Keymas Ghana Ltd. Vrs Nampasia & Another [2023] GHADC 430 (27 March 2023)

CORAM: IN THE WALEWALE DISTRICT COURT HELD ON, 27TH MARCH 2023 BEFORE HIS WORSHIP SIMON KOFI BEDIAKO ESQ. SITTING AS MAGISTRATE SUIT NUMBER: NE/ DC/WW/COM/3/2023 KEYMAS GHANA LTD (SUING PER ITS CEO PLAINTIFF BUKARI ABDUL-RAUF) V 1. NANTOMAH NAMPASIA (D1) DEFENDANTS 2. AMINU IMORO (D2) JUDGEMENT Introduction: Plaintiff filed the Writ of Summons on 22nd August 2022. By the court’s order, Plaintiff filed an amended Writ of Summons claiming against the Defendants as follows: 1. 2. 3. 4. An order compelling the defendant to pay their remaining principal balance, the sum of GH₡30,800. An order of the court compelling Defendants to pay their outstanding interest the sum of GH₡8000. General damages. Cost. CASE OF THE PLAINTIFF Plaintiff is a company registered in Ghana operating in agri-business in the Upper East and North-East Regions of the Republic of Ghana. Plaintiff commenced the suit via its Chief Executive Officer, Bukari Abdul-Rauf. Plaintiff’s case is that the Defendants entered into an agreement with the Plaintiff on 25th June 2021 for the plaintiff to supply them with certified seeds of rice which the plaintiff accordingly did by supplying a total of 160 bags of certified seeds of rice to the Defendants. Plaintiff avers that the cost of each bag of certified seeds of rice which includes interest is Two Hundred and Fifty Ghana Cedis (GHS 250) therefore totaling Forty Thousand Ghana Cedis (GHS 40,000). According to the Plaintiff per their agreement, the Defendants were to pay the GHS 40,000 to it immediately after harvesting the rice precisely by January 2022. Plaintiff avers that the Defendants only paid an amount of One Thousand and Two Hundred Ghana Cedis (GHS 1,200) leaving an outstanding balance of Thirty-Eight Thousand and Eight Hundred Ghana Cedis (GHS38,800) which includes the interest of Eight Thousand Ghana Cedis (GHS 8,000) on the cost of the 160 bags of certified seeds of rice supplied to the Defendants. Plaintiff avers that the Defendants have deliberately failed to pay the outstanding balance thereby breaching the agreement they entered. CASE OF D1: The case of D1 is that he and D2 entered into an agreement with Plaintiff for Plaintiff to provide the following five (5) services to them: • tractor services for land preparation • certified seeds of rice • fertilizer • agro-chemicals and • harvesting services D1 avers that under the agreement, he and D2 were responsible for clearing their respective farmlands and bearing cost of labour and cost of harvesting the rice. According to D1, in return for the services of the Plaintiff, they were required after harvesting the rice to give to the Plaintiff five (5) bags of grains of rice per each acre farmed by the Defendants. D1 avers that contrary to the terms of the agreement, Plaintiff only supplied Defendants with certified seeds of rice. D1 avers that Plaintiff supplied them with a total of 160 bags of certified seeds of rice. According to D1, the Defendants could not fulfil their part of the contract because Plaintiff failed to perform all its obligations under the contract. Plaintiff did not provide them with the tractor services, fertilizer, agro chemicals, and harvesting services as agreed. D1 prayed that the court compels the Plaintiff to render the remaining services to the Defendants so that they can also fulfil their part of the agreement by giving five (5) bags of grains of rice per acre to the Plaintiff after harvesting. CASE OF D2 D2’s case is that he and D1 entered into an agreement with Plaintiff. In this agreement, Plaintiff was required to provide ploughing services, certified seeds of rice, fertilizers, chemicals, and harvesting services. According to D1, Plaintiff failed to provide all these services save the certified seeds of rice which he provided to them. D2 avers that he took a total of 35 bags of certified seeds of rice from D1 for his farm after the Plaintiff had supplied the certified seeds to them through D1. According to D2, due to the failure of the Plaintiff to provide ploughing, fertilizer, chemicals, and harvesting services to them as agreed, he had to get those services elsewhere. He avers that he got a tractor to plough his land for him, he also purchased chemicals to spray the land and when it was time for harvesting, he engaged the services of a combined harvester to harvest the rice. D2 stated that the failure of Plaintiff to fully perform its obligations under the agreement led to him running at a loss for that farming season. According to D2 after harvesting, he got 76 bags of grains of rice. Out of this, he used 56 bags of grains of rice to pay the person he engaged to harvest the rice with the combine harvester. He stated that he gave 15 bags of grains of rice out of the remainder of 20 bags to the CEO of the Plaintiff company. According to D2, he informed Bukari Abdul-Rauf that he has a balance of 20 bags of grains of rice to give to the Plaintiff and that he was going to give 10 bags to the Plaintiff and then give the remaining 10 bags to the Plaintiff after the next farming season which was the 2021/2022 farming season. ISSUES IDENTIFIED: The following issue has been identified for determination by this Court: Whether or not Plaintiff is entitled to recover the cost of the certified seeds of rice plus interest