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J U D G M E N T
DR. SETH TWUM, J.S.C:-
On 22nd April 1994,
the Plaintiff issued a Writ of
Summons in the High Court,
Accra, against the Defendants.
The Writ was indorsed with the
following reliefs:-
(i)
An order that the Plaintiffs’
goods in the custody of the
Defendant be released to the
Plaintiff.
(ii)
An injunction restraining the
Defendant from releasing the
goods to anyone save the
plaintiff.
(iii)
Damages for wrongful detention
of Plaintiff’s goods.
On 9th May 1994 the
Court granted an application by
a company called “SEO-KWANG
GHANA LTD” to be joined as
Co-Defendant. After the joinder,
and with leave of the Court the
Plaintiff filed an amended Writ
of Summons and amended Statement
of Claim. The Co-Defendant’s
name was put on the Writ and the
Statement of Claim. In the
amended Statement of Claim, the
Plaintiff averred inter alias as
follows:
“(3) The Plaintiff in the
course of his business, orders
and
receives various goods for sale
in Ghana from a number of
Commercial Houses in Korea such
as Ilseki Co. Ltd, Hanla Tyre Co
Ltd and Leebo Products Ltd”.
“(4) During the course of
1993, Plaintiff placed orders
and
received a number of Bills of
Lading as the consignee of
various goods from the said
Commercial Houses.”
“(5) Plaintiff received the
Bills of Lading on the goods
from
Defendant, the carrier of same,
and proceeded to clear same but
due to financial difficulties
succeeded in clearing some of
the goods.
“(6) Subsequently when the
Plaintiff was getting ready to
clear
the remaining goods, he
received information that
Defendant was taking steps to
amend the Bills of Lading, some
of whom (?) had been misplaced,
reconsigning same goods to the
Co-Defendant.”.
“(11) Plaintiff contends that
title to the goods have long
passed
to him and nobody including the
consignor could unilaterally
reconsign the goods to a third
party.
“(12) Plaintiff further
contends that Co-Defendant is a
stranger to the contract and is
only been (?) misled by its
misguided directors”.
On 3rd June 1994, the
Defendants filed their
statement of defence. The
following paragraphs epitomize
the substance of that defence.
“(4) Except that the
Defendants admit having at the
request of the consignor also
known as the shipper of the
goods, altered the relevant
documents to replace the
Plaintiff with the Co-Defendants
as the new cosignees of the
goods, paragraph 6 of the
statement of claim is denied”.
“(10) In answer to
Plaintiff’s claims generally,
the Defendants say that as
Carriers, they carried 18, 40ft
containers with goods therein
consigned by the shipper
(consignor) to the Plaintiff’s
as consignees….in two lots as
follows:-
(i)
6 x 40ft on their boat called
“KADUNA” which arrived at Tema
on 22nd July 1993.
(ii)
12 x 40ft on their boat called
“KUMASI” which arrived at Tema
on 14th November
1993.”
“(15) The Defendants say that
as at 31st day of May
1994 indebtedness in demurrage
and administrative charge of
the 6 x 40ft containers alone
stands at ¢45,288,000 which must
be paid before the goods can be
released to the Plaintiff or
Co-Defendant whichever of them
is declared by the Court to be
entitled to the goods.”
On 27th May 1994, the
Co-Defendant filed its statement
of defence. Apart from
paragraphs 3 and 5 thereof, all
the remaining paragraphs merely
denied the Plaintiff’s averments
in the statement of claim.
Paragraphs 3 stated that “save
and except that the Co-Defendant
is a newly registered Company,
paragraph 7 of the statement
of claim is denied”. In
paragraph 5 the Co-Defendant
pleaded in answer to paragraph
12 of the statement of claim
that it was no stranger to the
transaction but that the bill of
lading was indorsed to it and
as such entitled in law to the
goods covered by the said bills
of lading. With leave of the
Court, the Co-Defendant withdrew
the entire statement of defence
and substituted a fresh one. In
this the Co-Defendant averred in
paragraph 2 that “the goods
were cosigned through Ilseki Co
Ltd by Seo-Kwang Trading Ltd to
the Plaintiff”. It repeated the
averments contained in paragraph
10 of its earlier statement of
defence. It then counterclaimed
as follows:-
“(a) The goods cleared by
the Plaintiff part of which has
been sold and rest remaining at
a warehouse near Spintex Road.
(a)
Payment to Co-Defendant of
demurrage and interest, storage
charges occasioned by the long
stay of the 18 containers at the
port.
(b)
Declaration by the Court that
the goods as contained in the 18
containers at the port is the
property of the Co-Defendants
and is by law entitled to take
delivery of same.
Soon after being joined as a
party the Co-Defendant applied
for an order of interim
injunction and preservation of
property. Paragraph 5 of the
Co-Defendant’s affidavit in
support stated that “The goods
subject of these proceedings
were shipped to the Plaintiff’s
Company by the same having been
paid for by Seo Kwang Company of
Korea”. In an affidavit opposing
the application, the Managing
Director of the Plaintiff
Company, Choi Namgurn pointed
out in paragraph 7 that Seo
Kwang Company of Korea and
Seo-Kwang Ghana “are both of
recent origin. Seo Kwang of
Korea was incorporated in Korea
in or around November-December
1993 whiles Seo Kwang Ghana Ltd
was incorporated in Ghana in
March 1994. They could not have
paid for or be consignees for
goods shipped in May and June
1993.” This notwithstanding, the
Court granted the application.
In the result the goods were
detained until August 1994 when
they were cleared by ADB, the
Receiver Manager.
On 6th February,
1995, the Defendant once again
obtained leave of the Court and
amended its statement of defence
by adding the following new
paragraphs.
“(17) The Defendants say
that the goods in the 18
containers remained uncleared
and continued to attract
demurrage charges until some
time in August 1994, when they
were cleared by the Receiver and
Manager (A.D.B) appointed by the
court on or about 29th
July 1992”(?).
“(18) The total amount of
Administrative and demurrage
charges stands at
¢134,062,068.00 as at 31st
July 1994 as shown on the
statement marked Exhibit “D”
attached hereto.”
The Defendant then
counterclaimed as follows:-
“The Defendants counterclaim for
an order that the said sum of
¢¢134,062,068.00 be a first
charge by way of a lien on the
goods in the containers or the
proceeds therefrom upon sale, to
be paid to the Defendants with
interest thereon from 18th
August 1994 to the date of
judgment by the Receiver and
Manager, or in the alternative
by the party to whom title to
the said goods is adjudged
wholey and/or in part.”
Of the issues set down for
trial at the Summons for
Directions the following were
in my view the most relevant to
the issues appearing on the
pleadings.
a.
Whether the Co-Defendant is a
stranger to the contract of sale
of the goods between the
Plaintiff and the Consignors.
b.
Whether or not the consignors
actually instructed the
Defendant to alter the relevant
documents on the goods to
replace the Plaintiff with the
Co-Defendant.
c.
Whether the Defendant actually
altered the documents on the
goods. If so, whether such
purported alteration is null and
void.
Hearing commenced on 30th
May 1995 before his Lordship Mr
Justice Asare Korang who was
transferred to Accra before he
could complete it. On 12th
November 1995 Mr Justice K.K.
Acquaye who was then presiding
over the Court, ordered that the
case be started de novo. During
the de novo hearing Mr R.S.
Agbenot Counsel for Seo Kwang
Ghana filed a new writ of
summons on 5th
November 1997 on behalf of Yung
Chul Choi and Eun Mook Bang,
against Dae Sik Jang (the M.D of
Seo Kwang Ghana Ltd) and Seo
Kwang Ghana Ltd, itself.
