IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL DIVISION)
ACCRA - A.D 2018
NDK FINANCIAL SERVICES LIMITED - (Plaintiff)
KWASHIE TAILORS & DRY CLEANERS LTD. AND OTHERS - (Defendants)
DATE: 13 TH APRIL, 2018
CIVIL APPEAL NO: BFS/302/2011
JUDGES: SAMUEL K. A. ASIEDU JUSTICE OF THE HIGH COURT
IRENE DAVIS ESQ., FOR KWAME AMENANO- TANNOR ESQ., FOR PLAINTIFF
ANDREWS TETTEH ESQ., FOR DEFENDANTS
ENID MARFUL SAU ESQ., FOR SYVESTER WILLIAMS ESQ., FOR THE 3RD PARTY
By a writ of summons and a statement of claim issued on the 11th day of August 2011 the plaintiff claims against the defendants:
a) An order for recovery of the sum of GH¢1,967,821.72 being the balance due and owing on account of credit facility extended to 1st Defendant by Plaintiff on 19th November, 2009, repayment of which was secured by 2nd and 3rd Defendants but settlement of which Defendants have failed to make good several demand notices notwithstanding.
b) Interest on the said sum of GH¢1,967,821.72 at the rate of 6.5% per month calculated at the close of each day and payable at the end of every month on compound basis until date of final payment.
c) Cost including Lawyer’s fees assessed at 15% of the aggregates sum due and payable under the said facilities.
After the service of the writ by the plaintiff and the entry of appearance by the defendants, a statement of defence was filed in which the defendants claimed indemnity from the Ministry of Education. The defendants therefore initiated third party proceedings against the Attorney General who was therefore, subsequently, brought into the case as a third party. An appearance was entered on behalf of the Attorney General who later filed a statement of defence after leave had been granted by the court. In its statement of defence, the Attorney General counterclaims against the 1st defendant for:
a) Delivery of 130,966 school uniforms or payment of the value of the 130,966 of the School Uniforms to the Third Party.
b) Payment of Gh¢653,210.40 being the value of School Uniforms on 155,312 yards of School Uniforms Fabric taken delivery of by the 1st Defendant and which the 1st Defendant had failed to deliver.
c) Interest on the said sums.
From the pleadings filed by the parties, the court finds that it is not in dispute that on the 28th December 2009, the 1st defendant entered into a contract with the Ministry of Education for the supply of school uniforms for pupils of Basic schools. The court also finds from the pleadings that the total number of school uniforms which the 1st defendant undertook to supply, under the contract, to the Ministry of Education is three hundred and fifty one thousand (351,000) pieces. It is also not in dispute from the pleadings that the contract sum agreed upon between the 1st defendant and the Ministry of Education was GH₵4, 914, 000.00. The court further finds, from the pleadings, that in accordance with the General and Special Conditions of the contract, the 1st defendant was to pre-finance the contract and full payment made for each specified quantity delivered. The parties do not dispute that payment was to be made within twenty-one days (21) after the date of receipt of Claim Letter supported by Stores Receipt Voucher and an Acceptance Certificate. Again from the pleadings, the parties do not dispute that the 1st defendant was to provide a performance security of 10% of the contract price in the sum of GH₵491,000.00. The court also finds from the pleadings that the 1st defendant admits that on the 22nd and 31st December 2009, the Ministry of Education paid to the 1st defendant the sum of GH₵1, 965,000.00 and GH₵91,000.00 totaling GH₵2, 056,600.00 as an advance payment to facilitate the swift execution of the contract.
The court finds further, from the pleadings, that the defendants do not dispute that on the 3rd of November 2009 the 1st defendant applied to the plaintiff company for a credit facility for the purpose of enabling the 1st defendant company purchase sewing machines, fabric and also to enable the 1st defendant bear the cost of labour for the supply of the 351,000 pieces of school uniforms to the Ministry of Education. It is not disputed by the defendants that on the 19th day of November 2009, the plaintiff company granted to the 1st defendant company credit facility in the sum of GH₵3,035,000.00 for a period of sixteen (16) months. The defendants do also not dispute that interest payable on the facility was 6.5% per month calculated at the close of each day and payable at the end of every month on compound basis until date of final payment. The defendants also admit that the facility, per the offer letter, was to expire on the 31st March 2011.
