WEST AFRICAN ENTERPRISES LTD vs. WESTERN HARDWOOD ENTERPRISE LTD [1995-96] 1 GLR 155

CASES REFERRED TO

(1) Walsh v Lonsdale (1882) 21 ChD 9, CA.

(2) Crayem v Consolidated African Selection Trust Ltd (1949) 12 WACA 443.

(3) Odametey v Clocuh [1989-90] 1 GLR 14, SC.

(4) Nartey v Mechanical Lloyd Assembly Plant Ltd [1987-88] 2 GLR 314, SC.

(5) Odoi v Hammond [1971] 1 GLR 375, CA.

(6) Asare v Brobbey [1971] 2 GLR 331, CA.

(7) Kwofie v Kakraba [1966] GLR 229.

(8) Arkorful v Sey [1980] GLR 752.

(9) Boateng v Dwinfuor [1979] GLR 360, CA.

(10) Atta v Amoasi [1976] 2 GLR 201, CA.

(11) Majolagbe v Larbi [1959] GLR 190.

(12) Kabba v Young (1944) 10 WACA 135.

(13) Kugbe v Union Trading Co Ltd (1929) DCt ‘26-’29, 201.

(14) Nelson v Nelson (1949) 13 WACA 248.

(15) Interplast Ltd v Bonsu [1979] GLR 285, CA.

NATURE OF PROCEEDINGS

APPEAL by the plaintiff from the judgment of the High Court, Sekondi dismissing its action against the defendants for, inter alia, damages for trespass to a land he had purchased at a public auction. The facts are fully set out in the judgment of Acquah JSC.

[p.160] of [1995-96] 1 GLR 155

COUNSEL

James Ahenkorah for the plaintiff-appellant.

Bodza-Lumor for the first defendant-respondent.

Sekyi-Hughes (Papa Owusu Ankomah with him) for the second defendant-respondent.

JUDGMENT OF ACQUAH JSC.

In 1968 the Apowa stool represented by Nana Amoa Gyebu XIII leased a portion of the stool’s land to the Takoradi Brewery Ltd (TBL) for its business. The boundaries of the land leased, which are not disputed, are as follows: on two sides by land belonging to the Apowa stool, on another side by the Whin River and on another side by the Takoradi-Apowa motor road. Takoradi Brewery Ltd went into possession of the land and put up some buildings thereon.

Not long thereafter, around 1970, TBL became indebted to one Leory Francis who instituted a court action for the recovery of the debt, obtained judgment and caused the property of TBL to be sold by public auction. The West African Enterprises Ltd (WAEL) bought the right, title and interest of TBL in the lease. A certificate of purchase tendered as exhibit A in this action was issued to evidence the purchase. The WAEL then took over the leasehold property.

In 1986 the Western Hardwood Enterprise Ltd (WHEL) entered this property and took over possession, alleging that the Apowa stool had leased that same area to them for 50 years. After unsuccessful discussions to resolve the matter, the WAEL took out a writ of summons at the High Court, Sekondi against WHEL as the first defendant and Nana Amoa Gyebu XIV, the Apowa stool chief who leased out the property to WHEL as the second defendant, claiming:

“(i) Unlawful interference with the plaintiff’s rights and interest in respect of land at Apowa.

(ii) Damages for trespass.

(iii) An order for perpetual injunction restraining the defendants, their agents, servants, workmen and assigns from in any way interfering with the plaintiff’s said rights and interest in the land.”

In their statement of claim, WHEL pleaded the facts as stated earlier but further pleaded that when it took over the lease property of TBL, it paid the rent due under it to the Lands Department, and remained in possession for over ten years before WHEL entered and drove its men

[p.161] of [1995-96] 1 GLR 155 from the land.

In its statement of defence, the first defendant, WHEL, admitted the boundaries of the land as pleaded by the plaintiff and further admitted that the land was originally leased to TBL by the Apowa stool. The first defendant then pleaded that it approached the Apowa stool in 1984 for a land to run its business. The stool granted a lease of 77.13 acres of land to it. But before the grant, it conducted a search at the lands Department, Sekondi and found from the search that part of the land was leased to TBL in 1969 but that the lease was not concurred in by the government. The search further disclosed that the Apowa stool re-entered the land in 1983 on the ground that TBL did not develop the land. Relying on the search, a lease dated 2 August 1984 was executed. The first defendant further pleaded that there were some buildings on the land and that it entered into a separate written agreement with the Apowa stool on those buildings. It claimed that it spent over ¢5 million to rehabilitate three of the buildings.

