IN THE SUPERIOR COURT OF JUDICATURE IN THE COMMERCIAL DIVISION (COURT 1) OF THE HIGH COURT OF JUSTICE ACCRA
HELD ON TUESDAY THE 9TH DAY OF JULY, 2024 BEFORE
HER LADYSHIP JUSTICE SHEILA MINTA
SUIT NO. CM/RPC/0100/2020
OCTILLIONS FZE - PLAINTIFF
E1-1302 C, AJMAN FREE ZONE
AJMAN, UNITED ARAB EMIRATES
VRS.
1. SAHARA ROYAL GOLD REFINERY - 1ST DEFENDANT
H/NO. 24, AMBASSADORIAL ENCLOVE
EAST LEGON
ACCRA – GHANA
2. GODWIN KWAKU AMEKUEDI - 2ND DEFENDANT
22 OKINE AVENUE, OFF GARDEN STREET
EAST LEGON, ACCRA
---------------------------------------------------------------------------------------------------JUDGMENT
INTRODUCTION
Lord Hope of Craighead in the case of Chester vrs. Afshar [2004] UKHL 41 at para. 87 as submitted by Counsel for the Plaintiff stated:- “The purpose of the law is to uphold rights and to offer remedies in cases of breached duties.”
On 25th October, 2019 the Plaintiff in this matter, a company incorporated in the United Arab Emirates engaged in the business of gold trading instituted the current suit against the Defendants jointly and severally for the following reliefs:-
An order directed at the 1st and 2nd Defendants jointly and severally to pay to the Plaintiff the total amount of US$370,818.62, the breakdown of which is as follows:
US$105,298.62 being monies standing to the Plaintiff’s credit in the 1st Defendant’s account prior to the submission of the pro forma invoice on May 23, 2018, for the Proposed Shipment;
US$190,000.00 being the remainder of the total discounted price for the Proposed Shipment.
US$40 being the refundable Deposit paid by the Plaintiff to the Defendant, and
US$35,520.00 being liquidated special damages for non-delivery.
Interest on the amount claimed in relief (i) at the prevailing commercial rate from May 24, 2018, till date of final payment.
General damages for breach of contract.
Costs including lawyer’s fees and litigation expenses.
Such further orders or reliefs as this Honourable Court may deem fit.
According to the Plaintiff the parties in this case duly entered into an agreement for the sale of gold to it by the Defendants. By the Agreement the Plaintiff was to pre-finance the purchase of the gold by the Plaintiff based on the invoices submitted to it by the 1st Defendant for quantity and quality of gold to be supplied. That having made various payments to the Defendants they failed to supply the value of gold that ought to be supplied which has culminated in the instant suit.
The Defendants on the other hand denied owing the Plaintiff in their Statement of Defence filed on 10th June, 2020, and stated among others that the Plaintiff underpriced the gold bars supplied it by the 1st Defendant and also sold the gold bars supplied only during the times that the prices were low. They also Counterclaimed against the Plaintiff as follows:-
An order directed at Plaintiff to refund to 1st Defendant the rest of money it has illegally locked up for the 8.kgs of gold sent by 1st Defendant to Plaintiff.
An order for the parties to go into account.
Below are summaries of each party’s cases to the present suit.
SUMMARY OF THE PLAINTIFF’S CASE
The Plaintiff stated that on the 29th December, 2017, it executed a Gold Sale and Purchase Agreement (GSPA), with the 1st Defendant acting through the 2nd Defendant its Chief Executive Officer (CEO). The Plaintiff’s tendered the said agreement as Exhibit “A”. The Plaintiff alleged that the terms of the GSPA was to the effect that, the Plaintiff would pre-finance the 1st Defendant to enable it supply gold bars at a discounted price to it at agreed quantities and quality. The 1st Defendant was to deliver the gold bars within 4 business days upon payment by the Plaintiff. According to the Plaintiff per the terms of the agreement failure to supply the gold within the said four days was to attract a damage fee of US $2,000.00 for every kilogram of Gold that remained undelivered by the 1st Defendant. That the Plaintiff was to have the gold bars assayed by its nominated refinery or assayer in order to determine the actual quality and quantity of each order supplied by 1st Defendant. It is thereafter that the parties will re-adjust the purchase price based on the assay report and any excess monies will be credited to the Plaintiff’s account with 1st Defendant and deducted from the next invoice.
