Division: IN THE SUPREME COURT
Date: 11 MAY 1964
Before: SARKODEE-ADOO CJ, OLLENNU AND ACOLATSE JJSC
JUDGMENT OF OLLENNU JSC
Ollennu JSC delivered the judgment of the court. In or about 1958 the appellant raised a loan from the second respondent, £G60 being the aggregate amount to be repaid. No details or particulars were given as to the principal sum and interest thereon. The appellant gave the second respondent a promissory note on the amount and secured payment of the same with a gold chain valued £G80. The amount became due at the end of May 1959, whereupon the second respondent by her agent, one E. O. K. Oppong, sent a demand note, exhibit 1, to the appellant in the following terms:
“Sir,
Please take notice that the time fixed for the payment of the amount of sixty pounds (£G60) is overdue, and you are requested to make payment forthwith. In failure of which I will be compelled to sell the property pledged as contained in your promissory note in hand for recovery without further notice to you.”
In this note also, the second respondent failed to give particulars of the loan and interest.
The appellant defaulted, and on 16 June 1959, the second respondent, again by her said agent, wrote to the appellant exhibit 2 as follows:
“Sir,
Upon my letter of demand of 30 May 1959, I have to inform you that your property pledged to me have been sold for the sum of twenty-five (£G25). You are requested to make payment of the balance of thirty-five pounds (£G35) forthwith in failure of which I will be compelled to institute legal action against you in the court for recovery of same.”
The letter too gave no particulars of the principal loan and of the interest thereon.
On 5 April 1960, the second respondent by her said agent instituted action against the appellant in the Municipal Court, Kumasi, for recovery, not of the sum of £G35 due as stated by her in exhibit 2, but for an amount of £G68 14s. Although the writ of summons was served on the appellant, he failed to appear on the return date and judgment was entered against him on 28 April 1960, for the amount of £G68 14s.
A formal decree was served on the appellant on 20 May 1960, but a copy of the order or decision of the court was not served upon him. However, on 28 June 1960, the second respondent applied to, and on 30 June 1960, the municipal court issued a writ of fi. fa. for the attachment and sale of plot No. A.N. 57, the property now in dispute, with the building thereon, for the recovery of the sum of £G71, and the property was accordingly attached, to be sold on 28 July 1960; but the sale did not take place until 18 December 1960, the same having, in the interim, been postponed twice at the instance of the appellant, and once upon the auctioneer’s own initiative. The property was knocked down to the first respondent for £G2,500; the certificate of purchase, exhibit B, was afterwards issued to him in respect of the purchase. The first respondent also paid to the Kumasi Municipal Council the sum of £G91 4s. on account of ground rents due; he then served notice upon the appellant to vacate the premises and also called upon the tenants of the house to attorn tenants to him.
Prior to their attachment, the premises had been mortgaged to a co-operative society to secure a loan of £G2,500. The appellant refused to quit the premises or to allow his tenants to attorn tenants to the first respondent, who therefore, instituted this action claiming against the appellant: (a) a declaration of title to, and recovery of possession of, the premises No. N.A. 57, Kumasi; (b) the rents for the period 15 January 1961 to date of judgment, at £G60 a month; and (c) a perpetual injunction.
The appellant resisted the claim on the grounds that: (a) the premises are the property of his family, and cannot, therefore, be sold in execution of a decree against him personally; (b) the legal estate in the premises was vested in the co-operative society by reason of the mortgage to them; (c) the issue and execution of the writ of fi fa. were irregular and fraudulent, and therefore ineffective; and (d) the second respondent by her agent the said E. O. K. Oppong, had accepted from him an assignment of a promissory note for a higher amount to collect the same and to pay himself the judgment debt and whatever else might be due.
Pursuant to the defences raised, the appellant applied and the second respondent and the co-operative society were joined as parties to the suit. The second respondent did not file any reply to the defence of the appellant, and at the trial refused to give evidence; and the court recorded the refusal as follows: “E. O. K. Oppong states he represents Agnes Opare who is his cousin and states he does not wish to offer any evidence in this case.”
The Nkwanta-Abore Co-operative gave evidence and tendered their deed of mortgage, but the same had not been registered, and therefore by virtue of section 23 of the Kumasi Lands Ordinance,1 is not effective.
The said deed of mortgage also disposed of the plea that the premises are family property, because therein, the appellant is shown to be the mortgagor, and members of his family are shown as witnesses attesting to the fact that he is owner entitled to dispose of the legal estate therein. The deed of mortgage, therefore, operates as estoppel against the family it being a declaration by the family against their interest.
