COMMERCIAL LAW

1. COMMERCIAL LAW

2. NATURE OF LAW OF TORT AND INTENTIONAL TORT TO GOODS BY HOLY K KPORTORGBI (SIRHOLY) DEPARTMENT 0F ACCOUNTING AND FINANCE SCHOOL OF BUSINESS UNIVERSITY OF CAPE COAST

3. MENU • Section 1 Introduction To The Law Of Tort • Section 2 Intentional Tort To Goods-conversion • Section 3 Examples Of Conversion And Trespass To Goods • Section 4 General Defences To Intentional Tort- Volenti • Section 5 General Defences To Intentional Tort- Inevitable Accident • Section 6 General Defences To Intentional Tort- Statutory Authority

4. INTRODUCTION TO THE LAW OF TORT • What is tort? A tort is a French word meaning wrong or harm. Torts are civil wrongs in other words they are harmful acts that result in civil actions brought by the person harmed. A tort is a civil wrong for which the remedy is a common action for unliquidated damages, which is not exclusively the breach of contract or a breach of trust or a mere equitable obligation. Professor Winfield also defines tort as a breach of duty primarily fixed by the law, where the duty is one towards persons generally and its breach is redressible by an action for damages.

5. LAW OF TORT AND LAW OF CONTRACT DISTINGUISHED The law of tort is imposed on citizens irrespective of their consent whilst contracts arise from agreements between contracting parties. The law of tort protects diverse interest but the law of contract protects a sole interest for the performance of promises. Contract comes about as a result of an agreement between parties whilst the law of tort is on all persons not to cause harm, suffering or injury to others.

6. AIM OF THE LAW OF TORT Tort is concerned with the allocation or prevention of loss, or redistribution of loss in the sense that if a tort is committed the one who committed the wrong would have to compensate the innocent party for the damage caused.

7. TORT AND CRIME DISTINGUISHED Definition of crime A crime is an act which is punishable by fine, imprisonment or death by the state. Criminal law defined crime as an act committed or omitted in violation of public law and such wrongs are punishable by imprisonment, fine or both. A crime is therefore a legal term for any act or omission which is in contravention to the rules of conduct approved by the community.

8. TORT AND CRIME DISTINGUISHED In tort, an action is initiated by the individual while criminal proceedings it is initiated by the state. Secondly, the title in a suit in tort consist of the names of the private individual concerned in the action while in criminal proceedings on the other hand is usually between the suspect and the republic. Thirdly, remedy available for the injured party in tort could be calculated as damages suffered and therefore compensated by granting of damages for loss or injuries suffered. Whiles a criminal conduct attract an imprisonment or fine or both or death penalty.

9. TORT AND CRIME DISTINGUISHED Again remedies available to the injured party is to compensate the individual for loss or injury suffered whiles punishment imposed on the criminal offences is either to reform the offender or prevent from committing similar offences and to punish the offender for the sake of punishment. It is important to point out that monies paid as compensation in tort goes to the individual, however, in crime it goes to the state.

10. TORT AND CRIME DISTINGUISHED However, there are some similarities between tort and a crime. Certain tortuous acts are also crime. For instance a civil assault can be both a crime and a tort. Also conversion may also constitute stealing or fraud by false pretences. Though in tort, damages are awarded to compensate the aggrieved party, he is not punished as in the case of crime. However, in some torts, damages may be awarded in excess of actual loss to punish the person who commits a tort.

11. DAMAGE AND LIABILITY Damage is loss suffered by one person or harm caused to him. This damage may be physical or economic, resulting from a wrongful act or default and generally leading to the award of a measure of compensation. Liability is the accountability for some state of affairs to which one’s conduct has contributed, together with an obligation to repair any injury caused. A person is therefore liable for his wrongful acts and he has to compensate the other whom he wronged.

12. FORMS OF LIABILITY Liability may be imposed as a legal consequence of a person’s act or his omission if he is under a legal duty to act. Liability may also be imposed upon one person as the legal consequence of the act or omission of another person with whom he stands in some special relationship such as master and servant. This is known as vicarious liability. Liability may be based on fault, sometimes an intention to injure is required but more often negligence is sufficient.

13. INTENTION AND MOTIVE Brain CJ said “It is common knowledge that the thought of a man shall not be tried, for the devil himself knoweth not the thought of man.” Bowen LJ stated “The state of a man’s mind is as much a fact as the state of his digestion.” It means that no one can be perfectly certain of what passes in the mind of another person, and in law what a man thinks must be deduced from what he says and does. A person’s motive may be his reason for doing something. The intention is the reason behind what he had done.

14. INTENTIONAL TORT AND UNINTENTIONAL TORT Intentional tort is voluntarily, willingly causing harm or affecting the interest of another person. It is knowing that your action could lead to a particular result. Unintentional thought is involuntarily. Unknowingly causing harm or injury to another person.

15. NEGLIGENCE An act that a reasonable person will conclude would lead to the invasion of the interest of the plaintiff. It is falling short of the objective standard of conduct expected from a person. Negligence may signify full advertence (regard or knowledge) to one’s conduct and consequences. In most instances it signifies inadvertence by the defendant. In Vaughan v Menlove (1937), the defendant was warned that his haystack could overheat and caught fire.

