ASARE ORIGINAL PAY ALL vs. BAFFOUR [2001-2002] 2 GLR 165

CASES REFERRED TO

(1) North Western Salt Co Ltd v Electrolytic Alkali Co Ltd [1914] AC 461, HL.

(2) Royal Exchange Assurance Corporation v Sjoforsakrings Aktiebolaget Vega [1902] 2 KB 384, CA. (3) Attorney-General v Rambell Enterprises Ltd, High Court, Accra, 16 December 1997, unreported. (4) Asare v Brobbey [1971] 2 GLR 331, CA.

(5) Harper v Killion, 345 SW 2d 309 (Tex Civ App 1961).

(6) Schandorf v Zeini [1976] 2 GLR 418, CA.

(7) Blunt v Blunt [1943] AC 517, HL.

(8) Nkrumah v Ataa [1972] 2 GLR 13.

(9) Lanquaye v The Republic [1976] 1 GLR 1.

(10) Abakam Effiana Family v Mbibado Effiana Family [1959] GLR 362, CA.

[p.167] of [2001-2002] 2 GLR 165 (11) Gedge v Royal Exchange Assurance Corporation [1900] 2 QB 214.

(12) Snell v Unity Finance Co Ltd [1964] 2 QB 203; [1963] 3 All ER 50; [1963] 3 WLR 559, CA. (13) St John Shipping Corporation v Rank (Joseph) Ltd [1957] 1 QB 267; [1956] 3 All ER 683; [1956] 3 WLR 870.

(14) Gordon v Metropolitan Police Commissioner [1910] 2 KB 1080, CA.

(15) Mahmoud and Ispahani, Re [1921] 2 KB 716, CA.

APPEAL by the appellant private lotto operator from the judgment of the trial court in favour of the respondent for the sum of ¢74 million the respondent won on lotto tickets he had purchased on credit from an agent of the appellant and which the respondent paid for after the draw. The facts are sufficiently stated in the judgments of Gbadegbe and Owusu-Ansah JJA.

David Kudoadzi for the defendant-appellant.

J K Yeboah for the plaintiff-respondent.

Gbadegbe JA. By his action herein commenced before the Circuit Court, Accra the plaintiff-respondent (herein after referred to as the plaintiff) claimed against the defendant-appellant (herein- after referred to as the defendant) the payment of the sum of ¢74 million, being the value of wins drawn on lotto numbers on 21 October 1995. The evidence on the record is that the defendant is engaged in the conduct of private lotto under the provision of the National Weekly Lotto (Amendment) Law, 1989 (PNDCL 223) and as such is licensed to operate a lotto other than that undertaken by the Department of National Lotteries.

It appears from the transcript that the controversy herein arose when the defendant claiming that the plaintiff had not paid for the stakes before the numbers were drawn refused to pay the proceeds of the wins. In his evidence, the plaintiff contended that he staked the numbers which were drawn out of several to the tune of ¢482,000. That he did not pay immediately, he having come to an arrangement with the agent of the respondent, the first plaintiff witness, the latter was to pay immediately for the stakes in order

[p.168] of [2001-2002] 2 GLR 165 that he refunded the same later. In his evidence he stated that the following day, ie 22 October 1995, a day after the draw, he turned up in the house of the said agent, the first plaintiff witness, to pay the value. When, however, he presented his winning tickets in the expectation of receiving his proceeds, the defendant would not pay on the ground that he had credited the stakes. Since the matter could not be resolved, the plaintiff took out the writ of summons herein claiming as herein before mentioned.

In his evidence the plaintiff called the agent, the first plaintiff witness who is described in the judgment of the lower court as a “writer” whose evidence was to the effect that the plaintiff did, in fact, ask him to pay on his behalf, which he did and that on the following day, he came to make a refund of the amount to him. The defendant strenuously contended at the trial that the stakes of the plaintiff were credited and that when the first plaintiff witness’s returns of sales were checked he had a deficit of ¢518,000 of which the winning tickets in contention were part.

At the end of a full scale trial, the learned trial judge found as a fact that the plaintiff had made the requisite payment. He expressed himself in his judgment thus:

“I will prefer the evidence of the plaintiff and the first plaintiff witness, (the writer) that the plaintiff’s tickets were paid for on his behalf by the writer before the draw. Consequently, I will find that the plaintiff had a valid ticket which he won on 21 October 1995. These valid tickets on the evidence before the court entitled the plaintiff to the amount of ¢7,440,000. I will therefore give judgment to the plaintiff against the defendant in the sum of ¢7,440,000. I will award the plaintiff interest on the said sum from 21 October 1995, to the date of the judgment.”

