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JUDGMENT:
By a Writ of Summons issued on
20th May, 2009, the
Plaintiffs commenced this action
praying for the following:
“a. An Order dissolving the 2nd
Defendant Company and its assets
sold out and proceeds
distributed among the
shareholders
b. An Order for recovery of
US$5,000 monthly outstanding
balance
of rent payable to the
Plaintiffs with the agreed
penalty of 25% therein with
effect from September, 2008 up
to and inclusive of the date of
payment.
c. Interest on the said
total outstanding balance plus
the interest of 25% monthly with
effect from September, 2008 up
to and inclusive of date of
payment.
d. An Order restraining the
Defendants, their agents and
assigns from using the name
“Haitsma” for incorporation of
any company or enterprise for
their benefit.
d. Damages.”
Plaintiffs’ case is that by an
agreement between the 1st
Defendant and the 2nd
Defendant, the 2nd
Defendant leased its equipment
to the 1st
Defendant. By the said
agreement the 1st
Defendant was enjoined to pay a
monthly rent of US$ 5,000.00
(Five Thousand United States
Dollars) which sum was to be
paid to the Plaintiffs. They
stated further that the 1st
Defendant had defaulted in
payment of the rent.
The Plaintiffs claim that the
rentals aforesaid are for their
personal benefit and have
accordingly instituted this
action in their individual
capacities for the reliefs
indorsed on the Writ of
Summons.
It is the Defendants’ case that
the 1st Defendant
vehemently contests this action
and maintains that indeed the
Plaintiffs have no cause of
action at all against it. While
the 1st Defendant
admits there is an agreement
between the 2nd
Defendant and it and the fact
that the said agreement places
on it the obligation of paying a
monthly rent of US$5,000.00 it
states that the rentals are to
be paid to the Plaintiffs in
their capacity as the
representatives of the 2nd
Defendant in the said
agreement. The 1st
Defendant contends therefore
that the rentals are due to the
2nd Defendant and not
for the personal benefit of the
Plaintiffs.
Before I look at the issues to
be determined in this suit, I
will state some material facts
which in my opinion are not
disputed by the parties.
1.
That
Haitsma Equipments Limited is a
Limited Liability Company
Incorporated under the Companies
Act 1963 (Act 179)
2.
That
the Plaintiffs and the 1st
Defendant are shareholders and
Directors of Haitsma Equipments
Limited.
3.
That
prior to the incorporation of
Haitsma Equipments Limited the
Plaintiffs and the 1st
Defendant entered into a Joint
Venture Agreement
4.
That
there is a Rental Agreement
dated 5th June, 2008
between Haitsma Equipments
Limited and the 1st
Defendant.
5.
That
in the lease aforesaid Haitsma
Equipments Limited is
represented by the Plaintiffs.
The Defendant appears not to be
challenging the fact that it
owes some money on the rental
payment. What they are saying
is that the money is owed to the
2nd Defendant and not
the Plaintiffs. In my opinion
therefore, the main issue to be
determined is whether the
monthly rental of US$ 5,000 is
payable to the Plaintiffs or to
the 2nd Defendant.
According to the Plaintiffs’
Attorney, Hayford Atta Boafo, he
introduced the Plaintiffs to the
1st Defendant, to
invest into a drilling rig for a
bore hole drilling business.
The arrangement was under the
cover of a Joint Venture
Agreement (Exhibit “B”) the
parties initially signed a
Memorandum of Understanding
(Exhibit “C”). The Plaintiffs
and the 1st Defendant
incorporated a limited liability
company. The Plaintiffs
subsequently entered into a
rental agreement with the 2nd
Defendant (Exhibit “E”).
It was Hayford Atta Boafo’s
evidence that in the said
Exhibit “E”, 1st
Defendant was the local partner
and the Plaintiffs were the
“foreign partners”. For ease of
reference, I shall reproduce the
whole agreement. It reads as
follows:
“RENTAL AGREEMENT BETWEEN TBL
RESOURCES LTD & HAITSMA
EQUIPMENTS LTD
This Agreement is made on
this 5th day of
June 2008 between M/S TBL
RESOUCES LTD, represented by
the director of Finance & Admin;
MR. JONATHAN GADOR, Hs.
No. 4, 2nd Soula
Street, Labone. P.O. BOX CT
6109, Cantonments, Accra, GHANA.
And
HAITSMA EQUIPMENTS
represented by MR. ANDREWS
KWAME ANDOH AND GRIETJE
HAITSMA resident at Camminga
str. 23, 8892 ZH Franeker,
Holland.
1.
Haitsma Equipments Ltd owner of
the Drilling Rig Unit II with
registration nos. GR 8133 X and
GR8134X with its accessories has
agreed to give a rental
agreement to TBL Resources
Limited.
2.
