AFRICAN DRUG CO. vs. KUMASI CITY COUNCIL [1973] 1 GLR 164

CASES REFERRED TO

(1) Tool Metal Manufacturing Co., Ltd. v. Tungsten Electric Co., Ltd. [1955] 1 W.L.R. 761; 99 S.J.

470; [1955] 2 All E.R. 657, H.L.

(2) Canadian Pacific Rail. Co. v. R. [1931] A.C. 414; 100 L.J.P.C. 129; 145 L.T. 129, P.C.

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NATURE OF PROCEEDINGS

ACTION by the plaintiffs claiming damages for wrongful ejectment and for loss in business profits occasioned by the act of the defendants wherein the defendants also counterclaimed for arrears of rent. The facts are fully set out in the judgment.

COUNSEL

C. F. Hayfron-Benjamin for the plaintiffs.

A. K. Acheampong for the defendants.

JUDGMENT OF MENSA BOISON J.

By their writ of summons the plaintiffs claim against the defendants, the council, damages for wrongful ejectment and for loss in their business profits occasioned by the defendants’ act. The substance of the statement of claim is that the plaintiffs, as importers and retailers of pharmaceuticals, had their office in store No. B4 in the Asafo Market, Kumasi, which they had rented from the defendants, forcibly locked up by a servant of the defendants, for alleged arrears of rents. According to the plaintiffs, this act prevented their having access to their files and documents. The documents including import licence for drugs, without which they were unable to take customs delivery of certain pharmaceutical consignments during the period. As a result of their failure, the drugs were eventually sold at a public auction by the Customs Department as unclaimed goods. Apart from the resulting loss of profits thereby occasioned, the plaintiffs also complain of having suffered damages for their inability to transact business from their office No. B4 as a result of the closure. For the loss the plaintiffs claim general damages, besides a claim for special damages of N¢10,308.20.

The defendants in the first place denied the material allegation of forcibly locking up the office of the plaintiffs. In the alternative they justified any such closure under the provisions of the council’s Control of Markets Bye-Laws, which entitled them to revoke the plaintiff’s licence as tenants, even without notice, for the arrears of rents. They also appeared to have denied any damage to the plaintiffs and counterclaimed for arrears of rents in the sum of N¢378.00.

The important issues settled for trial were:

(1) whether the plaintiffs were tenants or licensees;

(2) whether there was on or about 10 August 1968 a dispute as to the amount of rent owed by the plaintiffs;

(3) whether or not the defendants locked up the plaintiffs’ office and if so whether the act was wrongful;

(4) whether or not the plaintiffs suffered damage; and

(5) whether or not there was any breach of the council’s Control of Markets Bye-Laws, 1964.

There is no dispute upon the evidence that the plaintiffs at the material period, were tenants of the defendants occupying by licence, one market store No. B4 at the Asafo Market in Kumasi, that they were in arrears of rent by 10 August 1968. The amount which was later agreed to be N¢378.00 was paid by the plaintiffs after the institution of this action.

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Nothing in my view turns on that payment. Nor do I think that there is much that turns on the version of the plaintiffs that they disputed the amount. In any case, there is no evidence of any complicated accounting which leads me to find that the plaintiffs could have had any genuine dispute about the arrears due. The plaintiffs have not given evidence of any cheques paid in respect of the rents and I reject their evidence that they had paid in advance rents to the market manager, for which they had not been credited, as improbable in a company of their standing. I find that the query and demand for a statement of account was only an excuse to play for time, when, as it has been admitted, the company was in some financial difficulties. I accept the evidence of the defendants that after the payment of the rent for the first two months, that is November and December 1966, the plaintiffs paid nothing from 1 January 1967 to August 1968. Indeed exhibit 1 bears out that at the material date of 10 August 1968 the sum in arrears was not disputed. So that the question of importance is whether the defendants in fact threw the plaintiffs out on 10 August 1968, and whether they were justified to do so in the manner complained of.

