KUMASI - A.D 2014
MR. BIGG’S -(Plaintiff)

SUIT NO:  RPC/64/13

The Plaintiff herein proceeded with its case against the Defendant under Order 36 rule (1) (2) (a) of the

High Court (Civil Procedure) Rules, 2004 C.I. 47. It provides as follows:


Rule (1) (2)      where an action is called for trial and a party fails to attend, the trial judge may:

(a) Where the Plaintiff attends and the defendant fails to attend, dismiss the counterclaim, if any, and allow the plaintiff to prove the claim.


It is important to give a brief history of the instant case. It was listed for hearing on 6/11/2013. The Defendant and his counsel were absent without reason. Two adjournments were given and a hearing notice was duly served for the last time on counsel for the Defendant per the affidavit of service filed on 16/01/2014. When the case was called for hearing on 29/01/2014, again, the Defendant and his counsel were not in court. In accordance with the above cited provision of C.I. 47, the Defendant’s counterclaim was dismissed and the Plaintiff was allowed to prove its claims.


By the endorsement on the Plaintiff’s writ of summons filed on 14/01/2013, the Company sought to recover an amount of $ 92, 750.00 being unused rent advance paid by the Plaintiff to the Defendant together with interest and cost.


The issues for trial are set out below:


Whether or not the Parties agreed that upon Plaintiff vacating Defendant’s premises, Defendant would refund unused rent of $ 92, 270.00 to the Plaintiff?


Whether or not the Defendant informed Plaintiff of his appointment of a quantity surveyor and made Plaintiff party to the inspection of the premises by the quantity surveyor?


Whether or not unpaid water bill to the tune of GH¢ 4,752.93 was submitted to Defendant after Plaintiff had vacated the premises?


Whether or not Defendant leased the premises to another tenant within two months after Plaintiff had vacated it.


Whether the Defendant is entitled to his counter-claim?


With the dismissal of the Defendant’s counterclaim, the fifth issue becomes redundant. Even though the Defendant waived his right to participate in this trial, the Plaintiff is enjoined by law to prove its claims to be able to succeed. Going back to the case of Zambrama v Segbedzi (1991) 2 GLR 221, Kpegah JA (as he then was) noted:


“The correct proposition is that, a person who makes an averment or assertion, which is denied by his opponent, has the burden to establish that his averment or assertion is true. And, he does not discharge this burden unless he leads admissible and credible evidence from which the fact or facts he asserts can properly and safely be inferred. The nature of each averment determines the degree and nature of that burden.”


The basis of this principle is section 11(4) of the Evidence Act, 1975 (NRCD 323) which states:


“In other circumstances the burden of producing evidence requires a party to produce sufficient evidence which on the totality of the evidence leads a reasonable mind to conclude that the existence of the fact was more probable than its non existence.”


Usually, the burden of persuasion lies on the same party who bears the burden of producing evidence as was held in the case of Sumaila Bielbiel v Adamu Dramani & AG (2012) SCGLR 370.


Section 12 of the Evidence Act provides that the burden of persuasion requires proof by a preponderance of the probabilities. This is defined in section 12(2) in the following manner:


“Sec 12(2) ‘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.”


Having regard to the nature of the instant case, the evidential burden as well as the burden of persuasion first rest on the Plaintiff Company. If the Defendant had participated in this trial, he would have assumed the same burden as to the assertions in his statement of Defence.


In discharging this burden, evidence was adduced on the Plaintiff’s behalf by one Adaraniwor Omoniyi who described himself as the Operations Manager of the Plaintiff Company. His evidence on the issues before the court was concise. It was to the effect that the Plaintiff leased the Defendant’s house in Kumasi for a period of five (5) years. The five years rent was paid in advance but due to poor business, the Plaintiff had to vacate the premises. By an arrangement between the parties, the Defendant undertook to refund an amount of USD 92, 750.00 to the Plaintiff Company within three months if the Plaintiff vacated the premises by 13/01/2012. This was to enable the Defendant advertise and let out the property in issue.


A copy of the agreement covering the lease in issue was tendered as exhibit A. Three correspondences between lawyers for the parties subsequent to the said arrangement were tendered as exhibits B, B1 to B 2.


According to the Plaintiff’s representative, the Defendant inspected the premises on 31/01/2012 after which vacant possession was given. At the time of vacating the premises, the Plaintiff’s representative indicated that all utility bills had been paid. To his knowledge, no utility bill was sent to their lawyer after they had vacated the premises. Yet, the unused rent was never refunded. Further, he told the court that he came back to demand the money within the three months period and a loan/finance bank was already in occupation.


Before going into the merits of this case, I wish to comment on an arbitration clause contained in the tenancy agreement between the parties. I notice from clause (8) of the said agreement (exhibit A), that provision was made for the settlement of disputes. I find it necessary to set out the said clause:



a. The parties shall endeavour to settle any dispute and misunderstanding, which may arise in connection with this agreement amicably.

b. Where amicable settlement of any dispute arising from this agreement is impossible, the parties shall refer the dispute to an arbitrator appointed by the mutual consent of the parties.

c. The parties may by written agreement waive reference of any dispute arising under this agreement to arbitration so that any dispute, which cannot be settled amicably by the parties, may be adjudicated upon by a court of competent jurisdiction in Ghana.


