IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL DIVISION)
KUMASI - A.D 2015
SAVANNAH FARMERS MARKETING - (Plaintiff)
SOLOMON OSSEI SARFO & ANOR - (Defendant)
DATE: 14TH AUGUST, 2015
SUIT NO: RPC/166/14
JUDGES: HER LADYSHIP ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
RICHARD OBENG MENSAH FOR DEFENDANT
MOHAMMED ALHASSAN FOR PLAINTIFF
In this action, the Plaintiff, Savanna Farmers Marketing Company, is claiming an amount of GH¢ 74, 576.00 representing the outstanding balance of white maize sold to the Defendants. The Plaintiff described itself as a registered company engaged in the processing and marketing of cereals. The 2nd Defendant was described as a co-operative society engaged in the marketing of farm produce with the 1st Defendant as its director. These facts are not in dispute. In sum, the Plaintiff's case is that the 1st Defendant approached it in July 2013 and offered to buy white maize for and on behalf of the 2nd Defendant. Pursuant to an agreement between the parties, the Plaintiff was to supply 7800 mini bags (50kg) of white maize equivalent to 3000 (130 kg) bags to the Defendants. Out of this quantity, the Plaintiff supplied 6,120 mini bags on credit after an agent of the latter had inspected the same. Subsequently, the 1st Defendant raised concerns about the unwholesome nature of 140 bags which the parties deducted from the quantity supplied leaving a balance of 5, 980 mini bags equivalent to 2300 of the 130kg. It is also the Plaintiff's case that the parties renegotiated the price and it was reviewed downwards from GH¢ 65.00 per each 130 Kg bag to GH¢ 60.00 and for the 2300 bags, the Defendants were to pay GH¢ 138,000.00. The 1st Defendant is said to have executed two post dated cheques as part payment but one cheque was dishonoured leaving an unpaid balance of GH¢74, 576.00 which is still outstanding.
The case for the Defendants is that it was rather the Plaintiff Company which prevailed upon them to purchase the said maize and the same was eventually supplied to them. They denied the Plaintiff's assertion that their agent inspected the maize prior to delivery. It is also their case that the Plaintiff was aware that the maize sold to them were to be supplied to the World Food Programme (WFP).
However, the WFP rejected the consignment on the basis that they were unwholesome. The Defendants alleged that they sold the rejected consignment to poultry farmers but they also lost their birds because of the toxins in the maize. In short, they attributed their inability to pay the outstanding balance to the poor quality of the maize supplied to them by the Plaintiff. The quantum of indebtedness was also challenged on the basis that the two postdated cheques amounting to GH¢126,500.00 represented the full payment at the agreed price of GH¢ 55.00 per bag. Thus, after one of the cheques had been returned, the balance outstanding is GH¢ 63, 250.00 and not GH¢ 74, 576.00 as alleged by the Plaintiff. And, they have refused to pay this amount because the maize was unwholesome and the poultry farmers who purchased them have also refused to pay for the same. The Defendants therefore counterclaimed as follows:
a) Repayment of the GH¢ 63, 250.00 that Defendants' paid to Plaintiff.
b) Interest on the said amount at the prevailing commercial bank rate from 1st September, 2013 till the final day of payment.
c) Damages for the death of the poultry that were fed with the Plaintiff's unwholesome maize and loss of business and reputation of Defendants and their customers.
d) Any other order or orders as this Honourable Court may deem fit.
Four issues were set down for trial and these are:
1) Whether or not the maize supplied to the defendants were unwholesome and contained toxins?
2) Whether or not the Plaintiff agreed with the Defendants to pay GH¢60.00 per bag after the Defendants complained that 140 bags of the said maize were unwholesome?
3) Whether or not the parties are entitled to their respective claims?
4) Any other issue arising from the claim.
