GHANA CONSOLIDATED DIAMONDS LTD vs. TANTUO AND OTHERS [2001-2002] 2 GLR 150

CASES REFERRED TO

(1) Scott Paper Co v Brayton Paper Works (1927) 44 RPC 151.

(2) Walker v Wilsher (1889) 23 QBD 335, CA.

(3) Nichols v Evens (1883) 22 ChD 611; 48 LT 66.

(4) Moon v Dickinson (1890) 63 LT 371; 38 WR 278.

(5) Young v Black Sluice Commissioners (1909) 73 JP 265.

(6) Crossfield v Such (1852) 8 Exch 159; 155 ER 1301.

(7) Coote v Ford [1899] 2 Ch93; [1895-99] All ER Rep 673, CA.

(8) Emcee Ltd v Sunday Pictorial Newspapers (1920) Ltd [1939] 2 All ER 384.

(9) Gears v Braley [1940] 2 KB 442; [1940] 3 All ER 376, CA.

(10) Jourdain v Johnson (1835) 2 Cr M & R 564; 150 ER 241.

(11) James Tucker SS Co v Lamport & Holt (1909) 23 LTR 10, CA.

(12) Weber v Birkett [1925] 2 KB 152; [1925] All ER Rep 244; 41 TLR 451, CA.

(13) Smith v Schilling [1928] 1 KB 429; 44 TLR 109, CA.

(14) Cumper v Pothecary [1941] 2 KB 58; [1941] 2 All ER 516, CA.

(15) Hubback v British North Borneo Co [1904] 2 KB 473, CA.

(16) Spurr v Hall (1877) 2 QBD 615.

(17) Kaprow (S) & Co Ltd v Maclelland & Co Ltd [1948] 1 KB 618, CA.

(18) Klamborowski v Cooke (1897) 14 TLR 88.

[p.154] of [2001-2002] 2 GLR 150

(19) Rowe v Kelly (1881) 59 LT 139.

(20) Benning v Ilford Gas Co [1907] 2 KB 290.

(21) Baiden v Solomon [1963] 1 GLR 488, SC.

APPEAL by the defendants company to the Court of Appeal against the decision of the trial court refusing their application to stay proceedings after they had paid money into court in an action brought against them for payment of end of service benefits, specific performance, declaration and injunction by the plaintiffs, their former employees. The facts are sufficiently stated in the judgment of Benin JA.

Aduama Osei for the applicants.

M B Afoom (with him E Anokye) for the respondent.

Benin JA. There is a dearth of judicial authority in our local jurisprudence on the subject we are going to discuss in this appeal. The plaintiffs sued the defendants, their former employers, for certain reliefs relating to their terminal benefits. The defendants paid in some money under Order 22, r 1 of the High Court (Civil Procedure) Rules, 1954 (LN 140A). This appeal turns on the practice and procedure under Order 22, r 1 and 2 of LN 140A. Since we are going to refer extensively to these rules under Order 22 of LN 140A, I propose to set them out here:

“1. (1) In any action for a debt or damages or in an Admiralty action the defendant may at any time after appearance upon notice to the plaintiff pay into Court a sum of money in satisfaction of the claim or (where several causes of action are joined in one action) in satisfaction of one or more of the causes of action; provided that with a defence setting up tender before action the sum of money alleged to have been tendered must be brought into Court.

(2) Where the money is paid into Court in satisfaction of one or more several causes of action the notice shall specify the cause or causes of action in respect of which payment is made and the sum paid in respect of each such cause of action unless the Court or a Judge otherwise order.

(3) The notice shall be in Form 3 in Appendix B, and shall state whether liability is admitted or denied and receipt

[p.155] of [2001-2002] 2 GLR 150 of the notice shall be acknowledged in writing by the plaintiff within three days.

2. (1) Where money is paid into Court under Rule 1 the plaintiff may within seven days of the receipt of the notice of payment into Court or, where more than one payment into Court has been made, within seven days of the receipt of the notice of the last payment into Court, accept the whole sum or any one or more of the specified sums in satisfaction of the claim or in satisfaction of the cause or causes of action to which the specified sum or sums relate, by giving notice to the defendant in Form 3A in Appendix B; and thereupon he shall be entitled to receive payment of the accepted sum or sums in satisfaction as aforesaid.

