ACCRA - A.D 2016

DATE:  26TH JULY, 2016
SUIT NO:  AC/07/2014

Plaintiff claims the following reliefs endorsed on its amended writ against the defendant:

i. Specific performance.

Or in the alternative

Special damages of US$113,233.80 or its cedi equivalent of GH¢293,726.93 being the money spent on the due diligence exercise and the monies spent in the preparation for the acquisition of the controlling stake in the Defendant Company.

ii. An injunction restraining the Defendant, whether by itself or by its servants or agents or otherwise howsoever, from doing the following acts or any of them, that is to say, parting or dealing with or disposing of any of its shares otherwise than to the Plaintiff.

iii. An Injunction restraining the Defendant Company from registering the transfer of the shares to any other parties than the Plaintiff.

iv. Damages for breach of contract.

v. Interest on any sum found due at such rate and for such period as the honourable court shall deem fit.

vi. Further or other reliefs.

vii. Costs.


In the statement of claim that accompanied the writ, plaintiff who glorify itself as a specialist in mortgage finance in Ghana claim to have made certain approaches to the defendant, with intent to acquiring a controlling stake in defendant’s entity. Defendant acceded to the request of Plaintiff but granted plaintiff a three month exclusivity period on 15th January, 2014, to conduct due diligence on defendant company with view to making an offer to acquiring defendant company.


Plaintiff then asseverates that it did conduct its due diligence and expended considerable amount of money running into over hundred thousand US dollars after which it did make a definite offer to defendant to acquire a majority shares in Defendant Company on the 5th of February, 2014. To defendant the offer was duly and unequivocally accepted by the defendant on the 3rd of March, 2014. Based on the acceptance of its offer it further paid monies to the tune of US$69,421.07 to a company by name Harborough Ltd to solicit for the sum of 11 million US dollars to acquire Defendant Company. Plaintiff further notes that to its dismay, defendant has called an annual general meeting and sought the approval of its shareholders for the recapitalization of defendant by its majority shareholder, being National Investment Bank (NIB). And due to that defendant seems to have resiled from the agreement it has with Plaintiff notwithstanding the remonstrations made by plaintiff.


Plaintiff then particularizes the special damage it has suffered which comes to a total of US$113,233.80 or its cedi equivalent of Ghc293, 726.93 and accordingly prays for the reliefs endorsed on the writ of summons.



Defendant has denied that it is liable to be mulcted in any kind of damage or liable in law to be compelled to specifically perform any contract as there had been no contract. To defendant, Plaintiff was among a number of entities that expressed interest in acquiring shares in defendant and plaintiff was accepted subject to further negotiations and approval by the defendant’s shareholders and Bank of Ghana. Defendant further answer that plaintiff ought to have known that the board of directors of defendant do not have the mandate to accept an offer for the transfer of shares without the consent of its shareholders and bank of Ghana. Besides the share and purchase agreement that was to be prepared for signing was also never done. And as the shareholders have refused their consent there is nothing it could do and is therefore not liable for any expenses incurred by plaintiff.


As the pretrial conference failed to settle the matter between the parties the following were set down for trial by the pretrial Judge:

1. Whether or not a contract was formed between the Plaintiff Company and the Defendant Company on the 3rd of March, 2014 when the Board of Directors sent a letter accepting the Plaintiff Company’s offer.

2. Whether or not the Defendant breached the said contract by calling an Annual General Meeting (AGM) seeking shareholders’ approval for the recapitalization of the Defendant Company by the National Investment Bank (NIB) thereby increasing the shareholding of National Investment Bank (NIB) further when same had been offered to the Plaintiff Company.

3. Whether or not by making an unequivocal and unconditional acceptance on the 3rd of March, 2014 of the Plaintiff Company’s offer, the Directors of the Defendant Company had represented to the Plaintiff Company that they had obtained all the necessary consent including that of the shareholders to sell and/or transfer the relevant shares to the Plaintiff Company.

4. Whether or not contracting parties failing to execute a sale and purchase agreement between them invalidates any contract already formed.



Being a civil trial it is well known that the party alleging a fact bears the burden of persuasion and the burden of producing evidence, both being components of the burden of proof. See sections 11(1) and and 12 of the Evidence Act. This is put better in the Supreme Court case of ABABIO v AKWASI III [1994-95] GBR 774 where the court noted as follows: 

“a party whose pleadings raised an issue essential to the success of his case assumed the burden of proving such issue. The burden only shifted to the defendant when the plaintiff has adduced evidence to establish the claim”


The plaintiff testified through its representative, being its internal auditor, Emmanuel McCarthy and tendered as much as twenty nine documents. Most of them had to do with its quest to show the expenses it incurred in an attempt to prove its entitlement to special damages. However, key among its documents in support of the claim of the existence of a contract having come into being include among others, the following vital documents: a letter from defendant authorizing the plaintiff to commence a due diligence exercise for two month as Ex ‘A’, Exhibits B to Z to CC are all concerned with one expenditure or the other made by plaintiff. Ex ‘DD’ and ‘EE’ will be very crucial in resolving the existence or non-existence of a contract between the parties.


