IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL APPEAL)
ACCRA - A.D 2017
FRIGO LIMITED - (Defendant/ Appellant)
INFITCO COMPANY LTD- (Plaintiff/Respondent)
DATE: 9TH NOVEMBER, 2017
CIVIL APPEAL NO: H1/157/2017
JUDGES: K. A. ACQUAYE J.A. (PRESIDING), A. M. A. DORDZIE (MRS) J.A, S. DZAMEFE JA
AMARTEI AMARTEIFIO WITH M. K. YEBOAH FOR DEFENDANT/APPELLANT
MS. EFFIBA AMIHERE WITH DZIFA DADZO FOR PLAINTIFF/RESPONDENT
A.M. DORDZIE J. A:
This action arose out of breach of a construction contract the parties entered into in March 2001. By the terms of the said contract the plaintiff, a company that operates cold stores engaged the defendant to construct a cold store facility for it at Tema at a cost of USD392, 000 excluding VAT. In February 2007 the contract terms were renewed to include insulation using polyurethane spray system, installation of cooling units and other works such as electrical, doors and cable fixing. The plaintiff paid a total of USD 400,000 out of the contract sum and had USD150, 000 as an outstanding balance to be paid by instalment per terms agreed to in the contract.
The defendant breached the terms of the contract and failed to complete the works as agreed. The plaintiff on the 22nd of December 2014 instituted an action in the High Court, Tema seeking the following reliefs:
“The payment of USD 250, 000 which is the outstanding balance out of the sum of USD 400, 000 paid to the defendant for the construction of cold storage facility at Tema.
Interest on the said amount from the date it became due till date of final payment.
It is part of the terms agreed to in the contract that disputes arising out of the contract would be referred to the Commercial Court of Ghana. In protest to the commencement of the suit in the Tema High Court, which has general jurisdiction, the defendant, on the 22nd of January 2015 entered a conditional appearance and subsequently filed a motion praying that the writ be set aside on the ground that the High Court Tema was the wrong forum to institute the action. This prayer was granted and the suit was transferred to the Commercial Division of the High Court Accra.
The defendant on the 11th of May 2015 filed a statement of defence to the action in which it raised the issue of the action being statute barred and subsequently filed an application under Order 33 Rule 5 of C. I. 47 praying the High Court to dismiss the action as statue barred.
Order 33 Rule 5 reads: “Where it appears to the Court that the decision of any question or issue arising in any cause or matter and tried separately from the main cause or matter substantially disposes of the cause or matter or renders trial of the main cause or matter unnecessary, it may dismiss the cause or matter or make such other order or give such judgment as may be just”.
The decision of the High Court refusing the application to dismiss the action is the subject matter of this appeal.
GROUNDS OF APPEAL
The appellant canvassed the following grounds of appeal in the notice of appeal filed on the 25th of February 2016.
The ruling was against the weight of evidence
The court erred in holding that exhibit 4 was an acknowledgement in writing of indebtedness to the plaintiff and thereby revived plaintiff’s claim.
The court further erred in holding that the plaintiff could not anticipate the issues raised by the defendant because the defendant had failed to file a defence.
The appellant is praying this court to set aside the entire ruling of the High Court dated 10th of February 2016.
In arguing the appeal learned counsel for the appellant made no submissions in respect of ground three of the appeal, it is deemed that the said ground three had been abandoned and it is hereby struck out.
In support of grounds one and two it is counsel’s submission that the respondent ought to have proved on the preponderance of the probabilities that its claim was not statute barred in accordance with Section 4 (1) (b) of the Limitation Act. Counsel further argued that the respondent was required to adduce sufficient evidence to establish the unequivocal acknowledgment of the appellant’s indebtedness to it, but plaintiff failed to discharge that burden. Counsel then went on to analyze the content of exhibit 4 (the document the court held to be an acknowledgment of the debt by the defendant and therefore places the action under the saving clause of S17 of the Limitation Act) and concluded that the said exhibit 4 does not satisfy the requirements of acknowledgement as stipulated under the Limitation Act.