The defendants’ representative, the town clerk, whom I shall refer simply as the defendants’ first witness gave evidence denying that the plaintiffs were ever ejected. This was from his records. What he said was that the defendants made an exception of the plaintiffs, although at the time there was a general exercise to evict tenants in arrears, and in fact several others were evicted. He gave no particular reason why the plaintiffs were given such singular preferential treatment. By exhibit C dated 23 August 1968, the plaintiffs complained of a servant of the defendants, one Mamah having thrown out the plaintiffs’ clerk from the store, and having locked them out, removing the keys. The incident was on 10 August 1968. Exhibit D dated 9 September 1968, written by the defendants in reply to exhibit C did not categorically deny the allegation that Mamah had forcibly locked the plaintiffs out, but instead informed the plaintiffs’ solicitor of instructions to permit them to occupy the store, and with a warning that all arrears of rents should be paid. This is what the material part of exhibit D said:

“Dear Sir Room No. B4 Asafo Market Thank you for your letter No. F2/MIS/155/JKB/68 of 23 August 1968.

I wish to inform you that the market manager has been instructed to permit your clients to occupy the above room in the interest of their trade for the time being. I am to add, however, that their tenancy is subject to regular payment of the rent due and in this connection, I have directed the market manager to eject your clients from the market if they fail to pay all arrears of rent due to the council by the end of the month.

Yours faithfully, (Signed) ? ?”

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In due course in answer to the claims from the plaintiffs for losses sustained as a result of the action of Mamah, the defendants on 12 February 1969, wrote, no doubt after full investigation and consideration, exhibit K as follows:

“Dear Sir, Room No. B4 Asafo Market Thank you for your letter of 27 December 1968.

You will remember that in August 1968 when you reported the seizure of the key to room No. B4 by Mamah because your clients had not paid their arrears of rent, I advised the city treasurer to allow your clients to retain the room in the interest of their trade in view of the serious disclosure they made and upon your clients undertaking to pay the arrears of rent due by the end of September 1968. You will remember further in October 1968, the city treasurer informed the company, that is your clients, that they were in arrears of rent from January 1967 to 1968, and that payment of such arrears should be effected without delay. In fact the city treasurer even requested that your clients should either disprove or confirm our claim that they were in arrears from the period in question, but nothing was heard from them nevertheless no action has been taken to eject them from the room.

I am informed by the city treasurer that your clients, that is, Messrs. African Drug Company, have never been ejected from the store and that they are still occupying it. Their claim therefore that the store was locked up by Mamah as a result of which they lost three (3) consignments of pharmaceutical preparations is not only surprising but utterly untrue. The council cannot therefore be held liable for the sum of N¢3,080.20 which your clients contemplate claiming for unlawful closure of their office by an employee of the council.

In any case, the council does not see anything wrong with the action taken by Mamah if in fact he did so because by accumulating their rent, your clients have not only contravened the conditions under which their tenancy of the room was approved by the council but they have proved to be unreliable tenants who appropriately qualify for ejection without any notice.

I wish to confirm that unless your clients pay their arrears of rent due by 28 February 1969 they will be forcefully ejected from the room. Please warn them accordingly.

Yours faithfully, (Sgd.) ? ?”

Town Clerk”

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I think exhibits C and K are consistent with the plaintiffs’ evidence that Mamah locked them out of the office. Consequently, I find therefore that the defendants’ servant for a period, until the counter-instructions, kept the plaintiffs out of the office with all their belongings still in that room, and in no position to transact any business from that room. That in legal terminology in my opinion amounts to ejectment, and I find on the evidence that Mamah did not give any notice, written or oral before he ejected the plaintiffs. I further find that for the period the plaintiffs were put out of the office they had in that room exhibit L, i.e. the import licence for pharmaceutical products.

But what the defendants say is that even on such finding, the interest created between them and the plaintiffs by their occupation of room No. B4 was such that their action cannot be wrongful. That is to say, they were justified by virtue of the arrears of rent to eject without notice.

The defendants as successors in title to the Kumasi City Council have a statutory duty to establish and control markets in the municipality of Kumasi. This is provided for by section 47 of the Local Government Act, 1961 (Act 54), to be referred to as the Act. It ordains by subsection (2) that, “It shall be the duty of every city or municipal Council to perform the functions specified in Part I of the First Schedule to this Act.” And by paragraph 21 of the said Schedule, the council is enjoined, “To provide, maintain, supervise and control markets, slaughterhouses and pounds and all such matters and things as may be necessary for the convenient use of such markets, slaughterhouses and pounds.” I am satisfied that the Asafo Market in Kumasi, of which No. B4 is one of the stores, was established by virtue of and in compliance with the Act. The Act further confers on the defendants by section 67 the power to regulate by bye-laws the operation of the market. Pursuant to that power the council made by-laws, effective from 24 April 1964, for the control and operation of certain markets within the defendants’ jurisdiction including the Asafo Market, then referred to as the Kwame Nkrumah Market; viz, the Kumasi City Council (Control of Markets) Bye-Laws, 1964, dated 20 April 1964, and published as No. 17 of Local Government Bulletin dated 24 April at p. 157.

