ACCRA - A.D 2016

SUIT NO:  RPC/211/13

The Plaintiff’s claim against the Defendants in its amended writ of summons filed on 10th June 2014 is for; the recovery of GH¢172,092.69 together with interest or in the alternative the judicial sale of all properties moveable and immoveable identified as belonging to the 2nd Defendant by virtue of the Personal Counter Indemnity executed in favour of the Plaintiff.


It was the Plaintiff’s case that it was a subsidiary of Access Bank (formerly Intercontinental Bank) licensed to conduct the business of insurance. The 1st Defendant was a limited liability company which had a right to market and sell Airtel Ghana’s mobile phone and services.


According to the Plaintiff, Access Bank in partnership with the Plaintiff had an origination deal in which the Bank would provide a bank guarantee in favour of Airtel against a possible default by distributors in repayment to Airtel Ghana for airtime lifted by the distributors of which the 1st Defendant was one. The Plaintiff as part of the transaction was to provide a counter guarantee to the Bank which it did in this case.


The Plaintiff stated further that the 1st Defendant also provided a Counter Indemnity dated 23rd February 2011 to indemnify it from and against all action, proceedings, damages, claims, costs, demands or expenses, which the Bank may suffer, incur or sustain by reason or on account of the Bank having given the Bank Guarantee and to reimburse the Plaintiff in respect of all payments, which may be made by the Bank in favour of Airtel Ghana Ltd. Additionally, the 2nd Defendant issued a Personal Guarantee in favour of the Plaintiff.


The Plaintiff contended that this guarantee was extended from February 2012 till April 2012. Due to the 1st Defendant’s inability to pay Airtel, the money owed, Airtel fell on the guarantee issued by Plaintiff to recoup its money.


The Defendants in their defence stated that the Bank unilaterally cancelled its guarantee with them thus throwing them out of business. They contended that the Plaintiff only provided insurance cover for the Bank Guarantee. Therefore aside of receiving insurance premiums from the 1st Defendant the Plaintiff had no dealings with the Defendants.


The issues settled for trial of this matter are:

1. Whether or not the Plaintiff is clothed with capacity to institute the present action?

2. Whether or not the 2nd and 3rd Defendants have been wrongfully joined to the suit?

3. Whether or not the Plaintiff provided the 1st Defendant with insurance cover for the Bank Guarantee?

4. Whether or not the Plaintiff acted as surety for the 1st Defendant in the transaction with the Bank and Airtel Ghana Ltd?

5. Whether or not the 1st Defendant failed to make good on the value of the losses incurred as a result of its failure to honour the distributorship obligation to Airtel Ghana Ltd?

6.  Whether or not the Bank called in on the Counter Guarantee issued in favour of the 1st Defendant by the Plaintiff as a result of the Defendants’ failure to honour its obligations to Airtel Ghana Ltd?

7. Whether or not the Plaintiff as surety is subrogated or invested with the rights of the Bank against the Defendants?

8. Whether or not the 2nd Defendant issued a Personal Counter Indemnity in favour of the Plaintiff?

9. Whether or not the 1st Defendant issued a Corporate Counter Guarantee in favour of the Plaintiff?

10. Whether or not the Plaintiff can enforce a contract of which it is not a party?

11. Whether or not the Defendants are indebted to the Plaintiff?


In my considered opinion, the major issues of relevance here are:


Whether or not the Plaintiff provided the 1st Defendant with insurance cover for the Bank Guarantee?


Whether or not the Plaintiff acted as surety for the 1st Defendant in the transaction with the Bank and Airtel Ghana Ltd?


Whether or not the Plaintiff is clothed with capacity to institute this suit?


Whether or not the Defendants are indebted to the Plaintiff?


All the other issues would be subsidiary under these pertinent issues. The court would therefore consider the following issues first:


Whether or not the Plaintiff provided the 1st Defendant with insurance cover for the Bank Guarantee?


Whether or not the Plaintiff acted as surety for the 1st Defendant in the transaction with the Bank and Airtel Ghana Ltd?


