SAMUEL vs. STATE HOUSING CO [2001-2002] 1 GLR 570

CASES REFERRED TO

(1) Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705, HL.

(2) Donkor v Alhassan [1987-88] 2 GLR 253, CA.

(3) Agogro v Ago [1973] 1 GLR 45.

(4) Lawala v The Republic [1976] 1 GLR 359, CA.

(5) Lady Gwendolen, The [1965] P 294; [1965] 3 WLR 91; [1965] 2 All ER 283, CA.

(6) Bolton (HL) Engineering Co Ltd v Graham (TJ) & Sons Ltd [1957] 1 QB 159; [1956] 3 WLR 804;

[1956] 3 All ER 624, CA.

ACTION by the plaintiff for a declaration of title to an estate house purchased through the estate manager of the defendant-company wherein the defendant’s defence was that the sale was invalid. The facts are sufficiently set out in the judgment.

Adomako Kwakye for the plaintiff.

Joe Osei Owusu for the defendant.

Quaye J. In or about March 1995, the plaintiff went to the premises of the defendant-company in Kumasi and expressed his intention to purchase an estate house. The defendant-company was a statutory corporation which built houses and provided accommodation to interested members of the Ghanaian public who either hired them on rentals or purchased and owned the said houses.

On the day in question, as stated, the receptionist of the defendant-company in Kumasi directed the plaintiff to the estate manager of the company in the person of one Christiana Boateng. The said officer or agent of the defendant company asked the plaintiff to go and inspect house No E 161, Airport Estates/Buokrom Estates. Upon inspection,

[p.573] of [2001-2002] 1 GLR 570 the plaintiff was pleased with the said house, and so indicated that fact to the estate manager. The selling price of the said house was quoted and the plaintiff paid ¢11.5 million in full settlement of the purchase price. He was however not issued any receipt in evidence of the payment. When, and at any time that the plaintiff asked about the receipt, he was told by the estate manager that the area director who would, in accordance with the policy of the defendants, endorse or countersign the receipt when it was issued, had travelled abroad for studies. She always assured him that the receipt would be issued shortly upon the return and assumption of duty by the area director.

The plaintiff was however not totally bereft. He was issued with exhibit A, an introductory letter to the Electricity Co of Ghana and the Ghana Water Co Ltd, companies which served the dual purpose of identifying the plaintiff as the purchaser of the disputed house, and also a request to both companies to provide electricity and water supply to the house. As a demonstration of further commitment by the defendant-company, acting through the estate manager, Christiana Boateng, a sub-contractor of the defendant-company known as Akokotre Construction Co Ltd were detailed to complete and render the subject house habitable. The said construction company was supplied the necessary materials from the defendant-company’s store at North Suntreso by their storekeeper.

The second plaintiff witness, the managing director of Akokotre Construction Co Ltd gave evidence to the effect that his company having been so mandated by the defendant-company, fixed louvre blades, electrical fixtures, plumbing fixtures and door locks to the house. During the final works, the second plaintiff witness requested the plaintiff who had been introduced to him as the purchaser of the house by the estate manager of the defendant-company, to either employ a watchman or let somebody live in the house to serve as a disincentive to thieves who might otherwise be attracted by the fixtures and fittings.

In response to this invitation, the plaintiff initially allowed the first plaintiff witness to live in the house. Subsequently, two Roman sisters (one of them being the third plaintiff witness) joined the first plaintiff witness to occupy the house. The first plaintiff witness indeed lived in the house from September 1995 until February 1997. Apparently, she was joined by the said Roman sister in October 1995. The

[p.574] of [2001-2002] 1 GLR 570 plaintiff personally lived in the house from May 1996.

The quiet enjoyment of the subject matter by the plaintiff was punctuated by an act of the defendant-company. The defendants cursorily or as a routine requested the plaintiff to provide them certain particulars about himself by way of completing a form, exhibit B, which had been prepared by the defendants. After the plaintiff had submitted the completed form the defendants told him that he was not known in their records to be a lawful purchaser of any house built by them. The plaintiff was consequently invited, if he was interested in regularising his ownership of the house, to pay a further ¢32 million to the defendants. The plaintiff protested this new demand and caused his solicitor to communicate his protest in writing to the defendants. The said protest found expression in exhibit C to which the defendants did not react until when at dawn on 4 March 1997 they went and forcibly ejected the plaintiff from the house in dispute. The version of the plaintiff was corroborated by the first, second and third plaintiff witnesses, respectively, in the relative portions.

