Arrital Ghana Limitedvs. Accra CITY Hotels Limited PDF

Preview

Summary

The gist of the case that was put before the trial court simply stated is that the defendant company wanted a renovation of the kitchen of one of its hotels, Novotel Hotel. The renovation was to cover masonry, plumbing works, electrical works, air conditioning and supply and installation of kitchen ...

Description

ARRITAL GHANA LIMITED vs. ACCRA CITY HOTELS LIMITED [COURT OF APPEAL, ACCRA] CIVIL APPEAL NO. H1/216/2011 DATE: 28TH MARCH, 2013

COUNSEL: MR. Y. KULENDI FOR THE PLAINTIFF/RESPONDENT MR. J.K. AGYEMANG FOR DEFENDANT/APPELLANT CORAM: KANYOKE J.A., OFOE J.A., JOHNSON J.A.

JUDGEMENT

OFOE,J.A.: The grounds of appeal the defendant/ appellant, hereinafter referred to as the defendant, would want us to consider are as follows: "I. That the judgment is against the weight of the evidence. II.That the learned trial judge erred in law and evidence in holding that the Defendant breached contractual agreement between the parties. III. That the learned trial judge erred in law and evidence in awarding damages against the Defendant as a result of the detention of its tools. The learned trial judge erred in law in denying thatthat the Defendant had a lien over Plaintiff's tools. V. The learned trial judge refusal of Defendant counterclaim is against the weight of evidence. VI. That further grounds of appeat may be filed uponreceipt of a certified copy of the judgment of the trial court.” These

grounds

of

appeal

have

arisen

as

a

result

of

defendant's

dissatisfaction with the judgment of the trial court's conclusion that it was the defendant who was in breach of the contract and also granting to the plaintiff Euro 22,089 as balance due for value of work done, Euro 8,094 as supervision fee, and interest on these amounts at prevailing bank rate from the 10th of December 2008 up to date of final payment and a further award of Euro 30,000 as general damages for unlawful detention of mobile work station, tools and equipment. Cost of GH¢5000 was also awarded against the defendant. The gist of the case that was put before the trial court simply stated is that the defendant company wanted a renovation of the kitchen of one of its hotels, Novotel Hotel. The renovation was to cover masonry, plumbing works, electrical works, air conditioning and supply and installation of kitchen equipment. For various reasons contested by the parties the works could not be completed by the plaintiff leading to termination of the agreement by the defendant with immediate effect. The letter was dated 10th December 2008. After the termination the defendant prevented the plaintiff's workers from collecting their tools from the worksite. It took the intervention of the police to get the tools released to the plaintiff/respondent hereinafter referred to as the plaintiff. The plaintiff, unhappy at the termination of the contract and seizure of its tools sued the defendant claiming per its writ of summons for: "a. An order compelling defendant to pay forthwith to the plaintif the sum of Euro 39,589.00 being amount owed by defendant to plaintif. b. Damages for unlawful detention of plaintif's tools equipment and mobile work from December 10, 2008 to March 9,2009. C. Interest on the said sums in a and b above at the prevailing bank rate from December 2008 till date of final payment. d. Costs e. Further or other reliefs”. Defendant believing that the contract was breached by the plaintiff also counterclaimed for: “a. €17,512.00 being amount due to Defendant as stated in paragraph 11 (of Statement of Defence). b. US$49,731.00 being business lost between January 2009 and June 2009 when Defendant's kitchen should have been completed for normal operations to begin. - C. US$7,240.00 being additional costs incurred by Defendant in renting container freezer from January to June, 2009. d. €21,039.ii being demurrage paid to Delmas Shipping Lines in respect of store kitchen equipment, as civil and plumbing works were delayed by Plaintiff's conduct; and e. Legal costs”. Defendant's entire counterclaim was dismissed by the trial judge.

