IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL COURT),
ACCRA- A.D 2019
CARBON COMMODITIES DMCC - (Plaintiff)
HELENA ARTHUR MAWUENYEGA -(Defendant)
DATE: 23 RD JULY, 2018
SUIT NO: RPC/122/15
JUDGES: HER LADYSHIP ANGELINA MENSAH-HOMIAH (MRS.)
ANNA FORDJUOR FOR PLAINTIFF
EMMANUEL K. ARTHUR FOR DEFENDANT
The Plaintiff in this suit is described as a Free Zone Company registered under the laws of the United Arab Emirates and carries out the business of supplying commodities. The defendant is also described as an entity registered under the laws of Ghana and it is engaged in the business of selling frozen fish. The dispute between the parties came up as a result of USD 123,900 worth of Fish shipped by the Plaintiff to the defendant under a contract of sale agreement for which full payment has not been made.
Per the endorsement on the amended writ of summons filed on 19/07/17, the Plaintiff sought to recover the sum of Sixty- Nine Thousand, One Hundred and Eighty Three United States Dollars Seventy One cents (US$69, 183.71) and interest thereon at the current commercial rate from October 10, 2014 to the date of final payment. However, after the lawyers had filed their final addresses, counsel for the Plaintiff applied for, and was granted leave, under Order 16 rule 5(1) of C.I. 47, to amend the indorsement on the Plaintiff’s writ of summons to reflect an amount of USD 60,730.00 as the sum being claimed from the Defendant instead of US$69,183.71.
The further amended writ of summons and statement of claim were duly filed on 10/07/2018.
It is the case of the Plaintiff that the Defendant had up to ninety days to pay for the fish supplied valued US$ 123,930.00 and not as and when she sold the fish. But, she has breached this contract of sale.
The Defendant denied liability to the quantum claimed, on the grounds that the quality and quantity of the fish actually supplied differed from what was agreed on. Coupled with the intermittent power outage at the time, the Defendant contended that she had to sell the fish at reduced prices, a situation which was brought to the attention of the Plaintiff. Again, the Defendant alleged that she transacted with an agent of the Plaintiff by name Francis Hagan, and the said agent took delivery of part of the consignment worth GHC 151,410.00, and there is an outstanding balance of GHC 21,410.00 which has to be set off against her indebtedness. She asserted that per her records, she is entitled to pay US$49,303.06 to the Plaintiff but she is unable to do so because as of the time of filing her defence, the fish was still in her cold room. The Defendant counterclaimed for an order for the Plaintiff to take delivery of the quantity of fish remaining in her cold room, and for the value to be deducted from any amount owing to the Plaintiff. These assertions were denied by the Plaintiff in its Reply.
ISSUES FOR TRIAL
After an abortive pre-trial settlement conference, the following issues were set down for trial:
Whether or not Francis Hagan acted as an agent of the plaintiff?
Whether or not Francis Hagan took some of the fish supplies (d) to the defendant?
Whether or not the value of the fish supplied amounted to GHC 123,930.00 or US$112,503.60?
Whether the plaintiff is entitled to its claim?
Whether the Defendant is entitled to her counterclaim?
WHETHER OR NOT FRANCIS HAGAN ACTED AS AN AGENT OF THE PLAINTIFF.
In the pleadings and evidence on record, the names ‘Hagan’ and ‘Eghan’ were used interchangeably, it is however settled, per the witness statement of DW2 that the correct name is Francis Eghan. Hence, all references in the pleadings and evidence to the name ‘Hagan’, shall be construed as ‘Eghan’.
The Defendant who alleges that Francis Eghan acted as an agent of the Plaintiff, which has been denied by the Plaintiff, bears the onus of proof of this fact. The rules of evidence, specifically, sections 11(4) and 12 of the Evidence Act, 1975 NRCD 323 requires that the Defendant on whom the burden of persuasion rests, adduce cogent evidence which, on the basis of all the evidence before the court, makes her assertions more probable than not. If she fails to do so, the evidential burden on this fact will not shift onto the Plaintiff.