The Apowa stool represented by its occupant, the second defendant, in its amended statement of defence like the first defendant, also admitted first, the boundaries of the land as pleaded by the plaintiff and secondly, that the land was originally leased to TBL. The second defendant went on to make a further crucial admission, ie that TBL on obtaining the lease of the land, took possession of the land, built bungalows, offices and a factory on the land. Undoubtedly such an admission by the Apowa stool which leased the land to TBL, is extremely significant and material. The stool then went on to plead that it addressed series of letters to TBL drawing TBL’s attention to its failure to develop the land in terms of the lease agreement. But TBL did not comply with the ultimatum to develop the land; hence the stool re-entered the land by a letter dated 18 April 1983 and took possession thereof, and thereafter leased same to the first defendant. The second defendant thereafter contends that its re-entry and lease of the land to the first defendant was lawful and proper.

At the trial, the plaintiff testified and called three witnesses and tendered in evidence as exhibit A, the certificate of purchase; exhibit B, an office copy of the lease of TBL; and exhibit C, the certificate of registration of business name. The first defendant also testified and called two witnesses. It tendered in evidence a number of exhibits including exhibit 3, the result of a search from the Lands Department,

[p.162] of [1995-96] 1 GLR 155 and exhibit 4, the lease document from the second defendant to the first defendant. The second defendant also testified and called no witness.

Now, in the course of the trial, it became evident on the face of the office copy of exhibit B, ie the lease document from the second defendant to TBL, that the document was not registered. And as the second defendant witness from the Lands Department also pointed out in his evidence, it was not easy to say on the face of it whether it was even stamped.

In his judgment, the trial judge relying on section 24 of the Land Registry Act, 1962 (Act 122) held that exhibit B was ineffective and invalid to confer the rights stipulated in it on TBL, and consequently, exhibit A likewise conferred no valid title on the plaintiff. Consequently, the trial judge concluded that at the time the first defendant-company obtained their grant of the land in dispute, the second defendant-stool had not effectively divested itself of title in the disputed land. The trial judge then went on to hold that he believed the first defendant’s evidence that before the first defendant obtained its grant the search it made disclosed that the land had been re-entered. For in his view, the plaintiff was properly notified of the re-entry. He finally dismissed the plaintiff’s claim and entered judgment for the defendants with costs.

Not surprisingly, having regard to the state of the pleadings and the evidence, the plaintiff lodged the instant appeal against this judgment on the following grounds:

“(i) The judgment of the trial court was wrong and highly repugnant to equity and good conscience in that it applied the provisions of the Land Registry Act, 1962 (Act 122) to dismiss the plaintiff’s case in spite of clear evidence on the record that although exhibit B was an unregistered instrument the Takoradi Brewery Ltd had with the knowledge and permission of the second defendant gone into possession of the land in dispute under that instrument, paid rents and made considerable developments on the land and the plaintiff, as successor to Takoradi Brewery Ltd, had taken possession of the land with those developments thereon when with notice of such prior possession the first defendant had subsequently taken and registered a competing instrument.

(ii) The learned trial judge misdirected himself when he failed to

[p.163] of [1995-96] 1 GLR 155 consider the legal validity of the purported re-entry by the second defendant when under the lease, exhibit B, the power to re-enter was reserved to the government and not to the lessor—as is in the case of exhibit 4, the lease between the defendants.

(iii) The learned trial judge was wrong, in disbelieving the evidence of the plaintiff and its witnesses that when the first defendant entered the land in dispute the plaintiff’s workers had made farms on it.

(iv) The learned trial judge was wrong in holding that at the time the first defendant first entered the land in dispute, it had been abandoned and was vacant when these matters were not pleaded and there was, in any case, evidence showing that the plaintiff was still in possession.”

Arguing on behalf of the plaintiff, learned counsel, Mr James Ahenkorah, submitted on the first ground of appeal that the view the trial judge took of the effect of the unregistered lease, exhibit B, in the light of Act 122, made him come to a wrong conclusion of the law. He argued that there was sufficient evidence that the plaintiff was in effective physical control and possession of the land before the first defendant entered the land and that equity would not permit Act 122 to be used as an instrument of fraud. He referred to Walsh v Lonsdale (1882) 21 ChD 9, CA and Crayem v Consolidated African Selection Trust Ltd (1949) 12 WACA 443. He also referred to Bentsi-Enchill’s Ghana Land Law (1964, Sweet & Maxwell), pp 312-329 and Megarry’s A Manual of the Law of Real Property (3rd ed), p 320: And concluded that there is sufficient evidence on the record, apart from the unregistered lease, to sustain the plaintiff’s claim.