The Plaintiff further posited that as security for pre-financing the purchase of gold by the Plaintiff the 2nd Defendant offered a personal guarantee Exhibit “B" (dated 29th December, 2019) pursuant to the GSPA to take the necessary steps to discharge any losses, claims and damages from the 1st Defendant’s breach.
The Plaintiff stated that on 2nd January, 2018, the 1st Defendant made a request to Plaintiff for a refundable deposit of US $40,000.00 to enable the 1st Defendant perform its obligations under the GSPA and tendered Exhibit “C” (request for deposit dated 2nd January, 2018. In Exhibit “D” tendered by the Plaintiff the Defendants confirmed receipt of US$40,000 deposit to be retained by 1st Defendant for the payment of proforma invoice of 20th January, 2018. According to the Plaintiff the parties engaged in a series of transactions and between 30th December, 2017 and 23rd May, 2018 Plaintiff ordered 62.06kg of gold out of which 44.3kg was supplied with a shortfall of 17.76kg of gold. In support of this Plaintiff tendered Exhibit “E” Series being Plaintiff’s statement of account with 1st Defendant, invoices, transfers made by Plaintiff to 1st Defendant and email correspondences in support of Plaintiff’s case. That per the agreement between the parties, Defendants having failed to supply 17.76kg of gold per clause 4.4 entitled Plaintiff to damages at the agreed sum of US$2,000.00 per kilogram being a claim for US$35,520.00 together with a total of US$105,298.62 which stood to the credit of the Plaintiff’s account. The Plaintiff’s story is that the said US$105,298.62 claimed was as a result of prior purchase price re-adjustments based on final assay reports from previous shipments and excluded the deposit. In support of this Plaintiff tendered Exhibit “F” (email from Plaintiff to Defendants dated 22nd May, 2018) being the breakdown of the assay report and price adjustment.
Despite the lapses in supply, the Plaintiff proceeded to make payment of US $190,000.00 in response to a proforma invoice from the 1st Defendant in respect of the supply of 8.06 kg of gold to be supplied by the 1st Defendant. The purchase price for the 8.06kg of gold was US $295, 298.62, however, due to the amount already standing to the credit of the Plaintiff, it was only required to pay the balance of US $190,000.00. Following this payment, the 1st Defendant again failed to deliver the gold bars despite several demands from the Plaintiff.
The Plaintiff averred also that by an attempt to resolve the issue of Defendants’ inability to supply Plaintiff with gold or refund the money received, 1st Defendant issued a promissory note to Plaintiff promising to supply the gold not later than 15th August, 2018. It however failed to also fulfil this promise, amidst excuses of having challenges with obtaining a license to purchase, refine and export gold. After several other promises and consequent failures to fulfil same, the Plaintiff caused its lawyers to issue two consecutive demand notice, initially to the 1st Defendant and thereafter the 2nd Defendant as the former’s guarantor. It is on the above facts that the Plaintiff commenced the present action to recover the debt due it.
SUMMARY OF DEFENDANTS’ CASE
The 2nd Defendant is the Chief Executive Officer of the 1st Defendant Ghanaian company engaged in the mining and export of mineral products. The parties sometime in December 2017 entered into a business relationship, being a Sale and Purchase Agreement for the supply of gold bars to be purchased by the Defendants for the Plaintiff. According to the Defendants, Plaintiff was aware that 1st Defendant had to pre-finance the activities of small-scale miners for supply of gold upon receipt of which 1st Defendant would then forward same to Plaintiff. The parties therefore executed an agreement dated 29th December, 2017 to govern their working relationship and Defendants tendered same as Exhibit “1” which is the same as Plaintiff’s Exhibit “A”. It is the Defendants’ testimony that 2nd Defendant was fraudulently coerced by the Plaintiff to execute a personal guarantee dated 29th December, 2017 which was also tendered as Exhibit “2” which is also the same as Plaintiff’s Exhibit “B”.
By the Defendants story the fraudulent conduct complained of was that the Plaintiff deliberately kept the bars of gold which the 1st Defendant had supplied it, waited for the world market price of gold to plummet to enable it pay a lower market price for same in contravention of the terms of the agreement. This conduct, as Defendants contend was contrary to the agreed terms of the parties to base the values on assay report presented to Plaintiff by the Defendants. That Plaintiff by its conduct, unilaterally determined the price for which the gold was purchased and thereby prevented the 1st Defendant from making some profit.
