Belly-Eff Company Limited v Ghana Education Trust Fund and Others (GJ/0961/2022) [2025] GHAHC 122 (30 April 2025)

IN THE SUPERIOR COURT OF JUDICATURE, IN THE HIGH COURT OF JUSTICE (GENERAL JURISDICTION DIVISION, COURT 12) ACCRA, HELD ON THE 30TH DAY OF APRIL, 2025 BEFORE HIS LORDSHIP JUSTICE AYITEY ARMAH-TETTEH SUIT NO: GJ/0961/2022 BELLY-EFF COMPANY LIMITED - PLAINTIFF VRS 1. THE GHANA EDUCATION TRUST FUND - DEFENDANTS 2. THE VOLTA REGIONAL COORDINATING COUNCIL 3. THE HONOURABLE ATTORNEY GENERAL --------------------------------------------------------------------------------------------------------------------- PARTIES: PLAINTIFF IS REPRESENTED BY SAMUEL OFORI KUMAH DEFENDANTS ABSENT COUNSEL: - GEORGE KWESI ESSEL, ESQ., LED BY DARYL EBO LAING, ESQ., FOR THE PLAINTIFF PRESENT PERELLA BRUCE FOR NANA AGYEI BAFFOUR AWUAH, ESQ., FOR THE 1ST DEFENDANT PRESENT JEFF ADU DUODU-OPARE (ASA) FOR 2ND AND 3RD DEFENDANTS PRESENT ----------------------------------------------------------------------------------------------------------- JUDGMENT Page 1 of 15 INTRODUCTION [1] The Plaintiff is a Company incorporated in Ghana and is in the construction industry. The 1st Defendant is a Fund established by the Ghana Education Trust Fund Act, 2000 (Act 581), among others, with the object of providing finance to supplement the provision of education. The 2nd Defendant is a government entity responsible for facilitating the overall development of the Volta Region. The 3rd Defendant is the Principal Legal Advisor to the government and is responsible for the institution and conduct, as well as the defence, of all civil cases on behalf of the State. The Plaintiff and 2nd Defendant on 10th August 2016, entered into a Contract with reference number GET/VR/25/16(the Contract) for the construction of a 2-storey Dormitory Block at Dzolo Senior High School, Dzolo Gbogame, in the Volta Region. The Plaintiff started construction of the work, and in June 2019, it was issued with an Interim Payment Certificate numbered 2 in the sum of Ghs502,496.89. The 2nd Defendant, which entered into the Contract with the Plaintiff, has failed to pay the amount, alleging that it is the responsibility of the 1st Defendant to pay. In response to Plaintiff’s claim, the 1st Defendant asserts that it has no obligation to pay the money as the Contract was between the Plaintiff and the 2nd Defendant, and not responsible under the Contract to pay the Plaintiff for the work done. The fundamental question that arises in this case is, between the 1st and 2nd Defendant, who is responsible for the payment of the work done by the Plaintiff under the Contract. PLAINTIFF’S PLEADINGS [2] The Plaintiff in its pleadings avers that by a letter dated 20th July, 2016, Plaintiff and 1st Defendant were both notified by Procurement & Management Consultancy Limited (the Consultants) to undertake a project under the auspices of the 1st Defendant comprising the completion of the construction of a 2-Storey Dormitory Block at Dzolo Senior High School, Dzolo Gbogame, in the Volta Region. Page 2 of 15 [3] According to Plaintiff, the Consultants were the appointed Project Consultants overseeing the construction of the project by and on behalf of the 1st Defendant, which project formed part of the government’s Schools Under Trees &Emergency Interventions Programe-SUTEmIP (Phase II). [4] It is the further case of the Plaintiff that by an agreement with reference number GET/VR/25/16, 10th August 2016, the Plaintiff entered into a contract with the 2nd Defendant in consultation with the 1st Defendant for the construction of a 2-Storey Dormitory Block at Dzolo Senior High School, Dzolo Gbogame, in the Volta Region. [5] According to Plaintiff, as is the norm and practice with the type of agreement entered into and the kind of project awarded to the Plaintiff, popularly referred to as “GETFUND Projects”, the 1st Defendant, by statute, is the funding or financing organisation. [6] According to the Plaintiff, it proceeded to the project site and commenced its scheduled work. The Consultants, after site inspection, issued a Payment Certificate numbered 1 in the sum of Ghs 591,611.99. The payment certificate was dispatched by the 2nd