DOLPHYNE vs. SPEEDLINE STEVEDORING CO LTD AND ANOTHER [1997-98] 1 GLR 786

CASES REFERRED TO

(1) Robertson v Reindorf [1971] 2 GLR 289, CA.

(2) Timitimi v Amabebe (1953) 14 WACA 374.

(3) Allcard v Skinner (1887) 36 ChD 145; 56 LJCh 1052; 57 LT 61, CA.

NATURE OF PROCEEDINGS

APPEAL by the plaintiff-appellant from the decision of the Court of Appeal allowing the appeal of the defendant and setting aside, inter alia, the award of damages for fraud in favour of the plaintiff-appellant by the trial circuit court. The facts are

[p.789] of [1997-98] 1 GLR 786 sufficiently set out in the judgment of Charles Hayfron-Benjamin JSC.

COUNSEL

Dr Ekow Daniels for the appellant.

E D Kom for the respondents .

JUDGMENT OF BAMFORD-ADDO JSC.

I have had the privilege of reading in advance the judgment of my very able and respected brother Charles Hayfron-Benjamin JSC, and I agree entirely with his reasons and decision that the appeal should be allowed. I, however, wish to comment on one issue. In the statement of case of the second defendant-respondent, his counsel gave notice of amendment in paragraph (4) as follows: “My Lords, may I formally apply for leave to amend the second defendant’s statement of defence to plead the Limitation Decree, 1972 (NRCD 54) to the effect that ‘the plaintiff’s claim is statute-barred by the provision of the statute of limitation.”’

The statement of case which contained this notice was dated 26 July 1995 and I see nothing in the appellant’s statement filed on 30 September 1996 opposing this application. Be that as it may, I have considered the application for leave to amend the second defendant’s pleading to enable him rely on the Limitation Decree, 1972 (NRCD 54) to defeat the plaintiff’s claim. The defence that a claim is statute-barred must be pleaded as set out in Order 19, r 16 of the High Court (Civil Procedure) Rules, 1954 (LN 140A) which also applies to the circuit court. The defendant failed to plead the statute of limitation in his pleading, neither did he apply at the circuit court for amendment to plead it but chose to rely on the equitable principles of laches and acquiescence, and under which the case was fought and decided right up to the Court of Appeal. Now at this late stage he intends to defeat the plaintiff’s claim by relying on the said statute. It is trite law that the courts have power to amend pleadings at any stage of the proceedings. But it is a discretionary power which would be granted in very deserving cases. It would be granted when it is necessary for determining the real issue or question in controversy between the parties, provided of course it can be made without injustice to the

[p.790] of [1997-98] 1 GLR 786 other party. This power is provided in rule 23(3) of the Supreme Court Rules, 1996 (CI 16) which says: “(3) The Court may in hearing any civil appeal make any order necessary for determining the real issue or question in controversy between the parties.”

The question in controversy in this case is whether or not fraud was perpetrated by the second defendant against the plaintiff, and my view is that it does not include possible defences open to the parties. It is not the duty of courts to decide what defences parties should rely on. It has been said that the power to amend should be judiciously and sparingly used so as to do justice to the parties: see the very instructive dictum of Amissah JA in the case of Robertson v Reindorf [1971] 2 GLR 289 at 297 wherein he said: “I am with counsel when he says that this court has the power to allow applications or the amendment of the pleadings even in cases on appeal . . . The question is whether this is a deserving case for the exercise of the courts’ undoubted power. This court will allow the amendment if by it the real issues between the parties as appear on the record will be determined. It is a power which I think, ought to be used sparingly. When used judiciously, it saves a multiplicity of actions, at the same time doing substantial justice to the parties. In my opinion the power ought not to be used to raise fresh issues which could easily have been raised at the trial but were not. Nor should it be used to spring surprises on an adversary at such a late stage in the judicial process, especially when it is obvious that by granting the application, that adversary would seek leave to adduce fresh evidence to justify his position and thereby set matters at large once more.”

Applying the principles stated above, it is my view that this is not a deserving case for the grant of leave to amend pleadings sought by the defendant. It would in the circumstances of this case be rather unjust to grant such leave.

JUDGMENT OF CHARLES HAYFRON-BENJAMIN JSC.

This appeal is of rather small compass. The plaintiff-appellant’s only ground of appeal is the general ground that the judgment is against the weight of the

[p.791] of [1997-98] 1 GLR 786 evidence. However, in his statement of case, the appellant limits his complaint to “so much of the decision of the majority judgment as allowed the appeal from the circuit court.”