To my mind the above submissions of counsel for the appellant portray a misconception of the import of the preliminary legal issue he raised in the application for dismissal of the action he placed before the trial court. The issue raised by the appellant’s application before the trial court was whether by virtue of sections 4 and 17 of the Limitation Act the plaintiff/respondent’s action was statute barred or not.
It was a preliminary legal issue the appellant raised, the disposal of which may totally dispose of the matter.The argument that the respondent must provide proof on the preponderance of the probabilities suggests a full trial of the action, after which the court should make its decision based on the law and facts presented to it.The nature of the appellant’s application does not require such proof.
Proof by preponderance of the probabilities which by counsel’s submission, should have been the degree of proof from the respondent at the hearing of the application before the trial court emanates from S11 (4) of the Evidence Act which provides the degree of evidence required to succeed in civil matters.Section 11 (4) of the EvidenceAct reads: “In other circumstances the burden of producing evidence requires a party to produce sufficient evidence so that on all the evidence a reasonable mind could conclude that the existence of the fact was more probable than its non-existence.”
Section 12 (2) of the Evidence Act goes on to define ‘preponderance of probabilities’ thus: “Preponderance of the probabilities means that degree of certainty of belief in the mind of the tribunal of fact or the court by which it is convinced that the existence of a fact is more probable than its non-existence.”
The submissions of learned counsel for the appellant, in my view do not support the grounds of appeal before us.
Ground one which is the omnibus ground that the ruling is against the weight of evidence I find not to be an appropriate ground of appeal in this case. The circumstance under which such a ground could be appropriately raised and argued had been sufficiently settled by case law; an appellant can rely on this ground where his grievance is that he adduced sufficient evidence to support his claims but the trial court failed to take into consideration the evidence that could have tilted the scale of justice in his favour. See the cases of Djin v Mussah Baako [2007-2008]1SCGLR and Abbey v Antwi  SCGLR 17.
In this case, the appellant raised a preliminary legal issue to be considered by the trial court; it did not present any evidence to the court, in fact the appellant’s affidavit supporting the application is a short one that did not have any exhibits attachedexcept the construction agreement between the parties.Ground one of the appeal lacks merit and it must fail.
The appellant’s submissions further failed to address any errors committed by the trial court in construing sections 4 (1) (b) &17 (1) (a) of the Limitation Act.
The respondent’s reaction to the grounds of appeal are basically on the following points:
Firstly that the appellant’s reliance on section 4 (1) (b) of the Limitation Act to say that the action is statute barred is wrong. The said section is applicable to simple contracts, which are basically informal contracts. The contract upon which the plaintiff respondent’s action is founded is a construction contract and does not fall in the category of ‘simple contracts.’
Secondly if the court rejects this first argument then section 17 (1) (a) is applicable to the plaintiff’s action. The plaintiff’s action is founded on a breach of the construction contract between the parties. The defendant appellant received monies for works it failed to execute. In the action the plaintiff is claiming a refund of the amounts. By exhibit 4 a document the plaintiff attached to the affidavit opposing the application for the dismissal of the action, the parties in their own handwriting listed works done under the contract and works undone. The document was signed by both parties. The defendant had never denied that it accepted monies for works to be done under the contract. Having acknowledged that it had not done some of the works amounts to acknowledging that it is indebted to the plaintiff in the sums of money it took for works undone. Cause of action therefore accrued from the date of exhibit 4 which is 25th of January 2014.
Thirdly that the issues appellant had raised in the submissions made on its behalf can only be determined if the case is tried on its merit, the appeal therefore must be dismissed.
The main issue for determination by this court is whether the trial court wrongfully construed sections 4 (1) (b) and 17 of the Limitation Act and therefore erred in allowing the action to remain on the cause list.