Defendants also contended that pursuant to the agreement, they initially supplied Plaintiff with gold, worth over US$40,000.00 based on the assay report and subsequently shipped gold with the prevailing market value of US $364,084 but Plaintiff refused to pay to the 1st Defendant the said value. Moreover, without any justification, the Plaintiff transferred the sum of US$40,000.00 which was payment for 17.76kgs of gold which had been earlier supplied to Plaintiff, hence, the 1st Defendant contends that it does not owe the Plaintiff any money.
The 1st Defendant further averred that on 23rd May, 2018 when they submitted a pro-forma invoice to Plaintiff for the sum of US$295,2298.62 the Plaintiff paid only US$190,000.00 leaving a balance of US$150,000.00 contrary to the agreed terms. The Defendants’ narrative is that it is in a bid to resolve the above issue and to continue doing business that the 2nd Defendant issued a promissory note on behalf of the 1st Defendant. That the promissory note being Exhibit “J” dated 9th August, 2018 was provided on condition that the Plaintiff would transfer the outstanding balance to the 1st Defendant before any gold will be shipped to the Plaintiff. The Defendants posited that the Plaintiff rather owes 1st Defendant money and by its conduct 1st Defendant’s capital for running its business has been locked up and that the small-scale miners from whom it acquires the gold have not been able to meet 1st Defendant’s demand.
In Defendants’ depositions, they stated also that 1st Defendant pre-financed small-scale miners with funds transferred by Plaintiff to 1st Defendant and immediately the miners received the funds, Government of Ghana during that period placed a moratorium on small-scale mining activities country-wide which frustrated the supply of gold. Upon the occurrence of this situation the Defendants have communicated same to Plaintiff that the condition precedent to the supply of gold to Plaintiff has been frustrated but Defendants are however making diligent efforts in securing funds so that they can buy and export the gold to the Plaintiff. That Defendants have assured Plaintiff that they are working towards refunding money due to the Plaintiff for gold not yet supplied. But curiously the Defendants have counterclaimed against the Plaintiff for:-
An order directed at Plaintiff to refund to 1st Defendant the rest of money it has illegally locked up for the 8.kgs of gold sent by 1st Defendant to Plaintiff.
An order for the parties to go into account.
ISSUES FOR TRIAL
Having gone through pre-trial settlement conference and the parties unable to settle the matter, the pre-trial Judge and the parties set down the following issues for determination at trial:-
What were the agreed terms of the Gold Sale and Purchase Agreement entered into between the parties and dated December 29, 2017?
Whether or not the Plaintiff unilaterally determined the price of the gold bars?
Whether or not the 2nd Defendant executed a Personal Guarantee on behalf of the 1st Defendant in favour of the Plaintiff, and if so, what were the terms of that Guarantee?
Whether or not Plaintiff paid the amount of US$40,000 to the Defendants as Deposit, and if so, what were the conditions accompanying the payments of the Deposit?
Whether or not the 1st Defendant has breached its contractual obligations to deliver the gold bars to the Plaintiff under the Gold Sale and Purchase Agreement dated December 29, 2017?
Whether or not the Plaintiff has breached its contractual obligations to the Defendants?
Whether or not the Plaintiff is indebted to the Defendants?
Whether or not the Plaintiff is entitled to its reliefs sought as indorsed on the Writ of Summons?
Whether or not the Defendants are entitled to their Counterclaim?
Trial in this matter ended on 28th February, 2024 and both parties were ordered to file the respective written submissions on or before 27th March, 2024. Counsel for the Plaintiff filed hers on 8th April, 2024 and this matter was adjourned several times for Counsel for the Defendants to file his address but on 7th May, 2024 Counsel for the Defendants appeared in Court and informed the Court that he does not intend to file an address and so there is none filed on Defendants’ behalf at the time of writing this judgment. Before the discussions on the issues begin, I will state the rules of evidence applicable to the determination of the issues that the Court has to apply in reaching a conclusion on which of the parties have been able to persuade the Court by the production of credible evidence that its story is more probable than the other that would warrant a determination to be made in one’s favour against the other party.
