COURT OF APPEAL, ACCRA
APALOO CJ, EDWARD WIREDU AND OSEI-HWERE JJA
Apaloo CJ By a judgment dated 30 October 1984 the High Court entered judgment for the respondent- company against the appellant-company for the return of 27,265 bags of calcium carbonate or their value at ¢900 per bag and ¢15,000
damages for unlawful detention. If our arithmetic is correct, the total pecuniary award adds up to just over ¢24½ million. That claim was founded in detinue and although the appellant-company contended in the court below that the suit was wrongly founded on that ancient remedy, this plea failed to persuade the judge. They again raised this issue of law before this court and invited us to hold that on the facts, the judge below was in error in holding that a case of detinue entitling the respondent-company to the return of the goods or their value and damages was established.
But the determination of the correct holding on this legal issue, depends, as most issues of law do, on the facts found or proved; and to the facts we now turn. The appellant-company, as its name suggests, manufactures rubber products. Its business turnover during the period June-November 1982 suggests that it was in business in a large way. One of the chemicals it uses in the manufacture of its products is calcium carbonate. There is no evidence whether it ordinarily imports this chemical itself. There is however evidence that a year before the transaction which gave rise to this action, it bought a quantity of this chemical from a gentleman called Dhawan at the price of ¢180 per bag.
The evidence shows that the appellant-company has on its board two directors. They are Mr S Fakhry who is the managing director and another gentleman called Adnan Fakhry. It would seem that for the actual day-to-day running of the company, they employed an Englishman called Westray. In March 1982 both directors of the appellant-company were out of the country. The managing director, S Fakhry, was himself in Lebanon. Dhawan had a fairly large quantity of calcium to sell. It is admitted on the evidence that this is not a fast moving commodity. So as pushing tradesmen often do, he called on the appellant-company’s general manager and offered to sell him the lot.
The evidence shows that Westray was himself unwilling to commit the company to the purchase of this chemical without obtaining the sanction of the managing director. So he got in touch with him in the Lebanon and obtained his authorisation to go ahead with the purchase. He accordingly bought a large stock. The records of the company show that it received a total quantity of 35,365 bags of the chemical and paid an aggregate sum of ¢10,357,500 for the lot.
Although the carbonate belonged to Dhawan who imported and warehoused it and who in truth entered into the contract of sale with the appellant-company, Dhawan requested that payment for the lot should be effected on the invoices presented by two separate and distinct companies who have no legal connection with Dhawan. They are Criterion Co Ltd– the respondent in this appeal (hereafter referred to
as Criterion), and another company called Pyramid Lime and Paints Industries Ltd (hereafter referred to as Pyramid).Dhawan, according to his own account, was the managing director of Saka Manufacturing Co Ltd and Meldes General Chemical Industries. None of the directors of Dhawan’s companies serve on the boards of Criterion and Pyramid. In other words, there was no company law concept of interlocking directorships. Dhawan admitted quite frankly that the respondent-company, that is Criterion, was its agent in receiving payment of the purchase price. Criterion was clearly not his agent in entering into the contract. On this, there was no equivocation. Dhawan said clearly, that he entered into the contract of sale himself.
On its proper analysis, the transaction was a credit sale agreement. Dhawan was to supply to the appellant-company all his stock of the chemical. Payment was to be effected on a weekly basis on presentation of invoices. Mr Lawrence, the managing director of Criterion, was to do the billing and invoicing. These terms were respected and Dhawan paid the appellant-company compliment by stating that the bills were met if and as they were presented. Trouble arose about the contract, according to Dhawan, only when Mr S Fakhry, the managing director of the appellant-company, returned to Ghana.
This was at the beginning of February 1983. According to Dhawan, he ordered that further payments be discontinued. As at that date, in Dhawan’s estimation, the appellant-company had paid for about 15,000 bags of the chemical. The contract price was ¢300 per bag.
This matter is complicated by one factor, namely the Pyramid Co, said to be one of the “sister companies” of Dhawan, also bought calcium from Dhawan. Although Pyramid itself claimed that it bought the chemical from Criterion, this is unlikely to be the case because the respondent-company was not shown to own any calcium in its own right. Although in this suit that company laid ownership of the chemical in itself and sought its return in a detinue suit, its managing director was pressed in cross-examination to admit that, “I do not claim that the calcium carbonate in question is my company’s property.” So Criterion again appears to be the front by which Dhawan also sold the chemical to Pyramid. The latter used carbonate in its manufacture of paint. Pyramid, presumably to raise liquid cash, itself sold some of the carbonate it bought from Dhawan to the appellant-company. The records produced by the appellant-company show that it bought from and paid Pyramid the sum of ¢5,646,000 for 19,600 bags of carbonate.
