IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL DIVISION)
KUMASI - A.D 2016
MAIMUNA ADAMS - (Plaintiff)
ERNEST ADOM & ANOR - (Defendants)
DATE: 20TH APRIL, 2016
SUIT NO: RPC/139/13
JUDGES: ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
MAVIS DOMALE FOR PLAINTIFF
K. ANSAH SUADWA FOR DEFENDANT
The Plaintiff commenced her action by a writ of summons and statement of claim issued on 25/06/2013. After two lawyers had abandoned her, she engaged the services of a third lawyer who filed an amended writ of summons and statement of claim with leave of the court on 02/02/2015. Before hearing could start, a fourth lawyer had come in and she also prayed for time to study the processes filed.
By the amended writ of summons and statement of claim, the Plaintiff sought to recover the sum of GH¢30,000.00 being the sum given to the 1st Defendant in September, 2011 for the supply of 1000 gallons of palm oil which he failed to do and the 2nd Defendant promised to refund same and thus became surety for the payment of the sum but has since failed to pay despite repeated demands for payment. She also sought to recover interest on the sum claimed. In her amended statement of claim, she gave details of how the transaction which culminated in this debt came about. Specifically, after her husband had allegedly introduced the 1st Defendant to her and upon alleged representations made by the 1st Defendant, she parted with the money for the supply of the quantities of palm oil in issue.
The Defendants denied liability in their statement of defence filed on 6/07/2013. In the said statement of defence, the 1st Defendant averred that he first transacted with the Plaintiff 's husband and did supply him with palm oil worth GH¢28,000.00. And, when he became satisfied, he gave him another GH¢28,000.00 and GH¢ 4,000.00 for the supply of additional 500 and 140 jerry cans of Palm oil which he did supply. He further asserted that he has fully discharged all his responsibilities to supply the Plaintiff (through her husband) with all the palm oil for which he was given monies on three occasions. The 2nd Defendant also averred that she never told the Plaintiff that if her son, the 1st Defendant did not pay, she will pay the Plaintiff.
The issues agreed to be tried as these:
Whether or not 1st Defendant represented to the Plaintiff that he could supply her with 1000 gallons of Palm oil?
Whether or not as a result of that representation Plaintiff paid GH¢ 30,000.00 to 1st Defendant?
Whether or not 2nd Defendant undertook to refund the said GH¢ 30,000.00 to Plaintiff at the end of September, 2011?
Whether or not the Plaintiff is entitled to her claims?
This is a purely civil suit and the rules of evidence require that the Plaintiff who has dragged the Defendants to court must prove her case on the balance of probabilities so that a reasonable mind can conclude that her claims are more probable than not. The requisite degree and standard of proof are provided for under sections 11(4) and 12 of the Evidence Act, 1975, NRCD 323 as follows:
"Sec. 11 (4)
In other circumstances the burden of producing evidence requires a party to produce sufficient evidence which on the totality of the evidence, leads a reasonable mind to conclude that the existence of the fact was more probable than its non-existence.
Sec. 12. Proof by a preponderance of the probabilities
(1) Except as otherwise provided by law, the burden of persuasion requires proof by a preponderance of the probabilities.
(2) “Preponderance of the probabilities” means that degree of certainty of belief in the mind of the tribunal of fact or the Court by which it is convinced that the existence of a fact is more probable than its non-existence."
Cases in which the above principles have been explained and applied include (Zambrama V Segbedzie (1991) 2 GLR 221, CA; Yorkwa v Duah (1992/93) GBR 278; Adwubeng v Domfeh (1996/97) SCGLR 660; Takoradi Floor Mills v Samir Faris (2005/06) SCGLR 882; Yaa Kwesi v Arhin Davis(2007/08) SCGLR 580; Sarkodie v FKA Co. Ltd. (2009) SCGLR 65 holding 1 and Abbey v Antwi (2010) SCGLR 17 at 19 (holding 2).
In the instant case, the burden of proof of all the issues for determination first rest on the Plaintiff until it is shifted onto the Defendants.