On the part of the defendant-company, their version was ventilated by their representatives, the assistant administrative officer and an assistant estate officer, the first defendant witness. Both witnesses elaborately led evidence to set out the procedure for acquiring or purchasing a house from the defendant-company. An intending purchaser must first of all complete an application form to which he was required to affix two passport pictures of himself. Exhibit 2 was tendered as a standard application form. After the form had been submitted, an officer of the company, most likely the estate officer or assistant estate officer would take the prospective purchaser round to inspect some of the houses available. He would then choose the one he was interested in and then pay the purchase price in full to the cashier, against a receipt to be issued in his favour. This would be followed by an offer letter from the company as in exhibit 3.

The defendants disputed the claim that the plaintiff had paid ¢11.5 million for the house. They contended that the selling price for the house in 1995 was ¢15.5 million. They furthermore drew a distinction between exhibit A and exhibit 4 and held fast to the assertion that exhibit A did not officially emanate from the defendant-company.

There are two issues for determination by the court, viz:

(1) Whether the plaintiff paid ¢11.5 million to the defendant [p.575] of [2001-2002] 1 GLR 570 company towards the purchase of H/No E 161, Airport Estate.

(2) Whether the plaintiff is entitled to his claim for declaration of title to the said house.

In respect of the above, counsel for the plaintiff contended that the evidence of the second plaintiff witness, the defendant’s representative and the first defendant witness showed that Christiana Boateng was an employee of the defendant-company as an estate manager. Her status with the defendant-company was therefore established. Furthermore, the defendants never denied that the plaintiff paid ¢11.5 million to the estate manager. He submitted therefore that the defendant being a company, must necessarily act through and by its officers. The fact that the defendant-company is denying that the money was paid to the cashier does not mean that the money was not paid. It was submitted therefore that the plaintiff paid the ¢11.5 million to Miss Christiana Boateng who was an agent of the defendant-company. This submission was founded upon the decision in Lennards’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 at 713, HL that:

“. . . a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation. . . if Mr. Lennard was the directing mind of the company, then his action must, unless a corporation is not to be liable at all, have been an action which was the action of the company itself . . .”

(The emphasis is mine.)

Counsel next touched on the issue as to whether the disputed house was allocated to the plaintiff. He referred to the evidence of the defendants concerning the procedure for acquisition of a house which they contended the plaintiff in this case did not go through. He contended that the evidence of the defendants and that of the second plaintiff witness demonstrated that it was only upon a person having paid the purchase price for a house in full that the company would request its sub-contractor, in this case, Akokotre Construction Co Ltd, to complete the house into a habitable state. He therefore submitted that the fact that the defendants mandated the subcontractor to

[p.576] of [2001-2002] 1 GLR 570 complete the house concluded the matter that the plaintiff had indeed purchased the house and that was why the plaintiff occupied the house for nearly two years.

On behalf of the defendants, their counsel expressed the view upon the evidence that the plaintiff set out to purchase a house from the defendant-company but clearly that the plaintiff failed to take any steps set out by the defendant-company for prospective purchasers of their estate houses. The money that the plaintiff claimed he paid to Christiana Boateng did not reach the defendant-company, even so, the said allegation of payment was not corroborated in any form by any witness of the plaintiff throughout the evidence. Counsel for the defendants therefore submitted that the plaintiff had failed to prove that he paid any money to the defendant-company, and in the absence of such proof the plaintiff’s claim that he had purchased H/No E 161, Airport Estates from the defendant-company cannot be sustained. This submission was supported with the decision in Donkor v Alhassan [1987-88] 2 GLR 253, CA. In that case the respondent paid money to the appellant towards the purchase of the appellant’s house. These payments of money were duly receipted. When the appellant failed to execute the transfer of the house to the respondent unless the latter paid more money, the trial judge relied, inter alia, on the receipts that had been issued by the appellant for the payments that had been made by the respondent, and held in favour of the respondent that there was a validly enforceable contract between the parties. This judgment was confirmed by the Court of Appeal in the above reference. It was further contended by the defendants herein that in the event the plaintiff indeed paid the alleged money to Christiana Boateng, she was neither authorised nor entitled to receive money on behalf of the company, that function having been reserved to or vested only in the cashier. Finally, counsel for the defendant-company referred to exhibit 1 wherein Christiana Boateng had pleaded with the plaintiff to allow her a short time to refund the money to the plaintiff. Counsel urged upon the court that the said refund was referable only to the ¢11.5 million that the plaintiff had paid to Christiana Boateng.

It is important in this judgment to consider the relative roles of the principal characters. By way of a summary of the facts, the plaintiff approached the defendant-company with a request to purchase one of the estate houses that the company had built. It appears that

[p.577] of [2001-2002] 1 GLR 570 was the first time that the plaintiff had tried to transact any such business with the defendant-company. He therefore walked to the receptionist from where that officer directed the plaintiff to the schedule officer in the organisational arrangement of the defendant company. That officer was the estate manager, Christiana Boateng. She did not redirect the plaintiff. The estate manager held herself up to be the one who had the fiat of the company to deal with or handle prospective purchasers of the estate houses on behalf of the company. In that capacity, whether assumed or real, she directed or instructed the plaintiff, and the latter did accordingly. In all that happened, the plaintiff knew that he was on a genuine course. The estate manager acted in a manner that would not in the least create any suspicion about her in the eyes of the plaintiff. She involved the other appropriate officers or organs or both of the defendant-company such as the receptionist, the storekeeper, the sub-contractor and the like. All this happened when the defendant-company seemed oblivious of the fact. Was that because they too believed that their agent was acting in good faith as she was presumed and expected to do?