Following this, the defendant appealed to this court. As at 14 March 1997 the sole ground filed with the notice of appeal was the omnibus one which sought to impeach the court’s finding on the ground that it was against the weight of the evidence. Subsequently, the said ground was supplemented with the following:

“(i) the trial judge erred in failing to find as a fact that the plaintiff credited the lotto;

[p.169] of [2001-2002] 2 GLR 165

(ii) the trial judge’s finding that the writer paid on behalf of the plaintiff is not supported by the evidence;

(iii) the honourable trial judge erred when he failed to find that there was a shortage in the daily order registered on 21 October 1995 by the writer.”

Before proceeding to consider the appeal in terms of the issues which we are to determine, I think it proper in the exercise of the powers conferred on us under rule 31(b) of the Court of Appeal Rules, 1997 (CI 19) to correct the defect in the original ground of appeal by substitution for the word “ruling” that of “judgment”. I think that the proceedings before us were based on a judgment, the delivery of the learned trial judge having been made after a full scale trial.

Having regard to the fact that the subject matter of the contract before us is one of betting, I think that the same is illegal except it is proved to have been specifically authorised or sanctioned by law. Thus, it is important first for this court to examine the legality or otherwise of the transaction, even though no objection was taken to the same by either party: see North Western Salt Co Ltd v Electrolytic Alkali Co Ltd [1914] AC 461, HL and Royal Exchange Assurance Corporation v Sjoforsakrings Aktiebolaget Vega [1902] 2 KB 384, CA.

Now, the plaintiff’s own evidence is that he staked the numbers on a “national banker to banker” which was in respect of a lotto to be drawn on 21 October 1995. True, it is that the nature of the lotto was not specifically pleaded, but I do not think that this precludes this court from examining the relevant legislations, namely the National Weekly Lotto Act, 1961 (Act 94), and the National Weekly Lotto (Amendment) Law, 1989 (PNDCL 223) to discern if the transaction is within the limits of the law, and therefore enforceable. It must be pointed out that the undertaking which the Department of National Lotteries is enabled to conduct is different from that of the District Weekly Lotto operators and that in particular, the latter group of licence is intended for an undertaking conducted separately and distinctly from the former. In section 1(a) of the Act 94 as amended by PNDCL 223, s 1(b) it is provided: “The operation of any form of lotto other than a lotto operated by the Department of National Lotteries shall be known as

[p.170] of [2001-2002] 2 GLR 165 a District Weekly Lotto.”

The parent Act, ie Act 94, also creates the offence of clandestine lotto in the following words in section 3(1). “A clandestine lotto, by whatever name called and in whatever manner and under whatever denomination it may be conducted, is prohibited”, with section (2) of Act 94 going further to create an offence in relation to stakes or undertakings which are clandestine in nature, the said offence being defined in PNDCL 223 to mean” . . . lotto conducted otherwise than under the provisions of this Act.”

In my view, it is clear from the enabling legislation that to be enforceable the transaction must be one which is sanctioned by law and that the burden is on the one who requires the court’s aid in enforcing the same. On the nature of lotto in terms of the applicable law, see Attorney-General v Rambel Enterprises Ltd, High Court, Accra, 16 December 1997, unreported coram Gbadegbe J (as he then was).

The simple question which this court has to resolve, turning on the nature of the transaction, is whether the transaction was within the law? I wish to pause and say that this crucial determination was inadvertently lost sight of by the trial court and since this court in the exercise of its powers of rehearing must ensure that judgments of lower court are in conformity with the laws of the land, it is important that this issue be considered: see Asare v Brobbey [1971] 2 GLR 331, CA. I have examined the evidence and come to the view that the contract before us was one which violated the enabling law; in particular it was by its nature a “clandestine lotto” within the meaning of section 3 of Act 94, as defined in PNDCL 223. It being so, it is a transaction which should be struck down as void and one from which neither party derived any specifically enforceable rights. I have taken the said view of the facts, first, by resorting to judicial notice as provided under section 9 of the Evidence Decree, 1975 (NRCD 323) in view of the usage of the words “national banker to banker”, a word which means that the stakes were drawn on the operations of the Department of National Lotteries which is normally done on Saturdays as distinct from the licences, which the appellant obtained to conduct a District Weekly Lotto. I wish to state that judicial notice is often taken by courts of facts which are notorious within the jurisdiction, they being of common knowledge among reasonable mens. In McCormick on

[p.171] of [2001-2002] 2 GLR 165 nd Evidence (2 ed), p 760, para 329 the learned authors provides thus:

“The oldest and plainest ground for judicial notice is that the fact is so commonly known in the community as to make it unprofitable to require proof, and so certainly known as to make it indisputable among reasonable men.”

