the damaged chattel. In this particular case appellant’s counsel was of the view that two weeks was such reasonable period, and the award by the trial judge ought to be varied accordingly.

While conceding that the appellant’s counsel has stated the correct principle of law to apply in claims for loss of user profits, the respondent was however of the view that on the facts of the present case, six months was such reasonable period. These concessions make my task easy. For it means firstly that the respondent’s counsel has admitted that the damages for loss of use was excessive, it having been based on a wrong principle of law. Secondly, that the issue of what is a reasonable period within which the victim could have secured an alternate vehicle is a question of fact determinable on the particular facts of the case.

But then, before I make my own assessment, I would like to point out that the learned trial judge ordered that the loss of use be calculated from the date of the issue of the writ. In other words although the plaintiff in his writ sought for damages from the date of the accident, which was on 19 April 1986, the learned trial judge limited it to the date of the issue of the writ. In view of this, this attack against his decision, that he erred in awarding damages for loss of use from the date of accident is clearly unjustified for he never made any such award. But then the other side of it also is this, that since the appellants never complained about his decision that loss of use shall run from the date of the issue of the writ, (and not from the date of the accident as he had endorsed on his writ) I would have no right to disturb that part of the decision and consequently I would concern myself with only that part of the judgment which says the loss should be calculated to the date of judgment.

The celebrated case of West African Bakeries v Miezah [1972] 1 GLR 78 page 80 is authority for the proposition that where an income-earning vehicle is damaged beyond economic repairs, the period for which loss of profit is recoverable is a reasonable time depending on the circumstances of each case. Again, the undoubted position of the law is that what is a reasonable time is an issue of fact determinable from the circumstances of the particular case. I will therefore have to make my own determination of this fact in view of the admission by appellants’ counsel that the attack on the learned judge’s award is well and truly justified.

Like in the West African Bakeries v Miezah case, there is no evidence that there is a scarcity of vehicles on the market. On the contrary, there is an abundance of them on the market. Unlike that case, in this instant case, the vehicle involved is a taxi cab where no exclusive additional work like the building of a body need be done on it to make it suitable for the purposes for which it was being purchased. But I do recognise the fact that time would be spent to have it sprayed into the colours of a taxi cab to meet the demands of the law. I would also not be unmindful of the fact that the impecuniousity of the innocent party is no excuse but I would at the same time not gloss over the fact that in the present day it is not quite easy to immediately lay hold on an amount as huge as ¢180,000. I can therefore foresee that the appellants would need some reasonable time within which to find the wherewithal. These together with the time needed to have the vehicle tested and examined for a report to be issued in the first place as to whether it was economically viable to have it repaired at all, together with the steps he would have to go through to ensure the vehicle is on the road would mean in my view that some 4 months is such reasonable time within which he could have procured a replacement. In the circumstance, since the appellants have stated they have no quarrel with the award of ¢2,000 per diem, I will allow also the appeal with respect to damages for loss of earnings. I will vary the order to read ¢2,000 per diem as for a six-day week (earnings of the said taxi) from the date of the issue of the writ to date of judgment of the High Court.

ESSIEM JA. I agree.

ADJABENG JA. I also agree.

Appeal allowed.

S Kwami Tetteh, Legal Practitioner.