This
rental agreement is effective
from 01.06.2008 and is valid for
a period of two years with the
option to renew.
3.
TBL
Resources shall be responsible
for all maintenance works on the
equipment over the rental
period.
4.
TBL
Resources shall provide all
logistics including spares
accessories , PVC, Gravel and
cement and mud chemicals.
5.
TBL
Resources is to provide fuel,
casings and all other lubricants
needed to execute the drilling
works.
6.
TBL
Resources is to take care of its
own workers, in terms of payment
of salaries, allowances etc and
provide all logistics (support
vehicles, maintenance of
vehicles, all spares and
accessories, etc.) needed for
them to execute the drilling
work at site.
COST
7.
TBL
Resources shall pay a rental fee
of US$5,000.00 a month over the
24 month period to the foreign
partners.
8.
Rental charges shall be payable
in the first week of the next
month and shall be paid on
monthly basis.
9.
TBL
Resources shall pay interest on
the invoice at the rate of 25%
per annum for delayed period.
10.
During
the period of this Agreement,
the equipment shall be under the
sole control of TBL Resources
Limited.
It is agreed that any
misunderstanding should be
resolved amicably. In the event
that an amicable solution cannot
be reached, both parties shall
seek the services of an
arbitrator. The ruling of the
arbitrator shall be binding on
both parties.
This Agreement duly signed by
the two parties is sufficient
evidence of the acceptance by
each party to be bound by its
terms. This rental agreement
supersedes the initial rental
agreement signed on 01.11.2007.
Signed for and on behalf of
TBL RESOURCES LTD
Sgd.
JONATHAN GADOR
(Finance/Admin Director)
In the presence of
Witness
Martin Boafo
P.O. Box 15447 ACCRA –NORTH
Signed
Signed for and on behalf of
HAITSMA EQUIPMENTS LIMITED
Sgd.
Sgd.
ANDREWS KWAME
ANDOH
GRIETJE HAITSMA
In the Presence of:
Martin Boafo
P.O. Box 15447 ACCRA- NORTH
Signed “
In my opinion, an interpretation
of the 7th paragraph
will determine the issue as to
who should be paid the monthly
rental fee of US$5,000.00. The
object sought to be achieved in
construing any contract is to
ascertain what the mutual
intentions of the parties were
as to the legal obligations each
assumed by the contractual words
in which they sought to express
them. This proposition
expresses both the object of
interpreting any contract, and
also the limitations placed upon
the courts in seeking to
ascertain and give effect to the
elusive intention of the
parties.
That the court seeks to give
effect to the intention of the
parties to a contract is true
only in a loose sense. In the
first place, the parties cannot
generally give evidence to the
court as to what their intention
really was. Secondly, their
contract may have been made for
them either by a lawyer employed
for that particular purpose; or
by the draftsman of a set of
standard terms which the
parties, or sometime one of the
parties. Thirdly, the words
chosen by the parties may
imperfectly express what they
wished to achieve, or they may
have been selected as a
compromise between rival points
of view; or the parties
themselves have had different
understanding of what the words
meant. Fourthly, the court is
concerned to ascertain, not what
is the intention of the actual
parties to a contract, but what
would have been the intention of
hypothetical reasonable parties,
placed in the same position as
the actual parties, and
contracting in the words used by
the actual parties. Thus in
Reardon-Smith Line Ltd v.
Hansen-Tangen[1976] 1 WLR 989,
Lord Wilberforce said:
“Where one speaks of the
intention of the parties to the
contract one speaks objectively-
the parties cannot themselves
give direct evidence of what
their intention was – and what
must be ascertained is what is
to be taken as the intention
which reasonable people would
have had if placed in the
situation of the parties”.
A similar point was made by Lord
Reid in McCutcheon v. David
Mac Brayne Ltd. [1964] 1
WLR 125, approving the
following quotations from Gloag
on Contract (2nd Ed.
1985, P.7):
“The judicial task is not to
discover the actual intentions
of each party it is to decide
what each was reasonably
entitled to conclude from the
attitude of the other”.
It is therefore more accurate to
say that the object of a court
of construction is to ascertain
the presumed intention of the
parties, on the assumption that
both parties are reasonable.
For the purpose of the
construction of contracts, the
intention of the parties is the
meaning of the words they have
used. There is no intention
independent of that meaning.
The intention of the parties
must be ascertained from the
language they have used,
considered in the light of the
surrounding circumstances and
the object of the contract, in
so far as that has been agreed
or proved. In attempting to
reach a conclusion as to the
presumed intention of the
parties, the court will
generally adopt an objective
approach, that is to say that it
will consider what would have
been the intention of reasonable
persons in the position of the
actual parties to the contract.
Precisely, the paragraph being
construed reads thus:
“TBL Resources shall pay a
rental fee of US$5,000.00 a
month over the 24 month period
to the foreign partners.”