Ordinarily this new action
should not have affected the
proceedings before Mr Justice
Acquaye but Mr Agbenoto applied
for stay of those proceedings
until such time that the new
suit had been completed.
Obviously, Mr Agbenoto’s
position was untenable. He could
not be counsel for and against
Seo Kwang Ghana Ltd at the same
time. Meanwhile on 30th
July 1997 the Court ordered
that Mr Chong who had been
appearing in Court as a
representative of Seo Kwang
Ghana Ltd should stop such
further appearances as it was
clear that his position as a
shareholder in the company did
not give him sufficient
authority to appear in court on
behalf of the company.
Matters reached such a head that
Mr Frempong Boadu, learned
Counsel for the Plaintiff
applied for Seo Kwang Ghana Ltd
to be struck out of the case or
that Mr R.S. Agbenoto should
cease to represent Seo Kwang
Ghana Ltd. The first limb of the
application was prompted by a
notice dated 25th
January 1995 filed in court by
the Managing Director of Seo
Kwang Ghana Ltd to the effect
that the Company should be given
leave to withdraw its statement
of defence and to discontinue
its counterclaim. The Court said
it would deal with the notice
but it appeared it escaped its
attention and nothing was heard
of it again. Be that as it may,
the Co-Defendant (Seo Kwang
Ghana Ltd) thereafter took no
further part in the proceedings.
Mr Agbenoto gracefully bowed out
of the case.
On 13th January 1998,
Yung Chul Choi and Eun Mook Bang
applied through their lawyer
Dick Anyadi to be joined to the
suit in their personal
capacities. The application was
granted and they were joined as
1st and 2nd
Co-Defendants.
With the withdrawal of Seo Kwang
Ghana Ltd from the suit, it was
clear that only the minor issue
of “Whether or not the Plaintiff
was in the position to clear and
pay for the goods” remained out
of the issues set out for trial
at the summons for directions.
The new Co-Defendants filed a
very lengthy statement of
defence and counterclaim on 8th
April 1998. In my view, the
following paragraphs together
give a fair idea of their
defence.
“(7) In further answer to
paragraphs 3, 4, 5, and 6 the
Co-Defendants say that some time
in 1992 the Managing Director of
the Plaintiff Company, Choi Nam
Gurn, was introduced to the
Co-Defendants who were then
directors of Ilseki Company in
Korea, as a businessman based in
Ghana.”
“(8) Upon discovering that
the Co-Defendants were
interested in importing Ghana
timber to Korea the said Choi
Num Gurn made representations
verbal and in writing to the
Co-Defendants that his company,
the Plaintiff herein, was in
big time business owning a
sawmill and a huge timber
concession in Ghana; a
representation he well knew to
be utterly false.
“(9) Based on those
representations the said Choi
Nam Gurn persuaded the
Co-Defendants to ship various
goods to him in Ghana with the
assurance that the monies to be
realized from the sale of same
could be used to purchase the
timber for export to
Co-Defendants in Korea.”
“(10) With the assurance
given them by the Plaintiff’s
Managing Director Co-Defendants
procured and consigned a variety
of goods, mainly tyres, office
equipment and vehicles in 28
containers to the Plaintiff in
Ghana.”
“(11) The goods were procured
primarily by the Co-Defendants
acting per the 1st
Co-Defendant, EUN MOOK BANG,
from producers such as ILSEKI CO
LTD, HANLA TYRES CO. LTD and
LEEBO PRODUCTS LTD on credit
terms with bank guarantees
arranged by the Co-Defendants.”
“(12) In order to secure the
said Bank guarantees the 1st
Co-Defendant EUN MOOK BANG
Mortgaged his house in Korea as
collateral security to the
Banks. At no time did the
Plaintiff or its managing
director order any goods
directly from producers in
Korea.”
“(13) The goods were shipped
to the Plaintiff through the
Defendants as carriers against
Bills of Exchange with the
papers being sent to the
Plaintiff through the banks,
namely National Investment Bank
and Standard Chartered Bank.
Payment was deferred for periods
ranging from 1 to 3 months.”
“(25) In view of Plaintiff
and its Managing Director’s
non- performance the
Co-Defendants as unpaid sellers
were forced to reconsign the
remainder of their goods to
their new company in Ghana, Seo
Kwang Ghana Ltd and instructed
their shipping agents, the
Defendants to effect the
necessary amendments to the
shipping documents relating to
same.”
The Co-Defendants gave so-called
particulars of the frauds
alleged but in view of my
assessment of the frauds
pleaded I need not repeat them
in this judgment.
In its reply the Plaintiff
denied the averments of the
Co-Defendants and further
pleaded that its Managing
Director personally negotiated
the supply of the disputed
goods with the suppliers and
even the Managing Directors of
Ilseki Co Ltd and Hanla Tyres Co
Ltd came to Ghana as guests of
the Plaintiff’s managing
director.
I have deliberately and rather
laboriously set out the most
potent parts of the pleadings of
each of the parties in deference
to the industry and scholarship
exhibited by counsel for the
remaining parties; bearing in
mind also that a party cannot
at the trial set up a case
inconsistent with his pleadings.
See Appiah v. Akers Trading Co
(1972) 1GLR 28.
The Managing Director of the
Plaintiff company gave evidence
on its behalf. He said the
Plaintiff ordered various
goods mainly retreaded tyres
from Ilseki Co Ltd, Hanla Tyres
and Leebo Product Ltd, all
registered in Korea. He said the
goods were duly shipped to it
and when they arrived in Ghana
the Plaintiff collected bills
of lading covering the goods
from the correspondent banks
of the suppliers’ banks in
Korea. These Ghana banks were
Standard Charted Bank and
National Investment Bank. In
consideration of it being given
these bills of lading, the Banks
presented it with bills of
exchange drawn upon it by the
suppliers whereby it undertook
to pay the suppliers’ banks in
Korea the face value of the
bills of exchange. The bills
were to mature 90 days after
sight.
The Plaintiff admitted it could
not immediately pay demurrage
and other administrative charges
incurred by it to Ro Ro
Services, the Defendants. The
Plaintiff said the company
managed to take delivery of six
containers and gave one
container to the Defendants as
security or for the contents to
be sold to defray its
indebtedness to the Defendants.
He said whilst all this was
going on the Defendants claimed
to have received instruction
from the consignors asking them
to change the name of the
Plaintiff on the shipping
documents and to take steps to
hand over the goods to the new
consignees- Seo Kwang Ghana Ltd.
He said when the Plaintiff could
not persuade the Defendants to
deliver the goods to it, it
commenced the present action
against them for the reliefs
already particularized in this
judgment.
The Defendants, while admitting
that they had altered the
manifest on the goods so as to
represent to the port
authorities that the
Co-Defendants were the new
consignees, it denied changing
the bills of lading. Generally
its position was ambivalent and
said that they were willing to
deliver the goods to whosoever
of the Plaintiff or the
Co-Defendants the Court would
adjudge to be entitled to the
goods. Further, it claimed a
kind of lien by counterclaiming
for an order that their
demurrage and other
administrative charges, then
amounting to a little over
¢134million, be a first charge
on the proceeds of sale of the
goods.
For their part the Co-Defendants
were represented in court by the
second Co-Defendant who spoke
for the two of them. He said
when the original Co-Defendant
decided to withdraw from the
suit they were aggrieved because
they had not agreed to the
withdrawal. He said it was for
that reason that they decided to
join the action as Co-Defendants
to protect their interests in
the goods. He said the total
value of the goods sent down
from Korea came to US
$1.120million. He added that the
securities he gave in Korea for
the goods to be sent down to
Ghana were auctioned. He also
testified that as a result of
the Plaintiff’s failure to clear
the goods, they were going to be
auctioned. He said the Branch
Manager of the Defendants told
them that the only thing they
could do was to contact the
consignors, the owners of the
goods, and shipping agents to
change the name of the
consignees in Ghana in order to
retrieve the 18 containers of
goods left stranded at the port.
