KERECOM COMPANY LIMITED vs KUMASI METROPOLITAN ASSEMBLY
  • IN THE SUPERIOR COURT OF JUDICATURE
    IN THE HIGH COURT
    KUMASI - A.D 2019
KERECOM COMPANY LIMITED - (Plaintiff)
KUMASI METROPOLITAN ASSEMBLY -(Defendant)

DATE:  25 TH FEBRUARY, 2019
SUIT NO:  OCC 26/2017
JUDGES:  DR. RICHMOND OSEI-HWERE, J
LAWYERS:  RAY APPIAH-AMPONSAH FOR THE PLAINTIFF
PATRICK ADU-POKU WITH VALENTINE BOAMAH AND SYLVIA AFIA OWUSUAA FOR THE DEFENDANT
JUDGMENT

 

On 22nd March, 2016 the Plaintiff instituted the present action against the Defendant herein. By an amended statement of claim filed on the 31st July, 2017, Plaintiff’s claim against the Defendant is for:

i. An order directed to the defendant to pay an amount of GH365,934.19 being an outstanding indebtedness for waste management services render to the defendant by the plaintiff.

ii. Interest on the GH 365,934.19 at the prevailing commercial bank rate at the time of judgment from 30th April, 2013 till date of final payment.

iii. Costs including legal fees.

 

Per the amended statement of claim, the plaintiff’s claim hinges on the fact that the defendant has failed or refused to pay the outstanding debt owed it as a result of its services of street sweeping and drain cleaning within the central business district of the Kumasi Metropolis for sixteen (16) months.

 

The defendant averred in its amended statement of defence that it has paid all its indebtedness to the plaintiff and that the plaintiff is not entitled to the reliefs endorsed on the writ of summons.

 

ISSUES

After unsuccessful attempts at settlement, the following issues were set down for trial namely:

1. Whether or not the defendant owes the plaintiff the sum of GHC 390,732.40?

2. Whether or not the defendant is indebted to the plaintiff to the tune of Gh 390,732.40 or thereof?

3. Whether or not the late Nana Peasah (deceased) was the chief executive officer or director of the Plaintiff Company?

4. Whether or not Nana Peasah had authority to receive any payments on behalf of the plaintiff company?

5. Whether or not plaintiff is entitled to its claim?

 

The GH390,732.40 figure as captured in the claim was subsequently amended to GH365,934.19. THE BURDEN OF PROOF IN CIVIL SUITS GENERALLY

 

As in all civil suits, the onus of proof first rests on the party whose positive assertions have been denied by his opponent. Depending on the admissions made, the party on whom the burden of proof lies is enjoined by the provisions of sections 10, 11(4), 12 and 14 of the Evidence Act, 1975 (NRCD 323) to lead cogent evidence such that on the totality of the evidence on record, the court will find that party's version of the rival accounts to be more probable than its non-existence. Indeed, this basic principle of proof in civil suits expounded in Zambrama V Segbedzie (1991) 2 GLR 221 has been subsequently applied in numerous cases including Takoradi Floor Mills v Samir Faris (2005/06) SCGLR 882; Continental Plastics Ltd v IMC Industries (2009) SCGLR 298 at pages 306 to 307; Abbey v Antwi (2010) SCGLR 17 at 19 (holding 2); and Ackah v. Pergah Transport Limited and Others [2010] SCGLR 728.

 

In Ackah v. Pergah Transport Limited and Others supra, Adinyira, JSC succinctly summed up the law, at page 736:

“It is a basic principle of law on evidence that a party who bears the burden of proof is to produce the required evidence of the facts in issue that has the quality of credibility short of which his claim may fail…It is trite law that matters that are capable of proof must be proved by producing sufficient evidence so that, on all the evidence, a reasonable mind could conclude that the existence of a fact is more reasonable than its non-existence. This is the requirement of the law on evidence under section 10 (1) and (2) and 11 (1) and (4) of the Evidence Act, 1975 (NRCD 323).”

 

Thus at the trial, the Plaintiff bore the burden of producing evidence and the burden of persuasion on the issue as to whether or not the defendant is indebted to it the amount of GH365,934.19. The plaintiff was required to lead evidence to establish this claim and if he failed the court ought to enter judgment against him. Essentially, the burden of producing evidence of the defendant’s indebtedness to the Plaintiff lied on the Plaintiff.

 

I shall proceed to discuss the issues to ascertain whether the Plaintiff has led cogent evidence to establish its claim. In doing so, I shall first tackle issues three and four together since they relate to the position of the said Nana Peasah in the plaintiff company. I shall then assess issues one, two and five since they are intrinsically linked. I shall also advert my mind to the written submissions filed by counsel for the parties in the analysis.

3. Whether or not the late Nana Peasah (deceased) was the chief executive officer or director of the Plaintiff Company?

4. Whether or not Nana Peasah had authority to receive any payments on behalf of the plaintiff company.

 

It has been the case of the defendant that the said Nana Peasah was the owner and director of the plaintiff company and that they dealt with him in that capacity. This assertion was confirmed at page 30 of the record of proceedings, when the representative of the defendant testified under cross examination as follows:

Q: And the last payment you made to the Plaintiff was on the 7th of July, 2015?