The basis of this is said to be rooted in common sense as was said in Harper v Killion, 345 SW 2d 309 at 311 (Tex Civ App 1961) thus:

“The doctrine of judicial notice is one of common sense. The theory is that, where a fact is well-known by all reasonably intelligent people in the community, or its existence is so easily determinable with certainty from unimpeachable sources, it would not be good sense to require formal proof.”

I think this explains why section 9 of NRCD 323 enables the court to take judicial notice of issues at any stage of the proceedings even without an invitation from the parties.

I need also say from common knowledge that 21 October 1995 was, as said from the evidence and confirmed by calendars, a Saturday and that as the evidence disclosed, the draw being on a Saturday at 5 pm, it must have been a draw conducted by the Department of National Lotteries under Act 94 which is normally done live on Ghana Television and watched by all who sit by their televisions at the time. Clearly, from the evidence, without resort to any surrounding circumstances, the draw was one which the plaintiff is prohibited from staking and the defendant is also prohibited from conducting; thus it is illegal with the result that nothing of consequence flows from it at least in a court of law: see Schandorf v Zeini [1976] 2 GLR 418 at 430, CA.

My Lords, assuming that the point on which this delivery has so far turned, which was raised by the court itself, is one which is in error, there is also the ground of appeal which raises the question whether or not by crediting the stakes and paying for the same a day after the draws were announced, the plaintiff had actually made a stake within the contemplation of the contract? In my thinking, a stake cannot be done on credit with the payment being effected [p.172] of [2001-2002] 2 GLR 165 after the draw. I think that this is clear from the nature of the game of lotto and the ordinary meaning of the word “stake” which is “money, etc risked or gambled on the unknown result of a future event”: see th Oxford Learners Dictionary (4 ed), p 1247. In my view, the “future event” in this context was the draw, therefore for one to have validly made a stake, the payment should have been made before the draw is made. Where as in this case, the plaintiff relies on credit which he paid on the day following after the draw, I think that he had not provided effective consideration for the numbers on which he had gambled and that he cannot rely on the evidence of the writer, the lotto agent, the first plaintiff witness, that he would make the payment in order that he refunds the same later. I have patiently and carefully considered the evidence of the first plaintiff witness and I think that it was one which was offered collusively and out of self-interest; the truth of the matter being that the plaintiff, made the payment after the draw and that before then he had not done that which at law would have amounted to a stake. I note that this version of the of facts which I have accepted differs from the finding of the trial judge that the stake was paid for by the first plaintiff witness on behalf of the respondent, but in my view, having regard to the evidence of a shortage in the returns of the first plaintiff witness and the evidence of a prompt challenge to the tickets belonging to the plaintiff on the ground that they were not paid for, as well as that of the third plaintiff witness on the non-payment, in the absence of evidence from the said first plaintiff witness tending to indicate how else the shortage came about, the reasonable inference to be drawn from the circumstances it that the tickets credited by the plaintiff were part of the shortage of ¢518,000, his being ¢482,000.

It is important to observe that since receipt for such stakes are not issued as in ordinary business but the value of the amount paid is entered on the ticket, this court must take a view of the transaction which is protective not only of the staker but the undertaker as well, and in my opinion the view of the facts accepted by the trial court was clearly unreasonable in that it does not seek to reinforce the fundamental nature of games of chance particularly lotto, and it being so, I think that this provides this court with a legitimate ground for intervention by setting aside the said unreasonable or wrong or both finding and substituting in its place

[p.173] of [2001-2002] 2 GLR 165 a finding that the stakes were not paid for by the plaintiff before the draw. To hold otherwise, in my view, would be defeatist of what games of chance are and open the door to others to assert that they had staked on credit. I think this is a view which the courts should not countenance, for if the question were asked: would such persons have paid if they lost? I think the obvious answer is no. Alternatively, I also think that in a similar manner the undertakers or the operators cannot enforce the payment for the stakes against them if they lost.