He said in order to change the
name of the consignees, they
registered the name of Seo Kwang
Ghana Ltd. The shareholders of
this Company were Mr Jang Dae
Sik, 40%; the Co-Defendants 30%
each. He concluded his evidence
by saying that the name of the
consignees was therefore changed
on 5th April 1994 to
Seo Kwang Ghana Ltd,
The Co-Defendants gave evidence
of the fraud pleaded against the
Plaintiff. The witness said that
by a series of fraudulent
mispresentations, the Managing
Director of the Plaintiff
Company managed to get them to
buy the goods on credit upon
bank guarantees secured by
property of the frist
Co-Defendant. Their evidence was
that as unpaid sellers they were
entitled to instruct the
Defendants to change the name of
the Plaintiff for that of the
company they formed in Ghana -
Seo Kwang Ghana Ltd.
The Receiver and Manager (the
Agricultural Development Bank)
filed its account on its work
and it transpired that it had
failed to responsibly and
faithfully discharge its duties
as Receiver/Managers as required
by law.The evidence established
that contrary to the prevailing
prices of similar tyres on the
market it had unilaterally sold
some at reduced prices and some
on credit.
After a careful sifting of the
totality of the evidence the
learned High Court Judge gave
judgment on the 15th
May 2002 as follows:-
i.
Declaration that the Plaintiff
was the party entitled to
ownership of the goods in
dispute. The Court therefore
ordered that all monies accruing
from the sale of the goods by
the Manager/Receiver be paid to
the Plaintiff subject to any
deductions and charges due
either from the sale or any
awards made against the
Plaintiff in this judgment.
Goods that remain unsold were to
be handed over to the Plaintiff.
ii.
The Plaintiff was to pay the
Defendants administrative and
demurrage charges due on the
goods amounting to a total of
¢134,062,068.00.
iii.
The Defendant’s claim that
interest be awarded on the sum
above was dismissed.
iv.
The ADB (the Receiver/Manager)
were ordered to pay the
Plaintiff, the victorious party,
the amounts due on the goods
sold by them on credit and the
prices of which have not been
paid.
v.
The ADB, were also ordered to
pay to the Plaintiff the
difference in prices of the
goods they sold at reduced
prices without prior
authorization from the court.
vi.
The counterclaim of the
Co-Defendants was dismissed for
want of capacity and lack of
proof of ownership.
vii.
Costs of ¢4million was awarded
to the Plaintiff.
The High Court judgment did not
please the Plaintiff or
Co-Defendants who promptly
appealed against it on 15th
July 2002 and 27th
May 2002 respectively.
The Co-Defendants gave notice
that they were appealing against
the entire judgment. The grounds
were:-
(i)
The Judgment is against the
weight of evidence.
(ii)
The learned trial judge failed
to give adequate consideration
to the case of the
Co-Defendants/Appellants.
(iii)
The learned trial Judge erred in
law in deciding that the
Co-Defendant failed to establish
any title to the goods the
subject matter of the suit.
(iv)
The learned trial judge erred in
law in deciding that once the
Co-Defendant failed to establish
their title to the goods the
subject matter of the suit the
Plaintiff as the consignee is
entitled to the goods.
They prayed that the whole
judgment be set aside and
judgment entered for the
Plaintiff (?)
The Plaintiff, for it part
cross-appealed against that part
of the judgment which ordered
the Plaintiff to pay
¢134,062,068.00 to the Defendant
and exonerated the Defendants as
being neutral. It relied on 3
grounds with the following
preamble!
Having made a correct finding
that “it would not be safe to
rely on these Exhibits as proof
of the lawful change of
consignee meaning that the
Defendant had no lawful right to
change the consignee, the Court
erred in,
(a)
Failing to declare that the
Defendant’s stand in the
statement of Defence and in
evidence of having by 25th
March 1994, changed the name of
the consignee, disenabled the
Plaintiff from clearing the
goods whether the Plaintiff had
money or not and therefore the
Defendants were not entitled to
any demurrage and
administrative charges beyond
25th March 1994.
(b)
Not declaring that the
Defendants had no right in
connecting Seo Kwang Ghana Ltd
to the 18 containers a situation
that made it possible for Seo
Kwang Ghana Ltd and later the
Co-Defendants to join the suit
thus unnecessarily delaying the
determination of the suit from
1994 to 2002.
(c)
Failing to condemn these
Defendants in damages for
wrongful detention of the 18 and
the 19th containers
after 25th March 1994
and failing to compensate the
Plaintiff for the unnecessary
delay in the determination of
the case as in paragraph (b)
above.
The Plaintiff sought two reliefs
from the Court of Appeal:
(i)
The order that the Plaintiff
pays ¢134,062,086.00 be set
aside and an order that the
Plaintiff pays if at all,
demurrage and administrative
charges as at 25th
March 1994.
(j)
The Defendant be made to
compensate the Plaintiff to
offset the appropriate loss
occasioned by the Defendants’
default or actions.
On the 28th of May
2004 the Court of Appeal gave
judgment. It dismissed the
Co-Defendants’ appeal in toto
and allowed the Plaintiff’s
cross–appeal in part. It held
that the Plaintiffs were liable
to pay the charges and other
bills that had accrued from the
arrival of the goods, until the
time the defendants replaced
them as consignees, that is to
say 25th March 1994.
It dismissed the claim for
damages for the wrongful
detention on the ground that the
Plaintiff caused or contributed
to it. Finally, it held that the
defendants and Co-Defendants
should be liable and bear joint
culpability for any demurrage or
other charges arising or
accruing after 25th
March 1994.
Once more the Plaintiff and the
Co-Defendants were dissatisfied
with the judgment. The Plaintiff
filed its appeal to this Court
on 26th August 2004
against “that part of the
judgment which failed to Mulct
the Defendants in damages to
compensate the Plaintiff for the
Plaintiff’s loss incurred not
only in the value of goods but
also in the capital lock-up,
since the Defendants illegally
changed on 25th March
1994, the Plaintiff as consignee
of the goods.” Only one ground
of appeal was relied on; i.e
“Having found that the
Defendants’ alleged change of
consignee as at 25th
March 1994 was illegal, the
Court erred in not deciding that
the said illegal act prompted or
paved the way for Seo Kwang
Ghana Ltd and later the
Co-Defendants to join the suit
resulting in the long delay of
the suit with its resultant loss
to the Plaintiff and therefore
the Defendants ought to
compensate the Plaintiff for the
loss.” It prayed this Court to
mulct the Defendants in damages
to compensate it on its loss.
The Co-Defendant’s appeal to
this Court was in respect of the
entire judgment of the Court of
Appeal. The following grounds
were filed.
(i)
The learned Justices of Appeal
erred in law in failing to
appreciate the legal effect of
the failure or refusal of the
Plaintiff to pay for the goods
within the 90 days period
prescribed under the contract of
sale on the consignor’s right as
unpaid sellers to stop the goods
in transit under section
35(1)(a) (ll) of the Sale of
Goods Act 1962 (Act 137).
(ii)
The learned Justices of Appeal
erred in law in failing to
appreciate and give effect to
the failure or refusal of the
Plaintiff/Respondent to pay the
purchase price of the goods
within the 90 days period
prescribed under the contract of
sale on the consignors’ right as
unpaid sellers under section 44
of the Sale of Goods Act, 1962,
Act 137 to recover possession of
the goods from the buyer
(consignee) after they have been
delivered to him.