The law on proof in civil matters has been expounded in several cases. Indeed from the 1959 case of Majolagbi v Larbi to Zambrama v Segbedzi (1991) 2 GLR 221 CA; Adwubeng v Domfeh (1996-97) SCGLR 660; Takoradi Flour Mills v Samir Faris (2005-2006) SCGLR 883; Yaa Kwesi v Arhin Davis ( 2007-2008) SCGLR 580; and Continental Plastics v IMC Industries- Technik GMBH ( 2009) SCGLR 298 at 307, the Courts have held that a party who makes a positive assertion which is denied by his opponent bears the burden of proof of those assertions as the case may be. In all these authorities, the required standard of proof was stated as "proof by the preponderance of the probabilities" as contained in sections 11(4) and 12 of the Evidence Act, 1975 NRCD 323.
The burden of proof consists of the evidential burden and the burden of persuasion. These are provided for under sections 11(4) and 14 of NRCD 323 as follows:
"11(4) In other circumstances the burden of producing evidence requires a party to produce sufficient evidence which on the totality of the evidence, leaves a reasonable mind to conclude that the existence of the fact was more probable than its non-existence."
"14. Allocation of burden of persuasion
Except as otherwise provided by law, unless it is shifted a party has the burden of persuasion as to each fact the existence or non-existence of which is essential to the claim or defence that party is asserting."
Having sufficiently stated the requisite degree and nature of proof in the instant civil suit, i will proceed to determine the first issue , i.e. whether or not the maize supplied to the defendants were unwholesome and contained toxins? On the basis of the pleadings, the Defendants bear the evidential as well as the burden of persuasion on this issue. The burden will only shift onto the Plaintiff if the Defendants are able to show by their evidence that the facts which they assert are more probable than not.
The 1st Defendant gave evidence for himself and on behalf of the 2nd Defendant. In his evidence in chief, he said the whole consignment fell below the agreed standard and that he notified the Plaintiff three days after he had taken delivery but the Plaintiff prevailed upon them to accept the maize because the " quality was also good". The Defendants said the World Food Programme (WFP) rejected the maize because they were not good for human consumption. In order to dispose of the maize, the Defendants sold them to poultry farmers and these poultry farmers discovered that the maize contained aflatoxins. This evidence was strenuously challenged and discredited by the Plaintiff. Indeed, in the evidence of the 1st Defendant, he said all the maize were unwholesome at the time of supply but under cross-examination, he admitted that only 140 bags were initially bad. This can be found in the cross-examination on 20/04/2015 as follows:
Q. Those that were agreed to be unwholesome were 54 bags of 130kg?
A. That is so.
Q. I am therefore putting it to you that it is false when you said the whole consignment was unwholesome?
A. That was the situation at the time of the transaction but it was when I supplied to the poultry farmers that I got to know that the whole consignment was unwholesome.
The cross-examination continued on 21/04/2015 thus:
Q. How long after you took delivery of the last consignment did you go to Tamale to re-negotiate?
A. three days
Q. How long after you received the consignment did you supply the poultry farmers?
A. Over three months.
Q. So you will agree with me that at the time you went toTamale to re-negotiate the price, you knew of the condition of the maize?
A. Yes. The maize was not the type I wanted and requested for. When I informed them, they indicated they will come to look at the maize but they never did.
Q. 54 bags of 130kg is equivalent to 140 bags of 50 kg?
A. It is true.
Q. Why do you pay for GH¢2300 bags when the bags supplied to you were 2, 354?
A. When I informed the Plaintiff of the condition of the maize they agreed that I take out those that were spoilt to my knowledge which I did.
Q. I am also putting it to you that because you went and told them that only 54 bags were not good, you admitted the averment that you were to pay for 2300 bags of 130 kg in paragraph 6 Of your statement of defence?
A. Yes. It was after I had admitted that the poultry farmers complained of the aflatoxins in the maize and the poison.
Q. I am putting it to you that there was no poison in the maize supplied by the Plaintiff?
A. The maize contained poison and that is why i gave the same to the poultry farmers.
Q. I am suggesting to you that if the maize were unwholesome at all, it was whilst in your custody?
A. Not correct.
From the foregoing, the 1st Defendant's inconsistent evidence as regards the quality of the maize supplied and the quantity which were discarded as damaged is unreliable and also goes against his credibility.