These 2 issues would set the tone for the other issues. Whilst the Plaintiff has contended that it acted as surety for the 1st Defendant in the transaction with the Bank and Airtel Ghana Ltd, it is the Defendants’ case that the transaction they entered into with the Plaintiff was an insurance contract in which premiums were paid to the Plaintiff. Having settled their insurance premiums, they were at a loss to why they had been sued.


He who asserts must prove. The onus of proof was on the Plaintiff to prove that it had acted as surety for the 1st Defendant. The Plaintiff asserted that it had acted as surety to the 1st Defendant. It provided Exhibit C and E which it stated was its evidence of its suretyship. Exhibit E is also an application for a bond and is said to have been signed by the 2nd Defendant on behalf of 1st Defendant. The 2nd Defendant has stated in court that he never signed the document which has been attributed to him.


Exhibit C is a Counter Guarantee said to have been executed by the 2nd Defendant. It states: 




In consideration of the INTERCONTINENTAL WAPIC INSURANCE GHANA LIMITED (Surety Company) becoming Surety on the Bond applied for on the day of 22nd February 2011 in connection with Bond Number IW/0065/2011CGB/HO for a total amount of ONE MILLION GHANA CEDIS ONLY (GH¢1,000,000.00) in favour of INTERCONTINENTAL BANK GHANA LTD (Obligee), we do hereby covenant and agree to pay the premium agreed upon and we do hereby bind ourselves, liquidators and assigns, to indemnify the said INTERCONTINENTAL WAPIC INSURANCE GHANA LIMITED (Surety Company) against all loss, costs, damages, charges and expenses, whatever and however resulting from any act, default or neglect of ours or of our employees, sub-contractors and agents, that he said INTERCONTINENTAL WAPIC INSURANCE GHANA LIMITED (Surety Company) may sustain or incur by reason of it having executed the said Bond or any continuation thereof.


We further agree for ourselves, our heirs, executors, administrators, liquidators and assigns, to accept the vouchers or any other evidence of any sum paid by the said INTERCONTINENTAL WAPIC INSURANCE GHANA LIMITED (Surety Company) under the aforesaid obligations as conclusive evidence against us and our estates of the fact and extent of our liability under the obligation to the said INTERCONTINENTAL BANK GHANA LTD (Obligee)


It is further expressly agreed that the said INTERCONTINENTAL WAPIC INSURANCE GHANA LTD (Surety Company) possesses the right to redeem the Bond at its discretion even if we dispute our liability towards INTERCONTINENTAL BANK GHANA LTD (Obligee)




From a cursory reading of Exhibit C, the Plaintiff has been described as a Surety Company having become surety on the Bond applied for on 22nd February 2011. This stands to reason that Exhibit C was executed after the application made in Exhibit E. So what was the role of the Plaintiff? Was it an insurer simpliciter or something more? The Defendants do not deny that a transaction was entered into between the parties. Whilst they claim it was an insurance policy they entered into, the Plaintiff says it was a surety bond.


Exhibit W is a Banking Facility Agreement between Intercontinental Bank now Access Bank and the 1st Defendant Company. The Bank had approved the 1st Defendant Company’s request for a Bank Guarantee. The securities for the said facility were:

1. Counter Guarantee from Intercontinental WAPIC Insurance (Ghana) Ltd covering the facility

2. Joint & Several Guarantee of Mesuma Deliman Osman and Mesuna Sumaila supported with net worth statement of each director.


Therefore the facility offered by the Plaintiff to the 1st Defendant Company could not be said to be an insurance cover for which the 1st Defendant had paid premiums. It was something more than that. In Paget’s Law of Banking (13th edition) it is stated at Chapter 33 @ p. 18 thus:

A guarantee is a promise to be liable for the debt or failure to perform some other legal obligations of another. The person to whom the promise is made; in this context, the bank, may be called the creditor, the person who makes the promise is the guarantor or surety, and the other whose obligation is guaranteed (i.e. the bank’s customer) is the principal debtor.


