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I
JUDGMENT:
Bodyshapers Limited (Plaintiff)
has sued Ghana
Telecommunications Limited
(Defendant) for the following:
1.
An
order for the payment of special
damages of GH¢72,381.60 by the
Defendant to the Plaintiff being
the amount paid to the
contractor as mobilization for
the construction for a Bill
Printing facility for Defendant
at Abelenkpe in Accra.
2.
General damages for breach of
contract.
3.
Interest on the said amount from
15th December 2004 up
to the date of final payment.
4.
Costs.
By the pleadings, it is
Plaintiff’s case that following
discussions between its Managing
Director and the Chief Executive
of Defendant, it wrote to the
Defendant making a formal offer
for the construction of a Bill
Printing facility, which was to
be rented out to Defendant. The
Defendant accepted the offer and
requested that Plaintiff start
the mobilization since time was
of the essence. According to
Plaintiff, Defendant requested
Plaintiff to start the work
whilst they worked on the lease
covering the land on which the
facility was to be put on. It
is Plaintiff’s case that
Defendant has breached the
agreement between them and has
caused huge financial loss to
Plaintiff.
Defendant on the other hand
contends that Plaintiff made
representations to the Defendant
that Plaintiff had a leasehold
interest in a parcel of land at
Abelenkpe. It was based on
these representations that
Defendant entered into
discussions with Plaintiff to
construct the building in
question to house the
Defendant’s Bill Printing
machines. In the process of
conducting due diligence,
Defendant discovered that
Plaintiff had no interest in the
said land, and further that
Defendant was only incorporated
to undertake health related
activities
From the reliefs being sought
Plaintiff’s have to first prove
that there was a contract, which
contract was breached by the
Defendant. The general position
of the law is that it is the
duty of a Plaintiff to prove his
case; i.e. he must prove what he
alleges. The burden only shifts
to the Defendant to lead
sufficient evidence to tip the
scale when on a particular issue
the plaintiff leads some
evidence to prove his claim.
See
Ababio v. Akwasi III [1994-95]
Ghana Bar Report, Part 2, 774.
To prove Plaintiff’s assertions,
the General Manager of Plaintiff
Company, Henry Darko (P.W.1)
tendered in evidence Plaintiff’s
offer letter (exhibit “A”) in
which Plaintiff proposed a
rental fee of US$8,000 per month
to be paid two (2) years in
advance. P.W.1 also tendered in
evidence Defendant’s letter of
acceptance (exhibit “B”).
P.W.1 also led evidence with
regard to mobilization funds
paid to the contractor who
undertook the project. He
tendered in evidence a statement
of details of the said payments
together with the payment
vouchers – exhibit “C” series;
the total amount was
¢723,816,000.00. P.W.3 (John
Lomotey Tei) is the contractor
who undertook the project and he
confirmed that exhibit “C”
series were the payment vouchers
issued in relation to the job he
did. Exhibit “D” is the
“Agreement to enter into a lease
for constructing an office and a
Bill Printing facility at S.C.C.
yard, Abelemkpe, Accra.” Exhibit
“D” is however not signed.
Ghassan Laba (P.W.2), Managing
Director of Moon Beam Limited
testified that it was his
company that was known to
Defendant. Since Plaintiff
company was a sister company and
unknown to Defendant, Defendant
asked Moon Beam Limited to
guarantee Plaintiff, which they
did. P.W.2 tendered in
evidence, the said guarantee as
exhibit “E”. Moon Beam also
provided an indemnity (exhibit
“F”) to Defendant.
There may be said to be three
basic essentials to the creation
of a contract; agreement,
contractual intention and
consideration. From the
evidence I have examined so far,
I will find that the main
elements of a contract were
satisfied. Exhibit “A”
referred to discussions between
the parties and Plaintiff stated
that it was formally submitting
its proposals to Defendant.
After listing the facilities to
be provided in the building,
Plaintiff then stated that “our
offer for the above facility is
US$18,000 per month, payment to
be made 2 years in advance”.
The Defendant in exhibit “B”
referred to exhibit ‘A’ and
stated categorically that; “we
are pleased to confirm that we
accept your offer as stated in
the letter and kindly ask you to
draw up a lease agreement
accordingly”. This is an
unequivocal acceptance of the
offer made by the Plaintiff to
Defendant regarding the
construction of the building;
and it is binding on the
parties. The Defendant did not
make a counter offer nor did it
make a conditional acceptance of
Plaintiff’s offer.
So, did Defendant breach the
said agreement as Plaintiff is
alleging? Plaintiff is
contending that it refused to
sign the agreement because
Defendant had unilaterally
changed the term of the
agreement that Defendant would
pay two years’ rent advance to
one year’s rent advance. On the
other hand, Defendant is
contending that Plaintiff
represented certain facts to it
which were untrue. And that it
was based on these
representations that they
accepted Plaintiff’s offer. The
position of the law is that
where a person, by his act or
statement causes another to
believe a thing to be true and
to act on that belief to his
detriment, the truth of such a
thing will be conclusively
presumed to be true in law
against the party making the
representation; Section 26 of
the Evidence Decree, 1975 (NRCD
323).
