By an amended writ of summons and a statement of claim, the plaintiff company claims against the defendant company.

A declaration that the Defendant is in breach of the contract of insurance.

A declaration that the Defendant acted fraudulent by attaching in the said policy on page 19 a limitation clause/wrong endorsement to the Plaintiff in the name of Yvonne Holdbrook.

A declaration that the Defendant by his actions is in breach of the National Insurance Commission’s rules.

An order ordering the Defendant to pay the Plaintiff the sum of US$2,355,135.14.

An order that the said sum in paragraph 4 above be paid with interest, from the 3^rd day of February 2015 until the day of Judgment or sooner at the appropriate rate.

Any or other relief.

After the service on the defendant of the writ of summons and statement of claim, the defendant entered an appearance and filed a statement of defence and, after an unsuccessful pre-trial settlement, issues were set down and the matter referred for trial. The parties filed their respective witness statements after which evidence was given by the representatives of the parties and their witnesses.

From the pleadings filed by the parties the court finds that the defendant has admitted that the defendant is a limited liability company which offers insurance services to members of the general public. It has also been admitted by the defendant that the plaintiff has been a regular customer of the defendant since October 2009. It has also been positively admitted by the defendant in paragraph 2 of its amended statement of defence that it created an Open Cover Policy/Marine Open Cover Policy insurance in favour of the plaintiff with policy number C/MRC/K09.003540Z which came into existence on the 16^th October 2009. Indeed, this Marine Open Cover Policy was tendered and received in evidence as exhibit B. Again in paragraphs 4 and 5 of its witness statement, the Managing Director of the defendant company testified that:

4. The Plaintiff Company has been a client of the Defendant Company since 2009. The Plaintiff Company maintains a Marine Open Cover Policy with the Defendant Company.

5. On the 16^th of October, 2009, the Defendant Company agreed to issue a Marine Open Cover with a policy number C/MRC/K09/003540Z to the Plaintiff Company. (Attached is a copy of the said Marine Open Cover Policy marked as “Exhibit 1”)

The testimony of the Managing Director of the plaintiff company was corroborated by the witnesses called to testify on behalf of the defendant. In paragraphs 4 and 5 of the witness statement of Audrey Megan Ankrah, the Claims Manager of the defendant, she stated that:

4. The Plaintiff Company has been a client of the Defendant since 2009.

5.The  Plaintiff’s  Marine  Open  Cover  Policy  with  the  Defendant  is  numbered C/MRC/K09/003540Z. (Referred as “Exhibit 1 in the Witness Statement of Charles Olabode Oseini).

And  in  paragraphs  4  and  5  of  the  witness  statement  of  Farodoye  Olayiwola,  the  Head  of

Underwriting of the defendant company, the said witness stated that:

4. The Plaintiff Company has been a client of the Defendant Company since 2009. The Plaintiff Company has a Marine Open Cover Policy with the Defendant Company.

5. On the 16^th of October, 2009, the Defendant Company issued the Plaintiff Company with a Marine Open Cover Policy. The Marine Open Cover Policy is numbered as C/MRC/K09/003540Z. (Referred to as “Exhibit 1” in the Witness Statement of Charles Olabode Oseini).

The law is stated quite clearly in Asante vs. Bogyabi [1966] GLR 232 that:

“Where the evidence of one party on an issue in a suit was corroborated by witnesses of his opponent, whilst that of his opponent on the same issue stood uncorroborated even by his own witnesses, a court ought not to accept the uncorroborated version in preference to the corroborated one unless for some good reason (which must appear on the face of the judgment) the court found the corroborated version incredible or impossible.”

The court finds no reason from the evidence on record to reject the corroborative evidence given by the witnesses of the defendant that the plaintiff maintains a Marine Open Cover Policy with the defendant company. This admission by the defendant company negates its contention and assertion made in paragraphs 5, 6 and 7 of its statement of defence that the plaintiff was not paying a yearly premium as required under an open cover policy; that the plaintiff failed to furnish the defendant, at the beginning of each year with an estimate of cargo to be imported during the year and again that the plaintiff was not declaring the volume of goods imported at the commencement of each voyage as required under such policies. In respect of the alleged breach by the plaintiff, the following answers were given by the Managing Director of the defendant company during his cross examination:

Q. So when you discovered that the plaintiff company was allegedly in breach of the policy did you ever write to the plaintiff company?

A. I think my underwriters did write but apart from that I discussed it severally with Mr. Charles Sethi, the MD of the plaintiff company. And all he was saying was pleading that we settle the plaintiff which I refused because it wasn’t right and proper. In fact it was fraudulent.

Q. He was fraudulent you say?

A: Yes

Q: I put it to you that the testimony you have just given to this court is untrue

A: That is not correct.

Q: You mean to say in a transaction of this magnitude your client has breached the terms of the policy. He has been fraudulent according to you and you still continue to trade with him. Is that right?

A: The plaintiff is one of my biggest clients and as such in the light of competition, we need to handle him and handle the issues carefully.

