IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT(COMMERCIAL DIVISION)
ACCRA - A.D 2016
NTHC LTD - (Plaintiff)
GHANA COCOA BOARD - (Defendant)
DATE: 22ND JULY, 2016
SUIT NO: OCC/05/2015
JUDGES: HIS LORDSHIP ERIC KYEI BAFFOUR JUSTICE OF THE HIGH COURT
Plaintiff, a guarantor of a loan advanced by the defendant to a company by name Dio Jean Ltd. for the purchase and delivery of cocoa for the 2012/13 cocoa season, birthed this writ out of the Registry of the court on the 9th of January, 2015 claiming the following reliefs:
i. A declaration that the arrangement between defendant and Dio Jean Co Ltd which led to an outstanding debt of GHc830.000.00 plus interest of Ghc132.800.00 carried forward from the 2011/12 season illegally deducted from the cocoa delivered by Dio Jean Co. Ltd during the 2012/13 season, is an unlawful and unethical business practice.
ii. A declaration that the decision by defendant to illegally deduct the outstanding debt of Ghc830.000.00 plus interest of Ghc 132.800.00 carried forward from the 2011/12 season is unilateral, capricious and arbitrary, in so far as it did not relate to the guarantee issued by plaintiff for the 2012/13 season.
iii. An order directed at the defendant for the immediate refund of the aggregate sum of Nine Hundred and Sixty-Two Thousand, Eight Hundred Ghana Cedis.
iv. Interest on the amount of GHc962.800.00 at the prevailing bank rate and/or commercial lending rate of interest from 16/10/12 continuing till date of final payment.
STATEMENT OF DEFENCE
Plaintiff provides the basis of his claim to the reliefs in a ten paragraph statement of claim that accompanied the filing of the writ. Plaintiff claims that defendant extended credit facilities to the tune of ten million Ghana Cedis for the purchase of cocoa to Dio Jean Ltd, a licensed cocoa buyer for the 2012/13 cocoa season. As part of the conditions for the grant of the loan it was required to provide a guarantee for the due repayment of the debt of Dio Jean Ltd in the event that Dio Jean Ltd failed to deliver cocoa to the tune of the amount provided it by defendant.
Plaintiff further avers that it did provide an unconditional guarantee defendant requested for from Dio Jean Ltd. Subsequently, Dio Jean Ltd failed to make cocoa deliveries to the level of monies advanced to it prompting defendant to call on the guarantee Plaintiff provided. Plaintiff again claim that it paid an amount of Ghc1.990.581.80 to defendant but later realized that the monies it paid; an amount of Ghc830.000 plus its interest of Ghc132.800 being component of Ghc 1.990.581.80 was as a result of illegal and unethical business practices between defendant and Dio Jean. And that this amount of Ghc830.000 together with its interest did not emanate from the debt that arose out of 2012/13 cocoa season but a previous debt that had been carried forward. To plaintiff this was not within the scope of the guarantee it provided and hence its claim for a refund of the aggregate sum of Ghc 962.800.00 from the defendant.
Defendant has resisted the claim of Plaintiff contending that plaintiff’s story had previously been raised in previous meetings with defendant and had been discounted. And after those issues had been dismissed by defendant that plaintiff went ahead to pay the monies it had undertaken to pay to defendant and what plaintiff is alleging is rehash of what it had said before.. Defendant further deny of any collusion or arrangement with Dio Jean to roll over any debt of Dio Jean into 2012/13 cocoa season.
ISSUES FOR TRIAL
With the pre-trial conference failing to resolve the matter between the two parties the following were agreed as issues set down for determination:
1. Whether or not an outstanding debt of Ghc830.000.00 plus interest of Ghc 132.800.00 from seed fund guaranteed by plaintiff for the 2012/13 cocoa season was carried forward from the 2011/12 cocoa season and illegally deducted by defendants from cocoa delivered by Dio Jean Ltd during the 2012/13 season.
2. Whether or not Plaintiff was aware of the arrangement between defendant and Dio Jean Ltd as to the said illegal deductions.
3. Whether or not plaintiff is stopped from maintaining the present action in the face of the judgment in Suit no. AC 726/14 entitled Ghana Cocoa Board v NTHC Ltd.
4. Any other issues arising out of the pleadings
EVALUATION OF THE EVIDENCE AND APPLICATION OF THE LAW
The court in exercise of its powers vested in it under Order 33 Rule 3 of the High Court (Civil Procedure) Rules, C.I 47 slated the third issue as to whether or not a previous default judgment obtained in Suit No. AC 726/14 operated as a res judicata or not for preliminary trial. The court in its ruling delivered on the 19th January, 2016 held that the default judgment obtained would not operate as res judicata as the present action of the plaintiff was not within the scope of the issues that became the subject of the judgment in the earlier suit between the parties. (See my ruling on the 19th January, 2016.
