AFRICAN CATERING SERVICES vs. THE ATTORNEY GENERAL
  • IN THE SUPERIOR COURT OF JUDICATURE
    IN THE HIGH COURT
    ACCRA - A.D 2019
AFRICAN CATERING SERVICES - (Plaintiff)
THE ATTORNEY GENERAL - (Defendant)

DATE:  27TH MAY, 2019
SUIT NO:  AC/288/2011
JUDGES:  HIS LORDSHIP JUSTICE KWEKU T. ACKAAH-BOAFO
LAWYERS:  MR. ERIC KWAME ATIEKU FOR THE PLAINTIFF
MRS. PATIENCE ADUMOA LARTEY WITH MS. ENID MARFUL SAU FOR THE DEFENDANT
JUDGEMENT

Background:

(1) This decision is about the Defendant’s position that the Plaintiff ought to have used the United States Dollar interest rate to compute accrued interest when it filed the Entry of Judgment in this matter because the transaction was contracted in the US Dollar. In my respectful opinion it is only appropriate that I reiterate and re-state parts of my ruling dated January 10, 2019 in respect of this case which has been on-going for some time now. As stated in that ruling; this Court differently constituted on September 11, 2014 entered judgment in terms of the following orders in favour of the Plaintiff as follows:

1. That the Plaintiff recover from the Defendant the sum of USD$297,000.00 or its Cedi equivalent being GH1,098,900.00 (at the rate of GH3.70 = 1 USD which is the forex bureau rate).

2. Interest on the GH1,098,900.00 at the prevailing commercial lending rate of 32% per annum from the 3rd October 2008 till the date of final payment being GH2,227,104.00 as at 4th February 2015.

           3. Cost of GH20,000.00”.

 

(2) The Plaintiff consequently filed an ‘Amended Entry Judgment’ on February 17, 2015 and served same on the Defendant. The Defendant after being served with the Amended Entry of Judgment filed a Motion on Notice for Leave to set aside same on April 12, 2015 on the grounds that the “Plaintiff/Judgment Creditor/Respondent used the Ghana Cedi interest rate instead of the US Dollar interest rate on a transaction which was contracted in US Dollars and the judgment debt was stated in US Dollars”. The record shows that this Court differently constituted on April 30, 2015 referred the matter to the Head of Audit of the Judicial Service to “compute the exact amount that is due the Plaintiff per the judgment of this Court”. The Court also ordered both lawyers to co-operate with the Auditor.

 

(3) By a report dated 1st February 2016 and signed by Robert Nii Aryee Tackie for the Director of Audit it was concluded that “Based on the relevant information and explanations made available for the purpose of our work and subject to any other decision that may be made by the honourable court on issues raised in paragraph 9 above, it is our candid opinion that the Defendant is indebted to the Plaintiff to an aggregate amount of GH2,688,985.73 as at 31st January 2016”. The report was tendered in Court on June 15, 2016 by Mr. Robert Nii Aryee Tackie who was extensively cross-examined by both Counsel. On July 15, 2016 which was the third appearance for the cross-examination, both Counsel prayed the Court to reject the report. The Court then ordered Counsel to file written submission to outline the basis for the request and the matter was adjourned to July 22, 2016.

 

(4) The record further shows that the Court was informed that the parties had agreed further to their discussions that the Auditor should present an updated report. Consequently, a new report dated June 28, 2018 was filed at the registry of this Court. Further to the filing of that report and prior to the adoption of same the Defendant filed an application for an order to adopt a Computation of Interest prepared on behalf of the Applicant on the grounds that “upon the study of the updated report by the Auditor of the Judicial Service, it was noticed that the principal amount had been converted from the United States Dollars to Ghana Cedis”. This Court by the ruling of January 10, 2019 dismissed the application

 

To Adopt or Not to Adopt Referee’s Report:

(5) In this decision the Court is called upon to decide whether or not to adopt the referee’s report. The cover letter of the updated report dated 28th June, 2018 and signed by Robert Nii Aryee Tackie states:

“In accordance with the Court order dated 18th June 2018, we present an updated computation of amount due Plaintiff in the above-mentioned case and submit, herewith, our report for your information and necessary action, please.

