COMMISSIONER, CUSTOMS, EXCISE AND PREVENTIVE SERVICE AND ANOTHER vs. MAHOGANY FURNITURE LTD AND ANOTHER [2001-2002] 2 GLR 476

CASES REFERRED TO

(1) Amissah-Abadoo v Abadoo [1973] 1 GLR 490.

(2) Keymer v Reddy [1912] 1 KB 215; 81 LJKB 266; 105 LT 841, CA.

(3) Hubbuck & Sons, Ltd v Wilkinson, Heywood and Clark Ltd [1899] 1 QB 86; 68 LJQB 34; 79 LT 429, CA.

(4) Owners of MV Vinta, The, Court of Appeal, Accra, 30 March 1999, unreported.

(5) Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] Ch 375; [1961] 2 WLR 196; [1961] 1 All ER 277, CA

[p.478] of [2001-2002] 2 GLR 476

(6) Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32; [1942] 2 All ER 122, HL.

(7) Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548; [1991] 4 All ER 512; [1991] 3 WLR 10, HL.

(8) Whitehead v Howard (1820) 2 Brod & Bing 372; 5 Moore CP 105; 129 ER 1010.

APPEAL by the defendant-appellants (CEPS and the Attorney-General) from the decision of the trial High Court, Accra overruling their preliminary objection that the action of the plaintiff company for restitution of money and property wrongfully taken from it brought more than six years after the event was statute-barred. The facts are sufficiently set out in the judgment of Owusu-Ansah JA.

Fifi Yankson for the defendant-appellants.

Solomon Quandzie for the plaintiff-respondent.

Gbadegbe JA. This is an interlocutory appeal from the ruling of the High Court, Accra dismissing the several objections taken by the defendant-appellant (hereinafter referred to as the defendants) to the action of the plaintiff-respondent (hereinafter referred to as the plaintiff). It appears from the proceedings that both objections were based on Order 12, r 24 of the High Court (Civil Procedure) Rules, 1954 (LN 140A) which provides:

“24. A defendant before appearing shall be at liberty, without obtaining an order to enter or entering a conditional appearance, to take out a summons or serve notice of motion to set aside the service upon him of the writ or of notice of the writ, or to discharge the order authorising such service.”

It is important to state that the said provision has been decided upon in several cases as lawfully entitling an applicant to enter conditional appearance where he seeks to deny jurisdiction in the court or to raise an irregularity in the writ or service thereof: see Amissah-Abadoo v Abadoo [1973] 1 GLR 490. So settled is the position that when a defendant who proposes to rely on the said rule indicates objection on a ground other than those lawfully available to him, the application is dismissed in limine with the conditional appearance being treated as an unqualified or absolute appearance: see Amissah-Abadoo v Abadoo (supra) at 498 wherein Edward Wiredu J (as he then was) expressed himself on the correct position as follows:

“Turning now to the circumstances under which a party is

[p.479] of [2001-2002] 2 GLR 476 entitled to enter a conditional appearance, the authorities are all agreed that a defendant may enter a conditional appearance where he intends to have the writ or the service of the writ set aside on the ground of irregularity of the writ or the service of it or to deny jurisdiction. Irregularity here includes the irregularity in the issue or service of the writ or in the form of the writ. The defendant’s application does not attack the plaintiff’s writ on any of the above grounds. Her sole complaint is that the writ did not disclose any reasonable cause of action against her. Her grievance is not among those which justify her entering a conditional appearance, the conditional appearance therefore is out of place and will be treated as unconditional appearance which would entitle her to present her application under Order 25, r. 4.”

In my view, the said statement of the law is a correct exposition of the practice, but I wish by way of comment to say that considering the application under Order 25, r 4 of LN 140A, the learned judge was quite benevolent to the applicant and that if he had taken a stricter view of the rules, the application would have been dismissed in limine. Since the grounds on which the application were planked were clearly outside Order 12, r 24 of LN 140A, in my view, its effect is that the applications were incompetent and were rightly refused by the learned trial judge, although I must confess that his reasons for refusing them were quite dissimilar from the opinion I have taken of the application.

Further to the above, since the applications were taken out under Order 12, r 24 of LN 140A, I think that the defendants were woefully out of time because the settled practice of the court is to have the objection raised within fourteen days: see Keymer v Reddy [1912] 1 KB 215, CA.