Q: What do you mean by handling the issues carefully?

A: By discussing with the plaintiff and bringing it to his attention.

Q: If he has done all these including committing an alleged crime why didn’t you insist upon the 30 days cancellation clause which enables either party to cancel the contract.

A: Apart from this policy the client has several other policies with us and in the light of competition we have to handle the issue carefully.

Q: Why could you not cancel that particular transaction out of the bigger transaction?

A: I discussed it with him and he understood and like I said it wouldn’t have been in the best interest of the company to lose the business so we manage clients so we had to manage him and manage the incident.

Q: So your testimony on Monday 27th November that the plaintiff company is a good client is untruthful. Yes or no?

A: The plaintiff client gives us a lot of business and rather than lose the business. We had to manage the issue.

From the answers given above, the court finds that even if it is true that the plaintiff company committed the breach alleged by the defendant in paragraphs 5, 6 and 7 of its statement of defence, the defendant by its conduct, in seeking to manage and handle the issues carefully, as the Managing Director puts it, waived its rights by not cancelling the policy and by continuing to receive premium under the policy from the plaintiff, and, thus, encouraging the plaintiff to labour under the belief that it had a valid Marine Open Cover Policy with the defendant under which he paid premium. The defendant is therefore estopped by its conduct from seeking to rely on the very alleged breach which it had overlooked. Section 26 of the Evidence Act, 1975 NRCD 323 is clear on this issue. It states that:

26.  Estoppel by own statement or conduct

Except as otherwise provided by law, including a rule of equity, when a party has, by that party’s own statement, act or omission, intentionally and deliberately caused or permitted another person to believe a thing to be true and to act upon that belief, the truth of the thing shall be conclusively presumed against that party or the successors in interest of that party in proceedings between

(a) that party or the successors in interest of that party, and

(b) the relying person or successors in interest of that person.

In the old English case of Pickard vs. Sears (1837) 6 Ad & El. 469 the principle of estoppel by conduct was explained as follows:

“Where one by his word or conduct wilfully causes another to believe the existence of a certain state of things, and induces him to act on the belief so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time.”

See also Obeng & Others vs. Assemblies of God Church, Ghana [2010] SCGLR 300 and Duodu and Others vs. Adomako & Adomako [2012] SCGLR 198

In respect of the transaction for which the plaintiff has sued the defendant company that is, the Marine Open Cover Policy Number C/MRC/K09.003540Z, the court finds that the defendant company has admitted that the plaintiff paid the required premium as assessed by the defendant. This admission is clearly made out in the testimony of the Managing Director of the defendant company in paragraph 17 of his witness statement wherein he stated that:

17. An amount of Eleven Thousand Three Hundred and Twenty-Seven Ghana Cedis Thirty One Pesewas (GH¢11,327.31) was debited from the Plaintiff’s Marine Open Cover Policy to cover the Bill of Lading, RCHZJG02.

Again under cross-examination the following answers were given by the Managing Director of the defendant company in respect of the payment of the required premium:

Q. It was suggested to the MD of the plaintiff company that they did not pay the premium for the shipment. I put it to you that that is wholly untrue. Yes or no?

A. No. It is true.

Q. Take a look at para 17 of your witness statement; what does it say?

A. Witness reads para 17

Q. And take a look at exhibit. 2 and tell this court what it says on the bottom.

A. It quotes the premium payable which is GH₵11,327.31 but the fact of the matter is that the premium was not paid in accordance with the dictates and requirements of the marine open cover and that is what we are saying.

Q. Was the premium paid? Yes or no?

A. Premium was paid but it has to be paid in the right manner for it to be valid.

Q. So the premium wasn’t valid nevertheless from your own admission in para 17 of your witness statement your company took the premium

A. Like I said earlier, things happened too fast when he approached us with the cover, and when the certificate was issued we were not aware of material facts guiding the operations of the policy.

Further, in respect of the defendant’s allegation that the plaintiff failed to pay its premium as it should under a marine open cover policy, the court finds that the defendant’s Managing Director has admitted at paragraph 14 of his witness statement that:

14. In 2014, the Plaintiff overpaid its Motor Insurance Policy for the year 2014/2015 so the Managing Director on the 8^th day of August , 2014, requested that we transfer the balance of One Hundred and Twenty Thousand Four Hundred and Fifty-Two Ghana Cedis, Twenty-Nine pesewas (GH¢120, 452.29) onto its Marine Policy.