The legal position is that if there was any fraud on the part of the estate manager, further evidence would be required from the defendant-company to show that the plaintiff who did not know the procedure in force in their company nonetheless knew of the fraud and was either party to it, or in any case, connived at it. Such evidence might include for instance, a notice broadly displayed at the premises of the defendant-company directing in-coming purchasers or even the public at large to the procedure in force or the appropriate officers or both that the public might transact business with. This position was in a way illustrated in the case of Agogro v Ago [1973] 1 GLR 45. Francois J (as he then was) in that case held, as stated in the headnote, that:

“(3) Where there is a notice in a vehicle repudiating any liability and intimating that passengers travelled at their own risk, a plaintiff will be held to have had express or effective constructive knowledge of the facts and the notice and the defendant would not be liable for negligence. In this case since no prohibition was issued to the first defendant against carrying passengers in his car and no notices were displayed in the car that passengers travelled

[p.578] of [2001-2002] 1 GLR 570 in the said car at their own risk, the plaintiff was not a trespasser and the second defendant was liable.”

The situation addressed in the cited case is analogous to the circumstance herein. The plaintiff was oblivious of any special rules or procedure. He had to rely on the officers of the defendant-company to purchase a house from the company. So far as the procedure and the appropriate officers he could deal with were concerned, the plaintiff was a blind man. Indeed, what obtained in the defendant-company’s internal affairs was known only to the officers of that company unless they duly informed outsiders. The relevance of this factor was addressed by the Court of Appeal in Lawala v The Republic [1976] 1 GLR 359, CA where it was held at stated in the headnote that:

“(3) It was not easy to determine the conditions governing the exportation overland of restricted or prohibited goods for the officers of the Department or Customs and Excise appeared to be the sole repositories of the lore contained in customs regulations and departmental instructions. . .

Per curiam. Although, in general, ignorance of the law is not an excuse, it is recognised that the details of the laws relating to the importation and exportation of goods are so complex that a person may present goods at the borders for export without having complied with the law and yet have no intention of flouting it.”

The two cases above referred to, seem to carry the legal message that would tend to exculpate the plaintiff and avoid for him any imputation of wrong conduct. Clearly, the plaintiff herein acted honestly and innocently in the face of the evidence adduced.

If the defendant-company sat by and allowed its agent to commit or perpetrate fraud in its name, then would the innocent party in law suffer? Before I come to address this issue, I feel bound to turn once more to consider the position of the estate manager vis-á-vis the defendant-company. Further to the position of the law as stated in Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd (supra) Winn LJ said in The Lady Gwendolen [1965] P 294 at 355, CA that:

“. . .wherever the fault either occurs in a function or sphere of action which the owner has retained for himself or is that of a manager independent of the owner to whom the owner has

[p.579] of [2001-2002] 1 GLR 570 surrendered all relevant powers of control, it is ‘actual fault of’ the owner. . .”

See further, Bolton (HL) Engineering Co Ltd v T J Graham & Sons Ltd [1957] 1 QB 159 at 172-173, CA per Denning LJ where he had sought to draw a distinction between circumstances and situations where an officer might be presumed to bind his employer on whose behalf he acted. He stated:

“A company may in many ways be likened to a human body. It has a brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such . . . So here, the intention of the company can be derived from the intention of its officers and agents. Whether their intention is the company’s intention depends on the nature of the matter under consideration, the relative position of the officer or agent and the other relevant facts and circumstances of the case.”

The evidence in the instant case was to the effect that Christiana Boateng was at the material time the estate manager. She was identified by the receptionist as the officer or agent of the company in charge of or responsible for all matters in respect of the sale of a house built by the company to interested purchasers. The estate manager by her conduct confirmed the role and position ascribed to her by the receptionist. Further to the above, the estate manager executed both exhibit A which the defendants described as irregular and exhibit 4 which they themselves tendered as genuine. In each case she signed for either the “Area Director Ashanti/Brong Ahafo” or the “Regional Manager, Ashanti.” It was the same estate manager who instructed the storekeeper to supply the needed materials for the completion of the house and also mandated the company’s sub-contractor, Akokotre Construction Co Ltd to put finishing touches to the house for the

[p.580] of [2001-2002] 1 GLR 570 benefit of the purchaser who was identified to be the plaintiff herein. Clearly, therefore, there was abundant evidence to show that the estate manager, Christiana Boateng, was to the company, not a hand but was more than that, one whose acts bound the defendant-company. The fact that the estate manager usurped the role of the cashier and further failed to pay the money over to the defendant-company was a matter of lapse of effective control, supervision or in any case purely an internal matter between the employer and the employee.