Further details of the case will be presented, if found necessary, in the course of this judgment. Before plunging into the concerns of the defendant in the grounds of appeal, the plaintiff through his counsel has raised certain preliminary issues that need our consideration. Counsel for the defendant in his submissions filed before this court headed grounds (i) and (ii) of his grounds of appeal as follows: “B. Grounds (i) and (ii) ERROR IN HOLDING THAT THE APPELLANT, RATHER THAN THE RESPONDENT, INDUCED THE BREACH OF THE CONTRACT BETWEEN THE PARTIES. Clearly this heading is not the same as the grounds of appeal filed by the defendant under grounds (i) and (ii) in his notice of appeal. Counsel for the plaintiff submits therefore that by this reformulation the defendant has abandon his ground (i) of the grounds of appeal which is that “the judgment is against the weight of evidence”. Even though we find counsel for the plaintiff's observation incisive and worth noting we do not think the circumstances of this case presents a clear case for which we should simply consider ground (i) of the grounds of appeal abandoned. His ground of appeal known to the records is still that stated in the notice of appeal despite the reformulation. It appears to us the reformulation was adopted for his own convenience. Indeed counsel for the defendant explained that the reformulation was just to represent to us the central theme of the grounds of appeal (i) and (ii) in the notice of appeal. We hold the view that it is when the defendant has failed to make submissions on this ground (i) that there would be clear justification concluding that defendant has abandoned his ground (i) of the grounds of appeal. The authorities are clear that if the defendant had failed to argue a ground of appeal then that ground of appeal ought to be considered as abandoned. This appears to be a practice which has evolved on application of rules 20(1) and (2). A party is required by these rules to base his submissions according to the grounds of appeal filed failing which he may have his appeal struck out. The question then is did he address this ground (i) of the grounds of appeal in his submissions before this court? We will provide the answer after reviewing his submissions in its entirety. Counsel for the plaintiff's next submission, also procedural, is to the effect that not only did the defendant fail to make any submissions on grounds (ii) of its grounds of appeal but it also set out a new ground of appeal different from that filed in the notice of appeal and proceeded to address that new ground of appeal. Having set up a new ground of appeal and also failed to

make submissions on this ground of appeal it is counsel's submission that the ground of appeal (ii) in the notice of appeal should be struck out or considered as abandoned. He submits further that since the defendant has set out a new ground of appeal not known to the grounds of appeal filed in the notice of appeal then that will be a breach of Rule 8(7) of the Court of Appeal rules which does not allow this court to hear him unless we have granted him leave to argue this new ground of appeal. The question then is did the defendant breach this rule as contended by the plaintiff? It is the reformulation of grounds (i) and (ii) of the grounds of appeal filed by the defendant that the plaintiff interprets as the defendant's abandonment and breach of Rule 8(7) of the Court of Appeal rules. We think it would be clearer appreciating the submissions of the plaintiff by reproducing what grounds (i) and (ii) of the grounds of appeal in the notice of appeal are and what the reformulated heading is. It is worth emphasizing that the reformulated heading was introduced by the defendant in his submissions filed before this court. It is not in his notice of appeal. The grounds of appeal (i) and (ii) in the notice of appeal provides: “;. That the judgment is against the weight of evidence. ii. That the learned trial judge erred in law and evidence in holding that the defendant breached contractual agreement between the parties.” The new ground of appeal referred to by counsel for the plaintiff which counsel for the defendant explained is just meant to reflect the central theme of grounds (i) and (ii) of the grounds of appeal in the notice of appeal provides: “ERROR IN HOLDING THAT THE APPELLANT, RATHER THAN THE RESPONDENT, INDUCED THE BREACH OF THE CONTRACT BETWEEN THE PARTIES” On reading the grounds of appeal in the notice of appeal and this reformulated ground introduced by the defendant which he describes as the "central theme” for his grounds (i) and (ii), we did not fail to notice that the new ground talks about "induced the breach of the contract..." which is not found in the notice of appeal. But should the introduction of these words and the reformulation of the two grounds of appeal into one in the form mentioned herein be interpreted as a new ground of appeal not known to the notice of appeal? In other words are the two, ie those in the notice of appeal and that reformulated into one, different in substance? On a closer reading of these grounds we saw the two grounds of appeal in the notice of appeal aimed at addressing the issue who was responsible for the breach of the contract. Was it the plaintiff or the defendant who breached the contract? We did not understand the reformulated ground of appeal asking any different question than the same question of which of the two parties was responsible for the breach of contract. Submissions of the defendant therefore would have to aim at addressing this issue and this we think the defendant did. His submissions sought to point out that it was the plaintiff's refusal to execute