(2) Payment shall be made to the plaintiff or on his written authority to his solicitor, and thereupon in the action or in respect of the specified cause or causes of action (as the case may be) shall be stayed.”

Pleadings had not yet closed in this action; but the defendants had filed their statement of defence denying liability for the plaintiffs’ claim. After the defence, the defendants paid money into court accompanied by a notice which reads:

“Notice of payment into court—order 22, r 1 Take Notice that the defendants have paid into court the sum of ¢243,587,146 and say that the said sum is in full satisfaction of the plaintiffs’ claims and all outstanding matters between the parties herein as specified in the schedule herein attached.”

From the face of this notice, it is clear the defendants paid in the money in full settlement of the action, at least this was their intention from the plain, ordinary reading of the notice. The plaintiffs took out the money and subsequently acknowledged receipt thereof, but rejected the terms of the payment in and said it was only a part payment so they would proceed with the action. This line of action was strenuously rejected by the defendants, who believed that the action was stayed by operation of law the moment the plaintiffs took out the money they (the defendants) had paid into court. The trial court did not go along with the defendants, hence

[p.156] of [2001-2002] 2 GLR 150 this appeal.

The argument made by counsel for the plaintiffs before the trial court and in this court in resisting the defendants’ contention that the action be stayed was that the money was not paid under Order 22 of LN 140A for the reasons that:

(1) through correspondence between the two solicitors, they had agreed that the defendants would pay some money into court in respect of some of the claims;

(2) Order 22, r 1 of LN 140A only applies to claims for debt or damages and not the sort of remedies sought by the plaintiffs herein by their writ; and

(3) the payment in did not conform to the rules of court. A fortiori, the acceptance too was not effect under Order 22 of LN 140A, the plaintiffs contended.

I will consider these points seriatim.

The letters.

For their full force and effect, I will set out the letters in question. One is dated 6 December 1994 from the defendants addressed to one Mr G O Ofori and it reads:

“We have the letter titled ‘Notice dated 29 November 1994 to which your signature is appended. As to whether you have exercised your option in the manner set out in the letter to you dated 23 July 1994, or otherwise, and particularly as to the sums due to you upon your leaving the company’s employment, we state that these are issues to be determined by the High Court, Accra in the suit that you have instituted against the company. In the meantime, the company expects you to vacated the company premises you occupy forthwith and to ensure that all company property in your possession remains at the company residence allocated to you. Keys and other items of company property associated with your work must immediately be handed over to the security department. We hereby give you notice that all sums due to you including your final salary and Christmas bonus, where applicable, consequent upon your leaving the company’s employment will be paid to the Registrar of the High Court,

[p.157] of [2001-2002] 2 GLR 150

Accra, and confirmation of this payment will be made to you through your solicitors.”

(The emphasis is mine.) The other letter dated 16 December 1994 was written by the plaintiffs’ solicitor “without prejudice” to the defendants. It reads:

“PAYMENT OF LEGITIMATE ENTITLEMENT DUE TO MESSRS TANTUO OFORI AND OTHER RETIRED CONTRACT STAFF OF GCD We refer to your letter of December 1994 addressed to our clients giving them notice of payment into the High Court of ‘all sums due to you including your final salary and Christmas bonus.’ A search at the High Court Registry today has revealed that no such sums had been paid into court. Our clients have informed us that you have failed or refused to pay them their legitimate entitlements in respect of end of service benefit, provident fund, rent refund, annual leave pay and leave travelling expenses which do not form part of the issues raised in their court action.

Our clients see in your conduct, an attempt to impose undue hardship upon them in order to force them to abandon their action against you. They have therefore instructed us to demand from you, which we hereby do, the payment of all entitlements legitimately due to them, with the exception of that which is the subject matter of the court action, namely loss of employment benefit.

Please be informed that we reserve the right to take appropriate action on this issue if our clients do not receive payment of those entitlements on or before close of business on Monday, 19 December, 1994. Please be advised accordingly.”

On the strength of these letters the plaintiffs submitted that the payment was not effected under Order 22, r 1 of LN 140A.