Criterion was apparently mandated by Dhawan to bill the appellant-company and presumably deliver the goods to it on its own way-bills; the evidence however shows that a large quantity of the chemical was received by the appellant-company on the way-bills of Pyramid, A
smaller quantity arrived by the way-bill of another company. It is Marks Shipping and Freight Agency. That is said to be yet another “sister company.” This litigation arose because Criterion claimed that although it sold and delivered a total of 27,265 bags of calcium to the appellant-company, it received payment for only 15,705 bags. On the facts, it is difficult to see how Criterion came to sue on a contract which it did not enter into and for recovery of the purchase price of goods which were sold and delivered to the buyer, in this case the appellant-company, by the man in whom property and possession of the goods resided namely– Dhawan. The respondent-company’s capacity to maintain this action was questioned before us but Criterion, by a process of argument which we will presently examine, asserted its legal competence to maintain these proceedings.
Again on the facts as we understand them, Dhawan intended to sell and did sell and caused to be delivered the calcium to the appellant-company in exchange for the contractual price of ¢300 per bag. The appellant-company therefore has transferred to itself not only the property in the calcium, but possession as well. If some part of the purchase price remained unpaid, one would have thought the proper remedy would have been an action for the unpaid balance of the purchase price and possibly interest from the date that sum should have been paid.
But curious as it seems, the claim indorsed on the writ, and settled by a professional lawyer, is for the “return of 27,265 bags of calcium detained unlawfully by the defendant despite demands to return same.” It is obvious that Dhawan was desirous of having these goods back in specie and may well have had second thoughts about the sale. The appellant-company proffered in paragraph 13 of its statement of defence, the vendor’s motivation for this. They plead in substance that a year after the sale was concluded, the Ghanaian cedi was devalued and prices of commodities such as the res litigosa in this case shot up. It was then for the first time that the true vendor asked for the return of the goods. He did not do this himself. The demand was made by Criterion’s solicitor in a letter dated 6 December 1983 and addressed to the managing director of the appellant-company. Two last invoices were presented by Criterion on 16 November 1982. These were promptly paid that very day by two cheques issued in Criterion’s favour and drawn on the Standard Chartered Bank. Both payments came to a total of ¢510,000: see exhibit 6.
In a reply to the statement of defence, Criterion pleaded in substance that when both directors of the appellant-company returned to Ghana they repudiated the purchase because they claimed that they
had sufficient stock of calcium to last least five years. Accordingly, “after long negotiations, agreement was reached that the plaintiffs (meaning Criterion) should refund all moneys paid by the defendants in pursuance of the agreement of sale.” Although Dhawan and Lawrence did not speak with a united voice, Criterion claimed that they succeeded in raising the total sum of ¢4,711,500 and tendered this to the appellant-company in return for the chemicals but the latter failed to honour this oral agreement. Hence the claim in detinue for the return in specie of the goods. The appellant-company’s answer was that this is false. They say they did not and could not have repudiated the sale inasmuch as they needed a large quantity of calcium carbonate for their manufacturing business. The appellant-company categorically denied that the original contract of sale was ever superseded by the oral agreement alleged by Criterion and its principal, Dhawan.
When pleadings closed, issues were set out for determination in a summons for directions by Criterion. The appellant-company, for its part, settled additional issues. It would seem from the record that only the additional issues settled by the appellant-company were ordered to be tried by Hayfron J who originally dealt with this matter. But there was considerable overlap between the two settled issues and no object would be served in burdening this judgment with verbatim reproduction of them. As they emerged both from the pleadings and evidence, the questions which Ansah-Twum J who tried the suit was invited to decide were:
“1 Was the quantity of calcium supplied ostensibly by Criterion to the appellant-company, 27,265 bags or 15,705?
2 Was there a subsequent oral agreement by the parties in which it was agreed that the calcium sold by Dhawan’s agent to the appellant-company be returned in consideration of the refund of the purchase price?
3 On the facts, did this claim properly lie in detinue which entitled the respondent-company to the return of the calcium in specie or their value?”
After a somewhat comprehensive recapitulation of the evidence of the parties, the learned judge decided both issues of fact and the only issue of law in favour of Criterion. The appellant-company invites us to say that the court’s findings on the facts and its holding on the law were wrong and that we should reverse them. Additionally, it was contended before us that in view of the evidence presented to the judge, the respondent-company had no capacity to bring this action and the judge should have dismissed it even on that score. The respondent-
company for its part argued that the findings of fact by the trial court was a matter peculiarly within its province and we should be slow to disturb it inasmuch as it has solid basis on the evidence. The judge’s holding on the issue of detinue was defended on the ground that in view of the oral agreement which superseded the earlier contract of sale, the position was that the right to immediate possession of the goods revested in Criterion and that it was accordingly entitled to seek its return in a detinue suit. Accordingly, it was urged on that score that the judge’s holding on the legal issue of detinue was right and ought to be upheld. As to the appellant-company’s complaint of lack of standing on the part of Criterion to bring this action, it was argued that as the appellant-company expressly admitted in its pleadings that it entered into the contract of sale with Criterion, it ought not to be permitted to contend that Criterion lacked legal capacity to sue it on that contract.