A: Yes because after that last payment the owner of the Company died and KMA was waiting for the family to do all the necessary documentation for payment to continue.

 

However, this is what transpired when he was confronted with exhibit F2 (the regulations of the company):

Q: Turn to Exhibit F2 the last page from the Registrar General Department. We have the address and Description of Subscribers. The first name is Edmund Prempeh, the 2nd person is Regina Adu Gyamfi.

A: Yes.

Q: And at all times material to this case in your capacity as the Head Internal Audit of the Defendant you were dealing with a Ltd Liability Co.?

A: Yes.

 

The said Edmund Prempeh who is a director of Kerecom Limited per Exhibit F2 is also the biological son of Nana Peasah. The plaintiff denies the assertion that Nana Peasah is the owner or a director of the company.

 

In the case of Mojolagbe v. Larbi and Others (1959) GLR 190, the court held that where a party makes an averment capable of proof in some positive way e.g. by producing documents, description of things, reference to other facts, instances or circumstances and his averment is denied, he does not prove it by merely going into the witness box and repeating this averment on oath or having it repeated on oath by his witness. He proves it by producing other evidence of facts and circumstances from which the court can be satisfied that what he avers is true.

 

The defendant tendered in evidence, exhibit 1 entitled “Minutes of meeting held on the Kerecom CBD Cleaning Contract on Wednesday July 10, 2013 at the office of the Metro Coordinating Director”. The document shows that Nana Peasah who was then the Presiding Member of the Kumasi Metropolitan Assembly, the defendant herein attended the said meeting as a representative of Kerecom Limited, the plaintiff herein. Also in attendance as a representative of the plaintiff was Edmund Prempeh.

 

It is trite learning that the primary document that demonstrates a person’s subscription and/or directorship of a company is the company’s regulations. From exhibit F2, Edmund Prempeh and Regina Adu Gyamfi were named as the first directors of the plaintiff company. There is no evidence on record to show that the provision in the regulation of Kerecom Limited relating to directors of the company was amended to reflect the name of Nana Peasah. It is my considered opinion that Nana Peasah acted as an agent of the plaintiff company in his dealings with the defendant particularly when he attended the said meeting on July 10, 2013 as captured in Exhibit 1. Edmund Prempeh, a director of the company never complained about Nana Peasah’s attendance of the meeting in the latter’s capacity as a representative of Kerecom Limited. Consequently, the legal principle of agency by estoppel was created in respect of the position of Nana Peasah vis-à-vis Kerecom Limited and its dealings with the defendant.

 

Professor G.H.L. Fridman in his book The Law of Agency (Butterworths 7th edition, London 1996) at page 11defines agency as:

“the relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principal’s legal position in respect of strangers to the relationship by the making of contracts or disposition of property.”

 

Section 26 of the Evidence Act, 1975 (NRCD 323) discusses estoppel by own statement or conduct as follows:

“Except as otherwise provided by law, including a rule of equity, when a party has by his own statement, act or omission, intentionally and deliberately caused or permitted another person to believe a thing to be true and to act upon such belief, the truth of that thing shall be conclusively presumed against that party or his successors in interest in any proceedings between that party or his successors in interest and such relying person or his successors in interest.”

 

The importance of this type of estoppel is that a person who by his words or conduct willfully or negligently causes another to believe in the existence of a certain state of things and induces him thereby to act on that belief or to alter his position is estopped from asserting against the other person that a different state of things existed at that time. Thus, in the instant case the plaintiff company through its directing mind in Edmund Prempeh made the defendant to believe that Nana Peasah is an agent of the company. Therefore, the plaintiff cannot be heard to be saying that Nana Peasah is unknown to it so far as the affairs of the company is concerned and that he never acted on its behalf.

 

From the foregoing, I agree with the submission of counsel for the plaintiff that the defendant has woefully failed to establish that Nana Peasah is the owner or director of the plaintiff company. Per the evidence on record, Nana Peasah who is now deceased was not a subscriber, a chief executive nor director of the plaintiff company. He was at best an agent of the plaintiff company. He therefore had the authority to receive payments on behalf of the plaintiff.

 

Is the Plaintiff entitled to his claim of the sum of GH365,934.19 from the Defendant?

 

From the evidence on record, there is no doubt that there was a cleaning service contract between the plaintiff and the defendant. It is also not in doubt that the contract was terminated with effect from April 30, 2013. This is best told by the combined effect of exhibits 1, D and D1. What is in contention is the outstanding amount payable to the plaintiff by the defendant as a result of the services rendered.

 

Exhibit 1 is the minutes of the meeting held on Wednesday July 10, 2013 at the office of the Metro Coordinating Director to discuss the Kerecom CBD Cleaning Contract. Paragraphs 3 and 4 of Exhibit 1 states:

“At this juncture the Coordinating Director asked that the minutes of the previous meeting be read so members would be reminded of the discussions held in the previous meeting. After the minutes were read, it came to light that an agreement had been reached on paying Kerecom Ltd. GHC40, 249 per month

(Representing 85% of the original contract sum of GHC47, 352) for the year January, 1st to December,

31st 2012. Consequently, the amount payable to him for the year would reduce from GHC568,224 to… The Assembly had as at April 30, 2013 paid an amount of GHC268, 175 out of the total annual payment of GHC482, 990 leaving a balance of GHC214, 815.