On the second ground, counsel submitted that if the court holds that the plaintiff had subsisting rights in the land under the unregistered lease, then the land could not validly have been re-entered by the second defendant. He pointed out that under the unregistered lease, the right of re-entry was reserved for the government, but then the evidence on the record, together with the admission of both defendants, show that it was the second defendant which re-entered the land. He argued that the right of re-entry is a right of forfeiture, and equity does not favour forfeiture. On the fourth ground, Mr Ahenkorah submitted that the holding that the land was vacant and abandoned at the time the first

[p.164] of [1995-96] 1 GLR 155 defendant entered was contrary to the pleadings and the evidence on the record. These matters were not pleaded. Moreover, the evidence shows that the plaintiff had buildings and men on the land. He further submitted that the judge erred in disbelieving the plaintiff’s witnesses. He then prayed that judgment should be entered for the plaintiff for damages for trespass and perpetual injunction.

Mr. Bodza-Lumor, leading counsel for the first defendant, submitted that the trial judge was not faced with an issue of priority of registered instrument; what the judge was faced with, according to counsel, was whether in the light of non-registration and the state of the law he could give effect to an unregistered lease. He contended the law is settled that an unregistered lease has no effect in law, and that possession does not displace section 24 of Act 122. Relying on Odametey v Clocuh [1989-90] 1 GLR 14, SC he contended that exhibit B is ineffective and invalid. Accordingly, the judge was bound to hold as he did in respect of the effect of exhibit B. Conceding that the first defendant was aware of the prior possession by TBL, that prior possession was effectively terminated by the second defendant, and that the first defendant was not obliged to investigate whether the termination by re-entry was proper. On the propriety of the second defendant’s re-entry into the land, counsel argued that in law a right of re-entry is reserved to a grantor who only can exercise it. On the judge’s holding that the land was vacant and abandoned at the time the first defendant entered, Mr Bodza-Lumor submits that the evidence shows that the land had long been abandoned. He argued that the evidence of the plaintiff’s witnesses gives the impression that they were tutored. He contended that there was no evidence that the plaintiff was in effective and exclusive possession.

Mr Sekyi-Hughes for the second defendant submitted that exhibit B is not registered and further not stamped. Accordingly, under the Stamp Act, 1965 (Act 311) as amended, exhibit B could not even be tendered in evidence. Relying on Nartey v Mechanical Lloyd Assembly Plant Ltd [1987-88] 2 GLR 314, SC and section 14(5) of Act 311 he contended that exhibit B was worthless. The conclusion of the trial judge is therefore right and unimpeachable. Mr Sekyi-Hughes went on to contend that once exhibit B is worthless, the issue of re-entry does not arise for discussion, neither can the other grounds of appeal hold. He concluded that the issue is one of the legal consequences of the

[p.165] of [1995-96] 1 GLR 155 unstamped and unregistered exhibit B. And that on the state of the law, the plaintiff has no case, and the appeal ought to be dismissed.

Now, the main controversy in this appeal centres round exhibit B, the lease document of TBL. Whereas the plaintiff submits that notwithstanding the unregistered nature of the exhibit, there is sufficient evidence aliunde to sustain its claim; the defendants contend that once the exhibit is unregistered and, indeed, unstamped, it is worthless and the plaintiff must fail since he can derive no title from the unstamped and unregistered document. The trial judge who relied only on the unregistered aspect of it held that in accordance with section 24 of Act 122 and the decided authorities on the point, the exhibit is ineffective and invalid, and that since the plaintiff’s exhibit A, ie the certificate of purchase, is based on this exhibit B, the plaintiff must fail.

We have closely examined exhibit B and found that it is neither stamped nor registered. Consequently, section 14(5) of Act 311 would forbid the tendering of exhibit B in evidence. In this wise, we agree with Mr Sekyi-Hughes that exhibit B ought not to have been admitted in evidence. And because exhibit B cannot legally form part of the evidence, Act 122 will therefore not fall for consideration at all in relation to that exhibit B. Likewise cases like Odoi v Hammond [1971] 1 GLR 375, CA; Asare v Brobbey [1971] 2 GLR 331, CA; Odametey v Clocuh (supra) and Nartey v Mechanical Lloyd Assembly Plant Ltd (supra). However, the trial judge held that since exhibit B was unregistered the plaintiff was bound to fail and consequently dismissed his claim.