(iii)
Having found that the
manufacturers of the goods,
Hanla Tyre Company, Ilseki
Company and Leebo products, all
of Korea were the consignors of
the goods to the
Plaintiff/Respondent herein the
learned Justices of Appeal like
the learned trial High Court
Judge, erred in failing to give
due weight and effect to their
declaration under oath that they
gave the carriers the order to
stop the goods in transit by
amending the shipping documents
to change the consignee therein
on the instructions of the
Co-Defendants/Appellants.
(iv)
The learned Justices of Appeal,
erred in holding that the goods
had not been effectively stopped
in transit by the consignors.
(v)
The learned Justices of Appeal
like the learned High Court
Judge erred in law in resolving
the issue of the capacity of the
Co-Defendants against the
latter. In particular the Court
erred in failing to property
evaluate and to appreciate the
effect of the formal
declarations of the
manufacturers, Hanla Tyre
Company, Ilseki Company and
Leebo products on the
connection of the Co-Defendants
with the goods the subject
matter of the suit.
The Co-Defendants therefore
asked this Court to set aside
the judgments of both the Court
of Appeal and the High Court and
enter judgment for them on their
counterclaim.
I propose to deal with the
appeal of the Co-Defendants
first for the obvious reason
that it is the easier of the
two.
As their grounds of appeal
testify to, there have been
concurrent findings of fact made
by both the High Court and the
Appeal Court against them on the
vital issue of locus standi. At
page 485 of the record, the High
Court Judge pointed out that at
the time the goods arrived in
Ghana the companies of which the
Co-Defendants claimed to be
directors had not been formed.
Now, if the manufacturers
actually instructed the
Defendants to reconsign the
goods they were to be diverted
to Seo Kwang Ghana Ltd, not to
the Co-Defendants in their
personal capacities.
Seo Kwang Ghana Ltd withdrew
from the case and dissociated
itself from the activities of
the new Co-Defendants who were
joined to the suit as 1st
and 2nd
Co-Defendants. The evidence was
clear these suitors had no
personal interest in the goods
from the inception of their
purchase by the Plaintiff. That
notwithstanding, these
Co-Defendants who were not in
the contemplation of the
consignors hatched a scheme
whereby they could claim the
goods for themselves. If indeed,
the consignors gave the alleged
instructions to the Defendants
to reconsign the goods to Seo
Kwang Ghana Ltd, they would have
had to countermand those
instructions when they found out
(or ought to have found out)
that Seo Kwang Ghana Ltd was not
interested. The 1st
and 2nd
Co-Defendants, by joining the
suit in their personal
capacities on allegation of
fraudulent misrepresentation by
the Plaintiff to them to induce
them to enter into the contracts
of sale of the goods were really
using the reaction of Seo Kwang
Ghana Ltd to the idea of
reconsigning the goods to
defraud the consignor and the
Plaintiff. The entire scheme,
based as it were, on the alleged
invitation by the Managing
Director of the Plaintiff’s to
invest in a timber business was
palpably false. This is because
the real consignors, had no such
business in mind. Theirs was a
straightforward foreign trade
transaction supported by
legitimate shipping documents
and payment of the purchase
price by the Plaintiff, secured
by bills of exchange which the
Plaintiff accepted. Whether or
not the Plaintiff could pay the
value of the bills of exchange
when they matured had nothing to
do with the 1st and 2nd
Co-Defendants. In any event, the
bills of exchange were to be
paid to the correspondent banks
here in Ghana of the consignors’
bankers in Korea. There was no
agreement between the Plaintiff
and the consignors that the
proceeds of the bills of
exchange would be used to
purchase and export timber to
Korea.
It is worth pointing out that
in the present appeal the
Co-Defendants have shifted their
ground. All the grounds of
appeal espouse the rights of the
consignors as unpaid sellers,
and their right of stoppage in
transit. In the High Court their
position was that they paid for
the goods but they consigned to
Plaintiff through the
consignors. They said they paid
for them by loans from Korean
banks secured by the house of
the first co-defendant in Korea.
In my view, grounds (i), (ii)
and (iii) are simply a
rehashment of the same theme,
failure to give due weight to
the consignors’ declarations to
reconsign the goods to Seo Kwang
Ghana Ltd. But those
declarations were allegedly made
by the consignors for the
non-payment of the price by the
Plaintiff. And in respect of
those declarations, the High
Court held, rightly in my
opinion, that it would be unsafe
to rely on them. This was a
finding of fact. It was
confirmed by the Court of
Appeal. So this harping on a
failure to give due weight to
the declarations completely
missed the point. Any objective
assessment of the evidence
clearly shows that the High
Court in particular, considered
the so-called declarations at
great length and concluded with
cogent reasons that they were
suspect and unreliable. But
assuming that the High Court
were wrong in its assessment of
the evidence, the goods would
have been diverted from the
Plaintiff to Seo Kwang Ghana
Ltd, at that point in time, as
involuntary bailees. They would
not have gone to the
Co-Defendants. Herein lies the
futility of the Co-Defendants
meddlesomeness!
Another point of relevance is
that the Court of Appeal held
that the consignors never really
sought to stop the goods in
transit. In my opinion the Court
was right. It was also right in
further holding that “neither
the Defendants Ro Ro Services,
Seo Kwang Ghana Ltd, nor the
Co-Defendants herein, whether
acting jointly or severally can
legally assume the position of
an unpaid seller”. In these
circumstances there is no need
for me to consider the erudite
learning of learned counsel for
the Co-Defendants on sections of
the Sale of Goods Act 1962 (Act
137) quoted by him. In my view
they go to no issue since the
facts on which to base those
arguments were firmly rejected
by the Courts below. The courts
below rightly dismissed the
Co-Defendants’ appeal. I will
also dismiss it. I only wish to
add that it will do the
profession a great deal of good
if learned counsel, will, where
the occasion warrants, accept
that there is a limit to
effective legal action.
Next, I will consider the
Plaintiff’s cross-appeal and
other matters.
The Plaintiff’s cross-appeal
raised a neat point as to the
remedies available to a
Plaintiff who sues for the
wrongful detention of his goods
in circumstances where the trial
court has appointed a
Receiver/Manager of the goods to
take possession of them from the
Defendant who was in possession
and against whom the original
suit had been brought.
At common law, two causes of
action are available to a
Plaintiff who claims that his
goods are being wrongfully
detained by another. These are
conversion and detinue. These
days conversion is the more
popular cause of action. Indeed,
in England, detinue has been
abolished by section 2(1) of the
Torts (Interference with Goods)
Act, 1977 and has provided that
conversion now also covers the
only case that was probably
formerly the exclusive province
of detinue- i.e., inability to
redeliver the goods as a result
of their loss or destruction. In
our law, therefore detinue still
covers wrongful retention of
goods. Of course, in most cases
of detinue there would also be a
concurrent liability in
conversion.
On the other hand, conversion
requires a positive act and has
never lain where the defendants
once had the Plaintiff’s goods
but was unable to return them
because they had been lost or
negligently destroyed. This case
presents a not-too dissimilar
scenario.
Conversion is a single wrongful
act and the cause of action
accrues at the date of the
conversion. Detinue on the other
hand, is a continuing cause of
action which accrues at the date
of the wrongful refusal to
deliver up the goods and
continues until delivery up of
the goods or judgment.
Consequently, demand for
delivery up of the chattel is an
essential requirement of an
action in detinue and it lies
only when at the time of the
demand for delivery up of the
chattel made by the person
entitled to possession, the
defendant was either in actual
possession of it or was estopped
from denying that he was still
in possession.
In its amended statement of
claim filed on 20th
May 1994, the Plaintiff claimed
as follows:-
(a)
A declaration that all the goods
itemized in various Bills of
Lading and consigned to
Plaintiff and in the custody of
the defendant are the property
of the Plaintiff.
(b)
An order that the said goods be
released by Defendant to
Plaintiff.