The court therefore finds the defendant’s allegation of irregular or non-payment of premium by the plaintiff to be completely unsupported. On the contrary the defendant’s Managing Director’s admission shows that the plaintiff rather pays its premium regularly and, sometimes, in excess such that in respect of its motor insurance it over paid its premium for which reason it became necessary for the plaintiff to request that the excess payment be transferred to its marine open cover. The plaintiff’s case essentially is that it maintains a marine open cover policy with the defendant company and that in the month of July 2014, the plaintiff imported 1,352 bundles of reinforcing steel bars from China. According to the plaintiff, on the 20^th July 2014, the cargo was loaded onto a vessel named as MV Rui Chang Hai at the port of Zhangjiagang. The said vessel left the port of Zhangjiagang to the ports of Xingang and later to Tianjin also in China to load further cargo. Soon after departing the port of Tianjin, the MV Rui Chang Hai collided with the MV Zhong Wei 2 as a result of which the MV Rui Chang Hai sustained severe damage to the starboard side of the hull. Sea water infiltrated the cargo holds of the MV Rui Chang Hai and caused damage to plaintiff’s cargo on board the vessel. By reason of the damage, the MV Rui Chang Hai had to call at the port of Tianjin for repairs after the vessel had been salvaged by salvors. After the repair works, the cargo was reloaded, whereupon, the vessel sailed to the port of Tema in Ghana.

Upon the discharge of the plaintiff’s cargo, surveyors established, after investigations, that the cargo was damaged. The cargo was therefore depreciated at 70% to be sold to smelting companies to be used as raw materials. Meanwhile, the plaintiff put in a claim after notifying the defendant of the accident. The defendant after deliberations issued the plaintiff with a certificate of discharge but, later, failed to make good the amount on the certificate raising all sorts of reasons for not honouring the payment. The plaintiff reported the matter to the National Insurance Commission who appointed an expert to investigate the matter. The expert found the defendant liable but when finally the defendant refused to pay the recommended amount, the plaintiff proceeded with its writ of summons claiming the amount endorsed on the writ.

The defendant admits that the plaintiff imported goods made up of 1,352 bundles of reinforcing steel bars from China which were carried on the MV Rui Chang Hai. The defendant admits that the said vessel was involved in a collision with another vessel as a result of which the plaintiff’s cargo on board the MV Rui Chang Hai got damaged and was later depreciated at less than market value. However, the defendant contends that at the time that the plaintiff got the defendant to issue it with a marine insurance certificate on the 12^th August 2014, the plaintiff was already aware that the vessel had been involved in a collision on the 31^st of July 2014 and yet the plaintiff kept this fact away from the defendant. In other words, the defendant’s contention is that the plaintiff did not observe the principle of uberrimae fidei with the defendant in procuring the marine insurance certificate. This averment is contained in paragraph 19 of the amended statement of defence filed on the 21^st March 2017. Under cross examination, the Managing Director of the defendant company stated, by way of answer to a question on this allegation, as follows:

Q. Do you have any evidence in this court that the plaintiff company concealed matters before approaching your company?

A: Yes.

Q: Show the court the evidence.

A: When the claim was lodged with us, as usual, we requested for all documentations in respect of the transaction including correspondence exchanged with 3^rd parties so when the evidence was submitted, we went through the evidence and we discovered that the consignee, the insured has pre-knowledge of a potential claim. In fact there was an email that was sent to him surprisingly we couldn’t trace the date of the email which is very unusual.

Q. Do you have that document in court?

A. Yes; Exhibit H.

Q. I believe you said the date was faint on exhibit H.

A: Yes

Q: Take a look at exhibit H. Do you see that the date is clear on exhibit H?

A: This is the date of the collision. The one you are referring to.

Q: Which date are you referring to?

A: The date that the letter was written.

Q: Look at the top left hand side of the letter, do you see that. I believe the date of this letter is 25/8/14

A: Yes I have seen the date.

Q: I put it to you that there is no evidence of concealment.

A: I may have gotten the exhibit number wrong but I am sure in the course of this trial the Claims Manager will produce that document.

It is clear from the above answers that the Managing Director could not adduce any cogent evidence or at all that the plaintiff company knew of the occurrence of the marine accident before they declared their import and paid the necessary premium thereon under the Marine Open Cover Policy and that, the exhibit H upon which the Managing Director of the defendant company relied to make that allegation does not, in fact, show that on the date that the plaintiff declared its import and paid the appropriate premium the plaintiff company was aware that the MV Rui Chang Hai, which was carrying the plaintiff’s cargo, had been involved in a marine accident with another vessel and sustained injuries to its hull which had compromised the plaintiff’s cargo on board. The said exhibit H, clearly, bears the date of 25^th August 2014 contrary to the defendant’s assertion. The court also finds that the Claims Manager of the defendant, Audrey Megan Ankrah, upon whom the Managing Director relied, finally, to prove the defendant’s allegation of lack of good faith on the part of the plaintiff, could also not furnish the court with any concrete evidence to prove the defendant’s allegation. The said exhibit 4 which the witness referred to in paragraph 7 of her witness statement does not show that on the date when the plaintiff declared its import and paid the appropriate premium to the defendant, the plaintiff knew of the involvement of the MV Rui Chang Hai in a marine accident as a result of which the integrity of the plaintiff’s cargo on board had been compromised. In respect of the date of declaration of the import by the plaintiff, the Managing Director of the defendant has testified that the plaintiff caused an amount of GH₵120,452.29 standing to the credit of its motor insurance to be transferred to the marine open cover policy on the 8^th August 2014.