Now, Act 122 deals with registration of instruments affecting land. Unlike the Land Title Registration Law, 1986 (PNDCL 152) which deals with the registration of titles and interests in land. Thus registration under Act 122 gives notice of the fact of the registration of that instrument to the whole world. The registration does not give validity to the transaction evidenced by the registered instrument. Thus the law is settled that registration under Act 122 does not confer state guaranteed title. As Archer J (as he then was) held in Kwofie v Kakraba [1966] GLR 229 at 231-232:

“. . . there is no provision which states that the validity of any instrument shall not be questioned in any court of law after registration. I therefore hold that although registration is now

[p.166] of [1995-96] 1 GLR 155 compulsory and constitutes notice to all persons, yet the Act does not confer state-guaranteed title on grantors who have no title at all . . . “

See also Arkorful v Sey [1980] GLR 752 and Boateng v Dwinfuor [1979] GLR 360, CA. As far as Act 122 is concerned, legal validity attaches to the registered instrument and not the title or interest transferred in that instrument.

It is to remedy this serious anomaly that PNDCL 152 was enacted. In the Memorandum to PNDCL 152 it is stated:

“Systematic land tenure research in Ghana has revealed radical weaknesses on the present system of registration of instruments affecting land under the Land Registry Act, 1962 (Act 122) …

The effective characteristic of land title registration is that land is placed on the folio of the land register as a unit of property and transactions are recorded by reference to the land itself and not merely through instruments executed by the parties as is the case with deeds registration.”

Now, when in a trial, any exhibit is found to be ineffective and invalid, as in the instant case, inadmissible, the court ought to consider further whether apart from that inadmissible exhibit, there is no other evidence to sustain that party’s claim. If there are other admissible evidence and materials on record to sustain the party’s claim, then the court is duty-bound to consider those other matters. The inadmissibility or invalidity of an exhibit does not mean the automatic failure of the party’s claim unless from the pleadings and evidence, that claim cannot be sustained on any other ground apart from that exhibit.

Now, the pith of Mr. Ahenkorah’s submission is that apart from the invalid exhibit B, there were sufficient material on record to enable the trial judge enter judgment for the plaintiff, and that the trial judge’s failure to do so was erroneous in law.

In the instant case, the trial judge correctly appreciated the burden on the plaintiff when he stated: “. . . the principle of law is that where in addition to a claim for trespass the plaintiff claims an injunction, title is automatically put in issue because that claim postulates that the plaintiff is either the owner of the land in dispute or has had prior to the trespass complained of, exclusive possession of it.”

[p.167] of [1995-96] 1 GLR 155

(The emphasis is mine.) Now from his pleadings and evidence the plaintiff’s root of title is first, the lease by the Apowa stool to TBL, and secondly, the purchase of the interest of TBL at the public auction.

Now in respect of the lease to TBL, both the first defendant and the second defendant admit this fact in their pleadings. For in its statement of claim, the plaintiff pleads the boundaries of the land and the fact of the lease in paragraphs (4) and (5) as follows:

“(4) The land over which the dispute has arisen is situate at Apowa and is bounded on two sides by land belonging to the Apowa stool, on another side by the Whin River and on another side by the Takoradi, Apowa motor road.

(5) The land was originally leased to Takoradi Brewery Co Ltd for purposes of its business by the Apowa stool.”

In its statement of defence the first defendant pleads in paragraph (1) thus: “(1) The first defendant company admits paragraphs (1)-(5) and (20)-(22) of the plaintiff-company’s statement of claim.” (The emphasis is mine.) While the second defendant in his amended statement of defence also pleads in his paragraph (1) as follows:

“(1) Except that the second defendant denies that the plaintiff duly paid its rents as contained in paragraph (6) of the statement of claim, the second defendant admits paragraphs (1), (2), (3), (4), (5) and (6) of the statement of claim.”

(The emphasis is mine.) Once the fact of the lease by the Apowa stool to TBL is admitted by both defendants in their pleadings, the law is that no proof is required of that admitted fact: see Atta v Amoasi [1976] 2 GLR 201, CA. The principle dealing with proof in law, as expounded in Majolagbe v Larbi [1959] GLR 190, comes into play only where an averment made by one party in his pleadings is denied by the other in his defence or reply, thereby making it necessary for the one who made that averment to produce evidence in proof of it. No principle of law requires a party to prove an admitted averment.