My Lords, since the grounds on which the defendants took out their processes under Order 12, r 24 of LN 140A were wrong, the question which arises is whether treating the application as based on an unconditional appearance was proper in the circumstances? I do not think so. Clearly, the grounds taken by the defendants were those which by the rules of LN 140A, in particular Order 19, r 16 ought to have been contained in their pleadings-defence—to enable them raise it competently under Order 25, r 2 of LN 140A. Not having pleaded them they had not satisfied a condition precedent to their being raised and as such the applications were bad: see Hubbuck & Sons, Ltd v Wilkinson, Heywood and Clark Ltd [1899] 1 QB 86, CA and The Owners of MV, Vinta, Court of Appeal, Accra, 30 March 1999,

[p.480] of [2001-2002] 2 GLR 476 unreported.

In the language of Order 19, r 16 of LN 140A it is provided thus:

“16. The defendant plaintiff (as the case may be) must raise by his pleading all matters which show the action or counterclaim not to be maintainable, or that the transaction is either void or voidable in point of law, and all such grounds of defence or reply, as the case may be, as if not raised would be likely to take the opposite party by surprise, or would raise issues of fact not arising out of the preceding pleadings, as, for instance, fraud, Statute of Limitations, release, payment, performance, facts showing illegality either by statute or common law or Statute of Frauds.”

Clearly, in my thinking, the defendants by not complying with these rules could not have raised the point arising under the statute of limitation, ie the Limitation Decree, 1972 (NRCD 54) and consequently the applications were incompetent and were in my thinking properly dismissed by the court below. I have no doubt that the said rule applies to the second ground of the second defendant’s objection under section 34 of the transitional provisions of the Constitution, 1992 as well. The result is that the instant appeal fails and the decision of the trial court is affirmed.

Before resting this judgment, I wish to sound a word of caution to those who desire to take points of law commonly known as preliminary objections which have the effect, if properly taken, of disposing of actions without a trial by quoting from the words of Evershed MR in Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] 1 Ch 375 at 396, CA:

“I repeat what I said at the beginning, that the course which this matter has taken emphasises, as clearly as any case in my experience has emphasised, the extreme unwisdom—save in every exceptional cases—of adopting this procedure of preliminary issues. My experience has taught me (and this case emphasises the teaching) that the shortest cut so attempted inevitably turns us out to be the longest way round.”

I am in total agreement with the learned judge’s, observation and of the opinion that, as it is, the course of this action has been prolonged by the preliminary point which the appellants took in error, with the result that so simple a matter for determination taken out in 1994 is still pending and is yet to be finally determined. I hope that the parties have learnt their lessons and would exercise extreme caution when seeking

[p.481] of [2001-2002] 2 GLR 476 to take such short courses. Under the circumstances, the matter is remitted to the lower court to be dealt with in its normal course.

Owusu-Ansah JA. Briefly, the facts of this case are that the plaintiff, a limited liability company in Ghana, in the early part of 1987 chartered a vessel christened MV Pollar to carry timber being exported by the plaintiff to the Middle East. According to the plaintiff, at the time of the shipment the plaintiff was managing Western Timbers Ltd another timber firm, on behalf of the Government of Ghana. The lumber being shipped by the plaintiff were also wholly and fully covered by all necessary and relevant documents.

The plaintiff states further that whilst the said vessel was being loaded at the Port of Takoradi, agents or servants, or employees and privies of the first and the second defendants entered the port, detained the vessel and after assaulting the staff and agents of the plaintiff and other workmen loading the vessel had them arrested and placed in custody for various periods of time.

By a letter dated 28 January 1988 headed “illegal shipment of timber from the Port of Takoradi” the first defendant imposed pecuniary penalty of ¢84 million on the plaintiff and Western Timbers Ltd jointly and severally. In spite of protests from the plaintiff, its officers were kept in custody until the said amount of ¢84 million was paid by the plaintiff. It is the plaintiff’s case that there is no legal or factual basis for the imposition of the said pecuniary penalty of ¢84 million on it by the first defendant.

The plaintiff alleges further that the defendants wrongfully converted the entire consignment or shipment of 3292 bundles of lumber of various types as in the specifications covering them and have refused to release the said bundles of timber to the plaintiff despite repeated demands and petitions.

A special audit task force under the chairmanship of Mr Edwards D Agyemang conducted a thorough investigation into the alleged attempted shipment of lumber from the Port of Takoradi by the plaintiff when managing Western Timbers Ltd and found that the said shipment was sufficiently documented thus making the allegation against the plaintiff misplaced.