According to the witness, the plaintiff presented the bill of lading on the import, Number RCHZJG02, to the defendant on the 12^th August 2014 and got the defendant to issue the marine certificate of insurance, exhibit 2 herein, to the plaintiff on the 12^th August 2014. This testimony is contained in paragraph 16 of the witness statement of Olabode Oseni; the Managing Director of the defendant company, filed on the 4^th July 2017. The witness stated that on the 21^st August 2014, the plaintiff notified the defendant’s Claims Manager of the accident and that this development aroused his suspicion stating that the accident had occurred about one month before the plaintiff company made its declaration to the defendant. The defendant’s Managing Director stated that the plaintiff had known of the accident which occurred on the 31^st July 2014, since 8^th August 2014 but it waited till 21^st August 2014 before informing the defendant of same. Finally the defendant contended that the conduct of the plaintiff company violated the policy which required the plaintiff to promptly inform the defendant of any incident which may lead to a claim.

By the terms of the contract, exhibit B herein; the parties have agreed that this insurance is subject to

English Law and practice. Section 17 of the English Marine Insurance Act of 1906 states clearly that:

17. Insurance is uberrimae fidei.

A contract of marine insurance is a contract based upon the utmost good faith, and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party.

The principle of utmost good faith connotes a duty or an obligation imposed on the parties to the insurance contract to disclose all material circumstances affecting the insurance contract and to avoid making misrepresentations. Thus, the learned author, Susan Hodges, in her book Cases and Materials on Marine Insurance Law (1999), Cavendish Publishing, United Kingdom, stated at page 213 that

“The obligations to disclose and to abstain from misrepresentations constitute the most significant manifestations of the duty to observe utmost good faith. Both ss. 18 and 20 echo the rule that every ‘material circumstance’ must be disclosed to the insurer ‘before the contract is concluded’. Section 17, unlike sections 18, 19 and 20, does not specify when the duty of utmost good faith is to be observed. Whilst sections 18 and 19 spell out the duty of disclosure before the formation of the contract, the Act is silent about any such duty after the conclusion of the contract.”

In Container Transport International Inc. vs. Oceanus Mutual Underwriting Association (Bermuda) [1984] 1 Lloyd’s Report 476, Lord Stephenson, speaking of utmost good faith, stated at page 525 of the Report that

“It is enough that much more than an absence of bad faith is required of both parties to all contract of insurance”

According to Justice Steyn in Banque Keyser Ullmann vs. Skandia [1987] 1 Lloyd’s Report 69 at page 93, the duty is “… not only to abstain from bad faith but to observe in a positive sense the utmost good faith …”

See also the case of Pan Atlantic Insurance Co. Ltd vs. Pine Top Insurance Co. Ltd [1994] 2 Lloyd’s Report 427.

In view of the law, therefore, the question to determine is whether or not, on the date of the declaration of the import by the plaintiff, the plaintiff was aware or had knowledge of the accident involving the MV Rui Chang Hai, the vessel which was carrying the plaintiff’s cargo of reinforcing steel bars and yet failed to disclose this fact to the defendant. The parties do not dispute the fact that the plaintiff’s cargo was shipped on the MV Rui Chang Hai on the 20^th day of July 2014 which then commenced its voyage on the 21^st July 2014 from the port of Zhangjiagang to the ports of Xingang and Tianji all in the Republic of China to load other cargo. Again there is no dispute by the parties that the MV Rui Chang Hai was involved in a collision with the MV Zhongwei 2 on the 31^st July 2014. Indeed, there is evidence, exhibit D herein, that on Thursday 7^th August 2014, the plaintiff received email informing the plaintiff that its documents for the Rui Chang Hai are clean. Although the documents were being sent by DHL, soft copies of the invoice and the Bill of Lading were attached to the said email sent to the plaintiff on the 7^th August 2014 and received at 9.36pm.

The court finds that on the 8^th of August 2014, the plaintiff made its declaration of the shipment/import from China to Ghana to the defendant herein. Exhibit D1 bears ample testimony to this declaration made on the 8^th August 2014 and some of the information contained in exhibits D2 and D3 which are the Invoice and the Bill of Lading, respectively, are captured on the declaration exhibit D1. For instance, the value of the shipment made up of the cost and the freight amounting to $2,359,857.22 is captured on the declaration exhibit D1. The Bill of Lading number, RCHZJG02, is also captured on the declaration of shipment. As a result of the declaration made in exhibit D1, the Marine Certificate of Insurance, exhibit D4 herein, was issued by the defendant to the plaintiff on the 12^th August 2014.

From the exhibits referred to therefore, the court finds that the defendant’s Managing Director’s evidence given in paragraph 16 of his witness statement that the plaintiff presented the Bill of Lading to the defendant on the 12^th August 2014 cannot be correct. For, whiles it is correct that the defendant issued to the plaintiff, the Marine Certificate of Insurance, exhibit D4, which is the same as exhibit 2 tendered by the defendant company, on the 12^th August 2014, the court finds as incorrect, the assertion by the defendant company that the plaintiff’s declaration was made on the 12^th August 2014.