What is left for determination in this suit is the first two main issues as to whether any illegal and unethical business practices between defendant and Dio Jean led to a rollover of an amount of Ghc 968.000 from 2011/12 season and if so whether the plaintiff was aware.
But first some few guiding rules on burden of proof assumed by the parties in this suit as that would be very critical in resolving the issues between the parties. It is a notorious and settled principle of evidence that a party making a claim bears both the burden of producing evidence and burden of persuasion, the two being components of the burden of proof. The burden of persuasion is defined in section 10 of the Evidence Act, NRCD 323 to mean:
“For the purposes of this Decree, the burden of persuasion means the obligation of a party to establish a requisite degree of belief concerning a fact in the mind of tribunal of fact or the court
(2) the burden of persuasion may require a party
(a) to raise a reasonable doubt concerning the existence of a fact or
(b) to establish the existence or non existence of a fact by a preponderance of the probabilities or proof beyond reasonable doubt”
The burden of producing evidence on the other hand is defined in section 11 as follows:
“(1)For the purpose of this Decree, the burden of producing evidence means the obligation of a party to introduce sufficient evidence to avoid a ruling against him on the issue.
(4) In other circumstances, the burden of producing evidence requires a party to produce sufficient evidence so that on all the evidence a reasonable mind could conclude that the existence of a fact was more probable than its non-existence”.
Per section 14 of the Decree, 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 whiles section 17 governs the allocation of the burden of producing evidence. It notes that the burden of producing evidence of a particular fact is on the party against whom a finding on the fact would be required in the absence of further proof and that the burden of producing evidence is initially on the party with the burden of persuasion as to the fact.
In this regard Dr. S. Twum, JSC noted in the case of BAKER-WOODE v NANA FITZ [2007-2008]
SCGLR 879 that:
‘the common law has always followed the common sense approach that the burden of persuasion on proving all facts essential to any claim lies on whoever is making the claim’
The Supreme Court had earlier reiterated this principle in the 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 having made a number of allegations and praying for remedies, how did he go about discharging its obligations under the law? As factually, the plaintiff has the burden to prove and demonstrate that an amount of Ghc 830.000.00 together with interest was not incurred within 2012/13 cocoa season but a previous one. And how did the defendant rebut any claim made by the plaintiff?
Plaintiff testified by calling its Legal Officer, Augusta Andrews who testified and tendered the following documents on behalf of the plaintiff: an unconditional guarantee provided by plaintiff as Ex ‘A’, the payment made by plaintiff to defendant after judgment was obtained as Ex ‘B’, a letter written to defendant to demand a refund of what plaintiff claims are monies that were illegally and unethically it was made to pay and finally a follow up letter written by the Solicitors of the plaintiff to defendant to again demand the payment of the monies. Whiles the defendant testified through its Accounts Manager, Daniel Gyabaa and also tendered exhibits 1 to 11.
From the evidence of the plaintiff’s representative, I glean that Access Bank (then Intercontinental bank) which had provided an unconditional guarantee to defendant for 2011/12 cocoa season was called upon to make good their guarantee provided when Dio Jean failed to provide cocoa to the level of the amount advanced to it. Defendant had demanded Ghc 2,989.891.08 from Access bank, then Intercontinental bank as per Ex ‘4’ tendered by the defendant. By plaintiff’s calculation Access bank, out of the demand made on it, paid only Ghc2,146,993.90 and the difference between the amount paid and the original demand made on Access bank was Ghc830.000 plus an interest of 16% making a total of Ghc962,800 as the outstanding amount that was carried forward and illegally pushed as part of the debt of 2012/13 cocoa season.
As long as Access bank did not pay all the demanded amount of Ghc2,146.993.90; it is the case of plaintiff that there had been a collusion between the defendant and Dio Jean Ltd of an illegal agreement to push the difference to 2012/13 cocoa season for plaintiff to be saddled with liability to clear. This position which is the gravamen of the claim of the plaintiff was made evident when Davies, Esq. subjected defendant’s representative to cross examination in the following:
“Q: Look at Ex 7, how much did Access Bank pay
Q. Look at Ex 4, how much did Cocoa Board indicate to Access Bank as to the indebtedness of Dio Jean in respect of the guarantee they provided for the 2011/2012 main crop cocoa season
Q: Juxtaposing Ex 7 against Ex 4, did Access Bank pay the totality of the indebtnedness implicated in Ex 4
A. No, My Lord. But that is why it was stated in my evidence that Dio Jean Ltd held funds in respect of the 2011/2012 season and continued to purchase cocoa in the minor season for delivery and continuously reduce their debt ….”