On the really serious issue of fact between the parties, the position was that Criterion asserted that it sold and delivered 27,265 bags of calcium carbonate to the appellant-company. The latter admits the sale and delivery of 15,705. The question simply is, who assumes the burden of proving this disputed quantity of 11,560 bags? That question must be decided on first principles. It is Criterion that asserts this and it is plain the burden is on it to prove the extra bags which it alleged it delivered and which the appellant-company denies.
This dispute is between two companies which are in business and which would, in the normal course of events, keep records of these matters. If these documents are kept in the ordinary course of business and record matters ante litem motam, they would be trustworthy pieces of evidence in the manner contemplated by section 125 of the Evidence Decree, 1975 (NRCD 323), and their admission would not be excluded by the well-known hearsay rule. The reason simply is that there would be no reason to misstate the facts and one’s experience of the world teaches one that the facts so recorded would, in all probability, be true.
In this case, to establish its claim, Criterion would be expected to produce its way-bills or the way-bills of the agents by whom it despatched the goods. The evidence is that these way-bills are normally receipted for by the appellant-company’s agents. They in addition issue store receipts. If these documents were produced, and the total of the goods recorded add up to 27,265 bags, that would settle the disputed issue of quantity decidedly in Criterion’s favour. Criterion did, in fact, produce some documents– five relevant documents, in fact, namely first, a statement of the goods it supplied, invoiced and for which it received full payment from the appellant-company. The total of those goods came to 15,705 precisely as the appellant-company contended in exhibit A; secondly, it produced a letter, exhibit B dated 6 December
1983, in which its solicitor demanded the return of 27,265 bags of calcium; thirdly, it produced a statement, exhibit C, showing particulars of the goods it allegedly supplied to the appellant-company for which it had, on its own showing, neither presented invoices nor been paid; and fourthly, it produced a way-bill book, exhibit F, containing duplicate way-bills belonging to Marks Shipping Agency and those way-bills ex facie consigned a quantity of calcium to the appellant-company. On that way-bill book and its contents, we will make some observations presently. The last document seemingly helpful to the respondent-company’s case on the issue of the actual quantity of goods supplied by Criterion to the appellant-company, is a written declaration, exhibit J, of the appellant-company’s erstwhile general manager, a Mr Westray, sworn to in London on 17 July 1984 professedly under the English Statutory Declarations Act, 1835. That declaration states in paragraph 3 as follows: That a total quantity of 27,265 bags of calcium carbonate was received from Criterion Ltd.”
Of all the documents tendered by the respondent-company, the only one that gets anywhere to establishing Criterion’s assertion of the quantity of goods supplied is the statutory declaration of Westray.
In so far as that declaration was tendered to prove Criterion’s claim that it supplied 27,265 bags of calcium to the appellant-company, it offends the well-known hearsay rule and would ordinarily be excluded in evidence at common law. However, Order 37, r 60 of the High Court (Civil Procedure) Rules, 1954 (LN 140A) mitigates the severity of the hearsay rule by allowing the admission of certain documents to prove “the facts in issue” under certain well-defined conditions. It is not necessary in this appeal to reproduce these conditions. But rule 62 of that Order provides an important exception to the admission of such documents. It says:
“62. Nothing in this Order shall render admissible as evidence any statement made by a person interested at a time when proceedings were pending or anticipated involving a dispute as to any fact which the statement might tend to establish.”
The writ in this suit was sued out on 12 January 1984. The statutory declaration was made on 17 July 1984 when the suit was pending and when Westray well knew that one of the facts in dispute was the total quantity of the carbonate supplied to the appellant-company by Criterion. Clearly, he was a person “interested” within the meaning of the rule because he himself in a letter to the appellant-company’s managing director two weeks before he made the statutory declaration, claimed that Dhawan, the principal character in this suit, invited him by telex, exhibit 3, to come and testify on his behalf. It is
obvious what he desired him to state in aid of his case is what he swore to.
The declaration was admitted under the liberal regime of section 118 (1) of NRCD 323 which provides for the admissibility of what is described in the marginal notes as “firsthand hearsay.” That document is in some measure, supportive of Criterion’s case. The “declaration” of Mr Westray clearly impressed the judge. He reproduced it in full and held that it “amply corroborated” the respondent-company’s case. So thoroughly enamoured was the judge of the “facts” averred in Westray’s declaration that the judge wondered why the appellant-company did not “throw in the towel.”
But to discredit Westray’s “declaration”, the appellant-company put in, without objection, a letter dated 3 July 1984 written by Westray and addressed to the appellant-company’s managing director (exhibit 3). That letter after relating the invitation to him to testify on his behalf from Dhawan, states in paragraph 3 that:
“I cannot believe his court action has the remotest chance of succeeding and my written statement should ensure that. While I remain in London I believe it will make it quite impossible for him. As I see it, he has brought an action that cannot be substantiated and unless he can prove it (which he can’t) he has already lost it.”
That letter clearly troubled the judge because it constitutes an obstacle to Westray’s veracity. But the judge explained it away by saying that Westray wrote that letter because he was expecting “to receive a loan from the Fakhrys, and of course he had to play his cards well.”
