HIGH COURT
DATE: 24TH JUNE 1970
ABBAN J.
CASES REFERRED TO
(1) Majolagbe v. Larbi [1959] G.L.R. 190.
(2) Norgah v. Quartey, Court of Appeal, 15 May 1967, unreported; digested in (1967) C.C. 115. [p.120] of [1971] 1 GLR 119
(3) Addae v. Moro, Court of Appeal, 14 April 1969, unreported.
(4) Pole v. Leask (1863) 33 L.J.CH. 155; 8 L.T. 645; 9 Jur. (N.s) 829, H.L.
(5) Read v. Anderson (1884) 13 Q.B.D. 779; 53 L.J.Q.B. 532; 51 L.T. 55; 49 J.P. 4; 32 W.R.950, C.A.
(6) Adams v. Morgan & Co., Ltd. [1924] 1 K.B. 751; 93 L.J.K.B. 382; 103 J.T. 792; 40 T.L.R. 70; 68 S.J. 348, C.A.
NATURE OF PROCEEDINGS
APPLICATION to vary the report of a referee in which he recommended that a counterclaim for an amount overpaid be allowed and that the plaintiffs’ claim for the value of goods sold to or bought on behalf of the defendants be dismissed. The facts are fully set out in the judgment of the court.
COUNSEL
W. Mensah for the plaintiffs.
K. Mensah for the defendants.
JUDGMENT OF ABBAN J.
The plaintiffs by their specially endorsed writ claim from the defendants the sum of N¢4,599.09, representing the value of goods sold to or bought for the defendants. The plaintiffs attached to their writ a statement of account giving details of goods supplied, the dates on which they were supplied and payments so far made by the defendants. The plaintiffs alleged in their statement of claim that these goods were delivered to the defendants between 1 September 1966 and 8 July 1968, at the request of the defendants who made part-payments leaving a balance of N¢4,599.09. This is the total amount of N¢27.70 and N¢4,4571.36 respectively, shown as the last two items at the bottom of the statement of account which was originally attached to the writ but tendered as exhibit A at the reference. The defence is a complete denial. The defendants averred that they were wrongly and unlawfully debited with the said sums of N¢27.70 and N¢4,571.36. The defendants further averred that they have rather over-paid the plaintiffs the sum of N¢4,124.74. Consequently they put in a counterclaim for this amount in their statement of defence.
The summons for judgment filed by the plaintiffs came on for hearing on 15 May 1969 before my brother Anterkyi J. who made the following order:
“It appearing that there is a dispute as to the state of accounts, the matter is referred to the Registrar of the High Court (Finance) Mr. Brew for the resolution of the accounts and a report thereon. Each party to pay N¢2.00 for each sitting. I do give leave to the defendants to defend.”
In pursuance of this order, the parties and their counsel went before the said referee on 2 July 1969 when the reference started. The reference came to an end on 26 November 1969. The referee then submitted to the court a report containing his findings and recommendations for due consideration. It appears on the whole the referee accepted the evidence of the defendants and came to the following three conclusions:
[p.121] of [1971] 1 GLR 119
“The final position of the accounts is therefore:
(a) Amount claimed on the writ N¢4,599.74 to be disallowed.
(b) Counterclaim of N¢4,124.74 is to be allowed.
(c) Amount paid by the defendants but not supported by any agreement and which the defendants now claim N¢5,612.73 to be allowed.”
It is to be observed, that the amount being claimed by the plaintiffs in their writ is N¢4,599.09 and not N¢4,599.74 as stated by the referee in his first conclusion referred to supra. Both counsel seemed to have overlooked this error. However, I think this is just an accidental slip on the part of the referee and it can conveniently be corrected by the court. A correction of this nature, in my opinion, will not in any way affect the substance of the claim, especially where the parties, as in this case, are aware of the fact that the correct amount which formed the subject-matter of the plaintiffs’ claim is N¢4,599.09. I will therefore exercise the court’s general power of amendment as provided under Order 28, r. 12 of the Supreme [High] Court (Civil/Procedure) Rules, 1954 (L.N. 140A), to amend the figure of N¢4,599.74 appearing in the first conclusion of the referee to read N¢4,599.09 and the same is accordingly amended.