There may be varied reasons why the whole debt demanded by defendant against Access Bank was not paid in full. One reason may be what plaintiff seems to be putting forward that the difference was carried forward to 2012/13 cocoa season. Another could be what defendant had been insisting that Dio Jean continued to deliver cocoa to reduce its level of indebtedness to defendant. The fact that the whole amount of Ghc2,989,891.08 was not paid does not in the absence of further evidence and particulars from plaintiff leads to one and only conclusion that there had been a collusion for illegal and unethical business practices on the part of defendant and Dio Jean.
It was woefully not enough for plaintiff to have made such a bare assertion and leave it there acting as if the burden of persuasion was cast on the defendant. Indeed the written submission of learned counsel for plaintiff seems to me that once plaintiff has made an assertion it suffices to prove its claim before the court. It was only when the plaintiff had adduced the necessary evidence to back its claim of illegal and unethical business practices that the burden would have shifted to the defendant to prove otherwise.
The cross examination of plaintiff representative revealed how shallow the claim of plaintiff was as the plaintiff’s representative, who had been with the plaintiff just two months before she testified showed how little she knew about the case. I will proceed to demonstrate a few of the utter lost cause that plaintiff embarked upon whiles its witness was in the box.
First when asked as to Intercontinental Bank having guaranteed the loan of 2011/12 cocoa season this is what she had to say:
“Q: I want to suggest to you that the 2011/12 operations of Dio Jean was guaranteed by Intercontinental bank
A: My Lord, I do not know that for a fact”.
One then wonders then on what basis did plaintiff come to court at all if it did not know as fact that Access Bank guaranteed the 2011/12 cocoa season loan which in another breath it turns round to claim in its statement of claim that Access Bank did not pay all the debt arising out of that loan that the said bank guaranteed. This answer is a negation of what plaintiff had asserted in its statement of claim before the court.
Plaintiff’s representative was also woeful in her answer as to how the amount plaintiff is claiming came about in the following discourse with Amenyaglo, Esq:
“Q: How did you come by the figure Ghc 830.000 as not having been paid for 2011/12 crop season
A. My Lord, it was from the value of the cocoa beans that Dio Jean delivered to Cocoa Board. When you take the value of it out of the tonnage amount for 5 million there was no way about Ghc 830.000 would have come. There was supposed to be excess of funds and upon a review and analysis of the tonnage delivered and deductions made about 830.000 was not supposed to come from the 2012/13 crop season”.
This is startling! Why? Plaintiff was not privy to the contract between Dio Jean and defendant for both 2011/12 crop season as well as 2012/13 season. Plaintiff did not have any evidence of tonnage of cocoa beans delivered by Dio Jean and was expecting defendant to have provided it that information to have shore up its floundering case and yet plaintiff’s representative is making allusions to arriving at the figure they claim from the court by analyzing tonnage of cocoa delivered. Plaintiff could not have done any analysis of tonnage of cocoa beans delivered as throughout the trial the plaintiff was completely clueless as to how much cocoa was delivered by Dio Jean to defendant.
Again, plaintiff representative whiles in the box could not even tell the court the circumstances that led to the payment of Ghc 1,990.581.80 in the following damning admission:
“Q: Can you tell the court the circumstances under which this monies were paid
A: My Lord, I have already indicated that I do not know the circumstances under which they were paid”.
Little wonder, therefore, that in the address of counsel for plaintiff, the only reference to the evidence of their own witness who had to prove their claim was in respect of her re-examination as any reference to her cross examination would have been clear to plaintiff’s counsel the lapses in their case which they were relying on before the court.
The charge of plaintiff against defendant is not a light one as it has alleged illegality against defendant. Illegality is to conduct one’s affairs in such a way as to bother on an act that is not only prohibited by statute but the law providing sanctions for a breach. Indeed what is an illegality is put succinctly by the Nigerian Supreme Court in the case of FASEL SERVICES LIMITED & ANOR V. NIGERIAN PORTS AUTHORITY & ANOR (2009) 2 CLRN at page 25 wherein the court stated on illegality as follows:
“The position of the law is that where a statute declares a contract or transactions between parties not only void but also imposes a penalty for violation, that contract or transaction is illegal ab initio. However where the legal sanction is merely to prevent abuse or fraud and no penalty is imposed for the violation the provision of the statute, the violation is merely voidable and not illegal.”
By this legal definition or implication of what an illegality is in law how would an unproven allegation of collusion amount to an illegality?