the new contract and his failure to deliver the tiles to the defendant despite several requests that caused the breakdown of the contract between the parties. The reformulation, not withstanding, we are of the view that the substance is the same as the ground of appeal (ii) and therefore not an introduction of a new case or new ground of appeal. Admirably incisive though counsel for the plaintiff's examination of these grounds of appeal is we think substantial justice demands we devalue his position on these preliminary issues and proceed to examine the substance of the grounds of appeal raised by the defendant. We need to remind ourselves that an appeal, as is common legal knowledge, is by way of hearing and this casts a duty on an appellate court to review the whole of the evidence on record whether the trial judge has in anyway faltered as to give cause to upholding the appeal lodged by an appellant. The powers of the appellate court in reviewing the whole evidence and when those powers would be exercised in interfering with the trial court's findings have been expounded in several authorities. Refer to the cases of Gregory vrs. Tandoh IV &Hanson (2010) SCGLR 971 at 985 Obeng vrs Assemblies of God Church (2010) SCGLR 300, Achoro vrs Akanfela (1996-97) SCGLR 209, Akuffo Addo vrs. Cathline (1992) 1GLR 377, Koglex (No2) vrs Field (2000) SCGLR175. Taking note of sayings in these authorities we proceed to examine the appeal before us. Which of the parties breached the contractual agreement? This is the substance of the 2nd ground of appeal. Is it the plaintiff or the defendant? The trial judge was very clear in her reasoning holding the defendant liable for the breach of the contract. She held, to start with, that there was a contract between the parties. This finding we found supportable on the evidence. There was no dispute throughout the trial that the works the defendant offered to the plaintiff to be carried out in its Novotel Hotel were for civil works ie masonry, plumbing, and electrical works. It was an agreement based on exhibit C, a single paged document with the support of defendant's purchase order. On the authority of Fofie vrs Zanyo(1992)2GLR475,Koglex Ltd No2 vrs Field(2000)SCGLR175 she was justified in interpreting these documents within the circumstances of the case as concluding a contract. It was however a bone of contention between the parties whether the defendant contracted to also award to the plaintiff the supply of the kitchen equipment. Whilst the plaintiff contended that he presented a Turn Key project to the defendant concerning the whole contract works and therefore the defendant was bound to award to it also the supply of the kitchen equipment, the defendant held a different view, contending that the kitchen equipment supply was a separate contract which it was not obliged to award to the plaintiff. As a matter of fact the defendant awarded this contract to another company. The reaction of the plaintiff who was disappointed that it was not awarded the kitchen equipment supply contract was to present to the defendant two options (through e mail) as a solution to the disagreement over this kitchen equipment supply contract. The e mail, admittedly a long one and not in our standard english, concluded presenting

two options as follows: “1. We revise the quotation in consideration of what has been described above. 2. We supply you with all the imported materials that we have fully paid for and is on his way to Ghana, the prefab walls for which we have already paid a considerable deposit and is ready for collection in Ghana. We add the works made up to now (the demolition is completed at 90%) and on the deposit that we have received, we proceed with the balance due in and out Your sinks and works table (now in our warehouse) will be returned to you.” The defendant no doubt understood the options offered it and chose the 1st option thus allowing the plaintiff to revise the quotation under which it was executing the contract. The evidence discloses. that the parties were agreed that the plaintiff should continue the work awaiting the signing of a contract which will incorporate the revised quotation. Indeed the works continued until around the 9th December 2008 and a day after the termination letter was issued by the defendant. Counsel in his submissions considers this understanding as a “subject to contract” situation. He relies on certain correspondence including that of the plaintiff asking when this written contract would be ready and the defendant's respond that it would be ready within a week as evidence that the parties were agreed that the revision of the initial contract was subject to a formal contract being prepared and executed for its effectiveness. And until that condition was met none of the parties could be held to perform its obligations under the agreement. According to counsel the parties had in mind a formal written contract as a condition precedent and without which there cannot be a valid modified contract. He stated and we accept that “ Whether a "subject to contract” stipulation will have the effect of a binding condition precedent will turn ultimately on the construction of the words used by the parties as well as the circumstances of the particular case” He proceeded in his submission that where the condition precedent is dependent on the discretion of any of the parties then that party would be expected by the courts to act bona fide and reasonably else that party will be held in breach of contract. And this is where according to counsel, the plaintiff failed to so act. He failed because on all the occasions when the draft agreement for the new contract was submitted to him for his approval he introduced inconsequential changes in the draft contract thereby frustrating the intentions of the parties. In the light of this behavior of the plaintiff counsel therefore finds the conclusion of the trial judge that there is no indication that the payment by installment was based upon the respondent signing a formal contract unacceptable. Also not acceptable to counsel is the finding of the trial judge that it was not the plaintiff who refused to sign the contract. It is his submission that it was the plaintiff's inconsequential amendments that delayed or frustrated the signing of a formal contract and thus induced the breach of the existing contract between the parties. Counsel ties in the alleged failure of the plaintiff to deliver the tiles to this principle of “good faith and reasonableness” that