Additionally, it had also been agreed that GHC20,000 was to be paid per month from January to April, 2013 amounting to GHC80,000 thus making the total outstanding payment to be made to Kerecom Ltd

GHC294,815 up to April 30th 2013.”

 

In furtherance to exhibit 1, the defendant gave an undertaking in exhibit D1. The document dated July 29, 2013 states:

“UNDERTAKING FOR THE PAYMENT OF OUTSTANDING BILLS TO MESSRS KEREKOM LIMITED BY THE KUMASI METROPOLITAN ASSEMBLY IN RESPECT OF CBD CLEANING CONTRACT

 

From: Kumasi Metropolitan Assembly           To: Kerecom Gh. Ltd

 

Kumasi, Ghana                                                     Kumasi Ghana.

 

After two consecutive meetings held on 24th April, and 10thJuly, 2013 respectively, it was agreed and concluded that the Kumasi Metropolitan Assembly owed Messrs Kerecom Limited an amount of GHC294,815 (Two thousand ninety-four thousand eight hundred and fifteen Ghana Cedis) representing the total outstanding payment due Messrs Kerecom Limited for services rendered under the above mentioned contract which has been terminated with effect from April,30th 2013.

 

The Kumasi Metropolitan Assembly, represented herein by Mr. Solomon Asiedu, the Metropolitan Coordinating Director, do hereby agree pledge to abide by the following payment terms:

PAYMENT INSTALLMENT

DUE DATE

AMOUNT (GHC)

1st Installment

August 31, 2013

50,000.00

2nd Installment

September, 2013

50,000.00

3rd Installment

October, 2013

50,000.00

4th Installment

November, 2013

50,000.00

5th Installment

December, 2013

50,000.00

Total amount owed

294,815.00

 

 

For and on behalf of the Kumasi Metropolitan Assembly.

 

It is therefore without a doubt that the indebtedness of the defendant to the plaintiff as at 10th July, 2013 was at an agreed sum of GHC 294,815 (Two hundred and Ninety-Four thousand eight hundred and fifteen Ghana Cedis). This, plaintiff had given an undertaking to liquidate the same by December 31, 2013. It must also be emphasized that prior to this agreed sum the defendant had already made some payments to the plaintiff. From exhibit 1, the said payment amounted to GHC268, 175 as at April 30, 2013.

 

The defendant, however, failed to go by the payment plan contained in exhibit D1 but made some payments between 20/09/2013 and 07/07/2015. This is evidenced by the plaintiff’s exhibit G series as well as the defendant’s exhibit 2.

 

By plaintiff’s own showing in exhibit G, payments made to it by the defendant on different dates (i.e. between 20/09/2013 and 07/07/2015) amounted to GHC 212,000.00. This amount represents the sum total of gross payments. The plaintiff also exhibited receipts issued by it in respect of the payments received from the defendants in exhibits G1 to G 12. These receipts show the net payments made to the plaintiff. Thus, per plaintiff’s evidence, the agreed indebted sum of GHC 294,815.00 less GHC 212,000.00 brings the total outstanding debt of the defendant to GHC 82,815.00. Meanwhile, the defendant’s Exhibit 2, the contract register which recorded payments made to the plaintiff states the outstanding sum owed to the plaintiff as GHC82, 065.00. The two figures relating to the defendant’s indebtedness to the plaintiff are palpably close and they corroborate each other to an extent. I am, however, inclined to rely on the amount generated from the plaintiff’s evidence, as the deduction of the withholding tax was likely to create the disparity between the two calculations.

 

The plaintiff has invited the court to discard the expected monthly payment amount of GHC 40,249.00 which was used in the calculation in arriving at the GHC 294,815.00 figure and use the original amount of GHC 47,352.00 in the calculation since the defendant is in breach of its undertaking to liquidate the debt by 31st December, 2013. I am unable to accede to plaintiff’s prayer since many factors might have gone into the negotiated figure. We should not forget that this agreed sum was borne out of the termination of the contract. It will therefore be unfair to change the agreed amount to the detriment of the defendant. There was no default clause in the undertaking (exhibit D1) and same cannot be implied based on the circumstances. The result is that the defendant owes the plaintiff the sum of GHC 82,815.00 and not GH365,934.19 as claimed by the plaintiff.

 

Accordingly, I enter judgment in favour of the plaintiff against the defendant in the amount of GHC 82,815.00 plus interest at the commercial bank rate from 31st December, 2013 till date of final payment.

 

I have taken into consideration the provisions of order 74 of C.I. 47 on award of cost. I have taken cognisance of the expenses incurred (including lawyer’s fee) in prosecuting this case by the plaintiff. Accordingly, I award costs of GHC 15,000.00 against the Defendant and in favour of the Plaintiff.