Ghana Legal Information Institute - Breach of Contract https://old.ghalii.org/tags/breach-contract en Glencore A.G v Volta Aluminum Company Limited (J4/40/2013) [2015] GHASC 10 (28 January 2015); https://old.ghalii.org/gh/judgment/supreme-court/2015/10-1 <div class="field field-name-field-flynote-sync field-type-taxonomy-term-reference field-label-above"><div class="field-label">Flynote:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/tags/cl" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">CL</a></div><div class="field-item odd"><a href="/tags/special-damages" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Special Damages</a></div><div class="field-item even"><a href="/tags/general-damages" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">General Damages</a></div><div class="field-item odd"><a href="/tags/breach-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Breach of Contract</a></div><div class="field-item even"><a href="/tags/damages" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Damages</a></div></div></div><div class="field field-name-field-headnote-and-holding field-type-text-long field-label-above"><div class="field-label">Headnote and Holding:&nbsp;</div><div class="field-items"><div class="field-item even"><p>The plaintiff/appellant unsuccessfully sued the defendant/respondent for breach of contract following the latter’s refusal to accept delivery of the relevant goods. Curtailing the appellant’s sizeable claim for special damages, the High Court awarded only nominal damages – an order later confirmed by the Court of Appeal.</p> <p>At the Supreme Court, the scope of section 48 of the Sale of Goods Act (the act) was elucidated: the computation of damages thereunder may be either general or special depending on the circumstances of each case. General damages refer to those which are foreseeable without proving that special circumstances were brought to the breaching party’s attention. Special damages are those which are foreseeable by the parties at the time of contracting because certain circumstances have been highlighted which render the damages within the realm of the signatories’ reasonable contemplation. These must be pleaded and proved at trial.</p> <p>The plaintiff’s claim for special damages for the losses suffered by the breach was not proven before the High Court and were subsequently abandoned. The Supreme Court thus took the plaintiff to be entitled only to general damages under section 48 of the act. To this end, the plaintiff did not lead any evidence on the multipliers which would entitle the court to award enhanced damages. Section 48 caters to the contract price/market price differential and not to a computation of lost profits. The plaintiffs failed to adduce sufficient evidence to merit the proposed determination of damages and so the nominal award made by High Court in terms of s 48 was adequate.</p> <p>The appeal was dismissed.</p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"><p class="rtecenter"> </p> <p class="rtecenter"> </p> <p class="rtecenter"><strong>IN THE SUPERIOR COURT OF JUDICATURE</strong></p> <p class="rtecenter"><strong>IN THE SUPREME COURT</strong></p> <p class="rtecenter"><strong> ACCRA AD-2015</strong></p> <p> </p> <p class="rteright"><strong><u>CIVIL APPEAL</u> NO. J4/40/2013</strong></p> <p class="rteright"><strong> 28<sup>TH</sup> JANUARY 2015</strong></p> <p> </p> <p><strong>GLENCORE A.G………………PLAINTIFF/APPELLANT</strong></p> <p><strong>VRS                                         APPELLANT</strong></p> <p><strong>VOLTA ALUMINUM ………...DEFENDANT/RESPONDENT</strong></p> <p><strong>COMPANY LIMITED…………RESPONDENT</strong></p> <hr /> <p class="rtecenter"><strong>JUDGMENT</strong></p> <hr /> <p><strong><u>JONES DOTSE JSC:-</u></strong></p> <p> It is provided in <em>sections 1 (1), 47, 48 (1) and (2) of the Sale of Goods Act, 1962 (Act 137) </em>as follows:</p> <p class="rteindent1"><em> “1(1) a contract for the sale of goods is a contract by which the seller agrees to transfer the property in the goods to the buyer for a consideration called the price, consisting wholly or partly of money.”</em></p> <p class="rteindent1"><strong><em>47. Damages for non-acceptance</em></strong></p> <p class="rteindent1"><em> (1) Where the buyer wrongfully neglects or refuses to accept and pay for the goods in accordance with the terms of the contract, the seller may maintain an action against the buyer for damages for non-acceptance.</em></p> <p class="rteindent1"><em> (2) In a contract for the sale of goods to be delivered by instalments,</em></p> <p class="rteindent1"><em> (a) if each instalment is to be separately paid for, subsection (1) shall apply to each instalment separately, <strong>but where the buyer has by words or conduct shown an intention to repudiate the contract the seller may, if the seller accepts the repudiation, maintain an action for damages for non-acceptance in respect of the goods;</strong></em></p> <p class="rteindent1"><em> (b) in any other case, a breach in respect of one or more instalments shall be treated for the purposes of subsection (1) as though it were a breach in respect of the whole contract or of the remaining part of the contract.</em></p> <p class="rteindent1"><strong><em>48.    Assessment of damages</em></strong></p> <p class="rteindent1"><strong><em>(1) The measure of damages in an action for damages is the loss which could reasonably have been foreseen by the buyer at      the time when the           contract was made as likely to arise from the breach of contract.</em></strong></p> <p class="rteindent1"><em>(2) Where there is an available market for the goods, the measure of damages is prima facie to be ascertained by the <strong>differences between the contract price and the market or current price.</strong></em></p> <p class="rteindent1"><em>(a) If a time has been fixed for acceptance, <strong>or if the buyer repudiates the contract before the time of performance, and the seller does not accept the repudiation, at the time or times when thegoods ought to have been           accepted.</strong></em></p> <p class="rteindent1"><em>(b) <strong>In any other case, at the time or times of the refusal to accept the goods</strong>.” Emphasis supplied.</em></p> <p><strong>BRIEF FACTS</strong></p> <p>This is an appeal by the Plaintiff/Appellant/Appellant, hereafter referred to as the Plaintiff against the decision of the Court of Appeal rendered on 7<sup>th</sup> day of July, 2011 which also affirmed the decision of the High Court, dated 13<sup>th</sup> November 2009 by which the Defendants/Respondents/Respondents hereafter referred to as the Defendants were directed to pay the Plaintiff’s, general damages of GH¢25,000.00.</p> <p><strong>PLAINTIFF’S CLAIMS IN THE TRIAL HIGH COURT</strong></p> <p>The Plaintiff claimed the following reliefs against the defendants:</p> <p class="rteindent1">a.       A declaration that, on the basis of the correspondence between, the conduct of the Plaintiff and Defendant, a valid and binding contract existed between them for the sale of <strong>26,250 metric tons of alumina by the Plaintiff to the Defendant.</strong></p> <p class="rteindent1">b.       A declaration that in as much as the Defendant indicated its refusal and/or refused to accept delivery of the <strong>26, 250 metric tons of alumina</strong> from the Plaintiff, the Defendant breached the contract between it and Plaintiff.</p> <p class="rteindent1"><strong>c.       General damages for breach of contract.</strong></p> <p class="rteindent1">d.       Special damages in the sum of US$6,918,750, which the Plaintiff has lost as a result of the Defendant’s breach, and the subsequent fall in the price of alumina.</p> <p class="rteindent1">e.       Costs, including solicitors’ fee.”</p> <p>Even though the parties in this case testified and were cross-examined, the material evidence upon which their contractual relationship was founded and established had been based mainly on electronic communication and documentary evidence. As a result, we deem it appropriate, at this stage to refer to some of the salient features of the core correspondence and or transactions between the parties with the relevant dates to support them. These are as follows:-</p> <p class="rteindent1"><strong><em>19<sup>th</sup> August 2008</em></strong></p> <p class="rteindent1">The Plaintiff made an offer of the Alumina to the Defendant valid till 4 pm New York time on the next day</p> <p class="rteindent1"><strong><em>20<sup>th</sup> August 2008</em></strong></p> <p class="rteindent1">The Defendant, acting through its Chief Finance Officer, Felix Gaisie, accepted the Plaintiff’s offer, with further instructions <strong><em>to “go ahead and secure it for us</em></strong>”.</p> <p class="rteindent1"><strong><em>20th August 2008</em></strong></p> <p class="rteindent1">The Defendant’s Felix Gaisie wrote to his colleague, Dela Agbo, to take steps to establish letters of credit in favour of the Plaintiff.</p> <p class="rteindent1"><strong><em>25th August 2008</em></strong></p> <p class="rteindent1">The Plaintiff emailed the defendant, nominating the “MV Pan Leader or sub” to ship the Alumina.</p> <p class="rteindent1"><strong><em>26th August 2008</em></strong></p> <p class="rteindent1">The Defendant emailed the Plaintiff approving the “MV Pan Leader or sub”.</p> <p class="rteindent1"><strong><em>29th August 2008</em></strong></p> <p class="rteindent1">The Defendant assured the Plaintiff that it needed the Alumina despite its attitude and said “you will get the signed contract”.</p> <p class="rteindent1"><strong><em>1st September 2008</em></strong></p> <p class="rteindent1">The Defendant wrote to the Plaintiff with the assurance that it was not contemplating breaching the contract, saying they were “not going back on our acceptance of your offer and apologize if that is the impression created.”</p> <p class="rteindent1"><strong><em>10th September 2008</em></strong></p> <p class="rteindent1"><strong>The Defendant emailed the plaintiff that it was no longer interested in the Alumina, as it intended to take delivery of alumina from “one of its shareholders”.</strong></p> <p class="rteindent1"><strong><em>19<sup>th</sup> September 2008</em></strong></p> <p class="rteindent1">Plaintiff nominates MV Ellicon as the new vessel for the carriage of the cargo, but there is no confirmation from the Defendant.</p> <p class="rteindent1"><strong><em>19th September 2008</em></strong></p> <p class="rteindent1"><strong>The plaintiff wrote to the defendant to accept the Defendant’s repudiation.</strong></p> <p class="rteindent1"><strong><em>17th October 2008</em></strong></p> <p class="rteindent1">On this date, M.V. Marine Bulker set sail from a port in Brazil to Nikolayev-Ukraine with alumina for Talco. See Exhibit U. The Plaintiff claimed it took this action to mitigate it’s losses.</p> <p class="rteindent1"><strong><em>24th October 2008</em></strong></p> <p class="rteindent1">The Defendant (showing renewed interest after its breach) emailed the Plaintiff that it expected the Alumina to arrive in Tema no later than mid November 2008.</p> <p class="rteindent1"><strong><em>28th – 31st October 2008</em></strong></p> <p class="rteindent1">The Plaintiff held the Alumina in transit in Gibraltar for possible shipment to the Defendant, as the Defendant showed renewed interest.</p> <p class="rteindent1"><strong><em>28th October 2008</em></strong></p> <p class="rteindent1"><strong>The Defendant wrote to the Plaintiff to state that its letters of credit had failed, compelling the Plaintiff to continue its steps in mitigation.”</strong></p> <p>It has to be noted and observed that, the vessel which finally lifted the Brazilian cargo which the Defendants contracted to buy, was MV Marine Bulker. The evidence on record indicates that there was no prior notification to the Defendants by the Plaintiffs on this new vessel.</p> <p>There is also no indication that there was prior approval by the Defendants before the Brazilian alumina was loaded onto this vessel.</p> <p>There is however indication that, the Defendants were notified by a later correspondence after the cargo had already been lifted by the vessel MV Marine Bulker.</p> <p>It is also necessary to state the following facts and chain of events in the contractual relationships between the parties.</p> <p>From the evidence on record, the Plaintiff contractually agreed to lift 26,250 metric tons of Brazilian alumina for the Defendant and an Australian alumina for another company called TALCO in one of the former Soviet Republics.</p> <p>Following the Defendants breach to accept the Brazilian alumina, the Plaintiff diverted this cargo to TALCO in a bid to mitigate their losses. Having delivered the Brazilian cargo that was meant for the Defendants to TALCO, the plaintiff had to consign the Australian cargo originally meant for TALCO to China and deposited them in three warehouses until they found markets for them.</p> <p>Indeed the Plaintiff, in paragraph 55 (f) of their statement of claim averred as follows:-</p> <p class="rteindent1"><em> “By shipping the goods to TALCO, the Plaintiff was left with an unsold Australian cargo that was originally meant for TALCO.”</em></p> <p>It is therefore clear that, contractually, it is the Brazilian cargo contract that the Defendants had repudiated and it is to that contract that damages must be looked at and assessed.</p> <p>What is of interest here is that, whilst the plaintiff failed to give any details about the prices at which it sold the Brazilian cargo to TALCO, which was the original cargo meant for the Defendants, it rather sought to give some indicative prices at which it sold the Australian cargo.</p> <p>The above constitute a brief summary of the material dealings between the parties herein.</p> <p><strong>DECISION BY THE HIGH COURT</strong></p> <p>Thereafter, the case proceeded to trial, and the High Court after an evaluation of the merits of the case delivered judgment in the following terms:</p> <p class="rteindent1"><em> “In conclusion, I declare that on the basis of the correspondence between and conduct of the Plaintiff and Defendant, a valid and binding contract existed between them for the sale of 26,250 metric tons of alumina by the defendant.</em></p> <p class="rteindent1"><em>I also declare that in as much as the defendant indicated its refusal and/or refused to accept delivery of the 26,250 metric tons of alumina from the plaintiff, the defendant breached the contract between it and plaintiff.</em></p> <p class="rteindent1"><strong><em>I will hold that plaintiff is entitled to general damages and award damages of GH¢25,000 in favour of Plaintiff. I will however hold that plaintiff is not entitled to the special damages being claimed.”</em></strong></p> <p><strong>APPEAL TO COURT OF APPEAL AND JUDGMENT </strong></p> <p>Dissatisfied with the decision of the High Court, the Plaintiff unsuccessfully appealed against the Judgment to the Court of Appeal. In it’s judgment of even date already referred to supra, the Court of appeal in a unanimous decision dismissed the appeal in the following terms:-</p> <p class="rteindent1">“<em>Having closely looked at all the relevant evidence in the Record of Appeal including the exhibits tendered, I am of the view that the plaintiff’s case is not founded on any loss or damages it incurred on the price of mid November Australian alumina it contracted with Talco and the actual sale price of the Australian cargo sold to Chinese companies. <strong>The plaintiff did not tender any evidence in respect of the agreed price of the November Australian alumina between the plaintiff and Talco. Nor did the plaintiff also tender the agreed price of the Brazilian alumina the subject matter of the contract which defendant repudiated, which plaintiff conveyed to Nikolayev, Ukraine or Tipo, Georgia. I am referring particularly to the agreed sale price between the plaintiff and buyers in the Ukraine or Georgia, because that specifically is the cargo in respect of which the plaintiff had a claim against the defendant. The evidence was entirely silent on this. The plaintiff’s claim is based on a perceived loss comparing 20<sup>th</sup> August 2008 Brazilian alumina price with an entirely different cargo, the subject matter of a contract between the plaintiff and Talco negotiated on the basis of November 2008 and not August 2008 alumina prices</strong>. The plaintiff admitted that the November 2008 consignment was contractually assigned to Talco and had nothing to do with Defendant and as the trial judge stated, whatever arrangement made after the repudiation of the contract by the defendant from the late September 2008 up to October 2008 represented a separate set of events.</em></p> <p class="rteindent1"><em>How much did the plaintiff sell the Brazilian cargo to Talco when it was conveyed to Ukraine or Georgia after the repudiation of 10<sup>th</sup> September 2008 and acceptance of the breach of plaintiff on September 19, 2008? <strong>There was nothing in the evidence on this to enable a clinical statutory assessment to be made by the trial court or in this court.</strong></em></p> <p class="rteindent1"><strong><em>We think, in the circumstances, it was within the discretion of the learned trial judge to award nominal damages, even if she did not advert her mind to the issue of statutory damages as defined in section 48 of Act 137 in her judgment.</em></strong></p> <p class="rteindent1"><em>The appeal in the circumstances is dismissed and the judgment of the trial court, awarding nominal damages affirmed.”</em></p> <p><strong>APPEAL TO SUPREME COURT</strong></p> <p>As the Plaintiffs’ were still dissatisfied with the decision of the Court of Appeal, they appealed to this court, because the Court of Appeal:-</p> <p class="rteindent1">a.       awarded a low figure as general damages; and</p> <p class="rteindent1">b.       declined to award special damages</p> <p><strong>GROUNDS OF APPEAL</strong></p> <p>The following then constituted the grounds of appeal by the Plaintiff to this court:</p> <p class="rteindent1"><strong>a.       “The Court of Appeal erred when it affirmed the High Court’s award of general damages on the basis that there were no multipliers in the evidence to guide the assessment of general damages.</strong></p> <p class="rteindent1">b.       The Court of Appeal came to the wrong conclusion when it found that the consequential loss claimed by the Appellant was too remote to warrant the award of special damages.</p> <p class="rteindent1">c.       The decision of the Court of Appeal was against the weight of the evidence.”</p> <p><strong>RELIEFS SOUGHT FROM THE COURT OF APPEAL</strong></p> <p>The reliefs which the plaintiff seeks from this court are:-</p> <p class="rteindent1">a.       “An upward variation of the general damages affirmed by the Court of Appeal; and</p> <p class="rteindent1">b.       A reversal of the decision of Court of Appeal declining the grant of special damages.”</p> <p>It is to be noted and observed that, in their submissions in their statement of case, learned Counsel for the plaintiffs, submitted as follows:-</p> <p><strong><em> “For reasons to be given near the end of this statement of case, the appellant will abandon grounds B &amp; C and focus on Ground A. “</em></strong></p> <p>Indeed, learned Counsel for the Plaintiff only extensively argued ground A of the appeal, and did not profer any arguments in respect of grounds B &amp; C. These are therefore to be considered as having been abandoned.</p> <p>It is again interesting to note and observe that, learned counsel for the Plaintiffs in their statement of case stated as follows:-</p> <p class="rteindent1"> “<strong><em>It is admitted that no evidence was provided of how much the appellant sold the rejected alumina to Talco for.</em></strong><em> However, we submit (and will demonstrate) that this was no reason not to assess damages properly and in accordance with the Sale of Goods Act, 1962 (Act 137).”</em></p> <p>We have indeed verified the above statement and found it to be correct in the sense that, the plaintiffs did not provide any evidence of the said particulars of sale of this Brazilian Cargo to TALCO.</p> <p>At the trial court, the plaintiff’s did not anchor their case on the Sale of Goods Act, 1962, Act 137 specifically, although the facts stated therein fitted into a contract under the Sale of Goods Act.</p> <p>In view of the fact that the appeal has been narrowed down to the Court of Appeal’s affirmation of the High Court’s award of general damages on the basis that there were no multipliers in the evidence to guide the assessment of general damages, it is considered worthwhile to quote in extenso portions of the High Court judgment on this issue. This is to fully understand why the learned trial Judge dismissed the special damages and also <strong>awarded only nominal damages by way of general damages.</strong></p> <p><strong>REASONS FOR THE HIGH COURT DECISION</strong></p> <p class="rteindent1"><em>“From the totality of the evidence adduced, it is my opinion that P.W1 did not lead sufficient evidence to convince the court that the cargo on board the vessel M/V Maren Bulker was originally meant for Defendant. <strong>Indeed,</strong> <strong>that the conditions required for the delivery of the goods pursuant to the contract of sale had not been satisfied.</strong></em></p> <p class="rteindent1"><em>Defendant has also made a case that the vessel M/V Maren Bulker had never been nominated by the Plaintiff and approved by the Defendant as was required. The Plaintiff relied on a draft commercial invoice attached to the Plaintiff’s draft contract of sale dated 24<sup>th</sup> October 2008 and tendered in evidence as exhibit “AA”, in support of shipment. This email was sent to Defendant after the M/V Maren Bulker had set sail on October 17, 2008.</em></p> <p class="rteindent1"><em>For a start, notice cannot be retroactive; notice was required to be given in advance. This is because prior approval of Defendant was required before any loading or dispatch of any cargo, the subject matter of the contract between the parties. It is in line with this that in August 2008, the vessel Pan Leader was nominated and approved by the parties, subsequently, Plaintiff nominated M/V Elikon. According to D.W.I the essence of giving Defendant prior notice of the vessel nominated by Plaintiff <strong>is to ensure that the vessel would fit into the dock of the buyer and secondly to vet the last five cargo carried by the vessel to ensure that the current cargo would not be contaminated by the previous cargo. Plaintiff did not challenge this evidence.