MAXWELL OPPONG vs COMMERCIAL INVESTMENTS LIMITED
  • IN THE SUPERIOR COURT OF JUDICATURE
    IN THE HIGH COURT (COMMERCIAL DIVISION)
    ACCRA - A.D 2018
MAXWELL OPPONG - (Plaintiff)
COMMERCIAL INVESTMENTS LIMITED - (Defendant)

DATE:  23 RD FEBRUARY, 2018
CIVIL APPEAL NO:  OCC/38/2015
JUDGES:  SAMUEL K. A. ASIEDU JUSTICE OF THE HIGH COURT
LAWYERS:  NO LEGAL REPRESENTION FOR PLAINTIFF
R.O. SOLOMON ESQ., FOR DEFENDANT
JUDGMENT

 

By a writ of civil summons issued on the 11th May 2015, the plaintiff claims against the defendant:

a. Immediate and unconditional transfer of ownership and title of the house to the Plaintiff as per the master Agreement executed.

b. Cost for bringing this action including solicitor fees.

 

The writ was accompanied by a statement of claim. After entry of appearance, the defendant filed a statement of defence in which it also counterclaimed against the plaintiff for Damages for loss suffered by the defendant arising from the plaintiff unilaterally taking possession of and completing the building the subject matter of this suit.

After the failure of pre-trial settlement, the parties filed their respective witness statements, whereupon, the matter was set down for trial at which each party gave evidence per a witness and closed their case. From the pleadings, the court finds that the defendant does not dispute the fact that in January 2006, the parties entered into an agreement in respect of a home ownership scheme which the defendant company was operating at its estate development site at a place called Fair Havens, East Legon Hills for the sale and purchase of a three (3) bedroom house at a cost of $58,179.00. Indeed, by this agreement, which was tendered and received in evidence as exhibit MOB, the defendant agreed to build and sell to the plaintiff a three bedroom house situate at Fair Haven, East Legon Hills at an ultimate price of $58,179.00.

 

The court finds that it was a term of the agreement that the plaintiff pays 2% of the purchase price as a commitment fee and, thereafter, an amount of $237.66 was to be paid every month for a period of twenty four (24) months after which the plaintiff shall be entitled to enter into possession of the house. From exhibit MOB, the parties also agreed that after the plaintiff has been put into possession, he would continue to pay the monthly installmental payment until the cost of the house was fully defrayed. The court finds from exhibit MOC that on the 9th January 2006, the plaintiff paid an amount of $1,200.00 to the defendant which was far in excess of the commitment fee required to be paid and so the excess amount of $36.42 was reckoned against the installmental payment due in respect of February 2006. Exhibit MOC is a receipt issued by the defendant in acknowledgment of the payment of the $1,200.00 by the plaintiff.

 

The court finds from clause H of the agreement, exhibit MOB herein, that the parties agreed that between 36 and 72 months from the date of payment of the commitment fee and upon consistent payment of the monthly installmental payments, the plaintiff’s house will be made available to him for his occupation so however that the plaintiff would continue to pay the monthly installments until the price was fully paid. There is evidence to the effect that as a result of the prompt payment of the sum of $1,200.00 by the plaintiff to the defendant, the defendant company wrote to inform the plaintiff that his house will be completed by June 2007 for the plaintiff’s occupation and that the part of the agreement, exhibit MOB, specifically, the part of clauses G and H which states that the plaintiff shall be entitled to enter into possession after 24 months and that his house will be ready for occupation between 36 and 72 months, were no longer applicable to the plaintiff. The defendant has asserted that even if it made that offer to waive the terms of clauses G and H of the agreement, the same is not binding on the plaintiff because the plaintiff gave no consideration therefor.