That apart, much more was expected from him in proving that the maize contained aflatoxins. His bare assertions in the witness box that some poultry farmers whom he had supplied the maize to told him that the maize had been contaminated with aflatoxins will not suffice. In Dzaisu v Ghana Breweries Ltd (2007/2008) SCGLR 539, the court held thus:
“It is trite law that a bare assertion by a party of his pleadings in the witness box without proof did not shift the evidential burden onto the other party."
The least the Defendants could do in this case to discharge the evidential burden and the burden of persuasion placed on them was to introduce credible and scientific evidence that indeed at the time the maize were supplied to him, they contained aflatoxins.
Let me digress a bit to state what aflatoxins are. According to Gary Munkvold et al (2012) Iowa State University, aflatoxins are a group of chemicals produced by certain mold fungi i.e. aspergillus flavus and as pergillus paraciticus. They are usually recognized by olive green or gray green respectively on corn kernels in the field or in storage. A similar view was expressed by Gary A. Payne & Neil W. Widstrom who are experts in plant pathology and insect biology in their article contained in Critical review in Plant Sciences volume 10 issue 5 1992 pages 423 to 440. They also confirm that aflatoxin producing fungus aspergillus flavus can grow and produce aflatoxin on corn pre-harvest and in storage. The authorities also say that although aflatoxins are not automatically produced whenever grains become moldy, the risk of aflatoxin contamination is greater in damaged, moldy corn than in corn with little mold. They conclude that aflatoxins are harmful to livestock and humans. The level of concentration is also linked to the level of toxicity.
From the Defendants' own evidence, they cultivate maize on large scale and sell same to the WFP but when they have a shortage, they buy maize from third parties such as the Plaintiff company. Their evidence shows that they deal in large quantities of maize, both pre-harvest and storage. The Defendants introduced the term aflatoxins in the instant case and it can be reasonably inferred from the totality of their evidence that they are familiar with pre-harvest and post harvest aflatoxins in maize as they are very common in all maize producing zones.
Various tests can be conducted for the presence or absence of aflatoxins in maize but analytical laboratories provide the best estimates of aflatoxin concentration. Apart from visual inspection , the Defendants ought to have taken reasonable steps to check for this common fungi growth in the maize when they detected that 140 bags (according to them) had gone bad at the time they took delivery. This would have been a good opportunity for them to reject the entire consignment based on scientific examination of the maize for aflatoxins. Yet, they kept the maize for three months before off-loading them to poultry farmers. None of the alleged poultry farmers was called give evidence on behalf of the Defendants and to confirm that any aflatoxin infested maize was supplied to them! Also, virtually no evidence was adduced on the method of storage of the maize during these three month period before they were sold to the alleged poultry farmers.
Did the Defendants observe best storage practices? I must say that the risk of aflatoxins in maize can be reduced by (i) observing best practices such as control of environmental conditions. According to Dr Paul Vincell, a Plant Pathologist in the University of Kentucky, maintaining moisture level of between 13% to 15% has been found to curb aflatoxin accumulation in storage; (ii) bio-control of aflatoxins i.e. the use of biological control agents. See Biocontrol Science & Technology vol. 16 issue 5 2006 437 - 449; and (iii) use of chemicals to detoxify the aflatoxins. The evidence does not show that the Defendants observed any of these best practices to prevent and/or curb the growth of aflatoxins in the maize supplied to them.
WFP is a reputable organization and if indeed, the maize contained aflatoxins, the Defendants would have been given an official notification to that effect. In the absence of any such notification from WFP and an independent scientific proof by the Defendants that indeed the maize contained aflatoxins , i find that at the time the Plaintiff supplied the maize to the Defendants, they did not contain any aflatoxins. I also find that any subsequent growth and accumulation of aflatoxins in the maize(if any) is attributable to the bad storage practices of the Defendants and the Plaintiff cannot be held liable since the property in the goods had passed. See sections 26(2) and 27(2) of the Sale of Goods Act 1962 Act 137.