Section 4 (1) (b) of the Limitation Act is the legal basis of the defendant’s application to dismiss the action as statute barred, therefore it is important for the trial court to take a close look at the said section and decide whether the application to dismiss the action was sustainable or not. Unfortunately the ruling before us is silent on this. However by virtue of Rule 8 (1) of the Court of Appeal Rules 1997 C. I. 19 which says: “Any appeal to the Court shall be by way of re-hearing…..”, it isnecessary to make a finding on that issue.
Section 4 (1) of the Limitation Act, 1972 (NRCD 54) gives the list of action that are barred after six years, it reads:
“The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued:—
(a) actions founded on tort other than actions to which sections 2 and 3 apply;
(b) actions founded on simple contract;
(c) actions founded on quasi-contract;
(d) actions to enforce a recognisance;
(e) actions to enforce an award, where the arbitration is under any enactment other than the Arbitration Act, 1961 (Act 38);
(f) actions to recover any sum recoverable by virtue of any enactment (other than actions to which sections 2 and 5 apply).”
Sub section (b) of section 4 is the relevant section in this matter. Counsel for the respondent in her submissions argued that simple contract as described by the section refers to oral contracts. She relied on Black’s Law Dictionary 9th edition’s definition of simple contracts to support the argument. Counsel argued further that the contract the subject matter of litigation between the parties is a construction contract and therefore does not fall within the category of simple contracts.
I have a different opinion on the interpretation of the phrase simple contracts as provided in section 4
(b) of the Limitation Act. Our (Ghanaian) existing statutes do not make any distinction in the definition of contracts in terms of it being oral or written.
The Contracts Act 1960 for example does not make any distinction between contracts by virtue of it being oral or written. Section 11 of the Contracts Act provides:
“Contracts need not be in writing except in certain cases Subject to this Act, and to any other enactment, a contract whether made before or after the commencement of this Act, is not void or unenforceable by reason only that it is not in writing or that there is no memorandum or note of the contract in writing.”
It is therefore inaccurate to say that ‘simple contracts’ as described in section 4 (1) (b) of the Limitation Act is limited to oral contracts; and that the construction contract which is the subject matter of this suit does not fall under the category of contracts contemplated under section 4 (1) (b) of the Limitation Act.
The Limitation Act has no provision which makes distinction between contracts, neither has it any provision for any other contract apart from the provisions in section 4 of the Act. The comments by the drafters of the statute is a useful source of reading into their intentions. The comments in the memorandum on contracts read: “Other actions in tort and actions in contract, to enforce a recognizance or an award, or to recover money are barred after six years.” (Emphasis mine). This suggests the Act has contracts in general in mind consequently, to achieve the purpose of the Act it is appropriate to construe the phrase ‘simple contract’ as referring to contracts generally.
We are not persuaded by the argument by counsel for the respondent limiting the scope of section 4
(b) to her definition of simple contracts and concluding that the action is not caught by the 6 years provision in section 4(1) (b) of the Limitation Act.
However in our view, the action is saved by section 17 of the Limitation Act. Section 17 (1) & subsection (1) (a) read:
17. “Fresh accrual on acknowledgement
(1) For the purposes of this Act, the right of action accrued on, and not before, the date of the acknowledgement,
(a) where a right of action has accrued to recover a debt and the person liable for the debt has acknowledged the debt;”
Sub section 2 reads:
2) “An acknowledgment shall be in writing and signed by its maker”
The trial court carefully considered the question of fresh accrual of actions as provided under section 17 of the Limitation Act and found that the document executed by the parties in 2014, exhibit 4 is an acknowledgement of the defendant’s indebtedness to the plaintiff for works he received payment for but did not do.The cause of action therefore accrued on 25th of January 2014.
I do not find any error in the findings and conclusions the trial court came to in respect of exhibit 4 and section 17 (1) (a) of the Limitation Act. Ground two of the appeal fails as well.
The appeal we find lacks merit and it is here by dismissed Costs of GH¢3,000.00 to the respondent.