The plaintiff’s evidence is that, in the afternoon of 8^th August 2014, at about 4.32pm, the plaintiff received notification of the accident from Luis Rivera at Steel Resources and on the 11^th August 2014, the plaintiff again received notification of the accident from Cosco, the shippers. Although the defendant seems to challenge this piece of evidence given by the plaintiff, the defendant has not been able to adduce any cogent evidence as to the date on which the plaintiff received notification of the accident. All that the defendant has done is to cast empty doubt as to this piece of evidence as captured in paragraph 19 of the witness statement of the Managing Director of the defendant company where he states that “I found it suspicious that just nine days after the debit on the plaintiff’s marine open cover policy, the vessel had been involved in an accident.” It needs to be pointed out that a party does not come to court to succeed on his claim on the basis of suspicion except cogent evidence. Suspicion alone is not enough! The authorities are clear on this point. Sections 14 and 17 of the Evidence Act, 1975, NRCD 323 provides:

14.  Allocation of burden of persuasion

Except as otherwise provided by law, unless it is shifted a party has the burden of persuasion as to each fact the existence or non-existence of which is essential to the claim or defence that party is asserting.

17. Allocation of burden of producing evidence Except as otherwise provided by law,

(a) the burden of producing evidence of a particular fact is on the party against whom a finding on that fact would be required in the absence of further proof;

(b) the burden of producing evidence of a particular fact is initially on the party with the burden of persuasion as to that fact.

Thus, in the instant matter, as long as it is the defendant’s case that the plaintiff filed its declaration with the defendant at a time that the plaintiff was already aware that the MV Rui Chang Hai, the vessel which was carrying the plaintiff’s cargo of reinforcing steel bars, was involved in an accident, and thus; the plaintiff failed to observe utmost good faith with the defendant, it is the duty of the defendant to adduce cogent evidence to prove its assertion. In Bank of West Africa Ltd. v. Ackun [1963] 1 GLR 176, the Supreme Court pointed out that:

“The onus of proof in civil cases depends upon the pleadings. The party who in his pleadings raises an issue essential to the success of his case assumes the burden of proof. In the instant case the defendants accepted substantially the plaintiff’s claim but raised an additional or separate issue. The trial judge was right in placing the onus of proving this additional issue on them.”

Admittedly, the plaintiff did not make its declaration as soon as the cargo of reinforcing steel bars was shipped. ‘Shipment’ here means at the time that the cargo crossed the ship’s tackle into the ship. Obviously, that is not possible because the plaintiff require information on the Bill of Lading before it could file its declaration with the defendant. Primarily, a Bill of Lading is the most cogent evidence that particular goods have been shipped. This is vividly stated in Halsbury’s Laws of England (3rd edition) Vol. 35 at page 522 paragraph 747 where the learned author writes that

“A bill of lading thus issued is prima facie evidence of the receipt by the carrier of the goods described therein”.

This position of the law was affirmed by the court in Pan African Trading Co. and Another vs. Holland West African and Another [1976] 1 GLR 237 at 238. See also Kaguin Enterprise (Ghana) Ltd vs. Umarco (Ghana) Ltd [1999-2000] 2 GLR 682.

Thus, section 8 of the Bills of Lading Act, Act 42 provides that

“8. Bill of lading conclusive evidence of shipment

A bill of lading in the hands of a consignee or endorsee for valuable consideration representing goods to have been shipped on board a vessel, is, subject to section 4, conclusive evidence of the shipment as against the master or any other person signing the bill of lading, unless the holder of the bill of lading had actual notice at the time of receiving it that the goods or any of them had not been in fact loaded on board.”

The fact that the Bill of Lading was needed before a proper declaration could be filed by the plaintiff with the defendant company is revealed by the following dialogue which took place under cross examination of the Managing Director of the defendant company

Q: The information that is put into the declaration form, where does that information come from?

A: It should come from the plaintiff. Who has all the details of the shipment

Q: I put it to you that the information that is inserted into the declaration form which is later sent to your company comes from the bill of lading. Is that right?

A: Not at all because that same information could be obtained from a Proforma invoice.

Q: Without the bill of lading how would you know the quantity of the cargo, details of the voyage, and the name of the vessel?

A: Every other information you mentioned is in the Proforma invoice except the name of the vessel and the name of the vessel is not absolutely important at the time of the buying of the marine insurance cover.

Q: So the information on the Proforma invoice where does that come from?

A: The plaintiff or my client supplies that information

Q: I put it to you that the plaintiff takes it from the bill of lading when it is received.

A: He has been advised on a number of occasions not to wait for the bill of lading. The Proforma invoice will do.

Q: I put it to you that the plaintiff takes that information on receipt of the bill of lading from his agent. Can you answer yes or no?

A: I wouldn’t know but based on our advice, he should have just sent us the information on the Proforma invoice.

Q: Can you take a look at exhibit D1 in the plaintiff’s witness statement and also D3. Do you accept that D1 is a declaration form? Yes or no?

A: No.