From the pleadings, it is clear that the defendants admit that the 1st defendant company accepted the terms and conditions of the offer letter as a result of which the sum of GH₵3,035,000.00 was disbursed to the 1st defendant company by the plaintiff. The court also finds from the pleadings that, the 2nd and the 3rd defendants executed a deed of mortgage over all that parcel of land situate at Bawaleshie, Accra and registered as AR/4524B/2005 in favour of the plaintiff company and on behalf of the 1st defendant company as security for the repayment of the facility together with interest up to date of final payment on the due date upon default of 1st defendant company. Again from the pleadings the defendants admit that by a deed of guarantee dated the 19th November 2009, the 2nd and 3rd defendants agreed to repay the facility together with accrued interest up to the date of final payment on the due date upon default of the 1st defendant company. The court further finds from the pleadings that the defendants admit that as a further security for the repayment of the loan together with interest the 1st defendant company assigned vehicles Number GT. 3384 Z and GT. 79 Y to the plaintiff company. The defendants as well as the third party admit, from the pleadings, that by a letter dated the 19th November 2009, the Ministry of Education agreed to pay the proceeds from the contract between the Ministry and the 1st defendant, that is, the contract sum of GH₵4, 914, 000.00 in the joint names of the plaintiff and the 1st defendant.
The court finds from paragraphs 23, 24 and 30 of the statement of defence that the defendants do not dispute that the amount endorsed on the plaintiff’s writ of summons is owed to the plaintiff. This finding is further buttressed by admission made by the defendants’ representative during cross examination in answer to the following questions put to him
Q. I am taking you to para 51 of your witness statement. Your contention under para 51 is that the plaintiff is entitled to all the reliefs it is claiming
Q: But you further contend that the said reliefs should be against the 3rd party and not you.
In the said paragraph 51 of their witness statement the defendants have testified on oath that:
51.The Defendants contend that the Plaintiff is entitled to its claims and reliefs against the Third party alone and will repeat the grounds contained in their defence and the Notice issued to the Third party.
Again, from its statement of defence, the third party denies owing the plaintiff whether partly or at all. From the pleadings, the plaintiff maintains that its suit against the defendants is based entirely on the contract between the plaintiff and the defendants. The defendants’ contention is that the plaintiff is entitled to its claims against the Ministry of Education and not the defendants because the Ministry of Education abrogated the contract between the 1st defendant and the Ministry of Education. The 3rd party has denied the allegation of abrogation of the contract between the 1st defendant and the Ministry of Education. Hence, one issue for the determination of the court is whether the Ministry of Education abrogated its contract with the 1st defendant. Yet, another issue is, even if it is established that the contract between the 1st defendant and the Ministry was abrogated by the Ministry, whether the fact of abrogation was what led to the accumulation of debt which the plaintiff seeks to recover by the instant suit. In other words, whether or not the alleged abrogation of the contract between the 1st defendant and the Ministry of Education was the proximate cause of the accumulated debt which the plaintiff seeks to recover from the defendants.
Elsewhere the defendants have pleaded that even if it is found that the defendants are liable on the plaintiff’s claims, the defendants should be indemnified by the third party. This is the logical deduction from paragraphs 23, 24 and 30 of the statement of defence filed by the defendants. The question therefore for the determination of the court is whether or not the defendants are entitled to be indemnified by the third party, specifically, the Ministry of Education in respect of the claims endorsed on the writ by the plaintiff against the defendants.
Abrogation of contract
The defendants’ allegation is that the Ministry stopped paying for work done by the 1st defendant without any notice to the 1st defendant and that on the 24th May 2011; the Minister of Education unilaterally and orally declared that she had abrogated the contract with the 1st defendant. According to the defendants, this action of the Minister amounted to a breach of the contract dated 28th October 2009 and exhibited as exhibit G to the witness statement of the plaintiff. The evidence given by the defendants is to the effect that the fabric for the sewing of the school uniforms was manufactured by Printex Limited and paid for by the Ministry of Education and, thereafter, the fabric is released to the 1st defendant who sews them into school uniforms and then delivers them to the Ministry which, upon receipt of evidence of delivery, issues cheques for the payment of the cost of the quantity delivered. According to the defendants, in September 2010, the Ministry stopped payment for uniforms delivered to it and, as a result, Printex Limited refused to release the fabrics to the 1st defendant due to the plaintiff’s refusal to pre-finance the project.
