Court name
Court of Appeal
Case number
35 of 2008

Hotel Chez Moi Vrs Unibank GH Ltd and Another (35 of 2008) [2008] GHACA 27 (22 May 2008);

Law report citations
Media neutral citation
[2008] GHACA 27
Coram
Quaye, JA
Dotse, JA
Apaloo, JA

IN THE SUPERIOR COURT OF JUDICATURE

IN THE COURT OF APPEAL  -  A C C R A

 

CORAM:-  QUAYE, JA [PRESIDING]

                    DOTSE, JA

                    APALOO, JA

 

HI/35/2008

22ND MAY, 2008

 

 

HOTEL CHEZ MOI                       …         PLAINTIFF/APPELLANT

      V E R S U S

1.  UNIBANK [GH] LIMITED  ]   …         DEFENDANTS/RESPONDENTS

2.  F.O. SQUIRE                          ]

 

                 ------------------------------------------------------------

                                J  U  D  G  M  E  N  T

                 ------------------------------------------------------------

 

APALOO, JA:-  This appeal emanates from the judgment of the High Court Accra dated 10th May 2007.

            The facts leading to the decision of the lower court are not in dispute.

The Plaintiff/Appellant (hereinafter referred to as Appellant) became indebted to the 1st Defendant/Respondent a Bank (hereinafter referred to as the 1st Respondent),  consequently it sued in the High Court Accra and obtained judgment against the Appellant.  At the time of going into execution the judgment debt stood ¢1,182,136,200.00.

            Arising out of that judgment the 1st Respondent attached the movable and immovable property of the Appellant.  By a letter dated 11th April, 2005 the Deputy Sheriff requested Tent Services a firm of valuers to do a valuation of the property under attachment.  The letter was copied to Messrs F.O. Squire & Co. the Licensed Auctioneer (hereinafter called 2nd Respondent) who was to conduct the sale and actually undertook the sale.

            The movable property listed hereunder were all sold without reserved price for the of sum  ¢7,000,000.00.

  1. 2 No. 12 inch LG Television set.
  2. 1 No. 28 inch Sansui Television set.
  3. 2 No. Bedside LG Refrigerators.
  4. 1 No. Panasonic Fax Machine.
  5. 2 No Cyber Star CPU Monitors with Key Board and Mouse.

It is noted that the Appellant had paid the 1st Respondent the outstanding balance on the judgment debt as at now; however being aggrieved by the sale which was done without a reserved price, it accordingly issued a Writ of Summons against the two Respondents for the following reliefs:

            “(a)  A declaration that the sale of the movable properties of the

                    Plaintiff without a reserved price is wrongful and unlawful.

             (b)  General damages of ¢400,000,000.00 for the wrongful and unlawful

                    sale of the Plaintiff’s movable properties.”

The trial ended in favour of the Respondents with the trial judge having dismissed the action.  The Court below was of the view that the sale was not subject to a reserved price.

            Of the three grounds of appeal filed by the appellant, it is our view that the two grounds of appeal canvassed before this Court can conveniently resolve this appeal.  The grounds were that;

           “(a)  The Learned Trial Judge erred in holding that the sale did not

                   have to be subject to a reserved price.

            (b)  The Learned Trial Judge erred in holding that the Plaintiff failed

                   to prove that it had suffered any substantial injury by reason of

                   any material irregularity, illegality in the conduct of the sale.”

In attempt to resolve the issues before her the trial Judge delivered herself in these words;

            “The issue at stake therefore is not whether the Defendants were entitled

              to sell or not.  The question is; was [the] sale without the prior fixing of

              reserve price by the Court wrongful, irregular or illegal.  If the sale is

              materially irregular, then under Order 45 r 10(1) of the High Court

              (Civil Procedure) Rule C.1. 47, a party can apply, to have the sale set

              Aside.  Having failed to do so within the time limit of 21 days allowed

              under the law, the Plaintiff is challenging the sale, on the basis of

              illegality which as stated in the Supreme Court case of Marfo Vrs.

              Adusei [1964] GLR 365 has no time limit.”

The judgment continued that;

           “The High Court (Civil Procedure) Rules 2004 however makes a

            distinction between sale of land by the order of the Court under

            Order 30 and sales in execution of judgment of immovable and

            movable property under Order 45.”

With all due respect to the trial judge, she went astray when she considered Order 30 r 2(4) a and Order 45 on periods of notice for the auction and came to the conclusion that

“There is no requirement under Order 45 that reserve price be fixed.”

            By the first endorsement on the Writ of Summons, the Appellant had challenged the sale of its properties at an auction without the prior fixing of the reserved price.  This challenge no doubt went to the root of that auction sale and in our view the applicable law in force is the Auction Sales Law 1989 (PNDC Law 230).  Section 17(2) of the Auction Sales Law is explicit that,

            “Where the auction sale is as a result of a judgment debt, the sale shall

               be subject to a reserved price to be determined by the Court which

               gave the judgment.”