The agreement is said to be
between TBL Resources,
represented by Jonathan Gador
and Haitsma Equipments
represented by Mr. Andrew Kwame
Andoh and Grietje Haitsma. It
appears to me therefore that the
agreement is between two
entities/companies.
In my opinion, if the parties to
the agreement (Exhibit “E”)
intended that Haitsma Equipment
(2nd Defendant)
should be paid the monthly
rental fee, it should have
stated categorically that the
said amount should be paid to 2nd
Defendant and not the “foreign
partners”. 2nd
Defendant as an entity is
definitely not a foreign
partner; it is a limited
liability company incorporated
under the laws of Ghana.
Exhibit “B” captures the genesis
of the whole transaction/
arrangement between the
parties. The parties herein
entered into a Joint Venture to
purchase a drilling rig. The
total investment was $200,000
with each of the partners
contributing 50% of the amount.
Parties subsequently signed a
Memorandum of Understanding
(MOU). Exhibit “B” spelt out
the status of the parties in the
agreement. The Plaintiffs, who
are individuals and are resident
in Holland, were referred to as
“Foreign Partners”, and the 1st
Defendant was designated as a
“Local Partner”, under the Terms
of Payment under the Joint
Venture Agreement (Exhibit “B”),
it was stated that there would
be a monthly transfer of Foreign
Partners’ profit to the Foreign
Partners.
According to Exhibit “B”,
invoices were to be raised and
the Foreign Partners paid for
same. But in Exhibit “E”, it
stated that the Foreign Partners
were to be paid an amount of
$5,000 monthly simpliciter.
There was nothing about the said
partners raising any invoice
before payments were made.
It is my view that 1st
Defendant’s argument that the
$5,000 was meant to be paid to 2nd
Defendant has not been proved.
Payment of monthly profits to
the Foreign Partners under
Exhibit “B” in my opinion is not
inconsistent with the provision
for the payment of a monthly
rental fee of $5,000 per month
in Exhibit “E”. Indeed, Exhibits
“F” and “G” are series of
e-mails sent by Jonathan Gador
to the Plaintiffs in which Mr.
Gador makes reference to
payments made to the Plaintiffs
and explains why there had been
delays in making outstanding
payments, amongst other things.
D.W.1, in his evidence in chief,
stated that Defendants were
paying the monthly $5,000 and
the 25% it attracted whenever
there was a default, to the
Plaintiffs until they defaulted
and Plaintiffs caused their
lawyer to write to them
demanding same that they
consulted their lawyer who
advised them not to pay.
I will find that the Plaintiffs
are entitled to the payment of
$5,000 per month under the
agreements between the parties
herein. Plaintiffs are therefore
entitled to recover the
outstanding amount on the
monthly rental fee of $5,000
together with the agreed penalty
of 25% thereon, and I will so
hold. Plaintiffs are also
entitled to interest on the
total amount at the interest
rate of 25% from September, 2008
until date of final payment.
With regard to the claim for an
order dissolving the 2nd
Defendant Company and for its
assets to be sold and the
proceeds distributed among the
shareholders, there is no
evidence placed before the Court
as to why the 2nd
Defendant Company should be
dissolved. The Companies Act,
1963, Act 179 provides the
procedures for winding up a
company. Winding up may be by
way of an official liquidation
in accordance with the
provisions of the Bodies
corporate (Official
Liquidations) Act, 1963 (Act
180); or by private liquidation
in accordance with the
provisions of the Code. In the
circumstances of the instant
suit, I cannot grant the said
relief and will accordingly
dismiss same.
Plaintiff is also praying that
the Court make an Order
restraining the Defendants and
their agents from using the name
“Haitsma” for incorporation of
any company or enterprise for
their benefit. The evidence
adduced on behalf of the
Plaintiffs was that “Haitsma” is
the family name of the 2nd
Plaintiff. Consequently I will
grant the said prayer and order
that the Defendants and their
agents be restrained from using
the name “Haitsma” for
incorporation of any company or
enterprise for their benefit.
Plaintiffs are making a claim
for damages, but no basis has
been laid for such an award. I
will accordingly dismiss same
In conclusion, I will order that
the Defendant pay to the
Plaintiffs, all the outstanding
amount on the monthly rental fee
of $5,000 together with all the
penalty that the amounts have
accrued. Plaintiffs are also
entitled to interest on the
total amount at 25% from
September, 2008 until date of
final payment.
Costs assessed at GH¢2,000.00.
(SGD)
BARBARA
ACKAH-YENSU (J)
JUSTICE OF THE HIGH COURT
COUNSEL
DUBIK YAKUBU
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PLAINTIFFS
BANNERMAN WILLIAMS JNR.
- DEFENDANTS |