The High Court rejected the defence and entered judgement for the first respondent in respect of his claims and awarded him £G110 mesne profits instead of his claim for rents.
The appellant lodged an appeal against the judgment of the High Court on two main grounds: (1) that the sale of house No. N.A. 57, Kumasi, to the first respondent, was null and void and of no legal effect; (2) that the finding of the learned trial judge that the judgment obtained by the second respondent against the appellant at the Kumasi Municipal Court was not tainted with fraud was unreasonable and cannot be supported having regard to the evidence. There are two illegalities relied upon by counsel in the first ground of the appeal: (i) the execution issued contravened regulation 97 (2) of the Local Courts Procedure Regulations, 1952,2 and (ii) the attachment of real property for such a small sum without first attaching movable property.
Dealing with the point raised that the issue of execution and the consequent sale of the property upon the writ of fi. fa. is illegal, and therefore the sale is null and void, the learned judge of the High Court said inter alia:
“The judgment in this case was delivered on 28 April 1960, and was admittedly ex-parte. Although there is no evidence that a copy of it was served on the defendant, a formal decree was served on him in less than a month after its delivery, namely, 20 May 1960. The formal decree in the special circumstances of this case gave the defendant the same information that the judgment of the court would have given him. He took no steps to set it aside. He did not seek to question the execution which was taken consequent upon it. On the contrary, he approbated it by writing to the deputy sheriff and asking for accommodation (see exhibit E). In
my judgment, it is much too late to permit the defendant either to question the judgment or the regularity of the steps which were taken to enforce it.”
Counsel for the appellant submitted that service of a decree together with a copy of the order made in default of appearance by a defendant in a local court, is a condition precedent to the issue of execution; therefore, he said, execution taken without such service is illegal. He referred the court to regulation 97 of the Local Courts Procedure Regulations, 1959. Counsel for the first respondent on the other hand argued that the only purpose for the requirement that a copy of the decision given in default of appearance by a defendant should be served on the defendant, is to enable the defendant who defaulted to re-open the proceedings; in support of the contention he referred the court to section 51 of the Local Courts Act, 1958,3 and the said regulation 97 (supra).
When properly interpreted, section 51 of the Local Courts Act, 1958, taken together with regulation 96 makes one provision, while the same section taken together with regulation 97 makes quite a different provision. A local court has no jurisdiction to review its decision once given; similarly a defendant or respondent to an appeal against whom judgment has been given in default, has no right of appeal. The purpose of section 51 of the Act, is to enable such a defendant or respondent to have the case re-opened if he should so desire; therefore, section 51 together with regulation 96, give the local court a special jurisdiction to review its decision given against such defendant or respondent, and eventually to give him, i.e. the defendant or respondent, a right of appeal. Regulation 96 provides as follows: “A Local Court Magistrate shall not have power to review his own judgment, decision or order: Provided that where judgment is given by default (ex parte) against the defendant, the provisions of section 51 of the Local Courts Act for reversing, varying or discharging the decision shall apply.” Section 51 is a verbatim reproduction of section 51 of the Native Courts (Southern Ghana) Ordinance.4 We cite with approval the interpretation given to the said section 51 of the Native Court (Southern Ghana) Ordinance, by the Land Court in Seawornu v. Gakor5; the sum total of which is, that the section gives a defendant or respondent, against whom judgment has been given in default, time within which he may apply to the court to reverse, vary or discharge its decision, that the said right continues until the expiration of one month after service of a copy of the decision of the court upon him, that so long as a copy of the said decision has not beenserved upon him, the right to move the court to review persists, it only becomes barred upon the expiration of one month from the date of service of a copy of the decision upon him.
Regulation 97 provides as follows:
“(1) When a party affected by an order of a Local Court has appeared in the proceedings it shall not be necessary to bring the terms of the order to his notice before proceeding to execution.
(2) When a party affected by an order of a Local Court has not appeared in the proceedings the terms of such order shall be brought to his notice by the service upon him of a formal decree together with a notice embodying the text of the order.”