In the evidence -in-chief of the defendant, she said sometime in the year 2014, Francis Eghan, an agent of the Plaintiff, approached her to discuss the supply of quality fish from the Plaintiff Company. He requested for documents such as Registration of Business Certificate, Bank Statements and VAT Registration for assessment and he took copies of the same. Later, an assessor from the Plaintiff Company came to do an assessment after which Francis Eghan delivered a contract to her to sign. Pursuant to this contract, the Defendant said she received three containers of mackerel fish and when she had quality and quantity supplied issues with the 2nd and 3rd consignments, she complained to Francis Eghan, who in turn introduced her to one Simon Williams as the Branch Manager of the Plaintiff Company. The other piece of evidence on Francis Eghan introduced by the Defendant is at he took over goods worth GHC 151,410.00 for which he made part payment of GHC 130,000.00 leaving a balance of GHC 21,410.00.
According to the Defendant, the Plaintiff Company informed her that they had sent Francis Eghan and one Miguel Galitino to recover the monies from her, and she in turn sent a demand notice to Francis Eghan. Concluding her evidence on this point, the Defendant told the court that since Francis Eghan acted as the agent of the Plaintiff, the Plaintiff is liable for the acts and omissions of the said Francis Eghan.
An employee of the Defendant by name Isaac Boamah testified as DW1, according to him, the defendant instructed him to go to Tema and liaise with a certain clearing agent for the clearing of three containers of Mackreal fish. He told the court that after the fish had been cleared, the Defendant further instructed him to contact Francis Eghan, and upon doing so, Francis Eghan escorted the containers to Morvelle Down, Tema, where DW1’s boys off-loaded one container into a truck and the rest sent to an unknown destination by Francis Eghan. Then, one week later, the Defendant called him to bring down the remaining two containers, so the DW1 in turn called Francis Eghan, who directed him to the “Will Bill Cold Store”, at Tema where he had kept the two containers of fish and he proceeded to the said location. DW2 said when he loaded the fish onto the truck, he realized that the quantity had reduced so he informed the Defendant, who indicated that Francis Eghan had told him that he had taken delivery of that quantity. DW2 said he directed the truck to send the fish to Kumasi. Later on, the Defendant called to complain about the poor quality of the fish and sent him pictures of the same as in his exhibits 6A and 6B.
Francis Eghan was the second defence witness (DW2). It was his evidence that whilst working with Gladec Enterprise in Kumasi, one Vivek who introduced himself as the Operations Manager of the Plaintiff Company, approached them and introduced the business of the Plaintiff Company, but his boss was not interested. Consequently, DW2 said at a meeting with Vivek, he accepted Vivek’s proposal to work as the Plaintiff’s agent and to look for clients who will be supplied with fish by Carbon Commodities.
Based on this express agreement, DW2 said he contacted the Defendant and performed the following duties for the Plaintiff relative to their client:
ü Pick-up her audited financial statement for assessment by an insurance company for her credit insurance.
ü Introduced her (Comfort Nyame) to Carbon Commodities.
ü Came to Kumasi to facilitate the signing of the contract between Comfort Nyame and Carbon Commodities.
ü Liaised between Carbon Commodities and Comfort Nyame as a representative and agent of Carbon Commodities.
Further, DW2 said at the instance of Carbon Commodities, he helped Comfort Nyame to clear her goods from the Port and also helped her to sell the fish. According to DW2, when he introduced the Defendant to the Plaintiff Company, she was assured of the supply of grade one fish but that was not what was eventually supplied to her.
The Plaintiff’s version of the rival stories is that it has no agent called Francis Eghan and that all the arrangements between the Defendant and the said Francis Eghan were private arrangements between those two individuals. Hence, the Plaintiff cannot be liable for the acts of Francis Eghan.