The defendants have either jointly or severally sold the said lumber and wrongfully kept the proceeds to themselves and have also refused to refund the pecuniary penalty of ¢84 million wrongfully imposed and extracted from the plaintiff.

The plaintiff therefore had no alternative but to sue the defendants for:

[p.482] of [2001-2002] 2 GLR 476

“(a) Refund of the sum of ¢84 million at current value by the first defendant to the plaintiff representing fine or penalty wrongfully imposed and obtained under duress from, the plaintiff on a quantity of lumber being loaded on vessel MV Pollar by the plaintiff sometime in 1987.

(b) An order for the replacement by the defendants jointly and severally of 3282 bundles or 5152.237m of lumber of the species being loaded on the vessel MV Pollar in 1987 by the plaintiff, and which were wrongfully and illegally seized by the defendants.”

The writ was filed on 19 December 1994 and served on 29 December 1994. On 6 January 1995, the first defendant filed a notice of entry of conditional appearance followed on the same day by another notice of conditional appearance filed by the Attorney-General’s Office. On 6 February 1995, the Attorney-General’s Office filed a motion to strike off the second defendant under Order 12, r 24 of the High Court (Civil Procedure) Rules, 1954 (LN 140A) supported by affidavit.

The main ground of the application was that the joinder of the second defendant was misplaced, improper and unnecessary and his name must thus be struck off because, (a) as admitted, the first defendant is a legally autonomous public service body with a legal capacity to sue or be sued in its own name; (b) the alleged tortious acts referred to by the plaintiff in his averments are acts which might be within the peculiar knowledge of the first defendant who could answer for them; and (c) the second defendant should not be brought in to answer for something it did not participate in and is in the dark about.

On 6 February 1995 the first defendant filed a motion on notice to strike out both the writ and the statement of claim attached thereto upon the grounds set out in the accompanying affidavit.

The main ground of the application is set out in paragraphs (5) and (6) of the said affidavit, that is to say, that the plaintiff’s claim offends against the provisions of the statute of limitation, ie the Limitation Decree, 1972 (NRCD 54) since the plaintiff’s action which is founded in tort is statute-barred under section 4 of NRCD 54, and that the entire action ought to be struck out against the first defendant. Then followed the plaintiff’s lengthy affidavit in opposition contending, inter alia:

“(1) That the Constitution, 1992 of the Fourth Republic of Ghana makes the second defendant a proper defendant in all civil actions against the State and the present action arose out of acts of agents, servants, and officials of state

[p.483] of [2001-2002] 2 GLR 476 such as the erstwhile National Investigations Committee and the office of the Chief of Staff of the erstwhile PNDC.”

The plaintiff also refers to numerous correspondence, between petitions to, and discussions with, various government departments and ministries in connection with the matter.

Another affidavit in opposition was filed by the plaintiff on 21 February 1995, purporting to answer the first defendant’s affidavit in support of motion on notice to strike out. In the said affidavit the plaintiff states, inter alia, that the plaintiff company was accused of criminal conduct, to wit attempted illegal exportation of lumber, in consequence of which officers and officials of the plaintiff company were detained for periods of up to thirteen months in some cases. The plaintiff goes on to state that it took a lot of effort and petitions to obtain an independent investigation to confirm that the plaintiff company had not committed any crime, but that the conduct of both of the defendants was wrong in equity and in law. It is therefore, contended that the plaintiff’s rights accrued when it was established that it had not committed any offence.

Finally, the plaintiff argues that the special task force report attached to the affidavit of 14 February 1995 also acknowledges the plaintiff’s entitlement to both the ¢84 million fine imposed by the first defendant and proceeds of the sale of the plaintiff’s lumber alleged to be lodged in an account with the Ghana Commercial Bank, Ministries Branch, Accra. It is noted that the special audit task force report is dated 24 May 1989.

The first defendant on 4 May 1995 filed a supplementary affidavit in effect traversing the major issues of fact raised in the plaintiff’s affidavit in opposition, and insisting that the plaintiff’s rights accrued in 1987 when the vessel was seized or detained and the pecuniary penalty of ¢84 million imposed. No formal evidence was taken. The court relied on the affidavit and exhibits MASEM 1-6.

The court gave its ruling on 19 July 1996 allowing the claim and dismissing the objections raised by the first and second defendants. The appeal is against that ruling.