Q: Look at D1 carefully.

A: Sorry Yes

Q: Look at D3 also carefully. It is a bill of lading right?

A: Yes that is correct.

Q: Do you accept that the information on the bill of lading is the same information on the client’s form of declaration?

A: Yes. It is the same but we don’t require all that information. We have already told the client in many times the only information required from the bill of lading is the name of the vessel and the sailing date.

Q: Look at the top part of D3 do you see a bill of lading number beginning with ‘R”

A: Yes

Q: What is the number?

A: RCHZJG02.

Q: Turn to exhibit D1, the declaration; do you see the bill of lading number which you just read to the court at the bottom page?

A: Yes

Q: I put it to you that that number is there so that the insurance company can check the bill of lading information against the information supplied by the plaintiff to make sure that the information is correct.

A: Not true.

Q: And therefore the declaration form is always filled when the bill of lading is received.

A: That shouldn’t be the case

Q: I put it to you that by the time the master of the ship sends a copy to the agent and the agent sends it to your client, the vessel would have left.

A: That is why we, on a number of occasions, advised the client to use the number on the Proforma invoice.

The court finds from the answers given by the Managing Director of the defendant, that, he was deliberately refusing to accept the obvious truth about the declaration. The policy issued by the defendant herein demands that the plaintiff files a declaration of shipment whenever any cargo covered by the policy is shipped by the plaintiff. It needs to be emphasized that the declaration expected of the plaintiff is not a declaration of goods purchased by the plaintiff abroad so that a Proforma Invoice will be enough as the defendant Managing Director would want the court to believe. The fact that goods have been purchased abroad does not necessarily follow that those goods would be shipped. Hence, being a marine open cover policy, it is only when the goods purchased by the plaintiff, within the intendment of the policy, have been duly shipped that the plaintiff’s duty to declare to the defendant company arises. The declaration can, therefore, not be validly made on the strength of information contained in a Proforma Invoice as the defendant’s Managing Director seeks to suggest in his answers above. The declaration is required to state, among others, the voyage, the vessel name and voyage number, the sailing date and the date of the arrival of the vessel. In the opinion of the court, this information cannot be provided by the plaintiff except the plaintiff receives the Bill of Lading from the shipper. Bills of Lading are issued either by or on behalf of the Masters of the Ship and until the Bill of Lading is received even the quantity of goods shipped cannot be correctly stated otherwise than by guess work.

Therefore the answers by the Managing Director of the defendant that the declaration form could have been completed with information from a Proforma Invoice cannot be correct. Even in the instant matter, a soft copy of the Invoice was received by the plaintiff together with the Bill of Lading on the 7^th August 2014 as a result of which the plaintiff filed the declaration on the 8^th August 2014. From the evidence on record, the court holds that the defendant has failed to adduce cogent evidence to prove its allegation that at the time the plaintiff filed its shipment declaration with the defendant on the 8^th August 2014, the plaintiff had knowledge of the involvement of the MV Rui Chang Hai in an accident. There is no such evidence of breach of the principles of uberrimae fidei by the plaintiff in this matter and the defendant fails on this issue.

The parties have agreed and the court has also found that the policy entered into by the parties is a marine open cover policy with policy number C/MRC/K09.003540Z as indicated on exhibit B and exhibit 1. Marine Open Cover has been explained in detail by Daniel Kwaku Afriyie. In his report received in evidence as exhibit Q he states at pages 2 to 3 that:

“The Open Cover is an agreement between the merchant or shipper and the underwriters, under which the assured (cargo owner) agrees to declare, and the underwriters for their part agree to accept all shipments falling within the scope of the open cover during the stipulated period; usually one year.

Open covers are contrasted with Floating Policies. At page 3 to 4 of exhibit Q, he explains Floating Policy and states that:

Floating Policies.

Open cover are not the only form of long-term contract used for cargo insurance. An earlier method which is still very widely used, alone or in conjunction with an open cover, is the floating or open policy. The main disability of an open cover is that it is not a legally enforceable contract of insurance, duly executed policies having to be issued subsequently and premiums paid as shipments go forward.

The floating policy, similar in many respects and with the same objectives as the open cover, is on the other hand, a valid marine insurance policy complying with all the essentials of a policy as stated in the marine Insurance Act, 1906.

Since the floating policy is effected in the same manner as any other marine insurance, the floating policy will give the regular overseas trader cargo insurance in advance for all his shipments within the terms of the policy for an undefined period. A floating policy is expressed in general terms, and is usually effected for a substantial round sum insured.

As the shipments go forward, they are declared to the underwriters and endorsed on the back of the policy, the insured value of each shipment, calculated in accordance with the basis of valuation clause, customarily, included, reducing the sum assured until it is exhausted.

The period of cover afforded by the policy will, therefore, depend upon the amount of the sum insured, and the frequency and value of the shipments. The premium on the full sum insured is payable when the policy is issued.”

Section 29 (1) of the English Marine Insurance Act 1906 defines what is a floating policy. It states that:

“ 29 (1) A floating policy is a policy which describes the insurance in general terms, and leaves the name of the ship or ships and other particulars to be defined by subsequent declaration.”