In his closing submissions, counsel for the Defendant, relied on section 26 of the Evidence Act, 1975 NRCD 323, and argued that by the Plaintiff’s own conduct of allowing Francis Eghan to act on its behalf, it is estopped from denying that Francis Eghan is its agent. Apart from the numerous services which Francis Eghan said the Plaintiff authorized him to do on its behalf, counsel referred the court to an email communication between an employee of the Plaintiff, Simon Williams, and the Defendant, tendered in evidence as exhibit 5 which reads:
Note that Francis and Miguel are in Kumasi tomorrow and will be coming to meet with you and to collect funds.
Counsel further drew the Court’s attention to the exhibit 7 series which gives details of the relationship between the Plaintiff Company and Francis Eghan. He then cited and relied on the case of Ada Co-operative Food Farmers Union Limited v. Abodie & Ors (1982-83) GLR 1144 (holding 2), thus:
Agency by estoppel would arise where one person had so acted as to lead another to believe that he had authorized a third person to act on his behalf and that other, in such belief, entered into transactions with the third person within the scope of such ostensible authority.
Counsel for the Defendant submitted that for all intents and purposes, Francis Eghan acted as an agent of the Plaintiff in respect of the transaction that has culminated in this suit.
The submission of counsel for the Plaintiff on this point is that on the authorities of Majolagbi v Larbi (1959) GLR 190 @ 192 and Zabrama v Segbedzie, (1991)2 GLR 246, the Defendant has failed to establish by the preponderance of the evidence that Francis Eghan acted as an agent of the Plaintiff because there is no agreement to that effect.
‘Agency’ can be created in a variety of ways, but the principal ones are by express agreement; implied agreement; and by operation of law. The power that an agent has to bind the principal depends on the agent’s authority. The authority can also be express, implied or ostensible. An express authority may be expressly established by an agreement between the principal and the agent; an implied authority derives from the type of work which the agent is doing, or the place where the agent is working. But, ‘Ostensible authority involves a situation where the principal, by words or action, has led a third party to believe that the agent has authority, when in fact the agent does not. This is also referred to as ‘apparent authority’ or ‘agency by estoppel’.
From the foregoing, the requirements of ‘ostensible authority’ can be summarized as follows: (i) a representation; (ii) a reliance on the representation and (iii) an alteration of a person’s position resulting from such reliance.
Ordinarily, a principal may adopt or ratify a contract validly entered into by the agent on behalf of the principal. The key point here is that the principal must be known or disclosed, if the agent acts on his or her own account, ratification is not available.
So from the submissions made by counsel for the Plaintiff, she has in mind an ‘express agency or authority’, that is why in the absence of a formal agreement, she concluded that no agency exists between the Plaintiff and Francis Eghan. But, counsel for the Defendant sees the relationship as that of ‘Ostensible authority’ or ‘agency by estoppel’. Even though the Plaintiff has persistently denied that Francis Eghan acted as its agent, there are pieces of evidence on record, when put together, support the position taken by counsel for the Defendant, that the Plaintiff, by its conduct led the Defendant to believe that an agency existed between the company and Francis Eghan. For example, the Plaintiff could not discredit the evidence of the Defendant and Francis Eghan (DW2) that it was the latter who linked the Defendant to the Plaintiff, and on behalf of the Plaintiff, sent the contract documents to the defendant to execute after which he returned the same to the Plaintiff’s officer, Simon Williams. Also, in the exhibit 7 series tendered by DW2, most of the emails emanating from the Plaintiff Company’s accredited officer were sent and/or copied to Francis Eghan. Specific reference can be made to exhibit 7B sent by one Miguel to Simon Williams and Francis Eghan, the subject was complaint on size, fat content and price of MKL 16+. Then, in exhibit 7C, the same Miguel proceeded to assign various tasks to Francis Eghan in the Plaintiff’s line of business. In another email correspondence, exhibit 5, copied to Francis Eghan, Simon Williams informed the Defendant thus:
Note that Francis and Miguel are in Kumasi tomorrow and will be coming to meet with you and collect funds.