(c)
General damages for wrongful
detention.
The evidence shows that as soon
as the goods arrived on Ghana,
the Defendants notified the
Plaintiffs to take steps to take
delivery of them. At this point
the Defendants’ position was
that the Plaintiff should pay
accumulated demurrage and other
administrative charges before
they would release the goods to
it. This was a kind of lien and
I am satisfied that the
Defendants would have been
justified in taking that stand
if that was the sole reason for
holding on to the goods.
However, the Defendant admitted
they had reconsigned the goods
to Seo Kwang Ghana Ltd.
Thereafter, the retention of the
Plaintiffs goods was no longer
referable to the Defendants lien
for non-payment of the demurrage
and administrative charges. The
original bill of lading had been
“nullified”, said the Defendants
(P386) and the right to clear
the goods from the port was no
longer in the Plaintiff. The
Courts below have held that the
so-called instruction allegedly
from the consignors and upon
which the Defendant claimed to
have amended the manifest, was
not valid. This means that the
Defendants had no just cause for
re-consigning the goods to Seo
Kwang Ghana Ltd. What is worse,
Seo Kwang Ghana Ltd, itself had
dissociated itself from the suit
and had filed notice of
discontinuance. In the result,
the Defendants’ refusal to
deliver the goods to the
Plaintiff or its decision to
re-consign the goods to Seo
Kwang Ghana Ltd constituted and
unjustifiable denial of the
Plaintiff rights in them. In the
alternative, the assertion by
the Defendants that title had
moved to Seo Kwang Ghana Ltd was
inconsistent with the Plaintiff
rights as consignees. Either
way, the Defendants had
committed detinue and conversion
for which they could justifiably
be made to compensate the
Plaintiff.
But this is not the end of the
matter. On 29th July
1994, on the application of Seo
Kwang Ghana Ltd, the High Court
made an order appointing the
Agricultural Development Bank as
Receiver/Manager of the contents
of the 18 containers, the
subject matter of the suit then
in the possession of the
Defendants. The Defendants
obeyed that order and the ADB
eventually took possession of
the goods.
For their part, the Defendants
had counterclaimed for the sum
of ¢134,062,086.00 for demurrage
and administrative expenses
against the Plaintiff or the
Co-Defendants. Then we have the
activities of the 1st
and 2nd
Co-Defendants, Eun Mook Bang and
Yung Chul Choi.
The High Court and the Court of
Appeal dismissed the Plaintiff’s
claim for damages for the
wrongful retention of its goods.
The High Court took the view
that “the goods remained in the
custody of the Defendants NOT
because the Defendants
UNILATERALLY chose to detain but
principally because the
Plaintiff failed to pay the
eligible charges due on the
goods when he was requested to
do so”. The Court of Appeal also
refused to grant the Plaintiff
any damages for the wrongful
detention of its goods on the
ground that “the Plaintiff
caused or contributed to it”. I
have demonstrated above that the
Defendants were clearly liable
in conversion and both the High
Court and the Court of Appeal
clearly erred in dismissing that
part of the Plaintiff’s claim.
A successful action for
conversion may result in a
judgment of one of three
different forms:-
(i)
For the return of the
chattel or recovery of its value
as assessed and damages for its
detention.
(ii) for the value of the
chattel as assessed and damages
for its detention.
(iii) for the return of
the chattel and damages for its
detention .
see per Diplock L.J. in
General and Finance Facilities
Ltd v. Cooks Cars (Romsford) Ltd
(1963) 1 W.L.R 644 at
650-651.
It is clear that in each of the
three different forms of
judgment, general or special
damages may be awarded for the
wrongful detention. Thereafter,
consideration is given to the
chattel. Either it is returned
or the value is assessed and
ordered to be paid to the
Plaintiff. This is because a
Plaintiff whose chattel is being
unlawfully detained by the
defendant may demand its return
(in specie) if the defendant is
still in possession. The
Plaintiff will be entitled to
insist upon its return to him,
particularly, if the chattel is,
for example, a rare painting or
a curio or antique furniture. If
it is not returned then apart
from the general damages, he is
also entitled to have the value
of the chattel assessed and an
order made for the assessed
value to be paid to him. The
same principle will apply if for
example, the chattel has been
destroyed or for some other
reason the Defendant cannot
return the chattel to the
Plaintiff. For example in
Serbeh v Mensah (Suit No.
J4/34/2004) S.C unreported)
dated 9th March 2005,
the Plaintiff’s caterpillar was
cannibalized by the purchaser.
It could therefore not be
returned to the Plaintiff and
its value was ordered to be paid
to the Plaintiff.
With this background, I will now
consider the Plaintiff’s claim
for damages for wrongful
detention of its goods. In his
statement of case on behalf of
the Plaintiff, Mr Frempong
Boadu, learned Counsel for the
Plaintiff stated that the
Plaintiff was not claiming
special damages so as to
specifically prove the quantum
of damages. He said the
Plaintiff was claiming general
damages but the quantum of
general damages may be
determined by material facts and
relevant figures available in
the case. He referred to P.746
of the record to demonstrate how
he had quantified Plaintiff’s
loss which he claimed “could run
into more than
¢4,000,000,000.00”. He submitted
“that the Defendant was the
cause of the long delay in
paying for the goods even if the
Plaintiff could have managed to
take delivery of the goods
earlier”.
At P.746 of the record learned
counsel stated the total tyres
apparently stored in the 18
containers was 4680 retreated
tyres. He said their total value
as given in the Bills of
Exchange came to $518,390.00. It
was from these and other facts
that learned counsel submitted
that the Plaintiff’s loss could
run into more
than¢4,000,000,000.00.
At common law, the only remedy
for conversion was the purely
personal one of damages.
However, when the defendant was
in possession of the goods and
refused to deliver them up on
demand, his act was not only
conversion but also detinue and
the form of judgment in detinue
might include an order for the
delivery up of the goods. In the
Plaintiff’s case here, what it
is claiming is really special
damages and surely they had to
be pleaded and particularized.
This it failed to do. In
Brandeis Goldschmidt & Co. Ltd
v. Western Transport Ltd ,
(1982) 1 All ER, 28, the
Plaintiff’s imported copper for
the purpose of their business
of refining it and selling the
refined products. The
Defendants, who transported
imported copper to the
Plaintiffs refinery, detained a
quantity of the Plaintiffs
copper to offset a debt owed to
them by the Plaintiffs’
forwarding agents. The
Plaintiffs brought an action
against the Defendants for
damages for wrongful detention,
and although the Defendants
admitted liability and delivered
up the copper, the Plaintiffs
continued to pursue their claim,
contending that they were
entitled to damages for:
(i)
the fall in the market value of
the copper during the detention
which they quantified at
£3588.00
(ii)
for additional interest paid on
their bank overdraft during the
period of detention, agreed at
£2800.00.
The Plaintiff did not adduce
evidence of the actual loss
sustained in their business by
reason of the wrongful
detention. The High Court
granted the Plaintiffs’ claim
but the Court of Appeal reversed
it, holding that damages for
wrongful detention were awarded
by way of compensation for loss
which a Plaintiff actually
sustained by reason of the
detention and therefore the
Plaintiffs had to prove actual
loss. Accordingly, since the
Plaintiffs had not incurred any
actual loss in the
circumstances, they were only
entitled to nominal damages for
the infringement of their right
of possession of the copper.
Generally, damages in tort are
awarded by way of monetary
compensation for a loss or
losses which a plaintiff has
actually sustained, and the
measure of damages awarded on
this basis may vary infinitely
according to the individual
circumstances of any particular
case. It is for a plaintiff to
prove what loss, if any, it has
suffered by reason of a tort,
and when, as in this case, the
effect of the tort is
potentially adverse interference
with the course of its business
operations, it is for it to
establish by evidence that there
was in fact such adverse
interference and that it
suffered a properly quantifiable
loss by reason of it.
