K. W. Mahtani Of Accra & Anor V. (I. P. Daswani Of Accra As Attorney Of Utoomal & Ors (1941)

LawGlobal Hub Judgment Report – West African Court of Appeal

Libel—Notice inserted in Newspaper by Defendant—Trial Judge found that an innuendo in the Notice imputing Insolvency was established—Innuendo imputing Insolvency was not pleaded by the Plaintiff—Defendant had no opportunity to contest—Duties of Appeal Court in such circumstances—Imputation of Insolvency taken into consideration in awarding damages—Misdirection.

Held :•(i) As the words complained of do not necessarily on the face of them impute insolvency the trial Judge was wrong in imputing to them an innuendo which was not pleaded.

(ii) That iu assessing the damages the trial Judge wrongly took into account the imputation of insolvencry.

Appeal allowed; judgment of. Court below set aside and a new trial before a different Judge ordered.

Cases cited : —

Dawe v. Palmer 123 English Reports 1147; Riding v. Smith (1876) 1 Ex: 93;

Vines v. Serrell (1835) 7 C & P. 163;

Crepigny v. Wellesley (1829) 5 Bing 402; Praed v. Graham (1889) 59 L.J.

Rateliff v. Evans (1892) 2 Q.B. 528;

Smith v. Schilling 1928 1 KM-. 429.

The facts are sufficiently set out in the judgment.

A. Sawyerr (with him K. A. Bossman) for Appellant. J. H. Co-ussey for Respondent.

The following joint judgment was delivered :

In this case the plaintiff caused to issue in the Divisional Court, Accra, a writ against the defendant containing the following claim:—

” The plaintiff carries on business at Accra and other places in ” the Gold Coast as a Trader and Importer of goods from India, ” England, China, Japan and other places.

” On October 2nd 1940, the defendant contriving and intending ” to injure the plaintiff in his said business and to prevent him from ” selling his goods falsely and maliciously wrote and published of the ” plaintiff in the form of a Public Notice in the issue of the African

Morning Post Newspaper of that date, the following words:—

” To Wixom IT MAT COMMIX.

” I, Gagandas Partabrai Daswani, holding Power of Attorney ” issued on the 19th January, MO, at Hong Kong and instructions ” from Mr Assudamal Vaswani, the Managing Proprietor of. iltessrs. ” Utoomal and Assudamal Company, Hong Kong and other branches ” to file suit against Mahtani Brothers, Accra and other branches for ” owing to the said firm Utoomal and Assudamal Company, Hong Kong, ” monies against various bills, etc., and to cancel Power of Attorney ” of Choithram Wadhumal Mahtani, brother of Sundannial Wadhumal ” Mahtani, Proprietor of Mahtani Brothers of the Colony of Gold ” Coast, vested in him by the above firm Utoomal and Assudamal ” Company, and for other purposes also do hereby revoke Mr Choithram ” Wadhumal Mahtani’s the said Power of Attorney.

” Any person or persons doing any business or moneytary tram-. actions with him in name of Utoomal and Assudamal Company from ” hereafter shall do so at his, her, or their risk.

” I also hereby beg to inform the public that any person or person* ” buying any of the stores of Mahtani Brothers in the Colony of Gold ” Coast shall do so • at his, her, or their risk.’

” By the said publication the defendant meant and was understood ” to mean that the plaintiff had no right to sell his goods and_: that ” he intended or was attempting to defraud the defendant or his ” creditors by selling or disposing of his goods and property and obtain” ing the proceeds thereof before the same could be secured and ” obtained possession of by or on behalf of the defendant.

” By reason of the publication of the said Notice the plaintiff has ” been greatly injured in his credit and reputation and has suffered ” and will suffer much loss and damage.

” The plaintiff claims £2,000 damages.”

To the claim the defendant filed the following defence:—

1. The defendant admits the writing and publication of the ” words set out in the plaintiff’s writ.
2. The said words do not mean and were not capable of the ” alleged meaning set out in the plaintiff’s said writ or of any other ” defamatory meaning.
3. If the said words are capable of the alleged meaning that the plaintiff was attempting to defraud the defendant by selling or
4. ” disposing of his stores ‘ and obtaining the proceeds thereof before K. W. ” the same could be secured and obtained possession of by the Mskulni ” defendant, the said defendant pleads that that was tame in substanceG. G.P.
5. ‘” and in fact.Dan►mi.
6. The said plaintiff did first of all dispose of his Cape Coast ” Store or sell the whole of the Stock in the said store, then later his ‘¹7:7¹ ” Koforidua Store ‘ or the whole of the stock in the said Koforidua cm_{. an}d “Store, in both cases to Messrs. K. Chellaram and 801111 and in both M’Carthy, j_a ” cases at prices considerably under value at a time when the said ” plaintiff was heavily indebted to the defendant’s Principals and with” out paying over the proceeds to satisfy the defendant’s Principals’ ” debt or account.
7. The words complained of were uttered on a privileged occasion, ” the said defendant having an interest as a creditor in the said “-plaintiff’s business or his assets.
8. That in any case the damages claimed are excessive and the ” plaintiff has not suffered any damages.”
9. And to this defence the plaintiff filed the following reply :—
10. The plaintiff joins issue with the defendant on paragraphs 2, ” 3 and 5 of his statement of Defence.
11. As to. paragraph 4 of the said Defence, the plaintiff says that ” he mold goods in his stores at Cape Coast and Koforidua in the ” ordinary course of business and the moneys realised from such sales ” were paid partly on account of Bills of supplying Merchants including ” the Bills of Utoomal and Assudamal and Company.
12. As to paragraph 6, the plaintiff says that by reason of the ” said libel, he has been greatly damnified in his business and has ” suffered in his credit both with Merchants in the Gold Coast and ” abroad and with Barclays Bank (Dominion, Colonial and Overseas), • Accra, his Bankers.”
13. The action was tried by Bannerman, J., who, on the 1st April, 1941, gave the following judgment :—
14. ” I consider this libel vicious. In my view there is no ” justification for it and it was not published on a privileged ” occasion. 1 give judgment for the plaintiff. for £1,500 ” general damages with costs to be taxed. In view of the ” importance of this case I will give my reasons for my ” judgment later on.”
15. Giving his reasons on the 10th April the learned Judge said :—
16. ” The facts in this case are so clear that there is no ” necessity to discuss them at any great length.
17. ” It is clear from the evidence that when the publication ” appeared on the 2nd October, 1940, the defendant’s ” principals (Utoomal and Assudamal and Company) had no ” interest in the goods in any of the plaintiff’s stores. In ” other words, the plaintiff was not owing Utoomal and ” Assudamal and Company any debt in respect of any of the ” goods in his stores, d I am satisfied that the defendant