That observation by the judge in point of fact throws discredit on Westray as a man of truth. It portrays him as somebody who was prepared to bend the truth to suit whoever was prepared to pay for that particular “service.”
That declaration, properly understood, meant Westray was asserting that Dhawan’s suit which was launched in the name of its front, Criterion, could not be established. He cannot have been unaware that that suit was bottomed on the main ground that 27,265 bags of calcium were bought by him for the appellant-company. He expressly cited correctly the title of that suit in his declaration. Westray’s assertion that Criterion’s case cannot be established makes sense only if he believed that claim to be false.
At all events, it should, we think, be borne in mind that although section 118 of NRCD 323 dispensed with the requirement of rule 62 of Order 37 of LN 140A, which excludes the written statement of an
“interested” witness, the policy reason underlying that rule still holds good. And that is that the court in order to accord credibility to the written statement of such an “absent witness” whose evidence cannot be tested by cross-examination, should ensure that he is impartial. We think if there is ground for thinking that that statement emanated from a person who cannot, in the nature of things, be impartial or disinterested, or if there is evidence that he has said orally or in writing anything which casts doubt on his impartiality, we think the court should accord such statement little or no weight. It is, we think, in this light that Westray’s declaration should be viewed.
Furthermore, it is to be remembered that in the well-known case of R v Harris (1927) 20 Cr App R 144 at 147, CCA it was held that where a witness is shown to have made an earlier statement inconsistent with his sworn testimony in court, unless he gives a satisfactory explanation of the discrepancy, his testimony was entitled to little or no weight. It must be, a fortiori, if such witness does not appear in court to give an explanation. We think Westray’s written declaration is of no weight. Yet it is this untested evidence that the judge considered as wholly corroborative of the respondent’s case. With respect, we think, the judge was a trifle credulous in uncritically accepting that “suspect” declaration.
There is independent circumstantial evidence of the falsity of that claim. According to the agreement testified to by S Fakhry as related to him by Westray, the payment for the chemical could be made only on invoice presented either by Criterion or Pyramid. Criterion indeed presented invoices and received payments. The record shows that they presented 21 invoices between August and November 1982. The last invoice was dated 16 November 1982, and the total quantity of bags involved came to 15,705. They presented no other invoice. The reason can only be that they did not send any more goods.
We think it is a legitimate inference that if indeed they had delivered to the appellant-company more calcium, they would have had either the original way-bills duly signed by that company’s agents or store receipts. They plainly did not have any of these documents. Yet the documents on the transaction which the appellant-company produced in evidence, were those kept by the company when Westray was himself at the helm of the company’s affairs. It would be fanciful to suggest that either Westray or anyone else took the supporting documents from Criterion and thus disabled it from presenting and supporting an invoice with them.
There is also the fact that the appellant-company showed no disinclination to pay its just debts. On this, even its chief antagonist Dhawan conceded that they met their bills on presentation. A company
that paid its debt to the tune of over ¢10 million between July and November cannot be said to be adverse to meeting its just debts. The suggestion by Dhawan that the appellant-company discontinued the payment of the purchase price of the chemical it had received upon Mr Fakhry’s return, was disproved not only by the fact that the company itself sent no invoice but also by the fact that the last payment made was on 16 November 1982. S Fakhry did not arrive back in Ghana until the end of January or early February 1983. It follows from this that payment was discontinued nearly three months before Mr S Fakhry’s return.
The conclusion is inescapable that none of the documents produced in evidence by Criterion even began to establish its case that it supplied to the appellant-company 11,560 bags of calcium over and above the 15,705 bags which the appellant-company admits. Exhibit C which seeks to show that Criterion supplied the 27,265 bags of calcium is not only practically useless but its admission as a business record and as an exception to the hearsay rule, offends section 125 (1) of NRCD 323. To make that self-serving document admissible, the law provides that:
“(a) the writing was made in the regular course of a business;
(b) the writing was made at or near the time the act or event occurred...,
(c) the sources of the information and the method and time of preparation were such as to indicate that the statement contained in the writing is reasonably trustworthy.”
The document did not even pretend to satisfy any of those requirements and objection to it was validly made and should have been sustained. At all events, that exhibit was neither signed nor dated nor was the quantity of the goods acknowledged by anyone. The total unreliability of exhibit C is also clearly shown by the fact that while it was tendered to buttress a claim of the extra unpaid for 11,560 bags, the total bags shown on that document is 17,900 bags.
The only business record produced by Criterion that appears to have some probative value in establishing the quantity of the calcium consigned to the appellant-company, by Criterion over and above the admitted 15,705 bags, is a way-bill book, exhibit F, tendered by one Vukor, Criterion’s senior clerk. That book belongs to Marks Shipping Agency. The book contains 32 duplicate way-bills which ex facie, consigned 11,215 bags of calcium to Rubber Products Ltd. The abstract of paid invoice, exhibit 4, produced by the appellant-company contains all these.