A guarantee obligation is secondary and accessory to the obligation the performance of which is guaranteed; the guarantor undertakes that the principal debtor will perform his (the principal debtor’s) obligation to the creditor and that he (the guarantor) will be liable to the creditor if the principal debtor does not perform. Therefore the guarantor’s liability for the non-performance of the principal debtor’s obligation is co-extensive with that obligation.


By the execution of the Counter Guarantee as part of the requirements from Intercontinental Bank, the Plaintiff was a surety who would be liable to Intercontinental Bank should the 1st Defendant renege on its obligations.


Exhibits C and E were documents which the defence said they had no knowledge of. They also stated that the signature purporting to be that of the 2nd Defendant was indeed not his. Upon application by the Plaintiff, the disputed signature in addition to other signatures belonging to the 2nd Defendant was sent for forensic evaluation. Counsel for the Defence has argued in his address that the report is in respect of one Seth Laryea Mensah. Indeed that is the name on the page 3 of the 9 page report. However the terms of reference for the disputed signatures on exhibits tendered in evidence in this trial and are referable to the 2nd Defendant. The expert’s conclusion which was found in Exhibit CE 1 was as follows:

In view of the above, there appears to be some level of disguise in the execution of the signatures on documents marked “C”, “E” and “M” therefore there is an indication that Mesuna Deliman Osman could have authored the reference signatures representing him on the Counter Guarantee marked “C”, Application for Bond No. LVDN/L9178/2014 marked E and the letter on Airtel Letterhead marked “M”


The conclusion does not refer to Seth Laryea Mensah at all. This court in appointing the Expert never sent in signatures of Seth Laryea Mensah who is a stranger to the instant suit. Based on the conclusions furnished to the court and to the examination of the witness on oath, the court finds that the findings in the report refer to the signatures attributed to 2nd Defendant and to nobody else.


In Osei v. The Republic (1976) 2 GLR 383, the court held that judges may form their own opinion on disputed handwriting. I hereby proceed to do exactly that by comparing and examining the disputed signatures on Exhibits C, E and M depicted on Exhibit CE1 with the admitted genuine signatures on Specimens 1-9 also found on Exhibit CE1.. In doing so, I also take inspiration from the case of In Re: Agyekum (Deceased) Agyekum & Others v. Tackie & Brown (substituted by) Adjindah & Others (2005/2006) SCGLR 851 which becomes relevant at this point. The court stated as follows:

“The Plaintiffs/Appellants laboured under one huge misapprehension, that is, the moment they alleged forgery, the matter could only be determined by reliance on the opinion of a handwriting expert. This is not a requirement under the Wills Act, 1971 (Act 360) or the Evidence Decree, 1975 (NRCD323). This type of witness is ordinarily employed to furnish aids to the trier of facts by which he is enabled, without any personal expertise to reach conclusions as to the genuiness or lack thereof of a disputed writing. But in the last analysis, the fact-finder has both the privilege and function of reaching his own conclusion as to the genuiness of disputed signatures or other handwriting with or without the opinion evidence of a handwriting expert.”


Furthermore, the expert’s evidence must not be isolated from the rest of the evidence in the case. What is the rest of the evidence in this case? Exhibit E shows that an application was made for a bond. After this application, Exhibit C a Counter Guarantee bearing a signature said to be that of 2nd Defendant came into being. After that, Exhibit D, a Personal Counter Indemnity was said to have been executed by the 2nd Defendant. The 2nd Defendant has however denied knowledge of the signatures attributed to him.


He told the court that he had entered into a contract of insurance. So he must have signed some document. But where is the document he has signed? Where was the insurance policy he relied on?


There is a difference in the nature and legal effect of a contract of insurance as distinct from a guarantee bond. The learned authors of Chitty on Contracts (Common Law Library Series) 28th edition Volume 2 paragraph 41-001 described a contract of insurance as follows:

A contract of insurance is one whereby one party (the insurer) undertakes for consideration to pay money or provide a corresponding benefit to or for the benefit of the other party (the assured) upon the happening of an event which is uncertain either as to whether it has or will occur at all or as to the time of its occurrence, where the object of the assured is to provide against a cost or to compensate for the prejudice caused by the event, or for his old age (where the event is the reaching of a certain age by the assured) or (where the event is the death of the assured) for the benefit of others upon his death. It is these objectives which distinguish insurance from gaming or wagering.