It is now a hackneyed principle of law that evidence in prove of one’s case is not just a witness mounting the box and repeating averments in a statement of claim. The case of MAJOLAGBE v LARBI  GLR wherein the court noted as follows:
“Proof, in law, is the establishment of fact by proper legal means; in other words, the establishment of an averment by admissible evidence. Where a party makes an averment, and his averment is denied, he is unlikely to be held by the Court to have sufficiently proved that averment by his merely going into the witness-box, and repeating the averment on oath, if he does not adduce that corroborative evidence which (if his averment be true) is certain to exist”
As a matter fact plaintiff’s representative contradicted some of the crucial averments made by plaintiff in its claim as I have demonstrated supra. The rule has always been as held in the case of DORIS NARTEY v CHRISTIAN KUMI  42 GMJ 182 @185 the Court of Appeal held per Yaw Appau JA (as he then was) that:
‘a party cannot in the course of hearing put up a case contrary to or inconsistent with that which he himself has put forward in his pleadings’
Also in the case of SEMANSHIE v BIH  MLRG 184 @ 195 where Dotse JA (as he then was) noted that it was an acceptable practice that whenever a party set up an entirely different case from that with which has been pleaded, then such a party must fail in his claim before the court.
On the other hand the defendant’s representative Daniel Gyabaa, notwithstanding manifold days of intensive and rigorous cross examination proved how doomed the case of the plaintiff was. The witness explained quite lucidly the business practice with regard to cocoa purchase and how when it initially called on the Access bank to make payment, it allowed and accepted cocoa deliveries from Dio Jean thereby reducing Dio Jean’s level of indebtedness to defendant. Such that at the time Access bank paid monies arising out of the guarantee it provided, that remained the only debt of Dio Jean at the time. One would ask what would have restrained defendant from asking all the monies due it from Access Bank when such Bank had provided a full unconditional guarantee to pay all the debts of Dio Jean only for it to saddle plaintiff, another guarantor with the liability to pay for a previous debt? Where is the evidence of collusion between Dio jean and defendant to engage in unethical and illegal business practice here?
Plaintiff only attempted to engage in what I will call unwarranted jurimetrics that did not in any way help its cause. I find and hold from the evidence available on record and a keen observation of the representatives of the parties that testified that there is no scintilla of evidence in support of any illegal and unlawful business practice for the carrying of any debt whatsoever for the payment by plaintiff. Plaintiff paid its just debt as per the guarantee agreement it gave.
Besides, one may ask where was Dio Jean Ltd during the whole trial. Could the presence of Dio Jean Ltd as a party or even a witness for the plaintiff not have helped matters? If Dio Jean Ltd colluded with defendant and it is the company that actually owed and for whose debt plaintiff stepped in and paid; why has plaintiff failed to pursue this company? I have considerable difficulty in appreciating why in the written address of plaintiff’s counsel he seems again to shift the onus on who was to have called Dio Jean Ltd and Access Bank to the defendant. For he states that:
“…defendant by failing to call Access Bank and Dio Jean after repeatedly stating that the debt had been settled by Access Bank and Dio Jean laboured under the illusion that it was Plaintiff’s duty to have called them, but this illusion is misplaced”
Is that so? That a party claiming that they had been a collusion in respect of unethical and illegal business practice between plaintiff and Dio Jean Ltd in respect of Dio Jeans debt now claim that by simply making that allegation defendant was duty bound to call Dio Jean Ltd to come to court to say it was not true. If plaintiff is imputing criminality to defendant, whose duty is it to establish such wild allegation. That defendant should have called the Ghana Police to say that there is no illegality as plaintiff is pontificating. The day our rules on evidence is changed to saddle a party whom allegations are made to come and disprove the averments, would have been the day Ghana would have truly entered the dark day of its legal practice.
In any case it is trite that in relations to the law on unconditional guarantee that once demand is made, the guarantor must pay without demur and pursue the borrower of the loan for its monies.
As the court has found no unethical and illegal business practice the second issue of whether plaintiff was aware of such collusion becomes a non-issue to engage my attention. If the court had found the existence of such a collusion of unethical business practices, the bigger legal issue would have been the scope of unconditional guarantee as to whether it could be made to cover debts guaranteed or not. It is needless for me to embark upon that exercise since it is now only academic, as far as this case is concerned, and any such journey would be an extravagant exercise of intellectual gymnastics. The scope of such guarantee has receive extensive judicial pronouncements in other jurisdictions of the common law tradition.
In the end the claim of the plaintiff is found to be weak, unconvincing and unproved. It is dismissed in its entirety. In awarding cost, the court is called upon to exercise its discretion. Such discretion must be exercised with considered degree of circumspection. Discretion must not only be exercised judicially but judiciously as well. Judicious means to be discreet and circumspect in balancing two competing interests in a given situation. See G.K.F INVESTMENT NIGERIA LTD V. NIGERIA TELECOMMUNICATIONS PLC (2009) 2 CLRN @ 25.
I take into consideration that there had been a trial of some of the issues earlier coupled with the fact that there was no substantial evidence for plaintiff to have embarked upon this action and in that circumstance I award cost of Ghc 15.000.00 in favour of defendant against the Plaintiff.