The case of Agogro v Ago (supra) would further be cited to illustrate whether in law the estate manager could be said to have represented the defendant-company. It was thus held as stated in holding (4) of the headnote at 47 that:

“(4) The test whether a servant is acting in the course of his employment and within the scope of his authority is whether the act of the servant is so connected with his duly authorised acts that may be considered as modes, although improper modes, of doing them in contradistinction to independent unrelated conduct. In the present case the defendant bank failed to show how the first defendant has side-stepped the authority conferred on him, or deviated materially from the course of his employment.”

Christiana Boateng, at the time the receptionist of the defendant-company referred the plaintiff to her, was the estate manager of the company. The actual functions of the office holder has not been made known to the court in this trial. Suffice it to say however that the position of an estate manager within a set up whose primary and statutory duty was to provide estate houses, was not like that of an ordinary worker. That position would, expectedly, be one of the high ranking officers within the establishment and the holder thereof would be a person of profile and rank.

The above findings notwithstanding, evidence has clearly established fraudulent conduct on the part of the estate manager amounting to a breach of her fiduciary relationship with her employer. The reflection of the above appeared in two instances. In the first place, the defendant-company had denied receiving any money from the plaintiff whether directly or through Christiana Boateng. In the second place, the said officer wrote exhibit 1 to the plaintiff to apologise for her inability to fulfil a promise, and further to assure him that she would

[p.581] of [2001-2002] 1 GLR 570

“pay off everything. . .” The expression “to pay off”, I submit, is not the same thing as “to refund” or even “to pay back.” The expression used herein by Christiana Boateng is more suggestive of a person who has made a purchase and was promising to pay the full purchase price. The above is merely semantic and does not really go to the root of the case. The aspect of exhibit 1 which attracts my closer observation is the date on which it was issued. That note was made on 29 June 1995. It was subsequent to the date that the first plaintiff witness went to live in the house. Before that date, however, the author of exhibit 1 had issued the introductory notes, exhibit A, to the Electricity Co and the Water and Sewerage Co on 16 May 1995 and had stated therein that the disputed house had been allocated to the plaintiff herein. Finally, between May and June 1995 the Akokotre Construction Co Ltd had undertaken the completion of the house for the occupation of the plaintiff upon the instructions of the defendant-company acting through the estate manager, Christiana Boateng.

The sequence of events in the above order would help determine the meaning, import and effect of exhibit 1 which counsel for the defendant-company has urged, ought to be interpreted to relate to the alleged payment of the purchase price for the house. That submission, with the greatest respect, cannot be sustained. It was subsequent to the writing of exhibit 1 that exhibit A was made. It was at about the same time that the second plaintiff witness was instructed to complete the house for the plaintiff to occupy. Indeed, if the note was in relation to the ¢11.5 million that the plaintiff paid for the house, then the subsequent action in instructing the Akokotre Construction Co Ltd, and also writing a letter introducing the plaintiff to the Electricity Co of Ghana and the Ghana Water Co Ltd would not have been necessary at all. In any case, once the estate manager dealt with the plaintiff in her capacity as an officer of the defendant-company, in the course of her official duties, the money received was so received for, by, or on behalf of the company. It became the debt or liability of the company even though the officer failed to pay it into the coffers of her employers. The whole transaction took place under the cloak of the employment of the estate manager, in the premises of her employers. Her fraudulent conduct or incompetency should not be visited upon the innocent purchaser in the position of the plaintiff. Upon the totality of the evidence, I find that the plaintiff paid an amount of money to

[p.582] of [2001-2002] 1 GLR 570

Christiania Boateng. Even though no receipt was issued in favour of the plaintiff for same, there is sufficient evidence to support the claim that it was ¢11.5 million. Equally, I find that H/No E 161, Buokrom Estate/Airport Estates was allocated to the plaintiff.

I accordingly enter judgment for the plaintiff. However, even though the house was allocated to the plaintiff, he was subsequently ejected from occupying it by the defendants. In deciding this matter finally, the fact is not to be discounted that Christiana Boateng did not build the house. The measure which dictates that the plaintiff should not be punished for the fraudulent conduct of the estate manager should also apply in respect of the company that their loss should not be total. Accordingly, I uphold the alternative claim of the plaintiff for the recovery of the money he paid, plus interest to date, and so order. In effect, I refuse to order recovery of possession of the house in favour of the plaintiff.

Judgment for the plaintiff.

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