The result clearly is that the plaintiff cannot be enabled to rely on payment made after the draw to enforce the transaction. I think such a payment if accepted was too late in the day and cannot operate retrospectively to regularise the credited stakes and consequently, the transactions is one which ought not to be enforced. The result is that the additional grounds (i) and (ii) of the instant appeal succeeds, and the judgment of the lower court is set aside and in place thereof this court enters a judgment dismissing the plaintiff’s case. The appeal is therefore allowed.

Since the parties have done that which constitutes an offence as herein before mentioned under Act 94 and PNDCL 223, I believe that the justice of the matter would require that they bear their own costs. The costs allowed by the lower court also set aside and if paid should be refunded forthwith.

Owusu-Ansah JA. The plaintiff is a lotto customer of a sub-agent of the defendant lotto operator. On 21 October 1995 which happened to be a Saturday, the plaintiff staked sports lotto from the defendant lotto writer. It appears that the plaintiff, at the time of staking the lotto, had no money to pay for the ticket and so he entered into a private deal with the lotto writer, who promised to pay on his behalf. The writer then issued out the ticket to the plaintiff without receiving payment for the ticket.

When the lotto was drawn later that Saturday evening, at 5.00 pm two of the plaintiff’s numbers (5-82) were drawn: whereupon the plaintiff proceeded to claim his winnings. The five numbers staked as a matter of interest were 31-82-5-41-34. Out of which 82-5 dropped. It is contended that when the amount collected by the first plaintiff witness (the writer) was being paid to the agent, it was short by ¢518,000.

[p.174] of [2001-2002] 2 GLR 165

The defendant refused to pay the plaintiff, as a result of which the plaintiff sued the defendant company claiming per his writ as amended:

“(a) An order of specific performance against the defendant to pay the plaintiff cash value of ¢7,440,000, being the total amount of winnings he made on the lotto draw of 21 October 1995.

(b) An order of the court for the recovery of an amount of ¢7,440,000 being the total amount of lotto won from the defendant company.

(c) Interest on the said amount at the current bank rate from 21 October 1995 to the date of judgment.” Not the date of payment! (It is noted!)

At the close of pleadings the following issues were set out for trial:

“(1) Whether or not the plaintiff staked the following numbers: 31-82-5-41 and 34 from the defendant lotto company.

(2) Whether or not out of the numbers staked the plaintiff won by the following numbers 82-5.

(3) Whether or not the tickets won where valid by the rules of the game.

(4) Whether or not the plaintiff is known to the defendant as somebody who won the defendant’s lotto on 21 October 1995.”

After hearing the evidence, the court held that the tickets issued out to the plaintiff, though credited, were paid for on behalf of the plaintiff by the writer. The court therefore gave judgment for the plaintiff and allowed his claim as endorsed on his writ of summons, and awarded interest on the said amount from the 21 October 1995 until the date of final payment. Costs was assessed at ¢250,000. Thus making a total of ¢12, 712,000 altogether.

The defendant company now appeals against the said judgment. The main grounds of appeal are as follows:

“(a) The trial judge erred in law in failing to find as a fact that the plaintiff credited the defendant appellant lotto.

(b) The trial judge’s findings that the writer paid on behalf

[p.175] of [2001-2002] 2 GLR 165 of the plaintiff is not supported by the evidence.

(c) The trial judge erred when he failed to find that there was a shortage in the daily sales registered on 21 October 1995 by the writer.

(d) The ruling is against the weight of the evidence.

(e) Additional grounds to be filed on receipt of either the judgment or the record of proceedings.”

The defendant indicated in his written submission filed on 26 October 1999 that he intended to limit himself to the first two grounds only.

With respect to ground one, it was submitted on behalf of the defendant that:

“instead of the court determining the issue of payment as the tickets changed hands, to ascertain whether there was any consideration for the tickets staked by the plaintiff, the trial judge was concerned with whether or not the money was paid at all.”

The emphasis was thus misplaced according to the defendant. In regard to the second ground, it was submitted on behalf of the defendant that the evidence of the plaintiff was that “he went to the writer’s house to pay for the ticket on Sunday morning, which was a day after the draw of the lotto numbers.”

In response to ground one, the plaintiff submits that the evidence of the first plaintiff witness was clear and unambiguous and proves that he paid for the tickets before the draw and the announcement of the result. He quotes extensively from the judgment and concludes that the issue as to whether the plaintiff had paid for his ticket through the first plaintiff witness before the draw, was settled when the first defendant witness gave evidence for the defendant, adding that the first defendant witness cannot be believed. In relation to ground two, it was submitted that the defendant had not been able to demonstrate in his statement the error complained of against the trial judge, and further that there had not been any sufficiently convincing evidence that there was a shortage directly attributable to or linked with the booklets from which the plaintiff did obtain his tickets. It was also said that the plaintiff credited the lotto in contravention of the rules of the

[p.176] of [2001-2002] 2 GLR 165 defendant company.