It was contended for Criterion that all these goods belonged to and were consigned to the appellant-company by the respondent and they
were entitled to receive payment therefore. It was said that if the appellant-company in error paid the purchase price of the goods to someone else, it was not their concern. In view of the agreement reached by the parties and acted upon in effecting payment for the goods, this argument is not open to Criterion.
According to the method of payment agreed upon, the appellant-company were entitled to make payment for goods it received on invoices presented by either Criterion or Pyramid. Marks Shipping Agency were, apparently, the carriers of the goods and if after delivery to the appellant-company they handed the signed and receipted way-bills to Pyramid and thus enabled them to make and present a verifiable invoice to the appellant-company, which made payment on the faith of it, then Criterion cannot be heard to complain.
There is, however, evidence from which an inference can be drawn that the goods consigned on the way-bill, exhibit F, belonged to Pyramid in its own right. All the way-bills on their face consigned the goods to the appellant-company. But Khoury of Pyramid explained that: “If there is a way-bill covering calcium carbonate supplied to Rubber Products and to which I sent my invoice and for which I have been paid, then I supplied the calcium myself “. So even if the goods in truth belonged to Criterion, since it agreed to a system of doing business by which goods belonging to it can be properly consigned on Pyramid way-bills, it cannot be heard to complain if Pyramid took advantage of this system and helped itself to some payments which should properly go to Criterion.
The learned judge appears to have accepted the evidence that the appellant-company overpaid Pyramid and he reasoned that this must have occurred because the appellant-company in error thought that the goods covered by “Pyramid’s way-bills must have been supplied by Pyramid.” He could not understand why the appellant-company offered no explanation for the overpayment. As the judge put it: “The defendants did not offer any evidence to explain why they overpaid Pyramid in respect of the calcium
Pyramid did in fact supply.”
In saying this, the judge must have overlooked the appellant-company’s evidence on this point. Their case, as testified to by Mr S Fakhry, was that when he returned to Ghana, he noticed that the packaging of the calcium which Westray bought for them in their absence was in very bad condition. He continued,
“Most of the bags in which the calcium were brought were torn and the contents in most cases were not 50 kilos as they were supposed to be.” Mr Fakhry complained about this to Mr Dhawan whom he knew to be the real owner and vendor of the chemicals. According to him, Dhawan saw
merit in his complaint and requested him to see Khoury of Pyramid for a discount. He saw him and after some negotiation, Khoury paid him ¢1 million. Fakhry was sure this was a discount and not overpayment.
It is true Dhawan alleged that Fakhry complained to him that his company overpaid Pyramid to the tune of ¢2 million yet he corroborated Fakhry that the latter complained about the short-weight of the bags and asked for a discount of ten per cent. Dhawan said he could not agree to that but omitted to say what he was prepared to agree to.
There were thus two contradictory accounts as to the reason why Khoury of Pyramid paid ¢1 million to the appellant-company. The latter says it was a ten per cent discount he sought. Dhawan and Khoury asserted that it was overpayment. As the quantity of calcium in dispute was 11,560 bags and the price was ¢300 a bag if, as the judge reasoned, the appellant-company erroneously paid to Khoury the cost of calcium properly supplied by Criterion, then the overpayment should be ¢3,468,000. It possibly cannot be ¢1 million which is the price for 3,333 1/3 bags. A surplus supply of 3,333 bags of calcium to Pyramid is not supported by any evidence on the record. The total payment the appellant-company made for the calcium it received was just over ¢10 million. Ten per cent of that sum, is ¢1 million. This fits snugly into Fakhry ‘s story and makes it the more probable of the two. Furthermore, to ask for discount on short-weight delivery of merchandise would seem to make good business sense. Had the judge not overlooked Fakhry ‘s evidence on this point but considered it along with Dhawan and Khoury ‘s rival accounts, he would in all probability, have concluded, as we do ourselves, that Fakhry ‘s story was the more likely of the two. That evidence was corroborated by the independent circumstance that the refund made to Fakhry came up to ten per cent of the aggregate purchase price of the chemicals.
One of the shortcomings in the appellant-company ‘s case which attracted the learned judge’s adverse comment, is that it did not produce any evidence to show not only the total purchase price it paid to Pyramid but also the aggregate sum it paid out to both Criterion and Pyramid in respect of the bulk consignment of 35,365 bags. In the judge ‘s own words:
“They did not also lead evidence to show the total amount of money they paid to Pyramid and indeed in respect of the 35,365 bags of calcium they admit they received from both Criterion and Pyramid. It is my view that when a defendant admits debt then the burden is on him to prove payment”
That observation shows clearly that the learned judge overlooked completely the cogent documentary evidence produced by the appellant-company on these matters. Not only did the appellant-
company produce the files showing the original documents on the transaction between it and Pyramid (exhibit 2), but also between itself and Criterion (exhibit 5). From these, the company abstracted the details showing not only the invoices and their dates of presentation but also the quantities, way-bill numbers, dates when payments were made and the banks on which cheques issued in payment were drawn. From these abstracts, the appellant-company showed that the total calcium it received from Pyramid was 19,660 bags at a total price of ¢5,646,000 (exhibit 4) and from Criterion 15,705 bags at a total cost of ¢4,711,500 (exhibit 6). The two supplies make a grand total of 35,365 bags and the aggregate sum paid therefore for receipts from both Criterion and Pyramid came to ¢10,357,500. Had the judge not completely overlooked these vital documents and the cogent probative effect they have on the appellant-company’s case, his eventual conclusion may well have been different.