Defendant to the Administrator of the 1st Defendant for payment, but despite several assurances by the 1st Defendant, the debt covering the certificate numbered 1 remained unpaid until the Plaintiff commenced Suit No. GJ/172/19 title Belly-Eff Company Limited vrs The Ghana Education Trust Fund. The 1st Defendant paid the principal amount and later paid the interest after obtaining summary judgment against it. [7] It is the further case of the Plaintiff that it continued to carry out its contractual obligations under the Contract and in June 2019 was issued with an Interim Payment Certificate numbered 2 in the sum of Ghs 502,486.89. The amount remained unpaid because the Defendants failed to pay. [8] The Plaintiff, therefore, claims jointly and severally against the Defendants the following reliefs: Page 3 of 15 1. An order for the payment of the sum of Five Hundred and Two Thousand, Four Hundred and Ninety-Six Ghana Cedis and Eighty-Nine Pesewas (502,496.89). 2. Interest on the sum of Five Hundred and Two Thousand, Four Hundred and Ninety-Six Ghana Cedis and Eighty-Nine Pesewas (502,496.89) from June 2019 to date of final payment. 1ST DEFENDANTS’ PLEADINGS [9] In their pleadings and in response to the claim of the Plaintiff, the 1st Defendant denied the Claim of the Plaintiff and contends that it never had any consultation with the Plaintiff/and or the 2nd Defendant in respect of the contract. [10] 1st Defendant further contends that not only did it not have any consultations with the 2nd Defendant for the 2nd Defendant to enter into a contract with the Plaintiff, but it also did not have any agreement with the 2nd Defendant regarding financing the 2nd Defendant’s project. [11] It is the case of the 1st Defendant that, being a funding organisation for infrastructural projects in the education sector in the country, does not make it liable to Contractors who enter into contracts with agencies or institutions of state for specific projects, as alleged by the Plaintiff. [12] According to the 1st Defendant, it made payment to the Plaintiff with respect to the Payment Interim Certificate numbered 1 following discussions it had with the 2nd Defendant, which is the entity that contracted the Plaintiff to undertake the project. [13] 1st Defendant contends further that, it made the said payment not because it had a contractual obligation to the Plaintiff but because the 2nd Defendant which had the contractual payment obligation to the Plaintiff made a case for due payment to the Page 4 of 15 Plaintiff, whereupon the Board of Trustees of the 1st Defendant Fund approved the sad payment. [14] 1st Defendant contends further that the fact that it made the previous payment to the Plaintiff for and on behalf of the 2nd Defendant does not mean that the current claim by the Plaintiff is to be paid by the 1st Defendant as a matter of course. 2ND AND 3RD DEFENDANTS’ PLEADINGS [15] The 2nd and 3rd Defendants’ case is that the payment obligation under the contract lies with the 1st Defendant and not with the 2nd Defendant. ISSUES FOR DETERMINATION [16] In my view, from the pleadings and the evidence led, the fundamental issue for resolution in this suit is whether the 1st or 2nd Defendant is responsible for paying the Interim Payment Certificate numbered 2 under the contract. [17] At the trial, the Plaintiff testified through its Managing Director, Mr. Samuel Oforikumah, the 1st Defendant, even though its Assistant Administrator – Projects filed a Witness Statement, it opted not to testify. Richard Kumedzro, a staff member of the 2nd Defendant, testified on behalf of the 2nd and 3rd Defendants. [18] The Plaintiff repeated its averment in its pleadings and testified that by a letter dated 20th July 2016, the Plaintiff, the 1st Defendant and the 2nd Defendant were notified of an award of a contract for the construction of a 2-Storey Dormitory Block at Dzolo Senior High School, Dzolo Gbogame, in the Volta Region. The Plaintiff tendered the notification letter as Exhibit A. [19] Exhibit A referenced a 2nd Defendant’s letter for the award of contract with reference number VRCC/MW.6/V.4 dated June 30, 2016. Exhibit A requested the Plaintiff to comply with the following