Defendant on the other hand testified through its General Manager Finance & Strategy, Joseph Kyeremeh. Most of its documents had earlier been admitted into evidence through the plaintiff. But key among the documents tendered were Exhibits 1 to 8 being series of correspondence between the parties. The court is invited to determine whether there had been any contract between the parties. As plaintiff bears the burden with respect to this allegation, how did plaintiff prove this claim?


Plaintiff in its statement of claim and per the evidence of its representative had made the court aware that it had expressed the desire to own the majority of the shares of defendant. There seems to be no dispute whatsoever about this claim at all as per Ex ‘A’, defendant approved the interest shown by the plaintiff and gave plaintiff a two month period to conduct its due diligence with the aim of acquiring defendant’s company.


There is evidence that with the completion of due diligence, plaintiff wrote per Ex ‘DD’ where plaintiff details out its interest to acquire defendant and how it plans to make it a viable entity. Defendant’s response is curious and worth quoting:

“The Board of Directors of First Ghana Savings and Loans Ltd (FGSL) at its meeting on 27th February, 2014 approved your offer for the purchase of forty million ordinary shares at Ghc0.25, valued at Ghc 10 million and 57% controlling stake in FGSL.

The board also authorized the preparation of the sale and purchase agreement that should incorporate the GHL strategy after acquisition ….

We are therefore, by this letter informing you to liaise with FGSL Management for the preparation and signing of the sale and purchase agreement”.


This was positively identified by Emmanuel McCarthy as bringing a contract into being in the following exchanges:

Q. The defendant company had no agreement with your company to sell any of its shares to it

A. My Lord, there was an agreement

Q. Can you show the court or refer the court to any such agreement that was executed by the defendant company and your company

A. My Lord I recollect there was an agreement between both parties which was supposed to be spelt out in a purchase and sales agreement

Q. I am suggesting to you that the defendant company never agreed to sell its shares to the plaintiff company in any written document

A. My Lord, I disagree with your position. Ghana Home Loans made an offer to First Ghana Savings and Loans which was accepted by First Ghana Savings and Loans. So … there was an agreement”


Indeed, plaintiff’s representative, though not a lawyer, was very spot on and recognized when a binding contract comes into effect as I am about to detail infra.


A binding contract comes into effect when there had been an offer, an unequivocal acceptance that does not amount to a counter offer or leave the fundamental terms of the contract still to be negotiated for. The contract is simply the agreement and not the document that defendant has so erroneously been led by its counsel to believe.


Contract has been defined as ‘a promise or set of promises which the law will enforce’. See Frederick Pollock’s Principles of Contract: A Treatise on the General Principles Concerning the Validity of Agreements in the Law of England, 7th ed. A contract therefore comes into being when there had been an exchange of promises between two or more parties or when a promise had been given in exchange for the performance of an act. What needs to be present for any agreement to be enforceable is one whether there had been a promise by one party. This usually may be reflected in the nature of an offer. And if there is an offer whether the offer has unconditionally been accepted. And if it has been accepted whether from the nature of the whole transaction there was an intention to create legal relations.


Indeed in the case of NTHC v YAA ANTWI [2009] SCGLR 117 this is how the learned Justice Date-Bah defined a valid offer and acceptance in a case where Ms Antwi had communicated her acceptance of an offer to sell a house she was living in to her and had not even paid the money long after the communication:

“Basically, an offer is an indication in words or by conduct by an offeror that he or she is prepared to be bound by a contract in the terms expressed in the offer, if the offeree communicates to the offeror his or her acceptance of those terms. Accordingly, the offer has to be definite and final and must not leave significant terms open for further negotiation. By significant, we here mean terms that are essential to the bargain contemplated. It is important to emphasize the proposition that the mere acceptance of an offer is sufficient to turn the offer into a contract, if there is consideration for it, together with an intention to create legal relations.