The first defendant’s sole objection was based on the provisions of NRCD 54 and the second defendant’s objection was based on both section 34 of the transitional provisions of the Constitution, 1992 and the provisions of NRCD 54. The earlier point raised as to capacity was not pursued.

The notice of appeal filed on 12 December 1996 contains three

[p.484] of [2001-2002] 2 GLR 476 major grounds of appeal, namely:

“(i) That the portion of the ruling that the action is not time-barred is erroneous in law in so far as the learned judge erroneously held that the action is not founded in tort or contract but rather on a third category called ‘a remedy for unjust enrichment or unjust benefit.’ (ii) That the learned judge in not holding that the action is one for an equitable relief disabled himself from correctly applying any equitable principle in the conclusion he arrived at.

(iii) That the learned judge erred in law in coming to the conclusion by analogy that, if as is provided in section 5(1)(d) of NRCD 54, the Controller of Customs and Excise has twelve years with which to claim duty due and payable then ‘by analogy in the interest of justice, a person who claims that CEPS has wrongly imposed on and obtained from him any duty should have twelve years within which to claim the refund or restitution of the money paid.’”

At paragraph (4) of the notice of appeal is the relief the first defendant is seeking which is “that the portion of the ruling dismissing the objection based upon the statute of limitations be overturned and thereby uphold the said objection as valid and applicable to this action.”

To deal first with ground (1):

“that the portion of the ruling that the action is not time-barred is erroneous in law in so far as the learned judge erroneously held that the action is not founded in tort or contract but rather on a third category called ‘a remedy for unjust enrichment or unjust benefit.’”

The first defendant contends that the position taken by the learned trial judge cannot stand because the endorsement on the plaintiff’s writ of summons actually encapsulates his cause(s) of action against the defendant and the acts or conduct complained of can be nothing other than tortious. Counsel proceeds to th quote several definitions of tort From Osborn’s Concise Law Dictionary (7 ed) as:

“An act which causes harm to . . . a person, whether intentionally or not, being a breach of a duty arising out of a personal relation or contract and which is either contrary to Law or an omission of

[p.485] of [2001-2002] 2 GLR 476 a specific legal duty or a violation of an absolute right.”

Quoting Sir F Pollock:

“A civil wrong for which the remedy is a common law action for unliquidated damages, and which is not exclusively the breach of a contract or the breach of a trust or other merely equitable obligation”— according to Salmond.” th Counsel quotes yet another definition of a tort this time from Street on Torts (7 ed): “The Law of Torts is concerned with those situations where one party causes or threatens harm to the interest of other parties.” Counsel therefore submits that it is a conduct or an act of one party which the law disapproves of and which harms or can harm another party which is the root of tort.

Without going into the polemics of whether there is a “law of tort’ or a “law of torts,” I think it is right to say that it is simply a breach of a legal duty other than under contract with liability for damages. After all it derives from the Latin word “tortum” which means “wrong” or “torquere”—twist. One may be inclined to agree, to some extent, with Maitland that the old forms of action have been buried but they still rule us from their grave.

The courts in this country must be prepared to move ahead with the times. It is rather anachronistic to categorise or departmentalise wrongful conduct into straitjackets of either a “tort” or “contract.” In the complexities of modern commercial and business world, the third category of unjust enrichment (possibly more in due course) must be recognised, if the courts are to do substantial justice as expected o them, and not to be bogged down by mere artificial technicalities.

I share the views of the learned trial judge that the reliefs endorsed on the plaintiff’s writ indicate quite clearly that he is suing for restitution of money and property which he thinks were unjustly or wrongly obtained from him. The remedy of restitution is not a remedy in contract—a remedy for unjust enrichment or unjust benefit as enunciated by Lord Wright in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 at 61, HL. The learned judge said authoritatively: “It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and

[p.486] of [2001-2002] 2 GLR 476 are now recognized to fall within a third category of the common law which has been called quasi-contract or restitution.”

This principle was followed by the House of Lords in the case of Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, HL. Since there is a paucity of direct local authority on the subject, we will have to be guided by relevant decisions of other jurisdictions, notably English decisions from which our laws have sourced. I would accordingly follow these authorities without hesitation.

With regard to ground (2), it was said that the trial judge in not holding that the action was one for an equitable relief disabled himself from correctly applying any equitable principle in the conclusion he arrived at. It was submitted that the plaintiff’s claim (b) against the defendants jointly and severally for the replacement of the 3282 bundles of lumber wrongfully and illegally seized by the defendants actually amounted to trespass to his goods or conversion of the said lumber and therefore a tortious act which is time-barred.