BURDEN OF PROOF
Now is trite that the party that makes an averment or allegation bears the burden of proof on those facts; Majolagbe v Larbi & Ors. [1959] GLR 190. By the Evidence Act, 1975 (NRCD 323), a party discharging the burden of proof has a two-fold burden; notably the burden of persuasion and the burden of producing evidence. The burdens of persuasion and producing of evidence are defined under Sections 10 (1) and 11(1) of NRCD 323 as follows:
“10. Burden of persuasion defined
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.”
“11. Burden of producing evidence defined
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 on the issue against that party.”
Moreover, Section 14 of NRCD 323 provides that unless it is shifted 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. In essence, both the Plaintiff and Defendants per their allegations, unless same is admitted, must convince this Court on the veracity of those facts they are laying claim to. In persuading the Court, each party is duty-bound to adduce admissible evidence to assist the Court in making a finding of fact which leads to the irresistible conclusion that a fact being claimed is more probable than its non-existence.
In the case of Ackah vrs. Pergah Transport Ltd. [2010] SCGLR 728 at 73, where the Apex Court stated that:
“It is a basic principle of the law on evidence that a party who bears the burden of proof is to produce the required evidence of the facts in issue that has the quality of credibility short of which his claim may fail. The method of producing evidence is varied and it includes the testimonies of the party and material witnesses, admissible hearsay, documentary and things (often described as real evidence), without which the party might not succeed to establish the requisite degree of credibility concerning a fact in the mind of the court or tribunal of fact such as a jury. It is trite law that matters that are capable of proof must be proved by producing sufficient evidence so that on all the evidence a reasonable mind could conclude that the existence of the fact is more reasonable than its non-existence.”
This principle of the law of evidence was applied in the election petition case of Akuffo Addo vrs. John Mahama [2013] SCGLR 1 Special Edition, and a plethora of cases including Yorkwa vrs. Duah [1992-93] GBR 280, CA; GIHOC Refrigeration vrs. Jean Hanna Assi [2005-2006] SCGLR 198; Dr. Kwame Appiah Poku & ors vrs. Kojo Nsafuah Poku ors. [2001-2002] SCGLR 162; Takoradi Flour Mills vrs. Samir Faris [2005-2006] SCGLR 882.
Again, the standard weighing the discharge of this duty is on the preponderance of the probabilities, hence, the Court need only be convinced that the existence of a fact is more probable than its non-existence (Section 12 of NRCD 323). It is therefore the duty of the Plaintiff, generally, to establish the requisite degree of belief in the mind of this Court by adducing cogent evidence to prove that the likelihood of circumstances it alleges is more probable than not. The Defendants having counterclaimed also bears that evidential burden in proof of its case.
ANALYSIS
In Fidelity Investment Advisors vrs. Aboagye Atta [2003-2004]2 GLR 188, the Court held that what issues are relevant and essential was a matter of law entirely for the judge to determine the case. I will begin my analysis with the discussions on issue 1 and 3 together by rehashing same to read “What is the legal effect of the Gold Sale and Purchase Agreement and Personal Guarantee executed by the 2nd Defendant”, followed by also merging the rest of the issues into 1 which I believe is likely to help in resolution of the dispute between the parties.
ISSUES 1 & 3
What is the legal effect of the Gold Sale and Purchase Agreement and Personal Guarantee executed by the 2nd Defendant?
It is not in doubt that the terms of the Gold Sale and Purchase Agreement (GSPA) executed by the parties on 29th December 2017 and tendered as Exhibits “A” and “1”, contained the understanding that is to govern the party’s business relationship. Even though the Defendants want to impugn same by some allegation of fraud, none of the parties denied executing same. The terms of the agreement have to be interrogated and a determination made as to whether the parties lived up to those agreed terms by their conduct, whether the agreement was varied and whether there was a breach and the effect of the breach if so found.
Per the said agreement the parties covenanted as follows:-
The 1st Defendant will supply the agreed quantity of gold bars to the Plaintiff.
The price of the gold bars will be discounted, and payment will be made by Plaintiff on a pre-financing basis, after the submission of a pro-forma invoice from the 1st Defendant to the Plaintiff.
1st Defendant was to deliver the gold bars to the Plaintiff within four (4) business days upon receipt of the payment of the discounted price.
Within 48 hours of receipt of the gold bars, the Plaintiff was to have the gold bars assayed by its nominated refinery or assayer and send a scanned copy of the final assay report to the 1st Defendant.