from the Defendants despite Plaintiff’s partial performance of its obligations under the contract with the Defendants. BURDEN OF PROOF: Before a court decides a case one way or the other, each party to the suit must adduce evidence on the issues to be determined by the court to the standard prescribed by law. In the case of Akrofi v Otenge and Anor [1989-90] 2 GLR 244 the venerable Adade JSC. held that: “what is proof? It is no more than credible evidence of a fact in issue. This may be given by one witness; or by several witnesses; what matters is the quality of the evidence.” The above legal position is supported by various provisions of NRCD 323, Section 14 of the Evidence Act, 1975 (NRCD 323) provides that: 14. Except as otherwise provided by law, unless and until 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 he is asserting”. This being a civil suit, the burden of producing evidence by both sides in the suit as well as the burden of persuasion is one to be determined on the preponderance of probabilities as defined by Section 12 of the Evidence Act 1975 (NRCD 323) which stipulates as follows: Proof by a Preponderance of Probabilities (1) Except as otherwise provided by law, the burden of persuasion requires proof by a preponderance of the probabilities. (2) “Preponderance of the probabilities” means that degree of certainty of belief in the mind of the tribunal of fact or the Court by which it is convinced that the existence of a fact is more probable than its non-existence. The defendant carries the burden of proving the facts alleged in his defence to the same degree as the burden Plaintiff carries in proving her claim against Defendant. It is also trite law that for every case there is a burden of proof to be discharged and the party who bears the burden will be determined by the nature and circumstances of the case. Sections 10 and 11(1) and (4) of the Evidence Act, 1975 (N. RC. D. 323) provide that: “10. Burden of Persuasion Defined (1) (2) 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. The burden of persuasion may require a party (a) (b) to raise a reasonable doubt concerning the existence or non- existence of a fact, or to establish the existence or non-existence of a fact by a preponderance of the probabilities or by proof beyond a reasonable doubt. 11. Burden of Producing Evidence Defined. (1) For the purposes of this Decree, the burden of producing evidence means the obligation of a party to introduce sufficient evidence to avoid a ruling against him on the issue. (4) In other circumstances the burden of producing evidence requires a party to produce sufficient evidence so that on all the evidence a reasonable mind could conclude that the existence of the fact was more probable than its non-existence. In Ababio v Akwasi 111 [1994-95] GBR at 774, the Supreme Court reiterated the point of a party proving an issue asserted in his pleadings. Aikins JSC. delivering the lead opinion of the court held thus: “the general principle of law is that it is the duty of the plaintiff to prove his case that is, he must prove what he alleges. In other words, it is the party who raises in his pleadings an issue essential to the success of his case who assumes the burden of proving it. The burden only shifts to the defence to lead sufficient evidence to tip the scales in his favour when on a particular issue the plaintiff leads some evidence to prove his claim. If the defendant succeeds in doing this, he wins, if not he loses on this particular issue. ANALYSIS: At the trial, Plaintiff testified orally via its Chief Executive Officer, Bukari Abdul-Rauf, and called one witness to close its case. Defendants testified by themselves and called no witnesses before closing their respective cases. I will now proceed to resolve the issue of whether or not Plaintiff is entitled to recover the cost of the certified seeds of rice plus interest from the Defendants despite Plaintiff’s partial performance of its obligations under the contract with the Defendants. The American Restatement (Second) of Contracts (1891) defines a contract as “a promise or a set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.” Black’s Law Dictionary, 9th Edition also defines a contract as “An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.” A contract may be wholly in writing, wholly oral, or partly in writing and partly oral. The validity of oral contracts in Ghana is expressed in section 11 of the Contracts Act of 1960 (Act 25) as follows: “subject to this Act, and to any other enactment, a contract whether made before or after the commencement of this Act, is not void or unenforceable by reason only that it is not in writing or that there is no memorandum or note of the contract in writing.” A contract may be discharged by an agreement between the parties to the contract, by the performance of the obligations under the contract by each party to the contract, by breach of the contract by a party to the contract, or by the frustration of the performance of the contract. Considering the issue on the table to be resolved in this matter, focus will be placed on the discharge of a contract by performance of the terms of the contract and the discharge of a contract by breach of the contract. It is trite law that breach of contract is a civil wrong and a cause of action arises when it occurs, thus an