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Contract –
Agreement – Manufacture and
Supply of pre-mix fuel –
Rejection of deliveries -
Recovery of the outstanding sum
- Damages for breach of contract
– Whether or not was against the
weight of evidence - Whether or
not that a claim for damages for
breach of contract would only
entitle a plaintiff to nominal
damages
HEADNOTES
The
plaintiffs herein won a tender
to supply 600,000 litres of
“marine mix” to the defendants
for the
manufacture of pre-mix fuel
for use by outboard motors.The
contract
document was tendered and marked
as exhibit A and is dated 22nd
August, 2002. It is significant
to note that the contract price
for a litre of the marine mix
was denominated in Euro and was
quoted at €1.63 per litre,
whilst Goil Oil Limited, the
other competitor and supplier
had their price quoted as €1.71
to a litre and were contracted
to supply 1,000,000 litres to
the defendants. The plaintiff
proceeded to supply the marine
mix to the defendants according
to the sample quality that they
were supplied with by the
defendants. The plaintiffs
successfully made three (3)
deliveries of the marine mix and
were paid as per the contract
terms set out in exhibit A. The
defendants however refused to
accept the 4th
delivery of the plaintiffs and
this resulted into series of
meetings between the parties
herein aimed at resolving the
differences i.e. reference
meetings held on 16/2/2005 and
1/3/2006 respectively.
Eventually, the plaintiffs were
permitted to supply the 4th
and other deliveries to the
defendants after almost two
years of stoppage by the
defendants arising from the
conduct of the defendants in
rejecting
the deliveries. One would
have expected that, the supply
and receipt of the subsequent
deliveries by the plaintiffs to
the defendants would have ended
matters, but that was not to be.
The refusal of the defendants to
pay for the 4th and
subsequent deliveries as per the
prices contained in exhibit A
but on different rates as
contained in exhibit 3 led the
plaintiffs to institute an
action in the High Court an
appeal filed by the defendants
against the High court judgment
to the Court of Appeal even
though was dismissed had some
significant reductions in the
awards made at the High Court,
As the defendants were still
dissatisfied with the judgment
of the Court of Appeal, they
further appealed to this court
HELD
It is thus
clear that even though the Court
of Appeal had re-adjusted the
awards in a significant manner
downwards, the award of costs
being discretionary, this court
is unable to disturb that
exercise of discretion. This
ground of appeal is thus
accordingly dismissed. In
concluding this case, we would
want to reiterate our strong
reservations about the arbitrary
manner in which the top
management staff of the
defendants at all material times
to the inception of this case
conducted themselves. In the
result, save as was varied by
this court in respect of grounds
II and III of the grounds of
appeal where the balance of
marine mix left to be delivered
by the plaintiffs to the
defendants was settled at
146,000 litres, the entire
appeal herein is dismissed as
unmeritorious and mischievous.
Save for the
above variations, the Court of
Appeal judgment of 11th
March, 2010 is accordingly
affirmed.
STATUTES
REFERRED TO IN JUDGMENT
CASES
REFERRED TO IN JUDGMENT
Effisah v
Ansah [2005-2006] SCGLR 943
Kusi & Kusi v
Bonsu 2010 SCGLR 60
Obeng v
Bempomaa C. A Part 3, [1992-93]
GBR 1027
Attorney-General v Faroe
Atlantic Co. Limited [2005-2006]
SCGLR 271 holding 4
Delmas Agency
Ghana Limited v Food
Distributors International
Limited [20072008] SCGLR 748
Jenkins v
Bushby [1891] 1 ch. 484
Kyenkyenhene
v Adu [2003-2004] SCGLR 142
Standard
Chartered Bank v Nelson
[1998-99] SCGLR 810
Hadley v
Baxendale 1854 9 Exch 341
Hadley v
Baxendale [1854] 9 Exch 341
Koufos v C.
Czarnikow Ltd. (The Heron II)
[1969] 1 A.C. 350
London and
Northern Bank Limited v Newness
[1900] 16 TLR 433
Hayward v
Pullinger & Partners [1950] I
A.E.R 581
Delmas Agency
Ghana Limited v Food
Distributors International Ltd.,
[2007-2008] SCGLR 748
T. K. Serbeh
&Co. Limited v Mensah
[2005-2006] SCGLR 341
Western
Hardwood Enterprises Limited v
West African Enterprises Limited
[1998-99] SCGLR 105
Bank of Ghana
v Nyarko and Anr [1973] 2 GLR
265 and
Guardian
Assurance Co. Ltd v Khajat
Trading Store [1972] 2 GLR 48
Juxon-Smith v
KLM Dutch Airlines [2005-2006]
SCGLR 438
BOOKS
REFERRED TO IN JUDGMENT
DELIVERING
THE LEADING JUDGMENT
JONES DOTSE
JSC:
COUNSEL
ADJABENG
AKRASI FOR THE APPELLANT.
ADDO ATTUAH
FOR THE RESPONDENT
______________________________________________________________________
J U D G M E N
T.
______________________________________________________________________
JONES DOTSE
JSC:
This is an
appeal by the
defendants/appellants/appellants,
hereafter referred to as the
Defendants against the judgment
of the Court of Appeal, dated 11th
March 2010, which also dismissed
an earlier appeal filed by the
Defendants against the decision
of the High Court dated 15th
August 2008 in favour of the
Plaintiffs/Respondents/Respondents
hereinafter referred to as
Plaintiffs.
The
defendants it must be noted lost
the action at the High Court and
although lost again at the Court
of Appeal, had a significant
part of the awards reduced
downward in their favour.
BRIEF FACTS:-
The
plaintiffs herein won a tender
to supply 600,000 litres of
“marine mix” to the defendants
for the manufacture of pre-mix
fuel for use by outboard motors.
The contract
document was tendered and marked
as exhibit A and is dated 22nd
August, 2002. It is significant
to note that the contract price
for a litre of the marine mix
was denominated in Euro and was
quoted at €1.63 per litre,
whilst Goil Oil Limited, the
other competitor and supplier
had their price quoted as €1.71
to a litre and were contracted
to supply 1,000,000 litres to
the defendants.
The plaintiff
proceeded to supply the marine
mix to the defendants according
to the sample quality that they
were supplied with by the
defendants.
The
plaintiffs successfully made
three (3) deliveries of the
marine mix and were paid as per
the contract terms set out in
exhibit A.
The
defendants however refused to
accept the 4th
delivery of the plaintiffs and
this resulted into series of
meetings between the parties
herein aimed at resolving the
differences i.e. reference
meetings held on 16/2/2005 and
1/3/2006 respectively.
Eventually,
the plaintiffs were permitted to
supply the 4th and
other deliveries to the
defendants after almost two
years of stoppage by the
defendants arising from the
conduct of the defendants in
rejecting the deliveries.
One would
have expected that, the supply
and receipt of the subsequent
deliveries by the plaintiffs to
the defendants would have ended
matters, but that was not to be.