It is clear that the basic issues of fact forming the main grounds of appeal were never raised at the application for direction stage as envisaged by the High Court (Civil Procedure) Rules, 1954 (LN 140A). It appears that the court did not advert its mind to them at all. Indeed, there would appear to be an abdication of responsibility for proper directions: hence the apparent confusion as to what were the real issues before the court and the inability to separate the chaff from the seed. In any event, by not clearly focussing on, or giving undivided attention to the issues in the case the trial court disabled itself from an objective assessment of the evidence. The purported findings of fact in favour of the plaintiff can hardly be supported by the evidence as a whole.

It is idle to stress the rule that it is not the function of an appellate court to disturb a finding of fact. To this rule, however, there are exceptions including but not limited to:

(1) The rule as stated in the case of Blunt v Blunt [1943] AC 517 at 578, HL.

(2) Where the so-called findings of fact are not supported by the evidence on record.

(3) The trial judge’s unjustified omission to consider the evidence as a whole or at all: see Nkrumah v Ataa [1972] 2 GLR 13.

(4) Where the rejection of jurisdiction of the trial court disabled the judge from evaluating the evidence.

On the record of proceedings the plaintiff states, inter alia:

“I had some numbers, but I had no money. The writer offered to pay on my behalf. He has a taxi. I told him I would pay him back which I make sales. Later I paid to him The writer agreed to stake for me. He gave me the tickets . . .”

It is significant to note that the date or day of payment was omitted from his evidence in chief. However, he only said: “Later I paid him.” The cross-examination makes interesting reading:

“Q 21 October 1995, which day was it?

A Saturday.

Q What time did the writer approach you?

A I did not look at my time but it will be around 12

[p.177] of [2001-2002] 2 GLR 165 o’clock to 1 p.m.

Q When did you pay the money to the writer?

A Sunday morning.”

Cross-examination continued the next day when the plaintiff was asked:

“Q You know the national banker to banker the sellers close at 5. o’clock on Saturday.

A Yes.

Q And you will agree that at the time you paid for the coupon (on Sunday) the draw had already come out (on Saturday).

A Yes.”

Quite obviously, they were referring to the National Lottery. I think in any case that the court can take judicial notice that at the present moment, it is only the National Lotto that is drawn at 5pm on Saturday. When it was suggested to him that the writer never paid anything on his behalf, he said: “he paid,” although he was not present when the money was allegedly paid by the writer; he was informed later according to him. Needless to say, this was a bare assertion, a bone without any flesh. In the light of the evidence from the horse’s own mouth quoted above in extenso, it is difficuli to see how the trial court could conclude that:

“The plaintiff and his witness, the first plaintiff witness maintain that the tickets were paid for before the draw and that the payment was made by the writer for the plaintiff.”

Added to this is the evidence of the second plaintiff witness. He said: “ . . . because the plaintiff credited the lotto there was a shortage: which shortage indicates that the plaintiff did not pay for his tickets, neither did the first plaintiff witness pay on his behalf.” The fact that this shortage occurred has not been denied. And there is no evidence that any other tickets were unpaid for. It is thus fair to infer on the balance of probabilities that the plaintiff or the first plaintiff witness or both of them did not pay for the tickets but credited them in contravention of the rule.

The plaintiff’s case as a whole provides a fertile matrix of contradictions. It is as surprising as it is unsupportable for the court [p.178] of [2001-2002] 2 GLR 165 to “prefer the evidence of the plaintiff and the first plaintiff witness, the writer, that the plaintiff’s tickets were paid for on his behalf by the writer before the draw.” I find myself regretfully unable to find any evidence to that effect. The plaintiff himself never offered any evidence of payment beyond his bare assertion that he paid the money to the first plaintiff witness on the following Sunday after the draw, on the previous Saturday. There is overwhelming evidence on the record to show that the first plaintiff witness never paid the money on behalf of the plaintiff either on the Saturday or at all. Quite apart from the recorded shortage, there is the evidence of the police officer as well as the evidence of the first plaintiff witness that the plaintiff and the first plaintiff witness both admitted that the tickets were actually credited, and were never paid for, to the operator. In the circumstances, my own view is that there is a total failure of consideration and therefore no contract was formed on the basis of the credited tickets.