Apart from the fact that both defendants admitted the fact of the lease by the Apowa stool to TBL, the second defendant, Nana Amoa Gyebu XIV, chief of Apowa, in his evidence unambiguously and emphatically confirmed his pleaded admission, when he testified: “I know the Takoradi Brewery Ltd. I know the land in dispute. Sometime

[p.168] of [1995-96] 1 GLR 155 in 1968 my stool granted the land in dispute to Takoradi Brewery Ltd.” (The emphasis is mine.) In the face of such positive admission by the Apowa stool that it leased the land to Takoradi Brewery Ltd in 1968, together with the admissions to the same effect in the pleadings, the trial judge’s holding that there was no such lease and that the Apowa stool never effectively divested itself of its title in the land simply because a written evidence of the transaction is ineffective by operation of law, is a direct negation of the pleaded admissions and evidence of the Apowa stool itself.

Indeed, because the fact that the Apowa stool granted a lease of the land to TBL, was admitted by all the defendants and was therefore not in dispute, no issue was joined on it in the summons for directions. The issues agreed on for trial are:

“(1) Whether or not the right, interest of Takoradi Brewery Ltd in the land in dispute with the properties thereon passed to the plaintiff’s company by purchase since about twenty years ago.

(2) Whether or not after the said purchase the plaintiff-company exercised rights and control over the land and everything thereon to the knowledge of the second defendant.

(3) Whether or not the first defendant knew or ought to have known of the plaintiff-company’s said right, title and interest and yet entered upon the land to perpetrate the acts called into question.

(4) Whether or not a mere registration at the Lands Registry of a purported grant or lease to the first defendant’s company divest the plaintiff-company of its right, title and interest in the land in dispute.

(5) Whether or not there was any registration at all.

(6) Whether or not the defendants have the right to interfere, intermeddle with the plaintiff’s properties on the land.

(7) Whether or not there has been a lawful re-entry or forfeiture by the second defendant.

(8) Any other issues arising out of the pleadings.”

There was no denial of the grant of the lease by the Apowa stool to TBL and no issue did and could have arisen in the pleadings. Issue (5) follows from issue (4). Thus on the state of the pleadings, exhibit B was unnecessary, and its inadmissibility does not convert the

[p.169] of [1995-96] 1 GLR 155 admission of the fact of the lease by the defendants into a denial. Consequently, the trial judge’s conclusion that the Apowa stool never divested itself of its title in the land to TBL conflicts with the pleadings and evidence of the defendants, and therefore cannot be supported.

The other leg of the plaintiff’s root of title is its claim that it purchased the right, title and interest of TBL at a sale by fi.fa. To this end, exhibit A was tendered. It is a certificate of purchase signed by Edusei J (as he then was). The authenticity of this exhibit was never impugned at the trial. The trial judge held that this exhibit A confers no title on the plaintiff because it is based on exhibit B. This is obviously erroneous.

For nowhere is exhibit B mentioned or recited in exhibit A. Exhibit A simply certifies that the plaintiff was declared purchaser of the right, title and interest of TBL in the land in dispute.

With the admission of the grant of the lease to TBL by both defendants, and the production of exhibit A, the certificate of purchase, the plaintiff has successfully proved his root of title on the balance of probabilities, and the burden thus shifts onto the defendants to establish their defences. The first defendant’s case is that it holds a registered lease from the second defendant. While the second defendant, while admitting that the stool initially granted a lease of the land to TBL, nevertheless contends that the stool lawfully re-entered, took possession thereof and leased same to the first defendant. The fundamental issue then is whether the second defendant lawfully re-entered the land.

In his amended statement of defence, the second defendant pleads that he issued the necessary re-entry notice and therefore exercised its rights of re-entry. Under cross-examination, the second defendant was asked:

“Q You now realise that the right, title and interest of Takoradi Brewery are now vested in the plaintiff company.

A Yes.

Q Your allegation of re-entry is based on exhibits 10 and 12.

A Yes.

Now, the very defence of the second defendant that he properly re-entered the land for a breach of a covenant implies that the second defendant admits that the Apowa stool earlier granted a valid lease of the land in respect of which the stool exercised its right of re-entry. As Adade JSC explained in Nartey v Mechanical Lloyd (supra) at 336:

[p.170] of [1995-96] 1 GLR 155

“In any case, the fact that the Atofotse was serving a ‘re-entry’ notice is itself an acknowledgment that the initial grant was a lawful one, but that the premises were liable to be re-entered and taken back for breach of a covenant or a condition of the grant.”