The refusal
of the defendants to pay for the
4th and subsequent
deliveries as per the prices
contained in exhibit A but on
different rates as contained in
exhibit 3 led the plaintiffs to
institute an action in the High
Court in which they claimed the
following reliefs:-
a.
Recovery of the outstanding sum
of euros 144,424.83 or its cedi
equivalent being monies due
plaintiffs from the supply of
marine mix to defendants and
which defendants have failed to
pay after several persistent
demands.
b.
Interest on the afore-said sum
from 31st October
2006 to date of final payment.
c.
Damages for breach of contract.
d. A
mandatory order directed at the
defendants to furnish plaintiffs
with a new delivery schedule on
the balance of deliveries.
e.
Any other reliefs
f.
Cost including Solicitor’s fees.
The High
Court after a full trial
delivered judgment in favour of
the plaintiffs briefly in the
following terms:-
i.
“114,424.83 euros or its selling
rate in cedis as outstanding
payments for the supplied
marine mix and drums with
interest from 31st
October 2006 to date of payment.
ii.
71,394 euros as loss of profit
on the 146,000 litres of oil
that plaintiff was prevented
from supplying with interest
from March 2006.
iii.
Special damages of 230,000 euros
as costs that should reasonably
have been in contemplation of
defendant when it prevented the
performance of this contract.
Interest on this sum runs from
date of judgment.
iv.
General damages of 500,000
euros.
v.
Defendant is also ordered to pay
plaintiff’s legal cost which is
set at 30,000 euros. Court costs
is set at GH¢3,000”.
As stated
earlier, an appeal filed by the
defendants against the High
court judgment to the Court of
Appeal even though was dismissed
had some significant reductions
in the awards made at the High
Court level.
On the 71,394
euro compensation for loss of
profit on the 146,000 litres of
oil that the plaintiff was
initially prevented from
supplying, the Court of Appeal
held thus:-
1.
“The appellant is equally
ordered to take delivery of the
remaining balance of 108,000
litres within the same period
and on the same terms i.e. at
euro 1.63 per litre with
interest from March 2006 to the
date of payment.
2. On
the award of General and Special
damages, the Court of Appeal set
aside the award of Special
damages of euro 230,000 awarded
against the defendants as
unproven, just as it did in
respect of the 71,394 euros
compensation as loss of profit.
3.
The Court of Appeal varied the
500,000 euro general damages to
350,000 euro.
4.
The legal and court costs of
euro 30,000 awarded by the trial
court was also reduced and
substituted by an award of
GH¢6,000.00.
5.
Costs of GH¢4,000 was awarded
against the defendants in the
Court of Appeal.
As the
defendants were still
dissatisfied with the judgment
of the Court of Appeal, they
further appealed to this court
on 24/5/2010 with the following
as their grounds of appeal:
i.
“The judgment is against the
weight of evidence.
ii.
The learned Justices of the
Court of Appeal erred on the
facts, by holding that there is
a purported balance of “108,000
litres” of marine mix on exhibit
A to be delivered by Respondents
and further that 146,000 litres
of marine mix was allegedly
rejected by the appellant, upon
delivery by respondents in March
2006, there being no such
evidence on the record.
iii.
The order by the learned
Justices that appellants pay
interest from March 2006 until
final payment, on the
above-named 108,000 and 146,000
litres of marine mix
respectively was perverse and
erroneous.
iv.
Their Lordships erred in law and
deviated from the settled
authorities that a claim for
damages for breach of contract
would only entitle a plaintiff
to nominal damages, awarding to
respondents, the sum of €350,000
which they described as
“substantial damages” and
contradicted themselves with the
following statements:
“There is
thus abundant evidence to
warrant an award of substantial
damages. Accordingly, I will set
aside the sum of €500,000 and
substitute an award of €350,000
as substantial damages against
the appellants.”
v.
The Court of Appeal erred in the
assessment and evaluation of the
pleadings, evidence and exhibits
and as a result came to wrongful
conclusions, which are not
sustainable on the facts, inter
alia, “there was no response to
the two letters, exhibits 4 & 6
which are same as exhibits S &
T. Nevertheless the Appellants
on 7th January, 2006
issued exhibit U authorizing the
payment of €76,186.20 in favour
of payment of 240 drums of
marine mix as per order
40004112op.
vi.
The Court erred in failing to
find that the High Court could
not enter “judgment for the sum
of €4,320 damages for the 540
drums in which the marine mix
was delivered” since the
respondent failed to discharge
the burden of proof as to the
market value thereof, if at all.
vii.
The award of “costs of GH¢4,000”
in the favour of respondents
against
defendant/appellant/appellants
was excessive and unwarranted,
against the background inter
alia, of the court setting aside
nearly €500,000 awards and costs
out of a total sum of
€945,818.83 awarded by the trial
judge, which meant that the
appeal was very necessary.”
We would have
preferred dealing with the
grounds of appeal in the
sequence in which they had been
filed. But since learned counsel
for the defendants argued them
randomly, we will also use the
same format, hoping that by the
time we are through with some of
the grounds of appeal the other
grounds would have been dealt
with and there would be no real
need to repeat the same
arguments.
GROUND V OF
APPEAL
v.
The Court of Appeal erred in the
assessment and evaluation of the
pleadings, evidence and exhibits
and as a result came to wrongful
conclusions, which are not
sustainable on the facts, inter
alia, “there was no response to
the two letters, exhibits 4 & 6
which are same as exhibits S &
T.
Nevertheless
the Appellants on 7th
January, 2006 issued exhibit U
authorising the payment of
€76,186.20 in favour of payment
of 240 drums of marine mix as
per order 40004112op.
The main
contention of the defendant
under this ground of appeal is
that, there had been a
successful settlement of the
breakdown of the original
contract between the parties.
The defendant therefore made
heavy weather in the failure of
the trial High Court and the
Court of Appeal to accept the
fact that, following the
breakdown of the terms of
agreement contained in exhibit
A, the parties negotiated and
settled on a new agreement as
contained in exhibit 3.
From the
facts, it is clear the parties
agreed on the contents of
exhibit A, which is dated 22nd
August, 2002 and is a purchase
order from the defendants to the
plaintiffs for the supply of
marine mix of 600,000 litres at
1.63 euros per litre.
The defendant
contends very strongly that the
agreement contained in exhibit A
under which the earlier
deliveries had been made had
been settled by exhibit 3.
From the
appeal record, it is clear that
Dr. K. K. Sarpong, the Managing
Director of the defendants at
all material times in his
evidence in chief and under
cross-examination made it quite
clear that the meeting of 16th
December 2005 which was aimed at
resolving the impasse between
them was inconclusive.
The following
question and answer by Dr.
Sarpong would make the position
very clear:
Q.
“Now did you agree to the
content of exhibit K and Q what
was your reaction to these
letters.