parties are enjoined to exhibit in a “subject to contract” situation. We understood counsel's submission here to be asking whether there is reason for holding the defendant responsible for the breach if it insisted that the plaintiff should deliver all the defendant's tiles in its custody as a potential loss avoidance measure before releasing any further monies to the plaintiff in the light of evidence that the plaintiff had unreasonably made it impossible for the parties to execute a formal contract which will give effect to their agreement? According to counsel the position taken by the parties in respect of the delivery of the tiles is also relevant in determining which of the parties induced the breach of the contract. On this issue of which of the parties breached the contract, counsel submitted as follows: “The respondents failure to execute the formal contract aside even a most cursory reading of the evidence on record will reveal that the other major reason why the appellant refused to honour the respondent's demands for installment payments in respect of work done was the respondent's failure to deliver the tiles and other materials ordered and paid for by the appellant under the initial contract but were still in the respondent's custody in the ware house". From the appeal record the delivery of the tiles took a prominent place in the case of the defendant. So why were they insisting on delivery of the tiles before any further payments one may ask? It is counsel's submission that they had lost trust in the plaintiff in the manner he arbitrarily imposed a revised invoice on them. It was therefore necessary they streamlined their contractual relationship so as to prevent a repeat of that situation and to prevent any potential loss to themselves. It was necessary they demanded the delivery of the tiles defendant had paid for to their site so it could check the quantum and quality and be assured that the tiles were available for use on the project. David Addy of the defendant company testified that they wanted the tiles delivered to be sure the plaintiff had imported the tiles. Antwi Peasah also said his company wanted the tiles delivered so they can check the quality and also the tiles should be available so that there would not be any delay. Defendant contends that all attempts at getting the plaintiff to deliver the tiles were met with one excuse or the other. Counsel identified some of the excuses. They are (1) In exhibit N the plaintiff stated that it was withholding delivery of the tiles because they were fragile and intended to use them on the project. (2) That it was willing to deliver the tiles only after the defendant had signed the new contract and upon payment of a third of the deposit (3) That in exhibit 14 the plaintiff said it was ready to release 70% of the tiles only if the defendant brought a draft cheque of 55,070.00 Euros plus the refund of US$500.00. (4)And when the plaintiff made a demand of 20,000 Euros installment payment(exhibit4) and the defendant asked that it gets copies of the shipping documents and take inventory of the tiles in plaintiff's custody(exhibit N) to enable it honour this 20,000 Euro payment the plaintiff rejected this offer too. (5) As a further attempt at resolving the tiles issue the defendant requested its consultant to

value works done by the plaintiff to enable payment to be made to the plaintiff if it was willing to deliver the tiles. After the valuation of 40,000 Euros when the defendant had instructed this amount to be paid to the plaintiff, the plaintiff still refused to deliver the tiles compelling the defendant to cancel the cheque. From the forgoing counsel disagrees with the trial judge's findings that it was for the defendant to go for the tiles and not the plaintiff to deliver them to it. He also disagrees with the trial judge when she said that there was nothing in the records indicating that the plaintiff had prevented the defendant from going for the tiles. Counsel disagrees because the tiles were in the custody of the plaintiff and the defendant couldn't have gone for them without the consent of the plaintiff. Counsel's submissio...