The defendants also testified that the Minister of Education, in May 2011, unilaterally and orally declared that she had abrogated the contract between the 1st defendant and the Ministry. The evidence of the 3rd party is to the effect that the Ministry of Education did not abrogate the contract as alleged by the defendants but, as a result of Government Ministerial reshuffle, the new Minister decided to study the contract and apprise herself with the content thereof as a result of which there was a hold up in the performance of the contract and the payment for uniforms already supplied. In view of the delay in the payments, the Ministry of Education paid an amount of GH₵106,643.37 to the 1st defendant as interest on the delayed payments.
The court finds from the evidence on record that all the parties agree that under the contract between the 1st defendant and the Ministry of Education, exhibit G herein, the contract could be terminated by the Ministry of Education by written notice to the 1st defendant. The court finds that the 1st defendant has not furnished the court with any written notice of termination of the contract by the Ministry of Education as contemplated in the contract document; the contention therefore, by the defendants, that the Ministry of Education orally and unilaterally terminated the contract remains unproven. On the contrary, the evidence given by the 3rd party that the performance of the contract was rather put on hold for a brief period due to Government Ministerial reshuffle appears to be more probable than the allegation that the contract was either abrogated or terminated by the Ministry of Education. At paragraph 25 of their statement of defence the defendants have averred that:
25. The 1st Defendant avers further that whiles the amount claimed remain unpaid the Ministry of Education by a letter of 5th August 2011 requested the 1st Defendant to lift fabric from Printex Ltd. to continue with the school uniform project and requested the 1st Defendant to sew uniforms for the First Day at School initiative by the Government and this was to be completed by September 2011.
If it is true that the contract was in fact abrogated or terminated by the Minister as alleged by the defendants the letter of 5th August 2011 could not have been written by the Ministry to the 1st defendant to resume the production of the school uniform under the very contract which had ceased to exist. In the opinion of the court therefore the letter of 5th August 2011, alluded to by the defendants in their statement of defence, lends support to the position maintained by the 3rd party that the contract was not abrogated or terminated but that its performance was put on hold pending study by the Minister. The court therefore holds that the contract in question was not terminated or abrogated by the Ministry of Education.
Accumulation of debt
As stated above, one other issue worthy of consideration is whether the temporary hold up in the performance of the contract was what led to the accumulation of the debt claimed against the defendants in this matter. In this regard it is worthy of note that the contract between the 1st defendant and the Ministry of Education, exhibit G, made both the General Conditions of Contract and the Special Conditions of Contract part of the agreement as a whole. Under clause 13.1 of the Special Conditions of Contract, the parties agreed that payment for each quantity was to be made within twenty one (21) days after the date of receipt of Claim Letter supported by the Store Receipt Voucher and Acceptance Certificate issued by the authorised agent of the Ministry and in any case, it was agreed by the parties under clause 16 of the General Conditions of Contract that the period of payment shall not exceed twenty-eight (28) days after the submission of an invoice or claim by the 1st defendant. It follows from the terms of the contract that it was not part of the agreement that the Ministry of Education will pre-finance the contract. Nonetheless, there is evidence on record that the Ministry provided initial funding to the 1st defendant even before the 1st defendant had made any supplies at all to the Ministry.
The answers below, which were given by the representative of the 1st defendant under cross examination attest to this finding:
Q. Do you remember that you applied for an advance payment from Ministry of Education in pursuance of the sewing of school uniform?
Q: As a witness to the contract exhibit G you will notice that it was your responsibility to purchase fabric from Printex.
A: Yes that is why when the contract was given to us we requested for a loan from the plaintiff.
Q: You will recall that the Ministry of education had advanced to your company the sum of GH₵2, 056,000 before the take-off of the sewing of the school uniform? Do you remember?
A: The advance was given some months after we had started producing the uniforms.
Q: And that amount is part of the cost of the production of the school uniforms by the company
A: That money was advanced to us.
The 1st defendant pleaded at paragraph 7 of its statement of defence and also gave evidence at paragraph 9 of its witness statement that the Ministry of Education stopped paying for work done in September 2010. Again the 1st defendant pleaded at paragraph 11 of its statement of defence that the Ministry unilaterally and orally abrogated the contract in May 2011. According to the 1st defendant the alleged abrogation, which the court had already found never took place, led to the non-payment of the facility it had taken from the plaintiff as well as the accumulation of interest thereon. Under cross examination on the 3rd May 2017, the representative of the defendants testified to the effect that at the time that the Ministry, allegedly, stopped payment the amount owed by the Ministry to the 1st defendant for school uniforms supplied was GH₵600,000.00. This implies that in September 2010 when the Ministry, allegedly, stopped paying for the work done by the 1st defendant, the indebtedness of the Ministry to the 1st defendant amounted to GH₵600,000.00.