In summary, the computation was updated to 31st January 2018 as follows:

a.    Amount due Plaintiff as at 31st January 2018 is Gh3,548,305.73.

b.    Interest charges computed using simple interest method over the period at the cedi prevailing commercial lending interest rate at judgment date agreed by parties at 32% amounted to Gh2,271,2015.73 as at 31st January 2018,

c.     Dollar to cedi conversion was done using exchange rate (average) prevailing in respect of each month.

d.    The principal amount of $297,000.00 was converted into Gh1,277,100.00 using the dollar exchange rate of Gh4.30 as at 31st January 2018.”

The report then attached appendices for the detailed breakdown. The report was admitted as ExhibitCE2” by the Court. Both Mr. Atieku for the Plaintiff and Mrs. Adumoa Lartey (CSA), Counsel for the Defendant/Judgment Debtor cross-examined the author of the report Mr. Robert Nii Aryee Tackie. After the cross-examination Mrs. Adumoa Lartey has prayed the Court not to adopt the report.

 

(6) To plumb the full depth of the argument of the Defendant/Judgment Debtor Counsel’s cross-examination and the argument advanced for the objection and leave no one in doubt, it is desirable to set out in extenso the cross-examination of Mr. Robert Nii Ayi Tackie by Mrs. Adumoa Lartey on Tuesday February 19, 2019. The following evidence was elicited:

“Q. You indicated to the Court that the principal amount was in Dollars and that you converted it into Cedis, can you explain to the Court why you converted it into Cedis?

A.    There was no agreed interest rate in Dollars between the parties and normally we fall on the Bank of Ghana (BOG), the feedback we had from the Bank of Ghana was they compile such rates.

 

Q. So you said you had a feedback from the Bank of Ghana, does that mean that you wrote to Bank of Ghana requesting for the applicable interest rate to be used for the principal amount which was in Dollars?

A. Yes, my Lord that is what I mean.

 

Q. Do you have the feedback from Bank of Ghana?

A. Yes my Lord, it is on my file…

 

Q. Since the principal amount was in Dollars, what you should have done was to use the monthly universal Dollar interest rate approved by the Bank of Ghana. I am putting it to you.

A. My Lord we normally fall on the BOG as I mentioned earlier and in this case, in their response they explained they do not have the rate I requested for. I do not know about the universal Dollar rate Counsel is referring to because the BOG did not give us that.

 

Q. As an Auditor, do you know why some commercial transactions are denominated in US dollars although the transactions are in Ghana Cedis?

A. My Lord what I know is about the time value of the money.

 

Q. Can you explain what you mean by the time value money?

A. My Lord it simply means that one cedi today, will not have the same value maybe in a week time or tomorrow.

 

Q. So, parties’ to commercial transactions use Dollars instead of Ghana Cedis to hedge themselves against the depreciation nature of the Ghana Cedis relative to the US Dollar.

A. Yes, my Lord that is one.

 

Q. So by having the transaction in US Dollars, they are protecting themselves against the weak nature of the Ghana Cedi, therefore when you had to apply the interest rate, the applicable interest rate should be the monthly universal Dollar interest rate approved by the BOG which is lower than the Cedi commercial interest rate.

A. My Lord I explained earlier that I do not know about this universal rate you are talking about and the BOG did not bring my attention to it. The issue of possible fall or rise in the value of rate is taken care of by our workings because we did not use one foreign exchange rate, in converting the amount from dollar to cedis, we used the average monthly rate and that takes care of any changes.

 

Q. How does it take care of the changes because this transaction was entered into by the parties in 2008 and we are in 2019 now, the dollar exchange rate in 2008 had risen steadily from 2008 to 2019?

A. My Lord if you study our workings, in the appendix, in October 2008 the exchange rate was 1.1565 and there had been changes throughout. As at January 2018, the exchange rate was 4.3 so my Lord it is not the same over the period.

 

Q. So, by converting the principal sum from Dollars into Cedis and subsequently using the commercial interest rate, the calculation was an error because the Plaintiff benefitted from our weak currency reflected in the exchange rate and also benefitted from using a relatively higher interest rate.