The Plaintiff had purchased the
tyres for the purpose of trading
in it, but it did not establish
by evidence that there had been
any fall in the price of the
tyres during the period of
detention attributable to the
Defendant’s wrongful act. The
Plaintiff complained rather that
as a result of the original act
of detention, the litigation
spread over a period of 10
years. However, the record shows
that on the 29th July 1994 the
Court made an order for the
goods to be handed over to a
Receiver/Manager and the
Defendants cannot be blamed for
the future dealing with the
goods by the Receiver/Manager.
In any event, I am not persuaded
that is a proper factor to be
taken into consideration in
assessing the Plaintiff’s loss.
The Plaintiff, as it has been
pointed out, claimed general
damages. General damage is such
as the law will presume to be
the natural or probable
consequence of the Defendant’s
act. It arises by inference of
the law and therefore need not
be proved by evidence and may be
averred generally. I accept that
the detention of the Plaintiff’s
goods between 26th
March 1994 and 29th
July 1994 when the Defendant
purported to hold them on behalf
of the original Co-Defendant
infringed the Plaintiff’s right
of possession of the goods. The
law implies general damage in
every infringement of an
absolute right. I will award the
Plaintiff nominal damages which
I assess at ¢50,000,000.00.
Now to the value of the goods.
The evidence shows that an
inventory of the goods was taken
and the Receiver/Manager took
possession. Its mandate was to
sell the goods (contents of the
18 containers) expeditiously and
to invest the proceeds in
interest-yielding securities.
The Receiver/Manager filed its
accounts and it was
cross-examined about the way it
discharged its mandate.
The evidence established an
abysmal dereliction of duty by
it. Contrary to its clear
mandate to sell and invest the
proceeds in interest-yielding
securities, it sold some of the
goods on credit and in respect
of others, it reduced the
approved prices without prior
authorization from the court
that appointed it. In the result
it recorded an amount of
¢301,099,302,43 as owed by
customers. (See page 426). At
page 434, a total sum of
¢146,457,026,19 is given as
representing interest on fixed
deposits made by the
Receiver/Manager. Obviously, if
there had not been unauthorized
reduction in the value of the
tyres, more money would have
been realized by the
Receiver/Manager and invested.
More interest would then have
accrued to the beneficiaries of
the proceeds of sale. Both the
credits outstanding and the
difference in reduced prices
must all be made good by the
Receiver/Manager.
In my view, a Receiver/Manager
appointed by the court not only
fills a fiduciary position
towards all who have legitimate
interest in the property which
he is to manage or dispose of,
but his appointment to such an
office of such responsibility
presupposes that he will
discharge his duties with
punctilious rectitude. This the
Agricultural Development Bank
failed to do. Little wonder the
ADB was adjudged by the learned
trial judge to have failed
responsibly and faithfully to
discharge its duties as
Receivers. In the circumstances,
the court rightly ordered, in my
view, that the ADB was to be
surcharged with the value of the
balance of the goods they did
not properly account for plus
interest at the prevailing bank
rate from 1996 to date of
judgment. The learned High Court
judge explained that the award
of interest was based on the
earlier order of the court to
the Bank to invest the proceeds
from the sale of the goods in
dispute in interest-yielding
Bonds to attract interest. I
confirm this order except that
the interest should be
calculated up to the date of
payment of the sums found due.
The payment should of course be
made to the Plaintiff.
The record shows that the Court
of Appeal allowed the
Plaintiff’s cross-appeal in part
by limiting the demurrage
claimed by the Defendant against
the Plaintiff to an amount
payable up to 25th
March 1994 when the Defendants
purported to re-consign the
goods to the original
Co-Defendants, Seo Kwang Ghana
Ltd. The sum of ¢134,062,082
which was adjudged to be paid by
the Plaintiff must now be
apportioned on a time basis so
that the true figure would be
ascertained.
Finally, the Court of Appeal
ordered “the Defendant and
Co-Defendants should be liable
and bear joint culpability for
any demurrage or other charges
arising or accruing after 25th
March 1994”. With all respect to
their Lordships in the Court of
Appeal I cannot see why the
Co-Defendants should also be
liable for the demurrage and
other charges after the
adjustment it had correctly
ordered. The Co-Defendants
applied and were given leave to
join the suit. They cannot be
penalized for that. I see the
Defendant’s claim for demurrage
against the Plaintiff as a claim
in quasi contract. The expense
was properly the Plaintiff’s. So
having paid on its behalf it was
entitled to be indemnified. It
was a kind of implied contract
to pay. The demurrage and other
administrative charges after 25th
March 1994 would have been
payable by the Co-Defendants if
the Court of Appeal had adjudged
them owners of the goods. The
Co-Defendants appeal failed and
was dismissed. They incurred no
liability for demurrage on other
people’s goods. The order of the
Court of Appeal in this regard
is set aside.
DR. S. TWUM, JS.C.
JUSTICE OF THE SUPREME COURT
S.A.B. AKUFFO (MS)
JUSTICE OF THE SUPREME COURT
PROF. T. M. OCRAN
JUSTICE OF THE SUPREME COURT
J. ANSAH
JUSTICE OF THE SUPREME COURT
DR. DATE-BAH, J.S.C:
The facts in this case have
already been ably set out by my
learned brother Dr. Twum JSC in
his usual thorough and
painstaking style in the
judgment of the Court delivered
by him. There is thus no need
for me to repeat the facts. I
agree with the Court that the
appeal should be dismissed and
the cross-appeal be allowed. My
own judgment, which is intended
to cast further light on the
liability of the defendant in
conversion, will focus on the
cross-appeal of the
plaintiff/respondent/respondent
(who will hereafter be referred
to as the plaintiff). The
grounds of appeal relied on by
the plaintiff in its
cross-appeal were to the
following effect (See p.777 of
the Record):
“Having found that the Defendant
alleged change of consignee as
at 25th March 1994 was illegal
the Court erred and (sic) not
deciding that the said illegal
act prompted or paved the way
for Seo-Kwang Ghana limited and
later the Co-Defendants to join
the suit resulting in the long
delay of the suit with its
resultant loss to the Plaintiff
and therefore the Defendants
ought to compensate the
Plaintiff for the loss.”
The plaintiff argues its case on
its cross-appeal as follows in
its Statement of Case:
“The goods are to be paid for in
dollars and even without any
direct figures from the Bank of
Ghana, I think the court can
take judicial notice of the fact
that between 1994 and May 2002
when the High Court delivered
its judgment the exchange rates
of the Cedi to US Dollars had
increased more than 700% so the
purchase price of the goods
which were to be paid in dollars
had increased by 700% at least.
The Plaintiff must pay this, as
faultless as the Plaintiff can
be for this long delay.
The Defendant (Roro Services)
claim that the Consignors
authorized them to replace the
Plaintiff with Seo-Kwang (Ghana)
Ltd. as the consignees
entititled to the goods has been
discussed above and the same had
not received favour from the
High Court and the Court of
Appeal. The High Court having
dismissed the Defendants
contention, failed to follow up
with the consequences of the
Defendant’s unlawful behaviour
and so the Plaintiff
cross-appealed to the Court of
Appeal on the grounds:
(a)
The Learned Judge ought
to have come out with a finding
that having unlawfully changed
the consignee the Defendant as
of 31st May 1994 and prevented
the Plaintiff from taking
delivery of the goods the
Plaintiff should not be made to
pay for demurrage and
administrative (sic) after 31st
May 1994 the Learned Judge
granted the Defendants
counter-claim.