aggrieved party to a contract may commence legal proceedings to enforce the contract. Breach of a contract occurs when a binding contract is not honoured by one or more of the parties to the contract by nonperformance or interference with the other party’s performance of his or her obligations under the contract. To establish a cause of action for breach of contract or for the enforcement of a contract, it must be established that there is an existing valid contract between the parties, there must be a performance by the party seeking to enforce the contract, and there must be an unjustified non-performance or failure to perform on the part of the other party. Regarding the discharge of a contract by performance, the general principle in law is that a party to a contract is required to perform precisely and completely all his or her obligations under the contract to entitle him or her to bring an action against the other party to enforce that party’s performance. This general principle was espoused in the English case of Re Moore & Co. v. Landauer & Co. [1921] 2K. B. 519. The case was in respect of an agreement for the sale of 3,000 tins of canned fruit packed in cases of 30 tins. When they were delivered it was discovered that half the cases contained only 24 tins although the total number of tins was still 3,000. The market value was not affected. The Court of Appeal held that notwithstanding that there was no loss to the buyer, he could reject the whole consignment because the goods did not correspond with the description agreed between the parties. See Cutter v Powell (1975) 6 T. L. R. and Bolton v. Mahadeva [1972] 1 W. L. R. 1009. This general position brought about some hardship for contractual parties who had for example provided a substantial or partial performance of their obligations under the contract which performance had been accepted by the other party to the contract. As a result of this, some exceptions have been espoused in case law to counter the harsh effect of the general principle stated supra. I will proceed to discuss two of the exceptions to the general principle of the complete performance of a contract stated above. The first exception I will discuss is the doctrine of substantial performance. Christine Dowuona-Hammond in her book The Law of Contract in Ghana (2016) at page 276 states that “The principle of substantial performance states that if the performance tendered falls short of the required performance only in some relatively trivial respect, the party not at fault is not completely discharged from performance. He must pay the price agreed upon for the work done or the services rendered but may counterclaim for the loss he has suffered by reason of the incomplete or defective performance. This means there will be a deduction for the partial non- performance or trivial defect in performance. What constitutes substantial performance of a contract depends on the nature of the contract and all the circumstances. The courts look at the nature of the defects in performance and the proportion between the cost of rectifying the defects and the total contract price. Generally, where the cost of rectifying the defects in performance is a relatively small proportion of the total contract price, the courts are likely to consider the contract as substantially performed.” See Hoenig v Isaacs [1952] 1 T. L. R. 1360. The second exception is applicable where the plaintiff partially performs his obligations under the contract and the innocent party accepts that partial performance. In such a case the party who tendered the partial performance can sue on quantum merit or quantum valebat, whichever is applicable. ‘Quantum meruit’ means “as much as he has deserved” and refers to “a claim or right of action for the reasonable value of services rendered.” Or ‘quantum valebat’ which means ‘‘reasonable sum for goods supplied’’. Christine Dowuona-Hammond in her book The Law of Contract in Ghana (2016) page 277 states that “Even though a promisor has only partially performed his obligations under the contract, he will be entitled to payment for his part performance if it can be inferred from the circumstances that there was a fresh agreement between the parties under which the promisee agreed to pay for the partial performance tendered. This inference is made where the other party, having the option either to accept or reject the partial performance, chooses to accept, and keep the benefit of the partial performance.” This exception was expressly espoused in the case of Sumpter v. Hedges [1898] 1 Q. B. 673. as follows: “There are cases in which, though the plaintiff has abandoned the performance of a contract, it is possible for him to raise the inference of a new contract to pay for the work done on a quantum meruit from the defendant’s having taken benefit of that work…. Where, as in the case of work done on land, the circumstances are such as to give the defendant no option whether he will take the benefit of the work or not, then one must look to other facts than the mere taking of the benefit of the work in order to ground the inference of a new contract…. The mere fact that a defendant is in possession of what he cannot help keeping, or even has done work upon it, affords no ground for such an inference. He is not bound to keep unfinished a building which in an incomplete