Based on the final assay report the actual quantity, and quality of the gold delivered, its actual purchase price and would be re-adjusted taking into consideration discounts and all applicable terms of the Agreement. After the re-adjustments, any excess monies paid by the Plaintiff would then be credited to the Plaintiff’s account with the 1st Defendant and deducted from the next invoice.
In the event of the 1st Defendant fails to deliver the gold in the quantity and quality agreed upon, the 1st Defendant shall immediately refund all monies paid for the purchase of the gold bars and shall, in addition, pay to the Plaintiff a damage fee of US$2,000.00 for every kilogram of gold ordered but for which 1st Defendant failed to deliver.
By Clause 10, the entire arrangement was to be pre-financed by the Plaintiff and there is evidence of invoices sent by 1st Defendant and correspondent transfers made to 1st Defendant. The Plaintiff’s case is that per the invoices submitted for the quantity of gold and corresponding payments made to Defendants there is a short fall which has to be refunded and the refund was to be made in accordance with the agreed terms. The Defendants have raised issues with the determination of the price of gold supplied under the agreement. Clause 5 stipulated that the purchase price of the gold which is per each kilogram supplied shall be determined by the buyer on the day of shipment per the London Metal Exchange (LME). It is further stated in Clause 8.3 that the buyer shall send a copy of the assay report to the seller, thereafter total accounts are finalized having recourse to Clause 5 as stated above.
The Plaintiff by the agreement nominated its refinery or assayer and the resultant report sent to the Defendants per the evidence before the Court. The Plaintiff tendered Exhibit “E” Series which were accounts for gold supplied, pro-forma/export invoices of 1st Defendant, evidence of transfers by the Plaintiff to Defendants and emails to Defendant in respect of assay report. The Defendants on the other hand did not produce before this Court any other evidence challenging Exhibit “E” Series.
On the assay report the Defendants’ story is that the Plaintiff waited for the gold prices to go down before selling same which said conduct disadvantaged the Defendants. On the 26th February, 2024 when the 2nd Defendant was being crossed examined by Counsel for the Plaintiff, the Court recorded the following:-
“Q: Under the agreement, the Plaintiff was to have the gold bar assayed by its nominated assayer and scanned copy of the assayed report sent to the 1st Defendant. Is that correct?
A: Yes, but what we do, we have a very competent equipment, so when we assay before they can allow you to ship the gold. But when the gold reach Dubai, they normally bring a different assay that was a lot of confusion all along during the trading period. The equipment we have is world standard.
Q: Look at Exhibit “1” of your witness statement, page 6 Clause 3.1. Under Clause 3.1(e) read out. So, under the agreement the parties agreed that the assayer nominated by the Plaintiff would provide the final report as to the quantity, quality and price of the gold supplied by the 1st Defendant. Is that correct?
A: It is correct, but this was the agreement but in practice it did not go like that, there were controversies discrepancies most of the times.”
Evidence of these “controversies” or “discrepancies”, one would have expected the Defendants to make available to this Court per emails or whatever correspondence they may have had with the Plaintiff on these controversies or discrepancies. The Court only needs to confine itself to the said Exhibit “A” in order to ascertain the terms of the Gold Sale and Purchase Agreement executed by the parties as the Defendants did not provide any other evidence contradicting or adding up to Exhibit “A”. It is trite that the intention of a written instrument must be gathered from the written expression of the author’s intention. Biney vrs. Biney [1974] 1 GLR 318. Exhibit “1” did not suffer from any absurdities or ambiguous interpretation that would warrant any other meaning to be read into it and the Courts are also not allowed to introduce new terms into agreements duly executed by parties. The Defendants did not produce any evidence that seeks to change the understanding of the parties in the execution of the agreed terms. The Courts have always believed in sanctity of contracts and the Defendants have not been able to adduce evidence to the Court that the parties intended something else other than Exhibit “A”.
Just like Exhibit “A” the 2nd Defendant did not deny executing the Personal Guarantee Exhibit “B” also dated 29th December, 2017. The Court notes that both Exhibits were executed on the same day. It is the Defendants' story that the 2nd Defendant’s guarantee was only in respect of the initial US$40,000.00 deposit and further averred that the Plaintiff had perpetuated fraud on the Defendants by concealing material evidence and knowing Plaintiff did not intend to comply with the agreed terms upon which the Personal Guarantee was issued. There is also Exhibit “J” being a letter dated 9th August, 2018 (Promissory Note) in which a promise was made by the Defendants to the Plaintiff to effect supply of outstanding gold and an apology rendered for the inconvenience caused Plaintiff. Defendants did not show what clause in Exhibit “A” that was allegedly breached by the Plaintiff for which a complaint has been made.
