|
________________________________________________________
J U D G M E N T
_______________________________________________________
ATUGUBA, JSC:-
The Plaintiff per its Writ of
Summons against the defendant
claimed the following:
“ a.) Plaintiff Company’s
claim against defendant is for
damages for the total collapse
of
the plaintiff company’s
business, loss of good will loss
of profits resulting from breach
of contract by defendant for
unlawfully withdrawing credit
facilities for plaintiff company
under credit facility agreement
for making funds available for
plaintiff company for
importation of much needed
machinery and equipment, spare
parts appliances etc, for
rehabilitation and repair of
plaintiff company’s factory as
manufacturers of electric cables
etc. and to enable plaintiff
company remain in business.
b)
Alternatively, for a declaration
that defendants are liable to
make substantial funds available
for plaintiff company under
credit facility agreement with
defendants to enable plaintiff
company bounce back into
business by rehabilitation,
repairing, replacing machinery
and for importation of raw
materials and generally for
doing all acts that are
necessary for plaintiff’s
company to commence production
and remain in business.
c)
Further or other reliefs as to
this Hon. Court may seem fit.”
The crux of the plaintiff’s case
is tersely put thus in its
statement of case dated
23/5/2007:
“My Lords, the short point to be
determined in this appeal is
whether Barclays Bank
(Respondent Bank) was right in
refusing to grant Ghana Cable
(Appellant Company) further
credit facilities despite the
existence of a debenture dated
20th December 1979
under which the appellant
charged all its assets as
security for payment of credit
facilities advanced to the
appellant by respondent
from time to time. See page 281
to 283 of the Record of Appeal
and Ex 1 (the guarantee)
executed by the appellant’s
Directors and Respondent on 20th
May 1981: See page 290 of Record
of Appeal.”
This question was answered in
the plaintiff’s favour by the
trial High Court but was
reversed by the Court of Appeal.
The plaintiff’s grievances with
the decision of the Court of
Appeal’s judgment may be
summarised as follows: By reason
of the unlimited security by way
of a debenture dated 20/12/1979
and a guarantee dated 20/5/1981
in favour of the defendant
against all its monetary
liabilities towards the latter
the plaintiff also had a
corresponding unlimited right to
monetary advances from it for
the purpose of operating its
business properly. At times the
contention is that by a course
of dealing between the parties
since the execution of the said
debenture in which the defendant
granted loan facilities to the
plaintiff regularly it is
inconsistent therewith and
indeed the defendant is thereby
estopped from, reneging on its
obligation to sustain the same.
The appellant quotes for its
contention on estoppel, Habib
Bank Ltd v Habib Bank AG Zurich
(1981) 1 WLR 1265 where
Oliver J applied the test
“Whether …it would be
unconscionable for a party to be
permitted to deny that which,
knowingly or unknowingly he has
allowed or encouraged another to
assume to his detriment.” This
is a familiar principle. But on
the facts of this case what has
the defendant knowingly or
unknowingly allowed or
encouraged the plaintiff to
assume to his detriment? The
plaintiff’s answer to this is at
p.6 of its statement of case as
follows:
“The various requests for credit
facilities made by the
plaintiff/appellant Company to
the defendant/Respondent Bank
which defendant/Respondent Bank
granted/met pursuant to the
terms and conditions of the
debenture see Ex AE1 to
AE3 led the appellant
Company into believing that upon
arrival of the machinery at the
Tema Port the respondent Bank
would make the needed funds
available for clearing the
machinery etc, from the port.”
Exhibits AE1 to AE3 have been
summarised by the Court of
Appeal at p.478 of the record of
appeal as follows:
“1. Exhibit AE1 was for a Credit
not exceeding ¢15 million and
was executed on 17th
July 1985.
2. Exhibit AE2 was for a Credit
not exceeding ¢60 million was
executed on 18th June
1987.
3. Exhibit AE3 was for a Credit
not exceeding ¢95 million and
was executed on 17th
May 1988.”
It is to be observed that these
exhibits relate to advances of
credit for amounts therein
stated as not exceeding certain
figures. Although these related
to stamping they also relate to
ceilings of credit which
ceilings are inconsistent with
the contention of the plaintiff
that it was entitled to
unlimited credit for unlimited
security.
If there was thus a discretion
in the matter of credit advances
to the plaintiff it is difficult
to see what obligation can arise
on these rather eratic and
seasonal credit advances to the
plaintiff to ground a contention
of estoppel upon documents of
agreement not shown to be
mandatory as to the grant of
credits to the plaintiff.