requirements, after which a contract will be required to be signed: Page 5 of 15 a. Submit to the Volta Regional Coordinating Council (2nd Defendant herein) through the Consultant an un-conditional performance bond of 30% of the contract sum or a Performance Bank Guarantee of 10% of the contract sum from a reputable bank using the acceptable format within fourteen days of this letter. b. Undertake an ‘all risk insurance cover’ (with a minimum of Gh¢ 30,000.00) for works in accordance with the Conditions of Contract on the Contract Data. c. Submit to the client your acceptance letter not later than 3rd August, 2016. d. Submit a programme of works within two (2) weeks for review by the consultant. [20] I find Exhibit A to be an offer by the 2nd Defendant through its Consultant to the Plaintiff for the award of the Contract for the construction of 2-Storey Dormitory Block at Dzolo Senior High School, Dzolo Gbogame – Lot: GET/VR/25/16 and per clause (c) above Plaintiff was to accept the offer by 3rd August 2016. In compliance with the requirement, the Plaintiff on 2nd August, 2016 accepted the offer per Exhibit B. Exhibit B was addressed to the Regional Coordinating Director of the 2nd Defendant. [21] The Plaintiff further complied with the requirements of Exhibit A and proceeded to sign the Contract, which was tendered as Exhibit C. Exhibit C is dated 10th August 2016 and made between the 2nd Defendant, Volta Regional Coordinating Council, as the Employer and the Plaintiff, Belly-Eff Company Limited, as the Contractor. [22] The parties (Plaintiff and 2nd Defendant) willingly entered into an agreement that culminated in the execution of Exhibit C. The general law is that everyone is bound by a contract he signs and he will be precluded from introducing extrinsic evidence to vary, modify or change the terms of the agreement and the court will enforce such contracts between the parties unless provisions of the contract are contrary to law, good morals, public order or public policy. In IP E-Game Ventures, Inc., Petitioner, vs. George H. Tan, Respondent (G.R. No. 239576, June 30, 2021) Lopez, J., J Page 6 of 15 It is basic that a contract is the law between the parties. Obligations arising from contracts have the force of law between them and should be complied with in good faith. Unless the stipulations in a contract are contrary to law, morals, good customs, public order, or public policy, the same are binding as between the parties. [23] See also the case of Allan Sugar (Products) Ltd v. Ghana Export Company Ltd (1982- 83) GLRD 91, where it was held that the Court would not rewrite an agreement entered into by parties and would hold them accountable for what they bargained for. No extraneous matters would be allowed to defeat the clear intention of the parties, and the court should uphold and respect the parties’ commercial bargains. [24] It is also the law that the function of the court is to ascertain what the parties meant by the words they used. The Court is to declare the meaning of words that are written in the instrument and not what was intended to have been written, so as to give effect to the intention expressed. See Akim Akroso Stool & Others v Akim Manso Stool and Others [1989-90] GLR 100 CA. [25] There are however, exceptions to these general rules of law. One of such exception is where there is an ambiguity in the terms of the contract. It is trite that where there is an ambiguity in the terms of a contract and the parties do not agree on a particular term, the court will have to decide on the dispute by resorting to extrinsic evidence. [26] In the present case, a reading of Exhibit C clearly shows no ambiguity in the terms of the Contract executed between the Plaintiff and the 2nd Defendant and as such does not call for any interpretation by resorting to extrinsic matters. EXHIBIT C [27] The agreement is in the following terms: Page 7 of 15 Whereas the Employer is desirous that the Contractor execute THE COMPLETION OF 2-STOREY DORMITORY BLOCK AT DZOLO SENIOR HIGH SCHOOL (hereinafter called the Works”) and the Employer has accepted the Tender by the Contractor for the execution and completion of such Works and the remedying of any defects herein. Now this Agreement witnesseth as follows: 1. In this Agreement, words and expressions shall have the same meanings as are respectively assigned to them in the Conditions of Contract hereinafter referred to, and they shall be deemed to form and be read and construed as part of this Agreement. (Emphasis mine) 2. In consideration of the payments to be made by the Employer to the Contractor as hereinafter mentioned, the Contractor hereby covenants with the Employer to execute and complete the Works and remedy any defects therein in conformity in all respects with the provisions of the Contract. 