IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (GENERAL DIVISION 7),
ACCRA - A.D 2018
LEXI BOOK - (Plaintiff)
ETOYS AND MORE LTD - (Defendant)
DATE: 14 TH JUNE, 2018
SUIT NO: GJ 725/2017
JUDGES: ERIC K. BAFFOUR, ESQ. JUSTICE OF THE HIGH COURT
LAWYERS: COUNSEL FOR PLAINTIFF – CHRISTOPHER ARCHER PRESENT
Plaintiff claims the reliefs endorsed on its writ issued against the Defendant the following:
a) Recovery of the sum of US$28,893.02 or its cedi equivalent being the unpaid purchase price of goods sold and delivered to Defendant
b) Interest on the sum of US$28,893.02 at the prevailing bank rate from 20th April, 2012 to date of final payment.
c) Costs of the action
Further or other orders as may be just or proper in the circumstances.
Plaintiff, a foreign company based in France claim that upon a request from Defendant, a Ghanaian company it agreed to supply electronic toys and learning materials to the Defendant with the goods corresponding to the order made by the Defendant. That the goods arrived at the port of Tema on the 28th of October, 2011 aboard vessel Portofino and another arriving on the 19th of October, 2011 from the port of Anvers. Plaintiff contend that upon arrival Defendant cleared the goods but has refused to pay since at 20th April, 2012. To Plaintiff numerous demands for the payment has not been heeded by the Defendant and hence the prayers contained in the endorsement on the writ.
Defendant in its statement of defence admit of a long standing business relationship between the parties since 2004. And that the payment of goods supplied by Plaintiff was conditioned upon the successful sale of the goods by Defendant. And that the goods supplied Defendant was only paid for after the goods are cleared and sold to customers in Ghana. Defendant further claim that Plaintiff delayed in notifying it of the shipment of the goods whiles the shipping documents were also received late leading to the goods being kept in an Aktos bonded warehouse. To Defendant whiles the goods were being kept at the warehouse, the goods were destroyed by a major flood that engulfed the warehouse on the 19th of November, 2012. And as a result the goods together with others belonging to other persons were destroyed under proper supervision. And notwithstanding the destruction of the goods it expressed the desire to pay for the goods at a discounted price for the sake of maintaining the healthy relationship between the parties but Plaintiff claimed to have repudiated the offer. Defendant finally claim that he did not clear the goods for sale due to its destruction. Plaintiff joined issues with Defendant in its reply and further claim that per the proforma invoice the parties agreed that payment for the goods was to be rendered within sixty days from the date of arrival of the arrival of the goods at Tema and that Defendant took delivery of the goods upon arrival, having also shipped original copies of the invoice, packing list and certificate of origin to the Defendant by DHL Express shipment.
And also that the claim of destruction caused by flood was only an afterthought brought to its attention only in June, 2016, four years after several demands for the payment of the monies.
With the closure of pleadings the following issues were set down for determination:
Whether or not the payment of the goods sold by Plaintiff to Defendant was subject to a pre-condition that the goods be successfully sold by Defendant before payment.
Whether or not by the terms of the sale the Defendant was under an obligation to pay the purchase price within sixty (60) days from the date of arrival at the Tema sea port.
Whether or not the Defendant by email dated 23rd April, 2012 promised to pay up the purchase price within two weeks from 23rd April, 2012.
Whether or not there was a delay in Plaintiff’s notification to Defendant of the shipment of the goods and the delivery of shipping documents to Defendant.
Whether or not the Defendant was unable to take delivery of the goods and sell them due to an annihilation of the goods by a flood in the warehouse on 19th November, 2012
Whether or not Plaintiff is entitled to its claim
Any other issue arising out of the pleadings.
Plaintiff testified through its lawful attorney, John Addo and his testimony was consistent with the pleadings of Plaintiff. He tendered, among others, the following exhibits on behalf of the Plaintiff. The power of attorney granted him by the Plaintiff as Ex ‘A’, copy of an invoice for an amount of US$ 28,893.02 as Ex ‘B’, packing list as Ex ‘C’ and certificate of origin as Ex ‘D’ series, a proforma invoice that Plaintiff claim stated that payment for goods supplied was to be effected within sixty days after receipt of goods as Ex ‘E’, copies of email exchanges between the parties as Ex ‘F’, ‘G’, ‘H’, ‘J’ and ‘K’, a proposal for payment by Defendant as Ex ‘N’.
On the other hand, Defendant testified through its Managing Director, George Sackey noting of the difficulty Defendant encountered with the late arrival of the documents of the goods that caused clearance problems for the Defendant at the Tema port that led to the goods being sent to Aktos bonded warehouse Number T-178 and eventually being destroyed in flood waters. Accordingly the witness tendered a report from Ghana Revenue Authority on the damage of goods by flood at the warehouse as Ex ‘1’ and an email exchanged between representatives of the parties as Ex ‘2’.