The trial court appears to have accepted this argument. This is what that court said:

“It is worthy of note that before the payment into court the

[p.158] of [2001-2002] 2 GLR 150 defendants by their letter, exhibit A . . . were aware that beyond the payment which they intended to make there would be an outstanding matter before the court to which the payment would not relate. . . In the first place, the correspondence between the parties . . . would give some indication that the payment into court was not meant to be an offer to be accepted or rejected by the plaintiffs as contemplated under Order 22, r 1. The parties, in effect, before the payment had come to the understanding that the matter before the court—at least some aspect of it—would go on after the money paid into court had been collected by the plaintiffs. From exhibit A, the payment into court and its acceptance could be linked to the vacation of the defendants’ premises by the plaintiffs. From the two letters . . . I am of the view that the payment of the money into court and its acceptance by the plaintiffs was originally intended by the parties to be a temporary solution while an aspect of their differences remained to be resolved by the court. That means the understanding between the parties was that after payment and acceptance by the plaintiffs the claim before the court would not be stayed in its entirety.”

I think a careful reading of these two letters quoted above will show that the parties did not agree on anything positive. At best, the defendants’ letter contained unilateral promise or proposal to pay “all sums” due the plaintiffs, which expression was re-echoed by the plaintiffs in their response. It is very significant to note that no specific figures were mentioned at all in any of these letters, let alone an agreement on any specific amount to pay. Such letters exchanged between solicitors or parties or both without prejudice” in the course of resolving differences between litigants, actual or prospective, are not intended to create any binding enforceable agreements. It is also clear that the defendants’ letter under reference was conditional upon the plaintiffs performing certain acts specified therein. The response did not accept these conditional terms since it failed to address same; rather fresh proposals and demands were made therein. It is noted that the solicitors or the parties or both were still talking and various proposals, demands, etc were being made and these did not ripen

[p.159] of [2001-2002] 2 GLR 150 into binding agreements. And even one could not talk about anything said by either party having influenced the other to alter his position to his detriment so as to be caught by estoppel under section 26 of the Evidence Decree, 1975 (NRCD 323).

In such situations, Clauson J would say as stated in Scott Paper Co v Brayton Paper Works Ltd (1927) 44 RPC 151 at 156 that:

“Negotiations, whether or not they are expressly stated to be without prejudice, are, and must be treated … as without prejudice in this sense that statements or admissions made by either party at such interviews are not to be admissible as evidence against the maker of the statement or admissions.”

Bowen LJ made a pertinent comment in the case of Walker v Wilsher (1889) 23 QBD 335 at 339, CA that:

“. . . it would be a bad thing and lead to serious consequences if the Courts allowed the action of litigants, on letters written to them without prejudice, to be given in evidence against them . . .”

The defendants wrote the letter with a proposal or call it a promise to pay some money into court upon the plaintiffs doing certain things. The plaintiffs replied without even saying whether they accepted these terms proposed by the defendants and rather made fresh demands. At that point I would have thought everything was at large with nothing concrete agreed upon, so either party was entitled to pursue his own course of action, without thinking these letters constituted any binding agreement. If a letter is written “without prejudice” it amounts to saying the other person may accept it or not as he wishes, and if he does not accept it the writer thereof suffers no consequence for it since it cannot be used in evidence against him. In this case the letters agreed on nothing and no figures were even suggested and approved of. Moreover, if the defendants had intended to pay the money pursuant to these letters nothing prevented them from saying so in the application to the court, instead of saying they were making the payment under Order 22, r 1 of LN 140A. It was thus wrong for them to have relied on these letters to create, as it were, an estoppel against the plaintiffs.

The import of Order 22, r 1 of LN 140A

[p.160] of [2001-2002] 2 GLR 150 The trial court cited two cases in support of the legal position that Order 22, r 1(1) of LN 140A applies only to claims for debt and damages; that is correct but Admiralty actions are included too. These cases are: Nichols v Evens (1883) 22 ChD 611 and Moon v Dickson (1890) 63 LT 371. So it was held in the case of Young v Black Sluice Commissioners (1909) 73 JP 265, that if the payment in is not in respect of a debt or damages, then it is not within the rule. See also Crossfield v Such (1852) 3 Exch 159. It was held in the case of Coote v Ford [1899] 2 Ch 93, CA that under Order 22, r 1, money can be paid into court only in respect of a claim for debt or for damages; it cannot be paid in in respect of an action brought to establish a right and obtain an injunction. It was also said in that case that a plaintiff in an action for damages and other relief, like an injunction, who takes out of court money which has been paid in in respect of the claim for damages with a denial of liability can go on with the rest of his claim.