Under the said bye-laws, the plaintiffs like other users or occupiers of the council’s stalls, store, tables, spaces etc., hold the grant by licence only. By bye-law 4 (3), an acceptance by any person of a licence to use any premises of the council’s markets “shall be construed as an undertaking by such person to comply with all the provisions of these Bye-Laws … so that a breach of any of the provisions of these Bye-Laws shall be deemed to be a breach of the licence.” By Bye-Law 5 (3), “a user or occupation by the month” shall pay the fees (i.e. rents) “monthly in advance within the first ten days of the month for which such fees are due … so, however, that neglect or failure to pay the monthly fee as aforesaid shall forthwith be deemed to be a breach of the Council’s licence.” From my earlier finding above, the plaintiffs at the time of the closure of their store were in arrears. I am bound to

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hold that the plaintiffs were in breach of their licence within bye-law 5 (3) from the very first month they failed to pay rent.

By the provisions of bye-law 4 (11) “Every licence granted by the Council for the user as occupation of any store, stall, table, or space in any market may be revoked at any time with or without notice if in the opinion of the Council such revocation is necessary in the interest of the good rule and administration of the particular market.” The defendants point to bye-law 4 (11) to justify the ejectment. In my view it is a condition in invoking bye-law 4 (11) to show that “the good rule and administration” of the market is at stake. It may well be that under the terms of the licence a failure by the plaintiffs to pay their rent due, might well prejudice the “good rule and administration of the market” to entitle revocation without notice. But no evidence was led to sustain that ground in bye-law 4 (11) that the arrears thereby in the opinion of the defendants made “it necessary in the interest of good rule and administration of the market” to revoke the licence. I am therefore of the opinion that the revocation in the manner exercised by Mamah has not been justified.

Be that as it may, there is one other aspect of the matter which I consider more important. The licence to the plaintiffs did not carry with it a proprietary interest. It was therefore a bare licence. At p. 114 of Salmond on Torts (14th ed.), the attributes of a bare licence are stated as follows:

“Under a bare licence no interest in property passes: the licensee is simply not a trespasser. A licence of this kind may be either gratuitous or contained in a contract for valuable consideration: in either case at common law it was revocable at the will of the licensor and was therefore no justification for any act done in exercise of it after revocation.”

But is was also recognised that a licensee is entitled to a reasonable time in which to remove himself and his property after the licence has been revoked and cannot be treated as a trespasser until the expiry of that time. See Tool Metal Manufacturing Co., Ltd. v. Tungsten Electric Co., Ltd. [1955] 1 W.L.R. 761, H.L. It has been described as a pack-up period and is said to be available to gratuitous as well as the contractual licensees. (See Salmond on Torts, p. 114). Thus in Canadian Pacific Rail. Co. v. R. [1931] A.C. 414 at pp. 432-433, the Privy Council held that a railway company, which had by licence erected telegraph installations on Crown land, were wrongfully evicted without reasonable notice sufficient in time to remove their installations and also to enable them to make arrangements “for the continuance of the telegraph line by erection of poles and wires elsewhere than on Crown property.”

From the above statements of the law at common law, although I am satisfied that by reason of the contractual right contained in bye-law 4 (11), the defendants could revoke the plaintiffs’ licence without notice, it did not in my opinion entitle them to seize the plaintiffs’

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equipment and documents which was the effect produced by Mamah locking out the plaintiffs. That is to say, on assumption that the defendants have made a case that it was necessary in the interest of good rule and administration of the market to revoke the plaintiffs’ licence without notice, they were not entitled to do so by detaining the plaintiffs’ equipment and documents in store No. B4. By that mode of ejectment the defendants prevented the plaintiffs from removing their property and continuing their business elsewhere which the non-access to the import licence in effect produced. I hold therefore that the conduct of Mamah in barring the plaintiffs access to their documents amounted to unlawful detention of documents and other equipment including exhibit L and was consequently unjustified.