On the other hand, the plaintiff’s claim is that by the end of July 2011, the 1st defendant owed it the sum of GH₵1, 967,821.72. Nonetheless, the testimony of the defendant’s representative, given on the 3rd May 2017 under cross examination, was that in all the 1st defendant supplied a total of 220,000 pieces of school uniforms to the Ministry of Education out of a total of 351,000 pieces of school uniforms which they were contracted to supply to the Ministry. It is the further evidence of the defendant that the Ministry had made payment to the 1st defendant for all the 220,000 pieces of school uniforms it had supplied to the Ministry. With this revelations therefore, the court finds it difficult to fathom how the 1st defendant still claims that the Ministry is accountable for the debt which the plaintiff claims is owed to it by the 1st defendant. The 1st defendant has not given evidence in respect of the date that the Ministry paid its debt to the 1st defendant and how the alleged stoppage of payment by the Ministry caused interest to accumulate on the debt owed the plaintiff by the 1st defendant. This is very crucial because it has long been the position of the law as was stated in the case of Okudzeto Ablakwa (No. 2) vs. Attorney General & Another  2 SCGLR 845 at 867 that
“If a person goes to court to make an allegation, the onus is on him to lead evidence to prove that allegation, unless the allegation is admitted. If he fails to do that, the ruling on that allegation will go against him. Stated more explicitly, a party cannot win a case in court if the case is based on an allegation which he fails to prove or establish. This rule is further buttressed by section 17 (b) which, emphasizes on the party on whom lies the duty to start leading evidence…”
In Ackah v Pergah Transport Ltd  SCGLR 728 the court re-stated the point that:
It is a basic principle of the law on evidence that a party who bears the burden of proof is to produce the required evidence of the facts in issue that has the quality of credibility short of which his claim may fail. The method of producing evidence is varied and it includes the testimonies of the party and material witnesses, admissible hearsay, documentary and things (often described as real evidence), without which the party might not succeed to establish the requisite degree of credibility concerning a fact in the mind of the court or tribunal of fact such as a jury. It is trite law that matters that are capable of proof must be proved by producing sufficient evidence so that on all the evidence a reasonable mind could conclude that the existence of the fact is more reasonable than its non-existence. This is a requirement of the law on evidence under sections 10(1) and (2) and (11(2) and (4) of the Evidence Act, 1975, (NRCD 323).
Again, in Takoradi Flour Mills vs. Samir Faris [2005-2006] SCGLR 882, the court explained the burden cast by law on a plaintiff such as in the instant case. The court pointed out that
“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 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”
As already pointed out above, the 1st defendant has failed to lead sufficient evidence to convince the court that the alleged stoppage of payment by the Ministry was what caused its indebtedness to the plaintiff to bloat to the colossal amount which the plaintiff claims is owed it by the 1st defendant. Another issue for consideration by the court is whether the Ministry is liable to indemnify the 1st defendant. Nonetheless, closely linked to this issue is whether or not the 1st defendant is liable on the plaintiff’s claim. On this score it is worthy of note that the plaintiff has pleaded from paragraphs 6 to 16 of its statement of claim that the 1st defendant applied for a loan facility from the plaintiff to enable it purchase sewing machines, fabric and pay for labour to enable the 1st defendant supply 351,000 pieces of school uniforms to the Ministry of Education. Subsequently, the plaintiff approved and disbursed an amount of GH₵3,035,000 to the 1st defendant to expire at the end of sixteen months that is on the 31st March 2011. The interest payable on the facility was agreed at 6.5% per month. The defendants have, in paragraphs 2 of their statement of defence admitted all these averments by the plaintiff.
The court finds that the defendants also admitted, during cross examination, that the 1st defendant took the loan from the plaintiff and even provided, together with the other defendants, security for the repayment of the loan to the plaintiff. The defendants have also admitted, under cross examination, that the 1st defendant has not discharged its obligations under the loan agreement by way of repaying the loan which it took from the plaintiff. On the strength of the pleadings and the evidence before the court including the admissions referred to above, the court finds and holds that the 1st defendant is indebted to the plaintiff herein in the sum of GH₵1, 967,821.72 being the amount owing on account of the loan extended to the 1st defendant by the plaintiff in this matter.
The plaintiff has admitted that the loan transaction was between the plaintiff and the 1st defendant. Both the plaintiff and the defendants have admitted that the 1st defendant has failed to discharge its obligations under the loan agreement as a result of which the 1st defendant has not repaid the loan granted it by the plaintiff.