So the starting point is to find out whether this was a case to which Order 22, r 1 of LN 140A was applicable. Among the reliefs endorsed on the writ are one for an order of specific performance of a contract and also for a declaration and for an order of injunction. In my view, these claims for a declaratory relief, specific performance and injunction, called hereafter as the first set of reliefs, are not such claims for which this rule will apply. There are other reliefs for the payment of money, including salaries, allowances, end of service benefits, called the second set of reliefs, which, though not quantified, still pass for a claim in damages and therefore come within the rule. Thus money could not have been paid in respect of the first set of reliefs under Order 22, r 1(1) of LN 140A so whatever payment was made did not come within the rule, since it was not a claim for a debt or damages. The payment could only relate to the second set of reliefs.

That explains the rationale for Order 22 r 1(2) of LN 140A which requires the defendant to specify in his notice the cause(s) of action for which he is paying in the money. In this case the defendants made a lump sum payment into court without specifying which of the causes of action it was intended for; they said it was in full satisfaction of all claims against them by the plaintiffs. But in view of Order 22, r 1(1) of LN140A this sort of payment in was wrong. Besides, where there are different causes of action it is

[p.161] of [2001-2002] 2 GLR 150 wrong to make a lump sum payment into court to cover all of them The facts in the case of Emcee Ltd v Sunday Pictorial Newspapers (1920) Ltd [1939] 2 All ER 384; were as follows. The plaintiffs sued in defamation complaining of two distinct defamatory matters. The defendants paid £50 into court, with a denial of liability. The jury returned a verdict in favour of the plaintiffs but awarded just a farthing in damages in respect of each defamatory matter. It was contended that the plaintiffs should pay costs to the defendants since, by the jury award, it meant the action should not have been brought at all. It was held that the payment into court was a bad payment in, since it was a payment of one sum in respect of two causes of action, and no application was made to the court to allow a general payment in, so no costs was awarded. See also the case of Gears v Braley [1940] 3 All ER 376, CA. In an old case of Jourdain v Johns (1835) 2 Cr M & R 564, the plaintiff sued for a specific sum of money for money lent and for goods sold, he also claimed a certain sum of money on a bill of exchange. The defendant paid a sum of money into court to cover both claims. It was held that the defendant ought to have shown distinctly what portion of the money paid into court was to be ascribed for the Bill of Exchange. And in the case of James Tucker SS Co v Lamport & Holt (1906) 23 TLR 10, CA, Cozens-Hardy LJ said that:

“. . . the rules by their language require that a defendant should state in respect of what cause of action he paid money into court. A defendant cannot pay money into court and say it is in respect of several causes of action.”

What is the effect of failure to specify what part of money paid in should be appropriated for what cause of action? The known authorities say it is a bad plea to pay one sum of money into court in satisfaction of two or more separate causes of action: see Weber v Birkett [1925] 2 KB 152, CA and Smith v Schilling [1928] 1 KB 429, CA. Thus the lump sum payment into court by the defendants without specifying for what cause of action it was paid did not satisfy the rule, so it could not have been made under the rule.

Form of payment

There was also an argument raised that the defendants did not

[p.162] of [2001-2002] 2 GLR 150 comply with the format prescribed by the rules in paying in the money. This is in reference to Order 22, r 1(3) of LN 140A Under this, the defendant is required to use a specified form, and then state whether by paying the money he admits liability or otherwise. The view was taken in Cumper v Pothecary [1941] 2 All ER 516, CA that the prescribed form should be strictly adhered to. Indeed, compliance with these provisions is important in view of the consequences for the choice that is made on the question of liability. It was held per Vaughan Williams LJ in Hubback v British North Borneo Co [1904] 2 KB 473, CA that if a defendant pays money into court admitting liability, then the plaintiff may in respect of that cause of action take it out at any time. But if he pays in without admitting liability, the money remains in court until the action has been tried. This is to show how important it is to comply strictly with the requirements of the rule by specifying the cause(s) of action for which payment is made and also stating whether you admit liability or otherwise.