A. My Lord that is not the issue at all. The difference is between the value of the Cedi and the Dollar in the exchange rate and so once you use the exact exchange rate, it just take care of any weakness either in the Cedi or the Dollar. If you have the Dollar and you want it in Cedis, it is the exchange rate you use, in the same way if you have Cedis and want it in Dollars, it is the exchange rate you use and that is what we used. We used the monthly average rate.

 

Q. On that basis we dispute the basis for the calculation of the interest on the principal sum of US$297,000.

A. My Lord if it has to do with the interest rate, as I mentioned earlier, we rely on C.I. 52

 

Q. Assuming we are to use the Ghana Cedi rate which we have disputed, how did you arrive at a flat interest rate of 32% for the period?

A. My Lord we were guided by the provisions under the C.I. 52 that we should use the rate of the day of judgment.

 

Q. Do you have any evidence to show to the Court that on the day of the judgment, the prevailing interest rate was 32% because I have not seen anything.

A. My Lord when coming to submit the letter from the BOG, I will submit that also…

 

Q. I put it to you that at no point in time did the Defendant ever agree to an interest rate of 32%

A. My Lord even though we did not take minutes at our meetings, it was in one of our meetings that she in person did not come but her representative was around.

 

Q. You said you do not have any minutes so I put it to you that it is figment of your own imagination.

A. My Lord I am a referee in this case and not a party and so what parties agreed to is what we put on paper.

 

Q. So, this 32% which I am disputing, it should not have been used retrospectively for the entire period from 2008 to 2018.

A. My Lord what I have done is my understanding of C.I. 52.

 

Q. We dispute the basis of the calculation of the interest.

A. My Lord this is our understanding of the assignment given to us except the Court has a different formula for us.

 

(7) From the exchange, it is clear that according to the Court appointed referee his computation was based on his understanding of C.I 52 and the agreement of the parties in regards to the interest rate at a meeting. Based on Counsel’s request that certain documents be provided to the Court, the suit was adjourned to enable the referee provide the said documents. On February 27, 2019 when the matter was recalled, the referee tendered three (3) documents and all were together tendered as Exhibit CE3 Series. The letters were a letter from the Judicial Service requesting from the BOG interest rates, the second was the letter of response from the BOG and the third was a document “showing that the rate of interest at the date of judgment was 32%”.

 

(8) In another snippet of cross-examination, the following ensued between the referee and Counsel for the Defendant on February 27, 2019:

“Q. Can you read the 2nd paragraph of the response from the Bank of Ghana?

A. Witness reads

 

Q. I put it to you that regardless of the fact that the Bank of Ghana indicated that it does not compile US dollar rate it does not mean that the universal dollar interest rate cannot be applied to the principal sum which is in US dollars.

A. My Lord I explained earlier that I am not properly aware of any universal rate and if there was such rate and it is the appropriate rate to use, the Bank of Ghana would advise us.

 

Q. I also put it to you that the 3 month London Interbank offered rates was merely an alternative to what you requested for.

A. We had a meeting where we discussed this rates from BOG and we agreed that the LIBOR is not appropriate for this case.

 

Q. If you say you had a meeting who are you referring to?

A. I am referring to the parties

 

Q. Who was the representative of the Defendant at that meeting?

A. I do not have the name in mind but I think the other party may have the name of the rep who came.

 

Q. I put it to you that I am the lawyer for the Defendant and I was never present at any such meeting, in fact this is the first time I am ever hearing of such a meeting.

A. A rep and I think a lady came from your department.

 

Q. Can you give us the name of the lady who came?

A. I explained that we do not take minutes at our meeting so I do not have the name. All I know is that the lady came to represent the Defendant.

 

Q. I concede that there were a number of meetings which I was not present but I am aware of but I put it to you that we never agreed to disregard the 3 months London Interbank Rates.

A. As I said earlier we agreed that the LIBOR was not appropriate in this case and that is why we had to fall on the cedi rate and the cedi interest rate and that also meant we had to convert the amount from dollar to cedi before applying the interest rate.