Turning now to the consideration of the whole report, the court on 2 June 1970 heard the arguments of learned counsel for the parties. Learned counsel for the plaintiffs submitted that even though the reference was regularly and fairly conducted, he found it difficult to understand how the referee could come to the conclusions he did on the evidence before him. Counsel said there was overwhelming evidence on the record from which the referee, if he had properly directed himself, could reasonably have found favour of the plaintiffs, because the evidence showed that the defendants were still owing the plaintiffs and that the referee erred in not upholding the plaintiffs’ claim of N¢4,599.09
With great respect to learned counsel for the plaintiffs, the evidence offered by the plaintiffs in support of their claim was not only weak but most unsatisfactory. It must be pointed out that the burden is on the plaintiffs to prove that the defendants are indebted to them in the sum of ¢4,599.09 and that this amount is made up of (a) the figure N¢27.70 being the value of goods delivered on 3 February 1967, and (b) the figure N¢4,571.36 being the value of goods supplied on 2 February 1967. See page two of exhibit A tendered by the plaintiffs. The administrative marketing officer of the plaintiffs, Mr. Oloye Okafo, who testified on the plaintiffs’ behalf, admitted that the said N¢27.70 was in fact paid by the defendants. In his examination-in-chief at page 2 of the report he said, “I can’t remember why the amount of N¢27.70 which has already been paid has been debited again on the statement of claim.” The plaintiffs, in their attempt to prove non-payment of the remaining amount, that is, the sum of N¢4,571.36, relied on exhibit A and on bare allegations. To me, the contents of the statement of account (exhibit A) should not carry much weight in the absence of debt notes or ledger books which show the record of sales and payments. In cases of this
[p.122] of [1971] 1 GLR 119
nature where paper transactions are inevitable, one would have expected a reputable company, like the plaintiffs, at least to make available at the reference documents like waybills signed by the defendants acknowledging the receipt of the goods involved in the last two items in exhibit A and upon which they base their claim. On the contrary, the Personnel Manager of the plaintiffs, Mr. Randolph Ofei Okine, under cross-examination at pages 8, 9 and 10 respectively, of the report said:
“I cannot produce supporting documents covering the two last items on the statement of claim now … I cannot produce the supporting document again to-day … Waybills were issued in respect of goods supplied under the two items but the defendant did not sign them. He said he was in a hurry. I cannot support the last two items on the statement attached to the writ with any waybill, invoice or any other record.”
It can therefore be seen that, on the whole, the plaintiffs simply put forward allegations of indebtedness in their statement of claim and repeated the same before the referee. It is well established that where a party makes an averment in his pleadings and it is denied, that averment cannot be sufficiently proved by just mounting the witness-box and reciting that averment on oath without adducing some sort of corroborative evidence. When delivering his judgment in the case of Majolagbe v. Larbi [1959] G.L.R. 190, Ollennu J. (as he then was) at page 192 had this to say:
“Here I may repeat what I stated in the case of Khoury and anor. v. Richter on this question of proof. That judgment was delivered on the 8th December, 1958, and the passage in question is as follows: -’Proof in law is the establishment of facts by proper legal means. Where a party makes an averment capable of proof in some positive way, e.g. by producing documents, description of things, reference to other facts, instances, or circumstances, and his averment is denied, he does not prove it by merely going into the witness-box and repeating that averment on oath, or having it repeated on oath by his witness. He proves it by producing other evidence of facts and circumstances, from which the Court can be satisfied that what he avers is true’.”