We interpret this to mean that whereas execution may levy on an order made against a party who had appeared, be he a plaintiff or a defendant, appellant or respondent, without service of copy of the order upon him, execution shall not levy on an order made against a party who has not appeared, be the plaintiff or defendant, appellant or respondent, without service upon him of (1) a formal decree, and (2) a notice embodying the text of the order. In other words it is a condition precedent that for execution to be legal against a party who has not appeared, that he
should be served both with a formal decree and notice of the order made against him in default. The reason for this mandatory rule is not difficult to see. Firstly, where in the other courts of the land, filing of an appeal does not operate as stay of execution and that execution can only be stayed upon an order either of the trial court or of the appellate court, the filing of notice of intention to appeal in a local court automatically operates as a stay of execution unless the appeal court should otherwise direct. Thus regulation 176 provides as follows:
“(1) A Local Court Registrar who receives a Notice of Intention to Appeal shall—
(a) attach a certificate copy of the order or decision to which such Notice refers; and
(b) forward it within ten days of receiving it to the Registrar of the Appeal Court named in it.
(2) The Local Court shall thereafter take no further action in the cause or matter and no further
proceedings in execution of the order or decision appealed against shall be taken except by direction of the Appeal Court.”
Now since under section 51 of the Local Courts Act, 1958, a local court will be bound to entertain an application for review of a judgment given in default, made at any time within one month of service of the order upon the defendant or respondent in default, and since in that review it may reverse, vary or discharge that order, it is certainly unjust that the local court should order execution to issue before the expiration of the period during which it could be called upon to review its said order.
Again, since filing of notice of intention to appeal operates by law as a stay of execution in a local court, it will be wrong for the local court to defeat the law by ordering the execution to proceed when the right subsists for a party to apply for a review, and if the review is refused, to appeal against the original judgment within one month from the date of the refusal of the application for review. On this question also, i.e. the right of a party to appeal against the original judgment when his application for review is refused, see the ruling of the Land Court in Seawornu v. Gakor6 which we cite with approval.
We are, therefore, of the opinion that the omission to serve a copy of the decision given in default on the defendant as required by the mandatory provisions of regulation 97 (2) rendered the execution null and void.
It was next submitted that the second respondent acted wrongly in causing immovable property of the appellant to be attached and sold, when she had not first had movable property attached and when it is not shown that the appellant had not enough movable property which could meet the amount of the decree. Counsel referred the court to Mather’s Sheriff and Execution Law (3rd ed.), p. 127. Counsel for the first respondent on the other hand, referred the court to regulations 142, 144, 145 and 146 of the Local Courts Procedure Regulations, 1959, and submitted that by virtue of regulation 146, the sheriff or bailiff has a discretion to attach real property, and is not bound to attach personal property first, and if that should prove insufficient, to attach real property.
At common law, the writ of fi. fa. is issued for the sale of goods and chattels; real property is not seizable under it, but chattels real like leasehold could: See Halsbury’s Laws of England (3rd ed.), Vol. 16, p. 45, para. 67. The writ of elegit applies to realty: Watson v. Murray & Co.7 Our form of execution came to us from Hong Kong where it permits the attachment of real property under a writ of fi. fa. should there not be enough personally to satisfy the judgment debt. Again in England, the writ obliges the sheriff to seize such chattels sufficient to satisfy the debt and costs; if what he seizes in one place proves to be insufficient, he may proceed to seize more. See Mather’s Sheriff and Execution Law (3rd ed.), p. 83. The
principle is stated in Halsbury’s Laws of England (3rd ed.), Vol. 16, p. 40, para. 59 as follows: “Under the writ of fieri facias it is [the sheriff ‘s] duty to seize and sell any goods which he has the power to seize, to an amount reasonably sufficient, but not more than sufficient, to satisfy the debt and his own expenses.” See also Gawler v. Chaplin8 and Aldred v. Constable.9
Now regulations 144, 145 and 146 of the Local Courts Procedure Regulations, 1959, relied upon by the first respondent are as follows:
“144. When an application is made for the execution of a decree for the payment of money by the attachment and sale of the property of the judgment debtor, the Local Court shall issue a writ of fieri facias.
145. Upon receipt of the writ the bailiff may seize movable property in the actual possession of the judgment debtor and keep it in his own possession and shall be responsible for its safe custody: Provided that clothing, bedding, and tools and instruments of his trade to the value of £G5, may not be seized.
146. Upon receipt of the writ the bailiff may attach lands, houses or other immovable property by serving the judgment debtor with a written order of the Local Court forbidding the judgment debtor from alienating and any person from receiving the property in any way. Copies of the written order shall also be posted up on the property itself.”