It is important to note that this appeal originated in the circuit court. By his writ of summons the appellant—then the plaintiff—sought four reliefs, the principal relief being a claim for ¢5 million damages for fraud. The other three reliefs were primarily directed against the Speedline Stevedoring Co Ltd, then the first defendants. At the close of the plaintiff’s case, counsel for the first defendant, submitted that the first defendants should be dismissed from the case; whereupon the learned judge dismissed the company from the case after giving reasons therefor.

Before us, by his statement of case, the appellant prays: “That the title of the suit be amended to include Speedline Stevedoring Co and the orders to make Dolphyne a member and director accordingly.” In my respectful opinion, the answer to this prayer will materially affect our decision with respect to the reliefs which, I say, primarily affect the first defendant company—Speedline Stevedoring Co.

It is trite learning that a court can amend the title of a case to conform with the justice of the case. Learned counsel for the respondent, however, submits that this court ought not to accede to the prayer of the appellant as the trial judge in his ruling on the application to dismiss the Speedline Stevedoring Co Ltd from the case found as a fact that no case was made against the said company. Counsel contends that the appellant having appealed against this interlocutory order, to restore the order “will pre-empt the decision on the interlocutory appeal.” In terms of rule 22 of the Supreme Court Rules, 1996 (CI 16) counsel is correct. But I will not subscribe to the view which learned counsel takes. To subscribe to such a view would be to encourage delays in the disposal of cases, particularly where there is patently no merit in the interlocutory appeal.

In respect of the present appeal, there is a fundamental defect which goes to jurisdiction and must be addressed in order to determine how far the interlocutory appeal affects the pendency of the appeal. As I have already premised, this appeal originated from a circuit court. A circuit court was an inferior court—now a lower court. It is yet again trite learning that an inferior or lower

[p.792] of [1997-98] 1 GLR 786 court only possesses such jurisdiction as is conferred, on it by statute. In the celebrated case of Timitimi v Amabebe (1953) 14 WACA 374 at 376 Coussey JA (as he then was) wrote that:

“On the other hand an inferior Court . . . is not presumed to have any jurisdiction but that which is expressly provided.

Jurisdiction, when used in the context we are considering it, means the power or authority to judge. A court is said to be of competent jurisdiction with regard to a suit or other proceeding when it has power to hear or determine it or exercise any judicial power therein.”

The jurisdiction of the circuit court must therefore be ascertained by reference to the Courts Act, 1971 (Act 372) which was the applicable law at the commencement of the present action. Reference to section 32 of Act 372 shows quite clearly that the circuit court does not have jurisdiction in matters concerned with the Companies Code, 1963 (Act 179). Indeed, by section 2, First Schedule thereof, unless the context so requires, a court means the High Court. Therefore, unless an applicant or party to an action or application in respect of matters coming within the ambit of Act 179 can demonstrate that there is some other law or even in Act 179 itself which specifically confers jurisdiction on the lower court, there will be no jurisdiction to entertain the matter. In the present appeal, nothing in the record demonstrates that there was jurisdiction in the circuit court, and that part of the action should have been dismissed. It must be conceded the Court of Appeal unanimously dismissed the claims (b) and (c) of the plaintiff’s indorsement on his writ. Ampiah JSC unequivocally stated:

“In the circumstances, he is entitled to succeed. He cannot be made to act against a company which is not a party to the action. The appeal against the order of specific performance and the declarations sought by the plaintiff in his claims (b) and (c) would therefore be allowed and the orders made, thereunder set aside. I would dismiss the plaintiff’s claims (b) and (c).”

I wholly endorse their lordships dismissal of the awards contained in claims (b) and (c) and I would emphasise that I am on [p.793] of [1997-98] 1 GLR 786 even stronger ground on the want of jurisdiction in the circuit court. Indeed, if the circuit court had no jurisdiction to embark on that part of the inquiry, then equally the Court of Appeal could not properly preside over it on appeal save to dismiss the claims. Therefore in respect of this appeal, by the powers conferred on this court by article 129 (4) of the Constitution, 1992, I will assume the jurisdiction of the Court of Appeal from which this appeal emanates and dismiss the appellant’s claims (b) and (c). In respect of the pending interlocutory appeal, it seems to me that there cannot be any legal basis for that order appealed against. As there was clearly no legal basis for the order because there was also no jurisdiction to make an interlocutory order therein. The decision of this court in this appeal must therefore put an end to that appeal. The objection is plainly made to delay the hearing and determination of the appeal. A court before which such an objection is taken is under a duty to satisfy itself that the result of a pending interlocutory appeal, will materially assist in resolving the issues in controversy between the parties. This objection fails and is dismissed.