It is trite law that the plaintiff must win by the strength of his own case rather than by the weakness of the defence. These principles would apply whether or not the first plaintiff witness is regarded, or regarded himself, as an agent for the plaintiff or for the defendant in accepting to pay for the tickets. It would appear that there was a conflict of interest; he really could not play a dual role! The second plaintiff witness provides further evidence of the apparent non-payment for the relevant tickets. The witness states: at page 27 of the record paragraph 10:

“When I asked Dan about the credit, Dan did not tell me anything.

Dan is the first plaintiff witness Dan also asked the plaintiff why he told management that he credited the coupon. Management did not pay because the plaintiff credited the coupon.”

The evidence of the third plaintiff witness, the police officer who investigated the matters was that the tickets were submitted to the defendant company without money. In other words, they were unpaid for.

In the light of the totality of the evidence, I am unable to share the conclusion of the trial court. It is in fact anybody’s guess whether the amount of ¢482,000 allegedly credited by the plaintiff

[p.179] of [2001-2002] 2 GLR 165 would have been paid by him the following Sunday if his two numbers had not dropped the previous Saturday.

It goes without saying that lotto is a game of chance. And like most games of chance, it is likely to be open to fraud and abuse. The fact that the Tesano Police got involved in this case at least smacks of suspicion of fraud, though there was no evidence beyond reasonable doubt in support of fraud. In my judgment, under no circumstances should the holder of credited ticket be in a position to sue for winnings in respect of the credited tickets unless there is an unambiguous written agreement to the contrary.

In all cases there must be incontrovertible evidence that payment therefor was made to, or received by an accredited agent on behalf of the lotto operator before the draw. Crediting a lotto ticket cannot be in the best public interest. Indeed, it can be said to be contrary to public policy. In my view, the practice must be discouraged, if in fact it is as prevalent as it seems.

It is noted that at the tail end of the evidence of the second plaintiff witness, counsel stated as follows: “I called the witness. Having earlier interviewed her and convinced myself that she had full knowledge of the case. Presently her evidence is hostile to us. I am compelled to apply that she be considered a hostile waste.”

With respect, not having full knowledge of a case is different from being hostile. Yet, the application was granted by the court. And this without any indication as to why the witness was hostile when she had not given a shred of evidence detrimental or damaging to the plaintiff’s case.

Of course, a hostile witness is a witness who proves adverse to the party calling him or her, especially if the evidence in court differs materially from his or her written statement, In Lanquaye v The Republic [1976] 1 GLR 1 it was held that to treat a witness as a hostile witness the court first has to form an opinion that the witness is adverse to the party calling him. The fact that the witness’s evidence is unfavourable to the party calling him does not necessarily make the witness adverse or hostile. With leave of the court, counsel may then cross-examine him or attack his credibility. Presumably the court was exercising its discretion under section 72 of the Evidence Decree, 1975 (NRCD 323) in which event the

[p.180] of [2001-2002] 2 GLR 165 condition thereof must have been satisfied.

The effect of treating a witness as a hostile witness is to render his evidence nugatory, ie futile or inoperative. Yet the court appears to have, not considered, but relied heavily on the evidence. Said the learned circuit judge:

“. . . Before counsel applied to treat the witness as a hostile witness, even though she had not offered any evidence adverse to that of the plaintiff’s case, yet her prevarication and hesitation in testifying gave a clear indication that she may embark on a course adverse to the plaintiff’s.”

With respect that is not the acid test, and I cannot sanction it. He goes on:

“The court, therefore, granted the application. At the end of her evidence through cross-examination by the plaintiff’s counsel, what stood out from her evidence was that on 21 October 1995, there was a win of ¢7.4 million. The plaintiff went to claim the amount but he was refused payment because he told the defendant that he credited the ticket. Why the plaintiff was not being paid, she said because of a shortage of ¢500,000. Agyiri made to her . . .”

With respect, this approach leaves a lot to be desired as the learned judge cannot approbate and reprobate.

There is no law which compels a party to a civil action to call all material witnesses especially if he is aware that the interests of such witnesses conflict with his own, and that it is unlikely that they would give evidence favourable to him.

In case of doubt, it is well established that the party who asserts must lose as in this case. This was the view of the Court of Appeal in the case of Abakam Effiana Family v Mbibado Effiana Family [1959] GLR 362 at 364, CA.