We are of the opinion that regulation 144 empowers the local court to issue a writ of fieri facias, as a common law process; that regulation 145 authorises the bailiff, by virtue of that common law process, to seize movable property, if there is a reasonable amount of such property sufficient to meet the debt and his costs; and that he can only resort to attachment of immovable property as provided under regulation
146 where the movable property is not enough to satisfy the debt. The discretion of the bailiff to attach immovable property as contained in regulation 146 may only be exercised in such circumstances as to make it just and reasonable. It is certainly wrong for the bailiff to have attached land and building in this case valued at least £G2,500 for an alleged debt of £G71, without first levying execution against the personalty. In this regard it should be pointed out that the bailiff was not left to exercise a discretion; the evidence of the first respondent’s third witness, the senior registrar of the Kumasi Local Court, shows that the bailiff was presented with a fait accompli, because the second respondent in her application for the issue of fi. fa. requested that the land and house No. N.A. 57 should be attached and sold, and the local court just made an order to that effect without satisfying itself that it had power to make such an order. If it had just been an injudicious exercise of discretion by the bailiff, the remedy of the appellant would have been a civil action in trespass based upon irregularity and not an illegality which vitiates the whole transaction. But in this case there is also the fact that the execution
itself is illegal.
There is one other matter which we feel compelled to touch upon. The transaction which culminated in the sale of the property is a moneylending transaction; and according to exhibit 2, the second respondent’s own letter, the balance due was £G35; yet she sued for £G68 14s. The second respondent in this court has taken an attitude similar to the one she took in the High Court: there has been no appearance by her or on her behalf. We asked counsel for the first respondent whether the transaction and the proceedings in the local court are not illegal in view of all the circumstances. Counsel replied that it is nothing more than sheer stupidity on the part of the appellant that he did not appear at the trial of the debt case in the local court to contest the claim as fraudulent; therefore, counsel submitted, the appellant cannot now be heard to complain. Counsel further submitted, that the record is silent whether or not the second respondent is a moneylender. This latter submission, in our view, places the second respondent on the horns of a dilemma. Because in either case her claim is illegal and the proceedings, judgment and execution thereon, are consequently null and void for the following reasons: Section 24 (1) of the Moneylenders Ordinance,10 provides that:
“Where proceedings are taken in any Court by any person for the recovery of any money lent, or the enforcement of any agreement or security made or taken in respect of money lent, the plaintiff shall produce a statement of his account as prescribed in section 20.”
Any person” there means a person whether or not a licensed moneylender. Section 20 of the Ordinance referred to in the section requires a statement of account showing:
“(a) the date on which the loan was made, the amount of the principal of the loan and the rate per centum per annum of interest charged; and
(b) the amount of any payment already received by the moneylender in respect of the loan or the interest thereon and the date on which it was made; and
(c) the amount of every sum due to the moneylender, but unpaid, and the date upon which it became due, and the amount of interest accrued due and unpaid in respect of every such sum; and
(d) the amount of every sum not yet due which remains outstanding, and the date upon which it will become due.”
Subsection (3) of the said section 20 provides that if a moneylender to whom a demand has been made for a statement of account in the form provided in subsection (1) “fails without reasonable excuse to comply therewith within one month after the demand has been made, he shall not, so long as the default continues, be entitled to sue for or recover any sum due under the contract on account either of principal or interest.” By analogy, therefore, if a plaintiff who sues on a moneylending transaction fails to produce such statement as the law requires him to do by section 24 (1) of the Ordinance, his claim should not be entertained by the court in which he sued, and if entertained should not be enforced.
The second respondent could not have produced such a statement to support her claim for £G68 14s. with costs, when upon her agent’s letter, exhibit 2, only £G35 was due. If she did, then she made a false statement and contravened the law. In either case the enforcement of her claim is illegal and she is not entitled to claim or enforce any sum due to her.
Thus this case bristles with illegalities from beginning to end, and consequent grave injustice. The court cannot shut its eyes against these illegalities which stare at it in the face.
What then is the position of the first respondent who purchased at the illegal sale? Counsel for the first respondent contends that he cannot be affected, and that the learned judge of the High Court said he is a “darling of equity” and is safely protected. On 24 March 1964, that is one week after we had reserved judgment, Mr. Victor Owusu, counsel for the first respondent wrote to the registrar of the court requesting him to direct our attention to the following three cases: (i) Boafo IV v. Kuma III,11 (ii) Nyako v. Akwa,12 and (iii) Akyeampong v. Atakora,13 which he said are authorities for a proposition that the first respondent, an innocent purchaser for value at an auction sale, is entitled to relief and should not be made to suffer in view of the appellant’s waiver and approbation of a mandatory provision. We do not see what relevancy any of these three cases has to the points at issue here.