The 1st defendant has further admitted that the Ministry of Education was not privy to the loan agreement between the plaintiff and the 1st defendant. The Ministry has also not undertaken to discharge any obligation owed by the 1st defendant under the loan agreement. It is true that the Ministry committed itself, in exhibit H, to effect payment for the supply of the uniforms in the joint names of both the plaintiff and the 1st defendant. However, that undertaking is binding on the Ministry to the extent that there is debt to be paid for school uniforms supplied by the 1st defendant. From the evidence before the court, the 1st defendant has admitted that, so far, it has supplied a total of 220,000 pieces of school uniforms to the Ministry and that the Ministry of Education has paid fully for the cost of these uniforms. It therefore stands to reason that the Ministry cannot be held under the Undertaking in exhibit H to make good debt owed by the 1st defendant to the plaintiff.
The reasons given by the defendants, in their statement of defence, for seeking indemnity from the Ministry of Education, in respect of the claim being made by the plaintiff are that the Ministry breached its contract with the 1st defendant when the Minister terminated or abrogated the agreement entered between the parties on the 19th November 2009. The court wishes, however, to state, emphatically, that the remedy for breach of contract is either a claim for recovery of damages or in certain circumstances a claim for specific performance. See Republic v. Ghana Industrial Holding Corporation; Ex parte Amartey Kwei and Others [1982-83] GLR 510. Indeed, it has never been the position of the law that where a party claims that another is in breach of an agreement between them the claimant’s remedy lies in indemnity except the contract specifically says so or the law imposes it by virtue of the nature of the contract in question.
In their book, Law of Guarantees (7ed.), by G. Andrews and R. Millett published by Thomson Reuters (Professional) UK Limited trading as Sweet and Maxwell (2015), the learned authors have stated at page 10 that
An indemnity, in its widest sense, comprises an obligation imposed by operation of law or by contract on one person to make good a loss suffered by another. Thus, most contracts of insurance and all contracts of guarantee fall within the broad definition. However, the expression “contract of indemnity” is more often used to denote a contract where the person giving the indemnity does so by way of security for the performance of an obligation by another.
Cheshire, Fifoot and Furmston on Law of Contract (15th ed.) defines indemnity at page 246 as one which a party agrees to make good any liability that another person is held to be under. Again, indemnity may arise in an agency situation. A party can pray another to indemnify him in an agency relationship. The principal is at law responsible for indemnifying the agent against all losses incurred in the discharge of the principal’s instructions Thus, in Baah Ltd. v. Saleh Brothers  1 GLR 119 the court held among others that
The relationship between the parties was that of an implied agency and on the general principles of justice the plaintiffs acquired rights of reimbursement and indemnity in respect of expenses incurred in consequence of ordering goods at the request of the defendants.
It follows that one may, successfully, pray for indemnity if he can show that by operation of law he is entitled to be indemnified or that he has entered into a contract with the other under which he is entitled to be indemnified under the circumstances. Thus, in Boakye v. Asamoah and Another  1 GLR 38 the court recognised only the contractual aspect of indemnity when it stated that
An indemnity was a contract whereby one party agreed to save the other from loss. A right to contribution however would arise whenever a person who owed, with another, a duty to a third party and was liable with that other to a common demand, discharged more than his proportionate share of that duty.
However in the English case of Owen v Tate and Another  2 All ER 129, the English Court of Appeal stated in no uncertain terms at page 133 that
A right of indemnity is a right of restitution. It can arise, as the cases reveal, notwithstanding the absence of any consensual basis.
Indeed the English court went ahead to hold at page 135 that
If without an antecedent request a person assumes an obligation or makes a payment for the benefit of another, the law will, as a general rule, refuse him a right of indemnity. But if he can show that in the particular circumstances of the case there was some necessity for the obligation to be assumed, then the law will grant him a right of reimbursement if in all the circumstances it is just and reasonable to do so.