</strong></em></p> <p class="rteindent1"><em>D.W.1 also stated that Defendant had to be notified of Plaintiff’s intention to load a vessel so that Defendant could exercise its option of either choosing to be there to supervise the loading or nominate an agent to do it. Also, Defendant had not notified Plaintiff of the establishment of Letters of credit, which was the mode of payment.</em></p> <p class="rteindent1"><em>The evidence led is that the first time Defendant became aware of the vessel was an invoice. So on October 25, 2008 Defendant wrote to P.W.1 that it had noticed an error on the face of the commercial invoice. Plaintiff did not provide any satisfactory explanation as to why it did not give Defendant prior official notification of the nomination of the vessel M/V Maren Bulker.</em></p> <p class="rteindent1"><em>It is Plaintiff’s further case that it secured the vessel on 28<sup>th</sup> August 2008 under a Charter Party Agreement which is referred to in the Bill of Lading dated 17<sup>th</sup> October 2008, and covering the goods consigned to Talco. P.W.1 tendered in evidence a copy of the said Charter Party (exhibit “AD”) and Bill of Lading (exhibit “U”). <strong>The Defendant called as a witness, Mr. Kofi Mbiah, Chief Executive Officer of Shippers Council. His evidence, which I accept, was that the Bill of Lading in question did not make reference to the Charter Party dated 28<sup>th</sup> August 2008, but rather to a Charter Party dated 23<sup>rd</sup> September 2008. Furthermore, the Bill of Lading is not transferable on its face and thus could not have passed title to Defendant</strong>.</em></p> <p class="rteindent1"><strong><em>The damage that Plaintiff is contending it suffered is, in my opinion therefore, too remote, and I will so find.</em></strong><em> In the circumstances Plaintiff cannot claim to have mitigated its loss by sending the cargo to Talco. </em></p> <p class="rteindent1"><em>Also the basis for the claim for demurrage against the Defendant has not been proved. The decision to send the vessel for maintenance was a decision, which the Plaintiff admits it took on its own; the same applies to the decision to hold the vessel for up to 31<sup>st</sup> December 2008.” </em></p> <p>Concluding her delivery, the learned trial Judge also gave the following explanation for the award of the nominal damages.</p> <p class="rteindent1"><em> “It is trite learning that the measure of damages is a computation of how much money must be paid by the party in breach to the innocent party. The purpose is to put the innocent party in nearly the same position that he would have been had the other party not breached the contract. In<strong> Royal Dutch Airlines (KLM) &amp; Another v Farmex Limited [1989-90] GLR 266, </strong>the Supreme Court held that on the measure of damages in breach of contract, the principle adopted by the Courts was restitution in integrum i.e. if the Plaintiff has suffered damages – not too remote- he must, as far as money could do it, be restored to the position he would have been in had that particular damage not occurred. <strong>Plaintiff therefore ought to be compensated for the expenses incurred in instituting the instant action.</strong></em></p> <p class="rteindent1"><em>The plaintiff has not made any other claim for special damages<strong>. For the plaintiff to be awarded special damages it has to establish what loss it has suffered by reason of the breach by leading evidence as to the quantifiable loss.</strong> In the absence of evidence as to any quantifiable loss suffered, Plaintiff will only be entitled to the award of general damages. See <strong>Yungdong Industries Limited v Roro Services [2005-06] SCGLR 819.</strong></em></p> <p class="rteindent1"><em>In the case of <strong>Delmas Agency Ghana Limited v Food Distributor International Limited [2007-2008] SCGLR 748</strong>; the general principle relating to damages was expatiated on. <strong>It was held that general damages are as the law will presume to be the natural or probable consequence of    the Defendant’s act. It ari</strong>ses by inference of the law and therefore need not be proved by evidence.    The law implies general damages in every infringement of an absolute right. <strong>The catch, it was further stated, is that only nominal damages are awarded;</strong> where the Plaintiff has suffered a properly quantifiable loss; he must plead specifically his loss and prove it strictly. If he does not, he is not entitled to anything unless general damages are also appropriate. In the instant case, on the evidence   adduced by Plaintiff, I am of the opinion that Plaintiff is entitled to general damages.”</em></p> <p>These quotations are necessary because they explain why the Court of Appeal did not disturb those findings of fact.     </p> <p><strong>REASONS WHY THE COURT OF APPEAL DID NOT DISTURB THE FINDINGS OF FACT BY THE TRIAL COURT</strong></p> <p>The following constitute the main reasons why the Court of Appeal did not disturb the findings made by the trial court:</p> <p class="rteindent1"><em> “I have closely considered the findings of the trial judge in respect of the cargo carried on the MV Maren Bulker and I find no cause to disturb those findings as the plaintiff insisted at all times that its conduct with regard to the goods on the vessel were intended to mitigate its loss. As acts done in mitigation occur after a breach or anticipated breach, there is no reason to conclude that there was a subsisting contract between the Plaintiff and Defendant in relation to the Brazilian cargo carried on the MV Maren Bulker given that the plaintiff concedes in its reply to the Defendant’s written submission that the appeal herein is not targeted at the decision of the trial court as to whether there was a valid contract between the plaintiff and the Defendant which was breached, <strong>but the appeal is targeted only at the treatment of damages, both general and special, by the trial court.”</strong></em></p> <p><strong>ANALYSIS OF THE STATEMENTS OF CASE FILED FOR AND ON BEHALF OF THE PARTIES</strong></p> <p>We have perused the erudite and well researched statements of case filed for and on behalf of the parties by their learned counsel. We take this opportunity to congratulate them for assisting this court with the detailed submissions contained in their statements of case.</p> <p><strong>FOR THE PLAINTIFF’S</strong></p> <p>Learned Counsel for the Plaintiff, anchored his submission on the following core issues:-</p> <p class="rteindent1">1.       That the Court of Appeal failed to consider the CRU monitor which according to Counsel ought to have been considered.</p> <p class="rteindent1">2.       That, section 48 (2) of the <em>Sale of Goods Act 1962 (Act 137)</em> is relevant in the computation of the damages flowing from the breach of contract by the Defendants.</p> <p>In this respect, learned Counsel for the Plaintiff’s submitted that in the assessment of damages arising from the Brazilian alumina cargo that was sold by Plaintiff’s to TALCO, the said section 48 (2) of the Act had to be applied.</p> <p>The position was stated by the Plaintiffs as follows:-</p> <p class="rteindent1"><em> “The position of the law on assessment of damages where a buyer breaches a sale of goods contract is that the court must calculate the damages by subtracting the market value of the goods at the time the goods ought to have been accepted (or at the time of the breach, where applicable) from the value of the goods at the time the contract was formed.”</em></p> <p>In discussions and analysis which will soon follow, it will be examined whether the plaintiff provided the material evidence upon which the said computation could have been applied. Even so, the court will have to consider whether taking all the facts into context, Plaintiff’s are entitled to the statutory damages under the Sale of Goods Act, or not.</p> <p class="rteindent1">3.       The Plaintiff also argued that, the re-sale of the rejected cargo is irrelevant in the assessment of damages as is stated in section 48 (2) of <em>Sale of Goods Act 1962 (Act 137).</em></p> <p class="rteindent1">4.       Finally, learned Counsel for the Plaintiff argued that, even though the first appellate court, (the Court of Appeal) confirmed and affirmed the findings of fact made by the trial High Court, this second appellate Court (Supreme Court) can for good reasons especially where the said findings are perverse, depart from them and make new findings of fact provided they can be supported by the record of appeal.(ROA)</p> <p>See cases such as the following:-</p> <p><strong>1.      Mensah v Mensah [2012]1 SCGLR 391</strong></p> <p><strong>2.      Gregory v Tandoh IV &amp; Anr. [2010] SCGLR 971</strong></p> <p><strong>3.      Obeng v Assemblies of God [2010] SCGLR 300 </strong></p> <p>Just to mention a few.</p> <p>However, we wish to state that having evaluated the findings of fact made by the trial court and same affirmed by the Court of Appeal, this Court does not see anything perverse to merit a reversal of the said findings of fact.</p> <p><strong>STATEMENT OF CASE BY DEFENDANTS</strong></p> <p>Even though learned counsel for the Defendants argued many points in response to that of the plaintiff, in substance, the issues considered germane to this appeal are the following:-</p> <p>i.        That the Plaintiff’s case has been anchored on a non-existent contract. This preposition has been based on the fact that, even though conclusive findings of fact have been made to establish the fact that the agreement between the parties was entered into on 20<sup>th</sup> August 2008, the fact remains that, there were some loose ends of this agreement, which needed to be tidied up.</p> <p>For example, the nomination and acceptance of the vessel to lift the   cargo, the request by Defendants to vary the price, the establishment of a valid L/C, etc all remained to be resolved. It is this which stretched the agreement to October 2008 on the basis that it had not been finalized. Can those factors be taken into consideration in looking at the 20<sup>th</sup> August 2008 contract?</p> <p>ii.       That the Plaintiff failed to prove the actual loss it has suffered by reason of the Defendant’s breach of contract, and whether these must be taken into consideration.</p> <p>A perusal of the above submission gives an indication that the defendant’s have not appreciated the total abandonment of the grounds of appeal on special damages. Since this ground of appeal has been abandoned, there is no justification for holding on to it. It is therefore of no consequence.</p> <p>iii.      That the Plaintiff’s case in the Supreme Court constitutes a departure from its pleadings and arguments in the lower courts. For that reason, they cannot argue a fresh point of law on appeal.</p> <p>This argument has been anchored on the basis that, the plaintiff’s claim in this court for statutory damages under the Sale of Goods Act, 1962 (Act 137) not having been the case it argued in the trial court, constitutes a departure from its pleadings and the set up of an entirely new case.</p> <p>The resolution of this issue like the previous one poses no problems. We will therefore deal with it peremptorily. It has to be noted that, the facts upon which the plaintiff’s based their claims throughout from the trial court, through to the 1<sup>st</sup> appellate court and this court have basically been the same, save for semantics in the submissions of learned counsel.</p> <p>The reference and reliance on the Sale of Goods Act, is a question of law. The Law is presumed to be in the bosom of the Judge, and it does not really matter whether the parties specifically made reference to the sale of Goods Act or not. The Court is presumed to apply any applicable law to a given set of facts.</p> <p>For example, the transaction in the instant case between the parties even though not specifically mentioned, is one under section 1(1) of the Sale of Goods Act, which states that <em>“Contract for the sale of goods is a contract by which the seller agrees to transfer the property in the goods to the buyer for a consideration called the price, consisting wholly or partly of money.”</em></p> <p>Applying the above definition to the contract that was deemed to have been entered into between the parties herein in or about 20<sup>th</sup> August, 2008 is one covered by the definition in section 1 (1) of the Sale of Goods Act.</p> <p>Thus, once the facts of the case support the legal position stated in the Sale of Goods Act, it is incumbent and imperative for the courts to apply such a law. As a matter of fact, being an issue, regulated by substantive law, means that it cannot be ignored once the facts relate to the given situation.</p> <p>However, the issues of whether the losses of the Plaintiff have been caused by the proximate or remote acts of the Defendants to make them liable for the damages therein under the rule in <strong><em>Hadley V Baxendale (1854) 9 Exch 341</em></strong> will be considered under a separate and detailed discussion.</p> <p>iv.      Learned Counsel for the Defendant, ended his submissions in the statement of case to the effect that the Plaintiff’s case cannot be brought under section 48 of the Sale of Goods Act, (Act 137).</p> <p>This is one of the   core and contentious issues to be determined in this appeal. For now, it is safe to conclude that, once the Plaintiff’s have pleaded certain facts which give rise to a specific situation in which some provisions of the Sale of Goods Act, 1962, (Act 137) can be said to be applicable, it cannot be said that, the Plaintiff’s case does not come under section 48 of Act 137.</p> <p><strong>What this court is therefore called upon to consider in this appeal is whether the application of section 48 of Act 137 and the computation of damages, so copiously relied upon by the plaintiff is applicable to the circumstances of this case if at all.</strong></p> <p>In resolving the issues raised in this appeal, we are of the view that, this court must consider whether the application and interpretation urged upon this court by the Plaintiff’s reliance on section 48 of the Sale of Goods Act, considering the evidence led by them in support, including the CRU monitor is sufficient to have enabled the trial court and any other court make a finding for them in terms urged upon this court in respect of the award of general damages.</p> <p>Whenever it has been ascertained by a court of law, that a buyer has wrongfully neglected or refused to accept goods which it had contracted to buy from the seller, pursuant to section 47 (1) of the Sale of Goods Act, 1962 (Act 137) the seller may maintain an action against the buyer for damages for the non-acceptance.</p> <p>In this case, it would therefore mean that the Plaintiff’s may take an action against the Defendant’s for this breach of contract. The facts in this case are very well known and the Plaintiff’s have exercised the options available to them under the law and that is why they are in this court.</p> <p>Furthermore, section 48 (1) of Act 137 has circumscribed the measure of damages that is available to be proven by the seller in case it institutes an action. This is defined as <em>“the measure of damages in an action for damages is the loss which could reasonably have been foreseen by the buyer at the time when the contract was made as likely to arise from the breach of contract.”</em></p> <p>The above provisions are the exact re-statement of the locus classicus principle in the case of <strong><em>Hadley v Baxendale (1854) 9 Exch 341 156. E.R.145.</em></strong></p> <p>The Supreme Court, speaking with unanimity in the case of <strong><em>Tema Oil Refinery v African Automobile Ltd. [2011] 2 SCGLR 907</em></strong>, at <em>pages 929 to 930</em> explained in detail this case of Hadley v Baxendale in the following terms:-</p> <p class="rteindent1"><em> “The locus classicus on the rule regarding remoteness of damage in contract which is applicable when the damages being claimed are general or unliquidated is to be found in the decision in Hadley v Baxendale [1854] 9 Exch 341 earlier referred to. In this case, the plaintiff’s mill was brought to a standstill by the breakage of its only crankshaft. The defendant carriers failed to deliver the broken shaft to the manufacturer at the time it had promised to do, and the plaintiff sued to recover the profits it       would have made had the mill been started again without the delay. The    Court rejected the claim on the ground that the facts known to the defendant were insufficient to show reasonably that the profits of the mill must be stopped by an unreasonable delay in the delivery of the broken shaft by the carriers to the third person. Expatiating on the judgment of the court, Baron Alderson, explained the rationale for its judgment thus:</em></p> <p class="rteindent1"><em> “Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either as arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract as the probable result of the breach of it.</em></p> <p class="rteindent1"><em>Now, if the special circumstances under which the contract was actually made were communicated by the plaintiff’s to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated. But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances, from, such a breach of contract”. </em></p> <p>The statement of Baron Alderson in the <strong><em>Hadley v Baxendale</em></strong> case continued thus:-</p> <p class="rteindent1"><em> “For had the special circumstances been known, the parties might have specially provided for the breach of contract by special terms as to the damages in that case, and of this advantage it would be very unjust to deprive them. Now the above principles are those by which we think the jury ought to be guided in estimating the damages arising out of any breach of contract… But it is obvious that in the great multitude of cases of millers sending off broken shaft’s to third persons by a carrier under ordinary circumstances, such consequences would not, in all probability, have occurred, and these special circumstances were never communicated by the plaintiffs to the defendants. It follows, therefore, that the loss of profits here cannot reasonably be considered such a consequence of the breach of contract as would have been fairly and reasonably contemplated by both the parties when they made this contract.”</em></p> <p>It can therefore be stated with some degree of emphasis that Hadley v Baxendale establishes two limbs of foreseeability; and these are; (i) damages which are foreseeable from the nature of the breach itself and (ii) damages which are foreseeable by the parties at the time of contracting because special circumstances have been brought to their attention which make the damages within the reasonable contemplation of the parties.</p> <p>Chitty on Contracts, General Principles, (25<sup>th</sup> ed) paragraph 1692 states on this principle thus:</p> <p class="rteindent1"><em> “The principle laid down in <strong>Hadley v Baxendale</strong> have been interpreted and restated by the Court of Appeal in 1949 in <strong>Victoria Laundry (Windsor) Ltd v Newman Industries Ltd. [1949] 2 KB 528</strong> and by the House of Lords in 1967, in <strong>Koufos v C. Czarnikow Ltd (The Heron II) [1969] 1 AC 350.”</strong></em></p> <p>The learned Authors of Chitty on Contracts then summarized the effect of these decisions and its import on the rule in <strong><em>Hadley v Baxendale</em></strong> as follows:-</p> <p class="rteindent1"><em> “A type or kind of loss is not too remote or consequence of a breach of contract if, at the time of contracting (and on the assumption that the parties actually foresaw the breach in question) it was within their reasonable contemplation as a not unlikely result of that breach.”</em></p> <p>Under the circumstances of this case, and considering the information available to the defendants, what would a reasonable man in their position have expected a repudiation of the Brazilian alumina cargo to be?</p> <p>Is it reasonable under the circumstances to foresee that such a breach would lead to the defendants being saddled with the difference in money value in respect of an Australian alumina cargo in respect of which they had never been aware off?</p> <p>Similarly, even in respect of the Brazilian Cargo, can the losses be said to be sufficiently likely to result from the breach of the contract and to make it proper for them to be held liable for the losses as if they flowed naturally from the breach or that the loss should have been within their contemplation? From the settled findings of the trial court and confirmed by the first appellate court, it appears there is no such proximate or remote cause to enable the Defendants to be liable for the exemplary damages being urged on this court by the plaintiffs.</p> <p>We have referred to portions of the findings by the learned trial Judge on how the Plaintiff claimed to have secured the vessel on 28<sup>th</sup> August, 2008 under a Charter Party Agreement dated 17<sup>th</sup> October 2008 marked in the ROA as Exhibit AD. The bill of lading supposedly in proof of this is marked as exhibit U in the ROA.</p> <p>We have verified all the said findings and found them to be correct. For example, the Bill of lading, exhibit U, is consigned to the <em>“Order of TALCO management”</em> and is non negotiable.</p> <p>The port of discharge is NIKOLAYEV, Ukraine or Poti, Georgia, and the vessel named is MV Maren Bulker, and the cargo therein is stated to be <em>“Sandy metalluigical Grade Alumina</em>” with a gross weight of 26, 249.79 MT.</p> <p>This Bill of lading was dated 17<sup>th</sup> October 2008 in Brazil. Exhibit AD, the Charter Party on the other hand was dated 28<sup>th</sup> August, 2008 and it is the instrument by which the vessel was secured.</p> <p>However, it is worth noting that, the bill of lading exhibit U did not make any reference to the Charter Party dated 28<sup>th</sup> August 2008, exhibit AD, but rather to another Charter Party dated 23<sup>rd</sup> September 2008 which is of no relevance to the Defendants. Plaintiff’s representative testified in court that on 17<sup>th</sup> October 2008 the MV Marine Bulker set sail from Villa Do Conde Port in Brazil to Nikolayev, Ukraine.</p> <p>However, per exhibit AA, dated 24<sup>th</sup> October 2008, the Plaintiff’s per an email also of even date, exhibit Z communicated thus:-</p> <p class="rteindent1"><em> “Charles/Felix,</em></p> <p class="rteindent1"><em>Pls. see attached for the new contract and invoice covering our latest agreement. To reiterate our position – please be advised in the event that VALCO fails to open a letter of credit from a bank acceptable to Glencore by the close of business on October 31, we well revert to the existing terms of our agreement (namely $465/ton price). Regards Matt”</em></p> <p>Exhibit AA is the Alumina Supply Agreement between the Plaintiff and Defendant, dated <strong>24<sup>th</sup> October 2008.