It seems, with respect, a misappreciation of the appellant-company’s case to suggest, as the judge did, that the company admitted a debt and accordingly assumed the onus of proving its payment. The appellants’ oft-reiterated position was that it owed no debt to the respondent-company. It admits it bought from Dhawan through his agents, Criterion, 15,705 bags of calcium carbonate and paid the contractual price in full. Criterion itself produced a document (exhibit A) which supports the appellant-company on this. But Criterion’s case was that it supplied 11,560 bags more than is admitted by the appellant-company. In our judgment, the burden of proving this extra supply lay on the respondent-company. In holding otherwise, we think, with respect, the judge misappreciated where this particular onus lay.
The judge also considered that a stereotyped letter which the appellant-company’s accountant signed and addressed to Criterion to inquire of their indebtedness to the former, as an acknowledgement of debt to the respondent-company as at 31 March 1983. As the judge put it: “I find also that the defendants themselves acknowledged their indebtedness to the plaintiffs by 31 March 1983 . . .” That finding is surprising in view of the auditor’s evidence. The auditor’s evidence on this score, was that if they required independent information about the state of the accounts with their clients’ suppliers, they send “letters pre-signed by the Rubber Products’ accountant with an envelope addressed to ourselves.” They sometimes get no reply to their inquiry, sometimes they get a nil reply. Sometimes, they get a statement of indebtedness, which their clients dispute. In this particular case, they got no reply from Criterion. By what stretch of imagination can this stereotyped audit inquiry be regarded as an admission of indebtedness? With respect, the judge’s holding on this score flew in the face of the evidence and was wholly wrong. We do not need to go into any further
details. We have said enough to indicate the process of reasoning which leads us to the firm conclusion that not only did Criterion fail to show that it sold and delivered more than 15,705 bags of calcium carbonate to the appellant-company but that the latter has shown by reliable documentary evidence that that was not in truth the case.
The second serious issue on which the judge’s decision was invited was whether the appellant-company repudiated the sale and accordingly a fresh agreement was entered into in which the appellant-company agreed to return the whole calcium purchased in exchange for the purchase price. Again on this factual issue, there was serious divergence between the stories told by the two opposing sides.
Criterion’s version was narrated by its principal, Dhawan. Accordingly to him, at a meeting at which he, Westray, Fakhry and Adnan were present, Fakhry said they had enough stock of calcium to last them at least five years. He was accordingly to pay back the purchase price to the appellant-company in return for the goods. Dhawan said calcium was a slow moving item and that he needed time to secure another purchaser. He said as he had no liquid cash to refund, he sought a concession from the Fakhrys to release the goods to him to dispose of and thereafter pay back the money. He implied that the Fakhrys were unwilling to part with the goods on that basis. But between June and July 1983, he was in luck. He obtained a buyer who was willing to take and pay for the goods. He therefore returned to see the appellant-company on the subject. Fakhry was again away. Westray had also apparently left the company and his successor disclaimed any knowledge of this new agreement. He succeeded in reaching Adnan in November 1983 on the phone. When he spoke to him about it, he denied any knowledge of the deal.
Fakhry’s account was rather different. He said when he returned to Ghana, he found that no amount was outstanding against them in respect of the chemical in their books. He denied that he asked Dhawan to collect the entire stock of the calcium the company purchased. He said it would have been unwise on his part to do such a thing because calcium was an imported item and that they required a large quantity for their business.
The question is, which of these rival stories rang true in view of the known circumstances of this particular transaction? According to the evidence, Westray got in touch with Fakhry in Lebanon and obtained his full blessing for the sale. Adnan who was said to be present, denied this new arrangement, according to Dhawan’s own account, even before he issued the writ. The only person whose evidence seems to support Dhawan, is Westray. The latter did not appear in court, and we noticed from his letter of 3 July to the company’s managing director
that he was a person who could switch sides for purely pecuniary reasons. Westray said in his untested declaration that: “The total quantity of 27,265 bags of calcium carbonate was received from Criterion Co Ltd.” It is hard to believe that he would have any motive for keeping the exact and this unusual figure in mind. But the records he left behind and which his successor produced in evidence (exhibit 5) and which were abstracted and tendered in evidence as exhibit 6, only show that the company received no more than 15,705 bags. If in truth the company received as much as 27,265 bags, why did Westray not pay for them? True, the appellant-company did not have liquid funds but it must have established a reputation of such creditworthiness that the banks were willing to grant it large overdrafts. At least, it must be said for Westray that he did not evince any disinclination to pay what he believed to be the company’s just liabilities on this transaction. He was able to pay for as much as 35,365 bags. Why would he wish to refuse to pay for 11,560 bags? A further point which tells against the likely truth of Dhawan and Westray’s account is that Criterion itself did not seek to obtain payment of this large difference. They knew that to secure payment, they had to produce an invoice which will be checked against the relevant receipted way-bills or store receipts issued by the appellant-company. At all events, it hardly rings true that Fakhry who, according to the evidence, was au fait with the deal even while in the Lebanon would on his return turn round and repudiate a sale that had his prior blessing, especially if it is remembered that the company obtained an overdraft to finance this purchase and would in accordance with normal banking practice, have to pay interest on the loan.
