IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL
ACCRA - A.D 2017
SIC INSURANCE COMPANY LIMITED - (Defendant/Appellant)
KEN KWAME ASAMOAH - (Plaintiff/Respondent)
DATE: 9TH FEBRUARY, 2017
CIVIL APPEAL NO: HI/167/2016
JUDGES: SAMUEL K. MARFUL-SAU J.A (PRESIDING), IRENE CHARITY LARBI (MRS) J.A, TANKO I.O. AMADU J.A
MAAME SARPONG FOR ESQ. (FOR DEFENDANT/APPELLANT).
EDWARD METTLE NUNOO ESQ. (FOR PLAINTIFF/RESPONDENT).
IRENE CHARITY LARBI (MRS). J.A.
(1) These are the facts of the case; The Plaintiff is a businessman resident in Ghana and the United States of America (USA). In or about February, 2008, the Plaintiff imported Chevrolet SSR Sports Car from USA through the Tema Harbour.
(2) Upon arrival of the vehicle in the country one Alhaji Iddrisu Yussufu expressed interest in its purchase with payment to be made at a later date. The Plaintiff parted with possession of the vehicle to Alhaji Iddrisu Yussufu who registered the vehicle in his name with the Driver Vehicle and Licensing Authority (DVLA) with Registration Number GN.8866-Z. However, Alhaji Iddrisu failed to make any payment for the vehicle. The Plaintiff, therefore retrieved the vehicle from Alhaji Iddrisu Yussufu.
(3) On 27th March 2009, the Plaintiff having recovered possession of the vehicle from Alhaji Iddrisu Yussufu, took a comprehensive Insurance Policy with the Defendant to protect the vehicle from any loss or damage at an insured value of Gh₵116,200.00 and paid Five Thousand Seven Hundred and Fifty-Nine Ghana Cedis (Gh₵5,759.00) as premium.
(4) On 1st August 2009, armed robbers allegedly seized the vehicle from the Plaintiff’s wife who made a report to the Police. All efforts of the Police to recover the vehicle failed to yield any positive result. The Plaintiff reported the loss of the car to the Defendant and put in a claim for the payment of the insured value of the vehicle but the Defendant refused to pay.
(5) By an amended writ filed on 27th March 2012, the Plaintiff claimed for recovery of Gh₵116,200.00 being the insured/ claim/replacement cost on Chevrolet No.GN.8866-Z under comprehensive Insurance Policy No.P/200/10/1001/2009/134 with the Defendant, interest on the said sum from April 2010 to date of payment at the Commercial Bank rate and Legal or Solicitor’s cost.
(6) The Plaintiff averred that by the terms and conditions of the comprehensive Insurance Policy, the Defendant, for charging the premium of Gh₵5,759.00 which was paid, assumed the risk to indemnify the Plaintiff in the event of any damage, loss, theft and cost occasioned to the vehicle and third parties during the term of the policy which commenced on 27th March, 2009 to expire on 26th March, 2010.
(7) The Plaintiff further averred that the policy on the vehicle has not been avoided or cancelled neither had the premium of Gh₵5,759.00 been refunded to him. The Plaintiff therefore contended that the Defendant having assumed the risk, was under a legal obligation to pay him the insured sum of Gh₵116,200.00 upon the total loss of the vehicle.
(8) In the Defendant’s further amended statement of defence, filed on 16th May, 2013 the Defendant averred that it is entitled to be relieved from indemnifying the Plaintiff on several grounds.
Firstly, the Defendant averred that upon the arrival of the vehicle in the country, the Plaintiff transferred property in it to one Iddrisu Yussufu who obtained a third party
Insurance Policy from the Defendant to cover the said vehicle for the period of 31st October, 2008 to 30th October, 2009. Subsequently, the Plaintiff also obtained comprehensive insurance to cover the vehicle from the Defendant for the period 27th March, 2009 to 26th March, 2010. The Defendant asserted that ownership in the vehicle resided in Iddrisu Yussufu at the time of the alleged robbery and the said Alhaji as owner transferred property in the vehicle to one Derrick Asante Amoako on 30th October, 2009 who in turn transferred property in the vehicle to EB ACCION Savings and Loans Company Ltd. on the same date.
(9) The second ground was that the value of Gh₵116, 200 declared by the Plaintiff for the vehicle when he took the Insurance Policy from the Defendant was inflated and fraudulent.