 

Q. Now, Exhibit CE3 series and the document from the BOG dated 15/5/15 does not say that the BOG has a policy against the use of the universal dollar rate.

A. The letter does not say that but as we always do we seek advice from BOG and I am sure if there was any such rate they would have provided us with it.

 

Q. At the last adjourned date you promised to submit a document showing that at the date of

judgment the rate of interest was 32%, do you have that document with you today.

A. Yes my Lord. It is the same information we got from BOG

 

Q. Can you refer us to the place on the document?

A. That is the second page of Exhibit CE3 series and the 2 page table document behind the BOG letter and the rate of September 2014

 

Q. Per the document I have the rate for September 2014 was 27.45

A. It is true. In our meeting we agreed that these were the prime rate from BOG. There is always an agreed added rate by each bank so we agreed that the rate should be fixed at 32%.

 

Q. I put it to you that we never agreed to this added rate because it was never to our favour.

A. In our meetings that was what was agreed by both parties”.

 

The Court’s Opinion & Analysis:

(9) Essentially, from the above exchange, the Defendant takes the position that the referee was wrong in adopting a wrong interest rate to calculate the interest on the principal sum the Court entered in favour of the Plaintiff. In effect the Defendant says the interest the Plaintiff is seeking to enforce amounts far in excess of what is due it. According to the Defendant there was no agreement between the parties as to the interest rates to be adopted and therefore the Court should not adopt the report because the calculation far exceeds that which should be applied to the amounts awarded by this court being a dollar amount. In effect the Defendant contends that the interest calculated is overinflated.

 

(10) The venerable Brobbey JSC stated in his book “Practice and Procedure in the Trial Courts & Tribunals of Ghana[1]” at page 586 paragraph 1293 that.

“The objects of cross – examination are two told. First it is to weaken or nullify the opponent’s case and secondly, it is to establish facts which are favourable to the cross examiner. In effect cross – examination aims at testing the accuracy of the witness’s evidence and at giving the witness the chance to deal with the case of the cross examiner”

 

(11) In my respectful opinion the essence of cross-examination is to provide an opportunity for the cross-examiner to impeach the credibility of a witness where there are sufficient grounds to do so such as discredited evidence of previous testimony or where there is an available documentary or other evidence to impeach the qualification, experience expertise or position a witness has ascribed to himself or herself while testifying. In this case, respectfully, I am of the view that even though Counsel for the Defendant did a good job, she failed to impeach the testimony of the Court- appointed referee on the report tendered in respect of the interest.

 

(12) From the record before this Court including the Defendant’s earlier application which was dismissed I understand the Defendant’s position to be that the contract was in the US Dollars and therefore the interest should be calculated using the US Dollar interest rate. Also, the Defendant contends that it did not agree to use an interest rate of 32%. From the cross-examination above I am of the respectful view that the Defendant’s objection that the parties did not agree that the said 32% be used is problematic based on the law. This is because whilst Mrs. Adumoa Lartey initially insisted that there was no meeting between the parties at which the said agreement was reached she later conceded that there were meetings at which she was not present but her representative did not inform her of any such agreement. I note that though the referee conceded that he had no notes of the meeting, Mr. Atieku, speaking as an Officer of the Court confirmed to the Court that there was an agreement at a meeting during which the Defendant was represented. He also could not mention the name of the Defendant’s representative but was insistent that he was willing to serve a subpoena on the said individual for her to attend Court to be cross-examined if the Defendant insisted on its position.

 

(13) I further note that the Defendant’s Counsel did not insist that there was the need for the cross-examination of the said representative but maintained that there was no such agreement in the absence of minutes of the meeting. I am of the view that whilst it would have been beneficial if the referee had some notes of what transpired, the absence of same should not undermine his work. As Mr. Nii Aryee Tackie said, he is not a party to the suit and therefore has no motive to inform the Court that the parties had an agreement if there was none. On that basis I believe him. Since under the law parties can agree to the interest to be used I wish to consider same in my analysis.