What is the legal effect of an arbitration clause contained in an agreement? An arbitration clause in a written agreement is binding on the parties to the extent stated in that agreement. However, in situations where a party institutes an action in court irrespective of an arbitration clause, the other party is not left without remedy. Under section 6 of the Alternative Dispute Resolution Act, 2010, it is stated:


“Sec 6.(1) Where there is an arbitration agreement and a party commences an action in a court, the other party may, on entering appearance, and on notice to the party who commenced the action in court, apply to the court to refer the action or part of the action to which the arbitration agreement relates, to arbitration.”


Thus, when in the instant case, the writ of summons and statement of claim were served on the Defendant, and upon entering appearance, he had a right to bring an application for the matter to be referred to arbitration. The grant of such an application would have operated as a stay of proceedings under section 6 (3) of the Arbitration Act.


In BCM Ghana Ltd v Ashanti Goldfields Ltd (2005-2006) SCGLR 602, the court held that the Defendant was entitled to bring an application for stay of proceedings pending arbitration under the dispute clause in their agreement where mutual conciliation was a pre-condition for resorting to arbitration.


The Defendant herein failed to exercise this right under section 6 of the ADR Act. He proceeded to file a Defence. The case was referred for pre-trial settlement which was not successful and it is now before a trial judge. Can he be said to have waived his right?


A case in point is Fodwoo v Northern Assurance Co. Ltd (1962) 1 GLR 296. In that case, the usual arbitration clause was among the clauses in an insurance policy issued to the Plaintiff. The Defendant failed to pay a claim submitted to them by the Plaintiff. The Plaintiff issued a writ against them. The Defendant resisted the Plaintiff’s claim on the ground that it was premature.


The court held, inter alia, that having fully contested the action on the merits, it was too late for the defendants to seek to claim the benefit of the arbitration.


In the instant action, the Defendant did not even raise the issue of arbitration in his defence and never bothered to apply to this court to exercise his right under the arbitration clause in the tenancy agreement. Under the circumstance, he is deemed to have waived that right, having neglected to exercise the same.


It is clear on the face of exhibit B1 that the Defendant, acting through his lawyer, Juliana Addo-Yobo, agreed to refund the unused rent to the Plaintiff within three months after vacant possession had been given to the Defendant. This is contained in the last paragraph of exhibit B1 and it reads:


“It is my client’s instruction to inform you that if vacant possession is granted on 13th January, 2012 as promised, within a period of three months from the date of vacation, the unexpired portion of the rent advance paid will be refunded forthwith.”


From this evidence, I find that the Defendant committed himself to refund the unused rent advance to the Plaintiff on terms. However, the Plaintiff gave vacant possession to the Defendant on 31/01/2012 instead of 13/01/2012. In any case, the said premises were let out within a period of three months after Plaintiff had vacated the same. Thus, it is my opinion that the slight delay in handing over the property to the Defendant did not cause him any inconvenience worth considering.


I also find from exhibit B that the Defendant was to do an inspection of the property before handing over. The Plaintiff’s evidence shows that this was done. If the Defendant was not satisfied with the condition of the property, why did he accept the keys to the premises? What prevented him from engaging a surveyor to assess the extent of damage, if any, before the Plaintiff gave him vacant possession? The Defendant would have been the best person to address these questions. On the basis of the evidence before me, I find that the Defendant duly inspected his property before taking over from the Plaintiff and I accept the Plaintiff’s story that the company had no information about any valuation done after the property had been handed over to the Defendant.


Looking at the totality of the evidence adduced by the Plaintiff, I find that he has sufficiently proved his claim for the recovery of an amount of ninety two thousand, seven hundred and fifty US dollars ($ 92, 750.00).


The Plaintiff is also claiming interest on this amount at the current bank rate? What is the basis for the award of interest in circumstances of this nature? When the money became due and payable three months after 31/01/2012, the Defendant had no justification for keeping the Plaintiff’s money. In Akoto v Gyamfi Addo (2005-2006) SCGLR 1018, the court categorically stated:


“The general principle for the award of interest to a party was that such a party had been unjustifiably kept out of the money due to him or her for the relevant period…”


This seems to be the general position even at Common Law. Thus in Harbutt’s Plasticin Ltd v Wayne Tank & Pump Co. Ltd (1970) 1 All ER 225 at 336, Denning MR had this to say:


“ … The basis of an award of interest is that the defendant has kept the plaintiff out of his money; and the defendant has had the use of it himself so he ought to compensate the plaintiff accordingly.”