Otherwise if one goes by the trial judge’s finding that there was no lease, then the question is: under what lease did the second defendant purport to exercise a right of re-entry?

Did the second defendant properly re-enter the land? According to the second defendant’s answer just quoted above, exhibits 10 and 12 are the bases of the re-entry. Exhibit 10 which is not dated but from its contents and the evidence of the second defendant was written on 23 February 1981 is a notice of re-entry addressed to TBL with a copy to the Lands Department, Sekondi. Exhibit 10 was not addressed to, nor a copy directed to the plaintiff. The notice gives TBL three months within which to:

“Develop the said premises as a brewery and in addition, (2) pay compensation in the sum of thirty thousand cedis (¢30,000) for the breach of the building covenant, I shall be considered to re-enter the said premises and resume possession thereof.”

Exhibit 10 further went on to state that by a copy of that exhibit to the Lands Department, Sekondi, the latter was being requested “to stop accepting any more rent from you.” Nevertheless, a month after this exhibit 10, the Lands Department in exhibit 11 wrote to the plaintiff acknowledging receipt of its rent for 1981. The postscript under this exhibit 11 dated 11 July 1983 states “Rent in arrears of ¢ 1,400 for the period 1 January 1981-31 December 1982 at ¢700.”

Now the directive to the Lands Department in exhibit 10, further reinforced by exhibit 11 shows that the plaintiff, ie WAEL had been paying the rents in respect of the lease to the Lands Department. Accordingly, the contention that it was not paying rents is false. Now it is exhibit 12, dated 18 April 1983, addressed to the plaintiff and copied to the Lands Commission and the Lands Department, which informed the plaintiff that the land had been re-entered on 21 March 1983 for breach of covenant. As pointed out earlier, the notice of the re-entry, exhibit 10, was not served on the plaintiff which had since 1975 stepped into the shoes of TBL by virtue of exhibit A, the certificate of purchase.

[p.171] of [1995-96] 1 GLR 155

Now the right of a landlord to re-enter or forfeit a lease is restricted by section 29 of the Conveyancing Decree, 1975 (NRCD 175). Section 29(1) of NRCD 175 provides that a right of re-entry or forfeiture under any provision in a lease for breach of any covenant, condition or agreement in the lease shall not be enforceable, by action or otherwise, until: “(a) the lessor serves on the lessee a notice (1) specifying the particular breach complained of. . .” Section 29(3) provides that the above restriction applies to all leases and cannot be avoided by any provision in the lease to the contrary. Since exhibit 10 was not served on the plaintiff, it follows that the second defendant’s re-entry was in breach of section 29 of NRCD 175.

Obviously to counteract this breach, Mr Sekyi-Hughes submitted that before 1 February 1990 (relying on exhibit 15) the plaintiff’s certificate of purchase was not known to the Lands Department, Sekondi while the second defendant in his evidence in-chief said: “I never negotiated anything with the plaintiffs because they said they were waiting for the chairman of the company to arrive in the country before starting any negotiation. The plaintiffs never came.”

As ably demonstrated by Mr Ahenkorah, the submission of Mr Sekyi-Hughes and the contention of the second defendant are false. Now the certificate of purchase is dated 29 July 1975. In exhibit 7 dated 16 December 1974, the second defendant’s predecessor, Nana Gyebu XIII, had threatened to re-enter for failure to pay rent. In exhibit 9 written on 28 September 1976, the Regional Lands Officer, Sekondi wrote TBL revoking the attempted re-entry, and stating: “This revocation is made subject to fresh negotiations being entered into between the Apowa stool and West African Enterprises, the purchasers of the interest of Takoradi Brewery Ltd.” This exhibit 9 is an exhibit of the defendants, and they are in law bound by its contents.

Now although the second defendant unashamedly alleges that the stool had not entered into any negotiations with the plaintiff, the defendants’ own exhibit 3 exposes the lie in such a false claim. Exhibit 3, dated 30 August 1984, being the result of the search conducted by the first defendant, states in its paragraph (5):

“(v) West African Enterprises Ltd purchased the interest of Takoradi Brewery Ltd but that fact was not communicated to this effect. The managing director however called personally on the Apowahene and performed custom.”