 

The court is however of the view that the prompt payment of the initial deposit of $1,200 for which reason the defendant company offered to ignore the terms referred to hereinbefore in clauses G and H serve as adequate consideration to the defendant for the offer notwithstanding that it was an obligation which the plaintiff was contractually enjoined to perform. For, section 9 of the Contracts Act 1960, Act 25 states in no uncertain terms that

9. Law as to consideration

The performance of an act or the promise to perform an act may be a sufficient consideration for another promise although the performance of that act may already be enjoined by a legal duty, whether enforceable by the other party or not.

 

In her book The Law of Contract in Ghana, published by Frontiers Printing & Publishing Company, Accra Ghana (2011) at page 99, the learned author Christine Dowuona-Hammond had stated among others that:

“Under Ghanaian Law, the performance or the promise to perform an act which one is already under a legal duty to perform constitutes sufficient consideration for another promise. Section 9 covers all three kinds of pre-existing legal obligations discussed. The phrase “legal duty” could refer to:

(i) a public duty imposed on a person under the general law, i.e. an act already enjoined by some legal duty;

(ii) a pre-existing contractual duty owed by the promisor to the promise under an existing contract between them, in which case it would be an act enforceable by the contracting party”: or

(iii) a pre-existing contractual duty owed to a third party under an existing contract between the promisor and that third party, in which case it would be an act which is not directly enforceable by the other contracting party.”

 

In Kessie vs. Charmant [1973] GLR 194 it was held, among others, that

The basic common law principle that to sustain an action on a promise by the defendant the plaintiff must show either that it was contained in a document under seal or that it was supported by consideration was still part of the law of Ghana, subject to statutory changes effected by the Contracts Act, 1960. One such change was that by section 9 the performance of an act, notwithstanding that it was already enjoined by some legal duty, was sufficient consideration.

The court explained further at page 202 that:

Section 9 clarifies a doubtful corner in the law of consideration by making it clear that the mere fact that a person is already legally bound to do what he now promises (or performs) does not prevent his promise (or performance) from being good consideration.

 

The court holds therefore that the agreement between the parties was revised mutually by them and that the defendant company agreed with the plaintiff, per exhibit MOD, to complete the plaintiff’s house by June 2007 to enable the plaintiff move into occupation of the said house. The court finds from the pleadings that the defendant has not denied that notwithstanding the fact that the plaintiff continued to make payments, the plaintiff was not even allocated a unit and his building had not been commenced by June 2007. This is clear from paragraph 8 of the statement of claim and paragraph 4 of the amended statement of defence. The court wishes to point out that it is no valid defence for the defendant’s default in building the plaintiff’s house by the June 2007 deadline for the defendant to say that by the nature and terms of the contract the plaintiff was aware that it was not possible for the defendant to complete the plaintiff’s house for his occupation by June 2007 with the initial deposit and the monthly installmental payments. The defendant company assumed the obligation to build to completion, under the contract, by June 2007, and therefore, the defendant committed a breach of contract by not performing in accordance with the agreement.

 

From the pleadings the court finds that the defendant admits that for the reason that the plaintiff was desirous of having the house, the plaintiff came to another agreement with the defendant company whereby the plaintiff agreed to pay $10,000.00 for the defendant to allocate a house to the plaintiff by 24th February 2010 and then another $7,000.00 by 10th April 2010 when the defendant would have finished the plastering and the application of first coat of paint to the building and then a final amount of $3,000.00 by the 31st May 2010 when the house would have been completed. The court again finds from the pleadings that pursuant to the fresh agreement, the plaintiff paid the initial $10,000.00 to the defendant company whereupon the defendant allocated to the plaintiff house number 87 Convent Avenue which had then been partially roofed. This fact which was pleaded by the plaintiff in paragraph 10 of his statement of claim was admitted by the defendant at paragraph 6 of its statement of defence. The defendant company has also admitted that despite the payment of the $10,000.00 by the plaintiff, the defendant company did not plaster the house and apply the first coat of paint thereto contrary to the fresh agreement; as a result, the plaintiff refused to pay the $7,000.00 and the $3,000.00 in accordance with the agreement. The defendant has also agreed in its statement of defence that upon its failure to fulfil its obligations under the second agreement, the plaintiff was compelled to enter into yet another agreement in January 2011 whereby the plaintiff was to make payments to the defendant which was to be applied specifically to the plaintiff’s house and his installmental account credited. The defendant in furtherance of this agreement issued exhibit MOF to the plaintiff. The court finds that in the said exhibit, the defendant company undertook to “order for all the materials needed at every stage of completion” and the plaintiff will “issue cheques to Commercial Investment Limited”.