A representation is a statement
of fact that is made by one
party to another intended to
induce and that induces the
other to enter into a contract.
A misrepresentation is a false
statement of fact that is
intended to induce and in fact
induces another to enter into
the contract. If, therefore the
statement is one of opinion
only, and not a statement of
fact, even if false, there is no
misrepresentation. Secondly, if
the statement relates to law or
legal effects, rather than it
being a statement of fact, there
is no contract. Thirdly, if
even the statement was false,
but the one alleging
misrepresentation was not aware
of the statement or did not rely
on it, then there is no
representation because there was
no inducement.
The burden of proving that the
claimant had actual knowledge of
the truth, and therefore was not
deceived by the
misrepresentation, lies on the
defendant; if established,
knowledge on the part of the
representee is of course a
complete defence, because he is
then unable to show that he was
misled by the
misrepresentation.
So, what evidence did the
Defendant lead to support this
assertion? Kafui Agomeda
Tetteh’s (D.W.1) evidence was
that, firstly, Defendant
realised that Plaintiff was
registered as a gym. There is no
evidence placed before the Court
to indicate that the Plaintiff
presented to the Defendant that
it was registered as a
construction firm only for the
Defendant to find out that it
was registered as a gym. It is
possible that the purpose for
which a company is registered
may change but may not be
amended in its Regulations.
More importantly, under
cross-examination, it was
suggested to D.W.1 that
Plaintiff got its regulations
amended pursuant to the query
raised by Defendant. D.W.1 did
not deny this. Secondly,
Defendant asserts that it had
received a letter from the
Divestiture Implementation
Committee (DIC) in reply to
their inquiries in which DIC
stated that Plaintiff had no
right to develop the land which
formed part of the erstwhile
State Construction Company
(S.C.C.) which was under
divestiture.
With regard to this alleged
misrepresentation, it is the
Plaintiff’s case that when these
matters were brought to the
attention of Plaintiff, they
took concrete steps to address
these concerns, which included,
securing a letter from DIC
giving them the right to develop
the land, subject to the
submission of drawings and
payment of ground rent to be
determined by the Land Valuation
Board (LVB).
P.W.1 tendered in evidence,
exhibits “K” and “L”. Exhibit
“K” was a letter dated 18th
June 1986, addressed to the
Managing Director of Plaintiff
Company. The said letter was
from the S.C.C who owned the
land. It was titled “Re:
Application for development of
plot at Abelemkpe. “It stated
that the proposal to develop the
land at Abelemkpe had been
recommended to the Board of
S.C.C. for approval. Exhibit
“L” was a follow up letter from
S.C.C dated 25th June
2009, in which they referred to
exhibit “K”, and informed
Plaintiff that the Board of
S.C.C had given approval for the
development of the land at
Abelemkpe. Subsequently, when
S.C.C. was placed under
divestiture, Plaintiff again
applied and obtained approval to
develop the land, from D.I.C.
This is captured in exhibit “M”,
addressed to L.V.B, and
requesting them to assess the
value of the land for ground
rent. Obviously, if Plaintiff
had no interest in the said land
DIC would not have requested LVB
to value the land to determine
the ground rent, and copy same
to the solicitor for Plaintiff.
P.W.2 also led evidence to show
that Plaintiff had good title to
the land as he tendered in
evidence, exhibit “J”, being a
copy of the Lease Agreement,
executed between Plaintiff and
DIC. Paragraph 4 of Exhibit
“J” reads that; “S.C.C. in July,
1996, granted the Lessee a
leasehold interest for fifteen
(15) years certain from 10th
December, 1996, with an option
for a further term of fifteen
(15) years”. Plaintiff also
furnished Defendant with
exhibits “E” and “F”, which were
the guarantee from its
affiliated company, and the
Indemnity, respectively, to give
Defendant the required
assurances.
It is the Plaintiff’s further
case that notwithstanding all
the assurances and the steps
taken by Plaintiff to perfect
its title, the Defendant
unilaterally decided to change
the terms of the agreement by
reducing the rent advance
payable, from two (2) years to
one (1) year. Counsel for
Plaintiff submits that this
amounts to a fundamental breach
of the terms of the contract and
this is what compelled Plaintiff
not to sign the revised
agreement. This is the basis
for the reliefs being sought by
the Plaintiff.
The position of the law is that
generally, barring fraud,
parties to a contract cannot
lead oral evidence to
contradict, vary, add or
subtract from the terms of their
written contract. Oral evidence
is admissible to explain (but
not to contradict) the
circumstances and terms of a
document. In my opinion,
Defendant has not adduced
sufficient evidence to discharge
the burden on it to prove that
there were misrepresentations
made by Plaintiff to Defendant
that warranted the unilateral
decision by Defendant to vary
the terms of the contract; and I
will so find.