</strong></p> <p>The question that begs for an answer is this:-</p> <p><strong>If the Brazilian cargo, meant for the Defendants, had already been consigned and shipped to TALCO on board MV. Maren Bulker on the 17<sup>th</sup> October 2008, what was there for the Plaintiff’s to enter into an agreement with the Defendants to buy a Brazilian Cargo of 26, 250 metric tones of alumina as per exhibit AA dated 24<sup>th</sup> October 2008?</strong></p> <p>Quite clearly it is apparent that the cargo on board the MV Maren Bulker was not meant for the defendants as is clearly depicted by the Bill of lading, exhibit U.</p> <p>Indeed the following explanation by the Plaintiff’s representative in his testimony exposes the lack of candour on the part of Plaintiffs. He explained thus:</p> <p class="rteindent1"><em> “On August 28<sup>th</sup> when defendant asked us to secure the cargo, we did. However, in the alumina industry you need to take your cargoes. So when that cargo secured we needed to move it. It was clear at that time that defendant was not performing, so we needed to make a decision on where to send the cargo.</em></p> <p><em>After reviewing our options, our shipping department decided the best place to send the cargo was to Talco, an alumina smelter in Tajikistan”.</em></p> <p>From all the above analysis, it is quite certain that the findings of fact made by the learned trial Judge on very key material issues have been supported by the evidence in the appeal record.</p> <p>This is because, exhibit U, did not make reference to the Charter Party of relevance to the Defendants, which is dated 28<sup>th</sup> August 2008, but rather as exhibit AD indicates to a charter party dated 23<sup>rd</sup> September 2008.</p> <p>In view of the legal position that such documents are not transferable, on its face value, title to the cargo could not in any case have been passed onto the Defendants.</p> <p>As a matter of fact, having considered the merits of the plaintiff’s case in detail we are inclined to accept the conclusions of the learned trial Judge, which were accepted and confirmed by the Court of Appeal that the damages the plaintiff contended it suffered are neither proximate nor within permissible remote limits to entitle them to any meaningful award of damages. See also the case of <strong><em>Delmas America Line v Kisko [2003-2005] 2 GLR 544</em></strong>, holding 3 where the Supreme Court expatiated on computation of damages in similar circumstances:</p> <p class="rteindent1"><em> “The measure of damages for the undelivered portion of the goods was <strong>the difference between the cost of the goods and their market price at the</strong> <strong>contracted place of destination</strong>. </em></p> <p class="rteindent1"><em>Since the goods had not been delivered an adjustment could not be made for freight and other allowances because freight was a separate item of cost from the cost of goods even in C &amp; F shipment term. Thus, the trial judge was right in excluding freight from the calculation of damages for non-delivery. In any case, the list of lost goods presented by the plaintiffs themselves, exhibit K, provided only the cost of the goods and made no reference to freight cost. However, since the court awarded exactly the figure provided by the plaintiffs as damages, no provision had been made for the element of damages that was to be used to compensate the aggrieved plaintiffs. On the evidence, however, the figures in exhibit K were certainly inflated because they were higher than those in exhibit B, the pre-litigation invoice submitted by the suppliers from which they were extracted.<strong> Unfortunately, the plaintiffs did not indicate the actual quantum of damages they had suffered.</strong> The court would therefore use the more credible figures extracted from exhibit B in respect of the undelivered or lost goods, adjust them by a margin of ten per cent and grant that sum as general damages. Since they did not plead a higher profit margin as special damages no such award would be made.”</em></p> <p>Speaking generally on the issue of the proximate and or remoteness of damage in the Plaintiff’s case, we believe it is the several weaknesses in the formulation of the Plaintiff’s case as had been enumerated in the judgments of the two lower courts, and further explained herein that had completely eroded any strength that the plaintiff’s had in their quest for enhanced award of damages.</p> <p>What must be noted is that, if the Brazilian Cargo was even not meant for the defendants, then the Australian cargo, which was not what they even contracted for would be too remote to merit any discussion on whether to consider the award of the statutory damages as is stipulated in section 48 (2) of the Sale of Goods Act, 1962 (Act 137).</p> <p>Section 48 (2) of the Sale of Goods Act, connotes that, where a market is available for the repudiated goods the measure of damages is <strong><em>difference money,</em></strong> and that means, the difference between the contract price and the market price.</p> <p>This then would imply application of general contract law principles to sale of goods contracts. Difference money as stipulated under section 48 (2) constitutes the <strong>foreseeable loss</strong> where there is an available market.</p> <p>In considering the application of this section 48 (2) of the Sale of Goods Act, it has been very difficult to find local decided cases on the issue.</p> <p>We have been persuaded by the decision of the England and Wales High Court (Commercial Court) in the case of <strong>Glencore Energy UK Ltd v Cirrus Oil Services Ltd. </strong>No. [2014] EWHC87 Comm. Case No. 2012 Folio 936 dated 24<sup>th</sup> January 2014, Coram Justice Cooke, and the American appellate Court of Illinois in the case of<em> <strong>Oloffson v Coomer 1973 II III App. 3d. 918, 296 N.E. 2D 871</strong>, coram: Alloy J.</em></p> <p>Since we would want to draw some parallels from the above English and American cases, we will set out the facts in extenso and also the relevant statutory provisions which are in pari materia to our own section 48 of the Sale of Goods Act, and finally the decisions of the courts.</p> <p><strong>FACTS OF THE CASE – GLENCORE V CIRRUS</strong></p> <p>In this action the claimant (Glencore) sought damages from the defendant (Cirrus Oil) for repudiation of a contract alleged to have been made on 4th April 2012 for the sale of 630,000 barrels of Ebok oil. Glencore's case is that the contract was concluded when a "firm offer" made in an email of 3rd April 2012 was accepted by a "good news" email from Cirrus Oil on the morning of 4th April 2012 in the context of negotiations which had been conducted between Mr Anthony Stimler for Glencore and Mrs Ivy Owusu for Cirrus Oil.</p> <p>Ebok is a young oil field in Nigeria with several different wells and reservoirs. Commercial production commenced only in December 2010. It was agreed between the parties that Ebok crude oil is invariably produced and sold as a blend of oil from various wells or reservoirs within the Ebok field. The field is subject to a joint venture between Oriental Energy Resources and Afren Plc, with production controlled by Afren. The oil produced was sold on behalf of the joint venture by Socar Trading SA, which is the international trading arm of the Azerbaijan state oil company.</p> <p>It appears that the nature of the arrangement between Afren and Socar involved Socar purchasing the crude oil from Afren and selling it at the same price to its purchasers but receiving a marketing fee for doing so of something in excess of $0.25 per barrel.</p> <p>Following the alleged email acceptance of Cirrus Oil on 4th April 2012 Glencore purchased the relevant cargo from Socar, specifically for sale into Ghana, as the cargo was intended to be sold by Cirrus Oil to Tema Oil Refinery ("TOR").</p> <p>Very shortly after the email of 4th April 2012, it became apparent that TOR would not accept a blend of Ebok crude oil, insisting that the cargo should comprise oil from only one well, – well 16 – an assay of which had been produced to it (together with two other assays).</p> <p>Even though, many issues were set down for trial, only the following is germane to our circumstance in this case. The High Court, settled the issue thus:-</p> <p>i) “If there was a binding agreement not induced by misrepresentation, as it is common ground that Cirrus Oil refused to proceed with the contract, <strong>what damages are recoverable by Glencore? The issue between the parties here, on the basis that the loss falls to be assessed as the difference between the contract and market value of the oil, is the true open market value at the time it would have been delivered at the end of May 2012.” </strong></p> <p>The judgment of the English High Court, continued it’s analysis by expatiating on section 50 (2) and (3) of the English Sale of Goods Act, 1979, which provisions are in pari materia to our own sections 47 and 48 of the Sale of Goods Act.</p> <p class="rteindent1"> “Section 50 (2) and (3) of the Sale of Goods Act 1979 provides for damages for non-acceptance, on the basis of the prima facie rule that the loss is to be ascertained as <strong>"the difference between the contract price and the market or current price at the time or times when the goods ought to have been accepted or (if no time was fixed for acceptance at the time of the refusal to accept)", is a claim for lost profits.”</strong></p> <p>The judgment then continued by explaining the rationale for the computation of damages provided under the said sections 50 (2) &amp; (3) of the English Sale of Goods Act. It is to be noted that, this rational is applicable to our own circumstances and would have been deemed to be applicable to this case if the plaintiff’s had pleaded and led evidence on the multipliers to entitle them to claims under special damages, using the second limb to the <strong><em>Hadley v Baxendale</em></strong> principle. This is what the learned trial Commercial Judge said:</p> <p class="rteindent1"><em> “The measure of damage constituted by section 50(2) and (3) of the Sale of Goods Act was designed to compensate the <strong>seller for the loss of the bargain with the buyer by computing how much worse off the seller would be, if at the time of the breach, he had sold the goods to a substitute buyer</strong>. The measure constitutes both a ceiling and a floor to the loss claim on the assumption that the seller had gone out into the market and sold at the date of breach. Movement in the market thereafter is then excluded from the calculation on the basis that any change in the figures affected thereby is the result of the seller's own decision to </em><em>play the market.</em><em>”</em></p> <p><strong>OLOFFSON V COOMER CASE</strong></p> <p>The facts and the decision of the Appellate court of Illinois, in the case of <strong>Oloffson v Coomer</strong>, already referred to supra supports the decision we have come to in this case. In the <strong>Oloffson v Coomer</strong> case, it is to be noted that, the judgment from which Oloffson appealed awarded him as plaintiff damages, which was the difference between the contract and the market prices in June, 1970, the day upon which Coomer, the defendant first advised Oloffson he would not deliver.</p> <p>Facts and decision in the said case are as follows:-</p> <p>“Oloffson was a grain dealer. Coomer was a farmer. Oloffson was in the business of merchandising grain. Consequently, he was a “merchant” within the meaning of section 2-1-4 of the Uniform Commercial Code. (III.Rev. Stat. 1969, ch 26, $2-104). Coomer, however, was simply in the business of growing rather than merchandising grain.</p> <p>On April 16, 1970, Coomer agreed to sell to Oloffson, for delivery in October and December of 1970, 40,000 bushels of corn. Oloffson testified at the trial that the entire agreement was embodied in two separate contracts, each covering 20,000 bushels and that the first 20,000 bushels were to be delivered on or before October 30 at a price of $1.12 ¾ per bushel and the second 20,000 bushels were to be delivered on or before December 15, at a price of $1.12 ¼ per bushel. Coomer, in his testimony agreed that the 40,000 bushels were to be delivered but stated that he was to deliver all he could by October 30 and the balance by December 15.</p> <p>On June 3, 1970, Coomer informed Oloffson that he was not going to plant corn because the season had been too wet. He told Oloffson to arrange elsewhere to obtain the corn if Oloffson had obligated himself to deliver to any third party. The price for a bushel of corn on June 3, 1970, for future delivery, was $1.16. In September of 1970, Oloffson asked Coomer about delivery of the corn and Coomer repeated that he would not be able to deliver. Oloffson, however, persisted. He mailed Coomer confirmations of the April 16 agreement. Coomer ignored these. Oloffson’s attorney then requested that Coomer perform. Coomer ignored this request likewise.</p> <p>The scheduled delivery dates referred to passed with no corn delivered. Oloffson then covered his obligation to his own vendee by purchasing 20,000 bushels at $1.35 per bushel and 20,000 bushels at $1.49 per bushel. The judgment from which Oloffson appeals awarded Oloffson as damages, the difference between the contract and the market prices on June 3, 1970, the day upon which Coomer first advised Oloffson he would not deliver.</p> <p>Oloffson argues on this appeal that the <strong>proper measure of his damages was the difference between the contract price and the market price on the dates the corn should have been delivered in accordance with the April 16 agreement</strong>. Plaintiff does not seek any other damages. The trial court prior to entry of judgment, in an opinion finding the facts and reviewing the law, found that plaintiff was entitled to recover judgment only for the sum of $1,500 plus costs as we have indicated which is equal to the amount of the difference between the minimum contract price and the price on June 3, 1970, of $1.16 per bushel (taking the greatest differential from $1.12 ¼ per bushel multiplied by 40,000 bushels). We believe the findings and the judgment of the trial court were proper and should be affirmed.” <em>Emphasis supplied</em>.</p> <p>It should be noted that, in the above cited Illinois appellate court case, the Plaintiff indeed pleaded and led evidence on the difference between the contract price and the market price on the due dates that the grain should have been delivered.</p> <p>However, since the Plaintiffs have abandoned their special damages, and have admitted that no evidence was led on how they sold the rejected alumina to Talco, they should be deemed not to be entitled to any measure of damages therein because they are special in nature.</p> <p>We have derived some guidance in the decision we have arrived at from the combined effect of the decisions in the <strong><em>Delmas America Africa Line v Kisko Products</em></strong><em>,</em> <strong><em>Glencore Energy v Cirrus Oil</em></strong> and <strong><em>Oloffson v Coomer</em></strong> cases all already referred to supra.</p> <p>In view of the above observations we deem it expedient to set out the facts in extenso in the said <strong>Delmas America Africa Line Inc. v Kisko Products (Ghana) Ltd</strong>, as follows:-</p> <p class="rteindent1"> “<em>The Plaintiff, a Ghanaian company that dealt in used car spare parts and accessories, purchased a consignment of those goods in Canada. Ocean marine shipping, the freight forwarders engaged by the Plaintiffs, contracted the defendants, a shipping company based in the United States, to transship the goods to Ghana. When the container arrived in New York from Canada, the defendants on the ground observed that it exceeded the maximum allowable weight, engaged a stevedoring company which reworked the cargo and removed the excess.</em></p> <p class="rteindent1"><em>However, when the cargo arrived in Ghana, the Plaintiffs found that a number of the items were damaged and some of the goods taken off the container in New York were missing. The defendants however ignored the Plaintiffs’ requests to address the problem. The Plaintiffs, therefore brought an action at the High Court as owners or consignees for <strong>general</strong> and <strong>special damages</strong> against the defendants for breach of contract by failing to provide adequate protection for the goods in the container. In their defence, the defendants contended, inter alia, that there was no privity of contract between them and the plaintiffs because the contract for the shipping of the goods was with Ocean Marine Shipping and the consignees of the goods were Ocean Lane Shipping and since the Plaintiffs were neither the consignees nor the indorsees of the bill of lading, they lacked capacity under section 7 (1) of the Bill of Lading Act, 1961 (Act 42) to bring the action. Moreover, they the defendants, were exempted from liability under section 4 (2) (1) of Act 42. The plaintiffs however submitted that they had brought the action not under Act 42 but at common law as the undisclosed principals of the consignors, Ocean Marine Shipping. The court found on the evidence, inter alia that:</em></p> <p class="rteindent1"><em>i.        the consignors had acted merely as agents of the plaintiffs .</em></p> <p class="rteindent1"><em>ii.       the defendants were aware that the plaintiffs were the owners of the goods. </em></p> <p class="rteindent1"><em>iii.      the defendants were responsible for the reworking of the goods and</em></p> <p class="rteindent1"><em>iv       the surveyor’s report supported the claim of the plaintiffs that the stowage of the goods after the reworking was unsatisfactory.</em></p> <p>The trial Judge then held, inter alia, that, as the real owners of the goods, the plaintiffs were entitled to sue the defendants in their capacity as an undisclosed principal, and on the <strong>basis of the values of both the damaged and lost goods the Plaintiffs had pleaded, </strong>she awarded the plaintiffs <strong>both general</strong> and <strong>special damages</strong> denominated in US dollars. An appeal by the defendants to the Court of Appeal was dismissed, but the Court changed the currency of the damages awarded against the defendants to Canadian Dollars.</p> <p>Both parties felt aggrieved by this judgment and therefore whilst the defendants appealed, the plaintiffs also cross-appealed to the Supreme Court.</p> <p>The Supreme Court by a majority decision of 4 – 1, dismissed both appeals, and held inter alia as follows:-</p> <p class="rteindent1"> “The proper measure of damages for the goods that were delivered in a damaged condition was the <strong>difference between the actual or potential value of the relevant item as undamaged goods, and what those goods would have fetched as damaged goods atTema. However, the courts below did not have any credible figures, actual or estimated before them on the latter aspect because the plaintiffs made no special pleadings for them</strong>. Accordingly, the court would merely award general damages based on exhibit figures, adjusted upwards by ten percent as general damages.”</p> <p>In view of the above it is quite clear that, having abandoned the relief of special damages, the plaintiffs can only be entitled to award of damages under the first limb of the rule in <strong>Hadley v Baxendale</strong>. As has been demonstrated in this judgment, the Plaintiff’s have not led any credible evidence that will entitle them to the enhance measure of damages that they are requesting for.</p> <p>In the same vein, we have observed that, the parties in the <strong>Glencore Energy v Cirrus Oil</strong> cases already, referred to supra, led expert evidence on the movement of the Ebok Oil on the markets to demonstrate how sophisticated and developed it was. Glencore Energy thus must be deemed therein as being forthright by coming out with all the necessary evidence capable of assisting the court in arriving at the decision given therein.</p> <p>In any case, from the way the learned trial Judge analsyed the judgment, it is clear that the measure of damages in issue therein was special damages. For example, the learned trial Judge observed thus:</p> <p class="rteindent1"> “The overall position which emerges therefore is that of a crude oil which traded in January – July 2012 at prices between DTD - $4.40 and DTD $ 5.50 per barrel.”</p> <p>Elsewhere in the judgment, the learned trial Judge remarked as follows:-</p> <p class="rteindent1">“In the light of these matters, and doing the best I can with the evidence available, I find that the market value of the Glencore/Cirrus Oil value on an FOB Nigeria basis was DTD -$4.90 per barrel which equates to DTD -$3.75 CFR Tema.</p> <p>I find that, on the balance of probabilities, the cargo quantity would have been 661,500 barrels as Glencore would have exercised its option to take the additional 5% on top of the 630,000 barrel figure (since it was making such a profit) and there was oil available to take, as shown by the contract quantity sold to Exxon.”</p> <p>The English High Court, concluded the judgment thus:</p> <p class="rteindent1">“The difference between the net contract price of DTD + $0.03 per barrel and the market value of DTD -$3.75 per barrel is therefore $3.78 per barrel. The difference on a cargo quantity of 661,500 barrels amounts to $2,500,470. “</p> <p>All these are clear indications that it was special damages that the court considered and awarded. Whilst we are not dealing with special damages in the instant case, this measure of damages therefore becomes irrelevant and superfluous.</p> <p><strong>CONCLUSION</strong></p> <p>We are persuaded by the rule in <strong><em>Hadley v Baxendale</em></strong> and the <strong><em>Glencore v Cirrus</em></strong> and the other cases referred to and state that, the computation of damages under Section 48 of the Sale of Good Act can either be general or special depending on the circumstances of each case.</p> <p>The first limb of the principle in <strong><em>Hadley v Baxendale</em></strong> applies to general damages, that is damages that are foreseeable without proving that special circumstances were brought to the attention of the person in breach. The second limb of the principle applies to special damages and this implies that those special damages have been proved, and are those damages that are foreseeable by the parties at the time of contracting because special circumstances have been brought to their attention and this makes the damages within the reasonable contemplation of the parties. Again, as the name implies, being special damages they have to be pleaded and proven at the trial.