Having weighed all the evidence on record, the Court finds that there was no express agency created between the Plaintiff company and Francis Eghan, but through the conduct of the authorized officers of the Plaintiff Company, Francis Eghan was held out as its agent for the purpose of doing business with the defendant, he was involved in all processes leading to the execution of exhibit ‘A’, and the Plaintiff again fell on him in its efforts to recover funds from the Defendant upon default. By the preponderance of the evidence before this Court, the Defendant has succeeded in establishing that there was more or less an implied agency between the Plaintiff and Francis Eghan, and Francis Eghan had ‘Ostensible Authority’ to act on the Plaintiff’s behalf. This was however limited to the sales agreement. The above notwithstanding, the goods were consigned to the Defendant, so it was only the Defendant who could authorize a third party to clear the goods on her behalf. Therefore, if she agreed and/or arranged for Francis Eghan to play any role in clearing the goods from the harbour to her designated warehouse, at that point, Francis Eghan could not have been working as an agent of the Plaintiff Company. He was working on his own account and is to be responsible for his actions and inactions. The ‘Ostensible authority’ which Francis Eghan exercised on behalf of the Plaintiff did not extend to him getting involved in the sale of the fish.
WHETHER OR NOT THE VALUE OF THE FISH SUPPLIED AMOUNTED TO GHC 123,930.00 OR USD 112,503.60 AND
WHETHER OR NOT HAGAN TOOK SOME OF THE FISH SUPPLIED TO THE DEFENDANT.
The Plaintiff’s evidence is that per the contract document, exhibit A, the value of fish supplied to the Defendant was USD 123,930.00, and was duly supplied to her. On the contrary, the Defendant maintained in her evidence that as a result of shortages in the quantities supplied as well as the poor quality, the Plaintiff’s officer by name Simon Williams reduced the value from USD 123,930.00 to USD 112,503.00 by way of discount. The Defendant also emphasized that Francis Eghan took over fish worth GHC 151, 410,00, but eventually paid GHC 130,000.00 leaving a balance of GHC 21,410.00. She relied on email correspondences between her and the said Simon Williams, exhibit 1, as proof of the discount.
Exhibit 1 shows that on 19/09/2014 at 14:30pm, the Defendant emailed Simon Williams as follows:
Hello, thanks for yesterday, please I would like you to send me a mail concerning all my discounts
At 4:08pm the same day, Simon Williams replied to the above mail in this manner:
Will send you an email with all the discounts shortly.
However, there is no evidence that any email was sent to the Defendant by Simon Williams in which the alleged discount was given. If that email is in existence, then, the same was suppressed from the court. The Plaintiff further challenged the bases upon which the Defendant alleged that a discount was given to her, namely: (i) exhibit ‘A’ stipulated the procedure by which all claims related to quantities and quality were to be made, but the Defendant did not follow the same, and beyond the stipulated period, all such claims are deemed waived; (ii) the Defendant’s claim that the fish supplied did not meet the agreed specifications is an afterthought; (iii) the Defendant’s oral evidence that she went into accounts with Simon Williams and he wrote down the figure USD 112,503.04 lacks credibility, she did not indicate where Simon Williams wrote this figure, she was not present at the port at the time the fish was cleared, checked in the presence of her representative (DW1), and transported out of the port to the Defendant’s designated warehouse. None of her witnesses also spoke to the value of the fish supplied. Counsel further submitted that the only shortage which DW1 testified about was what he observed at the point of loading the remaining two container loads of fish after DW2 had led him to the warehouse where DW2 had kept the fish. She argued that if there was any shortage at all, it is attributable to the failure of DW2 to truthfully account for the fish he took. Counsel urged the Court to find that the fish supplied to the Defendant was in fact worth USD 123,930.00.