3. The Employer hereby covenants to pay the Contractor in consideration of the execution and completion of the Works and remedying of defects the Contract Price of ONE MILLION, FOUR HUNDRED AND NINETY- NINE THOUSAND, NINE HUNDRED AND SEVENTY-THREE GHANA CEDIS, TWENTY GHANA PESEWAS.(Gh¢1,499,973.20) or such other sum as may become payable under the provisions of the contract at the times and in the manner prescribed by the Contract. [28] Clause 1.1 of the conditions of Contract (Exhibit C) defines the Contractor as a person or corporate body whose bid to carry out the Works has been accepted by the Employer. And the Employer is defined as the party who employs the Contractor to carry out the Works. Page 8 of 15 [29] The obligations of the parties under the conditions of the Contract, relevant to determining the issues before this court, including who is responsible for payment, are explicitly outlined in the contract Exhibit C. Clause 42. Provides as follows: 42.1 The Contractor shall submit to the Project Manager monthly statements of the estimated value of the work executed less the cumulative amount certified previously. 42.2 The Project Manager shall check the Contractor’s monthly statement and certify the amount to be paid to the Contractor. 42.3 The value of work executed shall be determined by the Project Manager. 42.4 The value of work executed shall comprise the value of the quantities of items in the Bill of Quantities completed. 42.5 The value of work executed shall include the valuation of Variations and Compensation Events. 42.6 The Project Manager may exclude any item certified in a previous certificate or reduce the proportion of any item previously certified. [30] PAYMENTS 43.1 Payments shall be adjusted for deductions for advance payments and retention. The Employer shall pay the Contractor the amounts certified by the Project Manager within 60 days of the date of each certificate. If the Employer makes a late payment, the Contractor shall be paid interest on the late payment. interest shall be calculated from the date by which the payment should have been made up to the date when the late payment is made at the prevailing rate Page 9 of 15 of interest for commercial borrowing for each of the currencies in which payments are made. (Emphasis mine) [31] SOURCE OF FUNDING Clause 63. is also in the following terms 63.1 In the event that the World Bank suspends the Loan or credit to the Employer, from which part of the payments to the Contractor are being made: (a) The Employer is obligated to notify the Contractor of such suspension within 7 days of having received the World Bank’s suspension notice (b) If the Contractor has not received sums due it within the 28 days for payment provided for in Sub-Clause 43.1, the Contractor may immediately issue a 14-day termination notice. [32] The agreement and the above provisions contained in the conditions of the Contract are unambiguous and do not call for any interpretation. The combined effect of the above provisions is that the obligation to pay for the Works undertaken by the Plaintiff under the Contract lies on the 2nd Defendant upon receipt of a Payment Certificate prepared by the Consultant. Once a payment certificate is issued, the 2nd Defendant is obligated to pay whatever amounts are contained in the payment certificate. [33] The 2nd Defendant, as the employer named in the Contract, is the one who appoints a Project Manager, also known as the Consultant. Clause 1.1 defines who the Project Manager is as follows: The Project Manager is the person named in the Contract Data (or any other competent