At paragraph 44-014 the description of Performance Guarantee or Performance Bond or

Guarantee Bond is given as:

….exceptionally stringent contracts of indemnity. They are contractual undertakings normally granted by banks to pay or repay a specified sum in the event of any default in performance by the principal debtor of some other contract with a third party, the creditor. The bank or other financial institution which grants a performance guarantee will of course demand a counter guarantee or indemnity from the customer at whose request the guarantee is granted. As the customer will be liable to reimburse the bank on their payment under the guarantee, and as he will be unable to prevent the bank from paying (except in cases of fraud) when demand is made on the bank, his position is clearly perilous.


Exhibit K also shows that there was an extension of Counter Guarantee Bonds in favour of 1st Defendant Company and 3 other companies dated 6th June 2012.


On 29th October 2012, the Plaintiff wrote to the 2nd Defendant in Exhibit N. The contents of Exhibit N are as follows:


The Managing Director


DPS Company Ltd


P. O. Box BT 182


Community 2, Tema


Attn: Mr. Mesuna Osman


Dear Sir,



We refer to the above noted subject and the various discussions with you following your inability to honour your distributorship obligations to Airtel Ghana Ltd as expected.


We wish to inform you that, unlike Insurances, Bonds/Guarantees issued are only intermediary commercial papers, hence any commercial losses incurred by the Surety Company are fully and wholly recovered from the guaranteed such as your company. ……….


On the basis of the above and in view of the signed Counter and Personal and Corporate Guarantees with us, we wish to re-emphasize the URGENT need to take immediate steps to redeem your obligation to ACCESS BANK for a continued and mutually beneficial relationship.


Please note also that we will have no other option than to exercise our right over the Personal and Corporate Counter Guarantees issued to us in recovery of all losses incurred in this transaction…….


Also in evidence is a writ issued out at the instance of Access Bank (Ghana) Ltd against the 1st and 2nd Defendants and one other on 4th April 2014 almost a year after the Plaintiffs in this suit had issued their writ in June of 2013. In the 2014 writ, Access Bank had claimed against the Defendants an amount of GH¢445,626.37. Paragraphs 7, 8 and 13 of the accompanying Statement of Claim state:


Plaintiff claims that the repayment of the Bank Guarantee was to be made through sales proceeded from airtime sales, and the facilities were secured by (a) a Counter Guarantee from Intercontinental WAPIC Insurance (Ghana) Ltd dated February 22, 2011 and (b) a joint and several guarantee of the 2nd and 3rd Defendants supported with the net worth of each of them dated February 22, 2011.


Plaintiff contends that the Bank Guarantee and Counter Guarantee from Intercontinental WAPIC Insurance (Ghana) Ltd which covered an initial period of 12 months were later extended; the Bank Guarantee for a total period of 4 months thus expiring on June 28, 2012 while the 1st Defendant paid for an extension of the Counter Guarantee which expired on June 16, 2012.


Plaintiff avers further that by a letter dated September it called upon Wapic Insurance Ghana Ltd to enforce the counter guarantee by way of indemnity but the total liability of the 1st Defendant covered by Wapic Insurance amounted to GH¢172,092.99 as at the date of the expiry of the Counter Guarantee, which amount was paid to the Plaintiff on April 22, 2013 leaving total outstanding debt of GH¢327,381.56 in respect of the money paid to Airtel.


This averment has been corroborated by Access Bank’s letter dated September 28 2012 to the Managing Director of Plaintiff Company. It is referenced DEMAND NOTICE – COUNTER GUARANTEE WITH REFERENCE NUMBER (Obliterated by stamp). The contents are as follows:

We refer to your Counter Guarantee of GHS 1,000,000.00 issued to Access Bank Ltd dated June 6th 2012, a copy of which is attached.