This opinion of the law was not only approved but also stressed by the Court of Appeal in its judgment in the case of Norgah v. Quartey, Court of Appeal, 15 May 1967, unreported; digested in (1967) C.C. 115.
In these circumstances, I am unable to say that the plaintiffs are entitled to the relief sought on the evidence before the referee. The evidence is not sufficient to satisfy the mind and the conscience of any reasonable referee and for that matter any reasonable judge so as to convince him to venture to act upon that conviction in favour of the plaintiffs. The referee was therefore justified in recommending that the plaintiffs’ claim should be disallowed.
[p.123] of [1971] 1 GLR 119
I now come to the defendants’ counterclaim for N¢4,124.74. The learned counsel for the plaintiffs submitted, with great vehemence, that the evidence on record shows that a written contract never formed the basis of the business transaction between the parties and that the referee was wrong in concluding that since there was no written agreement or contract, the plaintiff could not legitimately debit the defendants with charges incurred by the plaintiffs in the opening and cancellation of the letters of credit. Counsel said that these letters of credit were, in fact, opened purposely to order goods for and on behalf of the defendants and that the plaintiffs never ordered those goods on their own initiative, but on the instructions of the defendants. He contended that it was only fair and just that the defendants should be called upon to bear all the expenses made by the plaintiffs in establishing and in cancelling those letters of credit. Counsel therefore urged that the absence of a written agreement should not absolve the defendants from reimbursing the plaintiffs in respect of those expenses. Consequently the referee was wrong in depending upon the failure to produce a written agreement as his main reason for recommending that the plaintiffs should be asked to refund to the defendants the said N¢4,124.74 Vide recommendation (b) in the referee’s report quoted supra.
In the case of the devaluation charged levied by the plaintiffs and paid by the defendants on goods ordered for the defendants in or about 1966, counsel for the plaintiffs contended that it was equally wrong for the referee to recommend that these charges, amounting to N¢5,612.73, should also be refunded to the defendants, for the same reason that there was no written agreement showing that the defendants were to be liable to pay the said devaluation charges; especially because, the defendants themselves, in their own evidence, and in the course of cross-examining the plaintiffs’ witnesses, never disputed that these devaluation charges were properly and validly levied.
Learned counsel for the defendants in replying to the submissions of the plaintiffs’ counsel, contended
that the defendants deposited the amount of N¢4,124.74 with the plaintiffs against the purchase price of goods ordered for the defendants, and if the order placed by the plaintiffs for those goods was eventually cancelled and consequently the goods were never supplied to the defendants, it was unjust to allow the plaintiffs to defray the expenses incurred by them as a result of the opening and the cancellation of the said letters of credit with the N¢4,124.74. Counsel further contended that his clients, the defendants, were local purchasers who had nothing to do with import licences, the opening of letters of credit and the expenses connected therewith. He said his clients’ obligation was only to pay for the goods in cash and in Ghana cedi notes and that there was no c.i.f. contract between the plaintiffs and the defendants. The defence counsel in concluding his argument submitted that the defendants should be entitled to the refund of, not only the sum of N¢4,124.74 as stated in their counterclaim, but also the devaluation charges amounting to N¢5,612.73 levied on and paid by the defendants, and that the referee was right in so recommending.
[p.124] of [1971] 1 GLR 119
Having carefully examined the evidence before the referee and having given due consideration to the arguments and submissions of counsel, I am of the view that counsel for the plaintiffs is perfectly right in criticising the reasons upon which the referee based his recommendations in (b) and (c) respectively. The argument of learned counsel for the defendants takes a very narrow view of the evidence on record. The totality of the evidence before the referee, clearly shows that the defendants could not be taken to be mere local purchasers. They were in fact something more than that, and I would have dismissed not only the defendants’ claim for the refund of N¢5,612.73, being the devaluation charges, but also their counterclaim for N¢4,124.74, if in the latter case, the plaintiffs had been able to produce receipts from reliable sources to substantiate the said expenditure.