            We do not find any difficulty in appreciating the requirements of this provision and the mandatory provision in the law has no ambiguity whatsoever since the auctioned property without doubt were sold as a result of a judgment debt.  The Deputy Sheriff’s letter to Tent Services that the property under fifa should be valued, the letter having been copied to the Auctioneer removed any doubt that the auctioneer was not aware of this mandatory provision in the law.  The date of Gazette notification of this law was on 22nd June, 1990 and experience on the High Court Bench tells us that most auctioneers are aware of the mandatory provisions of this law and they do comply with it.

            The Learned Trial Judge having anchored her conclusions on Orders 30 rule 2(4) a and 45 of C.1. 47 the High Court Civil Procedure Rules, without doubt was in error.  This is so because “The law was clear that where an enactment had prescribed a

            special procedure by which something was to be done, it was that

            procedure alone that was to be followed” per Bamford Addo JSC

            in Boyefio Vrs. NTHC Properties [1996-97]

            SCGLR 531.

            It is our view that the sale conducted by the Respondents of the property as a result of a judgment debt without a prior reserved price fixed by the Court is a clear violation of the law and ipso facto unlawful and illegal.

            Black’s Law Dictionary 7th ed. defines the word “illegal” as “adj.  Forbidden by law and unlawful.”  What then are the consequences of an illegal or unlawful sale?  Case law has it that “There is a clear distinction between an irregularity and an illegality in sale either in execution or under a mortgage.  Whereas an irregular sale way be voidable or give cause for action in damages where substantial injury is suffered by the debtor, an illegal sale is void ab initio and no title passed under it.”  See Marfo Vrs. Adusei [1964] GLR 365.  The then Supreme Court applied the principle in Akyeampong Vrs. Atakora [1952] 14 WACA 4 in deciding the Marfo Vrs. Adusei case.

            In our view the auction sale being unlawful and contrary to Section 17(2) of the Auction Sales Law 1989, (PNDC Law 230) the sale ought to be set aside which we hereby do.  In the circumstances the first ground of appeal succeeds.

            In respect of the second ground of appeal this is how the trial Court concluded on the issue;

            “The Court relied on legal arguments as to the legality or otherwise

              of the sale but requested further evidence as to the quantum of loss

              alleged to have been caused by the Defendants.  The testimony of the

               Manager of the Plaintiff Company, the sole witness concerned the

               accounting date system installed in the computers for the storage of

               room bookings and orders for meals.  He also testified that the

               average monthly takings of the hotel amounted to $2,000 a month.”

According to the Trial Judge this evidence related to the processes of attachment and seizure under fifa and that the Plaintiff did not put in issue the legality or otherwise of the seizure of the goods as he accepted the processes involved were lawfully discharged.

            It is our view that from the evidence of the Manager of the Appellant Company on record, no evidence was indeed led to establish that the wrongful sale of the Appellant’s property occasioned them any losses.  Indeed the evidence led by the witness was directed at the Appellant’s deprivation of the equipment consequent upon the seizure.  There was no evidence indicating that as a result of the sale conducted in contravention to S. 17 of the Auction Sales Law the Appellant suffered any irreparable injury so as to warrant the assessment of damages.

            In any case the sale being wrongful we are of the view that the Appellant deserves nominal damages and we assess that to be GH¢2,000.00.  The decision of the lower Court is set aside and we declare the sale of the appellant’s property to be contrary to the Auction Sales Law and we set it aside.

 

 

 

                                                                                     R.K. APALOO

                                                                               JUSTICE OF APPEAL

 

 

 

 

DOTSE, JA:-  I have had the prior advantage of reading the Judgment of my brother Apaloo J.A. just delivered.  I entirely agree with the decisions arrived at and the conclusions reached therein.

            For purposes of emphasis, I wish to comment on a small point which I consider very crucial. 

The contention of the Appellant in this appeal has been anchored on the wrong interpretation given by the learned trial High Court Judge on the Auction Sales Law 1989, PNDC Law 230, Section 17(2) thereof.

            In dismissing the Plaintiffs/Appellants case, the learned trial Judge relied on Order 30 r. 2(4)(a) and Order 45 r. 10(1) of the High Court Civil Procedure Rules 2004,

C.I. 47.

            What must be noted is that, whilst the Auction Sales Law, 1989, PNDC Law 230 is a substantive Law the High Court, Civil Procedure Rules 2004, C.I. 47 is a subsidiary legislation.

            By ordinary rules of interpretation, the provisions in a substantive Law take precedence and prevail over the provisions in a subsidiary legislation.

            To this extent, it is clear that the learned trial Judge should have used the mandatory provisions of the Auction Sales Law, 1989, PNDC Law 230 Section 17(2) thereof and not the subsidiary legislation relied upon in C.I. 47.

            To this extent, I agree that the appeal herein against the Judgment of the High Court, Accra dated 10th May 2007 is accordingly allowed and same is hereby set aside.

 

 

 

                                                                           JONES DOTSE

                                                                     JUSTICE OF APPEAL

 

 

 

 

I agree.                                                              G.M. QUAYE

                                                                    JUSTICE OF APPEAL

 

 

 

 

COUNSEL:-  MR. S.K. AMOAH FOR PLAINTIFFS/APPELLANTS.

 

                        MR. KWAKU GYAU BAAFOUR FOR DEFENDANT/                    

                        RESPONDENTS.

 

 

 

 

 

 

 

 

 

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