The Plaintiff gave evidence to the effect that she got to know the 1st Defendant through her husband and that the 1st Defendant said he could supply her with palm oil from Juaben. In due course, the Plaintiff said she paid the sum of GH¢ 28,000.00 to the 1st Defendant and added1000 empty gallons valued at GH¢ 2000 for the supply of 1000 gallons of palm oil. According to the Plaintiff, her husband was present when the 1st Defendant received the money. She further told the court that after receiving the money, the 2nd Defendant failed to supply the palm oil and when she threatened to report the matter to the police, the 2nd Defendant pleaded that she was going to sell her cocoa farm to pay off her son's indebtedness. The 2nd Defendant also failed to fulfill her promise. Eventually, the 1st Defendant was prosecuted for defrauding by false pretences, convicted and sentenced to a fine of GH¢500.00. She tendered a copy of the judgment of the Circuit Court, Kumasi as exhibit A. Under cross-examination by counsel for the Defendants, the Plaintiff maintained that she never received the supplies which she paid for and that she did not know anything about the 1st Defendant delivering the palm oil in issue to her husband.
The Plaintiff's husband testified as PW1. He recounted how he got to know the 1st Defendant through his mother, the 2nd Defendant. He explained to the court that he initially paid GH¢ 28,000.00 to the 1st Defendant to be supplied with palm oil and added GH¢2000 for 1000 empty gallons. That consignment was duly delivered to him. Thereafter, his wife, the Plaintiff herein, also gave the 1st Defendant the same amount of money to be supplied with 1000 gallons of palm oil from Juaben but after taking the money, they did not set eyes on him again. He also corroborated the Plaintiff's evidence as regards the 1st Defendant's conviction and sentence. He added that the Circuit Court told the Plaintiff to take a civil action to retrieve her money.
Counsel for the Defendants again subjected PW1 to a vigorous cross-examination. Tried as Counsel did to discredit the testimony of PW1, he stood to his evidence that in respect of the transaction with the Plaintiff, the 1st Defendant failed to supply the palm oil. He also rejected Counsel's suggestions that the 1st Defendant had no direct dealings with the Plaintiff.
It is on record that one lawyer entered appearance for, and filed a defence for both defendants. The 1st Defendant never came to court during the proceedings but the 2nd Defendant participated in the trial up to the time the Plaintiff closed her case. A date was set for the Defendants to open their defence but the Defendants and their counsel failed to come to court. In view of the no show, the hearing was adjourned to 11/03/2016. A hearing notice was duly served on counsel for the Defendants on 04/03/2016 and again, the Defendants and their lawyer did not attend court on 11/03/2016. At that point, the court concluded that the Defendants did not intend to be heard. 23/03/2016 was set for the filing of closing addresses. Counsel for the Plaintiff filed her address by the due date and I have looked at it for what it is worth.
In line with the Evidence Act, where a defendant fails to testify either in person or through a witness, the inference is that he or she is inviting the court to assess the Plaintiff's evidence and to decide the matter before the court on the basis of that evidence alone. This is so because in weighing the evidence on record, the court will be limited to the evidence adduced by the plaintiff (s) and/or that of their witness(es). A case in point is Re Ashalley Botwe Lands; Adjetey Agbosu & Ors v Kotey & Ors ( 2003-2004) SCGLR 420 where the following observations as regards the burden of proof were made:
... A litigant who is a defendant in a civil case does not need to prove anything; the Plaintiff who took the Defendant to court has to prove what he claims he is entitled to from the Defendant. At the same time, if the court has to make a determination of a fact or of an issue, and that determination depends on evaluation of facts and evidence, the Defendant must realize that the determination cannot be made on nothing. If the Defendant desires the determination to be made in his favour, then he has the duty to help his own cause or case by adducing before the court such facts or evidence that will induce the determination to be made in his favour. The logical sequel to this is that if he leads no such facts or evidence, the court will be left with no choice but to evaluate the entire case on the basis of the evidence before the court, which may turn out to be only the evidence of the Plaintiff. If the court chooses to believe the only evidence on record, the Plaintiff may win and the Defendant may lose. Such loss may be brought about by default on the part of the Defendant ..."
In the case before me, I accept the evidence adduced by the Plaintiff and PW1 on the failure of the 1st Defendant to supply the Plaintiff with 1000 gallons of palm oil after receiving an amount of GH¢28,000.00 and 1000 empty gallons worth GH¢ 2000 as credible. Counsel for the Defendants was not successful in discrediting their evidence.
Having looked at the evidence on record in its entirety, I find that the Plaintiff dealt directly with the 1st Defendant who had represented to her that she could supply her with 1000 gallons of palm oil from Juaben; he in fact collected GH¢28,000.00 and 1000 empty gallons worth GH¢2000 from the Plaintiff pursuant to this oral agreement but failed to supply the same.
The oral agreement between the Plaintiff and the 1st Defendant amounts to a contract of sale within the meaning of section 1 of the Sale of Goods Act, 1962, Act 137. Per the provisions of section 8(1), the fundamental obligation of the seller is to deliver those specific goods to the buyer.