Another aspect of the matter to which the court did not advert its mind is the issue of agency. Of course the concept of agency is of vital importance in all areas of commercial activity. Without it, dealings would become cumbersome, expensive and impractical. The central core of agency is the relationship it denotes; labels used by the parties are of only minor importance. Agency can be created in a variety of ways. The three principal ones are express

[p.181] of [2001-2002] 2 GLR 165 agreement; implied agreement; and operation of law. I think the courts would generally prefer to look for the intentions of the parties to see if they intended to create an agency relationship.

It is common knowledge that the power that an agent has to bind the principal depends on the agent’s authority—whether express, implied or ostensible. There is no doubt in this case that the first plaintiff witness having been appointed a lotto seller was a sub-agent of the agent of the defendant company. There is evidence on record that as such he had specifically been instructed not to sell tickets on credit. As an agent he was under a duty not to exceed the authority granted by the principal, ie the proper agent acting on behalf of the lotto operator.

On the record of proceedings the first plaintiff witness describes himself as a “sub-agent of Asare Original Pay All.” That being the case, it seems to me to be rather odd to say the least, that he the first plaintiff witness and the plaintiff should enter into an oral agreement that he the first plaintiff witness would use his own money to pay the operator for the credited lotto tickets on behalf of the plaintiff. This potentially could, and in this case actually did, result in a conflict of interest to the extent that he could also be regarded as an “agent” for the plaintiff—albeit for a limited period only. The practice whereby the money is agreed to be paid by the agent to himself on behalf of a third party should as already indicated be discouraged. In the words of the first plaintiff witness himself “He (the plaintiff that is) told me that he had no money. I told him I would pay for him . . . I therefore agreed to stake for him …” This inevitably could provide an open-ended avenue for fraud. So much for the evidence. There is also the issue of legality.

These views have been predicated upon the assumption that the transaction could be properly entered into. The defence that a contract is a wager or illegal within the meaning of the law should, as a general rule, be pleaded, and the facts which are relied upon to bring the transaction within the relevant legal provision should also be stated. Sadly that was not so in this case.

In all cases, however, the court in my view, can itself, take notice of any illegality of the contract, on which the plaintiff is suing, if it appears on the face of the contract, or from the evidence brought before it, by either party, and even though the defendant has not pleaded the illegality as in this case. This is not surprising

[p.182] of [2001-2002] 2 GLR 165 because I do not think that it would have been in the interest of either party in the long run.

This view is amply supported by a number of respectable authorities including: Gedge v Royal Exchange Assurance [1900] 2 QB 214 and the case of Snell v Unity Finance Co Ltd [1964] 2 QB 203, CA.

Where the contract is not ex facie illegal, the question of illegality will depend upon the surrounding circumstances. I have in mind the National Weekly Lotto Act, 1961 (Act 94) as amended by the National Weekly Lotto (Amendment) Law, 1989 (PNDCL 223) s 1 which provides: “With a view to the raising of revenue it shall be lawful (a) for the Secretary to conduct a National Weekly Lotto. . .” Sections 2 and 3 of Act 94 state:

“2. (1) Any lotto, otherwise than a Lotto promoted and conducted under the provisions of this Act, shall be unlawful.

(2) Any person who contravenes the provisions of the preceding subsection commits an offence and shall be liable on summary conviction to a fine not exceeding two hundred pounds or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

3. (1) A clandestine lotto, by whatever name called and in whatever manner and under whatever denomination it may be conducted, is prohibited.

(2) Any person undertaking a clandestine lotto or collecting stakes therein and any person aiding or abetting the same in any way commits an offence and shall be liable on summary conviction to a fine of not less than fifty pounds and not exceeding two hundred pounds or to imprisonment for a term of not less than six months and not exceeding two years.

(3) Any person laying stakes in a clandestine lotto not being an accessory commits an offence and shall be liable on summary conviction, to a fine of not less than five pounds and not exceeding twenty pounds.”

The Act itself does not define “lotto.” But the Oxford Reference Dictionary defines it as a game by chance by means of which money is raised by selling numbered tickets and giving prizes to the

[p.183] of [2001-2002] 2 GLR 165 holders of numbers drawn not called at random, the outcome of which is governed by chance. In my opinion, any other lotto based on the results of the Department of National Lottery draws for the time being at 5pm on Saturdays, is prima facie illegal as being clandestine under section 2(1) of Act 94 unless the operator produces some authority granted by or on behalf of the minister. Looked at in its proper perspective, this case would appear to be within the ambit of the provisions of this Act. I do not consider that the categories of contracts that are illegal or contrary to public policy are closed.