Lord Herschell LC also expressed his view on this issue, in Chatham & Dover Railway Co. v South Eastern Railway Co. (1893) AC 429 as follows:


“ … When money is owing from one party to another and that other is driven to have recourse to legal proceedings in order to recover the amount due to him, the party who is wrongfully withholding the money from the other ought not in justice to benefit by having that money in his possession and enjoying the use of it, when the money ought to be in the possession of the other party who is entitled to is use. Therefore, if I could see my way through to do so, I should certainly be disposed to give the appellant, or anybody in similar position, interest upon the amount withheld…”


From the foregoing, it is obvious that the Plaintiff before me has satisfied the prerequisites for the award of interest and I will certainly not deny the company interest. The next question is the applicable rate of interest. Per the endorsement on the writ of summons, the Plaintiff pegged the interest at the current bank rate. I do not think that rate of interest is applicable in the circumstances of this case. The principle is that when court orders money to be paid in a foreign currency, interest on that money is to be levied in the same foreign currency.


This principle was applied in GPHA v Issofou (1993-94) 1 GLR 24. This was a case involving the importation of rice which was lost in transit. Damages were awarded against the GPHA in US dollars, the currency in which the plaintiff alleged that he ordered the rice. On the question of interest, the Supreme Court held that interest rates payable at the Ghana rates of interest (in terms of LI 1295) (now C.I. 52), were inapplicable to transactions dealt with in local currency. In conclusion, the court stated:


“Where the judgment debt, money or damages was to be paid in a foreign currency then the rules governing monetary transactions in that foreign currency in the foreign country would prevail unless expressly provided for and agreed upon by the contracting parties.”


Again, the Supreme Court, in National Investment Bank Ltd v Silver Peak Ltd (2003-2004) SCGLR 1008 stated:


“From the narration of the facts of the instant case, the obligation of the appellant was calculated in dollars, but the learned trial judge also made reference to the cedi equivalent of that dollar amount. That reference to the cedi equivalent does not justify his next step in applying the cedi interest rate to an obligation he had calculated in dollars. Thus, the fact that a foreign currency debt is discharged through the payment of the cedi equivalent by a Ghana resident, as such resident is obligated by law to do, does not change the nature of the underlying foreign currency debt and the fact that the appropriate interest rate which should attach to it is the usual interest rate commercially applicable to that currency. The mere fact of the payment in Cedis should not change the applicable interest rate.”


At page 1013 of the report, the court continued:


“It makes commercial sense for a dollar debt to attract a dollar interest rate because that interest rate (influenced by a rate set by the Federal Reserve Board) reflects the macroeconomic conditions of the United States, which determine the dollar-dominated debts world-wide. Similarly, it makes commercial sense for a cedi debt to attract a cedi interest rate since that rate reflects Ghanaian macroeconomic conditions (including, for instance, the rate of depreciation of the cedi against the leading foreign currencies and high interest rates). Thus, if a cedi interest rate is applied to a dollar obligation, the oblige( that is the creditor) will be over compensate because the cedi interest rate, which necessarily reflects the high inflation in Ghana, will be applied to a dollar obligation which has not been subjected to that high inflation.”


The Supreme Court brought a closure to these foreign interest rates in NTHC v Antwi (CM/J7/3/09) (see also editorial note in (2009) SCGLR 121. The Supreme Court granted an application for review and vacated its previous order in these terms: “that interest on the purchase price of the property, the subject-matter of the suit, be paid by the respondent (applicant herein) up to the date of payment at the applicable Bank of Ghana dollar rate as at the date of such payment.”


On the evidence before me, the Defendant’s debt obligation was calculated in US dollars. Thus, the Defendant will be required to pay the Bank of Ghana dollar rate of interest on the judgment debt. It is to be noted that the debt became due and payable three months after the Plaintiff had given vacant possession to the Defendant. On the evidence, the Plaintiff did give vacant possession to the Defendant on 31/01/2012. Three months from that date was 30/04/2012. Accordingly, interest will run from 30/04/2012 to the date of final payment.


Finally, is the debt to be paid in US dollars or not? It was held in NIB v Silver Peak Ltd, referred to above, that it would be unlawful for a Ghanaian resident to receive in Ghana any external currency for services or for the sale of goods. This decision was founded on section 5 of the Exchange Control Act 1961, Act 71. Section 5(3) is of relevance here and it reads:


“Except in the prescribed circumstances, a person or an individual shall not make a payment in external currency to or for the credit of a person resident in the Republic for services rendered by the resident for the purchase of or in the exchange of goods or property, or for the settlement of rent in respect of a property, owned by the person resident in the Republic.”


From the above, it can be categorically stated that the Plaintiff should not have paid the rent advance in an external currency in the first place. I will also not endorse this illegality by ordering the repayment in a foreign currency. Accordingly, judgment is entered in favour of the Plaintiff Company for the cedi equivalent of ninety two thousand, seven hundred and fifty ($92,750) US dollars together with interest at the Bank of Ghana dollar rate from 30/04/2012 to the date of final payment.


Cost of GH¢5000.00 is awarded against the Defendant in favour of the Plaintiff.