The Bank Guarantee of GHS 1,000,000.00 issued by Access Bank to Airtel (Ghana) Limited (Airtel) on behalf of DPS Ltd (DPS) has been called in by Airtel due to non-performance by DPS under the terms of the distributorship contract.


Accordingly, a demand has been made on the Bank (please find a copy attached) to pay Airtel a sum of GHS 499, 474.25 being the indebtedness of DPS to Airtel as at August 31st 2012. (Please find correspondence attached showing details of outstanding owed by DPS).


The Counter Guarantee issued by your good selves expired on June 16th 2012, and Access Bank hereby claims payment of GHS 172,092.69 being the total indebtedness to DPS to Airtel as at June 16th 2012.


Kindly make arrangements to settle the amount herein demanded within 7 days of the date of this letter.


In Re Ashalley Botwe Lands: Adjetey Agbosu & Others v. Ebenezer Nikoi Kotey & Others (2003/2004) 1 SCGLR 420 @ 465 the court per Brobbey JSC had this to say:

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 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 that the determination to be made in his favour then he has the duty to help his own cause or case by adducing evidence before the court such facts or evidence that will induce the determination to be made in his favour. A 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 evidence before the court which may turn out to be only the evidence of the Plaintiff. if the court chooses to believe the evidence on record, the Plaintiff may win, the Defendant may lose. Such loss may be brought about by default on the part of the Defendant. in the light of the statutory provisions literally relying on the common law principle that the Defendant does not need to prove any defence and therefore does not need to lead any evidence may not always serve the best interest of the litigant even if he is a Defendant.


The Defendants who relied on the defence that what was entered into was not a bond but an insurance policy did not provide evidence of the said policy which if it existed would have been available to be tendered in court. In the age old case of Mojolagbe v. Larbi and others (1959) GLR 190, the court had this to say:

“Where a party makes an averment capable of proof in some positive way e.g. by producing documents, description of things, reference to other facts, instances or circumstances and his averment is denied, he does not prove it by merely going into the witness box and repeating this averment on oath or having it repeated on oath by his witnesses. He proves it by producing other evidence of facts and circumstances from which the court can be satisfied that what he avers is true.”


The court continued by saying:

“Proof in law is the establishment of facts by proper legal means i.e. the establishment of an averment by admissible evidence. When a party makes an averment… he is unlikely to be held by the court to have sufficiently proved that averment by merely going into the witness box and repeating that averment on oath if he does not adduce that corroborative evidence which if his averment is true is bound to exist.”


The Defendants also stated in paragraphs 24, 25 and 27 of their Statement of Defence as follows:


Defendants say as an insurer, the Plaintiff has no reasonable cause of action against the Defendants.

Defendants say whatever arrangements they might have entered into with the Plaintiff in connection with the insurance cover the Plaintiff provided for the Bank Guarantee is a product of illegality and same is void.


Defendants say that the purported Counter Guarantee and Personal Counter Indemnity as alleged in paragraphs 6 and 9 of the statement of claim if any are inequitable, unconscionable, exploitative and illegal. Defendants would pray the Honourable Court to set same aside.


From the totality of the evidence before this court, the court finds that there is no support for the Defendants’ contention that what they did enter into with the Plaintiff was an insurance contract. Although the Plaintiff is an insurance company, the contract between it and the 1st Defendant was not an insurance contract. The court finds that the Plaintiff did not provide the 1st Defendant with insurance cover for the Bank Guarantee but rather acted as surety for the 1st Defendant in the transaction with the Bank and Airtel Ghana Ltd. By the same token, the court also finds that Access Bank called in on the Counter Guarantee issued in favour of the 1st Defendant by the Plaintiff as a result of the Defendants’ failure to honour its obligations to Airtel Ghana Ltd. The Guarantee Bond issued in favour of 1st Defendant could not have been issued without the Defendants’ knowledge. Though it was their defence that the period for the bond had expired, the Access Bank had to be paid because the indebtedness existed before the bond expired.


