Ecobank Sierra Leone & AMST Construction (413)  SLHC 413 (12 November 2015);
IN THE HIGH COURT OF Sierra Leone
COMMERCIAL AND ADMIRALTY DIVISION
FAST TRACK COMMERCIAL Court
Off Wallace Johnson Street-government wharf
MISC APP. 413/15
ECOBANK Sierra LEONE LIMITED PLAINTIFF
AMSMT construction & general supplies 1ST DEFENDANT
SHAKA M TURAY 2ND DEFENDANT
PRINCE BAH 3RD DEFENDANT
KELFALLAH, CONTEH & CO. COUNSEL FOR THE PLAINTIFF
FORNAH-SESAY, CUMMINGS, SHOWERS & CO. Counsel FOR THE DEFENDANT
BEFORE THE HON. MR. JUSTICE SENGU KOROMA J. RULING DELIVERED ON THE 13TH NOVEMBER, 2015
- By a notice of motion dated the 21st day October, 2015, the Plaintiff herein applied to this court for the following orders:
- That an interim order be granted preserving all monies on payments due the 1st Defendant in respect of past, present or future invoices and local purchase orders due and owing from Sierra Block concrete products limited pending the hearing and determination of this application.
- That are order be granted preserving all monies or payment due to the 1st defendant in respect of past, present and future invoices and local purchase orders due and owing from Sierra Block Concrete products Limited pending the hearing and determination of this matter.
- Any other order (s) that this court may deem fit and just.
- That the cost of this application be cost in the cause.
In support of this application is the affidavit of Mohamed Sheik Kamara sworn to on the 21st day of October, 2015 together with the exhibit attached thereto. The said affidavit purports to establish that the 1st Defendant was granted banking facilities by the plaintiff in consideration of which the defendant executed joint and several guarantees in favour of the plaintiff. The deponent further deposes that the Defendant is in default of payment of the sum of Le572,208,871.24.00
The deponent finally avers that he has been informed by the general manager of Sierra Block Concrete Products Limited that they were holding funds/monies which are due the 1st defendant and that unless this honourable court orders a preservation of the said funds which are due the 1st defendant and that unless this Honourable Court orders a preservation of the said funds the 1st defendant would not utilize them to liquidate its indebtedness to the plaintiff.
- Before proceedings, I would want to comment briefly on the notice of motion and affidavit in support filed herein, for an application of this nature to be made, the applicant must be a party to a cause or matter. In other words, there must be in existence a cause or matter which has been filed in the courts. It is therefore desirable that the said cause or matter is exhibited. In the instant case, no such document has been exhibited. Though there is an originating summons filed in respect of the substantive matter, the title thereof is different from that of the notice of motion herein. The affidavit in support, I must say has been poorly drafted. It refers to the non-existent defendants as there is no indication in the title of the action as to who are the 2nd and 3rd Defendant or that they even exist. Furthermore, reference is made to interest at the rate of 22.5percent from 1st October, 2015 unto payment. In support of this, he exhibits Statement of Accounts –Exhibits ‘D’. But there is no mention in it of interest rate payable in future. I have brought up these issues to remind counsel of this need for diligence in the drafting of court papers. It shall return to these issues in due course.
- Counsel for the plaintiff in his submission relies on Order 35, Rule 2 of the High Court Rules, 2007 which deals with Detention and preservation of property. He also refers the Court to the English Supreme court practice, 1999, paragraph 29/8/A/9. He concludes that the plaintiff is seeking an interim preservation of all monies or payments due the 1st Defendant in respect of any past, present and future invoices, and Local Purchase Orders due and owing from Sierra Block Concrete Products Limited pending the hearing and determination of this application and subsequently the substantive action.
The application is opposed by the defendants who have in the titled clearly stated the parties involved in this action. An affidavit in opposition sworn to by Michaela Kadijatu Conteh on the 4th day of November, 2015 has also been filed. She deposes that a writ of Summons has been issued by the 1st defendant against Sierra Block Concrete Products Limited and its country Director, seeking several reliefs, amongst which is the recovering of the sum of 187,255.271 due and owing but that Sierra Block Concrete Products Limited are relying on a Tripartite Domiciliation Agreement executed between the 1st defendant herein, Sierra Block Concrete Products Limited and the plaintiff herein in refusing to make the said payment to the 1st Defendant. In paragraph 8 of the said affidavit, the deponent deposes that she has made an undertaking to this Honourable Court that the defendant shall not, in anyway, whatsoever, solicit/procure payments from Sierra Block Concrete Products Limited until the said Honourable court has had an opportunity of hearing and determining the issues in dispute. It is important to note at this point that paragraph 3 of the affidavit in support refers to the Tripartite and Domiciliation Agreement as the consideration given for the grant of the facilities to the 1st Defendant.