The Court has paid a close attention to the clause on “quantity and quality claims” in exhibit A, which reads:
QUANTITITY AND QUALITY CLAIMS:
If any, will be passed on merits provided notice of such claims are sent by the Buyer by E-mail to the Seller. Quality and/or contamination claims and/or size claims and/or supply of incorrect cargo claims must be supported by Societe Generale De Surveillance (SGS) or another internationally recognized Surveyor’s report.
1. Short weight claims (if any) to be made within five (5) days from arrival of goods at the Buyer’s warehouse in Tema, Ghana basis an assized weighbridge weight report issued at the destination port.
2. Any quality claims like diesel contamination of the ordered goods will be quantified and claimed for within two (2) days of goods arrival at the Buyer’s warehouse in Tema, Ghana.
3. Any claims after the expiry of the claim period will be deemed to have waived and the seller accepts no liability for consequential loss, loss of income, loss of profit or injury that might be incurred. (emphasis added)
From the evidence of DW1, all three containers of fish were checked at the port of entry after which the Defendant instructed him to convey one container load of fish to Kumasi and give two container loads to DW2 which he complied with. In the Defendant’s own words, she sold the first container load of fish without any issues. According to DW1, it was one week later that the Defendant requested him to contact DW2 again, for the second and third containers to be brought to Kumasi. It is reasonable to presume from the evidence of DW1, that at the time all three container loads of fish were checked and moved from the port in his presence, all the agreed specifications as in exhibit ‘A’ had been met. The Defendant and her witnesses neither introduced any oral evidence, nor tendered any document with regards to the conditions at the “Will Bill Ware House” where the two container loads of fish were kept for at least one week. By the Defendant’s own showing in exhibit ‘4’, there was erratic power supply at the time the contentious fish was delivered to her and that impacted negatively on her work. So the erratic power supply could affect the storage of the fish and compromise the quality. This cannot be blamed on the Plaintiff Company.
In terms of the quantity and quality clauses referred to, supra, the time for making any such claims had lapsed by the time the second and third containers were sent to Kumasi. All the ensuing e-mails sent to Simon Williams certainly fell outside the claims period. Worst of all, there was no Survey report, either from SGS or any internationally recognized Surveyor to back the Defendant’s claims. In the very least, a weighbridge weight report could have been tendered because there was no way the consignment could have left the port of entry without it being weighed. Without these credible proof, the Defendant’s so called shuttling from Kumasi to Tema to meet Simon Williams, coupled with belated emails bemoaning the quality and quantities supplied served no useful purpose having regard to the “quantity and quality” clause in exhibit ‘A’. It is highly probable that, it was in view of the forgoing that there is no e-mail correspondence from Simon Williams in respect of the discount allegedly given by him. The said Simon Williams has since left the Plaintiff’s employment. The Court is in agreement with the submissions made by counsel for the Plaintiff that the Defendant failed to introduce any cogent proof of the discount said to have been given by the Plaintiff through its officer, Simon Williams. Short of that, the only credible evidence on record is that the fish delivered to the Defendant at the port met the specifications in exhibit ‘A’ and the value was USD 123,930.00.
Both the oral evidence of the Defendant, DW1 and DW2 point to the fact that Francis Eghan took some qualities of fish, from the second and third containers of fish, and thereafter he informed the Defendant. From the evidence before this Court, only Francis Eghan (DW2), and the owner of the Defendant’s designated warehouse in Tema knew the actual quantities DW2 took. Exhibit ‘3’ is a demand notice written on behalf of the Defendant by her previous solicitor to DW2, claiming that DW2 took a quantity of fish worth GHC 187,254.00 and there was an outstanding balance of GHC 21,410.00 to be paid. As rightly noted by counsel for the Plaintiff in her closing submissions, the Defendant’s solicitor at the time, who had been well briefed by his client, did not even find it necessary to copy the Plaintiff, and this is a confirmation of the Defendant’s own private arrangements with Francis Eghan, whom she had known for at least five to six years, before exhibit ‘A’ was executed. There is therefore overwhelming evidence before this court that Francis Eghan took part of the contentious consignment of fish without prior approval from Defendant and sold the same.