In spite of the 2nd Defendant’s denying the signatures found on Exhibits C and E, the evidence weighs overwhelmingly in favour of the Plaintiff that there was a Surety Bond in favour of 1st Defendant and that this bond was called in by Airtel and Access Bank due to the 1st Defendant’s inability to make good on its indebtedness to Airtel. The Plaintiff’s version of events has been corroborated by the evidence on record.


Section 7(1) of the Evidence Act, 1975 NRCD 323 has it thus:

“Corroboration consists of evidence from which a reasonable inference can be drawn which confirms in a material particular the evidence to be corroborated and connects the relevant person with the crime, claim or defence.”


The Defendants claims that the said bonds were illegal have not been proven by the evidence. They also have not led any positive evidence to show that the bonds entered into were inequitable or unconscionable. In Fosua & Adu-Poku v. Dufie (deceased) and Adu-Poku Mensah (2009) SCGLR 316, the court held that Section 11(4) of the Evidence Act, 1975 NRCD 323 put the obligation in civil proceedings of producing evidence on a party to produce sufficient evidence so that on all the evidence, a reasonable mind could conclude that the existence of the fact was more probable than its non-existence.


The next issues to be considered are:

Whether or not the 2nd Defendant issued a Personal Counter Indemnity in favour of the Plaintiff?


Whether or not the 1st Defendant issued a Corporate Counter Guarantee in favour of the Plaintiff?


One of the issues settled for trial was whether or not the 2nd and 3rd Defendants were proper parties to this suit. The Plaintiff amended its writ and the amendment did not include the 3rd Defendant. The court would not have to determine whether or not the 3rd Defendant is a proper party to the suit. The court would now need to find out whether the 2nd Defendant is a proper party to this suit?


The 1st Defendant is a company limited by liability. This means that by incorporation, the 1st Defendant became a separate legal entity distinct from those who incorporated it. That is to say, the 1st Defendant was separate and distinct from the 2nd Defendant who was a Director. In the case of Salomon v. Salomon (1897) AC 22, the court was of the view the persons who controlled the company, the motives behind the formation of the company or the motives of the shareholders were all immaterial. Once duly incorporated, there was a figurative veil that separated and distinguished the body corporate from the persons who formed it. In the case of Worldwide Shipping and Agencies (Gh) Ltd v. Darko (2001-2002) GLR 488 CA, the court found that though the appellants had said they acted on behalf of a limited liability company yet they had failed to disclose the whereabouts of the company. The court quoted with approval the views of Sanborn J in United States v. Milwaukee Refrigeration Transit C, 142 Fed 247 at 255 thus:

A corporation will be looked upon as a legal entity as a general rule … but when the notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association of persons.


The law is to the effect that the veil of incorporation would be lifted if it is just and in the interest of the public so to do.


In the case of Morkor v. Kuma (East Coast Fisheries Case) (1998/99) SCGLR 620 @ 632, the court per Akuffo JSC, stated the position of the law thus:

Save as otherwise restricted by its regulations, a company after its registration has all the powers of a natural person of full capacity to pursue its authorized business. In this capacity, a company is a corporate being, which within the bounds of the Companies Act, 1963 (Act 179) and the Regulations of the company may do everything that a natural person might do. In its own name it can sue and be sued and it can owe and be owed legal liabilities. A company is, thus a legal entity with a capacity separate, independent and distinct from the persons constituting it or employed by it. From the time the House of Lords classified this cardinal principle more than a century ago in the celebrated case of Salomon v. Salomon & Co (1897) AC 22, it has subject to certain exceptions, remained the same in all common law jurisdictions and is the foundation on which our Companies Act is grounded.


From this rendition of the law which has survived for well over a century, the 1st Defendant is a company limited by liability and in a position to owe and be owed legal liabilities. It is also a separate and distinct person from its directors and shareholders. Being an artificial person, it can sue and be sued in its own capacity.