According to Salmond on Torts (14th ed.) at pp. 143-144, “A conversion is an act of wilful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it.” The defendants’ act of locking out the plaintiffs was I find wilful, and evinced an intention to exercise dominion over whatever chattels were in the store, by the refusal to hand over the key initially. The defendants must suffer the risk that the chattels included exhibit L, which by its peculiar nature may be said to be to represent the consignments of drugs. I find the defendants were guilty of conversion of the document exhibit L.

There is a claim for special damages being the value of and loss of trading profits on three consignments of imported drugs. According to the plaintiffs, they could not produce exhibit L to the customs authorities to effect delivery, as a result of the detention of those documents by the defendants. The result was the plaintiffs were out of time and the drugs had to be sold by the customs authorities at a public auction.

On the evidence of the plaintiffs’ third witness Mr. Oklu, which I accept, he notified the plaintiffs as soon as the consignments arrived in April and May 1968; but when the plaintiffs’ fifth witness eventually arrived at Accra he had not the import permits (referring to exhibit L) with him and promised to fetch them back from Kumasi. The evidence is unchallenged that no delivery of dangerous drugs could be taken without such permits. There is also the evidence of the plaintiffs’ fourth witness Mr. Annan, a customs officer, which I accept, that an importer may still take delivery of his consignments any time up to the day of sale by auction, notwithstanding the fact that the statutory period of one month has lapsed. In my view, therefore, it is no answer to the claim that the plaintiffs ought to have taken delivery earlier, before August 1968, when Mamah locked out the plaintiffs. For though the bulletin notice to see was published on 5 July 1968, the auction sale did not come on till 18 September 1968. I find, therefore, that, but for their inability to collect exhibit L from store No. B4, the plaintiffs might well have taken delivery of their goods before 18 September 1968.

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I reject the defence that the plaintiffs’ failure to take delivery was the result of financial straits or negligence.

But it seems to me that the claim for special damages is no more than mere averment in the statement of claim and an assertion in evidence on oath. There are no documents such as invoices, or other like documents in support of the nature, quantity and value of the alleged consignments, to satisfy the court that the value of goods, and inferentially the profits, claimed are in fact damage suffered by the plaintiffs. Supporting documents in my view are all the more necessary since the evidence of the plaintiffs’ fourth witness does not support the plaintiffs’ evidence that there were three consignments. According to him there were only two consignments; one of seven packages and another of three packages. Besides, according to the plaintiffs’ fourth witness the consignment of seven packages was labelled and entered as containing labels, although at the time of the auction sale they were found to contain medicines. The first consignments must have been so entered in my view, for no other purpose but to defraud the revenue. It will be contrary to public policy for this court to lend its aid to the plaintiffs now to claim against the defendants as medicines. For the above reasons I do not find the claim for special damages proved and the claim should consequently fail. For loss of wages of clerks I find that the ejectment did disable the plaintiffs from gainfully employing their staff employed at the office No. B4. However, in the absence of staff vouchers or other documentary evidence I do not find that head proved either. I however find the claim for special damages for rent for 45 days amounting to ¢21.00 has been proved and accordingly I do award that to the plaintiffs. I think the loss of the 45 working days when the office was locked up, and whatever exhibit L might have meant, that in my opinion subject to the attempt to defraud the revenue should be a basis for the measure of general damages which the plaintiffs are entitled to in conversion. In the result, I enter judgment for the plaintiffs for the sum of ¢400.00 general damages and ¢21.00 special damages against the defendants. I am obliged to dismiss the counterclaim as the amount claimed had been paid since the institution of the action.

In considering costs, I am forced to remark that the protracted trial was the result of several adjournments occasioned by the plaintiffs; nor were they altogether wholly justified. This resulted in the trial running into six record books, which state did not make the writing of a judgment a pleasant task. That aspect need not swell the costs against the defendants. Besides I take into account that the plaintiffs paid the amount claimed in the counterclaim after the institution of the action. I think costs of ¢105.00 in favour of the plaintiffs is reasonable.

DECISION

Judgment for the plaintiffs.

S.Y.B.-B.