</p> <p>It will be recalled that, the Plaintiff’s endorsed their writ of summons with a relief of USD 6,918,750.00 as special damages for the loss they suffered for the breach of contract. However as later events have proven, the trial court dismissed the claims of special damages as not having been proven, and in this court, the Plaintiffs have abandoned it altogether.</p> <p>What this therefore means is that, the Plaintiffs must be deemed to be entitled to only general damages under the heads of claim under section 48 of the Act.</p> <p>See the case of<strong><em> Delmas America Lines v Kisko</em></strong> already referred to. Since the plaintiffs have not led any evidence on the multipliers which will entitle the court to use in the award of the general damages on the lines suggested in the Delmas America Line case, the Plaintiffs must be deemed to have not led credible evidence to have entitled them to enhanced general damages using the first limb of the principle in <em>Hadley v Baxendale.</em></p> <p>We have read the statement of case of the Plaintiff’s and would want to reiterate the fact that, the contract price/market price differential stipulated in section 48 of the Act, is not a computation of lost profits, as was contended and sought to be applied in the mathematical computation by the plaintiff’s.</p> <p>Lost profit is the difference between the total net cost to the seller of acquiring the goods and bringing them to the market on the one hand and the net sale price that would have been obtained on the other. In the <strong><em>Glencore v Cirrus Oil</em></strong> case, already referred to supra, the court stated that, <em>“The difference between this measure of damages and the section 50 of the English Act computation is illustrated by the different claims originally put forward in the particulars of claim by Glencore.” </em>See also <strong><em>Oloffson v Coomer</em></strong>, already referred to.</p> <p>In expatiating further on the applicability of the section 50 (2) and (3) of the English Sales of Goods Act, which are in pari materia with our own section 48, the learned Justice Cooke stated as follows in the <strong><em>Glencore v Cirrus case</em></strong> as follows:-</p> <p class="rteindent1"><em> “The alternative claim which was the only one pursued at the trial, was the claim based on section 50 (2) and (3) of the Sale of Goods Act. The point is illustrated by a simple situation where the cost of the goods to the seller is £100, the on sale price is also £100, and the market price at the time of the breach by the on sale buyer is £50. If the buyer had accepted the goods, the seller would in fact have made no profit at all, but, in accordance with section 50 (2) and (3) of the Sale of Goods Act, the prima facie measure of loss is £50 because the seller is left with goods worth less than the contract price.”</em></p> <p>With the above explanation, we are of the considered view that, the Plaintiffs if they had succeeded in proving their special damages would have been entitled to measure of damages using the above formula or if they had made alternative claims based on proven damages for breach.</p> <p>Under the circumstances, what the Plaintiffs are entitled to are general damages using the first limb of the <em>Hadley v Baxendale</em> principle.</p> <p>However, since the Plaintiff’s did not lead sufficient evidence with any degree of clarity and certainty to merit the computation of damages therein, we are of the view that the award of nominal damages by the trial court and confirmed by the Court of Appeal in favour of the Plaintiffs are considered adequate.</p> <p>We will therefore dismiss the appeal herein.</p> <p> </p> <p class="rtecenter"><strong> (SGD) V. J. M. DOTSE </strong></p> <p class="rtecenter"><strong> JUSTICE OF THE SUPREME COURT </strong></p> <p class="rtecenter"> </p> <p class="rtecenter"><strong> (SGD) G. T. WOOD (MRS) </strong></p> <p class="rtecenter"><strong> CHIEF JUSTICE</strong></p> <p class="rtecenter"> </p> <p class="rtecenter"><strong> (SGD) J. ANSAH </strong></p> <p class="rtecenter"><strong> JUSTICE OF THE SUPREME COURT</strong></p> <p class="rtecenter"> </p> <p class="rtecenter"><strong> (SGD) P. BAFFOE BONNIE </strong></p> <p class="rtecenter"><strong> JUSTICE OF THE SUPREME COURT</strong></p> <p class="rtecenter"> </p> <p class="rtecenter"><strong> (SGD) J. B. AKAMBA </strong></p> <p class="rtecenter"><strong> JUSTICE OF THE SUPREME COURT </strong></p> <p> </p> <p><strong><u>COUNSEL</u></strong></p> <p> DAVID ATTA ASIEDU ESQ. WITH HIM DAVID ADU-TUTU JNR. JOSEPH KWADWO KONADU AND NELSON AKONDOR FOR THE PLAINTIFF /APPELLANT/APPELLANT.</p> <p>RAYMOND CODJOE ESQ. WITH HIM BARBARA HOLM-FLEISCHER FOR THE DEFENDANT/RESPONDENT/ RESPONDENT.</p> <p> </p> </div></div></div><div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><iframe class="pdf" webkitallowfullscreen="" mozallowfullscreen="" allowfullscreen="" frameborder="no" width="100%" height="600px" src="https://old.ghalii.org/sites/all/libraries/pdf.js/web/viewer.html?file=https%3A%2F%2Fold.ghalii.org%2Fgh%2Fjudgment%2FSupreme%2520Court%2F2015%2F10%2FGLENCORE%2520%2520AG%2520%2520VS%2520VOLTA%2520ALIMINIUM%2520CO%2520LTD.pdf" data-src="https://old.ghalii.org/gh/judgment/Supreme%20Court/2015/10/GLENCORE%20%20AG%20%20VS%20VOLTA%20ALIMINIUM%20CO%20LTD.pdf">https://old.ghalii.org/gh/judgment/Supreme%20Court/2015/10/GLENCORE%20%20AG%20%20VS%20VOLTA%20ALIMINIUM%20CO%20LTD.pdf</iframe> </div></div></div> Wed, 08 Nov 2017 10:25:53 +0000 admghana 198 at https://old.ghalii.org https://old.ghalii.org/gh/judgment/supreme-court/2015/10-1#comments Andreas Bschor Gmbh & Co. Kg. v Birim Wood Complex Ltd and Another (J4/9/2015) [2016] GHASC 68 (22 March 2016); https://old.ghalii.org/gh/judgment/supreme-court/2016/68 <div class="field field-name-field-flynote-sync field-type-taxonomy-term-reference field-label-above"><div class="field-label">Flynote:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/tags/cl" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">CL</a></div><div class="field-item odd"><a href="/tags/absence-written-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Absence of Written Contract</a></div><div class="field-item even"><a href="/tags/sale-goods" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Sale of Goods</a></div><div class="field-item odd"><a href="/tags/goods-fit-purpose" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Goods Fit For Purpose</a></div><div class="field-item even"><a href="/tags/contract-warranty" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Warranty</a></div><div class="field-item odd"><a href="/tags/breach-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Breach of Contract</a></div></div></div><div class="field field-name-field-headnote-and-holding field-type-text-long field-label-above"><div class="field-label">Headnote and Holding:&nbsp;</div><div class="field-items"><div class="field-item even"><p>The parties entered into a business transaction for the supply and installation of a saw-mill. However, the transaction was not covered by a properly drawn up contract. Furthermore, it became apparent that the plaintiff provided the defendant with a plant which was defective and not fit for the purpose it was intended.</p> <p>This case considered whether the Court of Appeal had misdirected itself to the defects contained in the machinery, whether there was a breach of a fundamental obligation and whether the goods sold were fit for the purpose which they were intended to be used.</p> <p>The court considered the Sale of Goods Act, 137 of 1962 (the act) and found that the breach of a promise under the act depends on the category of promise; either a fundamental obligation, condition or a warranty. Breach of a fundamental obligation or a condition entitles the party not in default to repudiate the contract of sale and if it is the seller who is in breach, the buyer can reject the goods. The breach of a warranty cannot lead to a repudiation or rejection of the goods but will entitle the party not in breach to damages. However, a party entitled to repudiation and rejection may waive their right and opt for damages.</p> <p>The court considered whether the goods were fit for the purpose that they were provided for. The plaintiff sold the machinery in the course of its business on condition that it will be fit for the purpose of saw milling. A machine is fit for purpose if it is able to perform the task for which it was acquired, safely and for a reasonable period, before defects appear. The court found that a saw mill should not break down after 11 days of operation and therefore did not meet the standard of the purpose for which it was intended. The court found that as a result of the defect, the defendant was entitled to general damages as a result of the failure of the saw mill being fit for purpose.</p> <p>Appeal upheld.</p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"><p class="rtecenter"> </p> <p class="rtecenter"> </p> <p class="rtecenter"><strong>IN THE SUPERIOR COURT OF JUDICATURE</strong></p> <p class="rtecenter"><strong>IN THE SUPREME COURT OF JUSTICE</strong></p> <div> <p class="rtecenter"><strong>ACCRA, AD. 2016</strong></p> </div> <p>                                                              </p> <p class="rteright"><strong><u>CIVIL APPEAL</u></strong>:</p> <p class="rteright"><strong><u>NO.J4/9/2015</u></strong></p> <p class="rteright"><strong>22<sup>ND</sup> MARCH 2016</strong></p> <p><strong>ANDREAS BSCHOR GMBH &amp; CO. KG      PLAINTIFF/APPELLANT  </strong></p> <p><strong>                                                              /RESPONDENT</strong></p> <p><strong>VRS</strong></p> <div> <p><strong>1.BIRIM WOOD COMPLEX LTD    DEFENDANTS/RESPONDENTS                     </strong></p> <p><strong>2.BIRIM  TIMBERS  LTD              /APPELLANTS                                     </strong></p> </div> <p> </p> <hr /> <p class="rtecenter"><strong>J U D G M E N T</strong></p> <hr /> <p><strong><u>PWAMANG, JSC.</u></strong></p> <p>In 1988 the parties herein, who were in timber business in Ghana, entered into a business transaction worth about DM1.2 million for the supply and installation of a saw-mill for the defendants/respondents/appellants, hereafter referred to as the defendants, to be paid for with the supply of timber products to the plaintiff/appellant/respondent, hereafter referred to as the plaintiff. The transaction was not covered by a properly drawn up and executed contract document as the parties must have placed trust in each other. Unfortunately, events shortly after the installation of the sawn mill proved that trust alone, without properly executed contract, was not enough to ensure a smooth business relationship and they ended up in litigation which has lasted for about  twenty years.</p> <p>The litigation commenced in 1994 in the High Court at Akim Oda where defendants are based and after judgment there was an appeal to the Court of Appeal. This is an appeal against the decision of the Court of Appeal dated 3<sup>rd</sup> April 2008 which set aside part of the judgment of the High Court. The High Court had in its judgment granted the counterclaim of the defendants.</p> <p>After the installation of the saw-mill plant in 1991, defendants experienced some technical problems, some of which the plaintiff rectified and the others defendants had to repair by themselves. Contrary to what was agreed, the defendants initially did not supply timber products to the plaintiff in payment for the saw-mill so plaintiff demanded payment of the amount as stated in the pro forma invoice it had sent to defendants. Defendants then paid DM30, 000 but afterwards they supplied plaintiff some timber products as further payment. The timber products supplied did not fully settle the claim of plaintiff but defendants stopped further payments so plaintiff sued for its balance. When defendants were served they filed defence and counterclaimed for damages in diminution.</p> <p>After a full trial the High Court gave judgment on 20<sup>th</sup> December, 1999 and held that the plaintiff did not deliver all the machinery listed in the pro forma invoice. The court further held that plaintiff breached an implied condition of the contract of sale by supplying a plant that was not of the quality and fitness for a saw-mill. The court based its decision on the provisions of the <strong>Sale of Goods Act, 1962, (Act 137).</strong> The High Court judge therefore awarded damages to the defendants on their counterclaim to be deducted from the amount due to plaintiff as stated in the pro forma invoice. The trial judge refused to grant plaintiff interest on the sum allowed. The judgment failed to take  into account the payments made by defendants before the case was filed in court so defendants applied for a review of the judgment for those payments to be deducted from what was due plaintiff.</p> <p>When the Arithmetic was done to set off what was awarded defendants on their counterclaim with what was allowed for plaintiff on its claim, the plaintiff became the judgment debtor in sum of about DM80, 074.58. Being aggrieved, plaintiff appealed against the judgment.</p> <p>The Court of Appeal allowed the appeal and dismissed defendant’s counterclaim in its entirety.  The court held that, per the pro forma invoice tendered in evidence, defendants bought reconditioned, used and second hand machinery and having retained it for 20 months, they were not entitled to avoid the contract and refuse to pay. The Court of Appeal also held that plaintiffs did not sell the sawmill plant to defendants in the normal course of its business so the provisions of the <strong>Sale of Goods Act</strong> were not applicable to the contract in this case. The court further held that, in any case, the defendants did not strictly prove the special damages they claimed so the High Court was wrong in awarding special damages to defendants.</p> <p>One week after the judgment of the Court of Appeal the defendants appealed to this court setting out 7 Grounds of Appeal as follows:</p> <p class="rteindent1">i.   The Court of Appeal erred in law and caused a miscarriage of justice when the Court of Appeal Judges failed to advert their minds to the defects admittidly contained in the machienery supplied by the Respondents.</p> <p class="rteindent1">ii.   If the Judges of the Court of Appeal had adverted their minds to the fact that the first breakdown occurred after 11 days and not 20 months they would definitely have concluded that there had been a breach of a fundemental obligation.</p> <p class="rteindent1">iii.     The Appellate Court erred in law when the Court of Appeal set aside the lower court's finding of fact on the breach of the fundamental obligation as well as conditions and warranties without adequate reasons.</p> <p class="rteindent1">iv.      That the Court of Appeal's decision that there could not be an implied condition or warrenty where there is an express condition contained in the contract is wrong in law but it disabled the Court of Appeal from coming to the right conclustion on the question of breach of contract by the plaintiff. </p> <p class="rteindent1">v.      The judgment of the Court of Appeal is against the weight of the evidence record. </p> <p class="rteindent1">vi.      The Court of Appeal's negligent or deliberate refusal to acknowledge that Plaintiff failed to supply the goods they contracted to supply disabled the Court from arriving at the correct conclusion that the Plaintiff/Respondent has breached the contract to supply the goods they contracted to sell. The respondent company has ceased to exist as it has been dissolved.</p> <p class="rteindent1">vii.      The Court of Appeal erred in law and caused a miscarriage of justice when it failed to consider the legal effect of the Review of the judgment of the lower court by the said Court itself, even though the Court of Appeal had decided that the lower court had jurisdiction to review its own judgment. </p> <p class="rteindent1">viii.      Additional grounds of Appeal shall be filed on the receipt pf the record of proceedings. </p> <p>No additional grounds of Appeal have been filed. We shall consider all the grounds of appeal together.</p> <p>It is well-settled that an appeal is by way of rehearing and this means an appellate court is required to review the whole evidence on the record of appeal and come to its own conclusion whether the findings both of law and facts by the court below were properly made. Where the appellate court comes to the conclusion that findings of fact by the court below are not supported by the evidence on the record or where the findings are perverse, then it may set those findings aside. Another ground on which an appellate court will set aside findings and conclusions arrived at by a lower court is where the findings and conclusions are based on a wrong proposition of law.</p> <p>See the cases of <strong>ACHORO AND ANOR V. AKANFELA [1996-97] SCGLR 209and KOGLEX LTD (NO.2) V. FIELD [2000] SCGLR 175</strong></p> <p>As we consider this appeal it bears reminding ourselves that the <strong>Sale of Goods Act, 1962</strong> is the main source of our law as far as contracts for Sale of Goods are concerned and that the rules of the common law and equity are subservient to the statutory provisions.</p> <p>The Sale of Goods Act contains some implied terms that must be read into any contract of sales of goods in Ghana. These terms are promises which are deemed by law to be made by the parties to a contract of sale and are classified into three categories, namely; fundamental obligations, conditions and warranties. These categories are also applicable in general Law of Contract. The consequences of a breach of a promise under the Act depends on the category the promise comes under. A breach of either a fundamental obligation or a condition entitles the party not in default to repudiate the contract of sale, and if it is the seller who is in breach, the buyer can reject the goods. However the breach of a warranty cannot lead to repudiation or rejection of goods, but will entitle the party not in breach to only damages. But a party who is entitled under the Act to repudiation and rejection of goods may, nevertheless, waive that right and opt for damages instead. See Sections 49 and 55 of Act 137.</p> <p>Defendants in this case contend that though plaintiff breached a fundamental obligation and a condition stated in <strong>Sections. 8(1) and 13(1) (b) </strong>of the Act respectively, they did not reject the goods but opted for damages. Whether the claim of defendants is an afterthought, as contended by plaintiff, or not can only be determined upon an evaluation of the merits of the case.</p> <p><strong>Sections 8 (1) and (3) and 13(1) (b) of Act 137</strong> are as follows;</p> <p class="rteindent1"><strong><em>S. 8. Duties of the Seller (Fundamental Obligations of the Seller)</em></strong></p> <p class="rteindent1"><strong><em>(1)  In a sale of specific goods the fundamental obligation of the seller is to deliver those goods to the buyer.</em></strong></p> <p class="rteindent1"><strong><em>(3) Any provision in a contract of sale which is inconsistent with, or repugnant to, the fundamental obligation of the seller, is void to the extent of the inconsistency or repugnance.</em></strong></p> <p class="rteindent1"><strong><em>S.13 Quality and Fitness</em></strong></p> <p class="rteindent1"><strong><em>(1) Subject to the provisions of this Act and any other enactment there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale except as follows—</em></strong></p> <p class="rteindent1"><strong><em>(b) Where the goods are of a description which are supplied by the seller in the course of his business and the buyer expressly or by implication makes known the purpose for which the goods are required there is an implied condition that the goods are reasonably fit for that purpose.</em></strong></p> <p class="rteindent1"><strong><em>(2) The condition implied by paragraph (a) of subsection (1) is not affected by any provision to the contrary in the agreement where the goods are of a description which are supplied by the seller in the ordinary course of his business and the condition implied by paragraph (b) of subsection (1) is not affected by any provision to the contrary in the agreement unless the seller proves that before the contract was made the provision was brought to the notice of the buyer and its effect made clear to him.</em></strong></p> <p class="rteindent1"><strong><em>(3) An implied warranty or condition as to quality or fitness for a particular purpose may be annexed by the usage of trade.</em></strong></p> <p>Specific goods as defined in Section 81, the interpretation section, of Act 137, is “goods identified and agreed upon at the time a contract of sale is made,” In this case there is consensus by the parties that the Pro Forma invoice, Exhibit “A” constitutes the basis of the contract of sale of the saw-mill machinery and contains the list of goods to be supplied. It therefore means the contract is one for the sale of specific goods so Section 8(1) is applicable in this case. Consequently the fundamental obligation of plaintiff was to deliver all the machinery listed in Exhibit “A”. Defendants claimed that plaintiff did not deliver in strict accordance with that list. Plaintiff on its part stated that they supplied all the equipment on Exhibit "A". So it becomes a matter of proof and the burden is on defendants who made the allegation to prove that there was wrong or non-delivery.</p> <p>Defendants claim that instead of a Brenta Band Saw 1800 that was listed in the pro forma invoice, plaintiff supplied and installed a Brenta Band Saw 1600. Plaintiff’s managing director in his evidence-in-chief stated that it supplied all the machinery listed on the pro forma invoice. He tendered invoices, packing lists, the SGS reports and the bills of laden for each installment of machinery delivered.  Mr. Joseph Mensah who testified on behalf of defendants stated in his evidence that plaintiffs delivered a Brenta Band Saw 1600 and not 1800.  This witness had worked with the defendants for only five months prior to testifying and had no firsthand knowledge of what happened. It was therefore to be expected that he would tender some documents to support his testimony but he did not.