To sum up, the payment in did not comply with Order 22, r 1(3) of LN 140A in the sense that the cause(s) of action for which it was paid was not specified in the notice of payment. The notice did not also indicate whether the plaintiffs were admitting liability or otherwise. It was wrong to make a lump sum payment in respect of different causes, some of which were not covered by Order 22 r 1(1) of LN 140A, not being a debt or damage claim, that is the first set of reliefs. The defendants did not also seek an order, leave or direction of the court before making the payment. So the trial court’s conclusion that the payment was not in accord with these rules and that the cause of action was not abated by the payment in was justified and supportable.

One may logically ask the question: since the plaintiffs have already taken out the money, what is the effect of that on the action? It is clear from the foregoing discussion that the defendants took a mistaken view of the rules by claiming to pay the money under Order 22, r 1 of LN 140A. The law is that if money is paid into court by mistake, the defendant can take it out on the order of the court: see Spurr v Hall (1877) 2 QBD 615; Kaprow (S) & Co Ltd v Maclelland & Co Ltd [1948] 1 KB 618, CA. And it was decided in Cumper v Pothecary (supra) that a defendant could withdraw the whole of the sum paid in, or reduce same, but the

[p.163] of [2001-2002] 2 GLR 150 proper procedure to do so was for him to apply to the court for an order to that effect. That a defendant who has paid a sum of money into court is not entitled as of right to resile from that step, but must satisfy the court that he has good reasons for so doing. In my view, one good reason will be that the money was paid in by mistake of fact, for example that he has over-paid.

Additionally when money has been paid in by a defendant by mistake or in respect of a claim for unliquidated damages, the plaintiff cannot withdraw it without leave of court, for that money will have to remain with the court until after the case has been tried. The court will then give directions as to how to dispose of the money deposited with it. If the plaintiff succeeds, his damages, if any, will first be taken from it; then his costs, if any. Thereafter if there is any balance, the court will most likely order that it shall be refunded to the defendant as was done in the case of Klamborowski v Cooke (1897) 14 TLR 88.

And the fact that a defendant can ask for an order from the court to withdraw money he has paid in, provides the rationale for the rule in Order 22, r 1(2) of LN 140A which empowers the defendant to ask for leave to make certain payment into court, especially for different causes of action. On the other hand a plaintiff for whose benefit money is paid in can ask the court for particulars of the payment, especially if no apportionment was made by the defendant: see Rowe v Kelly (1881) 59 LT 139. And if a plaintiff feels embarrassed by a lump sum or other form of payment, he is entitled to apply by summons for particulars of the payment; this was the decision in the case of Benning v Ilford Gas Co [1907] 2 KB 290.

Thus the plaintiff is not to take out the money paid in if he is not sure for what particular purpose it was paid in. So if the plaintiffs herein had asked for particulars in the light of the notice, it would have afforded the defendants the opportunity to explain what they actually intended. The trial court has said the payment was for the monetary claims in the writ. But this is not wholly true if we look at the notice of payment. But on the other hand, the payment could not have been made in respect of the first set of reliefs. And even the schedule attached to the notice of payment confirms that the payment did not cover the entire causes of action. That necessitated the recourse for particulars before the money was taken out by the

[p.164] of [2001-2002] 2 GLR 150 plaintiffs. But that too was not done. Thus both parties did not comply strictly with the rules of court. The trial court therefore had a discretion to determine the fate of the money paid in and taken out. He rightly decided that it would be taken into account at the end of the trial when the plaintiffs’ entitlements come to be considered.

The last limb of this appeal is the failure by the defendants to take any part in the hearing after his application for a stay of proceedings had been turned down by the court below. Under the rules of court, they could have re-applied to this court for a second look at the application for a stay of proceedings but he failed to take that opportunity. Rather they chose not to take any further part in the proceedings. The trial court went ahead with the action and entered judgment for the plaintiffs. A party who is aware of the hearing or trial of a case but who chooses to stay away out of his own decision cannot be heard to complain if judgment goes against him that he was not given a hearing. He could only appeal on the merits of the judgment delivered. On a more relevant note, the Supreme Court has held in the case of Baiden v Solomon [1963] 1 GLR 488 at 495, SC per Crabbe JSC (as he then was) that “. . . it is not open to a party, except on very strong grounds, to refuse to take further part in a hearing after an adverse interlocutory ruling has been made against him. . .” I think this is sufficient to dispose of this appeal. The appeal is dismissed.

Adinyira (Mrs) JA. I agree.

Amonoo-Monney JA. I also agree.

Appeal dismissed.

DRKS