In her submission, counsel for the Defendants argues that the provision relied on by the applicant does not apply to “money” but to “property” in her view, money does not fall within the category of property.
Counsel for the plaintiff in his reply submits that property for this purpose is money which they want preserves. He reflects that the undertaking made by counsel for the defendants is insufficient because the High Court Rules, 2007 whose validate is derived from a statutory instrument supersedes an undertaking made by counsel.
- I have carefully listened to both counsel and note that the main point in dispute is whether order 35 Rule 2 is the applicable provision. What does order 35 Rule 2(1) say
Order 2(1) provides that on the application of any party to a cause or matter, the court may make an order for the detention custody or preservation of any property which is the subject matter of the cause or matter, or to which any question may arise in the action.
- The source of the courts power to order the detention custody or preservation, or the inspection of property is it’s inherit jurisdiction to secure by orders just and proper trial of issues. As Lord Diplock puts it in “THE SISKANA” (1979) AC 210, “it presupposes the existence of an action, actual or potential, claiming substantive relief which the High Court has jurisdiction to grant to which the order sought are but ancillary”. It therefore cannot exist in isolation. As I mentioned earlier, the plaintiff failed to exhibit any evidence that an action has been instituted against the defendants. Had the defendants not filed an affidavit in opposition stating the correct parties in an existing action before this court, the lapse of counsel for the Plaintiff would have been fatal to his case.
- What are the conditions to be fulfilled in order for an application under order 35 Rule 2 to succeed:-
- The plaintiff must have commenced proceedings in connection with the subject matter of the application. This has already been dealt with.
- The subject matter of the application must be “property”. Counsel for the Defendant has argued that money is not property in the context of Order 35 Rule 2. Counsel for the Plaintiff has argued to the contrary. What is the correct position. I will seek to resolve this issue by moving it from the general to the particular that is by looking at the law of property and how it would apply to this application. There are two types of property: Real and Personal as Personal Property also referred to as movable property, is anything other than land that can be the subject of ownership, including stocks, money, notes, patents and copy right as well as intangible property. By this definition, money can be classified as personal property and could therefore fall under the “property” referred to in order 35 (2).
Order 35 rule 2 further requires that the property shall be in the possession of the Respondent. In this case however, the money is not in the actual possession of the Respondent since it has not been paid over by Sierra Block Concrete Products Limited (SCPL). This should not be a problem as the law makes provision for constructive possession. A piece of property is said to be in the constructive possession of a person when he has the power and intent to possess and control it. In the instant case, it is clear that the Respondent is in constructive possession of all money due and owing to them by Sierra Block Concrete Products Limited by virtue of the Tripartite Domiciliation Agreement herein before referred to. My conclusion therefore is that the Applicant is properly before this court.
- Having said this, it is my view that for the purpose of proper case Management, it would be appropriate for this substantive matter herein to be consolidated with the matter between the Respondent herein and Sierra Block Concrete Products Limited. This is because the right to relief claimed in the causes or matters re in respect of or arises out of the same transaction or series of transactions that is the Tripartite Domiciliation Agreement. However, it is left with the parties to make the appropriate application to this court.
- In the circumstances, I make the following Orders:-
- That all monies/payments due the 1st Defendant in respect of any past, present or future invoices and local purchase orders due and owing from Sierra Block Concrete Products Limited be paid into the Judicial Sub Treasury pending the hearing and determination of the substantive matter.
- That the Respondent files an affidavit in opposition to the Originating Summons within three (3) days from the date this ruling is read in court.
- That the Applicant files a reply within three (3) clear days, after the expiration of the period limited for filing the affidavit in opposition.
- That the Deputy Master and Registrar shall within three (3) days thereafter assign the claim to a judge who shall conduct a Pre-trial Settlement Conference as required by Rule 5 (1) of the Commercial and Admiralty Court Rules, 2010.
- No order as to costs.
Hon. Mr. Justice Sengu Koroma (J.)