It seems to me that Act 94 has a dual purpose: first, section 1 of Act 94 as amended itself provides: “With a view to the raising of revenue it shall be lawful for the—(a) Secretary to conduct a National Weekly Lotto.” The Act can only make sense if it is read as permitting only the minister to conduct a National Weekly Lotto.

It may not be inappropriate to point out that Act 94 itself appears to depict a masterpiece of absolute ambiguity in parts. And the minister, for the avoidance of doubt as for clarification, may be called upon to exercise his powers under section 11 of Act 94. Section 11 of Act 94 provides that the minister may, by legislative instrument make regulations for a bewildering variety of matters such as:

“(a) the administration of the Lotto;

(b) the number of Lotto offices authorised to receive stakes;

(c) the day, the hour and the method of conducting the Lotto and its periodical drawings as well as the persons who shall be present at a draw of the Lotto;

(d) the stakes that may be laid on the result of the draw;

(e) the amount of prizes to be distributed and the conditions under which prizes may be paid;

(f) the manner and the conditions in or under which stakes may be accepted; . .

(p) the issue and sale of tickets . . .”

To mention just a few !!! Secondly, the intent of Act 94 is not only to raise revenue but also to protect the public.

In the former case the relevant contract may not itself be necessarily prohibited. In the latter case, however, it may be implicitly

[p.184] of [2001-2002] 2 GLR 165 prohibited.

The facts of this case certainly suggest that it is what in popular parlance is often referred to as “banker to banker” contract which is prohibited, although this point has not been canvassed by either counsel. It was alluded to in the record proceedings by the plaintiff himself. I am satisfied that the instant contract falls within the ambit of Act 94 and that it is prohibited in so far as the operator does not operate his own system but relies on the draw of the Department of National Lotteries to determine his own results without authority or licence—a loss of revenue to the government.

It was Devlin J (as he then was) who in the fullness of his wisdom pointed out in the case of St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267 at 283-287 that the distinction which has an important bearing upon the consequences of illegality is that disregard of a statutory prohibition may render the contract either illegal as formed or illegal as performed Devlin J (as he then was) also states that a contract is illegal as formed if its very creation is prohibited. In such a case the contract is void ab initio. It is a complete nullity under which neither party can acquire any rights, whether there is an intention to break the law or not. A contract is illegal as performed if, though lawful in its formation, it is performed by one of the parties in a manner prohibited by statute. When the contract is lawful in its inception but is executed illegally the position of the party responsible for the infraction of the statute is clear. All contractual rights and remedies are withheld from him. Commercial life is nowadays hedged in by so many statutory regulations that it would scarcely promote the interests of justice to drive the plaintiff from the seat of judgment merely because he has committed a minor transgression.

In my view, however, the illegality of the contract as performed in this case can even be based on public policy. No allowance is made for innocence. Even a contract that is ex facie lawful will be unenforceable by the plaintiff as a rule if his intention is to exploit it for an illegal purpose as appears to be the case here. In Gordon v Metropolitan Police Commissioner [1910] 2 KB 1080 at 1098, CA Lord Justice Buckley, neatly summarised the consequences where the contract is illegal at its inception. The learned judge said that the general principle founded on public policy, was that any transaction that was tainted by illegality in

[p.185] of [2001-2002] 2 GLR 165 which both parties were equally involved was beyond the pale of the law. No person could claim any right or remedy whatsoever under an illegal transaction in which he had participated: ex turpi causa non oritur actio. The court is bound to veto the enforcement of a contract once it knows that it is illegal whether the knowledge comes from the statement of the guilty party or from outside source. This view is supported by Scrutton LJ in Re Mahmoud and Ispahani [1921] 2 KB 716 at 729, CA. Obviously no money can pass by virtue of such a contract itself if this arises ex turpis causa and if both parties are in pan delicto. Ignorance of the law that “banker to banker” is prima facie unlawful is immaterial to the claim in the event of a win, notwithstanding that it has not been pleaded. The court can take judicial notice of the law.

On the evidence, the law and in all the circumstances of this case, it is my judgment that this appeal should be allowed, and the judgment of the trial circuit court set aside for the reasons given. It will be wrong to let the judgment stand. Costs allowed in lower court set aside. No order as to costs.

Farkye JA. I also agree.

Appeal allowed.

DRKS