The Defendant gave the particulars of fraud as follows:-
i) That the Customs value as quoted on the Customs Declaration Form with Declaration Number 42008033881/0 and dated 31/01/2008 was U.S $25,472.87.
ii) That per the Ghana Association of Bankers average interbank exchange rate for 27th March 2009 for U.S $1.00 to the Ghanaian Cedi was Gh₵1.349.
iii) That the Customs value of US $25,472.87 at an exchange rate of Gh₵1.349, the value of the said vehicle in Ghana would be Gh₵34,362.90.
iv) That the import duty as quoted on the said Customs Declaration Form in respect of Respondent’s vehicle was US $6,000.17.
v) That the import duty of US $6,000.17 at an exchange rate of Gh₵1.349 would amount to Gh₵8,103.67.
vi) That the Custom value in Ghana Cedis of Gh₵34,362.90 inaddition to the import duty in Ghana Cedis of Gh₵8,103.67 would total Gh₵42,466.57 (as the value of the said vehicle).
(10) The third ground is that the contract between the parties is based on unberrimae fides (utmost good faith) and that the Plaintiff breached this material term when he failed to disclose to the Defendant all relevant matters which he knew or could reasonably be expected to know which would enable the Defendant take a decision to insure and on what terms to accept the risk.
The Defendant contended that the Plaintiff had no insurable interest in the vehicle at the time of the consummation of the contract of insurance and the alleged robbery to warrant a claim of same.
(11) The Defendant therefore counter claimed as follows:-
a) A declaration that Defendant is entitled to avoid the contract of Insurance entered into between Plaintiff and Defendant in respect of Chevrolet SSR Sports Car with Registration No.GN.8866-Z covering the period 27th March, 2009 up to 26th March, 2010 on the ground of non-disclosure of a material fact and/or representation of fact which was false in some material particular.
b) An order setting aside the contract of Insurance entered into between Plaintiff and Defendant in respect of Chevrolet SSR Sports Car with Registration No.GN.8866-Z covering the period 27th March 2009 up to 26th March 2010.
(12) After a full trial, the High Court, entered judgment for the Plaintiff for the sum of Gh₵116,200.00 being the insured sum on which the Defendant levied the premium of Gh₵5,759.00, interest at the Commercial Bank rate from April, 2010 to date of final payment and cost of Gh₵8,000.00. The High Court dismissed the Defendant’s counter claim as having no basis.
(13) Aggrieved by the judgment, the Defendant filed a Notice of Appeal on six main grounds as follows:-
a) The judgment is against the weight of the evidence.
b) The Court erred when it held that the death of Alhaji Iddrisu Yusufu made it impossible for the car to be re-transferred to the Plaintiff.
c) The Court erred when it held that the Plaintiff had an insurable interest in the car.
d) The Court erred when it held that Defendant had full disclosure as to all relevant information relating to the car.
e) The Court erred when it held that the value of the car was not inflated.
f) The Court erred when it held that Plaintiff was not fraudulent.
Pursuant to leave of this Court granted on 21st June, 2016, the Defendant filed an Amended Notice of Appeal deleting the original ground (g) and replacing it with a new ground (g) which read as follows:-
“(g) The Court erred when it overruled Defendant’s objection to the admission of the evidence of Plaintiff on full disclosure by Plaintiff to Defendant on the ownership of the car at the time the Policy was issued”.
(14) In my view, all the grounds canvassed in this appeal are in essence criticisms of the trial court’s evaluation of the evidence. The two main issues arising out of these grounds of appeal in my further view can be narrowed down as follows:
i) Whether the Plaintiff had an insurable interest in the vehicle and
ii) Whether the Defendant is entitled to avoid the contract of insurance entered into between the Plaintiff and Defendant on ground of non-disclosure of a material fact and/or representation of fact which was false in some material particular.
The resolution of these issues would in my further view invariably resolve all the grounds.
The evidence of PW1, Samuel Nii Dartey Ofori corroborated the testimony of the Plaintiff that Alhaji Iddrisu Yussufu failed to pay for the vehicle and therefore had to return it to the Plaintiff. This was done at the Police Headquarters where the Plaintiff’s wife had lodged a complaint against Alhaji Iddrisu Yussufu for failing to pay for the vehicle.
(15) t is apparent on the pleadings of the Plaintiff and the facts that the understanding between the Plaintiff and Alhaji Iddrisu Yussufu was that the vehicle was to be paid for at a later date. It became clear from the testimonies of the Plaintiff and PW1, that what the Plaintiff disposed of was his right to immediate possession in the vehicle to Alhaji Iddrisu Yussufu but subject to full payment of the purchase price at a later date. It was based upon his understanding between the Plaintiff and Alhaji Iddrisu Yussufu that the latter returned the vehicle when he was unable to pay for it.