Course of Dealing
The plaintiff draws heavily from
Lord Denning’s opinion as to the
legal effect of a course of
dealing between parties in
Amalgamated Investment &
Property Co Ltd (In liquidation)
v. Texas Commerce International
Bank Ltd (1981) 3All ER 577
at 584. It is a long passage but
it is summed up in the last
paragraph as follows:
“So I come to this conclusion:
when the parties to a
contract are both under a common
mistake as to the meaning or
effect of it and thereafter
embark on a course of dealing on
the footing of that mistake,
thereby replacing the original
terms of the contract by a
conventional basis on which they
both conduct their affairs,
then the original contract is
replaced by the conventional
basis. The parties are bound by
the conventional basis. Either
party can sue or be sued upon it
just as if it had been expressly
agreed between them”.
In this case the plaintiff did
not seek production of the
debenture agreement in evidence
and therefore one cannot tell in
the first place what its terms
are so as to enable the court
see whether the parties made any
mutual mistake and therefore
substituted a course of
dealing. As far as the defendant
is concerned, there is no
mistake as to the effect of the
debenture. At p. 115 of the
record of appeal DW1 (the
defendant’s Risk Director)
testified thus:
“Q. So are you saying you
continued giving plaintiff
credit because of your
historical relationship with
plaintiff?
A. Yes, that is right.
Q. In addition, the bank also
sought to provide security
through the guarantee unlimited
and the charges on the assets of
plaintiff and its guarantors.
A. Yes, because we took the
security in case of default in
repayments.
Q. I am putting it to you that
that Bank cannot
arbitrarily refuse to advance
credit to a customer
with whom it has a long
relationship of credit advance
payment.
A. Indeed the Bank cannot
do so. There must be a basis for
the decline.”
Much earlier at p.15 of the
record DW1 said:
“Q. So if you look at Exhibits F
and F1, you will see
consistent pattern of debit
advances which are credit
facilities in favour of
plaintiff but there are very
(sic) record of payment, is that
correct.
A. Yes that is correct.
Q. I am suggesting to you that
the defendant was ready to
advance this credit payment to
plaintiff not withstanding
the lack of a record of
consistent repayment because of
the guarantee unlimited and the
various charges on the assets of
plaintiff and its guarantors.
A. That is not correct.
Q. I am putting it to you that,
that was the reason.
A. That money is at the
discretion of the Bank and no
other person. Banks lend money
within their discretion until
they cannot continue to do so
and that is what happened in
this case.
Q. I am not saying why the bank
stopped payments but that the
bank was in a position to
continue to advance credit
because of the guarantee
unlimited and the charges on the
assets of the plaintiff and its
guarantors.
A. That is not correct.
Q. What was the basis then
for the bank continuing to
advance credit notwithstanding
the lack of payment?
A. Because this was
assistance with a long
relationship with the defendant
bank though the plaintiff
continued to trade poorly and
the conduct of their account
continued to be poor, we
continued to offer plaintiff
financial support in the hope
that things will turn out better
but we never saw better days and
we stopped giving plaintiff more
money.”
From all this it is clear that
as far as the defendant is
concerned the sum total of any
course of dealing between the
parties is at the highest that
the defendant may for reasons
withhold further credits to the
plaintiff. The defendant
explained that it discontinued
the credit facilities because of
inter alia, fluctuations in the
exchange rate of the cedi and
the unameliorating trend of the
plaintiff’s operations. There is
nothing to show that this was
inconsistent with the terms of
any agreements between the
parties, which were merely
enabling or even with the course
of dealing. In Johnson v
Taylor Bros & Company Limited
(1920) AC 144 at 159 Lord
Atkinson said of a course of
business which was relied on as
altering the parties’ terms of
agreement as follows:
“As to the course of
business I think that the
respondents having, by a term of
their contract, a legal right to
have the shipping documents
tendered to him in England, they
could not lose that right by
adopting a course of business
according to which the
transmission of these documents
by post to them was accepted by
them as equivalent to a proper
tender. It is not stated that
according to this course of
business the documents, if lost
in the post, were treated as if
they had been received.
In the present case the
documents were not and could not
be posted, as they never
existed. The appellant was
not, in my view, released in any
way from his obligation to
tender the shipping documents in
England by this course of
business.”
Similarly there is nothing to
show that the alleged course of
dealing was inconsistent with
the reasons given by the
defendant for terminating the
credit facilities.