I will now determine the second issue, i.e. whether or not the Plaintiff agreed with the Defendants to pay GH¢ 60.00 per bag after the Defendants complained that 140 bags of the said maize were unwholesome? There is no doubt from exhibit 2 that the initial price per bag of 130 kg white maize was GH¢65.00. It is also not in dispute that the parties re-negotiated the price some time after delivery of the maize. What is in contention now is the price per bag of the remaining 2300 130kg bags. The Plaintiff's representative who gave evidence in court said he was not physically present in the room where the price re-negotiation took place but he was informed that the new price was GH¢ 60.00 per bag. The 1st Defendant who was at this meeting put the figure at GH¢55.00 per each 130kg bag (equivalent to 2.6 '50kg' bags). He added that the two cheques evidenced by exhibits B and C were meant for full payment and not part payment as alleged by the Plaintiff. In other words, full payment was to be done in two installments of GH¢63,250.00 according to the 1st Defendant. Notwithstanding the evidence of the Plaintiff's representative, PW1 was emphatic that if these two cheques had cleared, the Plaintiffs would not have come to court. It is my considered opinion that this express admission by PW1 during cross-examination confirms the Defendants' version of the rival accounts on the re-negotiated price i.e. GH¢55 per bag. The cross-examination immediately referred to was as follows:
Q. One of the negotiated agreements was that plaintiff agreed to reduce one bag of maize from GH¢ 65 to GHS 55?
A. I am not aware of that agreement.
Q. You only inflated the price from GH¢ 55 to GH¢60 when you thought of dragging the Defendants to court?
A. That is not true. You ever pointed out that if the 2nd cheque had gone through, we would not have been in court today and I agreed with you. We are in court because the 2nd cheque did not go through.
I am required to consider the evidence adduced by the parties on the balance of probabilities as was stated in the case of Takoradi Flour Mills v Samir Faris (supra) at page 884 (holding 5) thus:
“ It is sufficient to state that this being a civil suit, the rules of evidence require that the plaintiff produces sufficient evidence to make out his claim on a preponderance of probabilities, as defined in section 12(2) of the Evidence Decree, 1975 ( NRCD 323). In assessing the balance of probabilities, all the evidence, be it that of the plaintiff or the defendant must be considered and the party in whose favour the balance tilts is the person whose case is the more probable of the rival versions and is deserving of a favourable verdict.”
On the totality of the evidence before me, the Defendants' version of the rival stories is more probable than not. Therefore, i find that the parties agreed on GH¢55 per bag of 130kg white maize in respect of the remaining 2300 bags or their 50kg equivalent. I also find that the two cheques with the face value of GH¢ 63,250.00 each were issued to the Plaintiff as full payment for the 2300 bags of 130kg maize.
The last but not the least issue is whether or not the parties are entitled to their respective claims? I will not hesitate to say that Defendants owe the Plaintiff the sum of GH¢ 63,250.00. This is because the plaintiff duly fulfilled its fundamental obligation under section 8 of the Sale of Goods Act, 1962 Act 137 by delivering the white maize to the Defendants and under section 15 of the Act, delivery is concurrent with payment unless otherwise agreed. It is evident from exhibit 2 that full payment was to be made two weeks after delivery. The Defendants' even admitted during cross -examination that they owe the Plaintiff GH¢63,250.00. Therefore, the Defendants must pay the outstanding GH¢63,250.00 to the Plaintiff.
The Defendants have failed to adduce any credible evidence in support of their counterclaim. From the evidence adduced by the Plaintiff, the Defendants are not entitled to a refund of the GH¢ 63,250.00 already paid to the Plaintiff. They are also not entitled to any damages for the death of any poultry birds. This is so because in terms of sections 26(2) and 27 (2) of Act 137, the property in the goods passed when the maize was delivered to the Defendants and from that time on, they were at the risk of the Defendants as buyers. The Defendants are responsible for any damage to the maize and all associated issues having assumed the risk. In the circumstance, the counterclaims fail.
Judgment is entered against the Defendants jointly and severally in the sum of GH¢ 63, 250.00. The Plaintiff is also entitled to interest on this amount which the Defendants have unreasonably withheld. From exhibit C, the second payment was due on 31/10/2013. Accordingly, i award interest on the sum of GH¢63,250.00 at the Prevailing Commercial Bank rate and at simple interest from 31/10/2013 till date of final payment.
Cost of GH¢ 5,000.00 is awarded against the Defendants