A. “My
Lord subsequent to this letter I
came to the conclusion that TOR
and African Automobile have not
reached agreement at the meeting
of 16th December, so
I decided to convey a further
meeting, between the parties”.
Further to
the above, the witness Dr.
Sarpong testified as follows:-
“We had to
re-visit the issue that we
discussed in our meeting of 16th
December 2005 and particularly
the issue of pricing and
specification. Infact we talked
and we had the permission of
African Automobile to record the
meeting. I need to emphasise
that the issue of pricing came
up, several times and I had to
make the point and again that
since Goil was supplying the
same product, we cannot pay a
different price. We insisted on
paying what we pay Goil”.
Emphasis
Under further
evidence during
cross-examination, Dr. Sarpong
testified as follows:-
Q.
“Now you see in exhibit D, at
the time it was written there
had been previous deliveries to
you arising out of this?
A. Yes
my Lord.
Q. And
infact those deliveries were
based on the words of the
contract to them under the
bidding process.
A. I
have been told.
Q.
Infact it is based on exhibit A
A. Yes
Q.
Another contract was for supply
of 600,000 litres of marine mix
and at the time exhibit D was
written 246 had already been
supplied.
A. Yes
Q. And
in fact that was based on the
1.56 euro per litre
A.
That is correct”
From the
above discourse between learned
counsel for the plaintiff and
the defendants Managing Director
Dr. K. K. Sarpong it is clear
that an irrevocable contract had
been entered into between the
parties and this had crystalised
into the contents of exhibit D
which had been copiously
referred to.
This exhibit
D was written by the defendants
to the plaintiffs on 14th
October 2005 and
in
order for its full force and
effects, we refer to the
contents of the letter which
read as follows:-
14th
October 2005
“African
Automobile Limited
Mitsubishi
House
P. O. Box
1346
Accra
Fax: 021
232588
Attn: Mr.
Hijazi
Sir,
OUR ORDER NO
40004112-OP
FOR SUPPLY OF
MARINE MIX
YOUR REF. NO
MH/OFF/051/1433
Reference to
your letter accompanying the
sample that you brought for
testing, this is to inform you
that our laboratory results
confirm that the sample meets
our specifications.
In view of
this we are informing you to
supply 354,000Lts of the Marine
Mix which is the balance left to
be supplied.
Please be
informed that all the products
that you will supply will be
tested drum by drum in the
presence of your representative
if you so wish and they will be
accepted only after they meet
our specifications.
Thank you.
Tema Oil
Refinery Ltd
S. T. Adomako
Procurement
Manager”
The question
that is begging for an answer is
that, has the meeting of 1st
March 2006 following the
inconclusive meeting of
16/12/2005 been able to set
aside the contracts contained in
exhibit A & D and resulted into
exhibit 3 as was contended by
the defendants tenable?
What should
be noted is that the plaintiffs
never accepted exhibits S and T
and thus never responded to
them. This therefore created the
impression that any deliveries
made by the plaintiffs were made
pursuant to exhibits A & D.
In urging
this court to accept ground V of
the grounds of appeal, learned
counsel for the defendants, Mr.
Agyabeng Akrasi referred this
court to the case of Effisah
v Ansah [2005-2006] SCGLR 943 at
969 per Lartey JSC, holding
6 & 7.
We have
perused the erudite lead
judgment of the Supreme Court
delivered by Wood JSC (as she
then was) with a concurring
opinion by Lartey JSC but are
unable to find any support that
learned counsel for the
defendant has ascribed to the
said case.
On the
contrary, we agree with learned
counsel for the plaintiff, Mr.
Addo Atuah that on the authority
of the Effisah v Ansah,
there is an irresistible
conclusion and finding that in
real terms no settlement was
reached to rescind exhibit A & D
by the combined meetings of 16th
December, 2005 and 1st
March, 2006. What should be
noted is that, in cases like the
instant one, where in addition
to the viva voce evidence a mass
of documentary evidence was
tendered during the trial, the 2nd
appellate court such as this
court is virtually in the same
position as the trial court.
This is because most of the
findings of fact have been made
through a perusal of the
documents and we have been put
in the same position as the
trial court to assess the
totality of the evidence.
Using the
principle of law established by
the case of Effisah v Ansah,
this court will hold and rule
that quite apart from the fact
that the plaintiffs have led
very credible and convincing
evidence which would have
entitled them to judgment in any
case, the defendants case has
also created so many weaknesses
which all together further
contribute into strengthening of
the plaintiff’s case.
Having
therefore considered the
totality of the evidence both
oral and documentary, there is
no doubt that the plaintiffs
have succeeded in establishing
real basis for their case which
take its roots in exhibits A and
D. This is so, because there has
been no credible evidence that
has been led to establish that
the parties settled their
contract on the basis of
exhibits 3 and 4.
See also
Kusi & Kusi v Bonsu 2010 SCGLR
60 at 81, where Georgina
Wood CJ reiterated the decision
of the Supreme Court in Effisah
v Ansah already referred to
supra. See also Obeng v
Bempomaa C. A Part 3, [1992-93]
GBR 1027. It must be noted
that on the strength of the
above cases the conflicts if any
in the plaintiffs case have not
discredited the effect of the
plaintiffs case. The plaintiff’s
case is still solid.
It should
thus be noted that the
plaintiff’s never accepted the
contents of exhibit 3 and can
therefore be considered as
having never supplied under that
document. To our mind the Court
of Appeal cannot therefore be
faulted in the decision they
took affirming the findings of
the learned trial judge in
respect of exhibits A & 3.
The
Defendants next attacked the
admission into evidence of
evidence 22 which was tendered
by the plaintiff’s through Dr.
Abugrie, the defendants 1st
witness. Learned counsel for
defendant complains that the
said document was tendered
through the backdoor and that,
it infringes the rules of
natural justice. We fail to see
how this document was admitted
through the backdoor.
The evidence
on record is that, Tema Lube Oil
Company Limited have featured
prominently in the conduct of
scientific tests and analysis of
oil samples in this case. In
this respect, one Dr. Kwakye of
Tema Lube Oil, has performed
creditably and there has been no
evidence led to cast any doubt
on the expertise of Dr. Kwakye
in particular or of Tema Lube
Oil Limited in general.
Reference exhibits B and 2.
We have noted
that the plaintiff’s laid
sufficient foundation before
exhibit 22 was introduced and
tendered. In answer to questions
before exhibit 22 was tendered,
Dr. Abugre, a Deputy Managing
Director of the defendant’s
company answered that he
recognised the document but that
it would be difficult for him to
state whether the sample which
formed the basis of exhibit 22
was submitted after the earlier
exhibits in 2 and B. It was
after this admission that
counsel for the defendant
objected to the tendering of the
document.
There was no
valid basis for the objection.
In the first place, it must be
noted that the exhibit is
relevant as it relates to
scientific report on oil sample
submitted to the Tema Lube Oil
by plaintiffs for a report.