 

(14) Undoubtedly, the law regarding calculation of interest in Ghana is governed by the Courts (Award of interest and Post Judgment Interest) Rules, 2005 (CI 52). Furthermore, the law settles the thorny issue regarding post judgment interest. The legislation is not lengthy and therefore to leave no one in doubt same is reproduced here in extenso as follows:

 

Rule 1 - Order for payment of interest

If the court in a civil cause or matter decides to make an order for the payment of interest on a sum of money due to a party in the action, that interest shall be calculated

a.    at the bank rate prevailing at the time the order is made, and

b.    at simple interest

but where an enactment, instrument or agreement between the parties specifies a rate of interest which is to be calculated in a particular manner the court shall award that rate of interest calculated in that manner.

 

Rule 2 - Post Judgement interest

(1) Subject to sub rule (2) each judgement debt shall bear interest at the statutory interest rate from the date of delivery of the judgement up to the date of final payment.

(2) Where the transaction which results in the judgement debt

(a)  contained in an instrument,

(b)  evidenced in writing, or

      (c) admitted by the parties

and the parties specify in the instrument, writing or admission the rate of interest which is chargeable on the debt and which is to run to the date of final payment, then that rate of interest shall be payable until the final payment.

 

Rule 3 - Enforcement of interest payment

3. Interest payable under these Rules may be levied under a writ of execution.

 

Rule 4 - Interpretation of statutory rate

(1) In these Rules statutory rate of interest is the bank rate prevailing at the time the judgement or order is made by the court.

(2) Where there is doubt as to the prevailing bank rate, the 91 days Treasury Bill rate as determined by the Bank of Ghana shall be the prevailing bank rate.

 

(15) It bears emphasizing that the law has been articulated in judicial pronouncements in a number of cases from the Supreme Court. Referring to the statutory provision reproduced above, the Supreme Court, per Date-Bah JSC, in GHANA PORTS AND HARBOURTS AUTHORITY v NOVA COMPLEX LTD [2010] SCGLR 1 at pp. 10, 15-16 stated that:

“The statutory prejudgment interest rate applies between the date of accrual of the cause of action till the date of final judgment … The post-judgment interest rate then applies from that date till date of final payment by operation of law. … Rule 2(1) of CI 52 provides that ‘each judgment debt shall bear interest at the statutory interest rate from the date of delivery of the judgment up to the date of final payment’. This “statutory interest rate” is defined in Rule 4 as ‘the bank rate prevailing at the time the judgment or order is made by the court’.”

 

(16) Again, in DACOSTA & OTHERS v OFORI TRANSPORT LTD [2007-2008] SCGLR 602 at p. 610, the learned jurist, Date-Bah JSC once more had occasion to express himself thus:

“From today, the Plaintiffs are, of course, automatically entitled to the payment of interest on the judgment debt at the post judgment statutory interest rate under rule 2(1) of CI 52, namely the prevailing bank rate, or under rule 4(2) of CI 52, where there is doubt as to the prevailing rate, the 91 days’ Treasury Bill rate as determined by the Bank of Ghana, from the date of delivery of the judgment till the date of payment.”

 

(17) The Supreme Court in cases such as BUTT v. CHAPEL HILL PROPERTIES LTD (2003-2004) SCGLR 641 and NATIONAL INVESTMENT BANK LTD. v. SILVER PEAK LTD (2003-2004) SCGLR 1008 held that the applicable interest rate to be used in a matter like the one at bar where there is a foreign currency component should be based on the applicable rate at the jurisdiction where the currency can be borrowed. See the opinion of Dr. Date-Bah JSC at page 1013 of the NATIONAL INVESTMENT BANK LTD. v. SILVER PEAK SUPRA.