In the case of Appenteng & Others v. Bank of West Africa & Others (1961) GLR 199, the court held that a company was a separate legal personality quite apart from its members. The members, the court said, were not even collectively the company. The company was not an agent of either of its members. However the directors of the company were the company’s agents. Therefore in a transaction with the directors, the only persons entitled to a duty of care would be the legal entity.


Therefore, the proper Defendants in an action on contract would be the person or persons who made the promise and then proceeded to breach the said promise necessitating the suit. Since the 2nd Defendant had been sued jointly and severally with the 1st Defendant, he would be a proper party if the Plaintiff could establish their personal liability in the breach of the contract between the parties. Also if the veil of incorporation were to be lifted the 2nd Defendant could be held personally liable for any breaches the Plaintiff had complained of.


In the instant case, the 2nd Defendant as Director of the 1st Defendant Company signed the Application for Bond offered by the Plaintiff on 22nd February 2011. (See Exhibit E).


Exhibit D is a Personal Counter Indemnity said to have been executed by the 2nd Defendant in Plaintiff’s favour and follows from the evidence that security was provided for the facility accorded to the 1st Defendant by Access Bank. It has already been established that the Counter Guarantee, Exhibit C was executed by the 2nd Defendant on 1st Defendant’s behalf. Exhibit D would be reproduced for its full force and effect


















The signature on Exhibit D is uncannily similar to those on other documents sent for forensic evaluation. It has been established that those signatures could have been made by the 2nd Defendant. Those other documents i.e. Exhibits C, E and M were signed by the 2nd Defendant of behalf of the 1st Defendant. Since the 1st Defendant Company could not sign documents by itself being an artificial person, its Directors had to append their signatures on 1st Defendant’s behalf.  Though 2nd Defendant had executed these documents, he did not do so in his personal capacity but as a Director of 1st Defendant Company, for and on behalf of the Company.


Exhibit D however was executed in his personal capacity where the 2nd Defendant had given his own personal indemnity for 1st Defendant’s indebtedness. From the evidence, the 1st Defendant has failed to make good on the surety bond it signed with the Plaintiff. The Plaintiff, has however had to pay to Access Bank an amount of GH¢172,092.69 on 1st Defendant’s behalf. It was inevitable that the 2nd Defendant, the provider of the Personal Counter Indemnity was going to be called upon to make good on the security by paying off the amount of GH¢172,092.69 or forfeiting his personal and real property as agreed.


In Ellinger’s Modern Banking Law 4th edition (edited by E. P. Ellinger, Eva Lomnicka and

Richard Hooley at pp. 846-847 it is stated:

A guarantee is distinct from an indemnity which is an undertaking by one party to keep the other party harmless against loss arising from particular transactions, or events, and is not dependent on the continuing default of the principal debtor. An indemnity is thus in the nature of a primary rather than a secondary obligation. Unlike a guarantee, it is not required to be in writing or evidenced in writing and is usually unaffected by the fact that the obligation indemnified is void or enforceable. Additionally certain types of conduct of the creditor will discharge a guarantor but not an indemnifier.


Insofar as the 1st Defendant remains indebted to the Plaintiff, the 2nd Defendant is liable to settle any outstanding financial commitment or indebtedness of 1st Defendant to the Plaintiff. This is because of the existence of the Personal Counter Indemnity he executed in Plaintiff’s favour.


The other issues to be determined at this stage are:

Whether or not the Plaintiff is clothed with capacity to institute this suit?


Whether or not the Defendants are indebted to the Plaintiff?


Having found that the Plaintiff acted as surety for the Defendants in their transaction with Airtel and Access Bank, the Plaintiff was clothed with capacity to recover from the 1st Defendant, its obligations towards Airtel and Access Bank which it had failed to honour.