By the provisions of section 29(3) of the English Marine Insurance Act, 1906,

“ (3) Unless the policy otherwise provides, the declarations must be made in the order of dispatch or shipment. They must, in the case of goods, comprise all consignments within the terms of the policy, and the value of the goods or other property must be honestly stated, but an omission or erroneous declaration may be rectified even after loss or arrival, provided the omission or declaration was made in good faith.”

As a result of the provision in section 29(3) of the 1906 Act, Professor Howard Bennett has explained in his book The Law of Marine Insurance (2^nd ed.), Oxford University Press, (2010)” at page 41, paragraphs 2.29 to 2.30 that

“The assured, therefore, is obliged to declare all eligible risks and the insurer has no option to decline a declaration. It follows from this obligatory character of a floating policy that it constitutes an immediate contract of insurance and that there is no duty to disclose material circumstance that come to light after conclusion of the floating policy but before any individual declaration.

A floating policy traditionally provides cover up to a specified maximum aggregate value. The policy is exhausted once the cumulative value of risks declared by the assured reaches that aggregate limit, while the amount of premium depends on the risks in fact declared. The existence of an obligation on the assured to declare all cargoes within the terms of the cover prevents the selective declaration of only those cargoes in peril or already the subject of a casualty.

Floating policies as traditionally drafted presented the difficulty that the assured would have to be continually alert to the cumulative value of declared risks for fear of exhausting cover and running uninsured risks. Consequently, the market developed a form of umbrella cover with no maximum aggregate but that covered all risks within the terms of the cover within a specified period of time subject to a maximum limit for each risk. This was termed an open cover”

It has been explained that because of the risk of loss of cover if the assured does not pay constant attention to the cumulative value of the declared risk, the London Insurance market developed what has come to be known as ‘open cover’ which has no maximum amount of goods to be declared for the period but which has a maximum limit for each risk within the terms of the cover within a specified period of time. Professor Howard Bennett has pointed out that the expression ‘open cover’ is ‘not a term of art of marine insurance law and is found nowhere in the Marine Insurance Act 1906’. The court holds that open covers are by themselves not enforceable contracts of insurance until duly executed policies have been issued consequent upon declarations made and the payment of premiums. In the instant matter, upon the declaration of shipment by the plaintiff herein as shown by exhibit D1, the defendant issued the plaintiff with a duly executed policy in the nature of the Marine Certificate of Insurance, exhibit D4, which is the same as exhibit 2 tendered by the defendant company, on the 12th August 2014. The importance of the certificate of insurance, exhibit D4 herein, was not lost on the defendant’s witness Farodoye Olayiwola when he answered questions thereon as follows:

Q. The certificate of insurance is issued to cover shipments falling within the terms of the open cover

A: Yes.

Q: And that includes shipments even though loss has incurred before declaration within the practice of marine insurance.

A: Yes but provided that the loss is not known to the insured.

Indeed, the marine open cover policy has been held to be comparable to a floating policy. In Glencore International AG vs. Ryan (The Beursgracht) (No.2) [2001] 2 Lloyd’s Report 608, the court held that:

Having regard to the contract terms, there was nothing in the wording either expressly or impliedly binding “R” only in circumstance in which they had received a declaration. The policy was comparable to a floating policy.

The court will hold therefore that even if the declaration made by the plaintiff was made after the MV Rui Chang Hai had been involved in an accident which led to the damage of the plaintiff’s cargo, to the extent that the defendant has not been able to prove that the plaintiff was aware of the accident and the damage cargo before making the declaration, the defendant cannot avoid liability just for the reason that at the time the declaration was made the accident had happened. The defendant company has averred at paragraph 10 of its amended statement of defence that assuming that the court finds in favour of an open cover policy at the time of the voyage, the limit the defendant would pay to the plaintiff is $120,000.00. This is because the defendant has limited its liability to the sum of $120,000.00 in the Institute Standard Conditions for Cargo Contracts which is expressed to form part of the policy. The contention by the plaintiff on this averment is that the said limitation applies to one Yvonne Holdbrook whose name has been fraudulently inserted into the contract by the defendant company and that the said Yvonne Holdbrook is unknown to the plaintiff. The defendant’s response is that the insertion of the name of Yvonne Holdbrook into the contractual documents was a typographical error committed by the defendant. Indeed, in the evidence of the Managing Director of the defendant company as well as that of Farodoye Olayiwola, they both state that the presence of the name of Yvonne Holdbrook in the contractual documents was a typographical error. The contractual documents was prepared by the defendant through its agents or employees and therefore if in so doing they made a mistake, that mistake is a unilateral mistake and not common to the parties to the contract. In the opinion of the court it will be unjust for the court to allow the defendant to rely on and benefit from its mistake at the expense of the plaintiff herein. The limit of $120,000.00 which is expressed against Yvonne Holdbrook can therefore not be extended to affect the plaintiff in this matter.