Secondly,
exhibits B and 2, already
tendered into evidence show that
it would have been easy to
determine the dates of the
earlier exhibits, B and 2 and
the instant one 22. The dates on
exhibits B and 2 are 8th
September 2004 respectively,
whilst the date on exhibit 22 is
11th November, 2004.
There is
therefore ample proof that
exhibits B and 2 were prepared
before the sample in exhibit 22
was submitted for testing and
analysis.
Once the
witness has admitted recognition
of the exhibit but expressed
doubts on the issue of date
which could easily have been
resolved by reference to the
documents, the most important
criteria is relevance and once
that had been settled, there was
no problem. See section 51 (2)
of the Evidence Act 1975, NRCD
323. The document, exhibit 22
was therefore properly admitted
into evidence.
We will
therefore dismiss this ground V
of the appeal as without any
merit and basis whatsoever.
GROUND IV OF
APPEAL
iv.
Their lordships erred in law and
deviated from the settled
authorities that a claim for
damages for breach of contract
would only entitle a plaintiff
to nominal damages, awarding to
respondents, the sum of €350,000
which they described as
“substantial damages” and
contradicted themselves with
the following statements:
“There is
thus abundant evidence to
warrant an award of substantial
damages. Accordingly, I will set
aside the sum of €500,000 and
substitute an award of €350,000
as substantial damages against
the appellants.”
The statement
by the President of the Court of
Appeal to the effect that:
“There is
thus abundant evidence to
warrant an award of substantial
damages. Accordingly, I will set
aside the sum of €500,000 and
substitute an award of €350,000
as substantial damages against
the appellants.”
has been
taken out of context by learned
Counsel for the appellants to
launch the basis of the ground
of appeal herein.
Learned
Counsel argued that the award of
350,000 euros from the trial
court award of 500,000 euros
amounts to a non-judicial
exercise of discretion and
offends the principles upon
which general damages for breach
of contract are awarded.
Learned
counsel for the appellant then
referred this court to a long
line of cases to support this
line of reasoning. Prominent
among these cases are the
following:
1.
Attorney-General v Faroe
Atlantic Co. Limited [2005-2006]
SCGLR 271 holding 4
2.
Delmas Agency Ghana Limited v
Food Distributors International
Limited [2007-2008] SCGLR 748
The arguments
of defendants on this ground of
appeal unfortunately created the
impression that the Court of
Appeal had no basis for the
award of 350,000 euros as
general damages and thus
exercised their discretion
unjustifiably or wrongly.
In response,
learned counsel for the
plaintiffs referred copiously to
evidence on record to support
the basis for the award of the
substantial damages against the
defendants.
For example,
if reference is made to the
evidence in chief of PWI and the
many frustrating events
perpetrated by the defendants
against the plaintiffs in their
execution of the contract for
the supply of this marine mix
which is the raw material used
for the manufacture of pre-mix
fuel knowing very well that the
end product is distributed only
by the defendants on behalf of
the Government of Ghana, then
the inhumanity and callousness
of the defendants in the several
impediments put in the way of
the plaintiffs is really
gargantuan and is mind boggling.
It must be
noted that the plaintiffs could
not have put the product to any
other use as the end product the
pre-mix is solely distributed by
Government. Any attempt to
frustrate the plaintiffs
therefore will amount to locking
up of their funds and also space
for storage of a special
product.
In support of
their contention for the award
of the 350,000 euros, learned
counsel also referred to some
cases notable among them the
following:-
1.
Jenkins v Bushby [1891] 1 ch.
484 which was relied upon in the
Ghanaian case of
2.
Kyenkyenhene v Adu [2003-2004]
SCGLR 142 at 155, where Kay L.J
stated thus:
“In a
question of discretion,
authorities are not of much
value. No two cases are exactly
a link and even if they were,
the court cannot be bound by a
previous discretion to exercise
its discretion in a particular
way, because that would be in
effect putting an end to
discretion.”
3.
Standard Chartered Bank v Nelson
[1998-99] SCGLR 810 at 812
holding 3
4.
Finally the celebrated case of
Hadley v Baxendale 1854 9
Exch 341
In our
considered opinion, before any
appellate court can justifiably
conclude that an award of
substantial damages by a trial
court was either excessive,
unjustifiable and amounted to
non-judicial/wrong exercise of
discretion and therefore
inconsistent with laid down
principles of law established
over the years, there must be an
overview of the entire evidence
on record to either support the
award of substantial damages or
the failure of such an award.
In the
instant case, we have observed
that the Court of Appeal took
pains to refer in detail to the
many instances of blatant and
arbitrary conduct of the
defendants in not only
frustrating the plaintiffs in
the discharge of their part of
the contract, but that there was
an invisible hand teleguiding
the conduct of the defendants.
This is because not only did the
conduct of the defendants not
make any business sense but it
also lacked candour and good
faith.
In order to
establish the falsity of this
ground of appeal and why it must
fail, we deem it proper at this
stage to refer in extenso to
portions of the lead judgment of
the President of the Court of
Appeal who put the matter i.e.
conduct of the defendants beyond
per adventure as follows:-
“As regards
the award of euro 500,000
general damages against the
appellant, the appellant has not
demonstrated to this court why
this should not stand. When this
suit begun, each party presented
itself as the victim of high
handedness, callousness and what
have you, at the instance of the
other. At the close of the trial
it became abundantly clear that
the appellant rather than the
respondents could not acquit
itself of blameworthiness for
all the obstacles and
impediments in carrying out the
contract. The appellants created
as many excuses as there were
deliveries by the respondents
and each time the latter tried
to accommodate them until they
could no longer bear them. The
resultant unjustified refusal to
accept supplies under the
contract from the respondent
created the discomfort of
finding places to store these
products. Of course these
difficulties so created, more by
the neglect of appellants than
the suppliers, were within their
contemplation being long time
operators in the oil business.
If businesses in this country
are to run in the fashion
exhibited particularly by the
appellants, no private company
either indigenous or foreign
would be attracted to do
business. It is quite evident
that but the frustrating tactics
arising out of the internal
indiscipline exhibited or
employed by the appellants, the
whole contract would have been
carried out by now.”
The above
statement could not be further
from the truth. Indeed we would
have descended more heavily on
the defendants in similar
fashion. A perusal of the appeal
record, especially the many
exhibits which were tendered
during the trial gives ample
credence to the fact that the
defendants intentionally put
impediments in the way of the
plaintiffs, deliberately
calculated to frustrate them.
Can the defendants be permitted
to benefit from this gross
display of naked show of power
and negligence where there are
contractual terms to be complied
with? We do not think so.
This is
because, the plaintiffs detailed
out their reliefs in their
endorsement on the writ of
summons. Reference relief C
coupled with that are the
averments in paragraphs 21, 22,
23, 24 and 25 of the statement
of claim as amended. Aside from
the above averments, the
plaintiff’s tendered exhibit E,
dated 16th October,
2006 which was tendered without
objection.