16. MALICE IN TORT Malice means acting from a bad motive. Generally, the defendants motive is irrelevant. No good motive will ever excuse a tortuous act and a bad motive will likewise not turn an otherwise innocent act into a tortuous one. Example pushing somebody’s car to clear the way and the car had been destroyed.

17. SECTION 2: INTENTIONAL TORT TO GOODS What is intentional tort to goods? It is a direct and intentional interference with goods or chattel in possession of another person. Examples include the following: • Taking goods out of possession of another • Moving goods from one place to the other • Bringing one’s person into contact with them • Directing a missile at the goods • Scratching the panel of a car • Removing a tyre from a car • Taking a car from a garage

18. CONVERSION Conversion is an intentional dealing with goods which is inconsistent with the right of the true owner, and therefore denying the right owner to the goods or asserting a right inconsistent with the owner’s right, possession or right to immediate possession of the goods. It constitutes serious and unjustified denial of the person’s right to immediate possession. The aim of tort of conversion is to protect the interest of the plaintiff in the control of his or her goods. It does not protect the physical condition of the goods.

19. THE PLAINTIFF’S INTEREST IN CONVERSION For a plaintiff to claim that his right has been interfered with and such interference amounts to conversion, the plaintiff must prove that he had • Ownership and possession or • Possession or • An immediate right to possession but without ownership or actual ownership An owner without possession or an immediate right to possession cannot sue for conversion

20. Bailment A bailment occurs when possession of an item or property is transferred from one person (bailor) to another (bailee) The transfer is on the understanding that the bailee will be returned to the bailor If a third party converts the goods the bailee can sue the third party for conversion Where a bailment is a bailment at will then both the bailee and bailor has concurrent right to sue for conversion

21. Bailment cont’d The exercise of that rights by either party precludes the other from exercising In Sullivan v Williams the successful action of the bailor (car owner) on grounds of right to immediate ownership prevented the bailee (the bailor’s girlfriend) from suing the third party for damages

22. Hire purchase In hire purchase agreement where the hirer is not prohibited from selling or dispensing the goods until they have been paid for, the hirer has no course of action against the third party who acquires ownership from the hirer Whitley v Hilt (the piano case)

23. Lien and Pledges A lien is a right to retain possession of an item pending payment of a liability During the period that he has lien over the goods he can sue for conversion if someone takes physical control of the goods A pledge is type of security. Possession of the item is transferred as security for the payment of debt or the performance of a pledger. If there is default by the pledger, the pledgee has the right to sell the item

24. Subject matter of conversion Things that can be converted include Corporeal movable property Money Negotiable instruments Other securities Title deeds

25. States of mind of defendant in conversion The state of mind of defendant in conversion is very important Where a defendant did not intend, conversion would not occur Taking possession of another’s good constitute both conversion and trespass However, there is no conversion if such interference is merely temporary and unaccompanied by intention to exercise any right over the goods,

26. Session 3Intentional Torts to Goods- Examples of Conversion and Trespass to Goods

27. Conversion Anyone who deals with goods in any manner inconsistent with the right of the true owner is guilty of wrongful conversion This section discusses what amounts to conversion

28. Conversion by taking If goods are taken or damaged by any person and that person has the intention to negative the right of the owner, amounts to conversion If you appropriate fruit from a tree on the basis that its branch extends beyond the owners boundary unto your territory, you are guilty of conversion by taking In Tear v Freebodythe defendant wrongfully took possession of goods with the intention of acquiring a lien. The court held that he was guilty of conversion

29. Conversion by detention This occurs when goods belonging to a claimant are detained without his permission and there has been a demand which had been refused. Merely to be in possession of chattel without title is not a conversion nor tort of any kind If a car is parked and it is wheel-clamped or towed away without permission, there could be an action of conversion available to the car owner In Arthur v Anker however, it was held that no tort was committed because the defendant took some reasonable steps to warn the public not to pack there

30. Conversion by wrongful delivery Every person who without lawful justification denies a person of his goods by delivering them to someone else so as to change the possession is guilty of a conversion

31. Conversion by wrongful disposition If a person deprives another of his goods by giving another person a lawful title to them, he is guilty of conversion

32. Conversion by destruction Any person, who without lawful justification willfully consumes or otherwise destroys a chattel belonging to another person is guilty of conversion Mere damage which falls short of actual destruction is not in itself conversion

33. Acts that do not amount to conversion Mere movement of goods Mere movement without any denial of title is no tort Fouldes v Willoughby D moved P’s horse from D’s ferry hoping that action would induce P to leave the ferry.. P remained in the ferry across the river and thereafter sued for conversion The action failed because P has no intention to deny D title

34. Mere receipt of chattels If a person receives goods in good faith by way of pledge from another person who has no title to them, it is not conversion by the recipients In Spackman v Foster certain deeds were fraudulently taken from the plaintiff and pledge in 1859 with the defendant who received them in good faith and in ignorance of the plaintiff’s title. The plaintiff discovered the loss of the deeds after discovery in 23 years. The defendant refused to give up on the grounds of statute of limitation It was held that no cause of action accrues until demand and refusal, and that the defendant was liable