On 28th February, 2024 the 2nd Defendant under crossed examination by Counsel for the Plaintiff had the following recorded:-
Q: As the Managing Director of the 1st Defendant Company, you signed a personal guarantee on 19th December 2017 (Exhibit “B”) to cover the Defendants’ liability under the transaction, it that correct?
A: Yes, I signed this document. The personal guarantee is based on the US$40,000.00 that was given to the Defendants initially so I signed that.
Q: I put it to you that the personal guarantee was signed in respect of all the supply of gold.
A: It is not true.
Per the terms of this Personal Guarantee the 2nd Defendant guaranteed the performance of 1st Defendant and warranted as follows:-
“The Guarantor shall in all respects guarantee the due and proper performance of al obligations, covenants and conditions by or on the part of the Seller under the Agreement.
The Guarantor unconditionally and irrevocably guarantees the Beneficiary that in the event of the Seller failing in any respect to perform any or all of its duties and obligations or discharged any or all of its obligations under the Agreement, the Guarantor shall immediately upon first demand in writing by the Beneficiary, without having to show proof of default by the Seller, perform or take such steps as necessary to achieve the performance of such obligations and discharge any and all losses, damages, claims, costs, charges, and expenses howsoever arising from the said failure to the extent to which the Seller is liable under the terms of the Agreement.”
Exhibit “B” is so clear and the Defendants have not been able to prove that same was fraudulently procured by the Plaintiff. In the Defendants’ Witness Statement, they admitted having been unable to supply Plaintiff with gold as agreed and did no challenge the said agreement on ground of fraud. What they rather said was that it was frustrated by reason of the ban on small-scale mining at the time which they failed to lead evidence on. There was no clause in the agreement that they can only supply gold purchased from small-scale gold miners. In paragraphs 18 and 23 of the Defendants’ Witness Statement they posited as follows:-
18. “… and immediately these small-scale miners received the money from the 1st Defendant as a form of pre-financing, the Government of Ghana placed a moratorium on the activities of all small-scale mining in Ghana and this frustrated the activities of the 1st Defendant’s supplies and Defendant was unable to send the rest of the gold to Plaintiff as covenanted under the agreement and it was also the issue that these small-scale miners were unable to refund the money to Defendants since they have expended same on their mining activities.”
24. Thereafter, we e with Plaintiff’s representative and informed him that since the said amount was a direct capital from the Plaintiff into 1st Defendant Company and not a loan, Plaintiff should exercise restrain to enable us get another investor on board who will replace Plaintiff and is prepared to pay off to Plaintiff its capital investment into Defendants Company.”
Of course Plaintiff did not covenant to invest into 1st Defendant Company and the ban has since been lifted long ago and there is no evidence of supply or payment. Again, in Exhibit “C” which is a letter dated 2nd January 2018 by the Defendants they wrote to Plaintiff to be both liable for any breach that may occur in the GSPA Agreement. Also, in Exhibit “D” the Defendants acknowledged receipt of the US$40,000.00 as deposit to be refunded upon demand by the Plaintiff.
In Memuna Moudy & Ors vrs. Antwi [2003-2004] SCGLR 967 and the old case of Bank of Ghana vrs. West Africa Ltd. [1963] 1 GLR 176 @ 181 the Courts have always held that the party who asserts the positive carries the burden to lead evidence in proof of his claim or assertion. It is the clear thinking of the Court that this fraudulent claim of the Defendants has not been proved and that it is the Defendants who are in breach of the agreement between the parties. Having discussed the main agreements of the parties and the evidence before the Court in respect to the conduct of the parties it is the mind of the Court that some of the issues listed have been resolved in favour of the Plaintiff.
ISSUES 2, 4, 5, 6, 8, 7 and 9 could be resolved by merging same to read:-
“Whether or not any of the parties was in breach of the contractual agreement between them and the effect of the said breach if any.