Before going into details of my reasons for holding this view, I have to observe that the defendants never counterclaimed for the said devaluation charges of N¢5,612.73 in their statement of defence. They only counterclaimed for N¢4,612.74. It was the learned counsel for the defendants, who in his address before the referee, at the conclusion of the reference, and for the first time, submitted that the plaintiffs should be asked to repay to the defendants the said amount of N¢5,612.73 in addition to the sum of N¢4,124.74.
After the court had heard the arguments of both counsel and had adjourned the case to consider its decision, the defendants on 3 June 1970, filed a notice of amendment under Order 28, r. 1, asking for leave to amend their counterclaim to include this amount of N¢5,612.73. Up to now, counsel for the defendants has not made any effort to move the said amendment formally. All the same, the proposed amendment is still on the file and the court, even at this stage, can exercise its discretion either to allow it or to refuse it. There is no kind of mistake which if not fraudulent or intended to over-reach, the court ought not to correct, if the correction or the amendment can be effected without injustice to the other party, no matter however negligent may have been the first omission and however late the proposed amendment. The authorities are many on this proposition. See the recent judgment of the Court of Appeal in the case of Addae v. Moro, Court of Appeal, 14 April 1969, unreported.
But unfortunately, in the present case, I am inclined to refuse the defendants’ proposed amendment. The defendants in their evidence did not give any indication that they were also claiming the refund of these devaluation charges. No questions were even put to the plaintiffs’ witnesses to suggest that the 43 per cent. devaluation charges should not have been debited to the defendants’ account. If therefore the amendment is granted there will be no evidence on the record which can be used to support such a counterclaim. The defendants in their own evidence gave the impression that it was their obligation to pay those devaluation charges. In my opinion, the amendment if granted will unfairly be prejudicial to the plaintiffs, and will lead to injustice which cannot be recouped by costs. The amendment is therefore refused. Consequently the only counterclaim which I have to concern myself with in this case is the sum of N¢4,124.76.
[p.125] of [1971] 1 GLR 119
As I have already said, I disagree with the submissions advanced by counsel for the defendants in support of the reasons given by the referee to buttress his conclusions in respect of the counterclaim. My reasons are as follows: It is quite plain from the evidence on the record that the business relationship which has existed between the parties has not been based on any written agreement. Its characteristic feature has been one of mutual trust and understanding. The plaintiffs bought and then sold to the defendants electrical and other goods. The plaintiffs sometimes at the request of and on the instructions of the defendants, ordered those goods for the defendants and charged the defendants some commission. The defendants themselves furnished the plaintiffs with the addresses of manufacturers overseas from whom the goods required were imported. Here I refer to the evidence of Mr. Okafo at page 1 of the report: “I know Saleh Brothers as our customers. We have been doing business with them. We buy locally electrical goods for them, and also we import electrical goods on their behalf. We have been doing business with them since 1966.” I refer also to the evidence of Mr. Randolph Ofei Okine at page 6:
“I am the Personnel Manager of Baah Ltd. I know the defendants, Saleh Brothers. I know them in my official capacity. I knew them in 1966, when I was the goods manager. My company acts as commission agents for the defendants. We utilise our own import licences to order goods for them and charge them commission. The defendants brought manufacturers’ addresses and asked us to order the goods for them.”
The evidence of the defendants’ representative, Baha El Saleh, appearing at pages 13 and 16 respectively confirms this business relationship.
He said:
“I started business with them in 1966. I buy electrical goods from them. They do not manufacture those goods themselves. My company deals in electrical goods. They import the goods and sell them to us and other companies … When we go to them to buy goods and they are short of them, they ask us to give an undertaking to buy them if they ordered the goods for us … Letters of credit are opened for us when we ask the company to order the goods for us. There is no agreement oral or written between us and Baah Ltd. about our business transactions. Our transactions take this form: first we pay a deposit before the goods are ordered and we pay the balance when the goods arrive and they are delivered to us. It is correct that the bank raises charges when letters of credit are opened.”