Now the plaintiff seeks to recover the sum of $2,355,135.14 together with interest from 3^rd February 2015 to the date of judgment at the appropriate rate. This claim stems out of a Discharge Form, exhibit L1, issued by the defendant to the plaintiff pursuant to insurance claim filed by the plaintiff to the defendant. The plaintiff’s claim was filed pursuant to a report, exhibit J herein, produced by Lloyd’s agent, Omega Marine Ghana Limited who was commissioned by the defendant company to carry out a survey on the condition or damage to reinforcing steel bars and to assess the extent of damage sustained by the cargo. The defendant has admitted in paragraph 15 of its amended statement of defence that it indeed appointed Omega Marine Ghana Limited to assess the extent of damage on the cargo. After the plaintiff had lodged its claim with the defendant company, on the 3^rd day of February 2015 issued the Discharge Form, exhibit L1 herein, to the Plaintiff. In the said Discharge Form, the defendant committed the plaintiff company to accept the sum of $2,355,135.14 in full and final payment of the claims made by the plaintiff on the defendant. The plaintiff has given evidence that despite it acceptance of the sum of $2,355,135.14 offered by the defendant, per exhibit L1, the defendant has refused to pay the plaintiff the amount involved. The defendant has admitted issuing the Discharge Form exhibit L1, in question to the plaintiff. It however says that it took that step to assist the plaintiff claim on a general average declared on the vessel.

The court has carefully examined the content of the Discharge Form issued by the defendant and there is nothing in that document to show that it was issued by the defendant in order to assist the plaintiff claim on a general average declared on the vessel involved in the collision or to assist the plaintiff in any claim other than the claim submitted by the plaintiff to the defendant. This allegation by the defendant infringes section 177 of the Evidence Act, 1975, NRCD 323 which provides that

177.  Extrinsic evidence affecting the contents of a writing

(1) 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 those terms may not be contradicted by evidence of a prior declaration of intention, of a 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, but 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 of agreement; and

(b) by a course of dealing or usage of trade or by course of performance.

In DONKOR v. WIH AND ANOTHER [1989-90] 1 GLR 178, the court explained that

“As a firm rule of law oral evidence could not be admitted to add to vary or contradict a deed or other written document. However on the authorities, oral evidence was admissible to show that, while on its face the document purported to record a valid and immediately enforceable contract it had been agreed to suspend its operation until the occurrence of some event which had not yet taken place. The effect of such evidence was not “to add to, vary or contradict” a written document but to make clear that no contract had yet become effective.”

See also MOTOR PARTS TRADING CO. v. NUNOO [1962] 2 GLR 195.

It must be placed on record that the declaration of general average does not in any way explain away the issuance by the defendant company of a Discharge Form to the plaintiff in the instant matter. General average is an old English concept in admiralty law. In the old English case of Birkely v. Presgrave (1801) 1 East 220 it was stated at page 228 of the report in respect of the concept of general average that

“All loss which arises as a consequence of extraordinary sacrifices made or expenses incurred for the preservation of the ship and cargo comes within general average, and must be borne proportionate by all who are interest”

Section 66 of the English Marine Insurance Act, 1906 deals with general average claims. Section 66 (1) to (3) states that

66. — General average loss.

(1) A general average loss is a loss caused by or directly consequential on a general average act. It includes a general average expenditure as well as a general average sacrifice.

(2) There is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperiled in the common adventure.

(3) Where there is a general average loss, the party on whom it falls is entitled, subject to the conditions imposed by maritime law, to a rateable contribution from the other parties interested, and such contribution is called a general average contribution.

General average is also governed by the York Antwerp Rules.

In the instant matter, the evidence given on behalf of the defendant is that as a result of the damage sustained by the MV Rui Chang Hai arising out of the collision, salvors managed to save the vessel and in the meantime demanded the postage of a general average bond by the various interest groups of the voyage. In the opinion of the court, this general average bond demanded from the persons who were interested in the voyage, has got nothing to do with the Discharge Form which the defendant issued to the plaintiff consequent upon the claim which the plaintiff made upon the defendant as its insurers. The language and the terms of the Discharge Form are clear and the court will not permit the defendant to adduce extrinsic evidence to vary the content of the said Discharge Form. The court is satisfied that the defendant is liable to the plaintiff and that the defendant accepted its liability to the plaintiff by the issuance of the Discharge Form to the plaintiff. The law is clearly stated in INUSAH v. D.H.L. WORLDWIDE EXPRESS [1992] 1 GLR 267 that:

“ the general rule was that when a document containing contractual terms was signed, then in the absence of fraud or misrepresentation, a party of full age and understanding was bound to the contract to which he appended his signature.”

In the circumstances, the court will enter judgment for the plaintiff against the defendant in the sum of $2,355,135.14. The defendant is again ordered to pay to the plaintiff interest on the sum of $2,355,135.14 at the current commercial interest rate on the dollar from 3^rd February 2015 till the date of this judgment. The court awards costs in the sum of GH¢50,000.00.to the plaintiff against the defendant.