Aerodynamics Limited Vrs . Pa To Pa Building & Construction Ltd and Another [2022] GHAHC 53 (15 December 2022)

IN THE SUPERIOR COURT OF JUDICATURE, IN THE HIGH COURT OF JUSTICE HELD AT CAPE COAST IN THE CENTRAL REGION ON THURSDAY THE 15TH DAY OF DECEMBER, 2022 BEFORE HIS LORDSHIP JUSTICE BERNARD BENTIL - HIGH COURT JUDGE SUIT NO. E2/11/2021 AERODYNAMICS LIMITED VRS 1. PA TO PA BUILDING & CONSTRUCTION LTD 2. KWADWO AIKINS JUDGMENT The Plaintiff Company has instituted this action against the Defendants herein for the following reliefs: a. A declaration that the Defendants are in breach of the Agreement entered into between the Plaintiff and the 1st Defendant on the 21st day of April 2021 b. An order for specific performance against the Defendants for the performance of all their obligations under the Agreement, including but not limited to obtaining all the relevant licences, regulatory permits and certification for the running of the quarry. c. An order of permanent injunction to restrain the Defendants, their agents, workmen, privies, servants and assigns from coming to the quarry site and/or doing anything either directly or indirectly to interfere with operations at the quarry site d. General damages for breach of contract e. Cost, inclusive of legal fees f. Any further order(s) this Honourable Court deems fit. Alternatively, the Plaintiff prays this court to grant the following reliefs: g. A declaration that the Defendants are in repudiatory breach of the Agreement entered into between the parties on 21st April 2021 h. An order for the recovery of an amount of Three Hundred and Forty Thousand Ghana Cedis (GH₵ 340,000) being the loan granted to the 1st Defendant together with the interest charged on it. i. An order for the refund by the Defendants to the Plaintiff the amount of Eight Hundred and Fifty-five Thousand, Eight Hundred Ghana Cedis and Nineteen Pesewas (GH₵ 855,800.19) being the amount invested in the quarry project together with interest at 20% from 19th March 2021 to 17th June 2021 j. General damages for breach of contract. k. Interest on the amounts claimed in reliefs (h) and (i) at the prevailing commercial bank rate from 17th June 2021 till date of final payment. l. Cost, inclusive of legal fees m. Any further order(s) this Court deems fit. The facts or events culminating into this action are that, the 1st Defendant Company, acting through its Chief Executive Officer, the 2nd Defendant herein, contacted the Plaintiff through one Mr Gideon Kwabena Gyimah of FIXIT Enterprise to discuss funding options from the Plaintiff for a supply contract the 1st Defendant had with AMANDI INVESTMENT LIMITED at Sefwi Benchema in the Western North Region of Ghana involving the supply of 10,000 cubic metres of 0-500mm boulders by the 1st Defendant to AMANDI INVESTMENT LIMITED for the construction of a 38km road from Benchema Barrier to Adjoafua in the Western North Region. After due diligence on the part of the Plaintiff, the Plaintiff got interested in the project and entered into a Financial/Loan Agreement on 10th February 2021 by which the Plaintiff granted the 1st Defendant a loan of Two Hundred and Twenty Thousand Ghana Cedis (GH₵220,000) at an interest rate of sixty percent (60%) for a period of forty days between 10th February 2021 and 22nd March 2021 by issuing to the Defendants two post-dated cheques which cleared. Immediately after the execution of the loan agreement, the 1st Defendant sought to renegotiate the interest chargeable on it from the otherwise GH₵ 132,000 representing 60% to a flat value of GH₵ 120,000 which the Plaintiff magnanimously and readily agreed for the purpose of the business relationship they had just started. The Plaintiff says that, the 1st Defendant presented two post-dated cheques to the Plaintiff in service of the loan. Both cheques were dated 23rd March 2021, one with a face value of GH₵ 220,000 for the repayment of the principal loan and the other with a face value of GH₵ 120,000 for the newly agreed interest amount. These cheques, according to the Plaintiff, were dishonoured on the due dates when presented at the bank. The Plaintiff further avers that the 1st Defendant had breached its supply contract with AMANDI INVESTMENT LIMITED by its failure to supply the boulders required and this resulted in repudiation of the supply contract between AMANDI INVESTMENT LIMITED and the 1st Defendant. On account of the repudiation of the said supply contract, the Plaintiff avers that it became evident that the 1st Defendant would not be able to fulfil its loan repayment. The Plaintiff confronted the 1st Defendant about its debt liability and the dishonoured cheques and demanded for an immediate satisfaction of the debt. The 1st Defendant consequently made a proposal to