From this evidence, it is clear that the plaintiffs were utilising their import licences in ordering the goods when they were specifically instructed to do so by the defendants and charged the defendants commission. It is also clear that the defendants were aware that in carrying out the defendants’ instructions, the plaintiffs had to open letters of credit on the defendants’ behalf and to pay bank charges connected therewith. It therefore appears to me that an implied agency arose between the parties
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so far as the ordering of goods from overseas was concerned. See Pole v. Leask (1863) 33 L.J.Ch. 155, H.L. where Lord Cranworth said at pp. 161-2:
“No one can become the agent of another person except by the will of that person. His will may be manifest in writing or orally, or simply by placing another in a situation in which, according to ordinary rules of law, or perhaps it would be more correct to say, according to the ordinary usages of mankind, that other is understood to represent and act for the person who so placed him; but in every case it is only by the will of the employer that an agency can be created.”
The plaintiffs on the general principles of justice, acquired in those circumstances, rights of
reimbursement and indemnity in respect, of expenses incurred in consequence of ordering those goods at the request of the defendants. Where an apparently lawful act is done by one person at the request of another and in consequence of performing such an act the person doing it incurs expenses or suffers loss, the person who suffers loss, or made expenses should have a right of indemnity. In the absence of any agreement, the law in such a situation will imply from the request an undertaking to indemnify to the full amount of the liabilities incurred. See Read v. Anderson (1884) 13 Q.B.D. 779, C.A. and Adams v. Morgan & Co., Ltd. [1924] 1 K.B. 751, C.A.
On these principles I hold that the plaintiffs, apart from charging a commission, were entitled to call upon the defendants to pay all the normal charges connected with the opening of the letters of credit as well as all other reasonable and incidental expenses which can be proved to have been incurred by the plaintiffs, the devaluation charges not excepted; because, the plaintiffs proved that these devaluation charges were actually incurred. In fact, as I said, when dealing with the question of an amendment, the defendants never denied that these devaluation charges were incurred by the plaintiffs. So that even if I had allowed the defendants’ proposed amendment to the counterclaim, I would still have held that the defendants, for the reasons given above, are not entitled to recover the devaluation charges of N¢5,612.73. The referee therefore erred in concluding that the plaintiffs should be asked to refund the said devaluation charges.
For the same reasons, the plaintiffs would also have been entitled to be compensated for all legitimate and reasonable expenses made by them in ordering the goods, if they had been able to prove those expenses. The plaintiffs having admitted that they debited the defendants with those expenses and commissions amounting to N¢4,124.74, the onus is on them to prove that the said expenses were in fact incurred by them. Regrettably, the plaintiffs were unable to discharge this burden. There was no evidence before the referee to determine what portion of this N¢4,124.74 represented commission and what portion represented those expenses, such as the alleged bank charges involved in the opening and the cancellation of the said letters of credit. The plaintiffs never tendered even a single
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receipt from any source to support the said expenditure. The plaintiffs seemed to have relied on nothing more than mere assertions. It is only upon the plaintiffs’ failure to adduce corroborative evidence to support the said expenses and the commission, that I am compelled to hold that the plaintiffs ought to be ordered to refund the said amount of N¢4,124.74. Thus even though I do not agree hitherto with the reasons given by the referee in support of his recommendation (b), I agree with the conclusion arrived at.
In the result, the plaintiffs’ claim fails, and is accordingly dismissed. The defendants will be entitled to their counterclaim of N¢4,124.74. Judgment will therefore be entered and is hereby entered in favour of the defendants and against the plaintiffs for the sum of N¢4,124.74. The defendants will have their costs assessed at N¢250.00.
DECISION
Action dismissed.
Judgment for the defendants on the counterclaim.
T.G.K.