(b)
The Learned Judge ought
to have more importantly awarded
the Plaintiff adequate
compensation to mitigate the
loss of Plaintiff in paying for
the goods in Dollars in 2002 (at
the time of the judgment) when
the goods had not been paid for
because of the litigation
prolonged by the Defendants
unlawful act.
The Plaintiff’s appeal to the
Court of Appeal was accepted in
part, thus, the Plaintiff ought
not to pay demurrage and
administrative charges after
31st May 1994 because the
Defendant had no lawful
authority to change the
consignee but the Court refused
to award the Plaintiff any
compensation, hence the
cross-appeal to this Court. The
grounds and reasons for the
appeal had been canvassed above
and need not to be repeated save
the prayer that the Plaintiff
must be compensated to mitigate
its loss. The Plaintiff is not
claiming special damages so as
to specifically prove the
quantum of damages. Here the
Plaintiff claims general damages
but the quantum of general
damages may be determined by
material facts and relevant
figures available in the case
and for that matter I humbly
refer my Lords to page 746 of
the record of proceedings to see
how I have tried to assess the
Plaintiff’s loss which could run
into more than c4,000,000,000.
The Defendant as submitted above
is the great cause of the long
delay in paying for the goods
even if the Plaintiff could have
managed to take delivery of the
goods earlier. This is because
after the Defendant unlawfully
changed the consignee the
Plaintiff default getting the
goods released (sic) and the
Plaintiff ceased to be
responsible for the non-delivery
of the goods.
The Court of Appeals (sic) error
in not awarding damages to the
Plaintiff must be corrected and
the Plaintiff’s cross-appeal
upheld.”
In short, the Plaintiff, is
requesting this Court to revisit
the matter of the third claim
endorsed on its Writ, namely:
“damages for wrongful detention
of the Plaintiff’s goods.”
The Court of Appeal dismissed
this claim, with Quaye JA
offering the following
explanation:
“One of the most basic
principles of our jurisprudence
is that a party to an action
should not be allowed to take
advantage of his own defendant
(sic). Indeed, there is no
dispute that the plaintiffs
failed to present the relevant
documentation to the defendants
to collect the goods, thus
accruing huge demurrage and
administrative and handling
charges. It was only when they
were confronted with the
likelihood of losing the goods
that in desperation they started
to fight for ownership of the
goods. In the meantime the
goods had attracted huge
administrative and demurrage
charges. In my judgment, and
upon the facts and evidence
available, the plaintiffs are
liable to pay the charges and
other bills that had accrued
from the arrival of the goods,
until the time the defendants
replaced them as consignees,
that is to say 25th March 1994.
The claim for award of damages
for wrongful detention fails on
the ground that the plaintiff
caused or contributed to it.”
I am unable to accept the
learned Justice of Appeal’s view
on this issue. The Defendant’s
act of replacing the Plaintiff
as the consignee of the goods
was an act of conversion. By
that act, the Defendant became
liable for damages in
conversion. It had dealt with
the Plaintiff’s goods in a
manner which deprived it of the
use or possession of them. The
Plaintiff’s claim, in its Writ,
for “damages for wrongful
detention of the Plaintiff’s
goods” was in effect an action
in conversion. Whatever
default, with regard to the
payment of demurrage or
administrative charges, that the
Plaintiff exhibited prior to the
Defendant’s act of conversion
cannot negate the Defendant’s
liability for damages for
conversion. Both the judgments
of the learned trial judge and
His Lordship Justice Quaye JA
demonstrated an internal
contradiction in finding facts
that established a liability in
tort for conversion, but in
refusing to award any damages
for that tortious liability. As
Lord Nicholls of Birkenhead said
in Kuwait Airways Corporation
v Iraqi Airways (Nos. 4 and 5)
[2002] 2 AC 883 at p.1092:
“Conversion is the principal
means whereby English law
protects ownership of goods.
Misappropriation of another’s
goods constitutes conversion.
Committing this tort gives rise
to an obligation to pay
damages.”
It is true that the Defendant
argued that it had not detained
the Plaintiff’s goods, but that
the Plaintiff had disabled
itself from clearing the goods
because of its failure to take
the requiste steps. Thus in the
Statement of Case filed on
behalf of the
Defendant/Cross-Respondent, it
argues as follows:
“And my contention is that, the
evidence shows that for all this
time, the Plaintiff had failed
in duty to make itself legally
qualified to be able to clear
the goods and so it is not the
Defendant that was detaining the
goods, as the Plaintiff makes it
as one of the bases for seeking
damages against the defendant.
It is the Plaintiff’s own
failure to do what must be done
as a duty to qualify it as the
consignee with an accrued
right.”
With respect, this argument is
disingenous, since, after 25th
March 1994, the Plaintiff could
not clear the goods any more,
through the action of the
Defendant in replacing him as
the consignee with the original
co-defendant in this suit.
These arguments of the Defendant
can therefore have a relevance
to only the period before 25th
March. After that date, there
is no viable answer to the
Plaintiff’s claim for damages
for wrongful detention of its
goods, which in law amounts to
conversion.
Conversion is a tort of strict
liability. In other words, if
an act amounts to conversion, it
is irrelevant to the liability
of the tortfeasor whether he or
she is aware of that fact or
not, or is at fault. As Diplock
LJ (as he then was) said in
Marfani & Co. v Midland Bank
Ltd. [1968] 1WLR 956 at p.
971:
“At common law one’s duty to
one’s neighbour who is the owner
...of any goods is to refrain
from doing any voluntary act in
relation to his goods which is a
usurpation of his proprietary or
possessory rights in them.
Subject to some exceptions ...it
matters not that the doer of the
act of usurpation did not know,
and could not by the exercise of
reasonable care have known of
his neighbour’s interest in the
goods. This duty is absolute; he
acts at his peril.”
Thus it was not legally viable
for the Defendant in this case
to sit on the fence in between
the Plaintiffs and the
Co-Defendants. If it carried
out acts incompatible with the
ownership rights of either
party, it would be liable to
that party. Thus, its liability
would not be negated by the
following position that it
adopted, as described by the
learned trial judge:
“Now, the pivotal issue for
determination, upon which all
the other issues and reliefs
revolve and necessarily derive
from is the first issue, to wit,
a)
whether on the evidence
and the law, title or ownership
of the goods the subject-matter
of the present dispute, are
vested in the Plaintiffs or the
Co-Defendants herein.
In this regard, it must first be
stressed here that the position
taken by the Defendants, on
this issue was to take a neutral
stand and declared themselves
ready to abide the decision of
the court on this issue “since
these are matters which can only
be determined by the court
examining the evidence of the
Plaintiff and Co-Defendants.””
Having, in effect, thrown in its
lot against the Plaintiff (by
removing him as the consignee),
the Defendant took a risk which
has materialised, in that title
in the disputed goods has been
declared as vested in the
Plaintiff, rather than in the
Co-Defendants. It therefore has
to face the legal consequences
of the risk that it took.
In this connection, the
following discussion of the
nature of the tort of conversion
by Lord Nicholls of Birkenhead
in Kuwait Airways Corporation
v Iraqi Airways (Nos. 4 and 5)
(supra) at p. 1084 is
relevant:
“Conversion of goods can occur
in so many different
circumstances that framing a
precise definition of universal
application is well nigh
impossible. In general, the
basic features of the tort are
threefold. First, the
defendant’s conduct was
inconsistent with the rights of
the owner (or other person
entitled to possession).
Second, the conduct was
deliberate, not accidental.
Third, the conduct was so
extensive an encroachment on the
rights of the owner as to
exclude him from use and
possession of the goods. The
contrast is with lesser acts of
interference. If these cause
damage they may give rise to
claims for trespass or in
negligence, but they do not
constitute conversion.