(16) In Stroud’s Judicial Dictionary (3rd ed) Vol.2 Page 1484 para.
“An insurable interest” in goods does not necessarily imply a right to the whole, or a part, of a thing, nor, necessarily conclusively, that which may be the subject of privation; but the having some relation to, or concern in the subject of the insurance, which relation or concern, by the happening of perils insured against may be so affected as to produce a damage, detriment, or prejudice, to the person insuring: and where a man is so circumstanced with respect to matters exposed to certain risks or dangers as to have a moral certainty of advantage or benefit but for those risks or dangers, he may be said to be interested in the safety of the thing. To be interested in the preservation of a thing is to be so circumstanced with respect to it as to have benefit from its existence, prejudice from its destruction”. (Per Lawrence J; Lucena Vrs. Craufurd, 2B And P.N.S.302)
(17) In ROYAL EXCHANGE ASSURANCE VRS. TAYLOR  I GLR 226, the Plaintiffs under a contract of insurance, insured the vehicle of the Defendant a transport owner. Subsequently, the Defendant parted with possession of the vehicle but retained ownership until full payment of the purchase price. The Plaintiff in an action sought for a declaration that the Insurance Policy on the vehicle had become void and was no longer binding because the Defendant had after the sale lost his insurable interest in the vehicle.
(18) Abban J. (as he then was) after considering the facts that emerged and relying on the definition of insurable interest in Stroud’s Dictionary, held that until the purchase price agreed upon by the Defendant and the seller was paid or until property in the vehicle could be said to have passed to the purchaser, the Defendant still had an insurable interest in the safety and preservation of the said vehicle.
The Plaintiff testified that after he had re-possessed the vehicle from Alhaji Iddrisu Yussufu for non-payment of the purchase price, he took out a comprehensive Insurance Policy from the Defendant in respect of the vehicle.
These are excerpts of his testimony:
“............On 27th March, 2009 I went to the office of the Defendant around Asafo Market, opposite Prempeh Assembly Hall with my vehicle Chevrolet Sport’s Car 2003 Model with Registration Number GN-8866-Z for insurance coverage..........”.
The Plaintiff continued;
“So they took the car papers from me and they checked in their system. When they checked their system they found out that the car has already been insured”.
Then again the Plaintiff stated;
“So when I showed the papers, the girl took the paper and pointed out the chassis number of the car and she found out that the car was in their system. So she went ahead and called the Manager and explained the situation and the manager said it doesn’t matter because if I am the real owner and I want to make the insurance, they can make it in my name”.
Under cross-examination, the Plaintiff stood his ground that the Defendant was aware that the vehicle had previously been insured from their system but went ahead to comprehensively insure same.
(19) As the trial judge rightly observed, the Defendant made no attempt to adduce evidence rebutting the role and advice given by the said manager at Kumasi office of the Defendant. The undisputed fact is that the Defendant charged the Plaintiff a premium of Gh₵5,795.00 which was paid for comprehensively insuring the vehicle. The fact that the vehicle had previously been insured under a third party cover by Alhaji Iddrisu Yussufu did not stop the Defendant from comprehensively insuring the vehicle. The reason was simple in law because a third party insurance also termed as ‘liability insurance’ covers loss resulting from the insured’s liability to a third party, such as loss incurred by a driver who injures a pedestrian. Under this insurance, the insured’s claim under the policy arises once the insured’s liability to a third party has been asserted. However comprehensive insurance is wider in scope. It combines coverage against many kinds of losses that may also be insured separately.
(20) Therefore in my view the fact that the Plaintiff parted with possession of the vehicle to Alhaji Iddrisu Yussufu subject to full payment for it could not deprive the Plaintiff of his insurable interest in it. Similarly, is the fact that the third party insurance coverage taken earlier by Alhaji Iddrisu Yussufu was not a bar to the Plaintiff to have it comprehensively insured. This is because the Plaintiff had relation to, or concern in the vehicle the subject matter of the insurance which by the happening of any peril may be detrimental or prejudicial to him as the owner. Therefore, the trial court did not err when it held that the Plaintiff had an insurable interest in the vehicle. Accordingly, the ground (c) of the main grounds of appeal fails.
(21) We will now proceed to consider the Defendant’s complaint that the court erred when it held that the Defendant had full disclosure as to all relevant information relating to the car, that the value of the car was not inflated and further that the Plaintiff was not fraudulent.
