Sanunu Vrs Salifu (4/13/08) [2009] GHASC 16 (22 April 2009);

IN THE SUPERIOR COURT OF JUDICATURE

IN THE SUPREME COURT

ACCRA-GHANA

_________________________________________

CORAM: ATUGUBA J.S.C. (PRESIDING)

AKUFFO (MS) J. S C.

DATE-BAH (DR) J.S.C.

OWUSU (MS) J.S.C.

BAFFOE-BONNIE J.S.C.

CIVIL APPEAL

№ J4/13/08

22ND APRIL, 2009

SUMAILA SANUNU … PLAINTIFF/RESPONDENT/RESPONDENT

VERSUS

FRANKLIN GADO SALIFU … DEFENDANT/APPELLANT/APPELLANT

J U D G M E N T

BAFFOE-BONNIE, J. S. C:-

The Defendant/Appellant,(Appellant herein) a contractor, was awarded a contract by Ghana Telecom to build Payphone Shelters and Telephone Stand structures in the Wa District. As the Appellant’s company was cash strapped he approached the Plaintiff/Respondent, (Respondent herein) to assist him financially to execute the contract. The Appellant made a statutory declaration to jointly execute the contract and share the profit from the contract sum. The Appellant claims in Paragraph 4 of his statement of defence that the statutory declaration was between Franksali Enterprise Ltd of which the Appellant is the Managing Director and the Respondent.

Upon completion of the contract a total sum of ¢137,286,033.50 was paid to the Appellant Company. The Respondent claimed he alone financed the entire project to the tune of ¢107,627,000[Paragraph 8 and 9 of the Statement of claim] and this was denied by the Appellant [Paragraph 8 of the statement of defence]. The Appellant stated that the Respondent informed one Mr. Ibrahim Sefa that he spent an amount of ¢95,000,000 on the execution of the project. Despite the respondents refusal to give receipts to the Appellants to show how much he, Respondent, actually spent the appellant paid an amount of ¢94,074,631 to the Respondent.

On the appellant’s failure to pay what the respondent deemed to be due him on the agreement he brought an action at the High Court claiming a number of reliefs. After the appellant had entered appearance and filed a defence the Respondent applied for summary judgment claiming the Appellant had no defence to the action. To the affidavit supporting the application for summary judgment was annexed a document titled CONTRACT/AGREEMENT in which the defendant was admitting liability and promising to pay certain sums of money within a certain period. The application for summary judgment was granted. The appellant’s appeal to the Court of Appeal against the summary judgment was equally dismissed.

The Court of Appeal held (page 8)

“-considering that the statement of defence does not disclose any real grounds of defence, we are of the view that the learned trial judge was right in coming to the conclusions he did based on the findings of facts before him i.e. the documentary evidence exhibited. We will therefore not disturb his judgement.”

It is this decision that the Appellant is contesting.

After special leave to appeal had been granted by this court, the appellant filed the following grounds of appeal.

1 The Court of Appeal erred when it held that the document headed CONTRACT/AGREEMENT dated 13th day of april 2004 constituted the basis of this suit and that the action is one on a promissory note

2 The court of appeal erred when it failed to consider the circumstances in which the document headed CONTRACT/AGREEMENT was procured by the plaintiff and the part the hearing notice issued in the Circuit Court ,Wa on 8th April 2004 by the Circuit Registrar Wa, before the institution of the action on 10th may 2004, played in the procurement of that document

3 The Court of Appeal erred when it held that the statement of defence did not disclose any real grounds of defence

4 The Court of Appeal failed to consider adequately or at all the case for the defendant

5 additional grounds of appeal may be filed upon the receipt of the record of appeal.

No additional grounds were filed

In spite of the long list of grounds of appeal I think the main issue to be determined is whether the trial court acted in accordance with the law when it granted an order for summary judgment on the face of pleadings at that stage of the trial, and whether the court of appeal’s confirmation of same is justifiable.

Order 14, r. 1 of the High Court civil procedure rules as amended by LI 1129 states:

"1. Where in an action begun by writ a defendant has been served with a statement of claim and has entered an appearance, the plaintiff may apply to the Court for judgment against him on the ground that he has no defence to a claim included in the writ, or to a particular part of such a claim, or that he has no defence to such a claim or part except as to the amount of any damages claimed."

As Jessel M.R. said in Anglo-Italian Bank v. Wells (1878) 38 L.T. 197 at p. 199, C.A. Order 14,

"is intended to prevent a man, clearly entitled to money from being delayed, where there is no fairly arguable defence to be brought forward."

It was also noted by my learned brother Kpegah J, as he then was in YARTEL BOAT BUILDING CO. v. ANNAN [1991] 2 GLR 11, that Order 14

“… prescribes the procedure to be followed by a plaintiff who wishes to obtain summary judgment against his adversary. It does not confer on a plaintiff an absolute right to proceed for summary judgment in every case. Its purpose or aim is to permit a plaintiff to obtain summary judgment without necessarily going to trial if his claim is clear and the defendant is unable to set up any bona fide

defence, or create a situation indicating there are triable issues between him and the plaintiff.”(emphasis added)

At pages 14 and 15 of the report His lordship went ahead to state the conditions under which the court’s jurisdiction can be invoked under Order 14. He said,

“The first is that the defendant must have been served with a statement of claim…The important consideration is whether the plaintiff’s claim is clear and whether the defendant has any defence to it.