In Fibrosa Spolka Akeying v. Fairburn Lawson Combe Barbar Ltd (1943) AC 32 the court held:

It is clear that any civilized system of law is bound to provide remedies from cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from another which is against conscience that he should keep. Such remedies in English Law are generally different from remedies in contract or tort and are now recognized to fall within a second category of the Common Law which has been called quasi-contract or restitution. The principle of unjust enrichment requires:

1. That the Defendant has been enriched by the receipt of a benefit.

2. That this enrichment is at the expense of the Claimant.

3. That the retention of the enrichment be unjust.


The evidence on record show that the money owed to Airtel by the 1st Defendant Company had been settled by Access Bank Ltd. Access Bank in turn fell on the Plaintiff to fulfill its Surety Bond in the sum of GH¢172,092.69.


The burden of persuasion and the obligation to adduce evidence are defined in Sections 10(1) and 11(1) of the Evidence Act, 1975 (NRCD 323).


Section 10(1)


For the purposes of this Act, the burden of persuasion means the obligation of a party to establish a requisite degree of belief concerning a fact in the mind of the tribunal of fact or the court.


Section 11(1)


For the purposes of this Act, the burden of producing evidence means the obligation of a party to introduce sufficient evidence to avoid a ruling against him on the issue.


The evidence of the Plaintiff’s witness was credible, in line with the Plaintiff’s pleadings and was corroborated by the evidence on record. In Zabrama v. Segbedzi (1991) 2 GLR 221 and re-affirmed in the case of Continental Plastics Ltd v. IMC Industries (2009) SCGLR 298 @ 306-307, a party who makes an assertion which is denied by his adversary has the burden to establish that his assertion is true. He can do so by leading admissible or credible evidence from which the fact he asserts could be inferred.


On the other hand the Defendants’ evidence was subtly layered with all sorts of distortions and embroidery all in a bid to escape liability for their just debts. Section 80 of the Evidence Act, 1975 NRCD 323 provides:

(1) Except as otherwise provided by this Act, the court or jury may, in determining the credibility of a witness, consider any matter that is relevant to prove or disprove the truthfulness of his testimony at the trial.

(2) Matters which may be relevant to the determination of the credibility of the witness include, but are not limited to the following:—

(a) the demeanour of the witness;

(b) the substance of the testimony;

(c) the existence or non-existence of any fact testified to by the witness;

(d) the capacity and opportunity of the witness to perceive, recollect or relate any matter about which he testifies;

(e) the existence or non-existence of bias, interest or other motive;

(f) the character of the witness as to traits of honesty or truthfulness or their opposites;

(g) a statement or conduct which is consistent or inconsistent with the testimony of the witness at the trial;

(h) the statement of the witness admitting untruthfulness or asserting truthfulness.


In the case of Takoradi Flour Mills v. Samir Faris (2005/2006) SCGLR 882 at 900 the court said:

in assessing the balance of probabilities, all the evidence, be it that of the Plaintiff or the Defendant, must be considered and the party in whose favour the balance tilts is the person whose case is the more probable of the rival versions and is deserving of a favourable verdict.


It is also provided for in Section 12(1) of the Evidence Act as follows:

“Except as otherwise provided by law, the burden of persuasion requires proof by a preponderance of the probabilities.”


The Defendants have failed, omitted, neglected and refused to redeem their indebtedness to the Plaintiff. They were rather in collective denial that they had even accessed a Surety Bond from the Plaintiff which eventually would have to be paid if 1st Defendant was unable to pay Airtel for the airtime lifted.


As inexorably as iron filings are drawn to a magnet, the court finds the Defendants liable to the Plaintiff’s claim for the sum of GH¢172,092.69 together with interest at the prevailing bank rate from 10th June 2014 till date of final payment.


The Plaintiff succeeds in its claim against the Defendants as follows:


1st Defendant is ordered to pay to the Plaintiff the amount of GH¢172,092.69 together with interest at the prevailing bank rate from 10th June 2014 till date of final payment.


On 1st Defendant’s inability to do so, the Plaintiff may choose to proceed against the 2nd Defendant whose Personal Counter Indemnity has made him personally and severally liable to indemnify the Plaintiff in the event of 1st Defendant’s inability to make good on its indebtedness.


Costs of GH¢10,000.00 is awarded against Defendants.