 

(18) The apex Court in my respectful opinion further affirmed the above authorities but with clarification in the case of UNILEVER GHANA LTD. v. KAMA HEALTH SERVICES [2013-2014] 2 SCGLR 861. This is what the Supreme Court speaking through Benin JSC stated at page 844 of the report:

“There was this question whether interest should be paid when the contract sum was denominated in US dollars in order to preserve the value of the money against any depreciation in the cedis (see paragraph 18 of the statement of defence). Parties to a contract might choose a particular currency in order to guarantee to themselves the value of the contract sum; but liability to pay interest does not depend on what currency was used to denominate the contract sum. The type of currency used becomes relevant when the rate of interest is to be applied, for different rates of interest are applicable to transactions conducted in foreign as distinct from local currency: see Royal Dutch Airlines (KLM) v Farmex Ltd (No [1989-90] 2 GLR 682 SC, followed in Butt v. Chapel Hill Properties Ltd [2003-2004] 1 GLR 636 and National Investment Bank v Silver Peak Ltd [2003-2004] 2 SCGLR 1008. So too is interest not payable on account of the fact that the value of the principal sum has been diminished as a result of factors like inflation or devaluation of the currency; interest is payable because the vendor has kept the purchaser’s money under the contract which failed as a result of the vendor’s default”. [Emphasis Mine].

 

(19) At page 886 of the report, the apex Court in applying the law to the facts further stated that “With respect, the Court of Appeal erred because the sale contract gave the parties the option to pay the money due under the contract in local currency which option was exercised by both parties in paying for the property and making the refund. In the view of the court, having exercised the option, the parties thereby intended to be bound by the local bank rates of interest, if need be. It is not the currency denominated in the contract which matters but the currency agreed to be used and actually used and accepted by the parties for the transaction that should determine what currency rate of interest could apply”. [Emphasis Mine]

 

Conclusion & Disposition:

(20) I am of the view that where there is no evidence that the parties transacted the business in any other currency than the currency denominated in the Contract, the Silver Peak position as postulated by Date Bah JSC shall prevail. In this case however, based on the law and applying same to the facts I am of the respectful view that the circumstances show that the post judgment interest should be the prevailing bank rate as determined by the Bank of Ghana and not the USA Federal Reserve Rate. This is because the apex Court says it is not the currency denominated that matter but the currency in which the parties transacted the business.

 

(21) Further, the Plaintiff pleaded that “sometime in September, 2008, the Ministry of Foreign Affairs, Regional Co-operation and NEPAD contracted to provide catering services for the 6th African Caribbean and Pacific (ACP) summit which took place in Accra from 30th September to 3rd October, 2008”. The Plaintiff further averred that it provided the catering services and submitted an invoice and “subsequently Concord Consulting Group UCPMI, the consultant for the summit issued a cheque of GH¢142,000.00 being part-payment of the debt to the Plaintiff but the cheque was dishonoured upon presentation by the Plaintiff”.

 

(22) Indeed the judgment delivered on September 4, 2011 was to the effect that “the Plaintiff recover from the Defendant the sum of USD$297,000.00 or its Cedi equivalent being GH1,098,900.00 (at the rate of GH3.70 = 1 USD which is the forex bureau rate)”. The Entry of Judgment served was also couched in similar language. To my mind both the language used and the mode of business fit into what the Supreme Court said in the Unilever case supra that “it is not the currency denominated in the contract which matters but the currency agreed to be used and actually used and accepted by the parties for the transaction that should determine what currency rate of interest”. Though the Court was informed that the principal debt is paid the parties did not provide the Court with any information as to whether the Defendant paid same in the US Dollars or the Ghana Cedi equivalent. In any case, in an era where it is a notorious fact that the Central Bank (Bank of Ghana) is discouraging the use of foreign currency in transacting business, to my mind it strange that a government ministry is insisting on the payment of its debt by using foreign currency.

 

(23) Based on all of the above, it is my holding that the referee’s application of the prevailing local commercial bank rate as provided by the Bank of Ghana to the judgment debt was not wrong and same is acceptable. In this case there is evidence that the Parties agreed to the interest rate and therefore the referee was right to use the rate agreed to and apply the provisions of C1 52.

 

(24) In the circumstances, and further to the Court order dated 18th June 2018 the Court hereby adopts the referee’s updated report dated June 28, 2018 and tendered as ExhibitCE2” to be the report applicable in this case in regards to the interest. According ordered.

 

 

(Sgd)

KWEKU T. ACKAAH-BOAFO, J

(JUSTICE OF THE HIGH COURT)

 

...