[p.172] of [1995-96] 1 GLR 155

(The emphasis is mine.) Furthermore, the second defendant while under cross-examination was asked: “I put it to you that from time to time you have been going to the plaintiff company at Teshie-Nungua to collect drinks free of charge.” He answered:

“A It was on only one occasion when on my way to Tema, I branched to the plaintiff-company’s premises at Teshie-Nungua where I met the chairman of the plaintiff-company for the first time. On the said occasion he gave me a carton of schnapps and a half carton brandy.”

One can easily read in between this answer and reasonably hold that the answer is not the whole truth. Whatever be the position, the result of the search, exhibit 3, confirms that the plaintiff performed custom to the Apowa stool on their purchase of the interest, title and right of TBL. While exhibit 9 further shows that as at 1976 the Lands Department, Sekondi was aware of the interest of the plaintiff in the land. Obviously, at the time the second defendant went to the plaintiff’s company at Teshie-Nungua for a carton of schnapps, exhibit 10 had not been issued. Otherwise he would not have gone there to receive those drinks.

Accordingly, at the time the second defendant issued exhibit 10, he knew that the TBL was no longer his lessee, and that the lessee, by exhibit A was the plaintiff’s company, which he went to at Teshie-Nungua to collect a carton of schnapps. Yet the second defendant served no notice of the re-entry on the plaintiff. It was after the re-entry that exhibit 12 was served on the plaintiff. The re-entry was therefore contrary to section 29 of NRCD 75, and therefore invalid.

Now, the first defendant who took a lease from the second defendant contends in paragraph (14) of his defence that it had no notice of the plaintiff’s interest in the land. Furthermore, Mr Bodza-Lumor submits that the first defendant was not bound to inquire into the validity of the second defendant’s re-entry.

Now, the fact that TBL on obtaining the lease from the Apowa stool, built permanent structures on the land, is not disputed by the second defendant. For in paragraph (6) of the statement of claim, it is pleaded:

“(6) The Takoradi Brewery Co Ltd which was incorporated for the manufacture of beer took possession of the land and built bungalows, offices and a factory on the land. It duly paid its

[p.173] of [1995-96] 1 GLR 155 rents.”

In paragraph (1) of the second defendant’s amended statement of defence, it admits the above paragraph save the payment of rents. The certificate of purchase, exhibit A, also indicates what were on the land then as: “All that piece or parcel of land together with all the uncompleted Takoradi Brewery Ltd’s factory together with three residential bungalows.” And in paragraph (9) of its statement of defence, the first defendant admits the presence of these buildings and further proceeds to plead that it even entered into a separate written agreement with the second defendant in respect of its use of these buildings. Paragraph (9) reads:

“(9) the second defendant also by an agreement in writing dated August 1984, leased four dilapidated buildings on the land [to] the first defendant company.”

These averments apart, the first defendant’s representative in his evidence said that on its entry, it met watchmen who had planted cassava on the land. They also saw some structures and machines. In the face of the pleadings, the evidence of the first defendant’s representative and the evidence of the plaintiff’s witnesses, the trial judge’s finding that the land was vacant at the time the first defendant entered, is obviously erroneous and not supported by the record. These physical structures, the cassava farm and the watchmen the first defendant saw on its entry constituted actual notice of the interest and presence of the plaintiff on the land.

The first defendant pleads and testifies that it conducted a search, and relying on the result of this search it took the lease: see paragraph (7) of the first defendant’s defence. The first defendant’s registered indenture was tendered as exhibit 4 and it was executed on 4 August 1984. The result of the search, exhibit 3, is dated 30 August 1984. This shows clearly that the lease was first executed and about three weeks thereafter, it obtained the result of its search. It is therefore false for the first defendant to contend that it relied on the result of the search. The result of the search in plain language states that the land was leased to TBL and that the plaintiff purchased the right, interest and title of TBL, and finally that the plaintiff performed custom to the Apowa stool. The contents of exhibit 3 together with the physical structures and the watchmen seen on the land by the first defendant

[p.174] of [1995-96] 1 GLR 155 negate any pretence to lack of notice of the plaintiff’s interest in the land.