</p> <p>In their statement of case in this court, counsel for defendants has referred to a Barclays Bank foreign payment dated 24<sup>th</sup> January 1994 (page 42 vol 2 of record) in respect of Brenta Band Saw which the Managing Director for defendants referred to in his testimony. On its face, and from the record (pages111 to 114 vol 1) when defendant’s lawyer sought to tender that document in evidence through plaintiff's managing director, an objection was raised and the court upheld the objection on 27/11/96 so it was rejected and marked “RJ2”. It is noticed that the number ‘2” is also written on the document but Exhibit “2” is different. It is a Pro forma invoice of magnet valves, bolt blades etc. That document cannot be used as evidence.</p> <p>Defendants called one Mohammed Ntim Kusi as DW1, apparently to corroborate their case that plaintiffs supplied and installed a Brenta Band Saw 1600 for defendants in 1991. His evidence does not in any way say that he was present and saw plaintiff’s engineers install a Brenta Band Saw 1600 at defendant’s Saw-mill.  He said “I have gone to Birim Wood Complex on a visit.” When was this visit? His evidence does not say. Then he said “The pulley at Sabbah is 1600. One Brenda has been installed at Birim Wood Complex.”  There are two Sabbah’s in this case, DW1 and the Director of defendants. Which of them is the witness referring to?</p> <p>Defendants’ managing director in his testimony also claimed that plaintiff failed to deliver to them Hydraulic under table cross cut, Forklift, Exhaust system, and Electro cables and Circuit relays; which were all listed in Exhibit “A”. Plaintiff rejected this contention at trial and relied on the invoices and parking list it tendered in evidence.</p> <p>Exhibit ‘U’ is the letter dated 22<sup>nd</sup> July 1993 by Lawyer E. A. Oduro written on behalf of defendants in answer to plaintiff demand for payment before this suit was filed.That letter did not make any mention of a wrong supply of Brenta Band Saw 1600 instead of 1800 and a failure to deliver the Forklift and the other items. That letter strongly stated the case of defendants that the plaintiff was in breach of an implied warranty of quality and fitness. Since the dispute was eminent at the time that letter was written, one would have expected the letter to raise the issues of wrong and non- delivery if indeed they had had occurred.</p> <p>More fundamental is the fact that in the amended statement of defence and counterclaim of the defendants filed on 7/3/97, apart from the allegation of wrong-delivery of a Brenta Band Saw 1600, there is no pleading of non-delivery of any of the other items. This claim is in the nature of special damages and specific losses ought to have been specifically pleaded and strictly proved.</p> <p>Having regard to the burden of proof which was on the defendants in respect of the averments of wrong-delivery of items covered by documents tendered by plaintiff at the trial, we hold that defendants failed to discharge the burden of proof on them so we affirm the holding of the Court of Appeal which set aside the awards of damages for wrong-delivery of Brenta Band Saw 1600 and the non-delivery of Forklift and other items.</p> <p>We now turn to defendant’s case based on <strong>S. 13(1) (b) of Act 137. </strong>The Court of Appeal in their judgment rejected the trial judge’s application of that provision to the facts of this case and said a buyer of used goods has no remedy in law if the goods do not meet expected standards. As legal authority for that proposition of law, the Court of Appeal relied on the case of <strong>Rockson v. Armah [1975] 2 GLR 166 CA,</strong> which quoted Lord Denning in <strong>Bartlett v. Sidney Marcus Ltd [1965]2 All ER 753 CA </strong>as saying that;</p> <p class="rteindent1">“a buyer should realise that when he buys a second hand car, defects may appear sooner or later <strong>and in the absence of an express warranty, he has no redress.” </strong>(emphasis mine)</p> <p>What the defendants are saying, and which we agree with, is that there is a condition as to fitness for purpose implied by law that applies even to sale of secondhand goods if the seller sells them in the ordinary course of his business and the buyer makes him aware of the purpose for which he requires the goods.  With all due respect to the justices of the Court of Appeal, if they had read the case of <strong>Bartlett v Sidney Marcus</strong> closely, they would have realized that the court accepted that the seller in that case was under a statutory obligation pursuant to the English <strong>Sale of Goods Act, 1893,</strong> to ensure that the used car was fit for purpose, except that it was held on the evidence that the car met the fitness test.</p> <p> In <strong>Rockson v. Armah</strong>(supra) the issue before the Court of Appeal was the right of a purchaser to repudiate a sale upon discovery of latent defects so Francois J A in his judgment discussed Sections 51, 52(b) and 13(1)(a) of Act 137 but not Section 13(1)(b) which is the provision relied upon by defendants in this case. In<strong> Yirenkyi v Tormekpe [1987-88] 1 GLR 533 CA,</strong> the plaintiff bought a second-hand Toyota truck for ¢l57, 000 from the defendant.  He then spent ¢56,860 to make substantial repairs to rehabilitate the truck. In a subsequent action he brought against defendant to recover both sums and for damages for loss of use, he pleaded that after taking delivery of the truck he found that contrary to the warranty given to him, the truck was not roadworthy. The High Court entered summary judgment for him and held that the defendant was in breach of Section 13(1)(b) of Act 137 on the implied condition of fitness for purpose. On appeal, the Court of Appeal held that, whether the truck was fit for purpose or not was a question of fact and could not be determined without the taking of evidence.</p> <p>It is therefore an erroneous statement of the law of Ghana, and of England, to say that in all cases a buyer of used or secondhand goods has no redress if the goods fail to meet the quality and fitness for the purposes for which the buyer required them. The grounds for the condition as to fitness for purpose to be applicable are that the seller should sell the goods in the normal course of his business and the buyer should have made the seller aware of the purpose for which he requires the goods.</p> <p>The question that needs to answered is; what is meant by “<em>the goods are of a description which are supplied by the seller in the course of his business”</em> in <strong>section.13 (1) (b) of Act 137?</strong> In his submissions in the Court of Appeal, counsel for plaintiffs argued that the provision refers to goods sold as the main business of the seller. He did not refer to any legal authority but the Court of Appeal appears to have accepted that interpretation. In considering our judgment, we did not come across a Ghanaian case in which the provision was construed so we shall consider some English authorities for their persuasive effect.</p> <p>In the case of <strong>Ashington Piggeries Ltd v Christopher Hill Ltd [1972] A.C. 441,</strong> the House of Lords, in an appeal considered the interpretation of Section 14(1) of the Sale of Goods Act, 1893 of England which is worded just like our Section 13(1)(b) as follows; “goods of a description which it is in the course of the seller’s business to supply”. The Court of Appeal had held that the provision referred to a dealer in the goods in question and since the respondent was not a dealer in mink food, the provision did not apply to it. The House of Lords overturned the decision, holding that the interpretation of the provision by the Court of Appeal was wrong. This is what Lord Wilberforce said at page 494 of the report;</p> <p class="rteindent1"><em>‘I would hold that (as to subsection (1)) it is in the course of the seller’s business to supply goods if he agrees, either generally or in a particular case, to supply the goods when ordered…… But, moreover, consideration with the preceding common law shows that what the Act had in mind was something quite simple and rational: to limit the implied conditions of fitness or quality to persons in the way of business, as distinct from private persons……I would have no difficulty in holding that a seller deals in goods ‘of that description’ if he accepts orders to supply them in the way of business and this whether or not he has previously accepted orders for goods of that description.’ </em></p> <p>There have been other interpretations of similar provisions to the effect that the provisions do not only relate to situations where the goods are sold as an integral part of the business of the seller but include cases where there is a certain degree of regularity by the seller in the supply of goods of the description as distinct from a one off sale. See the cases of <strong>Davies v Summer [1984] 3 All ER 831</strong> and <strong>R &amp; B Customs Brokers Co Ltd v United Dominions Trust Ltd (Saunders Abbott (1980) Ltd, third party) [1988] WLR 321</strong>.</p> <p>The origin of the condition of merchantability and fitness for purpose is a statement by Best CJ in the case of<strong> Jones v Bright (1829) 130 ER 1167 at 1171</strong> where he gave the policy behind the law as follows;</p> <p class="rteindent1">“It is the duty of the court in administering the law to lay down rules calculated to prevent fraud, to protect persons necessarily ignorant of the qualities of a commodity they purchase, and to make it the interest of manufacturers and those who sell, to furnish the best article that can be supplied. ... I wish to put the case on a broad principle. If a man sells an article he thereby warrants that it is merchantable — that is fit for some purpose. ... If he sells it for some particular purpose he thereby warrants it fit for that purpose.”</p> <p>So the purpose of the statutory condition of quality and fitness is to protect buyers when they rely on the skills and knowledge of business sellers. We will therefore broadly construe <strong>Section13 (1) (b) of Act 137 </strong>and give effect to the purpose of the provision by including any sale where there is an element of regularity showing the seller has been selling goods of that description as part of his business, whether it is his main business or not; or where the seller accepted an order from the buyer to supply goods of that description. Where the goods were sold on “where is” basis or as a private sale, the provision is not applicable.</p> <p>The evidence in this case shows that as part of its timber trading business, plaintiff installed saw-mill plants for a number of timber companies in Ghana. In his evidence-in-chief, the Managing Director of plaintiff, Kimberly Michael, said as follows:</p> <p class="rteindent1"><em>“Sabbah came to Germany to see us at our organization. There was a discussion on how we could find the necessary machines and the cost of same.  He said he wanted machines in a practical way.  He discussed how practical it would be for him.  We had established machinery for four other companies in Kumasi – S.P.S., S.T.P. (Specialised timber products).  He asked for a second hand reconditioned machines for his company.  He had realised that new machines would cost three to four times and beyond.  I agreed with defendant and I came here two or three times because of the agreement.  We agreed to set sawmilling machinery for him.  We sent him a pro forma invoice.”</em></p> <p>Under cross examination plaintiff’s Managing Director said as follows:</p> <p class="rteindent1"><em>“Q.   So you supply timber machinery to those who supply you with timber?</em></p> <p class="rteindent1"><em>A.     Yes</em></p> <p class="rteindent1"><em>Q.     Mention the names of timber companies you have supplied machinery?</em></p> <p class="rteindent1"><em>A.     South B. S. Kumasi Wood Industries in Kumasi, Atwima Timber in Kumasi</em></p> <p class="rteindent1"><em>Q.     Can you tell us the others you have dealt with?</em></p> <p class="rteindent1"><em>A.     Western timbers at Takoradi, TDC Takoradi”</em></p> <p>He mentioned other companies they had supplied saw-mill machinery as; Birim Timber, Oda Sawn Mills, Fast Forest, W.S.I. Sawn Mills, S. B. S. All these supplies of sawn mills machinery were made between 1978 and 1991. That plaintiff had installed saw- mills for many timber companies was corroborated by the evidence of PW1.</p> <p>In this case, plaintiff supplied the complete set of Saw-mill machinery and sent a team of engineers to install it and test run the plant for a few days. The circumstances show clearly that the defendants were relying on the knowledge and skill of the plaintiff in the acquisition of the machinery.</p> <p>We have no doubt in our minds that plaintiff sold the Saw-mill machinery to defendants in the ordinary course of its business and we so find.  The Court of Appeal made the finding that plaintiff did not sell the saw- mill in the ordinary course of its business without reviewing the evidence and properly construing Section. 13(1) (b) of Act 137. We therefore reverse that finding by the Court of Appeal.</p> <p>The effect of our finding that plaintiff sold the machinery in the course of its business is that the machinery was sold on the condition that it will be fit for the purpose of saw milling. But the next question is; what is meant by the term fitness for the purpose as used in Section.13 of Act 137. If a seller sells used goods will the implied condition of fitness be the same as new goods?</p> <p>We shall use two English cases to illustrate the principles the English courts have applied in determining fitness for purpose in respect of secondhand vehicles;</p> <p>In <strong>Bartlett v Sidney Marcus Ltd</strong><strong> [1965] 1 WLR 1013</strong>, the dealer’s salesman told Mr Bartlett that the clutch of a second-hand Jaguar was not operating properly, but that he thought it could be put right by a minor repair. The price was reached on the understanding that the plaintiff would have the clutch repaired at his own garage. He drove it for about 200 to 300 miles over a period of four weeks and then took it to his garage, where it was found that the defect was far more serious and that the engine would have to be dismantled to repair the clutch system. The judge found that the clutch was not of merchantable quality. The defendants successfully appealed. Lord Denning said at page 1017 as follows:</p> <p class="rteindent1"><em>“A second-hand car is ‘reasonably fit for the purpose’ if it is in roadworthy condition, fit to be driven along the road in safety, even though not as perfect as a new car. Applying those tests here, the car was far from perfect. It required a good deal of work to be done on it. But so do many second-hand cars. A buyer should realise that when he buys a second-hand car, defects may appear sooner or later; and, in the absence of an express warranty, he has no redress. Even when he buys from a dealer the most he can require is that it should be reasonably fit for the purpose of being driven along the road. This car came up to that requirement</em>”</p> <p>In <strong>Crowther v Shannon Motor Co</strong><strong>. [1975] 1 All ER 30</strong>, an eight-year-old Jaguar had a mileage of 82,165 at the date of purchase. The dealer commended it, saying “it would be difficult to find a 1964 Jaguar of this quality inside and out” and adding, that for a Jaguar “it is hardly run in”. It passed an MOT test. Mr Crowther drove the car for three weeks and covered over 2,000 miles. He found that it used a lot of oil. The engine then seized up and the car came to a full stop. The engine was found to be in an extremely bad condition. So much so that it had to be scrapped and replaced by a reconditioned engine. At the trial in the county court, Mr Crowther called as a witness a previous owner of the car who had bought it from the same dealers about eight months before. He had used it for those eight months and then sold it back to the dealer. His evidence was that the engine was “clapped out”.</p> <p>Lord Denning MR after distinguishing the decision in Bartlett v Sidney Marcus said as follows at page 33 of the report: <em>“If the car does not go for a reasonable time, but the engine breaks up within a short time, that is evidence which goes to show it was not reasonably fit for the purpose at the time it was sold. On the evidence in this case, the engine was liable to go at any time. It was ‘nearing the point of failure’; said the expert...The time interval was merely ‘staving off the inevitable’. That shows that at the time of the sale it was not reasonably fit for the purpose of being driven on the road. I think the judge on the evidence was quite entitled to find there was a breach of section 14(1) of the Sale of Goods Act, 1893 and I would therefore dismiss the appeal. ” </em></p> <p>What the authorities show is that a machine is said to be fit for purpose if it is able to perform the task for which it was acquired safely and for a reasonably period before major defects appear. What is reasonable period will depend on the condition of the machine, whether new or used, whether any defects were disclosed by the seller, the level of assurance given by the seller, etc. So it is a question of fact to be determined by the court on a case by case basis. See <strong>Yerinkyi v Tormekpe </strong>(supra).</p> <p>Though in the High Court defendants’ case was that they contracted for the supply of new saw- mill machinery, their counsel in his statement of case in this court has submitted as follows;</p> <p>“The evidence justifies a finding that the parties agreed on the supply of <strong>Reconditioned machinery generally, with some of the machines being new</strong>, but certainly <strong>NOT</strong> on the supply of <strong>used or secondhand</strong> machinery simpliciter.” </p> <p>On its part, plaintiff has always maintained that they were required to supply reconditioned machinery. In a letter written by lawyer for the plaintiff tendered in evidence as Exhibit “Y”, he described the transaction between the parties as a “Turn Key” agreement. It is therefore in order to apply the implied condition of fitness for purpose to the plant as one unit and to determine if it met the reasonable man’s expectation of a Reconditioned Saw-mill. <strong>The Longman Dictionary of Contemporary English, Third Edition</strong> defines recondition as follows:</p> <p class="rteindent1">“to repair something, especially an old machine so that it works like a new one.”</p> <p>In our considered view, the reconditioned plant that plaintiff contracted to supply was supposed to work as a saw-mill, even if not like a new one, but work effectively for a reasonable period before breakdowns would occur. The expectation is thus  higher than what would be expected of a secondhand plant though it will not be as high as a new one. The evidence on record shows that within 10 to 11 days after the installation the whole plant ceased operating. Plaintiff’s Managing Director made the following admissions under cross examination:</p> <p class="rteindent1"><em>“Q.   I put it to you that ten or eleven days after installation the machines ceased to be functional. This was communicated to you through Mr. Testling?</em></p> <p class="rteindent1"><em>A.     Yes</em></p> <p class="rteindent1"><em>Q.     Were you ever made aware of the fact that the main carriage drive also broke down barely two months after the installation?</em></p> <p class="rteindent1"><em>A.     I don’t know whether after two months.</em></p> <p class="rteindent1"><em>Q.     It was communicated to you through Mr Testling</em></p> <p class="rteindent1"><em>A.     No</em></p> <p class="rteindent1"><em>Q.     Who did?</em></p> <p class="rteindent1"><em>A.     I myself was here.</em></p> <p class="rteindent1"><em>Q.     You directed that replacement should be sent from Cream Timbers, Takoradi</em></p> <p class="rteindent1"><em>A.     Yes</em></p> <p class="rteindent1"><em>Q.     The main carriage drive was second hand machine?</em></p> <p class="rteindent1"><em>A.     Not secondhand, reconditioned.</em></p> <p>At pages 103 of the record, the cross-examination of plaintiff’s representative continued as follows;</p> <p class="rteindent1"><em>Q.     It was communicated to you that the top pulley shaft of the bund mill broke into 2 and almost damaged the mill?</em></p> <p class="rteindent1"><em>A.     Yes, it was mentioned to me verbally by Mr. Fascaller.”</em></p> <p>The main carriage drive certainly is a critical part of the saw-mill and without it a saw-mill cannot operate as a saw-mill. In the expectation of a reasonable person, a reconditioned plant should not break down within 11 days of operation. In the same vein, for the main carriage drive of a reconditioned saw -mill to break down within two months of use is evidence that at the time of the sale it was not fit for the purpose of saw milling. The evidence on the record gives us the irresistible impression that the plant supplied by plaintiff did not meet the standard of a reconditioned plant. We accordingly find that plaintiff was in breach of the implied condition that the reconditioned plant it sold to defendants was fit for its stated purpose of saw milling timber logs.</p> <p><strong>PROOF OF DAMAGES</strong></p> <p>That brings us to a consideration of the part of the judgment of the Court of Appeal that set aside the trial Court’s award of damages in diminution in the sum of DM700, 000.00 to defendants for breaches of the contract. We will like to quote what the Court of Appeal stated in its judgment on the issue of the damages in diminution;</p> <p class="rteindent1"><strong>“</strong>In my opinion, I think that the learned trial judge was wrong in upholding the counter-claim of the respondents and awarding the sum of DM700, 000 since this was special damages and the Respondents should have been put to strict proof.</p> <p>They neither tendered any documents or receipts to support their claim that they had been put to extra expense in replacing broken down machinery supplied by the Appellants, and that in order to replace the defective items, they had had to look to other well-established  timber firms in the country.</p> <p>It is trite law that a claim for special damages must be explicitly claimed in the pleading with full particulars of how it is made……</p> <p>In the instant case, I find that the Respondents did not do any of these things. The only evidence on record alleges that as the machines broke down they needed to be replaced, and therefore the broken down parts were acquired from other sister timber firms e.g. saoud etc. <strong>Prah vrs Okai</strong> [1966] GLR 560 holds that “<em>special damages should be strictly proved</em>”. Having failed to prove special damages, the learned trial judge should have dismissed the Respondents’ counter-claim for special damages just as he did with the defamation.”