EVALUATION OF THE EVIDENCE AND APPLICIATION OF THE LAW:
At the heart of the issues agreed upon at the end of the pretrial conference is whether Plaintiff is entitled to the recovery of the amount of US$28,893.02 as the value of the goods supplied to the Defendant in October, 2011 together with interest. Plaintiff through its lawful attorney noted that the goods arrived at the port of Tema on the 19th of October, 2011 aboard vessel Grande Congo whiles the last consignment also arrived on the 28th of October, 2011 aboard Portofino. It appears Defendant did not contradict this claim of Plaintiff as to when the goods arrived at Tema as per paragraph 8 of the witness statement of George Sackey. There is also little dispute as to the amount involved. From Ex ‘B’, the invoice for the supply of the goods the amount is $28,893.02. This also has in no way been disputed by the Defendant. The claim of the supply of these items are also not in controversy. As a matter of fact nowhere from the cross examination of the Plaintiff’s attorney did learned counsel for Defendant contradict any of the claims of Plaintiff in the box or traverse any of the pleadings whiles the attorney was in the box. The crucial issues for my determination are the defences that have been mounted by Defendant as the reasons for the non-payment of the goods it concedes it received.
I find it necessary to raise them one after the other and evaluate as to whether they are genuine claims being raised by the Defendant. First is the claim of the late arrival of the documents of the goods thereby causing a delay in the clearance of the goods at the Tema seaport. Defendant’s representative claim in paragraph 10 of the witness statement that he managed to secure the documents in February, 2012 even though the goods arrived in October, 2011. Is this claim borne out by the facts in evidence? According to John Addo the Plaintiff sent to Defendant via DHL the invoice, packing list, certificate of origin to Defendant on the 27th of October, 2011 and that documents arrived the following day in Ghana. A look at Ex ‘D1’ shows that indeed Plaintiff sent the shipping documents to Defendant through Theresa Sackey, via DHL on the 27th of October, 2011. Defendant claim he received the shipping documents in February, 2012 without any attempt to explain that he could not get the documents from DHL on time due to difficulties on the side of DHL. Is it the claim of Defendant that DHL could not locate the shipping documents for them to collect or is it the case as per Ex ‘D1’ that the shipping documents arrived contemporaneously with the goods but Defendant failed to collect the documents on time? Defendant had claim that Plaintiff delayed in sending the shipping documents to Defendant but from Ex ‘D1’ showing the time the documents were sent, I hold and find as a fact that the shipping documents did not delay and Plaintiff shipped
them on the 27th of October, 2011 a day before the last consignment of the goods arrived at Tema and the claim of Defendant of the late arrival of the shipping documents is untenable and not borne out from the evidence before the court.
As a corollary the further claim that the goods had to be sent to the bonded warehouse due to the difficulty in the clearance of the goods precipitated by the late arrival of the goods cannot be correct as there may be other causes for the goods landing at the bonded warehouse other than the delay in the arrival of the goods. As I have found that the shipping documents arrived right on time for any clearance to have been made at the port and the failure to clear the goods on time cannot in any way be laid at the door steps of the Plaintiff.
The next fundamental defence for the non-payment of the money is the claim of the destruction of the goods at the customs bonded warehouse on the 19th of November, 2012. In the first place goods of a consignee would be sent to a bonded warehouse only when the period granted for the clearance of goods had not been met then the goods are sent towards the auctioning of the goods by the State. With my finding that the documents for the clearance of the goods arrived contemporaneously with the goods, the sending of the goods then to a bonded warehouse is more likely due to a failure on the part of Defendant to have raised the necessary and requisite monies to pay for the custom duty before its clearance.
With the claim of flood destroying the goods my mind was agitated and had thought that if this could not have been a defence of frustration. And indeed counsel for Defendant in his written submission has claimed that by virtue of the destruction caused by the fire outbreak the contract had been frustrated. A contract that has validly been entered into may be discharged by a number of factors including frustration. Any unforeseen contingency that occurs after the contract had been entered into that makes the performance of the contract physically impossible or radically change the nature of the obligations of the parties can be said to be frustration. So in the case of TAYLOR v CALDWELL  3 B&S 826 which involved a contract for the hiring of a music hall for performance but before the contract could be performed, the hall was burnt down. The court held that the performance of the contract had become impossible as the parties did not anticipate the occurrence of such an event. Any occurrence that seems to fundamentally alter the obligations of the parties to the contract will suffice. A better definition was given in the case of DAVIES CONTRACTORS v FAREHAM U.D.C  A.C. 696 as follows:
“frustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract...”.