In the Boafo case (supra), a judgment debtor moved the court to set aside a sale made in execution. The rules of court regulating a sale in execution provide that such a sale may be set aside at the instance of a judgment debtor if he fulfils each of three conditions: (i) he makes his application within 21 days of the date of the sale; (ii) he proves material irregularity in the conduct of the sale; and (iii) he satisfies the court that he has suffered substantial injury by reason of the sale. See Government [p.309] of [1964] GLR 299 of Ashanti v. Korkor.14 It was proved in the Boafo case (supra) that sufficient notice of the sale was not given, and that is a material irregularity, but that there was no proof of substantial injury. It was held, therefore, that the sale could not be set aside. To put it in other words, a material irregularity in the conduct of a sale in execution makes the sale merely voidable, not void. Until such a sale is set aside, it is legal for all purposes; but the moment it is declared by a court to be void, it ceases to have effect, and a purchaser thereunder will not be protected. The sale in the instant case is being challenged on grounds of illegality, not of irregularity. The contention therefore is that it is void ab initio, not just voidable. Should the court void a sale on grounds of material irregularity, the innocent purchaser for value will not be protected, he will have to surrender the property.
In the Nyako case (supra), an action was instituted in a native court B which was abolished while the case was pending. A native court A with a wider jurisdiction than the native court B was established for the area. In law a suit commenced in one court cannot be heard and continued in another court even though the latter possesses jurisdiction over the area and the subject-matter. The parties appeared before the native court A and there the plaintiff laid his complaint and the defendant pleaded and defended it. That procedure was also a lawful mode under the regulations for instituting proceedings in a native court. It was contended that the trial was null and void because the plaintiff did not take out a fresh summons. It was held that the proceedings which took place in the grade A native court were new proceedings which
were originated by the oral complaint by the plaintiff and not by the writ of summons taken in the abolished court B (even though the said writ was read out to the defendant). The proceedings were therefore regular and not irregular. The ratio decidendi in that case is that the parties adopted the alternative lawful mode of instituting proceedings in a native court, not that they acquiesced in proceeding upon a writ which expired with the court that issued it. It is not suggested in the present case that the illegal fi fa. was at any time abandoned, and that the sale which took place was made upon a lawful process of execution alternative to the writ of fi.fa.
Finally, the Akyeampong case (supra) involved a sale under a mortgage which was challenged on the grounds that the notice given by the mortgagee of his intention to exercise his powers of sale, “was not legal and proper, in that at that time the date of repayment under the mortgage deed was not due.” There was evidence that the power of sale was not in fact exercised until three months after the expiration of the time fixed in the mortgage for payment, and that when the sale was actually going to take place, the mortgagor was invited to be present but he refused to attend stating that his attendance could not prevent the sale. Again the plaintiff, the mortgagor, proved no damage. In those circumstances, the claim of the mortgagor was dismissed, though the court found that the sale was wrongful, since notice as prescribed in
the mortgage deed was not given. Note that the court held the sale to be wrongful, i.e. irregular, not illegal.
The present case is not one of irregularity in the conduct of a sale; it is not even, as the learned judge of the High Court thought, one of fraud for which equity could be called in aid. It is one which is illegal and therefore void ab initio. Therefore the first respondent acquired no title to the property which he can litigate.
We shall now proceed to consider the position of the first respondent upon the authority of cases where the sale has been held to be void by reason of illegality of the execution. A case in point is Gyebu v. Lagos15 and the English cases there referred to. The plaintiff in the case was the successor to a deceased judgment debtor. The first defendant judgment creditor went into execution after the death of the debtor, against farms of the deceased judgment debtor, without first obtaining the leave of the court and without having the plaintiff substituted for the judgment debtor as required by the rules. The second defendant was the purchaser at the sale in execution, who had no notice of the illegality. The sale was held to be illegal, and the plaintiff was held entitled to a declaration of title to and recovery of possession of the farms allegedly sold. The sale in the present case is in exactly the same position.
For these reasons we allow the appeal, set aside the judgment and order of the High Court, including the order as to costs; any costs paid to be refunded.
For the judgment of the High Court we substitute the following: the first respondent’s claim is dismissed, and judgment entered thereon for the appellant, with costs in the High Court assessed at £G63 against the first respondent and £G10 against the second respondent. The appellant will have his costs in this court fixed at £G74. Court below to carry out.
DECISION
Appeal allowed.
T. G. K.