 

The plaintiff has averred in paragraph 13 of his statement of claim that the defendant reneged on this agreement and stopped the arrangement altogether thus leaving the plaintiff’s house to seriously deteriorate. This averment had been denied by the defendant in paragraph 7 of the defendant’s statement of defence. However, a critical examination of the terms of the said agreement as shown by exhibit MOF shows that the defendant company undertook to “order for all the materials needed at every stage of completion” of the house. The plaintiff was to issue cheques to the defendant company. The court finds that there is no evidence to show that the defendant company ordered even a single material needed for the completion of the house. The defendant did not tender any such evidence before the court. From the terms of the agreement it is upon the order for materials needed to complete the house that the plaintiff will have to issue cheques to the defendant.

 

In the natural cause of things, it is only when the plaintiff has been served with an invoice by the defendant that the plaintiff can also issue cheques to cover the value of the invoice. The court will hold that it is because the defendant breached the agreement by its failure to order for the materials that disable the defendant from raising invoice and serving same on the plaintiff. The court therefore holds that the non-performance of this agreement, also, can be blamed on the defendant. Indeed, the defendant is guilty of the breach of this agreement and the defendant cannot lay blame at the door step of the plaintiff. The court finds that as a result of the non-performance of the defendant the plaintiff was compelled to take possession of the house and complete same in order to mitigate his losses. For a party to a contract is under an obligation to take reasonable measures to mitigate and reduce his losses. Thus, in British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 at 689,

HL, Lord Haldane observed that:

“The … [law] imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps.”

 

The same principle was re-iterated by the Supreme Court in the case of Borketey v. Achinivu and

Others [1966] GLR 92, where the court held that:

The appellant was under a duty to take all reasonable steps to mitigate the loss and could not claim any part of the damage which was due to his neglect to take such steps.

See also Delmas Agency Ghana Ltd vs. Food Distribution International Ltd. [2007-2008] 2 SCGLR 748. The plaintiff has pleaded in paragraphs 15 and 16 of his statement of claim that;

15. The Plaintiff contends that at the time he took over the completion of the house he had made a total payment of US$27,583.20 leaving an outstanding balance of about US$30,595.80.

16. The Plaintiff contends further that by the time he completed the house he had spent far in excess of US$30,000.00 mainly as a result of rising cost of materials, labour et cetera and the poor state of the building at the time he took over and which could be attributed to the shoddy construction work, substandard materials used and neglect.

 

It ought to be pointed out that these averments contained in paragraphs 15 and 16 of the plaintiff’s statement of claim have not been denied by or otherwise challenged by the defendant in its statement of defence. Order 11 rule 13 (1), (2) and (3) makes an unbending demand on any party to specifically deny allegations made in pleadings by his opponent which he does not admit. The rule provides that:

13.  Admissions and denials

(1) Subject to subrule (4) of this rule, any allegation of fact made by a party in the party’s pleading shall be deemed to be admitted by the opposite party unless it is traversed by that party in pleading or a joinder of issue under rule 14 operates as a denial of it.

(2) A traverse may be made either by a denial or by a statement of non-admission and either expressly or by necessary implication.

(3) Subject to subrule (4), every allegation of fact made in a statement of claim or counterclaim which the party on whom it is served does not intend to admit shall be specifically traversed by the party in the party’s defence or defence to counterclaim and a general statement of non-admission shall not be a sufficient traverse of them.