I will hold and find that Ex ‘DD’ emanating from the plaintiff to the defendant will constitute a valid offer that was made to the defendant. Again applying the test as to acceptance, the offer of the plaintiff was not rejected by the defendant, neither was there a counter offer nor a demand or clarification for further information. Ex ‘EE’ was clear, in in its acceptance as it provided the purchase price per share, the amount of shares being accepted for the sale etc. If this cannot constitute acceptance of an offer, then what else can constitute acceptance. I find and hold that Ex ‘EE’ was an acceptance of the offer made by plaintiff and once it was communicated to the plaintiff, a valid, binding and enforceable contract had come into being.


Counsel for defendant in his address claim that approval of the offer made by plaintiff cannot be equated to acceptance and at page 5 further claim that there were many issues for the parties to agree on to be incorporated into the sale and purchase agreement. One may ask, which issues? He himself had no clue as to the issues and little wonder could not even state one for the consideration of the court.


It is clear that it is not the use of the word ‘acceptance’ that becomes a magic word such that its avoidance does not bring a valid contract into being. In any case a simple check at the synonyms of ‘approval’ will bring out the following words – acceptance, consent, assent, compliance, acquiescence, concurrence, permission, blessing, rubber stamp, endorsement, ratification, authorization, license, validation, confirmation, backing, to go ahead, green light, ok, thumb up, among many more others. This submission of learned counsel for defendant on the use of approval and not acceptance, with profound respect, was extremely pedestrian and peripheral.


For in the case of FOFIE v ZANYO [1992] 2 GLR 475 the Supreme Court noted, among others, that acceptance of an offer must be some form of positive evidence by words, in writing or conduct from which acceptance can reasonably be inferred, the acceptance would have to be communicated to the offeror and that there was no need for specific method of acceptance of an offer. All these are met in this case. See also NTHC v YAA ANTWI supra.


Two false claims were put up by the defendant in a weak attempt to parry off the charge of the plaintiff and it is necessary that I raise them and expose how they cannot be used as a ruse to enable the defendant escape the consequences of its civil liabilities. First is what is claimed by defendant that it approved the transaction subject to the further approval of its shareholders. Its representative states in paragraph 19 of is witness statement that “at no time during the negotiation that the shareholders of the defendant company agreed to sell their shares to the Plaintiff. The second one is what defendant claims is the need to seek the approval of the Bank of Ghana for the sale. Two were stated by Mr. Kyeremeh under cross examination in the following:

“Q: So you agree with me that your company had settled on the plaintiff’s company in respect of the acquisition of the shares.

A. My Lord as I said earlier, we needed the shareholders’ approval, and then even after the shareholders’ approval, the Banking Act and specifically the Non-banking Financial Act, 2008, Act 774, specifically states that any financial institution regulated by the Bank of Ghana need prior approval for the sale of a majority shares to individual or company. So we needed a shareholders’ approval and finally the Bank of Ghana which was not done”.


This is far from the truth. The answer of the court on non-approval of the deal by defendant’s shareholders’ can simply be answered by the rule in Turquand’s case. That is ROYAL BRITISH BANK v TURQUAND [1843-60] ALL ER 435. The rule is to the effect that people transacting with companies are entitled to assume that internal company rules are complied with, even if they are not. This rule was later affirmed in the case of MAHONEY v EAST HOLIFORD MINING COM. [1975] LR HL 869’ where Lord Hetherly noted as follows:

“When there are persons conducting the affairs of the company in a manner which appears to be perfectly consonant with the articles of association, those so dealing with them externally are not to be affected by irregularities which may take place in the internal management of the company”.


This has been the position of the Ghana’s Company, Act 179 where under section 137 it states as follows:

A company shall act through its members in general meeting or its board of directors or through officers or agents, appointed by, or under authority derived from, the members in general meeting or the board of directors.

(2) Subject to the provisions of this Code, the respective powers of the members in general meeting and the board of directors shall be determined by the company's Regulations.

(3) Except as otherwise provided in the company's Regulations, the business of the company shall be managed by the board of directors who may exercise all such powers of the company as are not by this Code or the Regulations required to be exercised by the members in general meeting”.


I find and hold that the Board of Directors having communicated their unfettered acceptance of the offer of the plaintiff, it lies not in the mouth of the defendant to turn round to claim that their acceptance had not been approved by the shareholders’. The rule in Turquand and the Companies Act totally frown up such a defence.


Now to the claim of the transaction being subject to Bank of Ghana’s approval. The relevant portion for our dealing is section 20(1) of the Non-Banking Financial Act, Act 774 which states as follows:

“(1) A non-bank financial institution shall submit to the Bank for approval, any proposal or agreement which it intends to enter into with another party for the sale or disposal by amalgamation or otherwise of its business, or a part of its business.