In my respectful opinion, such was the concentration of the majority of their lordships with dilating on the legal niceties of Act 179 that they briefly adverted to the issue of fraud which was clearly within the jurisdiction of the circuit court and dismissed the claim for damages therefor. Thus wrote Kpegah JSC: “The finding of the court was as follows: ‘The evidence of the plaintiff and the second plaintiff witness is that there was a meeting where it was decided that he was to be made a director.’ This is the finding upon which the whole judgment and the finding of fraud against the second defendant is based.”

(The emphasis mine.)

With all due respect to his lordship, that statement was neither the finding of fraud by the trial judge nor did it seriously undercut the finding of fact by the trial judge as quoted above. On the record the true finding of the judge was that: “Particulars of fraud have been proved by the plaintiff as there are facts from which the court can infer fraud.” As Ampiah JSC wrote in his judgment:

[p.794] of [1997-98] 1 GLR 786

“Fraud is an issue of fact for the trial judge. On the evidence the judge found against the second defendant and gave judgment for the plaintiff. Such a finding can only be set aside if it is either perverse or not supported by the evidence on the record.”

It is obvious that his lordship did not attempt to fault the specific finding of fact on the grounds either that it was perverse or that the finding could not be supported by the evidence on record.

If I read the record correctly, learned counsel for the respondent in this appeal, then representing the appellants before their lordships in the Court of Appeal, chose to argue his case outside the pleadings and the evidence on the record. Learned counsel sought to rely on the equitable principles of laches and acquiescence. In view of the facts so found, these principles would not have availed him.

Before us, learned counsel still arguing outside his pleadings and evidence states in his statement of case that:

“In any case, when he said that he knew of the fraud, he waited for seven years before commencing litigation. It is true that the statute of limitation, ie the Limitation Decree, 1972 (NRCD 54) has not been specifically pleaded. Equity follows the law and this is a case in which equity will follow the law in holding that the plaintiff’s action is stale on grounds of laches and acquiescence.”

I need not expend any useful time in unravelling this incoherent statement of the law. Suffice it to say that the Limitation Decree, 1972 (NRCD 54) adverted to is essentially a special plea that must be pleaded: see Order 19, r 16 of the High Court (Civil Procedure) Rules, 1954 (LN 140A). It must be borne in mind that if this special plea is not pleaded, it cannot be adverted to in submissions to the court. The court on its part will not also of its own motion take notice that the action is out of time. Consequently, there was no real defence to the plaintiff’s claim for damages for the fraud. I am of the view that Ampiah JSC in his opinion offered in this appeal, when it was before their lordships, amply demonstrated the strength of the appellant’s claim. Said Ampiah JSC:

[p.795] of [1997-98] 1 GLR 786

“In fact his dealings with the company’s affairs in its formation period were found to be fraudulent: see exhibit one. That the plaintiff’s name did not appear in any of the documents tendered in evidence did not derogate from the plaintiff’s claim that the second defendant had defrauded him. The leaving out of the plaintiff’s name was part of the fraud complained of by the plaintiff. The statement by the first plaintiff witness that ‘he was not aware that myself or anybody ever gave the plaintiff an assurance that he was to be made a director … “ cannot be considered in isolation. This cannot displace the overwhelming evidence of the first plaintiff witness, the other witness and the plaintiff’s own evidence which the trial judge believed … The concealment of these documents was one of the acts of fraud perpetrated by the second defendant on the other members of the company.”

There now remains the issue of damages. In his judgment the trial judge stated:

“The plaintiff is claiming general damages as a result of the fraud and though he mentioned ¢5 million, the claim is not for special damages, and I would proceed to assess damages on that basis. The principle is that general damages are at large but there must be evidence at least of what the plaintiff had suffered or expended. There is evidence that the plaintiff was asked to perform these duties in Takoradi without remuneration in furtherance of that agreement. In 1979 the plaintiff paid ¢15,000 for licence.

The trial judge concluded:

“I consider that a return of about ¢3 million over the period of operation from 1976 to the date of issue of the writ, ie 1985, as being a fair measure of the damage suffered by the plaintiff and I accordingly award the said amount as damages against the second defendant.”

No challenge was offered to the assessment of the amount of ¢3 million as adequate damages for the fraud perpetuated against the

[p.796] of [1997-98] 1 GLR 786 appellant. Their lordships in the Court of Appeal did not seem to have challenged the basis of the award, save saying the ¢3 million was a colossal sum. This statement did not derogate from the validity of the award made by the trial judge. To the extent, therefore, that the trial judge gave reasons for coming to that conclusion as to the assessed damages, I will award the same. It is obvious that where in circumstances in which the claim of the plaintiff is supported by evidence which the judge accepts, the award of damages is at large and the judge is under a duty to award a reasonable sum and not necessarily nominal damages.