</p> <p>We have perused the record and carefully considered the evidence of defendants and their witnesses and we fully endorse the above findings of the Court of Appeal that defendants did not sufficiently prove special damages. Defendants are nevertheless entitled to General Damages for plaintiff’s breach of the implied condition that the reconditioned plant was fit for the purpose for which defendants acquired it.</p> <p>The principles that guide the courts in the award of General Damages have been repeatedly stated by the Courts.In the case of <strong><u>Attorney-General</u> v. <u>Faroe Atlantic Co. Ltd</u></strong> <strong>[2005-2006] SCGLR 271 Dr. Twum JSC </strong>stated as follows at page 290 of the Report;</p> <p class="rteindent1">“General Damages are such as the law will presume to be natural or probable consequence of the defendant’s act.They arise by inference of the law and need not therefore to be proved by evidence.”</p> <p>The settled position of the law is that General Damages are at large, meaning the court will award a reasonable amount having regard of the circumstances of the case.A court may award nominal damages under General Damages where no real loss has been occasioned by the infringement of a right, or award substantial damages where actual loss has been caused to the plaintiff.In this case our job is cut for us by <strong>s.56 of Act 137</strong> which provides as follows;</p> <p class="rteindent1"><strong><em>S.56. Assessment of Damages under S. 55.</em></strong></p> <p class="rteindent1"><strong><em>The measure of damages in an action under section 55 of this Act is the loss which could reasonably have been foreseen by the seller at the time when the contract was made as likely to result from his breach of contract.</em></strong></p> <p class="rteindent1"><strong>S. 56 of Act 137</strong> states the common law principle of remoteness of damages that limits damages to only losses that arise naturally from the breach of the contract and losses that can be said to have reasonably been within the contemplation of the parties as likely to be suffered in the event of a breach of the contract.  The <em><u>locus classicus</u></em> on the principle of remoteness of damages is <strong><u>Hadley v. Baxendale</u></strong> <strong>[1854] 9 Ex. 341, 156 ER 145</strong>.  In that case Alderson B. made an observation which is very much applicable to the facts of this case. He stated as follows at page 151:</p> <p class="rteindent2">“Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such a contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated.”</p> <p>The evidence on record is that the plaintiff supplied the reconditioned plant for defendants to use as a saw-mill in processing their timber logs for export.  The natural consequence of a failure of the plant to run smoothly is that defendants’ production of saw timber from that mill will be adversely affected and they will lose sales.  It is also a natural result that in order to put the mill back into operation defendants will incur expenditure on repairs and replacements. It is clear from the evidence that the operation of the Saw-mill was interrupted on a number of occasions due to breakdowns. There is evidence that on the eleventh day of operating the sawn mill it broke down in the presence of plaintiff’s representative and plaintiff had to send spare parts in order for it to be repaired and production to resume. There is evidence that the main carriage drive broke down within two months in the presence of plaintiff’s managing director. We have given consideration to the fact that plaintiff undertook this contract as a turnkey agreement and defendants placed total trust in them that what they supplied and installed would meet their requirements for a reasonable period.</p> <p>Having taken all the above circumstances into account, we award General Damages of DM250, 000 in favour of defendants against plaintiff for breach of the implied condition as to fitness of the plant they supplied and installed for defendants.</p> <p>The defendants in their statement of case have called our attention to discrepancies on the record as to the correct amount plaintiff is entitled to by the decisions of the High Court and the Court of Appeal. Defendants have called on us to correct and clarify the amounts on the basis of the evidence on the record.</p> <p>The trial judge in his judgment said as follows at page 305 of the record;</p> <p class="rteindent1">“Of the plaintiff’s claim (a) of DM1,172,654.76, DM 193,354.76 has been granted.”</p> <p>The judge did not expressly state in his judgment whether he had dismissed the claim for DM1,172,654.76 and awarded only DM 193,354.76, or whether that figure was arrived at after deducting the awards he made in favour of defendants on their counterclaim. The evidence on the record is that plaintiff tendered Exhibit ‘A’ in proof of his claim for DM1, 147,557.00. But in his evidence-in-chief he admitted that out of the invoice value, DM 30,000 was first paid and timber products worth DM273,429.34 was supplied to their subsidiary company by defendants. (See page 53 of the record).</p> <p>When the payments acknowledged are deducted from the invoice value, we get DM 844,127.66. We therefore set aside the judgment of the High Court and in its place grant plaintiff the sum of DM844, 127.66 being the balance of the cost of reconditioned Saw milling equipment, Machinery, Spare Parts and Installation.</p> <p>The amount of DM844,127.66 granted to plaintiff and the DM250,000 awarded to Defendants shall attract interests from the date of the judgment of the High Court i.e. 20/12/1999 to the date of this judgment at the prevailing bank rate of interest in Germany in line with this court’s decision in <strong>Royal Dutch Airlines &amp; Anor v. Farmex Ltd (No.2) [1989-90]2GLR 682, SC</strong>.</p> <p class="rtecenter"><strong>(SGD)        G.     PWAMANG</strong></p> <p class="rtecenter"><strong>JUSTICE OF THE SUPREME COURT</strong></p> <p class="rtecenter"><strong>(SGD)         W.   A.   ATUGUBA</strong>                      </p> <p class="rtecenter"><strong>JUSTICE OF THE SUPREME COURT</strong></p> <p class="rtecenter"><strong>(SGD)         J.   ANSAH    </strong></p> <p class="rtecenter"><strong>JUSTICE OF THE SUPREME COURT</strong></p> <p class="rtecenter"><strong>(SGD)        A.   A.   BENIN</strong></p> <p class="rtecenter"><strong>JUSTICE OF THE SUPREME COURT</strong></p> <p class="rtecenter"><strong>(SGD)</strong>        <strong> J.   B.   AKAMBA                                                                                                         </strong></p> <p><strong>JUSTICE OF THE SUPREME COURT</strong></p> <p><strong><u>COUNSEL</u></strong></p> <p>J.  K.  AGYEMANG  ESQ.  (WITH HIM  OSMAN  GYAN) FOR THE DEFENDANTS /RESPONDENTS/APPELLANTS.</p> <p>JUSTIN  AMENUVOR  ESQ. FOR  THE PLAINTIFF/APPELLANT/RESPONDENT.</p> </div></div></div><div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><iframe class="pdf" webkitallowfullscreen="" mozallowfullscreen="" allowfullscreen="" frameborder="no" width="100%" height="600px" src="https://old.ghalii.org/sites/all/libraries/pdf.js/web/viewer.html?file=https%3A%2F%2Fold.ghalii.org%2Fgh%2Fjudgment%2FSupreme%2520Court%2F2016%2F%2FANDREAS%2520BSCHOR%2520GMBH%2520%2520VRS.%2520BIRIM%2520%2520TIMBERS%2520LTD.pdf" data-src="https://old.ghalii.org/gh/judgment/Supreme%20Court/2016//ANDREAS%20BSCHOR%20GMBH%20%20VRS.%20BIRIM%20%20TIMBERS%20LTD.pdf">https://old.ghalii.org/gh/judgment/Supreme%20Court/2016//ANDREAS%20BSCHOR%20GMBH%20%20VRS.%20BIRIM%20%20TIMBERS%20LTD.pdf</iframe> </div></div></div> Tue, 31 Oct 2017 08:21:39 +0000 admghana 161 at https://old.ghalii.org https://old.ghalii.org/gh/judgment/supreme-court/2016/68#comments Abivams Limited v Platun Gas Oil Ghana Ltd (J4/29/2016) [2017] GHASC 29 (31 May 2017); https://old.ghalii.org/gh/judgment/supreme-court/2017/29 <div class="field field-name-field-flynote-sync field-type-taxonomy-term-reference field-label-above"><div class="field-label">Flynote:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/tags/cl" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">CL</a></div><div class="field-item odd"><a href="/tags/contract-sale" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract of Sale</a></div><div class="field-item even"><a href="/tags/contract-performance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Performance</a></div><div class="field-item odd"><a href="/tags/breach-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Breach of Contract</a></div><div class="field-item even"><a href="/tags/privity-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Privity of Contract</a></div><div class="field-item odd"><a href="/tags/summary-judgment" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Summary Judgment</a></div><div class="field-item even"><a href="/tags/liquidated-claims" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Liquidated Claims</a></div><div class="field-item odd"><a href="/tags/el" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">EL</a></div><div class="field-item even"><a href="/tags/minerals-oil-and-gas" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Minerals, oil and gas</a></div><div class="field-item odd"><a href="/tags/administrative-action" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Administrative Action</a></div></div></div><div class="field field-name-field-headnote-and-holding field-type-text-long field-label-above"><div class="field-label">Headnote and Holding:&nbsp;</div><div class="field-items"><div class="field-item even"><p>The appeal stemmed from the denial of the appellant's right to defend on merits due to the lower court’s grant of an Order 14 summary judgement in favor of the respondent, without properly engaging with the merits of the matter.</p> <p>Substantively, the court held that in a summary judgement application the plaintiff must bring a <em>prima facie</em> case for the claim, which includes showing the basis of the claim, before the burden shifts to the defendant to defend. However, a complete defence is not required but rather the defendant only needs to show that he has a reasonable defence to the claim and his defence is not a sham or intended to delay payment.</p> <p>Since the respondent’s claim had been based on an agreement and an alleged assignment, the court reasoned that on assessment of the evidence the argument of assignment lacked the element of intent and thus could not stand. Further, the argument that the respondent was a beneficiary of the agreement in question was unfounded. The trial court therefore erred in its decision to grant summary judgment as the very basis of the claim was reasonably challenged on the facts.</p> <p>The court thus concluded that the appellant had been unjustifiably been shut out of trial. It thus allowed the appeal setting aside the summary judgement.</p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"><p class="rtecenter"> </p> <p class="rtecenter"><strong><u>IN THE SUPERIOR COURT OF JUDICATURE</u></strong></p> <p class="rtecenter"><strong><u>IN THE SUPREME COURT</u></strong></p> <p class="rtecenter"><strong><u>ACCRA – A.D. 2017</u></strong></p> <p class="rtecenter"> </p> <p> </p> <p class="rteright"><u>CIVIL APPEAL NO. J4/29/2016</u></p> <p class="rteright"><u>31<sup>ST</sup> MAY, 2017</u></p> <p class="rteright"> </p> <p><strong>ABIVAMS LIMITED         ….         PLAINTIFF/APPELLANT/RESPONDENT</strong></p> <p><strong>VRS</strong></p> <div> <p><strong>PLATUN GAS OIL GHANA LTD.    ….    DEFENDANT/RESPONDENT/APPELLANT</strong></p> <p> </p> </div> <hr /> <p class="rtecenter"><strong><u>JUDGMENT</u></strong></p> <hr /> <p><strong><u>BENIN, JSC</u></strong><u>:- </u></p> <p>This appeal brings into focus once more the scope and limit of the popular Order 14 of the High Court (Civil Procedure) Rules), 2004, C.I. 47. That Order has become so popular even among students of the law because we are made to believe that it is the shortest route to obtain judgment in liquidated claims in particular, without going through the travails of litigation. But to the unwary judge who falls into that trap, he may be tempted to dismiss a defence to a claim under this order, as it were, to save time, especially bearing in mind the fact that the court is required to adopt expeditious and less expensive means to dispose of a case before it. But we must not lose sight of the fact that rules of court are meant to regulate orderly proceedings and nobody should be made to suffer therefrom, without real or just cause. The rules of natural justice prevail in all proceedings, hence the requirement that a person should not be made to suffer unless he has been heard in his defence, except by his own showing he does not want to be heard or clearly he has no defence to an action and should therefore not engage in a wild goose chase.</p> <p>As a result, the courts have over the years provided guidelines for the invocation of the provisions under Order 14 which every trial judge must observe, lest a defendant should be denied a hearing on merits, without justification. It is necessary at the outset of this decision to recall the caution sounded by Denman J in the case of <strong>Manger etc v. Cash (1889) 5 T.L.R. 271 </strong>when he said that: “<em>The jurisdiction is one to be exercised with great care, so as not to preclude a party from raising any defence he may really have. The judge is not to make the order if either he is satisfied that there is a defence, or that the defendant should be allowed to defend.” </em>This case is one of those cases in which the defendant/respondent/appellant, called the appellant, should have been allowed to defend but was denied this right to be heard on merits because of the unjustifiable invocation of Order 14 in favour of the plaintiff/appellant/respondent, called the respondent. The reasons for this conclusion with which this decision has begun would become apparent very shortly.</p> <p><strong>Facts of the case</strong></p> <p>On or about 13<sup>th</sup> January, 2015, the respondent issued a writ of summons at the High Court claiming the following reliefs against the appellant:</p> <p class="rteindent1">a.  An order for the recovery of the sum of USD522,010.06 or its equivalent in Ghana cedis at the prevailing commercial rate of exchange.</p> <p class="rteindent1">b.  Interest of 10% per annum on the said amount from 5<sup>th</sup> December, 2014 till date of final payment.</p> <p class="rteindent1">c.  General damages for breach of contract.</p> <p class="rteindent1">d.  Costs assessed at 10% of the amount owed, including Solicitors’ fees.</p> <p class="rteindent1">e.  Any further order(s) that this Honourable court could deem fit.</p> <p>For its full force and effect, we shall set out extensively the material contents of the accompanying statement of claim wherein the respondent averred as follows:</p> <p class="rteindent1">“3. The plaintiff says that pursuant to the Sales and Purchase Agreement (SPA) dated 18<sup>th</sup> July 2014, made between Omaroil Agency Limited as the seller of the one part and the Defendant herein as the buyer of the other part, Omaroil Agency Limited was to supply to the defendant 11,200 barrels of crude oil between the 23<sup>rd</sup> and 24<sup>th</sup> July 2014.</p> <p class="rteindent1">4. Plaintiff says that pursuant to the Sales and Purchase Agreement executed between Omaroil Agency Limited and the defendant it was agreed between the parties that an amount of USD87.10 per barrel was to be paid within 10 days of discharge to the plaintiff for its benefit for facilitating the supply of crude oil to the defendant.</p> <p class="rteindent1">5. Plaintiff says that a quantity of 8,149 barrels of crude oil was however actually supplied to the defendant on the 12<sup>th</sup> of August 2014 as a result of which it had to discount an amount of USD2.00 per barrel to the defendant as penalty for delay of 10 days, the discount of USD2.00 per barrel for the 10 days reduced the amount per barrel to USD85.10, thus bringing the total amount payable to USD693,479.90.</p> <p class="rteindent1">6. Plaintiff says that the defendant on 13<sup>th</sup> August 2014 through its bankers………..paid to it the Ghana cedi equivalent of USD120,000.00 out of the total amount of USD693,479.90 for the crude oil supplied to defendant.</p> <p class="rteindent1">7. Plaintiff also says that on the 18<sup>th</sup> August, 2014 it therefore issued the defendant with an invoice for the payment of outstanding balance of USD 567,479.90 for the quantity of oil supplied to defendant.</p> <p class="rteindent1">8. Plaintiff says that on the 2<sup>nd</sup> October, 2014 following the defendant’s failure to pay its outstanding debt, a Memorandum of Understanding to the Sales and Purchase Agreement was executed between it, the defendant and Omaeoil Agency Ltd in which the parties agreed that the defendant shall pay the outstanding balance of USD567, 479.90 to the plaintiff within two months in three equal installments by the 31<sup>st</sup> of December 2014.</p> <p class="rteindent1">9. Plaintiff also says that per the Memorandum of Understanding executed, it was also agreed by the parties that due to the delay on the part of the defendant to pay the amount of USD567,479.90 which was due and owing under the contract, an interest rate of 10% per annum from the 18<sup>th</sup> of August 2014……was to be paid on the outstanding balance.</p> <p class="rteindent1">10. Plaintiff further says that the defendant subsequently paid to it cash of USD10,000.00 on 5<sup>th</sup> December, 2014 as well as a further payment of the Ghana Cedi equivalent of USD52,416.50 by swift through its bankers……..leaving the outstanding balance of USD505,063.40.</p> <p class="rteindent1">11. Plaintiff says that the interest accrued on the outstanding balance……is USD16,946.66 bringing the total amount due and owing by the defendant under the contract to USD522,010.06 as at 5<sup>th</sup> December 2014.”</p> <p>The respondent brought the action following the appellant’s failure to pay the outstanding balance to it. The appellant entered appearance to the writ on 15<sup>th</sup> January 2015. On 22<sup>nd</sup> January 2015, the respondent caused to be filed a motion on notice for summary judgment under Order 14 of C.I. 47. In the affidavit in support deposed to by one Captain Michael Adu, the Managing Director of respondent-company, it exhibited a copy of the agreement made between the appellant and Omaroil, it was marked exhibit MA1. They also exhibited correspondence between the parties herein confirming that monies that were due under exhibit MA1 were to be paid to the respondent, marked as exhibits MA ‘2a’, and MA ‘2b’ respectively. They also exhibited the Memorandum of Understanding, as exhibit MA5. Furthermore, they exhibited evidence of payments made by the appellant and invoice issued by the respondent. Respondent also deposed to the fact that in their belief the appellant had no defence to the action.</p> <p>In their affidavit in opposition deposed to by one Ivan Romanov, the Managing Director, the appellant relied on the statement of defence which he said raised “very serious and triable issues”. Consequently, the appellant relied wholly on the statement of defence filed on 27<sup>th</sup> January 2015 wherein they made the following material averments:</p> <p class="rteindent1">“4. The defendant denies paragraph 4 of the statement of claim. In further denial, the defendant contends that the Sale and Purchase Agreement was executed between the defendant and Omaroil but Omaroil subsequently instructed defendant to transfer the purchase price to plaintiff on its behalf.</p> <p class="rteindent1">5………….Defendant shall contend that the agreement to transfer the purchase price to plaintiff’s account on behalf of Omaroil does not transfer any liability of Omaroil onto defendant. Accordingly plaintiff has no cause of action against defendant.</p> <p class="rteindent1">8. Save that the parties executed a Memorandum of Understanding which merely confirmed the earlier position of defendant effecting payment on behalf of Omaroil to plaintiff without any definite amount stated therein, paragraph 8 of the statement of claim is denied and plaintiff is put to strict proof.</p> <p class="rteindent1">9. The defendant admits paragraph 9 of the statement of claim save that no amount was stated therein and the contents of the said MOU were mere understandings between the parties but is not binding and of no legal effect. Therefore the contention by plaintiff for payment of interest of 10% per annum is of no legal significance.</p> <p class="rteindent1">10. In the alternative, the defendant contends that it was at all material times agreed that all payments to plaintiff was (sic) for and on behalf of Omaroil and therefore, defendant cannot be made to pay any such interest on the amount. Accordingly, there is no contractual relationship or privity of contract between plaintiff and defendant.</p> <p class="rteindent1">12. Paragraphs 11-14 of the statement of claim are denied and plaintiff is put to strict proof.</p> <p class="rteindent1">13. Defendant shall contend that it had entered into another agreement with Omaroil on the 18/09/2014 in which defendant was to pay another entity, Dome Energy an amount of USD 240,000.00 and which said amount was to be used to offset from the defendant’s liability or debt for the crude oil supplied by Omaroil.  </p> <p class="rteindent1">14. The defendant will contend at the trial that it had to adhere to Omaroil’s instructions as they were the suppliers of the crude oil save that defendant was instructed to pay to the plaintiff herein for their facilitating the supply of crude oil to the defendant.</p> <p class="rteindent1">15. The defendant says it had no option to pay Dome Energy as instructed by Omaroil as they were the actual suppliers of the crude oil and their liability was to Omaroil and not the plaintiff.”</p> <p>In a supplementary affidavit in support of the application, the plaintiff deposed that the defence put up by the defendant was a sham. They also deposed that the agreement between the defendant and Omaroil in favour of Dome Energy, if at all, was not binding on the plaintiff.</p> <p>The defendant responded to this in a supplementary affidavit in opposition filed on 10<sup>th</sup> February 2015 by annexing the MOU in respect of the instructions to pay Dome Energy. It was marked OC1.</p> <p>The defendant relied largely on its pleadings for the evidence in rebuttal of the facts in support of the application. Rule 3(1) of Order 14 entitles the defendant to do that, for the rule says a party may show cause either by affidavit or otherwise. The expression ‘otherwise’ includes the pleadings so far filed on record. On the same point, in the case of <strong><em>Ray v. Newton, (1913)1 K.B. 249 at 258</em></strong> Hamilton, L.J. held the view that a defendant’s affidavit is not conclusive and does not preclude him from relying on defences not raised in it.