The maxim is: “caveat emptor: qui ignorare non debuit quod jus alienum emit.” That is, a purchaser has no right to remain in ignorance of the fact that what he is buying belongs to someone other than the vendor. Accordingly, a purchaser who fails to investigate the vendor’s title does so at his own risk. Indeed, in Kabba v Young (1944) 10 WACA 135, it was decided that a purchaser of a legal estate on land which was in the possession and occupation of a person other than the vendor, as in the instant case, is bound either to inquire what that interest is or give effect to whatever that interest is; for such a purchaser is bound by all equities: see Kugbe v Union Trading Co Ltd (1929) DCt ‘26-’29, 201 at 204-205 and Nelson v Nelson (1949) 13 WACA 248. Similarly in Boateng v Dwinfuor (supra), the Court of Appeal emphasised that if the purchaser has, whether deliberately or carelessly, abstained from making those inquiries into the title of his vendor that a prudent purchaser would have made, he will be affected with constructive notice of what appears upon the title. The court supported its stand with this following passage from Snell’s Principles of Equity (26 ed), p 59:

“Apart from investigating the deeds, a prudent purchaser will inspect the land itself. If any of the land is occupied by any person other than the vendor, this occupation is constructive notice of the estate or interest of the occupier, the terms of this lease, tenancy or other right of occupation, and of any other rights of his . . .”

Thus quite contrary to the obviously untenable submission of Mr Bodza-Lumor, the obligations on a prudent purchaser are very heavy indeed. He has himself to blame if he fails to conduct a prudent and thorough investigation into the title of his vendor.

In the instant case, the first defendant took the lease before conducting a search at the Lands Department, Sekondi. Moreover, when it went on to the land it saw buildings and watchmen who had made cassava farms. Yet as Mr Bodza-Lumor submits, the first defendant did not find it necessary to investigate the validity of the alleged re-entry by the second defendant. If the first defendant had exercised a little prudence, it would have realised that no notices of the intended re-entry were served on the plaintiff whom the second

[p.175] of [1995-96] 1 GLR 155 defendant knew, as far back as 1975, that it had bought the interest of TBL on the land. The first defendant would also have found that the second defendant had no authority and mandate from the plaintiff to lease out its buildings on the land. It would have also found out that the contention that rents were not paid was false to the knowledge of the second defendant.

It is evident therefore that the re-entry was contrary to section 29(1) of NRCD 175, and the first defendant could not rely on mere registration of its lease which it took recklessly and without conducting a search (as the lease was executed before obtaining a search), and with full knowledge of the plaintiff’s actual possession and occupation of the land, to dispossess it. Act 122 was not meant to be used as instrument of fraud or to aid such unconscionable transactions. For section 18 of NRCD 175 empowers the courts to set aside an agreement to convey or a conveyance of an interest in land on ground of unconscionability.

With what title and authority did the second defendant, at least, lease out the buildings on the land to the first defendant? Having regard to the properties on the land, a proper mode of exercising his right of re-entry was for the second defendant to have issued a writ of summons for the recovery of the land. In Interplast Ltd v Bonsu [ 1979] GLR 285 at 288, CA the Court of Appeal per Apaloo CJ said: “Although in times past, the landlord may make an actual entry and forfeit the lease for breach of a covenant which reserves to him the right of re-entry, the usual practice at the present day is to sue for recovery of possession.”

We indorse the above observation and hold that where a lessor intends to re-enter for a breach of a condition or covenant in respect of a property where the lessee had made some improvements on the land, an action for recovery of possession should be resorted to. This is necessary to enable the court reappraise the whole matter and settle the interest of the lessor and the lessee should it become necessary to grant the lessor’s request for possession.

It is evident therefore that if the trial judge had not allowed the non-registration of exhibit B to cloud his vision, but had examined closely the pleadings and evidence, he would have undoubtedly entered judgment for the plaintiff. The plaintiff is therefore entitled to succeed

[p.176] of [1995-96] 1 GLR 155 in this appeal.

In assessing damages, we are mindful of the renovations the first defendant had carried out on the buildings of the plaintiff on the land. The first defendant incurred these expenses through its own reckless disregard of its interest in not waiting for the result of the search before taking the lease from the second defendant; and further in not investigating the validity of the alleged re-entry by the second defendant, having regard to the physical structures they saw on the land.

In the end, the appeal succeeds and the judgment of the trial High Court is set aside and judgment entered for the plaintiff. We grant an order of perpetual injunction restraining the defendants, their agents, servants, workmen and assigns from in any way interfering with the plaintiff’s rights and interest in the land. We award ¢500,000 damages for trespass with costs.

JUDGMENT OF ATUGUBA JSC.

I agree.

JUDGMENT OF SAPONG JA.

I also agree.

DECISION

Appeal allowed.

DRKS