A person who makes a commitment has an obligation to fulfill same and failure may constitute a breach per the understanding of the parties. See Prah & Others vrs. Anane [1964] GLR 458 and Hansem vrs. IBM World Trade Enterprise [1990] GLR 172. From the analysis above with regard to the agreements, both parties agreed that the Plaintiff pre-finances the purchase of gold, the Defendants submitted pro-forma invoices and the Plaintiff made various transfers and gold was subsequently supplied to Plaintiff by the Defendants of which an account was provided by Plaintiff showing a short fall of some 17.76 kilograms of gold. It was a term of the agreement that the Plaintiff appoints its own assayer to assay the gold supplied and send that assayed report to Defendants reconciliation. This the Plaintiff did and provided evidence to that effect. Per the terms of the agreement as stated above, the Plaintiff is entitled to the 17.76 kg gold paid for or its refund. Defendants failed to provide any other calculation challenging the values put forth by the Plaintiff and per the calculations of the Plaintiff the Defendants are indebted to it in the sum of US$370,818.62.
From the totality of the evidence before the Court it is clear that the Defendants failed to comply by the terms of the agreement to supply the Plaintiff with all the quantities of gold it had pre-financed and for which the Defendants have failed to supply. The parties again agreed that the Defendants refund all outstanding including the US$40,000.00 initial deposit. They also agreed on the penal charge for breach of the agreement being US$2,000.00 per kilo of gold not supplied. Where parties on their own volition enter into a contract, the Courts’ duty is to uphold the words and declaration of the parties as contained in the contract and that is exactly what I intend to do in this case. It is subsequent to a breach that the injured party’s right to claim remedies arises and in this case the parties have agreed that a damage fee of US$2,000.00 per kilo be paid per Clause 4.4 of the Agreement in the event of default by Defendants which I intend to also enforce.
Defendants argue that price of the gold supplied was to be agreed between the parties based solely on the assay report which was prepared and submitted by 1st Defendant’s metallurgist. Throughout the evidence of the Defendants and as indicated above the Defendants did not produce any contrary evidence throughout the transaction that they had cause to challenge the assay report of the Plaintiff. It has already been established that the final purchase price of the gold supplied is determined by making adjustments on the initial purchase price or the LME price, based on the assayer’s report. The claim of the Defendants that the assayer ought to be appointed by both parties cannot be true.
Clause 3.1 (e) of the Agreement stated; the “Buyer’s Nominated Refinery or Assayer is accepted by both parties as final assay for the quantity and quality and price of the Gold sold under this agreement.” In essence, the Plaintiff’s assayer or refiner and its report is presumed to have been accepted by the 1st Defendant. This clause was confirmed under cross-examination by the Defendants’ as earlier on stated.
The Defendants made bare denials to the Plaintiff claim Defendant pursuant to their dealings under the GSPA. In their Statement of Defence and Counterclaim, the Defendants prayed this Court for an order to compel the Plaintiff to refund “the rest of money it has illegally locked up for the 8.kgs of gold sent by 1st Defendant to Plaintiff.” Unfortunately, this alleged claim was not proved and they have in their Witness Statement admitted to pay off its indebtedness to Plaintiff.
The dictum in the Majolagbe v Larbi & Ors. [1959] GLR 190 case does not help the Defendants where the court stated:-
“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.”
In light of Plaintiff’s denial of this assertion and the lack of corroborating evidence by Defendants to support their claim, this Court hold that the Defendant has not been able to prove their claim against the Plaintiff. Defendants counterclaim are there therefore dismissed.
The Plaintiff has tendered in evidence Exhibit “E Series” detailing payments for invoices submitted by the 1st Defendant, the quantities of gold requested for and the corresponding quantities supplied. Between the periods of 30th December, 2017 to 23rd May, 2018, the Plaintiff made eight different orders for which the Defendant only supplied seven of the requests. In all the total quantity of gold ordered was 62.06kg whereas the total quantity supplied was 44.3kg, leaving a deficit of 17.76kg which the 1st Defendant has failed to supply. When one applies the damage fee of US $2,000.00 for every kilogram of gold undelivered by the 1st Defendant to the 17.76kg shortfall, the 1st Defendant becomes liable to pay to the Plaintiff a total sum of US $35,520.00 damages for non-delivery. The Plaintiff is therefore entitled to recover from the 1st Defendant the said sum of US $35,520.00 as damages for non-delivery of gold.