</p> <p>The defendant is given much latitude to introduce any plausible or credible defence to the claim, subject of course to the test of relevancy, in order not to be shut out. And he may do so in an affidavit or by reference to existing pleadings or other acceptable ways of introducing evidence to a court. And the court is bound to have regard to everything the defendant has to offer to guide it in making a determination.</p> <p><strong> Decisions of the courts below.</strong></p> <p>The trial court dismissed the application for the reason that triable issues were raised on the pleadings in two areas, namely (i) “whether the plaintiff could take benefit of the contract by the assignment” and (ii) “the priority of the plaintiff and Omaroil” The Court of Appeal thought otherwise and reversed the High Court’s decision and entered judgment for the plaintiff, save for the relief for damages which it ordered the High Court to determine on merits.</p> <p>The reasons given by the Court of Appeal may be summed up thus:</p> <p class="rteindent1">1.  The fact that the defendant had made part payment to the plaintiff is an admission of liability.</p> <p class="rteindent1">2.  The issue of priority of payment between the defendant and Omaroil as found by the trial judge is erroneous and non-existent.</p> <p class="rteindent1">3.  The issue of privity as raised by the defendant is “not real, and not substantial or consequential” as defendant “is estopped by its own conduct in raising the said issue having previously made payments” to the plaintiff before the action giving rise to the appeal was commenced.</p> <p class="rteindent1">4.  There was an assignment to the plaintiff by Omaroil under the SPA of 18<sup>th</sup> July 2014. Consequently “by virtue of section 7 of Act 25…….the assignment of legal rights and interest to an assignee extinguishes the rights and interest of the assignor” </p> <p>Being dissatisfied with this decision, the defendant has appealed to this court on these grounds:</p> <p class="rteindent1">(a) The learned Justices of the Court of Appeal erred in holding that the provisions of the Sale and Purchase Agreement dated the 18<sup>th</sup> day of July, 2014, inured to the benefit of the plaintiff which at all material times was not a party to the said agreement.</p> <p class="rteindent1">(b) The learned Justices of the Court of Appeal failed to consider in detail the plaintiff’s claim which was mainly for facilitation of the supply of crude oil to defendant and not for the actual supply of crude oil to defendant.</p> <p class="rteindent1">(c) The learned Justices of the Court of Appeal erred in granting the Plaintiff summary judgment without any proof of the amount due and in the face of triable issues raised on the pleadings and affidavits of both parties to this suit.</p> <p class="rteindent1">(d) The award of GH₵10,000.00 made by the Court of Appeal as costs in favour of the plaintiff is rather harsh and excessive.</p> <p><strong>Arguments by Counsel</strong></p> <p>The appellant’s counsel argued grounds (a) and (b) together, followed by (c). However, he abandoned ground (d) on the question of costs. We would address all the grounds together for purposes of convenience since they all arise from the same facts and source/s of law. To begin with, Counsel for the appellant argued that the first two grounds of appeal are intended to raise for the consideration and/or determination by this court “whether triable issues were raised on the pleadings of the parties or otherwise to warrant a grant or refusal of an application for summary judgment under Order 14 of C.I. 47.” Counsel cited this court’s decision in the case of <strong>Ballast Nedam Ghana BV vs. Horizon Marine Construction Ltd. (2010) SCGLR 435, </strong>on the scope of Order 14. And for the same purpose, he also cited the dictum of Wood JA (as she then was) in the case of <strong>Sadhwani vs. Alhassan (1999-2000) 1 GLR 19 CA </strong>at p. 25. Counsel stated the fact that though the court below cited both of these authorities, yet it misapplied their <em>ratio decidendi, </em>thereby occasioning a grave miscarriage of justice.</p> <p>Counsel then made this material assertion: “<em>Examining the statement of claim and affidavit in support filed by the respondent, alone, without comparing same with the processes filed by the appellant, should have convinced the lower court that the respondent is not entitled to summary judgment.”</em></p> <p>Counsel proceeded to examine the plaintiff’s case as pleaded, and pointed out two inconsistent or contradictory claims. The first one pleaded in paragraph 4 of the statement of claim, supra, is a claim based on payment of commission for facilitating the supply and delivery of oil to the defendant. The second is based on the actual supply of the crude oil contained in the contract, exhibit MA1. Counsel therefore stated that “<em>this apparent inconsistency of whether respondent was launching a claim against appellant as a facilitator entitled to commission or as the seller or supplier of the crude oil, was never resolved and still remains unresolved.”</em></p> <p>On the issue of assignment, counsel contended that there is no evidence on record that the seller, Omaroil, ever expressly assigned its interest in the SPA to the respondent.</p> <p>On the payments made by the appellant to the respondent, counsel contended that they were made to the respondent’s account “because that was nominated by Omaroil in the contract, exhibit MA1” Thus the payment could not be construed as an admission of the appellant’s liability to the respondent, counsel opined. Consequently, counsel submitted that the “contention by the appellant in its statement of defence that the respondent has no cause of action should have been interrogated to the hilt by the lower court before arriving at its decision. It is an issue arising from the pleadings of both parties to the suit.”</p> <p>In counsel’s view, several questions remained unresolved through the summary procedure adopted, and it would be fair and just that all questions be addressed through a full trial.</p> <p>In response to these arguments, counsel for the respondent said the respondent never pleaded that they were to be paid ‘some commission’ for facilitating the supply and delivery of the crude oil. Counsel stated that “it has never been the contention of the respondent that it was entitled to ‘some commission’ neither has it been in controversy, whether the respondent facilitated or actually supplied the crude oil. In fact, nowhere in the appellant’s pleadings was the issue of whether the respondent ‘facilitated’ or actually supplied the crude oil raised as an issue for determination by the lower courts.” According to counsel, the respondent’s case has been that it “facilitated the supply of the crude oil” to the appellant, per paragraph 4 of the statement of claim, repeated in paragraph 8 of the affidavit in support of the motion for summary judgment. This is the basis for the respondent’s claim, counsel contended.</p> <p>Counsel stated that the question whether the plaintiff was basing his claim on commission for facilitating the supply of crude oil was a new matter as same was never raised before any of the courts below. Besides, counsel referred to the fact that the request to interrogate the issue of supply and delivery of the crude oil was also a new matter, which the trial judge did not find was a triable issue. It is too late in the day to raise such matter for the first time in the apex court, counsel submitted. The principle, in the words of counsel, was that “facts which were not canvassed as being the subject matter before a lower court cannot be raised for the very first time at an appellate court.” He cited the authority of <strong>Antie and Adjuwuah v. Ogbo (2005-2006) SCGLR 494, </strong>holding 5. Further, counsel’s view was that it would amount to accepting a case different from what the party had put forward, and that would be contrary to the decision in the case of <strong>Dam v. Addo (1962) 2 GLR 200. </strong>He also cited the case of <strong>Aboagye v. Controller and Accountant-General &amp; Another (2012) SCGLR 538, </strong>where it was stated that it was not permissible under the Supreme Court Rules to introduce evidence by way of the statement of case.</p> <p>On the specific questions of privity and assignment, counsel was of the firm opinion that if there was no assignment, there would have been no basis for the execution of the MOU, exhibit MA5, and also for the appellant to have paid so much money to the respondent. According to counsel, the respondent was designated as the beneficiary of the funds under the contract wherein it was stated to benefit assignees of the parties, inter alia. The respondent was named in Appendix A of the contract as the beneficiary thereof. He also cited the various correspondences on the subject which he said confirmed the respondent as the beneficiary of the proceeds. In concluding this question, Counsel submitted that an attempt to distinguish between the assignment of the benefit and beneficiary “is of no legal consequence as to warrant a re-opening of this matter for trial. It is abundantly clear that the benefits of the contract had been unequivocally conferred on the respondents…..”</p> <p>On ground (c), the appellant is challenging the decision of the Court of Appeal that the provisions of the SPA inured to the benefit of the respondent when it was not a party thereto. The court below had stated that the appellant had acknowledged its indebtedness to the respondent and has pursuant thereto made part payments. It also stated that the seller had assigned its rights under the SPA to the respondent. The Court also stated that the respondent was the beneficiary of the SPA under Appendix A thereof. The appellant’s view was that there was nothing in the SPA which suggested that the respondent was a beneficiary; merely using its bank account to receive payments under the SPA did not constitute the respondent into a beneficiary, counsel submitted. Counsel also made reference to the other exhibits and concluded that they did not conclusively make the respondent a beneficiary. Counsel also referred to the lower court’s description of the respondent as an assignee of Omaroil and said the respondent could not be a beneficiary and an assignee at the same time. At any rate there was no evidence of an assignment. According to Counsel, what the court below did was tantamount to dealing with the matter on merits by the affidavits, contrary to the clear decision in the Sadhwani case, supra.</p> <p>In his response, counsel for the respondent said the SPA was made to benefit the respondent; consequently, the provisions of sections 5 and 6 of Act 25 were applicable. Thus the appellant and Omaroil were not entitled to vary the terms of the contract or rescind same. Counsel stated that “by the combined effect of exhibits MA(1), MA 2a &amp; b, MA(4) and MA(5), the appellant undertook to pay all proceeds to respondent. Having bound itself to such an agreement or undertaking, it is now not open to the appellant to contend that the court should have delved into the issue of whether or not it was bound by that undertaking to the respondent. In any case, it was not clear from the appellant’s pleadings whether the said amount of US$240,000.00 allegedly instructed to be paid to Dome Energy was paid. What is clear from the appellant’s affidavit in opposition and the submissions of his counsel…….is that, only an amount of USD183,000.00 was paid and even that, no evidence of payment was exhibited.”</p> <p><strong>Consideration by the court</strong></p> <p>Starting from the last submission by Counsel for the respondent, he stated that the payment of USD183,000.00, even if made, should not affect the appellant’s obligation to the respondent. In effect even if the appellant has paid part of the amount stated in the SPA to the seller’s credit as instructed in exhibit OC1, it is a matter of no consequence as far as the respondent is concerned. In effect without even interrogating the case, the court should overlook the apparent overpayment that evidence on record has thrown up. The court would not be entitled to ignore what appears to be double payment under the same contract, intended to benefit the seller and the respondent who claims to be the seller’s assignee. They would be unjustly enriched thereby and the court could not close its eyes to it. This was a sufficient reason why judgment should not have been entered for the respondent, at least not for the entire claim.</p> <p>We would next consider what counsel for the respondent referred to as new matters and/or evidence which have been raised for the first time in this appeal. It is observed that up to this point all arguments and decisions have been based on the pleadings and affidavit evidence filed before the trial court. Thus factually, nothing new has been introduced since then. It is clear all the submissions have been made pursuant to the facts on record. For that reason the submissions are admissible even if not canvassed in the courts below. What we understand counsel to be doing is placing different construction on the pleadings and affidavit evidence, especially the exhibits. This does not amount to introducing new matter or evidence. The court is entitled to draw inferences from accepted facts on record and for that reason a party may urge on the court a particular meaning or construction on the accepted facts even if the court below was not given such benefit. It does not violate any of the principles highlighted by counsel for the respondent in his submissions which have been outlined above. </p> <p>Order 14 of C.I. 47 has the following relevant provisions:</p> <p>Rule 1</p> <p><strong>Application for summary judgment</strong></p> <p>1 Where in an action a defendant has been served with a statement of claim and has filed appearance, the plaintiff may on notice apply to the Court for judgment against the defendant on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or that the defendant has no defence to such a claim or part of a claim, except as to the amount of damages claimed.</p> <p>Rule 2</p> <p class="rteindent1">(1) The notice of the application shall set out the reliefs sought by the plaintiff.</p> <p class="rteindent1">(2) The notice shall be supported by an affidavit verifying the facts on  which the relevant claim or part of a claim is based, and stating that in the deponent’s belief there is no defence to that claim or part of a claim, or no defence except as to the amount of damages claimed.</p> <p>Rule 3</p> <p><strong>Defendant may show cause</strong></p> <p>(1) A defendant may show cause against the application by affidavit or otherwise to the satisfaction of the Court.</p> <p>Rule 5</p> <p class="rteindent1">(1) On the hearing of the application the Court may</p> <p class="rteindent1">(a)  give such judgment for the plaintiff against the defendant on the relevant claim or part of a claim as may be just having regard to the nature of the remedy or relief sought, unless the defendant satisfies the Court, with respect to that claim or part of it, that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim or part of it.</p> <p>Over the years the courts have expressed in different ways what considerations to apply in proceedings for summary judgment. Some of them are contained in the following authorities:</p> <p class="rteindent1">(i)      In the case of <strong>Ballast etc v Horizon Marine Construction, </strong>supra, this court stated, per Gbadegbe, JSC, that “the court may only grant the application in cases where the defendant failed to set up a good defence or raise an issue which ought to be tried.”</p> <p class="rteindent1">(ii)      In <strong>Sadhwani v. Alhassan, </strong>supra, the court spoke of bona fide or good defence, that means a defence known in law, to entitle a defendant to defeat an application for summary judgment, and also that the court should not rely on affidavit evidence to dispose of triable issues.</p> <p class="rteindent1">(iii)     In the case of <strong>Jones v. Stone (1894) AC 122; 70 L.T. 174, </strong>Lord Halsbury stated that the proceeding established by Order 14 is a peculiar proceeding, intended only to apply to cases where there can be no reasonable doubt that a plaintiff is entitled to judgment; and where it is inexpedient to allow defendant to defend for mere purposes of delay.</p> <p class="rteindent1">(iv)     <strong>in Daimler Co. Ltd. v Continental Tyre &amp; Rubber Co. (Great Britain), Ltd. (1916) 2 A.C. 307; (1916-17) All E.R. Rep. 191, </strong>the trial-provided of course there is no arguable defence to the action-nevertheless, facts, this procedure was not appropriate. Among others, the defendant had alleged that the action was commenced without proper authorisation.</p> <p class="rteindent1">(v)      “When the Judge is satisfied not only that there is no defence but no fairly arguable point to be argued on behalf of the defendant, it is his duty to give judgment for the plaintiff”, per Jessel MR, in <strong>Anglo-Italian Bank v. Wells (1878) 38 L.T. 197 C.A. </strong>at 201.</p> <p class="rteindent1">(vi)     Even when there is a fair probability of a defence, leave to defend should be given; see <strong>Ward v. Plumbley, (1890), 6 T.L.R. 198.</strong></p> <p class="rteindent1">(vii)    It is important to note these significant words of Anin J.A. (as he then was) in the case of Wilson. V. Smith (1980) G.L.R. 152 at 161: “<em>While it is true that the rationale behind the summary procedure under Order 14 of L.N. 140A is to provide the plaintiff with a speedy mode of recovery of judgment in cases properly falling under it and thereby to prevent him from being delayed and put to an unnecessary and protracted trial-provided of course there is no arguable defence to the action-nevertheless, the Order was not intended as an engine for the suppression of the defendant. The Order is only intended to apply to cases where there is no substantial dispute as to the facts or the law.”</em></p> <p>It is observed that under both the old rules contained in Order 14 of the High Court (Civil Procedure) Rules, 1954, L.N. 140A (repealed) and the new rules under C.I. 47, also Order 14 thereof the provisions for summary judgment have been similar in content. Similar provisions apply under the English rules, thus the English authorities on this subject are quite germane and persuasive. These principles are also outlined in the Supreme Court Practice, 1967 edition at page 119 in these words: “<strong><em>The defendant may show cause against the plaintiff’s application….(2)on the merits, e.g. that he has a good defence to the claim on the merits, or that a difficult point of law is involved, or a dispute as to the facts which ought to be tried, or a real dispute as to the amount due which required the taking of an account to determine, or any other circumstances showing reasonable grounds of a bona fide defence.”</em></strong></p> <p>There are numerous cases which need not be cited, for the principles have become well-known and accepted and are briefly condensed in rule 5(1)(a) of Order 14. In summary, the court must be satisfied that on the facts and law the defendant ought to be given the opportunity to be heard on merits, where his defence raises reasonable and arguable points and is not intended merely to cause delay and is not a sham. A complete defence is not required at this stage; but as was held in <strong>Wallingford v. Mutual Society (1880) 5 App. Cas. 685; 29 W.R. 81 H.L. </strong>mere denial is insufficient; the defendant must give sufficient facts and particulars to show that there is a bona fide defence. </p> <p>We recount what counsel for the appellant said in his statement of case that  “Examining the statement of claim and affidavit in support filed by the respondent, alone, without comparing same with the processes filed by the appellant, should have convinced the lower Court that the respondent is not entitled to summary judgment.’’ In effect counsel is saying the plaintiff made no prima facie case in the first place to have warranted a consideration of the defence to the claim. Even though counsel did not expatiate on this, it is a true representation of the initial consideration of an application under order 14.</p> <p>Rules 1, 2 and 3 are the heartbeat of Order 14 and complement each other and should thus be construed together. The starting point in an application under this Order is for the court to examine the endorsement on the writ, statement of claim and affidavit in support of the application and decide whether the plaintiff has made what is called a prima facie case to entitle him to the court’s decision, even in the absence of a defence. Rule 1 entitles the plaintiff to make the application for summary judgment after entry of appearance; that is, even before the defendant has filed a statement of defence. This means that the court may proceed to examine only the material placed before it by the plaintiff. Hence the requirement that the court should be satisfied that the plaintiff has made a case, albeit prima facie. Where the court takes the view that the application is properly constituted, the burden is shifted to the defendant to show cause by affidavit evidence or otherwise, especially his statement of defence, if any has been filed, that he has a good, bona fide, reasonable, or fair defence to the plaint, in short that he has raised a legally cognizable defence to the claim or a part of it which ought to be tried as rule 5(1)(a) requires.</p> <p>In the statement of claim, the respondent averred that an SPA was entered into between the defendant and Omaroil. The respondent was not a party to this contract. The pleading also stated that the respondent was to be paid some money for facilitating the supply of crude oil under the contract, per paragraph 4 thereof, supra, which is repeated for purposes of emphasis:</p> <p class="rteindent1"><strong>“Plaintiff says that pursuant to the Sales and Purchase Agreement executed between Omaroil Agency Limited and the Defendant it was agreed between the parties that an amount of USD87.10 per barrel was to be paid within 10 days of discharge to the Plaintiff for its benefit for facilitating the supply of the crude oil to the Defendant.”