It must be
noted that this exhibit E, is a
well prepared document which has
detailed the various instances
of the defendants conduct which
have resulted into the breach of
the contract and the resultant
damages.
In order for
a full appreciation of this
exhibit, it is considered
worthwhile to reproduce this
exhibit E in order to lay bare
all the facts and circumstances
upon which the trial court and
the Court of Appeal based their
award of damages for breach of
contract.
“The Managing Director
Tema Oil Refinery (TOR) Ltd
Tema
Attn: Dr. K. K.
Sarpong
16th October 2006
Dear Sir
SUPPLY OF
MARINE MIX
We refer to
your letter ref:
PROC/WLQ/wg/06/331 dated 5th
October 2006 and react as
follows:-
1.
Our letter dated 26th
September was obviously aimed at
securing a definitive delivery
plan for your order No.
40079780P dated 10/5/06 and
2.
The part of your order No.
4000041120P dated 22/8/02 which
has been frustrated by your
deputy Ali Abugri who continues
to obstruct and frustrate this
order even as of to date.
3.
Despite a well documented
business transaction and our
compliance to all of the agreed
arrangements your Ali Abugri
created an issue that was not
german to those arrangement and
despite the futility of his
manufactured issue he was
determined to “fight it out”
even if it should lead him to
ignore both TOR’S management
decisions and cost TOR over a
million U.S. Dollar.
Now, to the
facts:
4.
TOR confirmed an order on our
company for 600,000 litres of a
specific product i.e. Marine
Mix. On TOR’s request, we
provided a sample; the sample
was approved by TOR’s
laboratory.
5. We
made three deliveries and each
time samples were taken, tested
and approved by TOR’s
laboratory.
6.
When we came to make the 4th
delivery we were told that Ali
Abugri has given instruction
that TOR cannot take delivery
because what we were coming to
deliver was not what TOR had
ordered. This notwithstanding
that the product was identical
to the previous deliveries and
that no sample of the new
delivery was taken for test. In
short this was an unjustified
and arbitrary decision by
Abugri.
7. We
wrote to complain about your
deputy’s decision insisting that
what we came to supply was what
you had ordered and exactly like
what we had already delivered.
8.
You formed a committee to look
into the manufactured issue
created by your deputy. At a
meeting convened at your
instance in your office and
attended by a representative
from Tema Lube Oil Company
(TLOC) who had been invited by
the committee. The Committee
concluded and we agreed that a
sample from the consignment that
TOR refused to receive be taken
and tested by TLOC to determine
its conformity with your order
or otherwise.
9. We
provided the sample. TLOC tested
the sample and confirmed its
conformity.
10. In
contradiction of the agreements
reached in committee Ali Abugri
persisted that the consignment
shall not be received.
11. We
wrote to you complaining. Your
General Manager (legal/admin)
responded in April 2005 “The
management of TOR has decided
that you resume delivery of
Marine Mix to TOR as per the
existing local purchase order”.
In defiance of his management’s
decision Ali Abugri continued to
persist and deny the delivery?
12. In
October 2005 your procurement
Manager wrote to us”… this is to
inform you that our laboratory
(test) results confirm that the
sample meets our specifications.
In view of this we are informing
you to supply 354,000
litres…”Nevertheless TOR’s
Abugri maintain his “position
and denies delivery”
13. On
31st October we wrote
to TOR (attention: your
procurement manager) demanding
that:
a.
TOR honours its commitment and
takes receipt of the consignment
of Marine Mix it had ordered.
b.
Pay the losses we suffered as a
result of your deputy Ali
Abugri’s decision to dishonor
TOR’s contractal commitment.
14. You
invited the undersigned for a
meeting at TOR to resolve the
issue your deputy had created.
Due to the inaccuracy of the
record of proceedings of that
meeting and the meetings that
followed all aimed at resolving
the manufactured issue created
by your deputy who unabated
persisted in frustrating the
delivery of your order we had to
write to your deputy, our
letters dated 19th
January 2006 and 13th
February 2006 refer.
15. We
regret to note that your letter
dated 5th instance
yet again takes us back to
square one. We therefore find
ourselves compelled by your
action to claim damages we
suffered as a result of your
actions in the sum of (Euro)
€1,275,621 as detailed in our
statement attached hereto as
under:
Lost revenue on your order
€1,196,333
Loss incurred in chasing
after € 79,288
Total
losses
€1,275,621
In summary,
in defiance of an unequivocal
agreement between us, the
consequent TOR’s management
decisions and all those
agreements reached in committee
designed to address the
arbitrary manufactured issue
created by your Deputy. It has
been the machinations of the
said Deputy that have rendered
all attempts at resolution null
and void. The consequence of
this has been to cause
substantial financial damage to
your company that now leaves us
with no alternative other than
to pursue our rightful due. This
irrespective of the irreparable
damage caused to our previously
excellent business working
relationship.
But for sake
of etiquette we would have
copied the creator of the issue
your deputy Ali Abugri.
Yours
faithfully
David T.
Morrel (Executive Director)
African
Automobile Limited”
The above
constitute sufficient reason why
the defendants should be held
liable to have caused the mess
into which the plaintiffs found
themselves in. As a direct
consequence, it must be noted
that, apart from the lame excuse
that the parties settled the
matter by exhibit 3, the
defendants have not been able to
explain to the satisfaction of
the Court their inability to
perform their part of the
contract which consisted only in
their taking delivery and paying
for it.
Under the
circumstances, the defendants
must be held liable for the acts
of commission or omission that
have resulted into damages for
the plaintiffs.
The locus
classicus on the rule regarding
remoteness of damage in contract
which are 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. In this case, the
plaintiff’s mill was brought to
a standstill by the breakage of
their only crankshaft. The
defendant carriers failed to
deliver the broken shaft to the
manufacturer at the time they
had promised to do, and the
plaintiffs sued to recover the
profits they 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
defendants 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
Alderson B, explained the
rationale for its judgment
thus:-
“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.
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.
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.” Emphasis
supplied.
Chitty on
Contracts, General Principles,
25th Edition,
paragraph 1692 states as
follows:-
“The
principles laid down in
Hadley v Baxendale (referred
to supra) have been interpreted
and restated by the Court of
Appeal in 1949 in Victoria
Laundry (Windsor) Ltd. V Newman
Industries Ltd. [1949] 2 K.B.528
and by
the House of Lords in 1967, in
Koufos v C. Czarnikow Ltd.
(The Heron II) [1969] 1 A.C. 350”
The learned
authors then summarised the
effect of these decisions as
follows:-
“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.”
From the
above formulations, it is our
considered view that, the
conduct of the defendants in the
instant appeal, given their
state of knowledge of the facts
as depicted from the appeal
record made it clear that the
defendants were aware of the
following:
1.