In the instant matter, as already stated above, the claim being made by the plaintiff against the defendants is the enforcement of a loan agreement between the plaintiff and the 1st defendant company. As noted, the Ministry of Education was not privy to the said loan agreement and neither has the Ministry any obligation to discharge under the said loan agreement. The obligation to repay the debt is principally on the 1st defendant and secondarily on the 2nd and the 3rd defendants by virtue of the guarantee and the security provided by them for the repayment of the loan in question. The court holds therefore that the plaintiff has not succeeded in leading or producing cogent evidence to show that the Ministry of Education has an obligation to discharge under the said loan agreement for which the non-performance of the Ministry makes it mandatory or equitable that the Ministry should be liable to indemnify the 1st defendant. It is the further opinion of the court that the only circumstance under which the Ministry would have been liable is if the 1st defendant had supplied school uniforms under the contract for which the Ministry had failed to pay for in accordance with its undertaking to do so under exhibit G and exhibit H. However, the overwhelming evidence on record shows that the Ministry of Education had paid for all the 220,000 pieces of school uniforms supplied to it by the 1st defendant. In the circumstances, the court holds that the 1st defendant is not entitled to its claim of indemnity against the third party herein. The 1st defendant’s claim is therefore dismissed. Judgment is therefore entered for the plaintiff against the defendants in the sum of GH₵1,967,821.72 together with compound interest at the rate of 6.5% per month from the 1st August 2011 to the date of final payment.
The third party has counterclaimed against the 1st defendant for:
Delivery of 130,966 school uniforms or payment of the value of the 130,966 of the School Uniforms to the Third Party.
Payment of Gh¢653,210.40 being the value of School Uniforms on 155,312 yards of School Uniforms Fabric taken delivery of by the 1st Defendant and which the 1st Defendant had failed to deliver.
Interest on the said sums.
In response to the third party’s counterclaim, the defendants have averred in paragraph 21 of their
Amended Reply and Defence to Counterclaim that:
21. The Defendants will contend that the said uniforms fabrics are available for collection by the Ministry of Education and aver that the said uniform fabrics were not sewn because the Ministry illegally abrogated the contract for sewing the school uniforms as averred above and this act resulted in the arrears owed to the Plaintiff to attract interest.
The evidence given by the third party on their counterclaim is that the 1st defendant has delivered a total of 220,004 school uniforms to the Ministry of Education out of the total agreed uniforms of 351,000 and that, as a result, the 1st defendant has failed to supply about 130,966 school uniforms which are therefore still outstanding. These school uniforms, which are yet to be supplied by the 1st defendant, were to be sewn out from a quantity of 155, 312 yards of fabric valued at GH₵652,310.40 which the 1st defendant has collected from the fabric manufacturer. The 1st defendant does not deny that it has, in fact, failed to supply 130,966 school uniforms, under the contract, to the Ministry of Education. The testimony of the 1st defendant on the counterclaim is, as stated in paragraph 52 of its witness statement that:
52. The Defendants will contend that the said uniforms fabrics are available for collection by the Ministry of Education and aver that the said uniform fabrics were not sewn because the Ministry illegally abrogated the contract for sewing the school uniforms as averred above and this act resulted in the arrears owed to the Plaintiff to attract interest.
From the evidence on record, in respect of the counterclaim, the court can deduce that the Ministry of Education has already paid for the cost of the fabric and that that is why the 1st defendant says that the said “fabrics are available for collection by the Ministry of Education”. The reason given by the 1st defendant for failing to sew the 155,312 yards of fabric into school uniforms is, in the opinion of the court, untenable. This is so because the 1st defendant has agreed under the contract, exhibit G herein, that the 1st defendant was to be paid, as stated in paragraph 13 of the Special Conditions of Contract for “each specified quantity delivered 21 days after the date of receipt of Claim Letter supported by the Store Receipt Voucher and Acceptance certificate issued by the Purchaser’s Authorised Representative.”
This clause in the contract implies therefore that it was not the duty of the third party, the Ministry of Education, to pre-finance the sewing of the school uniforms including the payment for the production of the fabrics and, in the opinion of the court, the fact that the Ministry of Education, on occasions, went out of its way to provide initial funding does not change the terms of the contract as agreed under clause 19.1 of the Contract Agreement.
The court holds therefore that the failure of the 1st defendant to sew the fabric, which it had lifted from the fabric manufacturer, into school uniforms constitutes a breach of contract. The Ministry of Education is therefore right to ask the 1st defendant to pay for the value of the fabric which is given as GH₵652,310.40.
The court will therefore enter judgment for the third party and consequently order the 1st defendant to pay the sum of GH₵652,310.40 to the Ministry of Education together with interest at the prevailing bank rate from 4th June 2014, the date the counterclaim was filed, up to the date of final payment.
The court will award costs of GH₵100,000.00 in favour of the plaintiff against the defendants and GH₵50,000.00 in favour of the third party against the 1st defendant.