So, is Defendant in breach of
the contract in question? In my
view, it is. And why do I say
so? The offer letter (exhibit
“A”) contained a provision that;
“payment to be made 2 years in
advance”. Defendant accepted
this offer and asked Plaintiff
to “start the mobilization as
soon as possible”, which
Plaintiff did. The subsequent
unilateral change in the term to
pay the 2 years’ advance
therefore constituted a breach
which entitled Plaintiff to be
discharged of all the remaining
obligations created by the
contract. I will therefore find
that Defendant did indeed breach
the contract in question.
Now, one would ask whether
Plaintiff itself was in breach
of the contract by refusing to
sign the agreement and also by
not completing the project.
Because, the one seeking to rely
on the other’s breach must
himself not be guilty of breach
in any material way. In
Comet Construction Co. Ltd v.
Tema Development Corporation
[1965] GLR
66,
the respondent sought to rely on
a forfeiture clause to terminate
the building contract with the
appellant on the ground that the
appellant had taken unreasonable
time to complete the
construction of a number of
buildings. But the respondent
had itself taken 22 months to
make the site available! The
arbitration award in favour of
the respondent was therefore set
aside.
The Plaintiff’s case is that
there was an agreement that
Plaintiff would start the
mobilization, which it did. It
was however the breach of the
Defendant that resulted in the
agreement not being signed, thus
Plaintiff was not able to
complete the project because it
was cash-strapped. In the
Defendant’s letter of acceptance
(exhibit “B”), the last
paragraph read as follows:
“As time is of the essence
we would appreciate if you could
start the mobilization as soon
as possible. We expect the
lease agreement to be executed
on or before 15th
October, 2004”.
The effect of declaring time to
be of the essence is to elevate
the term to the status of a
“condition” with the
consequences that a failure to
perform by the stipulated time
will entitle the innocent party
to (a) terminate performance of
the contract and thereby put an
end to all primary obligations
of both parties remaining
unperformed; and (b) claim
damages from the
contract-breaker on the basis
that he has committed a
fundamental breach of the
contract.
Is Plaintiff therefore entitled
to the special damages of
GH¢72,381.60 being claimed? It
is trite learning that damages
are the normal remedy for a
contracting party who suffers a
loss not too remote, as a result
of a breach of contract by the
other party. Special damages is
that precise amount of pecuniary
loss which the claimant can
prove to have followed from the
particular facts set out in his
pleadings. Special damages must
be specifically pleaded and
evidence relevant to it adduced.
In the case of
Delmas Agency Ghana Ltd. v. Food
Distributor
International Ltd [2007-2008]
SCGLR 748,
the general principle relating
to damages was expatiated on.
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 arises 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. The catch, it was
further stated, 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, he is not entitled to
anything unless general damages
are also appropriate.
P.W.1 tendered in evidence
vouchers for various payments
for mobilization, made to the
contractor who worked on the
project totalling
¢723,816,000.00
(GH¢72,381,600). The said
contractor, P.W.3 testified and
corroborated P.W.1’s evidence.
Defendant did not challenge
these pieces of evidence.
Indeed, D.W.2, an employee of
Defendant Company, confirmed
that Plaintiff used its own
money to start the project when
she testified that the project
stalled at some time and
Plaintiff was demanding money
from Defendant because they had
run out of funds.
In my opinion, Plaintiff has
proved the specific loss it has
suffered as a result of the
Defendant’s breach and is
entitled to an award of GH¢72,381.60
as special damages, and I will
so hold. If money is due, an
award of damages can take the
rates of interest and inflation
into account, for as Taylor JSC
said in
Sowah v. Bank for Housing and
Construction [1982-3] GLR 1324
at p. 1359:
“I propose to be guided by my
initial inclination, for I am
persuaded by the apparent modern
approach of the English courts
to the view that since money was
due at one point in time and it
is now being paid at a
subsequent point in time, the
interest which the money
attracts during the period
assuming that it is a loan, is,
inter alia, a fair yardstick by
which to measure to some extent
the damages so suffered by the
appellant, i.e. the contractor.”
I will therefore award interest
as prayed, on the said amount.
Plaintiff is also claiming
general damages. As stated
above, general damages are
awarded in respect of such
damages as the law presumes to
result from the infringement of
a legal right or duty; damage
must be proved but the claimant
cannot quantify exactly any
particular items in it. I will
find that Plaintiff is entitled
to an award of general damages,
and award an amount of
GH¢5,000.00.
To recapitulate, I will award
special damages to Plaintiff in
the sum of GH¢72,381.60. I will
also award interest on the said
amount at the prevailing bank
rate from 15th
December, 2004 up to the date of
final payment. General damages
of GH¢5,000.00 is also awarded
to Plaintiff.
Costs assessed at GH¢3,000.00
(SGD)
BARBARA ACKAH-YENSU(J)
JUSTICE OF THE HIGH COURT
COUNSELS
J. OPOKU BOATENG
- PLAINTIFF
FESTUS KAYI
- DEFENDANT
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