Dhawan and Fakhry had a previous business relationship. A year previously, his company had bought an unspecified quantity of calcium from Dhawan and there is no evidence of any previous business friction between the two. That being the case, if the Fakhrys were going back on their agreement to hand back the goods in specie in return for the cash, we should have thought that ordinary business etiquette would have demanded that Dhawan write a letter, however informal in tone, to his business associates to remind them of their oral agreement. The very first record of this so-called oral contract was a solicitor’s letter couched in somewhat unfriendly terms and ending with a threat “to be ruthless in the pursuit of all legal rights” (exhibit B). Which serious and well-meaning businessman with a genuine claim would opt for the fortuity of litigation rather than an amicable settlement?
Faced with two conflicting stories, neither of which is inherently incredible, these are the circumstances and probabilities which a
tribunal of fact must weigh up as part of its evaluative duty before pronouncing for the truth of one or other of the rival stories. On this issue, the learned judge merely said: “I find from the evidence adduced by the plaintiffs, amply corroborated by exhibit J (ie Westray’s declaration), that the plaintiffs did supply 27,265 bags of calcium to the defendants.” Without disrespect to him, we think the learned judge’s consideration of this case was infected with a high degree of superficiality and his eventual conclusion both on the quantity of the goods supplied and the existence or otherwise of the oral agreement is, in our opinion, incapable of support. We disaffirm both holdings and conclude that all the available credible evidence including the documents made ante litem motam, the probabilities and the commonsense of this case are heavily weighted in favour of the appellant-company’s story. We hold that to be the truth and accordingly find that there was no oral agreement between the appellant-company’s representatives and Dhawan for the return of 27,265 bags of calcium. We also find, again in disagreement with the judge below, that the total quantity of calcium sold and delivered to the appellant-company by Dhawan’s front company, Criterion, was 15,705 bags.
Our holdings on the two issues of fact are sufficient to found a verdict for the appellant-company and in ordinary cases, we would have considered it purely pedantic to pronounce on the third issue, namely whether on the facts, this action was properly laid in detinue. But whether this action was properly laid in the tort of detinue or not was raised in the appellants’ pleadings and made the subject of a preliminary point of law. When it was decided against the appellant-company, they took an interlocutory appeal to contest it. The propriety or otherwise of that remedy was also debated before us with some depth of feeling by the appellant-company. We consider therefore that we should deliver ourselves on that question of law.
According to Clerk & Lindsell on Torts (12th ed) at 933:
“The, action of detinue was based upon a wrongful detention of the plaintiff’s chattel by the defendant, evidenced by a refusal to deliver it up on demand, and the redress claimed was not damages for the wrong but the return of the chattel or its value.”
The learned authors of that useful book did not specify what sort of ownership was required to ground the action. According to Salmond on the Law of Torts (15th ed) at 146:
“The plaintiff must show that he has a right to the immediate possession of the chattel at the time of the commencement of the action, arising out of an absolute or special property in it. Such a right of possession may exist even though the chattel has been obtained under an illegal contract of sale.”
Street on Torts (4th ed) at 58, conceived the basic requirement for a successful detinue suit as Salmond did. There it is stated:
“It will be recalled that there was a separate form of action known as detinue; this applies where there is wrongful detention of a chattel. In detinue the plaintiff must ordinarily prove that he has a right to immediate possession and that the defendant detained the chattel after the plaintiff demanded its return.”
How do the facts of this case as we found them fit into the legal ingredients of a successful detinue suit?
We found that Dhawan, acting through Criterion, sold and delivered 15,705 bags of calcium carbonate to the appellant-company and obtained in full the purchase price. About a year afterwards, he repented the transaction and sought the return of the goods on the ground that there was a subsequent oral agreement to return them. We found the story of the subsequent oral agreement unacceptable. So the respondent-company did not even begin to establish anything like a right in itself to possession of the chemical, let alone an immediate right to possession. We feel no difficulty at all in holding that the claim in detinue was ill-founded.
The judge below erroneously, in our view, accepted that a subsequent oral agreement was entered into by which the appellant-company agreed to return the goods in exchange for the purchase price. The judge then delivered himself as follows:
“..that upon the abrogation of the earlier contract, the defendants thereby rejected the goods and property in the same reverted to the plaintiffs who were entitled to collect same upon payment of the money they received from the defendants.”