(22) According to the Plaintiff, he purchased the car for $83,000 and as proof he tendered Exhibit ‘C’. In cross-examination the Defendant strongly challenged the Plaintiff that Exhibit ‘C’ is an invoice and not a receipt to evidence payment for the vehicle.
After careful scrutiny of Exhibit ‘C’ and the information contained in it, I tend to agree with the Defendant’s assertion that Exhibit ‘C’ is not receipt. It is a “Bill of Sale” as indicated at the top right corner of the document. At the column headed ‘Terms of Settlement’, the “Selling Price” was left blank. Significantly under the term “Total Balance Due” is boldly written the sum “$83.000.00”. Nowhere on Exhibit ‘C’ is it indicated that any amount has been paid.
Then at page 223 of the Record of Appeal is the Customs Declaration Form with declaration Number 42008033881/0 for the vehicle. The value declared on this Form as the value of the vehicle is USD $25,472.87. Based on this amount, a Duty in the sum of Gh₵5,906.96 was accessed by Customs Excise And Preventive Service Ghana (CEPS). Nowhere on the Form does the figure $83,000.00 appear.
(23) The Plaintiff asserted in his testimony that he left the clearing of the vehicle to his agent and that he was not directly involved in the clearing. Apart from the Plaintiff assertion which was challenged, no corroborative evidence was provided by the Plaintiff. However, on the Declaration Form it is clearly stated that;
“The information and particulars herein entered electronically are true and correct and have been obtained from original of documents required for in the purpose of this entry”. [emphasis mine].
It is obvious therefore, that Customs Exercise and Preventive Service (CEPS) assessment of the Duty was based upon documents made available to it by either the Plaintiff or his Clearing Agent at the Port of Tema.
(24) There is no evidence on the record that the Plaintiff, becoming aware of this anomaly which he attributed to his Clearing Agent in respect of the lesser value declared for the vehicle prompted CEPS about it or made attempt to have it rectified. The Plaintiff took the benefit of his agent’s action and enjoyed the benefit of payment of a lesser Duty for a vehicle he alleges he bought for as much as USD $83,000.00. That was not all but there is no evidence on the record that this alleged anomaly was brought to the notice of the Defendant when the Plaintiff took the comprehensive insurance.
Instead, the Plaintiff represented to the Defendant that the vehicle valued $83,000.00 based upon Exhibit ‘C’ which Plaintiff referred to as receipt (See page 57-58 of the Record of Appeal) and the Defendant insured it under comprehensive cover at a value of Gh₵116,200.00 the equivalent of $83,000.00.
This no doubt amounted to a misrepresentation of material fact by the Plaintiff to the Defendant which goes to the root of the contract of insurance based upon unberrimae fides which entitles the Defendant under Exhibit ‘A’ Part ‘F’ Clause ‘2’ (at pages 210-211 of the Record of Appeal) to avoid the policy.
Indeed, if the actual value of the vehicle was $83,000.00 as alleged by Plaintiff, then a fraud had been perpetrated at first instance on the State by the declaration of a lesser value for it when it came to the payment of Custom Duty to the State.
(25) The combined effect of Sections 95(a) and (c) and 251(1)(d) and (f) and (2) of Customs Excise and Preventive Service (Management) Act 1993, PNDCL 330 is that the Plaintiff may be potentially liable for the offence of forgery and falsification having regard to the value declared for the vehicle which as a result attracted a lesser Custom Duty and which upon conviction would have made him liable to a term of imprisonment not exceeding one year or both a fine and imprisonment as well as forfeiture of the vehicle.
When such fraud against the State and or violation of statute is brought to the attention of the court, the court cannot ignore it.
(26) In the case of NETWORK COMPUTER SYSTEM LTD. VRS. INTELSAT GLOBAL SALES & MARKETING LTD., the Supreme Court per Atuguba JSC held that;
“A court cannot shut its eyes to the violation of a statute as that would be contrary to its raison d’etre. If a court can suo motu take up the question of illegality even on mere public policy grounds, I do not see how it can fail to take up illegality arising from statutory infraction which has duly come to its notice”.
In the above case, the Supreme Court, relied on its earlier decision in REPUBLIC VRS. HIGH COURT (FAST TRACK DIVISION) ACCRA, EX-PARTE NATIONAL LOTTERY AUTHORITY (GHANA LOTTO OPERATORS ASSOCIATION & OTHERS INTERESTED PARTIES)  SC GLR 390 AT 397 when His Lordship Atuguba JSC had held previously that: “It is communis opinio among lawyers that the courts are servants of the legislature.