The Plaintiff’s further alleges that on 23rd May, 2018, the 1st Defendant submitted a pro-forma invoice for the supply of 8.06kg of gold. Upon making the necessary price adjustments, the Plaintiff paid to the 1st Defendant a sum of US $190,000.00 as the purchase price. Exhibit “H” is evidence of the said payment to 1st Defendant. Plaintiff’s case is that it is yet to receive the said gold from the 1st Defendant, despite several demands for the 1st Defendant to remedy the non-performance of their contractual obligations. The Defendants in response stated that they deducted an amount of US $40,000.00 from the US $190,000.00, leaving a balance of US $140,000.00 in favour of the Plaintiff and same was insufficient for the 8kgs of gold it supplied to the Plaintiff.
Curiously Defendants issued Exhibit “J”, a promissory note in which they promised to make efforts to ensure the gold is delivered to the Plaintiff. Turning the story round to say they do not owe the Plaintiff, haven’t shown any evidence of payment or supply of gold subsequent to the date Exhibit “J” was written and the admissions in paragraphs 23 of Defendants’ Witness Statement are rather intriguing to say the least. It is in respect of these contradictory statements and lack of evidence of Defendants that finds the story of the Plaintiff more probable than that of the Defendants. There is also no evidence that the non-refundable deposit US$40,000.00 had been paid to the Plaintiff as agreed.
CONCLUSION
From the evaluation of the evidence before the Court the Defendants have failed to put forth credible defence to challenge that of the Plaintiff and also failed to proof their counterclaim. The Plaintiff on the other hand have been able to adduce cogent evidence before this Court that the likelihood of the circumstances it alleges is more probable than the story of the Defendants. It has been established that the Defendants are in breach of the agreement between the parties to supplied gold for payments received which entitled Plaintiff to remedies.
I will therefore enter judgment in favour of Plaintiff against the Defendants jointly and severally as follows:-
For the total sum of US$370,818.62; being US$105,298.62 plus US$190,000 and US$40,000.00 refundable deposit and the agreed damage fees of US$35,520.
Interest on the said sum of US$370,818.62 at the prevailing commercial bank rate from 24th May, 2018 till date of final payment.
On the relief for general damages for breach, that has already been taken care of in the contractual obligations of the parties and therefore no award would be made for this relief.
I award cost of Twenty-Five Thousand Ghana Cedis (GHS25,000.00) in favour of the Plaintiff against the Defendants.
(SGD.)
SHEILA MINTA, J.
JUSTICE OF THE HIGH COURT
REPRESENTATIONS
PARTIES:
ABSENT
COUNSEL:
RHODA MENSAH QUARSHIE WITH ALHASSAN ABDUL WAHID HOLDING BRIEF FOR ANNA FORDJUOR FOR THE PLAINTIFF – PRESENT
DAVID KOKO FOR DEFENDANT – PRESENT
AUTHORITIES:
1. MAJOLAGBE V LARBI & ORS. [1959] GLR 190
2. ACKAH VRS. PERGAH TRANSPORT LTD. [2010] SCGLR 728 AT 73
3. AKUFFO ADDO VRS. JOHN MAHAMA [2013] SCGLR 1 SPECIAL EDITION
4. YORKWA VRS. DUAH [1992-93] GBR 280, CA
5. GIHOC REFRIGERATION VRS. JEAN HANNA ASSI [2005-2006] SCGLR 198
6. DR. KWAME APPIAH POKU & ORS VRS. KOJO NSAFUAH POKU ORS. [2001-2002] SCGLR 162
7. TAKORADI FLOUR MILLS VRS. SAMIR FARIS [2005-2006] SCGLR 882
8. FIDELITY INVESTMENT ADVISORS VRS. ABOAGYE ATTA [2003-2004] 2 GLR 188
9. BINEY VRS. BINEY [1974] 1 GLR 318
10. MEMUNA MOUDY & ORS VRS. ANTWI [2003-2004] SCGLR 967
11. BANK OF GHANA VRS. WEST AFRICA LTD. [1963] 1 GLR 176 @ 181
12. PRAH & OTHERS VRS. ANANE [1964] GLR 458
13. HANSEM VRS. IBM WORLD TRADE ENTERPRISE [1990] GLR 172
14. CHESTER VRS. AFSHAR [2004] UKHL 41
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