It has been noted that hardship, inconvenience or material or financial loss cannot be relied upon as having called into operation frustration of a contract. The frustrated event must affect the subject matter of the contract or the fundamental obligation created by it and the event must render the contractual obligation radically different from what was originally undertaken. See DAVIES CONTRACTORS supra. MARITME NATIONAL FISH LTD v OCEAN TRAWLERS LTD  A.C 524; JOSEPH CONSTANTINE STEAMSHIP v IMPERIAL SMELTING CORPORATION  A.C. 154. Acquah JSC (as he then was) in the case of BARCLAYS BANK LTD v SAKARI [1996-97] SCGLR 639 emphasised the common principle as follows:
“under the common law frustration occurred where an external event of some kind which was not the responsibility of either party rendered further performance of a contract impossible or radically different from what had been contracted for. No valid finding of frustration could therefore be made without the court construing the contract to determine the nature of the obligation created on the parties—the obligation if unfulfilled by a party would entitle the other to sue for a breach of it—because on the authorities the unexpected event should affect the subject matter of the contract or the fundamental obligation created by the contract and not just any term of the contract”.
The consequences of a frustrated contract has been spelt out in sections 1-3 of the Contracts Act, 1960, Act 25. That when a contract is frustrated the parties are discharged from further performance of their obligations under the contract. Could the flooding have frustrated the contract? My answer is no and the reasons are provided infra. Exhibit ‘E’ clearly state that the goods are payable within 60 days upon receipt of the goods. Even though George Sackey challenged this claim by stating that the goods by their normal course of business between the parties are payable after the sale of the goods. It is trite under the parol evidence rule that once parties to a contract have reduced the terms that govern their agreement into writing, extrinsic evidence will not be admitted to vary or contradict the terms that have been written. See Chitty on Contracts 27th edition Vol 1, paragraph 12-081. One exception to this principle is for a party to adduce evidence to show the existence of a custom as it was done in the case of GILLESPIE BROTHERS v CHENEY EGGAR & CO  2 QBD 59. But here no evidence was adduced to back this claim of this custom in existence between the parties in the course of business. I had expected the Defendant to have produced evidence of previous arrival of goods and when payments were made to back the claim that the goods are not paid for within 60 days upon arrival. The common law rule finds expression under section 177 of the Evidence Act, NRCD 323 as follows:
Except as otherwise provided by the rules of equity, terms set forth in a writing intended by the party or parties to the writing as a final expression of intention or agreement with respect to such terms as are included in the writing may not be contradicted by evidence of any prior declaration of intention, of any prior agreement or of a contemporaneous oral agreement or declaration of intention, but may be explained or supplemented—
(a). by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the intention or agreement, provided that a will and a registered writing conveying immovable property shall be deemed to be a complete and exclusive statement of the terms of the intention or agreement; and
(b). by a course of dealing or usage of trade or by course of performance. Nothing in this section precludes the admission of evidence relevant to the interpretation of terms in a writing”.
Our law therefore clearly does not permit the course of defence which Defendant putup that contrary to Ex ‘E’ the goods would have to be sold first before payment are made. Again Ex ‘F’ series are a testament against the claim that the goods are sold before payments are made. On the 23rd of April, 2012, Theresa Sackey in a response to an email from Estelle Moriniere was promising to make payment within two weeks. She even apologized for the delay in the payment. Ex ‘G’ Estelle seeks answers as to the delay in the payment on Friday, 20th of April, 2012 by stating:
“I just want to understand why the payment has not been done since the invoice is overdue. That is to say end of December. I also want to know if there is any problem or claim that blocks the payment and also want to know when you plan to pay...”
Here by stating that payment was due in December, 2011 was consistent with the 60 days period within which payment ought to be made upon the arrival of the goods in the last week of October, 2011. In the responses of Theresa Sackey all assurances were that payment would be made. No just cause was given even when Estelle requested for the reasons for the delay in the payment. The issue of delay in arrival of the shipping documents was never raised to Plaintiff. If payment that was due in December, 2011 had not been made and the goods had been kept in a warehouse without the knowledge of Plaintiff and suffered flood almost a year when payment should have been made, then Plaintiff could not be made liable for that or that could not be advanced to discharge Defendant from its liability to Plaintiff.
Interestingly enough the goods being sent to the bonded warehouse was not even brought to the attention of Plaintiff and this creates the impression that it was lack of diligence or some negligence on the part of the Defendant not to have cleared the goods on time that occasioned the goods being bonded and hence the failure of Defendant to bring this to the attention of Plaintiff. If Plaintiff had a role to play in failing to send the shipping papers on time leading to the goods bonded why would Defendant at a time there was incessant demands by Plaintiff for its money not draw the attention of Plaintiff to what its action had led to the non-retrieval of the goods? Plaintiff having no cause in the goods landing at the warehouse, I find and hold that this cannot be advanced by Defendant as a legitimate reason for no payment of his debt or discharge him from its liability.
With the defences of Defendant having been exposed as not tenable, and with no genuine dispute existing that the value of the goods sent to Defendant was $28,893.02 and with no payment having been made, I rule that Plaintiff is entitled to the recovery of the monies together with interest at the treasury bill rate from 20th of April, 2012 being the date Plaintiff request the interest till final date of payment. Guided by Order 74 of the High Court (Civil Procedure) Rules on cost, I will award cost in favour of Plaintiff assessed at 8% of the principal amount of $28,893.02 awarded in favour of Plaintiff.