It is noted that the plaintiff is not claiming damages. Nor is it seeking any other order. What the plaintiff is claiming in effect is restitution or restoration of property unjustly taken under statute, namely the Customs and Excise Decree, 1972 (NRCD 114) now consolidated and re-enacted as the Customs, Excise and Preventive Service (Management) Law, 1993 (PNDCL 330). This is not an ordinary Claim for drawback or refund under section 13(5) of NRCD 114, which under section 12(2) of the Taxation Act, 1971 (Act 388) has to be brought within six years from the end of the financial year to which the claim relates. It is a claim for refund of a penalty or fine wrongfully imposed, as admitted.

It is true that equity does not aid the indolent but the vigilant. In this case however, having regard to the totality of the circum-stances, the affidavit evidence and all the relevant exhibits, it is difficult to say that the plaintiff has slept on its rights—not to mention the numerous but fruitless attempts at resolving the matter with the authorities. In any event, restitution is not specifically dealt with, under or by sections 2 to 5 of NRCD 54, which deals with limitations. Notwithstanding the brilliant submissions of learned counsel for the defendant I think the justice of this case, demands that the ruling be based on section 6(2) of NRCD 54 in answer to grounds (3). That subsection provides:

“(2) This section shall not be construed as preventing a Court from applying by analogy any provision of sections 2 to 5 in any proceedings where in the opinion of the Court the interests of justice so require.”

[p.487] of [2001-2002] 2 GLR 476

If ever there were cases in which the interests of justice so require, this is one of them. The praiseworthy and persistent but futile effort made by the defendant to recover the property and refund of the money are well appreciated. However, if it had acted a little more diligently it would not have been necessary to claim the current value of the amount involved.

A passing reference may be made to a letter dated 7 September 1993 Ref OP/S/801 signed by N A Quao, Special Assistant to the President from the Office of the President, The Castle Osu, Accra, marked MASEM 6. The cause of action may be said to have arisen in the early part of 1987 (see paragraph (4) of the statement of claim) Paragraph (4) of the exhibit states. “It is pertinent to draw attention to paragraph (11) of the letter by the Commissioner of CEPS which clearly states that the petitioner is entitled to some remedy in respect of the sale of the 2,803 bundles of timbers which had officially been declared and on which no offence has been committed.”

This would appear to be an acknowledgement of the substance of the plaintiff’s claim. Assuming without deciding that this is so, a further period of six years would start running from the date of that letter, ie 7 September 1993 even if this was an action in tort. Having decided already that it is not strictly an action in tort, this would hardly seem to be relevant.

Of course it is established that an acknowledgement is not effective unless it relates to a debt or other liquidated sum: see Whitehead v Howald (1820) 2 Brod & Bing 372. It must be added that a statute-barred debt is still payable despite the fact that its payment cannot be enforced by action and if there is any other method by which the creditor can obtain satisfaction it is at his disposal. The creditor is merely deprived of his two remedies of action and set-off. Thus the right is not totally extinguished.

With respect, I think I agree with the learned trial judge that since CEPS has twelve years within which (order S.5) to recover any duty due and payable to it, by analogy, in the interests of justice a person who claims that CEPS has wrongly imposed on and obtained from him any duty should have twelve years within which to claim the refund or restitution of the money paid. This is a discretionary matter. And in my opinion that discretion can quite properly be exercised in favour of the plaintiff in this case.

Furthermore, learned counsel for the first defendant in his very able and impressive submission has referred to section 12(1) of Act 388 which reads:

“12. (1) If it is proved to the satisfaction of the authority

[p.488] of [2001-2002] 2 GLR 476 responsible for the collection of any tax or duty that any person has paid, tax or duty in excess of the amount which he was 1iabe to pay, he shall cause the amount so paid in excess to be refunded to that person within three months of being so satisfied.”

In my view, this provision was intended to protect the tax payer rather than strengthen the hand of the authority. It rather imposes an obligation on the authority to refund the excess within three months instead of being bureaucratic about it, or indulging in foot dragging exercise as often happens.

In the circumstances, the appeal should be dismissed and it is hereby dismissed. The case is to be sent back to be heard on its merits.

No order as to costs.

Appeal dismissed.

D R K S