” knew that this was so. The debt which the plaintiff was ” owing in respect of goods delivered to him on the two D/ A ” bills had already been paid for before the defendant ” published the notice in the African Morning Post.

” True, there were certain goods which were lying -in the ” Warehouse of the Bank but these goods were not in the ” plaintiff’s stores at the time of the publication. Farther” more, these goods had already been sold to certain Indian ” Firms before the publication appeared in the Morning Post.

” In my opinion the plaintiff’s liability to Utoomal and ” Assudamal and Company, if any, represented certain Bank ” and Cable charges as well as depreciation in price in ” respect of the goods which were sold to the Indian Firms. ” This liability, which -the plaintiff disputed, could not, in ” my view, justify the defendant in publishing the notice in ” the Press. Furthermore, I am satisfied that the defendant ” did not send any statement of account to the plaintiff before ” he published the notice in the Press.

” In my view there was no justification whatever for the

publication of the notice in the Morning Post and the ” defendant was not privileged in publishing it. This news” paper, according to counsel for the plaintiff, has a fairly ” wide circulation in the Gold Coast.

” I am satisfied that, by this publication, the plaintiff ” has been greatly injured in his credit and reputation and ” has suffered and will continue to suffer -much loss and ” damage for many years. Throughout the hearing of this ” case the defendant made no attempt to put oil, on. troubled ” waters, or to admit the folly of his act. On the other hand ” he maintained an obstinate attitude and did all he could ” to justify the publication. The defendant went so far ^.111f ” to send a copy of the publication to the ^–Comptroller of ” Customs of the Gold Coast, and there is abundant evidence ” on record to show that the plaintiff’s reputation suffered so ” much that the Bank refused to grant him any more over” drafts. Bad as this is, the worse is to follow.

” The plaintiff conclusively proved that, after the publi” cation, his business was seriously affected and he lost his ” reputation and standing in the community and among ” Merchants. One particula, local firm actually refused to ” -supply him with provisions on the monthly credit basis.

” I am bound to draw the inference that the defendant

deliberately published the notice in the Press in order to ” show that the plaintiff was insolvent and that the goods in ” his stores belonged to ITtoomal and Assudamal and ” Company. If one person goes out of his way maliciously ” to damage the reputation of another person in his business ” or trade, then the person who causes the injury must suffer ” the consequences of his own act. (paw v. Palmer, 123

English Reports, page 1147). It has been held that it is
libellous to impeach the credit of a ` merchant or trader,

• or to impute to him fraud, dishonesty or any other conduct ` that would prejudice him in the way of his trade or

` business. Thus, it is libellous to write and publish of a

• trader or merchant that he is, or has been bankrupt,
• insolvent, or in embarrassed circumstances.’ (See Gately on Libel and Slander, 2nd Edition, at page 38).

” There can be no doubt that the defendant meant the public to treat the plaintiff as an insolvent, or that he is a man in embarrassed circumstances. In the case of Riding v. Smith (1876) 1 Exchequer Division, at page 93, Lord Keely, C.B., made use of these words :—` It appears

• to me that if a man states of another who is a trader earn` ing his livelihood by dealing in articles of trade, anything, ` be it what it may, the natural consequences of uttering ` which would be to injure the trade and prevent persons
• from resorting to the place of business, and it so leads to ` a loss of trade, it is actionable.’ In my view this principle applies equally to libel.

” In the case of Vines v. Serrell (1835), 7 C & P at page 163, Mr Justice Parke said : The plaintiff may show the ` manner of the publication with a view to damages.’ For example, the plaintiff may show that the libel was published in a newspaper when the defendant was under no duty to publish it except to a limited number of persons, for the more extensive the publication of the libel the greater the injury occasioned by it. (Crepigny ro. Wellesly (1829) 5 ” Ring, at page 402). The plaintiff may also urge in support ” of damages the manner in which the defendant has ” conducted his case at the trial. In the case of Praed v. Graham (1889), 59 L.J., it is stated that ` It is a rule of

• law in action of libel that the Jury, in assessing the ` damages, are entitled to look at the whole conduct of the defendant from the time when the libel was published ” ` down to the very moment of their verdict. They may

` take into their consideration the conduct of the defendant ” ` before the action, after the action, and in Court at trial

` of the action.’

” In this case I. was sitting both as a Judge and Jury

and the defendant did not make the slightest attempt at any ^if stage of the proceedings to throw himself into the arms of ” mercy. In these circumstances I was bound, after the

plaintiff had satisfactorily established his case, to regard ” the conduct of the defendant as vicious and to award ” substantial damages. Apart from the viciousness of the ” defendant’s conduct there are, no doubt, certain aggravating ” circumstances in the case which must be taken into account ” in awarding damages. In the case of libel or slander which