(4) Any allegation that a party has suffered damage and any allegation as to the extent of damage or the amount of damages shall be deemed to be traversed unless specifically admitted.

 

In explaining the essence of Order 19 rules 14, 18 and 20 of the old High Court Rules LN 140A which is in pari materia with the provisions of Order 11 rule 13 (1) (2) (3) of the current High Court (Civil Procedure) Rules, 2004, CI. 47, the court pronounced in the case of Kai vs. Amarkye [1982-83] GLR

that:

Order 19, rr. 14, 18 and 20 of LN 140A had the common object to compel each party in his turn to admit or deny fully each allegation of fact in the pleadings of his opponent: Failure to deny either specifically or by implication allegations of facts amounted to admission of them and no further proof of that was required.

 

See also HESSE v. ACCRA MUNICIPAL COUNCIL AND ANOTHER [1964] GLR 399.

As already pointed out, the defendant has not denied or even challenged, in its statement of defence, the plaintiff’s assertion that at the time he took over the house he had made a total payment of $27,583.20 leaving an unpaid balance of $30,595.80. Further, the defendant has not denied the averment that the plaintiff spent in excess of $30,000 to complete the house. Indeed, the failure of the defendant to deny these averments constitute an indirect admission of them as was pointed out in the case of Fori vs. Ayirebi [1966] GLR 627 SC. that:

“When a party had made an averment and that averment was not denied, no issue was joined and no evidence need be led on that averment. Similarly, when a party had given evidence of a material fact and was not cross-examined upon, he need not call further evidence of that fact.”

 

The defendant has admitted at paragraph 8 of its witness statement filed on the 22nd February 2017 that “in June 2011 the plaintiff took possession of the building by himself without our consent and went ahead to complete it”

On that score, the court finds that at the time the plaintiff took over the house, he had paid $27,583.20 leaving a balance of $30,595.80 to be paid in respect of the cost of the house. The court also finds that the plaintiff spent a sum of not less than $30,000 to complete the house in question. If therefore the defendant is entitled to any amount from the plaintiff at all, that amount should be the difference between the amount left to be paid on the house at the time the plaintiff took it over, that is the sum of $30,595.80 and the amount spent by the plaintiff to complete the house which is given as $30,000. In the opinion of the court therefore the defendant is entitled to recover no more than the sum of $595.80 from the plaintiff.

 

The defendant has counter claimed against the plaintiff for general damages for loss suffered by the defendant arising from the plaintiff unilaterally taking possession of and completing the building subject matter of this suit. Quite apart from the fact that the defendant failed to lead evidence to give the court the slightest indication as to the so-called damages suffered by the defendant, the court is of the opinion that the conduct of the defendant in consistently breaching the contract between it and the plaintiff is such that the court does not think it lies well in the mouth of the defendant to pray for damages. If anybody is entitled to damages at all it should be the plaintiff and not the defendant. However, the plaintiff failed to ask for damages against the defendant and so; the court will refrain from awarding any in his favour.

 

The defendant also says that it seeks to recover possession of the house from the plaintiff. The reason behind this claim of recovery of possession by the defendant is not clear to the court in view of the fact that the plaintiff has virtually finished paying for the cost of the house and has been in possession of the said house right from its completion and therefore, a great deal of injustice will be meted out to the plaintiff if the court were to accede to the defendant’s counter claim. In the opinion of the court, the defendant is not entitled to its counterclaim which is accordingly dismissed. On the contrary, the court will hold that the plaintiff is entitled to his claim for the transfer of ownership and title of the house.

 

The court will therefore make an order that the defendant execute a deed of transfer of the said house into the name of the plaintiff herein within 30 days from the date of this judgment subject to the plaintiff paying the sum of $595.80 to the defendant company.

The court will award cost of GH5,000.00 to the plaintiff against the defendant.