35. Redelivery- not conversion A person who innocently acquires possession of another by way of deposit and delivers them to him from whom he got them, before he received a notice of that persons claim to them is free from liability He has not deprived the plaintiff of his property for that property is now in exactly the same position as if the defendant had not interfered with it at all

36. Conversion as between co owners • When two persons own property there is unity of possession • Each co-owner is entitled to possession and ownership • One of the owners can not sue the other of conversion unless the act of the other amounts to the destruction of the property or permanently destroy the right of that other party to the sale thereof • An action by one co-owner to claim an exclusive right amounts to conversion

37. Remedies For Conversion/Measure of Damages • The general measure of damages in conversion is the value of the chattel • Credit would be given to the defendant of the return of the chattel or its equivalent. • The value of the chattel is the value as at the date of the conversion • The plaintiff may in addition to the value recover any special damage which is not deemed too remote • Refer to Brodley v. Reynolds (the carpenter recovered a special damage for loss revenue occasioned by the conversion • Perhaps the plaintiff must also take actions to mitigate his loss

38. Trespass To Goods • Trespass to goods is a wrongful physical interference with them • Interference must be direct and not consequential • In some cases, however, physical contact is not necessary. • Examples of trespass: removing a tyre from a car, or taking it from a workshop • A trespass to goods is actionable “per se” (that is without any proof of damage) • A successful action would entitle the plaintiff to at least a nominal damage

39. Measure of Damage in Trespass to Goods • If the plaintiff has been deprived of his goods, the measure of damage is the value of his goods • If the plaintiff has limited interest in the goods, he may recover the full value of them, although he may have to account to the owner for what he has recovered beyond his interest.

40. Conversion v Trespass • There is only a thin line between conversion and trespass • Whilst conversion is dealing with the goods in a manner inconsistence with the right of the owner, trespass is a wrongful physical interference with them • Trespass may be just handling the goods whilst conversion may be act of keeping the goods and preventing the owner from using the goods as wishes

41. SESSION 4: GENERAL DEFENCES TO INTENTIONAL TORTS • If an action of tort is brought against a defendant, he can rely on some defences that he is not liable • Let us discuss some of these defences Volenti non fit injuria plaintiff knowledge of risk notice inherent danger statutory duty

42. Volenti Non Fit Injuria The general rule is that a person has no remedy for harm done to him if he expressly or impliedly consented to suffer the actual harm inflicted or if he has consented to run the risk of it. “No wrong is done is done to a person who consents”

43. The meaning of consent • Mere knowledge does not necessarily imply consent. • The plaintiff must both appreciate the nature of the risk of injury and consent to run that risk • Consent need not be expressly given • It is sufficient that the plaintiff voluntarily agree to the risk of injury • A consent given under protest is no consent

44. Non fit injuria • Example is Injuries received in a course of a lawful game or sport • Modern case is normally used is in connection is with harm to person rather than to property • Mere knowledge of injury is not sufficient to constitute consent (Baker v James) • Nothing will suffice short of an agreement to waive any claim for negligence

45. Volenti Non Fit Injuria In Ghazi v State Gold Mining Corporation the plaintiff brought an action for damages against the defendant jointly and severally for injuries sustained by him as a result of a motor accident. The defendant by their pleading and evidence contended that the plaintiff was not entitled to his claim because the plaintiff had control of the defendant car on the day of accident but had allowed, permitted or acquiesced in a manner in which the driver had driven the vehicle on that day, thereby calling in aid the defence of non fit injuria The court held that to succeed on volunti non fit injuria,the defendant must prove that the plaintiff voluntarily and freely with full knowledge of the nature and extent of the risk consented to it

46. Plaintiff Knowledge of the Risk A person who has been sued may also rely on the defence that the plaintiff knew of the risk This can however not absolve the defendant In Smith v Baker &Sons, it was held that Volenti non fit injuria has no application to harm sustained by a person for the negligence of his employers in not warning him of the moment of recurring danger although he personally ran the risk of injury if and when the danger did occur

47. Notice There are instances where some persons may issue notices that certain events or activities may be done at the risk of the persons understanding those activities If such notice is made and any one disobeys the notice he does so at his own risk

48. Inherent danger • If a risk is inherent in a certain situation, it means the danger is a natural part of it. • Where a person engages in such an activity, he impliedly consent to endure the danger should it occur. • For instance the risk of being hurt is inherent in climbing a mast • An employer is however liable if he creates further risk which is not normally present in the job

49. Statutory duty • An employer has a statutory duty to protect his employees • If he breaches the duty there is of course liability to penalty that the statute provides • This duty of care covers only the employees or those mentioned. • In Harley v Mayoh the action failed because the plaintiff (a fireman working on the defendant’s premises) was not covered by “the persons employed” clause

50. SESSION 5 General Defences to Intentional Torts: Inevitable Accident We shall now focus on: • inevitable accident • act of God • mistake • necessity