Where the seller fails to deliver, the buyer may exercise the personal rights open to him or her under the Act. By the provisions of section 53, the buyer may sue the seller or damages for non-delivery. Upon proof of the case, the court may proceed to assess damages under section 54 where the measure of damages is explained as follows:
Sec. 54. Assessment of damages for non-delivery
(1) The measure of damages in an action under section 53 is the loss which could reasonably have been foreseen by the seller at the time when the contract was made as likely to result from the breach of contract.
(2) Where there is an available market for the goods, the measure of damages is prima facie to be ascertained by the difference between the market or current price and the contract price..."
Alternatively, the buyer may sue for specific performance under section 58 of the Act. In the case at hand however, the Plaintiff has sued for a refund of the monies paid and interest thereon. So long as a refund plus an award of interest will compensate her for the loss of use of her money over the period, it is my considered opinion that the result will not be any different if she had sued for damages for non-delivery.
Accordingly, the Plaintiff's action for a refund of GH¢30,000.00 against the 1st Defendant succeeds. The Plaintiff is also entitled to interest thereon at the prevailing bank rate from September, 2011, till date of delivery of judgment and post judgment interest from the date of delivery of judgment till date of final payment.
Next, I turn to the third issue which relates to the 2nd Defendant. The evidence on record is to the effect that after the 1st Defendant had failed to deliver the Palm oil, the 2nd Defendant orally promised to sell her cocoa farm to pay for the debt. What is the legal effect of that oral promise made after the payment of the money to the 1st Defendant?
On the endorsement to the writ of summons and in the pleadings, the 2nd Defendant is described as a surety who promised to pay off the debt owed by the 1st Defendant. Irrespective of the words used, that arrangement amounted to a guarantee to pay the debt owed by a third party. In other words, the word "surety" as used is synonymous with the word "guarantee".
Professor John Phillips of King's College, London in his writing on Guarantees contained in Erlinger's Modern Banking Law (2006) page 845 defined a "guarantee" as a personal undertaking by one person (the guarantor or surety) to be answerable for a liability of another (the creditor or lender). The learned author further explained at page 848 that for a guarantee to be properly constituted, it must not be for a past consideration.
That apart, for a contract of guarantee to be enforceable in Ghana, it must be in writing as provided for in section 14 of the Contracts Act, 1960, Act 25. It states:
Sec. 14. Guarantees to be in writing
(1) An agreement made before or after the commencement of this Act, by which a person
guarantees the due payment of a debt or the due performance of any other obligation by a third party, is void unless it is in writing and is signed by the guarantor or is entered into in a form recognized by customary law.
(3) For the purposes of this section and of sections 15 and 16, “guarantor” means a person who guarantees the due payment of a debt or the due performance of any other obligation by a third party.
The requirement for a guarantee to be in writing is the same at Common Law. Indeed, section 4 of the Statute of Frauds Act imposes this requirement in respect of any special promise to answer for the debt default or miscarriage of another person.
This point was well illustrated in the case of Elluah v Ankumah (1968) GLR 795. The court among other things threw out the Plaintiff's case. In respect of the undertaking by the Plaintiff to pay the debt of the defendant which was not in writing, the court stated (holding 2):
"The undertaking by the plaintiff to pay the debt of the defendant to G.N.T.C. in consideration of the assignment was a guarantee caught by section 14 (1) of the Contracts Act, 1960 (Act 25). Even if it were not so, it was a promise whereby the G.N.T.C. might obtain money from the plaintiff. As such it was caught by section 14 (2) of Act 25."
In the case before me, not only was the promise by the 2nd Defendant made orally, but it was also in respect of monies already given to the 1st Defendant. In effect, the guarantee for a past consideration was not properly constituted and it is also caught by the provisions of section 14 (2) of Act 25.
For the above reasons, there is no reasonable cause of action against the 2nd Defendant and the Plaintiff should not have sued her.
Accordingly, I enter judgment in favour of the Plaintiff against the 1st Defendant in the sum of GH¢ 30,000.00 and interest thereon at the prevailing bank rate from September, 2011, till date of delivery of judgment; and post judgment interest from the date of delivery of judgment till date of final payment.
Irrespective of the fact that the 1st Defendant never showed up in court, his lawyer came to court over a considerable period. The record shows that both parties have contributed to the undue delay in the disposal of this case. I have reviewed the provisions of Order 74 of C.I 47 on the award of cost and I hereby award cost of GH¢ 3000 against the 1st Defendant in favour of the Plaintiff.