WHETHER THE PLAINTIFF IS ENTITLED TO ITS CLAIM.
At the close of the evidence of the Plaintiff’s representative, it became clear that the Defendant had duly made some payments, and the balance outstanding is USD 60, 730.00. If the Defendant’s unsubstantiated discount of USD 11,427.00 which reduced the value to USD 112, 503.00 had been upheld, then, she would have been justified that she owes approximately USD 49,303.00. Having ruled out the alleged discount, and given the established fact that the Defendant has made payments totaling USD 63,200.00, the outstanding amount due on the consignment as per exhibit ‘A’, stands at USD 60, 730.00. Whatever quantities of Fish that Francis Eghan took in his personal capacity does not in any way reduce the Defendant’s obligations towards the Plaintiff. The Defendant is obligated, both under the Sales Agreement, and also under the Sale of Goods Act, 1962, Act 137, to pay for the goods supplied to her. Specific reference can be made to sections 21 and 22 as follows:
21. Fundamental obligations of the buyer
The fundamental obligations of the buyer in a contract of sale are to pay the price and accept delivery of the goods.
22. Payment concurrent with delivery
Unless otherwise agreed, the buyer shall be ready and willing to pay the price in exchange for delivery of the goods.
In the case at hand, the parties to exhibit ‘A’ agreed, that payment was to be made 90 days from the “bill of loading date”, the intended words ought to be “bill of lading”, per the customs of the trade. The failure of the Defendant to make full payment as indicated above amounts to a breach of the sales agreement. The plaintiff, as an unpaid seller, is not left without rights and/or remedies. Under section 35(1) (iii), and 35 (b) of Act 137, an unpaid seller has a right of resale or a right to recover possession of the goods where property has not passed. Also, under section 46(2), the unpaid seller can sue for the price. It states:
(2) Where, under a contract of sale of goods, the price or a part of the price is payable on a certain day, and the buyer wrongfully neglects or refuses to pay the price or the part which has become due, according to the terms of the contract, the seller may maintain an action for the price or the part which has become due, although the property in the goods may not have passed to the buyer.
Per exhibit ‘A’, “Title of ownership of goods does not pass to buyer until seller has received 100% payment for the goods shipped…”. Having regard to the perishable nature of the goods in issue, it makes both economic and business sense for the Plaintiff to exercise its right to sue for the unpaid price, and the court holds that the Plaintiff Company’s action is justified, it is entitled to be paid the outstanding amount of USD 60, 730.00 by the Defendant herein.
WHETHER OR NOT THE DEFENDANT IS ENTITLED TO HER COUNTERCLAIM.
The court will not hesitate to dismiss the Defendant’s counterclaim as being unmeritorious. The fish was supplied in the year 2014, the counterclaim for an order directed at the Plaintiff to take delivery of the “unsold” fish was filed on 04/06/2015, a little over three years ago. The Plaintiff cannot be expected to take delivery of fish kept in a private cold store for three solid years, amidst erratic power supply along the line. Any such order will be contrary to prudent business practices. The Defendant’s evidence that the fish got rotten and had to be disposed of is also not substantiated and will not see the light of the day. In any case, per exhibit ‘A’, all risks in the goods had already passed onto her.
The counterclaim has no legs to stand on and the same is dismissed. Accordingly, judgment is entered in favour of the Plaintiff against the Defendant in the sum of USD 60, 730.00. The Plaintiff is entitled to be paid interest on this amount because it has been deprived of the use of this money which could have been reinvested. Since the Defendant’s obligations are calculated in United States dollars, the court awards interest on the sum of USD 60,730.00 at the Bank of Ghana Dollar lending rate from October, 10, 2014, till date of final payment. See NIB Ltd. v. Silver Peak Ltd. (2003-2004) SCGLR 1008; 1013.
Cost of GHC 15,000.00 is awarded against the Defendant in favour of the Plaintiff.