(The emphasis is ours.) With respect, the learned judge’s proposition of law as to what he considered the consequence of “rejection” is hardly tenable. The property in the goods passed to the appellant-company on delivery. There is no authority for the proposition that in the event he relates, property revested in the respondent-company automatically. No law so provides. The learned judge did not appear to have used “rejection” in the terms envisaged by section 49 of the Sale of Goods Act, 1962 (Act 137). There can be no right of rejection after the goods have been delivered and the purchase price paid. He used the word “rejection” in its ordinary meaning as “refusing to accept, or unacceptable.” But even in that sense, it would be less than accurate to say that a company that took delivery of merchandise it intended to buy into its warehouse and thereafter proceeded to pay the contractual price for it, “rejected” the goods in the ordinary meaning of that word.
In our opinion, even on the facts accepted by the judge, ownership in the chemical and the right to their immediate possession resided in
the appellant-company. While the respondent-company on the judge’s finding may succeed in obtaining damages for the breach of the oral contract, a suit for the return of the goods in specie did not lie. Whatever version of the facts one accepts, an action in detinue did not lie.
As we said, the appellant-company argued for the first time before us that on the facts disclosed in the evidence, Criterion had no standing to bring this action. The reason advanced for this contention is that not only did Criterion concede in evidence that it was not the owner of the goods and that Dhawan was, but that it was the latter who entered into the sale contract with the appellant-company. Accordingly, it was contended that Criterion being an agent of a disclosed principal, it had no capacity to sue on the contract and that the judge should have so held. On the first principles of the law of agency as we understand it, that contention is difficult to answer. After some exceptions which are not germane to this case, Bowstead on Agency (8th ed) at 432 states the general legal principle as follows: “Except in this article provided [exceptions inapplicable here] no agent can maintain an action in his own name on any contract made by him as such, whether the principal be disclosed or undisclosed.”
Counsel for Criterion attempted to get round this contention by an argument which sounds perilously like estoppel. He referred us to paragraph 3 of the statement of claim in which it was averred that by an agreement made between the respondent and the appellant-company the former supplied to the latter a named quantity of bags of calcium for an agreed price. Counsel then next referred specifically to paragraph 3 (a) of the statement of defence in which it was pleaded that: “By an ordinary sale agreement, the plaintiff offered to sell and the defendant agreed to buy calcium from the plaintiff.” It was therefore submitted for the respondent-company that having on its own admission contracted with Criterion and paid part of the purchase price of the goods, it does not lie in the mouth of the appellant-company to contend that it was only an agent and that it contracted with Dhawan and that Criterion were merely invoicing agents.
That argument is superficially attractive, but its integrity is undermined by the proved and admitted facts of this case. The appellant-company may well have thought when the pleadings were settled, that its contracting partner was Criterion. The actual evidence produced before the court gave the lie to any such belief. Dhawan admitted quite frankly that he was the owner of the calcium and that he entered into the contract of sale with Westray. It was he who agreed with Westray on the purchase price as well as the mode of payment. The managing director of the appellant-company, S Fakhry, was on his return to Ghana given to understand that the company’s vendor was Dhawan and
it was to him he complained about the unsatisfactory state of the packaging and it was from him that he demanded the ten per cent discount. Dhawan far from disclaiming ownership, was pressed in cross-examination to concede that: “It is correct that if the goods were not sold at all and if it became a total loss, I would be the loser.”
Indeed, even Westray, the company’s erstwhile general manager, believed that Dhawan was the real as opposed to the putative plaintiff in the action. In his letter of July 1984 addressed to S Fakhry he said in paragraph 3 that: “ During the last two weeks, I have received two telexes from Dhawan requesting me to return to Accra to be his witness.” (The emphasis is ours.) Westray would not have written in this manner if he had believed that any other person than Dhawan initiated the litigation. Criterion’s own managing director, Lawrence Nuku, admitted that his company was not the owner of the goods. Clearly, it was merely the front by which Dhawan sought to agitate his claim to recover the calcium. Both Dhawan and Criterion knew the truth and it cannot be said that the company said or did anything or exhibited towards them any conduct on which they relied to their detriment. In our opinion, no principle of estoppelprecludes the appellant-company from contending that Criterion, being an agent of a disclosed principal, had no locus standi to bring this action.
However, as we determined this case on its merits, this legal submission, sound though it is, is merely academic. Dhawan collaborated with its front Criterion openly in this suit and gave evidence for it, and both sink together in this action, In view of our holding that the total quantity of calcium carbonate sold and delivered to the appellant-company was 15,705 bags which was fully paid. for, no question of an alternative claim for the unpaid balance of the purchase price arises. In the circumstances, the leave which we granted to the respondent-company on 5 February 1985 to amend the indorsement to add an alternative claim for the unpaid balance of the purchase price, serves no purpose and we hereby rescind and set it aside.
Before we express our final conclusion, we think it right to express to counsel on both sides our appreciation of the industry which they put into the preparation of this appeal and for the scholarship and candour with which they presented their argument. But in view of our holdings, the appellant-company is entitled to succeed on this appeal and we hold that it has.
Accordingly, we propose to reverse the judgment of the High Court with costs here and below.