</strong></p> <p>This particular pleading was the subject of two different constructions and given two different meanings. Taking the first construction or meaning which is espoused by counsel for the respondent, the payment due the plaintiff is covered by the SPA itself, wherein the seller was given the right to assign and the respondent was made a beneficiary. Following the second construction or meaning, Counsel for the appellant understands the respondent to be saying that besides the SPA there was another agreement between defendant and Omaroil which was made for the benefit of the respondent to the tune of USD87.10 per barrel payable by the appellant to the respondent within a period of 10 days of the supply or delivery. But Counsel for the respondent strenuously argued that there was no such discrepancy between the said paragraph 4 and the SPA in as far as the SPA was intended to benefit the respondent.</p> <p>Since the arguments are based on the same pleading and facts, we would proceed to discuss the two viewpoints together. Having regard to the nature of the case put forward by the respondent, certain questions arose. Since the respondent is not a party to the SPA, was there an assignment of Omaroil’s interest therein to the respondent? Or was the respondent a beneficiary of the SPA under its clear terms? What document evidences the other agreement, if any, referred to in paragraph 4 of the statement of claim? Is the appellant liable under both the SPA and the agreement, if any, mentioned in paragraph 4 of the statement of claim? Taking into account the averments in the statement of claim, these are legitimate questions which the trial court could raise even without regard to the defence. And if the court was not satisfied that there was a clear assignment, or that the respondent was a beneficiary under the SPA, he ought to refuse the application for summary judgment. In his view, Counsel for the respondent considered these matters to be trivial and inconsequential, but they are not. The party must be made to know the basis of the claim against him, for that will inform the nature of his defence.</p> <p>The appellant pleaded that the respondent had no cause of action against it since the respondent was not a party to the SPA and was neither a beneficiary nor assignee thereof. It is observed that all the various correspondences exhibited in this application made reference to the SPA as the only contract. The respondent admits it is not a party to it; thus there was the need for evidence to be adduced to satisfy the court that there was an assignment to it or it was a beneficiary of the SPA which entitled it to sue under the SPA, in other words that it has a cause of action under the SPA in its own right. When the issue is raised as to a cause of action, it ought to be interrogated first before any further step is taken in the action for it goes to the foundation of the matter before the court. For in a case founded on contract, the principle applicable, as stated in Halsbury’s Laws of England, 5<sup>th</sup> edition Vol 11, paragraph 208 at page 206 is that “<em>the proper claimant is the person with whom or on whose behalf the contract was made, or in whom the rights under the contract are vested.” </em>  </p> <p>The Court of Appeal answered these questions in favour of the respondent, for reasons which have been summarized above. It is clear there was no privity between the respondent and Omaroil as far as the SPA was concerned. But lack of privity could be defeated by a successful plea of assignment as an exception to the rules on privity. On the other hand, he could succeed if it established that it was a beneficiary of the contract. All the other matters arising in this case are ancillary to a resolution of the key questions of whether the respondent is an assignee of Omaroil or a beneficiary under the SPA. These two concepts, namely assignment and beneficiary under a contract, have different connotations in law so it was inappropriate for the Court below to have treated them together as one legal concept.</p> <p>What is required to be established in a case founded on assignment of an interest under contract? The elements applicable for the consensual transfer of rights under a contract are equally applicable to assignment under a contract, since it also entails a transfer of right/s. Thus to be legally effective, an assignment of rights under a contract must establish four elements. These elements have statutory backing in subsections 1 and 2 of section 7 of the Contracts Act, 1960, (Act 25). These are:</p> <p class="rteindent1">i.        The assignor must have the original right to the subject-matter; in this case the sum mentioned in the SPA. <em>Nemo dat quod non</em> <em>habet</em> applies.</p> <p class="rteindent1">ii.       The assignor must have expressed or exhibited clear intent to divest itself of its title or right to the subject-matter. This is a requirement under consensual transfer of right under contract as well as the Statute, namely section 7(1) of Act 25.</p> <p class="rteindent1">iii.      The assignor must have taken steps to effectuate that intention by an act of transfer or an agreement to assign recognized in law or equity. Section 7(2)(b) of Act 25 requires it to be in writing signed by the assignor or his agent. This does not exclude the principles of equity against fraud and unjust enrichment; if the court finds it unconscionable to allow an assignor to resile from his action which has caused detriment to the assignee, it will enforce it even in the absence of writing.</p> <p class="rteindent1">iv.      The subject-matter of the assignment, in this case, the amount of money, must be known and certain.</p> <p>The facts relied upon by the Court of Appeal were the SPA itself, the MOU, the various correspondences and the payments made by the appellant to the respondent. It is noted that the MOU as well as all the various correspondences made reference to, and relied on, the SPA. Thus the parties had no doubt that the SPA reigned supreme. If the respondent was the beneficiary under the SPA, why was Omaroil a party to the subsequent MOU? If the respondent was the assignee of Omaroil’s rights since 18<sup>th</sup> July 2014, why was Omaroil’s consent subsequently required for any transaction in relation to the SPA? Counsel for the respondent sought to answer by stating that the Appendix A took its roots from article 24 of the SPA, and when read together they made the respondent the beneficiary of the contract. But it does not answer the question why Omaroil’s consent was still required after making the respondent the beneficiary of the contract. Let us quote these provisions of the SPA and discuss their import. They provide:</p> <p class="rteindent1">“24. <strong>Appendices: </strong>There is one (1) appendix in this contract: Banking Coordinates (Appendix A)</p> <p class="rteindent1"><strong>APPENDIX (A)</strong></p> <p class="rteindent1"><strong>SELLER’S BANKING DETAILS</strong></p> <p class="rteindent1"><strong>BANK NAME                                      ECOBANK GHANA LIMITED</strong></p> <p class="rteindent1"><strong>BANK ADDRESS                       TEMA MAIN BRANCH</strong></p> <p class="rteindent1"><strong>ACCOUNT NAME                      ABIVAMS LIMITED</strong></p> <p class="rteindent1"><strong>BENEFICIARY                                   ABIVAMS LIMITED</strong></p> <p class="rteindent1"><strong>SWIFT CODE                                     </strong></p> <p class="rteindent1"><strong>IBAN ACCOUNT NO.</strong></p> <p class="rteindent1"><strong>CURRENCY                              USD</strong></p> <p class="rteindent1"><strong>A/C OFFICER</strong></p> <p class="rteindent1"><strong>A/C OFFICER CONTACT</strong></p> <p class="rteindent1"><strong>BUYER’S BANK DETAILS</strong></p> <p class="rteindent1"><strong>BANK NAME                                      UT BANK LTD</strong></p> <p class="rteindent1"><strong>BANK ADDRESS                       25B MANET TOWERS, AIRPORT CITY</strong></p> <p class="rteindent1"><strong>ACCOUNT NAME                      PLATON GAS OIL GHANA LTD</strong></p> <p class="rteindent1"><strong>BENEFICIARY                                   PLATON GAS GHANA LTD</strong></p> <p class="rteindent1"><strong>ACCOUNT NO</strong></p> <p class="rteindent1"><strong>CURRENCY                              USD</strong></p> <p class="rteindent1"><strong>ACCOUNT OFFICER</strong></p> <p class="rteindent1"><strong>TELEPHONE NO.</strong></p> <p>Article 24 of the contract upon which Appendix A hinges only makes provision for bank account, and in this context bank account to be named by both parties. The use of the expression ‘Beneficiary’ appears under Appendix A in both the buyer and seller’s account. It could bear more than one meaning, having regard to (i) the express words used and (ii) the subsequent conduct of the parties. On the face of the document, it could mean that the account holder is the same person who is the beneficiary of the account, in other words there is no other beneficiary of the account, like a trust or client or joint account which have other beneficiaries. It could also mean, as described by the respondent that it meant the money was for the benefit of the respondent. It could also mean that despite the designation of the respondent’s bank account to receive the payment, the money remains that of the seller hence the description in the contract as the “Seller’s Banking Details” and not the Beneficiary’s Banking Details. And from the subsequent conduct of the parties in involving Omaroil in signing MOU etc in respect of the SPA it appeared the contract does not mean what the respondent ascribes to it. In short, there was no clear intent from the face of the SPA and subsequent dealings or conduct of the parties that Omaroil had ceded its right to the money to the respondent. The lack of intention is buttressed by the fact that Omaroil also contracted with the appellant to pay part of this amount to another named person in exhibit OC1 dated 18<sup>th</sup> September 2014. A key element in assignment appears to be missing upon reading the SPA, MOU and exhibit OC1. Certainly intent may be established through the writing required by section 7(2) of the Contracts Act if indeed there was one.</p> <p>It is also significant to note that there is nothing in the express terms of the SPA that an assignment has been made to the respondent by Omaroil. The agreement only permitted Omaroil to assign its interest, meaning that it could be done by a separate agreement subsequently.</p> <p>On the question of whether the respondent was a beneficiary under the SPA, the respondent recounted Appendix A of the SPA and relied on Sections 5 and 6 of Act 25 the relevant of which which provide thus:</p> <p class="rteindent1">“<strong>5. Provision in contract for benefit of third party</strong></p> <p class="rteindent2"><strong>(1)          A provision in a contract made after the commencement of this Act which purports to confer a benefit on a person who is not a party to the contract, whether as a designated person or as a member of a class of persons, may, subject to this section and sections 6 and 7, be enforced or relied on by that person as though that person were a party to the contract.</strong></p> <p class="rteindent1"><strong>6.  Rights of third party</strong></p> <p class="rteindent1"><strong>Where under section 5 a person who is not a party to a contract is entitled to enforce or rely on a provision in the contract,</strong></p> <p class="rteindent2"><strong>(a)          a variation or rescission of the contract shall not prejudice that person’s right to enforce or rely on the provision if that party has acted to the prejudice of that party in reliance on the variation or rescission, unless that party consents to the variation or rescission; and</strong></p> <p class="rteindent2"><strong>(b)          subject to paragraph (a), a party against whom the provision is sought to be enforced or relied on is entitled to rely on or to plead by way of defence, set-off, counterclaim or otherwise a matter relating to the contract which that party could have so relied on or pleaded if the provision were sought to be enforced or relied on by the other party in the contract. </strong></p> <p>The applicable statutory provisions have been correctly cited by the respondent. However, these provisions apply only where the contract clearly confers a benefit on the third party. But as earlier pointed out, from article 24 and Appendix A of the SPA, one cannot conclude positively, without further extraneous evidence, that it conferred a benefit on the respondent. The SPA referred to the seller and not a facilitator of the sale as paragraph 4 of the statement of claim talks about. The seller as used in the SPA is not synonymous with a facilitator as used in the pleadings. If they are one and the same, let there be evidence to prove it. Based on the available evidence we hold that these provisions do not apply and the court below was wrong in concluding that those provisions under the SPA conferred a benefit on the respondent.</p> <p>What must be noted now is that at this stage it is not a full blown trial, the defendant only needs to show that he has a reasonable defence to the claim and his defence is not a sham or intended to delay payment. The defence raises for the court’s consideration key legal issues of assignment and enforcement of contract. If indeed exhibit OC1 is valid, the court’s decision would mean the appellant would have been compelled to over pay what was contracted for.</p> <p>To get over the issue of intent to assign and the effects of exhibit OC1, the Court of Appeal relied on section 7 of the Contracts Act and concluded that Omaroil could not validly enter into another contract exhibit OC1 when it had already assigned its interest under the SPA to the respondent. Section 7 of Act 25 provides that:</p> <p class="rteindent1"><strong><em>(1)          Subject to the relevant rule of law, and subject to any contrary intention appearing from a transaction giving rise to legal rights, a person may, after the commencement of this Act, assign a legal right to another person as specified in this Act.</em></strong></p> <p class="rteindent1"><strong><em>(2)          An assignment, whether given for consideration or not, of a vested right, transfers the right and interest in the assignment to the assignee and extinguishes the right and interest in the assignment of the assignor if-</em></strong></p> <p class="rteindent2"><strong><em>(a)     it is absolute and not by way of a charge only; and </em></strong></p> <p class="rteindent2"><strong><em>(b)     it is in writing and is signed by the assignor or the agent of the assignor; and </em></strong></p> <p class="rteindent2"><strong><em>(c) written notice of the assignment is given to the debtor or any other person against whom the right is enforceable.</em></strong></p> <p class="rteindent1"><strong><em>(3)          A purported assignment of a conditional right operates as a promise to assign the right if and when the condition occurs.</em></strong></p> <p class="rteindent1"><strong><em>(4)          An assignment, whether given for consideration or not, is valid although it does not comply with all or any of the requirements of subsection (2) but-</em></strong></p> <p class="rteindent1"><strong><em>(a)     a right so assigned shall not be enforced or relied on against the debtor or other party against whom the right is enforceable unless the assignor is a party to the proceedings in which it is sought to be enforced or relied on, or unless the Court is satisfied that it would be impossible or impracticable so to join the assignor; and</em></strong></p> <p class="rteindent1"><strong><em>(b)     the assignment shall not prejudice the debtor or any other person against whom the right is enforceable unless the debtor or the other person has written notice of the assignment.</em></strong></p> <p class="rteindent1"><strong><em>(5)          Where there are two or more assignments in respect of the same debt or right, a later assignee has priority over an earlier assignee if the debtor or other person liable had not received written notice of the earlier assignment at the time when the later assignment was made.</em></strong></p> <p class="rteindent1"><strong><em>(6)          A debtor or other person against whom a right is enforceable is entitled as against a person to whom the debt or the other right is assigned, to rely on or plead by way of defence, set off, counterclaim or otherwise, a matter relating to the right which the debtor or that other person could have relied on or pleaded against the assignor at the time when the writtten notice of the assignment was received by the debtor or that other person.</em></strong></p> <p>Section 7 applies when it is established that there was an assignment in terms of the elements set out above, meaning there was an intent to assign, and there was writing identifying the subject-matter and specifically naming an assignee and bringing it to the notice of the debtor. As earlier stated, the SPA does not unequivocally create an assignment in favour of the respondent. The conduct of the purported assignor in signing exhibit OC1 seems to suggest that under the SPA it meant to retain ownership of the amount stated therein and this gives more credibility to the suggestion that article 24 of the SPA and Appendix A only chose the respondent’s bank account to receive payments from the appellant. When the MOU and the various correspondences are read together with the SPA, there is no doubt that the parties were still relying on the provisions of the SPA to which the respondent was not a party and which on the face of it did not make it an assignee. Evidence is required to unearth the Omaroil’s intention in signing both exhibits OC1 in September 2014 and then exhibit MA5 in October 2014, vis-a-vis the earlier documents signed in July 2014.</p> <p>In summary, the court has to consider the fact that the SPA, MOU and the various correspondences did not appear to have specifically made the respondent a beneficiary, neither do they appear to have created an assignment of Omaroil’s rights, except that payments were to be made to the respondent per its stated bank account. It also has to consider the fact that the defence has raised very critical issue of cause of action, and the probability that it might face payments under two different contracts on the same subject-matter resulting in over payment. At this stage it is unwise in as much as it is unreasonable to reject exhibit OC1 when a clear intent to assign and actual assignment of Omaroil’s rights under the SPA have not been fully unearthed.</p> <p>The Court of Appeal undertook to construe the documents exhibited by the parties in coming to its decision. That would have been justified if the documents were conclusive of the matter. The respondent denies any knowledge of exhibit OC1 and the payment/s that were made under it. Therefore, the appellant would be required to provide evidence at a trial to prove the validity of exhibit OC1 and the payments made pursuant thereto. The appellant would also have to satisfy the court that it was entitled to deduct the amount contained in exhibit OC1 from whatever the balance is in the SPA. The respondent would be required to prove that it was either a beneficiary or assignee of the SPA, which is not easily deducible from the totality of the documentary evidence at this stage.</p> <p>The principle is that where, on an application for summary judgment, the issue raised was a pure point of construction which could be as well determined on summary application as at a trial, because it would not be affected by evidence, the court had jurisdiction to grant summary judgment, on the basis that a trial would have no realistic prospect of causing it to reach a different judgment. That was so stated in the case of <strong>BBC Worldwide Ltd. v. Bee Load Ltd., t/a Archangel Ltd. (2007) T.L.R. 86. </strong>But this matter does not depend on pure construction of documents, as at least exhibit OC1 and payments made under it have to be established at the trial, and moreover the exhibits are capable of more than one plausible construction and will thus require some form of evidence to assist the court determine the issues. Most importantly, the very basis of the respondent’s action is reasonably being challenged for if it is neither a beneficiary under the SPA nor an assignee of Omaroil, the respondent might not have a cause of action against the appellant.</p> <p>It is for these reasons that we conclude that the appellant was unjustifiably shut out of the trial. We therefore allow the appeal, set aside the judgment of the Court of Appeal and restore the decision of the High Court. We must state that except on matters of law stated herein which are binding on the courts below, nothing stated herein should be taken as a finding of fact by this Court; all the issues are at large and the trial court is unfettered in its decision to conduct a ‘full blown’ trial.</p> <p class="rtecenter"><strong>A. A. BENIN</strong></p> <p class="rtecenter"><strong>(JUSTICE OF THE SUPREME COURT)</strong></p> <p class="rtecenter"><strong>S. A. B. AKUFFO (MS)</strong></p> <p class="rtecenter"><strong>(JUSTICE OF THE SUPREME COURT)</strong></p> <p class="rtecenter"><strong>ANIN YEBOAH</strong></p> <p class="rtecenter"><strong>(JUSTICE OF THE SUPREME COURT)</strong></p> <p class="rtecenter"><strong>P. BAFFOE-BONNIE</strong></p> <p class="rtecenter"><strong>(JUSTICE OF THE SUPREME COURT)</strong></p> <p class="rtecenter"><strong>G. PWAMANG</strong></p> <p class="rtecenter"><strong>(JUSTICE OF THE SUPREME COURT)</strong></p> <p><strong><u>COUNSEL</u></strong></p> <p>OSAFO BUABENG FOR THE DEFENDANT/RESPONDENT/APPELLANT.</p> <p>CHARLES TETTEH FOR THE PLAINTIFF/APPELLANT/RESPONDENT.</p> </div></div></div><div class="field field-name-field-download field-type-file field-label-above"><div class="field-label">Download:&nbsp;</div><div class="field-items"><div class="field-item even"><iframe class="pdf" webkitallowfullscreen="" mozallowfullscreen="" allowfullscreen="" frameborder="no" width="100%" height="600px" src="https://old.ghalii.org/sites/all/libraries/pdf.js/web/viewer.html?file=https%3A%2F%2Fold.ghalii.org%2Fgh%2Fjudgment%2FSupreme%2520Court%2F2017%2F10%2FABIVAMS%2520LTD%2520VRS%2520PLATUN%2520GAS%2520OIL%2520GH.%2520LTD.pdf" data-src="https://old.ghalii.org/gh/judgment/Supreme%20Court/2017/10/ABIVAMS%20LTD%20VRS%20PLATUN%20GAS%20OIL%20GH.%20LTD.pdf">https://old.ghalii.org/gh/judgment/Supreme%20Court/2017/10/ABIVAMS%20LTD%20VRS%20PLATUN%20GAS%20OIL%20GH.%20LTD.pdf</iframe> </div></div></div> Wed, 06 Sep 2017 10:33:54 +0000 admghana 92 at https://old.ghalii.org https://old.ghalii.org/gh/judgment/supreme-court/2017/29#comments