That the plaintiffs having been
prevented from delivering the
marine mix contrary to the terms
of the contract and made to
secure storage and thereby
locking up their funds were
incurring losses so long as the
default in accepting delivery
persisted.
2.
From the given facts, the
defendants had sufficient
knowledge or were reasonably
expected to know all the
contract details.
In our
opinion therefore, it is clear
that the defendants should
fairly and reasonably be
considered as having
contemplated that the plaintiffs
will suffer substantial damage
as a result of their breach of
contract.
Lord Reid in
his opinion in the (The Heron
II) case already referred to
supra, stated the proposition so
succinctly as follows:-
“The crucial question is whether
on the information available to
the defendant when the contract
was made, he should, or the
reasonable man in his position
would, have realized that such
loss was sufficiently likely to
result from the breach of
contract to make it proper to
hold that the loss flowed
naturally from the breach or
that loss of that kind should
have been within his
contemplation.”
On the basis
of the above principles of law
and what appears hereunder, we
are of the considered view that
the Court of Appeal cannot be
faulted in their award of
substantial general damages.
In the case
of Attorney General v Faroe
Atlantic already referred to
supra, what the Supreme Court
per Dr. Twum JSC stated is not
different from the basic
principle stated in the
Hadley v Baxendale case
referred to supra.
The Supreme
Court per Dr. Twum JSC in the
Attorney General v Faroe
Atlantic case stated the law on
the award of general and special
damages at page 290 of the
report thus:-
“My Lords, in
my view, a claim for damages for
breach of contract will entitle
the plaintiff to nominal damages
only unless the plaintiff gives
particulars of special damage.
No particulars of general damage
are ever ordered. See
London
and Northern Bank Limited v
Newness [1900] 16 TLR 433.
General
damages are such as the law will
presume to be natural or
probable consequence of the
defendants act. They arise by
inference of the law and need
not therefore be proved by
evidence. Hence they may be
averred generally as was done in
this suit.”
Continuing,
Dr. Twum JSC stated further as
follows:-
“Special
damages, on the other hand, are
such a loss as the law will
presume to be the consequence of
the defendant’s act, but
depend at least, on the special
circumstances of the case.
They must therefore always be
explcity claimed on the
pleadings. See
Hayward v Pullinger & Partners
[1950] I A.E.R 581.”
Even if we
were to take holding 4 of the
above cited case without going
into the body of the case it is
clear again that the defendants
have clearly misconstrued the
true and total effect of the
said decision.
It is
therefore clear that the
Attorney General v Faroe
Atlantic case would be
deemed to have approved the
dictum of Kay L. J. stated in
the case of Jenkins v Bushby
referred to supra that in a
question where a judge decides
to exercise a discretion such as
is evident in the award of
damages in this case, no two
cases are of the same type such
that the court would be bound by
a prior exercise of discretion.
The court no doubt recognised
the special circumstances of the
case and therein lies the
difference between each case.
Secondly, as
matters stand now in this case,
the conduct of the defendants
have become so notorious from
the record of appeal that the
court is enjoined to take
judicial notice of same. As a
result, damages of the type
awarded are to be deemed as the
natural and probable consequence
of their conduct towards the
plaintiff’s in this case.
For example,
any business minded person would
have realised that defying the
clear instructions and
directives of the management of
the defendants which requested
the plaintiffs to resume
delivery of marine mix to the
defendants as per the existing
local purchase order would not
only lead to blatant defiance of
the defendants management
decision but will also lead to
loss to the plaintiffs if they
are prevented from delivering.
But this is what PW1 Dr. Ali
Abugri is on record as having
done with relish and from his
testimony is unrepentant.
Again, if you
refer to exhibit M, written by
the Plaintiff to the Defendant’s
per D.W.2, Dr. K. K. Sarpong, it
catalogues all the brazen
breaches of the contract as well
as the impediments and
frustrations put in the way of
the plaintiffs by defendants,
orchestrated mainly by DWI, Dr.
Ali Abugri. In all this, it
appears the Managing Director of
the defendants Dr. K. K. Sarpong
was either not on top of his job
or was sidelined by very
powerful forces within his own
establishment.
Our
justification for this is
captured in the following
cross-examination of DW2 Dr.
Sarpong by learned counsel for
the plaintiffs.
Q. At
the last adjourned date I
suggested to you that there was
no co-ordination in your outfit
and you denied it?
A. Yes
I did
Q. Now
Doctor Sarpong I want you to
look at exhibit 22 as well as
exhibit B?
A. Yes
my Lord I have looked at them.
Q.
These are the reports emanating
from the committee that was set
up on your rejection of the
50,000lt marine mix supplied by
the plaintiff do you recognise
it?
A. I
have never seen this report
Q.
This report emanated from your
own outfit?
A. I
said I have not seen it. TOR is
a very big company, the managing
director will not see every
document, I came to this court
because there was a
disagreement, I need not see the
report.
Q.
Would you still stand by this
denial that there was no
co-ordination?
A. As
managing Director I am not
expected to know everything I
got to know because there was a
disagreement, on that basis I
will say there is co-ordination.
Q.
Doctor, I am suggesting to you
rather firmly that exhibit 22
and exhibit B. confirm that
there was absolutely nothing
wrong with the 50,000 litres
premix delivered to you?
A. I
disagree with you, from what my
deputy told me there was
disagreement and that is what I
relied on.
Q.
Doctor Sarpong, again, I put it
to you that finally that there
was no basis for your rejection
of the marine that was delivered
to you?
A. I
disagree with you, my experts
told me that there was a
problem, if there was no problem
I don’t believe that we would
have an outcry of the premix
from the outboard motors.
Q.
What you supplied to the
fishermen was premix and not
marine mix fuel?
A. You
are right, but you agree with me
that we formulated premix fuel
using the marine mix and so far
as I am concerned my experts
told me that the marine mix was
the source of the problem.
Q. I
put it to you that your experts
were wrong in their information
that they passed to you?
A. I
have absolute trust in my
experts.
Q. You
know that the problem could also
have arisen in the formulation
by your own office.
A. I
expect that my experts would be
here to give the answer.
Q.
When the perceived problem
broke, you did not invite the
plaintiff to come and empty your
tank, you invited Goil to come
and empty the tank.
A. I
don’t know, I can’t answer that.
Q. It
is on record in this court that
Goil was invited to empty your
tanks?
A. You
are telling me
Q. I
put it to you that you invited
Goil to empty the tanks because
you knew they were the problem?
A. My
Lord if indeed my experts
invited them I am not aware of
it, so I can’t provide the
answer.
The above
lends credence to our
observation that DW2 was not on
top of the decisions that caused
the problems in the instant
case.