In sum the contentions of the
plaintiff with regard to the
action taken by the defendant
are misconceived and
far-fetched. Indeed the refusal
of the credit facilities for the
clearing of the goods at the
port and the regrant of some
credit facility a year later to
the plaintiff clearly shows that
the question of credits was
within the defendant’s
discretion. Were it not so what
stopped the plaintiff from
bringing its action until almost
12 years later?
A more serious issue concerns
the alleged wrongful detention
of the plaintiff’s Bill of
Lading to enable him source
funds elsewhere. One would have
thought that this very claim
could not arise if truly the
defendant were bound, as the
plaintiff contends, to sustain
the credit facilities
adinfinitum. I am prepared
to hold that the Court of Appeal
erred in denying the plaintiff a
remedy on that ground because it
was not covered by the
pleadings. It was. The plaintiff
distinctly pleaded in paragraph
7 of its statement of claim as
follows
“7. Plaintiff company says
that the defendant Bank also
flatly refused to release the
Bill of Lading on the said
machinery etc. to plaintiff
company to enable the machinery
to be cleared from Tema Port,
Defendant Bank did not, in this
regard, act in a manner which
accords with normal banking
practices and in discharge
of defendant BANK’s obligations
under the credit facility
agreement with plaintiff company.”
The indorsement on the writ of
summons also prayed for ‘c)
Further or other reliefs as to
this Hon Court may seem fit.’
These together satisfied the
requirement of pleadings See
Botchway v. Okine (1987-88)
2GLR 1 C.A. In any case the
ample powers of the Court of
Appeal relating to the hearing
and disposal of an appeal under
r 32 of C.I. 19 could cover the
situation; See Hanna Assi
(No.2) v. GIHOC Refrigeration &
Household Products Ltd (No. 2)
(2007-2008) SCGLR16.
However, wrongful detention of
the Bill of Lading was never
admitted by DW1 as the Court of
Appeal erroneously held. On this
issue DW1 testified (See
pp103-104 of the record of
appeal) as follows:
“Q. I put it to you that
the plaintiff was to pay for the
facility by putting the machine
to use.
A. Yes, that is correct.
Q. I am also putting it to you
that the plaintiff indicated to
you how it proposed to pay for
the facility over time
A. Yes that is correct.
Q. Under that transaction
between the plaintiff and the
defendant Bank, the plaintiff
was not obliged to pay or (sic)
the total cost of the machinery
and spare on their arrival at
Tema Port.
A. That is correct.
Q. You recall that when the
plaintiff had difficulty with
the bank in obtaining credit to
clear goods, the plaintiff
requested the bank to
release the Bill of Lading
covering the goods to plaintiff
to enable plaintiff raise money
elsewhere to clear the goods.
A. I am not sure about
this.
Q.I am putting it to you that
the Bank refused to release
the Bill of Lading to the
plaintiff.
A. Yes that is so.
Q. I am further putting it
to you that defendant refused to
release the Bill of Lading to
plaintiff on the ground that the
plaintiff was required to pay
for the total cost of the goods
on arrival at Tema port.
A. I am not aware of these
facts.
Q. In paragraph 8 of the
statement of defence, the
defendant says the Bill of
Lading was to be released on
plaintiff paying for the goods
at the Port.
A. That is correct because
it was in the interest of the
bank the plaintiff should pay.”
Such evasive and uncertain
answers do not in law amount to
an admission. In law an
admission must be clear and
unambiguous.
See Pomaa v Fosuhene
(1987-88) 1 GLR 244 S.C.
There is no evidence or ground
for holding that the defendant
wrongly withheld the plaintiff’s
Bill of Lading.
For all these reasons I would
dismiss the appeal.
W.A. ATUGUBA
JUSTICE OF THE SUPREME COURT
I agree: ANSAH,J.S.C.
J. ANSAH
JUSTICE OF THE SUPREME COURT
I also agree: OWUSU (MS), J.S.C.
R. C. OWUSU (MS)
JUSTICE OF THE SUPREME COURT
I also agree: ANIN YEBOAH,
J.S.C.
ANIN YEBOAH
JUSTICE OF THE SUPREME COURT
I also agree: BAFFOE-BONNIE,
J.S.C.
P. BAFFOE-BONNIE
JUSTICE OF THE SUPREME COURT
COUNSEL:
D. O. LAMPTEY FOR THE APPELLANT
CHARLES HAYIBOR FOR THE
RESPONDENT |