state would be a nuisance on his land.” See Hammond v. Ainooson [1974] 1 GLR 176-184. There are two distinctions that must be drawn when it comes to the assessment of the value of quantum meruit. In the case of Skanska Jensen International v. Klimatechnik Engineering Ltd [2003-2004] SCGLR 698, the supreme court stated that “the law in this area draws two clear distinctions. There are two bases for fixing the value of that quantum meruit: (a) reasonable remuneration fixed by the court; or (b) quantum meruit assessed at the contact rate. When one party starts to perform the contract but is prevented from completing it by the other party’s breach, he can claim quantum meruit at the contract rate.” From the evidence adduced by Plaintiff and Defendants, it is a fact that Plaintiff and the Defendants entered a contract for the Plaintiff to provide Defendants with five (5) services. These services are expressly stated in paragraph 1 of Exhibit A which is the contract document between Plaintiff and Defendants dated 9th January 2021 as follows: 1. Tractor Services for land preparation 2. Seed 3. Fertilizer 4. Agro-chemicals and 5. Harvesting services From Exhibit A, the Defendants in exchange for the services of the Plaintiff listed above, were to pay the Plaintiff in kind with paddy bags of rice immediately after harvesting. This was expressly stated in paragraph 2 of Exhibit A. Exhibit A, however, did not state how many paddy bags of rice were to be paid in kind to the Plaintiff by the Defendants immediately after harvesting. D1 in his evidence-in-chief stated that the Defendants were to pay the Plaintiff in kind with five (5) bags of grains of rice per every acre farmed by the Defendants if the Plaintiff provided all the five (5) services to the Defendants. D2 in his evidence-in-chief also stated that the Defendants were required to pay Plaintiff one bag of rice grains and a basin of rice grains for each bag of certified rice seeds taken from Plaintiff. When D2 was cross-examined by Plaintiff, he stated that it was D1 who told him. D2’s statement as to the grains of rice to be paid to Plaintiff in return for the services of Plaintiff is clearly not credible because D1 admitted that they were supposed to pay Plaintiff five (5) bags of rice grains if Plaintiff rendered all the five (5) services to them. Therefore, D2 cannot rely on any statement made to him by D1 to the contrary. According to Plaintiff, Defendants were to pay six (6) bags of rice grains (100 kilos) per acre to Plaintiff after harvesting if Plaintiff provided all the five (5) services to Defendants as agreed. Plaintiff did not adduce any evidence to prove this averment. The court therefore based on the admission of D1 and on the balance of probabilities believes that the Plaintiff and the Defendants orally agreed, outside Exhibit A that, the Defendants will pay to the Plaintiff in kind five (5) bags of grains of rice after harvesting the rice in exchange for the five (5) services from the Plaintiff. The general principle when it comes to construing or ascertaining the terms of a written contract is that where parties to a contract have reduced their agreement into writing, the written document is taken to be the whole contract. Therefore, no evidence dehors the written contract will be admitted to add to, vary or contradict the terms of the written contract. In the case of Motor Parts Trading Co. v. Nunoo [1962] 2 GLR 195-200 the supreme court held that “when a transaction has been reduced into or recorded in writing by agreement of the parties, extrinsic evidence is in general inadmissible to contradict, vary, add to or subtract from the terms of the document.” There are however some exceptions to this general principle. One of the notorious exceptions to this general principle is that extrinsic evidence may be admitted to fill the gaps in a contract, where it can be ascertained that the written contract is incomplete and that it was not the intention of the parties for all the terms of the contract to be contained in the written document. See Allen v. Pink [1838] 4 M & W140. Based on this exception to the general principle, the court, therefore, admits extrinsic evidence to fill the gap in the contract in respect of the number of bags of grains of rice the Defendants were supposed to give to the Plaintiff after harvesting the rice. It is also a fact that Plaintiff only supplied Defendants with seeds, precisely 160 bags of certified seeds of rice but failed to provide Defendants with the other four (4) services as agreed between the parties in Exhibit A. The Plaintiff, having failed to completely perform all his obligations under the contract, is not entitled to sue the Defendants to recover from the Defendants the five (5) bags of grains of rice per acre of land farmed by the Defendants. However, as discussed above, there are exceptions to the general principle that a party to a contract is required to perform precisely and completely all his or her obligations under a contract to entitle him or her to bring an action against the other party to enforce that party’s performance. The plaintiff cannot take advantage of the doctrine of substantial performance of his obligation under the contract to sue successfully the Defendants because merely providing one service out of a total of five (5) services agreed on under the contract