As a result
we are of the considered view
that the award of the
substantial damages of 350,000
euros by the Court of Appeal to
the plaintiffs has not infringed
the principles stated in
Attorney General v Faroe
Atlantic and see also
Delmas
Agency Ghana Limited v Food
Distributors International Ltd.,
[2007-2008] SCGLR 748
holding 3 where the
Supreme Court held as follows:
“Special
damages is distinct from general
damages. General damages is such
as the law will presume to be
the natural or probable
consequence of the defendant’s
acts. It arises by inference of
law and therefore need not be
proved by evidence. The law
implies general damage in every
infringement of the absolute
right. The catch is that only
nominal damages are awarded
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, the plaintiffs
succeeded in proving the damages
which they were awarded, and on
the evidence it is quite
apparent that the plaintiffs
have suffered damage which they
have been able to prove and are
therefore entitled to it.
In our
understanding, nominal in the
context used is relative. This
is especially so as in this
instant, the several breaches of
the contract, impediments,
frustrations and deliberate acts
perpetuated by high officials of
the defendants are so numerous
and well calculated that it will
be dangerous and unfair to stick
to the nominal damages
principle. Each case therefore
must be considered on its on
merits and circumstances.
Especially as in this case where
the plaintiffs detailed out the
losses in their statement of
claim and were able to prove it.
We note also
the invitation made to us by
learned counsel for the
defendants to use the principle
enunciated in holding 2 of the
Delmas Agency v Food
Distributors case to hold
that the Court of Appeal
improperly applied the
principles on assessment of
damages.
There is no
doubt that this court correctly
stated the principle that should
guide an appellate court in the
award of damages in the Delmas
Case. However, in this case, the
Court of Appeal cannot be said
to have incorrectly or
improperly applied the
principles in the award of
damages by considering
irrelevant matters.
In this case,
all the matters taken into
consideration were relevant and
live matters, perpetuated by the
defendants themselves and for
which they must be held for the
natural and probable causes of
their conduct.
In dismissing
this ground of appeal, we think
it is necessary to reiterate the
fact that a Court of law must
not only take into consideration
the prevailing economic forces
that are at play in the global
economic order, but also
consider the net effect of the
defendant’s conduct and its
negative effect on the financial
fortunes of the plaintiffs in
view of the plethora of evidence
that was led at the trial court.
See Standard Chartered Bank v
Nelson holding 2already
referred to supra.
The appeal on
this ground of appeal is also
dismissed.
GROUNDS II
AND III OF APPEAL
ii.
The learned Justices of the
Court of Appeal erred on the
facts, by holding that there is
a purported balance of “108,000
litres” of marine mix on exhibit
A to be delivered by Respondents
and further that 146,000 litres
of marine mix was allegedly
rejected by the appellant, upon
delivery by respondents in March
2006, there being no such
evidence on the record.
iii.
The order by the learned
Justices that appellants pay
interest from March 2006 until
final payment, on the
above-named 108,000 and 146,000
litres of marine mix
respectively was perverse and
erroneous.
The crux of
this ground of appeal finds
expression in the orders made by
the Court of Appeal to the
effect that the defendants
should arrange to take delivery
of the outstanding balance of
146,000 litres of marine mix
which they rejected upon
delivery within a period of
three months after the delivery
of the Court of Appeal judgment
at the rate of 1.63 euro per
litre, with interest from March
2006 when delivery was turned
down to date of payment.
The Court of
Appeal further ordered the
defendants to take delivery from
the plaintiffs of the remaining
balance of 108,000 litres within
same period and at same interest
rate.
The
defendants take issue with the
above orders. Contending that
the figures are arithmetically
incorrect, and that after the 4th
consignment on 21/12/2005, there
is no evidence that any further
deliveries were made until July,
2006 because of absence of
delivery schedule.
In keeping
with the noble traditions at the
Bar, learned counsel for the
plaintiffs, Mr. Addo Atuah has
conceded that the Court of
Appeal must have been in error
with the extra figure of 108,000
litres as an outstanding
delivery. Having done the
arithmetic calculations, it is
patent and clear that the
outstanding supply due and for
which the plaintiffs should be
directed to deliver and the
defendants ordered to accept is
146,000 litres and no more or
less.
With this
variation, this court
accordingly sets aside the order
of the Court of Appeal in
respect of the 108,000 litres of
marine mix. Save for the above
variation, the other orders of
the Court of Appeal in respect
of the 146,000 litres of marine
oil, with payment of interest
for the duration stated therein
on the terms of 1.63 euro per
litre are affirmed.
GROUNDS I AND
VI OF APPEAL
i.
The judgment is against the
weight of evidence.
vi.
The Court erred in failing to
find that the High Court could
not enter “judgment for the sum
of €4,320 damages for the 540
drums in which the marine mix
was delivered” since the
respondent failed to discharge
the burden of proof as to the
market value thereof, if at all.
These grounds
of appeal have been predicated
upon the erroneous impression
that the submission that the new
price contained in exhibit 3
will be accepted by this court.
With the earlier decision that
there was no acceptable
settlement which varied the
contract terms as per exhibit A
to exhibit 3, these grounds of
appeal must necessarily collapse
headlong.
Learned
counsel for defendants referred
this court to the case of
T. K.
Serbeh &Co. Limited v Mensah
[2005-2006] SCGLR 341
holding 3 & 4 to support the
further contention that credible
evidence of the value on the
open market of the converted
empty barrels or drums of oil
ought to be given before any
award can justified.
In this
respect, it must be noted that
the evidence by the plaintiff’s
on the 540 drums in which the
marine mix was delivered to the
defendants is very much
overwhelming. There is evidence
as per exhibit G for instance
that, specific demand had been
made by plaintiffs for the drums
but as has been consistent with
the defendants, they refused to
comply with those demands.
Additionally, the plaintiff’s
invoiced the defendants for the
said drums as per invoice on the
540 drums attached to exhibit G.
In the
absence of any other credible
evidence from the defendants to
contradict the value attached to
the drums by the plaintiffs, the
trial court and the Court of
Appeal were right to accept the
values placed on them by the
plaintiffs.
Whilst
admitting the fact that (as was
held on the authority of
Serbeh v Mensah already
referred to supra) that the
burden of proof as to the market
value of the drums rested with
the plaintiff’s, the invoice
attached to exhibit G which was
admitted into evidence without
objection clarified the position
and rather emphasise the
plaintiffs compliance with the
said principle of law. On the
whole, it is surprising that
learned counsel for the
defendants sought to question
the proprietary of the
management style of the
plaintiffs. On the contrary, it
is the defendants and their top
management exemplified in DWI
and DW2 which calls for swift
condemnation. Indeed if
businesses are to be conducted
as was done by the defendants in
this case, then all businesses
will collapse and run into
serious debt. We believe the
time has indeed come for state
officials to be surcharged with
such colossal losses if it can
be established as it has in this
case that the losses were
occasioned by their
recklessness.
It must also
be noted that the defendants did
not deny the averments pleaded
by the plaintiffs in their
statement of case. In any case
they also did not contradict
their evidence on the prices,
reference exhibit G.