Another important prerequisite is that the defendant must have "entered an appearance" to the plaintiff’s writ... If there is no appearance judgment by default may be entered under Order 13."…

An averment that the defendant has no defence to the action should be an integral part of the affidavit; not to downplay the fact that facts must be deposed to indicating that the plaintiff’s claim is real and considerably unimpeachable.”

What this means is that a judge must come to conclusion that on the face of the claim there is no defence to the action. A defence set up need only show that there is a triable issue; and leave to defend ought to be given unless there is clearly no defence in law and no possibility of a real defence on the question of fact.

See also the case of AtlantaTimber Co vs Victoria Timber Co Ltd 1962 1 GLR 221 where Charles J said:

(1) the purpose of Order 14, rule 1 of the rules of court is to enable a plaintiff to obtain summary judgment without trial, if he can prove his claim clearly. Thus even though a statement of defence may have been filed, the court is not

precluded from entertaining an application for summary judgment under Order 14, rule 1;.

In the instant case the Respondent (then plaintiff) in his statement of claim averred that he financed the entire project personally and went ahead to quote the figure. This was denied by the appellant. The amount with which the Respondent financed is also not certain. The Respondent claims it amounts to ¢107,627,000 and to the Appellant it is ¢95,000,000. This amount that was used to finance the project by the Respondent is an issue that the trial court had to determine.

It is also quite interesting to note that the evidence of “Promissory Note” which seemed to have influenced both the Trial Judge and Their Lordships at the Court of Appeal was never averred to in the Respondent’s statement of claim. To me this was a material fact that the Respondent should have averred to in his statement of claim and not in the subsequent affidavit seeking summary judgment..

In this court the Appellant is raising issue of duress in executing the “Promissory Note” as he did at the Court of Appeal. This is an issue that would have been properly resolved at the trial court if the opportunity had been given. And this opportunity would have arisen if the plaintiff had made it a part of his case that he was relying on a promissory note in his statement of claim. Unfortunately he sought to rely on this document only when he brought his application for summary judgment. He thus failed to give proper notice to the Appellant

Further, the Appellant, in his statement of defence and at all material times, has contended that the Agreement was between his company, a distinct legal entity,

and the Respondent. He only signed as a Managing Director of the company. This position is borne out from the wording of the statutory declaration signed by the parties before the contract works was executed.

Parts of the said statutory declaration read;

That I am the Declarant herein
That I make this solemn declaration for and on my own behalf as Managing Director of Franksali Enterprise Wa.
That the said enterprise have been awarded a contract to construct 4 NO PAY-PHONE SHELTER, 20 NO TELEPHONE STAND STRUCTURES FOR GHANA TELECOM WA, UPPER WEST REGION.
That the said enterprise is to execute the said contract jointly with Mr. Sumaila Sanunu of Wa.

If this claim of the respondent is true then it would seem the wrong party has been sued and that would not entitle the respondent to summary judgment. It matters not whether the Appellant owns all the shares in the company; the company is distinct from the Appellant. Salomon v. Salomon & Co. Ltd. [1897] A.C. 22.

All the foregoing are veritable triable issues that take this case outside the realm of summary judgment application.

In YIRENKYI v. TORMEKPEY [1987-88] 1 GLR 533 – 539 when the defendant’s defence raised triable issues as to whether or not, for instance, the plaintiff himself or by his agent inspected the vehicle before the price was paid, and whether or not the failure to effect the proper transfer did not make the plaintiff owner of the vehicle the court held that the application for summary judgment under Order 14

of the High Court (Civil Procedure) Rules, 1954 (L.N. 140A) as amended by rule 2 of the High Court (Civil Procedure) (Amendment) (No. 2) Rules, 1977 (L.I. 1129) was incompetent.

In this case it is my considered opinion that the trial judge and the learned justices of the court of appeal were unduly influenced to consider the strength of the parties’ claim by what they felt was overwhelming documentary evidence, in the form of a promissory note instead of considering whether there were real issues to be tried.

Bowen L.J. said in Blaiberg v. Abrams (1910) 77 L.T.J. 255, C.A.,

"In deciding whether the defence, set up is a real defence or not, all the circumstances must be looked at."

When all the circumstances are looked at in this case, what emerges to me is that the Appellant has put forward a defence, which if it can be proved, the action against him must fail. It may be that he will not be able to prove it at the trial, that is not the question. The question is the outcome of the action on the assumption that he is able to prove what he alleges. Since the action could end differently if he is able to substantiate his defence, I am firmly of the view that summary judgment was inappropriate and ought to have been refused and the defendant given unconditional leave to defend.

I will therefore grant the appeal and remit the case for trial on the merits.

P.BAFFOE-BONNIE