...mere unauthorised retention
of another’s goods is not
conversion of them. Mere
possession of another’s goods
without title is not necessarily
inconsistent with the rights of
the owner. To constitute
conversion detention must be
adverse to the owner, excluding
him from the goods. It must be
accompanied by an intention to
keep the goods. Whether the
existence of this intention can
properly be inferred depends on
the circumstances of the case.
A demand and refusal to deliver
up goods are the usual way of
proving an intention to keep
goods adverse to the owner, but
this is not the only way.”
Similarly,
the Supreme Court in Standard
Chartered Bank v Nelson
[1998-99] SCGLR 810 at p. 817
authoritatively pronounced that:
“But whenever, as in the present
case, chattels belonging to one
person are appropriated to the
use of another, the proper
action is in conversion….Indeed,
such is the modern situation
that where in normal commercial
relationships, goods or chattels
are wrongfully taken possession
of, then, the least application
of the goods or chattels to any
purpose whatsoever will amount
to conversion. Conversion,
then, is the wrongful possession
of goods or chattel belonging to
another and the use thereof by
that other.”
On the facts of this case, there
was clearly such a detention of
the goods as to constitute
conversion. On the instructions
of the alleged consignors of the
goods, the Defendant had changed
the Plaintiff from being a
consignee and thus challenged
its dominion over its goods.
Thus, the liability is clear.
What remains to be discussed is
the principles governing the
determination of damages that
should be paid for this
conversion.
The normal measure of damages
for conversion is the value of
the goods converted, together
with any consequential loss
which is not remote. In
contrast, the normal measure of
damages for detinue, which lays
emphasis on the return of the
goods, is the loss arising
through the detention of the
goods, in addition to the value
of the goods, where the court
has not ordered their return. I
have interpreted the Plaintiff’s
action as one for conversion,
rather than for detinue, since
there was no special emphasis on
the return of the very goods
interfered with. The Plaintiff
was more interested in receiving
the value of its goods than the
very goods themselves. The
rationale for the measure of
damages for conversion was
stated thus by Greer LJ in
Hall v Barclay [1937] 3 All
ER 620 at 623:
“where you are dealing with
goods which can be readily
bought in the market, a man
whose rights have been
interfered with is never
entitled to more than what he
would have to pay to buy a
similar article in the market.”
There is an issue as to when the
value of the goods is to be
determined. In the English case
law, no firm and inflexible rule
has emerged on this. However,
the value as at the time of the
conversion seems to be a normal
measure, subject to adaptation
to suit the needs of justice on
the facts of particular cases.
McGregor on Damages (16th
Edition, 1997), para. 1386
states that:
“It is submitted that the
soundest approach is to start
off with the value at the time
of conversion as the prima facie
measure; this is in accord with
the general principle that
damages are to be assessed as at
the date of the wrong. The
effect upon this measure of
damages of increases or
decreases in the value between
wrong and judgment must then be
considered.”
In Serbeh v Mensah (Suit
No. J4/34/2004, Unreported
judgment of the Supreme Court
delivered on 9th March 2005),
the Supreme Court held that
the Plaintiff in the case was
entitled to damages based on the
market value of the chattel
converted, as of the date of
conversion, and to interest on
the damages from the date the
cause of action arose. The
facts of Serbeh v Mensah
were as follows: the defendant
had bought and taken delivery of
equipment which belonged to the
plaintiff, pursuant to a
purported sales agreement
concluded with the wife of the
managing director of the
plaintiff. This purported
agreement was in fact invalid
since the wife had no authority
to enter into it. On these
facts, the Supreme Court held
that the defendant’s act of
purchasing a chattel which did
not belong to the purported
seller, coupled with his act of
receiving delivery of the
chattel, amounted to conversion
with effect from the date of
delivery of the chattel
concerned. The Court thus held,
as already noted, that the
plaintiff was entitled to
damages based on the market
value of the chattel converted,
as of the date of conversion,
and to interest on the damages
from the date the cause of
action arose. I propose to
follow this decision, as it is
binding on this Court and I do
not see any basis for
distinguishing, on this issue,
the material facts of that case
from the present case.
Accordingly, the damages that I
would award are what would be
equivalent to the value, as at
25th March 1994, of
the goods converted, together
with interest from that date to
the date of the final orders of
this Court. There are, however,
problems relating to the
mechanics for the computation of
this value. I am willing to
follow the lead of my brother
Dr. Twum JSC in referring the
computation of the value to Mr.
Prosper Adeti. He is to compute
the value of the goods in
accordance with the principles
and directions laid down by this
Court. Thus, I have reached a
conclusion on the measure of
damages applicable on the facts
of this case which is similar to
that of the Court, but through a
route that is a little
different.
The learned trial judge, His
Lordship K K Acquaye (of recent
blessed memory), was critical of
the conduct of the receiver and
manager that the trial court had
appointed and considered that
the receiver and manager had not
realized the full potential
market value of the goods. This
is what he had to say:
“Finally, the court, during the
pendency of the suit, appointed
the AGRICULTURAL DEVELOPMENT
BANK as Receivers and Managers
of the goods in dispute. The
goods were shipped to Ghana from
Korea in 18 containers and the
Bank as Receivers and Managers
were given specific orders by
the court to sell off the goods
in those 18 containers and
invest the proceeds to abide the
determination by the court of
the ownership of those goods.
It is regrettable to note that
the Bank failed to responsibly
and faithfully discharge its
duties as Receivers and Managers
as required by law. Their
statement of account submitted
to the court, shows that of the
c475,415,697.57 worth of goods
that was handed over to them and
which they gave out to
purchasers they were able to
recover only c174,415,697.57
leaving as much as
c301,099,302.43 still in debt.
That amount has been
outstanding with the persons to
whom the Bank has sold the goods
since 1996.
It is clear that they handled
this matter with extreme
recklessness and irresponsible
behaviour and conduct and I
fully endorse the submissions
made by counsel on behalf of the
Plaintiffs and the Co-Defendant
on this issue. I also accept
the suggestions made by counsel
in their submissions and hold
that if the Bank could not find
buyers at the going market
rates, their duty was to seek
further directions from the
court. This the Bank did not
do. Instead the Bank
unilaterally took the reckless
and irresponsible risk to reduce
the prices and sell the goods on
credit and so far have failed to
recover the proceeds and invest
same as ordered by the court.
By their negligent and reckless
action, the Bank as
Manager/Receivers have wholly
negated the purpose for which
the court appointed them – which
was to realize the proceeds from
the sale of goods in the 18
containers quickly and invest
the same so that the value of
the money may not be lost
between the time the action was
commenced and the time of final
judgment.
On the basis of the
misdemeanors, and defaults
recounted above, the court has
no hesitation whatsoever in
surcharging the Bank, the
Manager/Receivers, with balance
of the value of the goods they
gave out on credit and failed to
recover for the past five years,
together with interest at the
prevailing bank rates from 1996
to the date of judgment. The
award of interest here is based
on the earlier order of the
court to the Bank to invest the
proceeds. After payment, the
Bank may take whatever step they
deem fit to recover the money
from their debtors. The total
amount the Bank is ordered to
pay the victorious party herein,
i.e. the Plaintiff, is found in
the statement submitted to the
court by the Bank itself during
the trial. It is only after
payment of the monies mentioned
above that the Bank may apply to
the court for the payment of any
commission still due it.”
As my brother Dr. Twum JSC has
already indicated, this Court
confirms these orders by the
High Court to the
receiver/manager.
DR. S. K. DATE-BAH
JUSTICE OF THE SUPREME COURT
COUNSEL:
Mr. Dick Anyadi for Appellant.
Mr. Koranteng Ata-Caesar for
Respondent.
Mr. Frempong-Buadu for Cross
Appellant.
gso*
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