the Plaintiff whereby the 1st Defendant would introduce the Plaintiff to AMANDI INVESTMENT LIMITED for repudiated contract to be re-awarded to the Plaintiff as the new supplier of the boulders with the ultimate purpose that the Plaintiff would execute the contract to recover the principal loan granted to the 1st Defendant together with the accrued interest. The Plaintiff avers that, after broad consultations and with the view of mitigating its losses as the 1st Defendant could not satisfy the debt, the Plaintiff agreed to the proposal and the parties executed an agreement for that purpose. The said agreement had various terms which, according to the Plaintiff, where breached by the 1st Defendant. For instance, the 1st Defendant was mandated to provide all relevant licences, regulatory requirements and certificates for the operations of the Plaintiff at the quarry site until such a time as the Plaintiff recovered the principal and the accrued interest. Moreover, the agreement had a non-compete clause which proscribed the 1st Defendant from bringing on board any other investor or person whose activities would seek to compete with the activities of the Plaintiff. The Plaintiff avers that, notwithstanding these terms, the 1st Defendant has neglected, failed and/or refused to discharge his fundamental duty to the Plaintiff to produce all the relevant licences, regulatory permits and certificates for the smooth running of the quarry. The 2nd Defendant resorts to deceitful stories when enquiries are made concerning the relevant licences and permits. Again, in blatant disregard for the non-compete clause, the 2nd Defendant entered into an agreement with a third-party investor whom he brought to the quarry site to perform similar functions. This caused an impasse which had to ultimately be resolved by Chiefs and elders to make the third party leave the quarry site. Moreover, the 1st Defendant failed to co-exist in harmony with the landlord of the land by failing to discharge its financial obligations to the Stool thereby delaying the Plaintiff’s commencement of the operations of the quarry for over two months until the Plaintiff was cautioned and engaged the Chief and elders of the land to perform same for operations to commence. This delay, according to the Plaintiff, resulted in a drastic increase in the cost of the loan facility the Plaintiff took to undertake the venture. The Plaintiff says that the 2nd Defendant is very confrontational, contentious and abusive in nature and has consistently exhibited it, at least, three times at the Chief’s palace. He interferes and interrupts with operations at the quarry site whenever he comes around. He is very quarrelsome and attacks anyone with absolutely no provocation. The Plaintiff further states that, save for the intervention of this Honourable Court, the already breached agreement would become completely impossible to perform and the Plaintiff would risk losing all its capital invested in the project. The Defendants, despite several hearing notices served on them, disabled themselves from being heard. Thus, this Court proceeded to hear the matter in their absence. Once it is evident on record that the various hearing notices were duly served on the Defendants, this Court is justified in proceeding without the Defendants and to assume that they do not wish to be heard. It would be recalled that on the session of the High Court before His Lordship Justice Kwasi Boakye for the motion for judgment in default of defence, the defendants were absent. Per his Lordship ‘the application filed on 31st March, 2022 was adjourned to today at the instance of the Defendant’s Company’s lawyer. Today he is absent without reason; He had not responded to the application; I take it that he does not intend to do so. At the instance of the Plaintiff-Company/Applicant, I grant default judgment against the Defendant Company in terms of the alternative reliefs vii-xiii as endorsed on the writ of summons issued on 18th June, 2021. Cost to be assessed later. I order the plaintiff company to cause the Defendant Company to be served with hearing notice, discoveries, witness statements for case management conference on the next date. Suit adjourned to 26th May, 2022’. The refusal or inability of the Defendant to file defence to the action per authorities evince a clear indication that they do not have any defence at all and it will be waste of time and other resources to go to full trial. Where the Defendant seems to have defaulted in filing a defence the Plaintiff cannot be entitled to judgment in default of Defence until there is proof of service of the writ on the Defendant – See O.7 r 12(4) of CI 47. In this case the Defendants were served with the writ and statement of claim on