Consequently any act of a court that is contrary to a statute such as Act 722, Section 58(1)-
is unless expressly or impliedly provided, a nullity”.
(27) Dr. Date-Bah JSC in the same case supra stoutly stated at page 402 of the Report that:
“No judge has authority to grant immunity to a party from consequences of breaching an Act of Parliament. .......The judicial oath enjoins judges to uphold the law, rather than condoning breaches of Acts of Parliament by their orders. The end of the judicial oath set out in the second schedule of the 1992 Constitution is as follows:- “I will at all times uphold, preserve, protect and defend the Constitution and law of the Republic of Ghana.” This oath is surely inconsistent with any judicial order that permits the infringement of an Act of Parliament”.
The principle to uphold the law rather than condoning breaches thereof is long standing.
In ASARE VRS. BROBBEY 2 GLR 331 at 338, CA, Archer JA (as he then was) delivering the judgment of the Court of Appeal relied on the dictum of Scrutton LJ in the case of PHILLIPS VRS. COPPING  KB 15 at 21, as follows:- “It is the duty of the court when asked to give a judgment which is contrary to a statute to take the point although the litigants may not take it”.
See: GHANA COMMERCIAL BANK LTD. VRS. COMMISSION ON HUMAN RIGHTS AND ADMINISTRATIVE JUSTICE [2003-2004]1 SC GLR 91.
In the ENGLISH CASE OF GEISMAR VRS. SUN ALLIANCE AND LONDON INSURANCE LTD. AND ANOR. 3 ALL ER 570, The Plaintiff effected three (3) policies of insurance with the Defendants on the contents of his house whereby the Defendants agreed to indemnify him against loss by theft. While the policies were in force, articles were stolen from the Plaintiff’s house including some which had been imported into the United Kingdom by the Plaintiff without being declared to Customs and Excise Officers and without payment of the required duty. The Plaintiff stated to a loss adjuster that he had no intention of paying the duty if he could avoid it.
The Plaintiff was liable to penalties under the Customs and Excise Act 1952 for improper importation and remained so liable for three (3) years after the date of importation. Furthermore the articles were liable for forfeiture. The Plaintiff claimed indemnity in respect of the stolen articles. The Defendants denied liability in respect of the unaccustomed articles on the ground of Public policy and the Plaintiff brought an action against the Defendants, contending that, although the importation of those articles was the background of the case, it was in no way connected with the loss nor was it in any way concerned with the valuation of the Plaintiff’s insurable interest under the contract of insurance. It was held that although the policies of insurance were not themselves tainted with illegality, it would be contrary to public policy for the Court to assist the Plaintiff by enforcing them to the extent of granting him an indemnity against loss of the uncustomed articles, for by doing so, it would be assisting the Plaintiff to derive a profit from his deliberate breach of the law. Thus the Plaintiff’s claim in respect of the uncustomed articles failed.
(28) From the sequence of events which emerged from the evidence of the parties, it was after the vehicle had been cleared from the port that the comprehensive insurance cover was taken by the Plaintiff. From the Custom and Excise Declaration Form the vehicle was valued at $25,472.87 and a Duty of ₵5,905.98 was accessed and paid for the vehicle.
It is obvious that if a value of $83,000.00 had been declared as the value of the vehicle by the Plaintiff’s Clearing Agent the Duty that would have been accessed by Custom Excise & Preventative Service would have been higher. It would therefore be against public policy for this Court to insist that the Defendant should indemnify the Plaintiff by paying Gh₵116,200.00 being the equivalent of the $83,000.00 the Plaintiff claims to be the cost of the vehicle.
A declaration of a lesser value for the vehicle to CEPS is a clear infraction of PNDCL 330 which cannot be sanctioned by this Court. It is for this reason that the Defendant is given reprieve to avoid the contract of insurance entered between the Plaintiff and Defendant in respect of vehicle the subject matter in the suit.
(29) For these reasons the appeal is allowed in part and the contract of insurance entered into between Plaintiff and Defendant in respect of Chevrolet SSR Sports (Pick-Up) Car with Registration No.GN.8866-Z covering the period 27th March 2009 up to March 2010 is hereby set aside.
IRENE CHARITY LARBI (MRS).
(Justice of Appeal)
I agree SAMUEL K. MARFUL-SAU
(Justice of Appeal)
I also agree TANKO I.O. AMADU
(Justice of Appeal).