cannot be construed as a substantial performance of that contract. The other services, which include tractor services for land preparation, fertilizer, agro-chemicals, and harvesting services, which Plaintiff failed to provide to Defendants are not trivial but rather substantial. Plaintiff is however entitled to sue the Defendants on a quantum meruit basis. For Plaintiff to successfully sue the Defendants on a quantum meruit basis, Plaintiff must establish that based on the circumstances of the case it can be inferred that there is an agreement for the Defendants to pay for the certified seeds of rice Plaintiff supplied to them. From the evidence on record, Plaintiff supplied Defendants with 160 bags of certified seeds of rice. The Defendants accepted the certified seeds of rice even though the Plaintiff had failed to provide the first service of the contract which is the provision of tractor services to the Defendants for preparation of their farmlands. According to D1, the Defendants received the certified seeds on 25th May 2021, and they planted them on 30th July 2021. This means the Defendants kept the certified seeds of rice received from Plaintiff for nearly two (2) months before planting them because they were waiting for Plaintiff to provide the tractor services for land preparation. The Defendants had the option to return the certified seeds to the Plaintiff and sue for breach of the contract when the Plaintiff failed to provide them with the tractor services for nearly two (2) months, but they chose not to do so. The Defendants went ahead and planted the certified seeds and subsequently harvested rice grains which indicate that they took benefit of the certified seeds of rice supplied to them by the Plaintiff. D1 did not tell the court the number of bags of rice he was able to harvest. D2 told the court that he got 76 bags of grains of rice after harvesting the rice. It can therefore be inferred that there was a new agreement between Plaintiff and Defendants for the Defendants to pay for the certified seeds of rice that the Plaintiff supplied to them. In fact, the Defendants knowing very well that the farming season for rice in their community had passed due to the delay by the plaintiff to provide them with the tractor services still went ahead to plant the certified seeds that the Plaintiff supplied them instead of returning the same to Plaintiff. This is evident in the answers D1 provided to question posed to him during crossexamination by Plaintiff. Below are the questions and answers: Q – What is the farming season of rice in your community A – From 1st June to 1st Week of July. Q – Then it means you were aware that the rice planting in their valley was over and since we were not providing him the tractor, he could have kept the seeds without planting as the season was over. You told this court you started planting from 15/07/21. A – That is not true because part of the valley did well and that is why we were on him for harvesting services. The Court finds that Plaintiff is entitled to recover the cost of the certified seeds that were supplied to Defendants by Plaintiff from the Defendants on quantum meruit. According to D1 and D2 when they received the certified seeds of rice from the Plaintiff, D1 took a total of 125 bags of the certified seeds of rice for his farm and D2 took 35 bags of the certified seeds for his farm. Plaintiff admitted that D2 after harvesting the rice gave Plaintiff 15 bags of rice grains which were valued at One Thousand and Two Hundred Ghana Cedis (GHS 1,200). D1 admitted during trial that he has not paid any money or given any bag of grains of rice to Plaintiff in respect of the seeds that he took for his farm. Although D1 and D2 entered the contract jointly with Plaintiff, the evidence on record suggests that they had separate farms and they shared the certified seeds amongst themselves for their various farms. It will therefore only be prudent if each defendant is held accountable for the certified seeds he took for his farm. Therefore D1 shall be required to pay for the 125 bags of certified seeds of rice he took and D2 shall also be required to pay for the 35 bags of certified seeds of rice he took. According to Plaintiff, a bag of certified seed of rice cost Two Hundred and Fifty Ghana Cedis (GHS 250) plus interest. To break it down, a bag of certified seed of rice cost Two Hundred Ghana Cedis (GHS 200) plus interest of Fifty (GHS 50). This was corroborated by Gilbert Atanga, the witness of the Plaintiff. The Defendants failed to challenge the statement made by Plaintiff and its witness when they had the opportunity to cross-examine him. DISPOSITION: For all the reasons I have set out in this judgment Plaintiff’s action succeeds, and I accordingly enter judgment in favour of Plaintiff against Defendants as follows: 1. In respect of reliefs 1 and 2 a. D1 is hereby ordered to provide Plaintiff with 125 bags of certified seeds of rice (50kg) or pay to Plaintiff its monetary equivalent of GHS 31,250.00. b. D2 is hereby ordered to provide Plaintiff with 30.2 bags of certified seeds of rice (50kg) or pay to Plaintiff its monetary equivalent of GHS 7,550.00. 2. 3. Relief 3 of the Plaintiff is hereby denied. Cost of GHS 500 is hereby awarded against each defendant in favour of Plaintiff. SGD H/W SIMON KOFI BEDIAKO ESQ MAGISTRATE 27/03/2023 13