the 21st June, 2021. Order 13 of the CI 47 provides for default judgment in situations in which there has been a failure by the Defendant to file Defence to the action. The rules provide for specific instance such as where the claim is for only a liquadated or unliquidated demand, detinue, possession of immovable property and, mixed claims. In cases where such a default relates to a claim involving a relief such as declaration of title or damages that cannot be granted by the court on a motion, the correct procedure is for the applicant to apply to the court under its inherent jurisdictions for directions and for that aspect of the case to be set down for trial, (Nagy v Co-operative Press, Ltd [1949] 1 All ER 1019.) The practice is that after the entry of default judgment, the Plaintiff must serve a hearing notice on the Defendant for the assessment of damages. In order for the court to grant relief for damages as endorsed on the writ in the alternative reliefs granted under the default judgment the court invited the Plaintiff to prove his caser and be heard on merit. The Plaintiff was then ordered to file witness statement and serve same on Defendant to afford them the right to cross- examine even though they did not file any Defence. However, after several hearing notices served on the Defendants, they refused and or neglected to exercise their right to cross-examine. The Plaintiff was subsequently discharged. A Defendant who defaults in filing a statement of defence is deemed to admit the claim endorsed in the writ, (Cribb v Freyberger [1919] WN 22). It is provided in the order 11 r2(1), CI 47 that a defendant who is having entered appearance intends to defend the action must file a statement of defence within fourteen days of the expiration time for filing entry of appearance unless the court otherwise directs. In the instant case, the Defendant failed to defend the matter evincing a clear indication that he did not have a defence to the claim of the Plaintiff. However, the fact that the Defendants did not participate in the trial does not automatically entitle the Plaintiff to the reliefs sought. The Plaintiff is mandated to prove his case on a preponderance of probabilities as required in section 12(1) of the Evidence Act, 1975 (N. R. C. D. 323). The onus always lies upon the party who would lose if no evidence is led in the case and where some evidence has been led, it lies upon the party who would lose if no further evidence was led. SEE FAIBI V STATE HOTELS CORPORATION [1968] GLR 471. The issue to be determined in this case is whether or not the Plaintiff is entitled to the reliefs sought. In other words, does the evidence adduced by the Plaintiff tip the scales in its favour? The Plaintiff’s witness statement is essentially a reproduction of its statement of claim. However, the Plaintiff goes a step further by annexing documents in proving its case. The Plaintiff by its witness statement has satisfied this Court of the existence of a Loan Agreement between the parties. (SEE Exhibit A). There is further proof of payment to the Defendants the sum of GH₵ 220,000. This is seen in Exhibits B and B1 which are copies of the pay-in slips. The Plaintiff tendered two post-dated cheques issued by the 1st Defendant (Exhibit C series). However, the testimony of the Plaintiff is that these cheques were dishonoured by the bank. There is further evidence of an Investment Agreement entered into by the parties executed on 21 April 2021 (Exhibit D). This agreement contains the terms which the Plaintiff alleges have been breached by the Defendants. In my view, the evidence adduced by the Plaintiff is enough to give judgment in its favour. The Plaintiff has established a prima facie case against the Defendants and in the absence of opposition or evidence to the contrary, the testimony of the Plaintiff stands uncontroverted. I am satisfied that the Plaintiff has established its case on the preponderance of probabilities. Therefore, judgment is hereby given in favour of the Plaintiff. I find the Defendants to be in breach of the Investment Agreement executed on the 21 April 2021. The Defendants are ordered to pay to the Plaintiff the sum of Three Hundred and Forty Thousand Ghana Cedis (GH₵ 340,000) being the loan granted to the 1st Defendant together with the interest charged on it. The Defendants are further ordered to refund the amount of Eight Hundred and Fifty-five Thousand, Eight Hundred Ghana Cedis and Nineteen Pesewas (GH₵ 855,800.19) being the amount invested in the quarry project together with interest at 20% from 19th March 2021 to 17th June 2021. Cost of GH¢10,000.00 is awarded in favour of the Plaintiff. (SGD) BERNARD BENTIL J. [HIGH COURT JUDGE]. COUNSEL ANASTASIA ASANTE ESQ. FOR THE PLAINTIFF. 8