The appeal therefore succeeds and there will be judgment for the appellant on his claim for damages which are assessed at ¢3 million.

JUDGMENT OF AMUAH JSC.

I agree with the judgment as read by my brother Charles Hayfron-Benjamin JSC. I wish, however, to make some brief comments on the issues.

The issue of fraud.

The majority judgment of the Court of Appeal did not comment on the report issued against the second defendant by the Registrar-General’s Department. It appears to me, therefore, that the majority judgment is incomplete. The plaintiff from the evidence was a stevedore with expertise, having left his former employment, Takoradi Ports Services, with the view of forming a stevedoring company. He made expenses at the initial stages of the formation of the company. The second defendant on the other hand was a mere secretary entrusted with the registration and management of the company. According to the plaintiff, the second defendant at a meeting before the formation of the company was entrusted with his (the plaintiff’s) registration as a director but he (the second defendant) failed to do so and thereby he (the plaintiff) has suffered a loss and is entitled to damages. On the issue of fraud, considering the evidence of the plaintiff on the one hand and the evidence of the second defendant on the other hand, the plaintiff succeeds on the balance of probability.

Knowledge of the fraud by the plaintiff.

[p.797] of [1997-98] 1 GLR 786

Now, the company was registered in October 1976. In 1977 the plaintiff was a general manager of the company at Takoradi. Since he was not being invited to meetings of the company, he should have known or ought to have known that he was not a director of the company before he resigned in 1980. He was accused of lacking vigilance, and the defendant made this ground of defence as his shield. The definition of fraudulent misrepresentation can be found in Snell’s Equity (29th ed) at p 548. For easy reference I refer to it in full. The text is as follows:

“Definition. Fraud which Courts of Equity remedied concurrently with courts of Common Law can be defined with some precision. It consists of a false statement of fact which is made by Defendant to Plaintiff, knowingly or without belief in its truth, or recklessly, without caring whether it be true or false with the intent that it should be acted upon and which is in fact acted upon by Plaintiff. Defendant will be liable in such a case even though the misrepresentation was made with no corrupt motive and with no expectation of profit, and even though the person defrauded had a full opportunity of discovering the fraud or had an agent who, knew the truth. But where an agent innocently makes a statement which his Principal knows to be false neither agent nor principal is guilty of fraud unless the Principal intended the agent to make the false statement.”

It will be found that knowledge of the plaintiff of the fraud as a ground of defence affords no protection.

Lapse of time

After the fraud had come to his knowledge in 1980 he waited until 1987 before commencing proceedings. It is the contention of the second defendant that the plaintiff’s right to sue was thereby extinguished. Learned counsel, Mr Kom, cited the case of Allcard v Skinner (1887) 36 ChD 147, CA and stated thus: “The plaintiff in that case who had been a member of a sisterhood and bound by a vow of poverty gave all her property to the lady superior of the order. She later left the [p.798] of [1997-98] 1 GLR 786 sisterhood and six years later sued to recover her property. It was held that she had been subject to. undue influence and that her delay in bringing the action disentitled her to relief. The law helps the vigilant and not the indolent.”

He ended by saying that even though the statute of limitation, ie the Limitation Decree, 1972 (NRCD 54) was not pleaded, equity follows the law.

I quite agree with the reasoning but in the case before us, sections 1-15 under Part 1 of NRCD 54 does not provide a period of limitation in the case of fraud; whereas in the case of contract and tort there is a specific period of limitation provided under section 4(1). There is no such provision in the case of fraud and therefore the court has no specified period to follow. I find that proceedings to avoid a transaction can be brought at any time but there is, however, a requirement that the proceedings to avoid a transaction must be brought within a reasonable time from the date the plaintiff “has discovered the fraud or mistake as the case may be or could with reasonable diligence have discovered it”: see section 22 (1)(c) of NRCD 154 and also Snell’s Principles of Equity (29th ed) at 557 in the case where undue influence persists.

In the case before me, the undue influence which persisted against the plaintiff ceases to have effect when he resigned from the Speedline Stevedoring Co Ltd. Therefore he was left on his own to sue the company but failed to do so. When I consider the report of the Registrar General’s Department, the nature of the fraud, undue influence and the difficulties one has to overcome in a case like this before being granted a relief, the maxim: “Equity will not suffer a wrong to be without a remedy” is more appropriate. I agree with the judgment as read.

JUDGMENT OF ACQUAH JSC.

I agree.

JUDGMENT OF ATUGUBA JSC.

I also agree.

DECISION

Appeal allowed.

LSNA