(2) Subject to prior written approval of the Bank

(a) a non-bank financial institution may, other than in the ordinary course of its business, sell the whole or part of its assets in the country to another licensed non-bank financial institution”


From the evidence on record it has not been the case of the defendant that bank of Ghana did not approve the transaction. If it had not then the defendant would have pleaded frustration. The Central Bank only asked for shareholders’ approval which defendant had negligently failed to procure and why should plaintiff suffer for defendant’s own lapses when plaintiff per the Turquand’s rule was perfectly entitled in law to assume that the internal preconditions have been complied with. This ground must also fail.


Ipso facto then, the alleged holding of an annual general meeting by the defendant after a valid, binding contract had come into force does amount, to a blatant breach of the contract with the plaintiff that had come into being between the parties. I need not say more on this issue as my analysis on the first issue makes any further discussion moot.


Again, by the principle as expounded in the Torquand’s case, Mahoney, sections 137, 140 of the Companies Act, Act 179, the Board of Directors of defendant by accepting the offer of plaintiff, in law had fully represented to the plaintiff that all the necessary precondition to enable a binding contract come into being had been obtained by them.


The sections earlier quoted in Act 179 could only be supplemented by section 142 which states as follows:

“Any person having dealings with a company or with someone deriving title under the company shall be entitled to make the following assumptions, that is to say,

(a) that the company's Regulations have been duly complied with; Again see MAHONEY case supra.


Any share purchase agreement was only meant to condense and concretise the agreement that had been reached between the parties and was not meant to be what brings an agreement into being. The non-execution of the Sale Purchase Agreement does not have any effect at all on the contract that had into being.



Plaintiff claims specific performance of the contract or in the alternative special damages for breach of the contract. It is trite that specific performance is an equitable relief and granted when the court finds it just and equitable to so grant it discretionary. See STICKNEY v KEEBLE [1915] A.C 386”419. Among some of the factors that a court will have to consider in the exercise of its discretion include, among others, the following:

1. Whether there had been a part performance of the contract.

2. Whether damages will not be an adequate remedy

3. The uniqueness of the contract.

4. Whether time was of the essence of the contract.

5. Whether a third party in good faith has acquired right or interest in the subject matter.

6. Whether on the whole the court finds it just and equitable to grant the application.


See the following cases: KOGLEX LTD (NO2) v FIELD [2000] SCGLR 175; ERIC ANSONG v ALBERT GORMAN & ANOR J4/37/2011.


Considering the gamut of all these factors, I think the existence of an alternative remedy of damages should impel the court not to grant the order of specific performance. Plaintiff had asked the alternative remedy of special damages and damages for breach of contract.



Special damages are losses that is ordinarily not presumed by law. They are expenses incurred by party in respect of monies actually lost. They must specifically be pleaded, particularized and proved in court as they do not normally follow from ordinary cause. See BOHAM v EVONNA [1992] 1 GLR 287; CHAHIN & SONS v EPOPE PRINTING PRESS [1963] 1 GLR 163 SC. The greater part of the exhibits are all expenditure made by plaintiff in its quest to take over the defendant company.


Some were in respect of due diligence conducted before the acceptance of its offer whiles some, especially an amount of US$69,000.00 was in respect of payments to Harborough Ltd to enable plaintiff access an eleven million funds to recapitalize defendant. I have carefully checked the exhibits regarding the expenditures made and it is my view that all those monies are recoverable. As they are loss to the plaintiff that directly flows from the breach of the contract by defendant.


 As the court has declined the order for specific performance it is needless also for the grant of an order of injunction to restrain the defendant from transferring the shares to any person it deems. The order for the grant of an injunction to restrain a transfer of shares is also refused.



The plaintiff also seeks for general damages for breach of contract. In the Supreme Court case of


DELMAS AGENCY GHANA LTD. V FOOD DISTRIBUTORS INTERNATIONAL LTD [2007 – 2008] SCGLR 748 on the award of general damages the court held that:

‘General damages is such as the law will presume to be the natural and probable consequence of the defendant’s act. It arises by inference of the law and therefore need not be proved by evidence. The law implies general damage in every infringement of an absolute right. The catch is that only nominal damages are awarded’


In addition to the special damages the court will award general damages to the tune of Ghc40.000.00 in favour of the plaintiff.


In conclusion the reliefs that the plaintiff seeks succeeds in respect of the following:

1. An award of an amount of USD&113,233.80 or its cedi equivalent of Ghc293,726.93 as special damages.

2. General damages of Ghc 40.000.00


In respect of cost, I will mulct the defendant in cost of Ghc 40.000.00 for defending a doomed case when it had been offered ample opportunity at the pre-trial stage to have settled this matter and when the evidence was so clear that a binding contract had come into being.