This
principle has been firmly stated
by the Supreme Court decision in
Western Hardwood Enterprises
Limited v West African
Enterprises Limited [1998-99]
SCGLR 105, that
where the pleadings of the
parties were adidem on a given
issue, the plaintiff was not
bound to lead evidence to
emphasise that point. It would
have been necessary for the
plaintiffs to have led evidence
on the price if the defendants
had contested that fact and the
evidence in exhibit G on the
price of the drums. In view of
the apparent admission of the
price, the plaintiffs were
entitled to the award.
Under the
circumstances, these grounds of
appeal are also dismissed.
GROUND VII OF
APPEAL
vii.
The award of “costs of GH¢4,000”
in the favour of respondents
against
defendant/appellant/appellants
was excessive and unwarranted,
against the background inter
alia, of the court setting aside
nearly €500,000 awards and costs
out of a total sum of
€945,818.83 awarded by the trial
judge, which meant that the
appeal was very necessary.
This ground
of appeal is postulated on the
basis that because the
defendants were largely
successful at the Court of
Appeal, no costs should have
been awarded against them, or if
at all, then only nominal costs.
Learned Counsel for the
defendant made copious
references to the awards of the
trial court that the Court of
Appeal slashed and reduced
downwards in favour of the
defendants. In support of the
above contentions, learned
counsel referred the court to
the following cases:
1.
Bank of
Ghana v Nyarko and Anr [1973] 2
GLR 265 and
2.
Guardian Assurance Co. Ltd v
Khajat Trading Store [1972] 2
GLR 48
Responding to
the above submissions, learned
counsel for the plaintiffs
submitted that since the appeal
was unanimously dismissed by the
Court of Appeal, it follows
that, the plaintiffs as the
successful party must be
compensated for in terms of
costs.
In this
regard, learned Counsel referred
the court to the case of
Juxon-Smith v KLM Dutch Airlines
[2005-2006] SCGLR 438
at 442
and concluded
that there is no evidence on
record to fault the exercise of
discretion by the Court of
Appeal in awarding costs against
the defendants despite their
huge success at the Court of
Appeal.
We observe
that, the defendants in their
appeal against the judgment of
the High Court dated 12th
August, 2008 appealed against
the whole judgment. How did that
appeal end? That is now history.
Suffice it to be that even
though the Court of Appeal
significantly reduced some of
the awards as was rightly
pointed out by learned Counsel
for the defendants, the appeal
was in the main dismissed. It is
generally accepted that costs
follow a successful litigant
unless the prevailing
circumstances make it quite
certain that costs should not be
awarded. In all these
circumstances, the courts
exercise their discretion which
is based on the circumstances of
each case. No two cases are ever
similar in this respect.
In the
instant case, we have reviewed
the entire record and we are of
the considered view that there
are no real, imagined or
putative grounds upon which this
court will disturb the exercise
of discretion of the Court of
Appeal to award costs. Having
reviewed the entire evidence, we
are of the view that the costs
so awarded were in order,
appropriate and to the point.
Considering
the totality of the facts of
this case, we do not think it is
appropriate to disturb the award
of costs of GH¢4,000.00 in
favour of the plaintiffs.
This is
because in the case of Bank
of Ghana v Nyako & Anr
already referred to supra, the
trial High Court had awarded
costs of ¢750.00 in favour of
the plaintiffs therein whose
damages for wrongful dismissal
were assessed at ¢7,881.84 and
¢10,832.40 respectively as at
June, 1972. On appeal inter alia
against the award of costs, the
Court of Appeal: coram Apaloo JA
(as he then was), Lassey JA and
Archer JA (as he then was) held
as follows:-
“Although the
award of costs was discretionary
it must not only reflect the
result of the suit but must also
bear a reasonable relation to
the amount of work, that the
preparation and conduct of the
suit must have involved.”
The Court of
Appeal concluded that, since the
said case was not complicated,
the costs of ¢750.00 in 1972 was
excessive.
In the
instant case, it is quite clear
that this has been a complicated
case to handle, with a lot of
exhibits and calculations to
deal with, not to mention the
various contractual documents
that have to be taken into
consideration. Such was the
complicated nature of the case
that the Court of Appeal also
found itself in error in the
calculations it made on the
volume of litres of marine oil
left to be delivered by the
plaintiffs reference to 108,000
and 146,000 litres of marine
oil.
Secondly, if
consideration is given to the
facts germane to the institution
of the instant case, then it
follows that costs must
definitely follow the event.
We are
therefore of the opinion that on
the basis of the decision in the
Bank of Ghana v Nyako
case, the award of costs by the
Court of Appeal reflected the
work that was put into the
preparation of the pleadings and
conduct of the case by the
plaintiffs. As a result, it is
not considered worthwhile to
disturb the exercise of
discretion by the Court of
Appeal.
This
principle was reiterated by the
Supreme Court in the case of
Juxon-Smith v KLM Dutch Airlines
[2005-2006] SCLGR 438 at 442
where the court speaking with
one voice through Georgina Wood
(Mrs) JSC as she then was stated
as follows:
“The
appellate court had thus rightly
substituted the correct findings
on the evidence and re-assessed
the quantum based on correct
findings. The re-assessment was
not so clearly erroneous that it
ought to be set aside.
The court
would therefore not disturb the
award by the Court of Appeal,
bearing in mind that the award
was discretionary and the appeal
was not from one discretion to
another.”
It is thus
clear that even though the Court
of Appeal had re-adjusted the
awards in a significant manner
downwards, the award of costs
being discretionary, this court
is unable to disturb that
exercise of discretion. This
ground of appeal is thus
accordingly dismissed.
CONCLUSION
In concluding
this case, we would want to
reiterate our strong
reservations about the arbitrary
manner in which the top
management staff of the
defendants at all material times
to the inception of this case
conducted themselves.
In the
result, save as was varied by
this court in respect of grounds
II and III of the grounds of
appeal where the balance of
marine mix left to be delivered
by the plaintiffs to the
defendants was settled at
146,000 litres, the entire
appeal herein is dismissed as
unmeritorious and mischievous.
Save for the
above variations, the Court of
Appeal judgment of 11th
March, 2010 is accordingly
affirmed.
[SGD] J. V. M DOTSE
JUSTICE OF
THE SUPREME COURT
[SGD] G. T. WOOD
[MRS.]
CHIEF JUSTICE
[SGD] ANIN
YEBOAH
JUSTICE OF THE SUPREME COURT
[SGD] P. BAFFOE-BONNIE
JUSTICE OF THE SUPREME
COURT
[SGD] B.
T. ARYEETEY
JUSTICE OF THE SUPREME
COURT
COUNSEL;
ADJABENG
AKRASI FOR THE APPELLANT.
ADDO ATTUAH
FOR THE RESPONDENT |