person appointed by the Employer and notified to the Contractor, to act in replacement of the Project Manager) who is responsible for supervising the execution of the Works and administering the Contract. Page 10 of 15 [34] The Consultant who prepares and issues payment certificates under the Contract is an agent of the 2nd Defendant and not an agent of the 1st Defendant. The Project Manager was the one who wrote to the Plaintiff notifying it of the award of the Contract. It is same Project Manager who prepared the Interim Payment Certificates 1 and 2. The Project Manager did all these as an agent of the 2nd Defendant and not an agent of the 1st Defendant. [35] From the terms of the Contract, there is no doubt that it is the 2nd Defendant, as the employer, who should pay the Plaintiff for the Works done and is responsible for honouring payment in respect of any Payment Certificate 2 in the sum of Five Hundred and Two Thousand, Four Hundred and Ninety-Six Ghana Cedis and Eighty-Nine Pesewas (Ghs 502,496.89) prepared and issued by the Consultant or the Project Manager. [36] However, it is the case of the Plaintiff, 2nd and 3rd Defendants that it is the 1st Defendant that is the funding agency and is obligated to pay the Plaintiff under the Contract. It is pleaded at paragraphs 2, 6, 8, 9 and 10 of the statement of claim as follows: 2. The 1st Defendant is a government agency tasked with the provision of funding for educational infrastructure projects in Ghana, such as the School Under Trees & Emergency Interventions Program- SUTEmIP (Phase II). 6. The Plaintiff states that by a letter dated 20th July, 2016, the Plaintiff and the 1st Defendant were both notified by the Procurement & Project Management Consultancy Limited (hereinafter referred to as “The Consultants”) to undertake a project, under the auspices of the 1st Defendant, comprising the completion of a 2- Storey Dormitory Block at Dzolo Senior High School, Dzolo Gbogame. 8. The Plaintiff further states that the company referred to in paragraph 4 (supra) , were the appointed project consultants overseeing the construction of the project by Page 11 of 15 and on behalf of the 1st Defendant, which project formed part of the government’s School Under Trees % Emergency Interventions Program- SUTEmIP(Phase II). 9. The Plaintiff says that by a contract with reference number GET/VR/25/16, the Plaintiff entered into a contract with the 2nd Defendant in consultation with the 1st Defendant for the construction of a 2-storey Dormitory Block at Dzolo Senior High School, Dzolo Gbogame. 10. The Plaintiff says that as is the norm and practice with the type of agreement referred to in paragraph 6 (supra), and the kind of project awarded to the Plaintiff [37] The 1st Defendant denied specifically the above averments of the Plaintiff and pleaded that it is not responsible for the payment of the contract price. It also went further and denied it under cross-examination of the Plaintiff’s witness: Q. Per paragraph 9 of your Witness Statement, you testified that the Plaintiff made enquiries as to who the funding agency was and the response was that it was the 1st Defendant. Is that not correct? A. It is correct. Q. By “Funding Agency” you mean the Institution that had the obligation to pay the Plaintiff for the work done under the contract. Is that correct? A. It is correct Q. I am suggesting to you that the Plaintiff did not make any such enquiry as alleged in paragraph 9 of your Witness Statement. A. That is not correct. What happens is that when advertisements are made in the dailies, the project managers are also advertised in the papers so what we the contractors, normally do is to contact the Project Managers to find who or where the Page 12 of 15 Project Funding is coming from, and it is normal practice. More so, I had done series of GETFUND Projects so it is very known to me where the Funding is coming from. [38] The Plaintiff testified under cross-examination that in the Structure of the Contract, though the 1st Defendant is not a party to the Contract but the Contracts are signed or executed in consultation with the 1st Defendant because it is their obligation in the Contract. [39] Richard Kumedzro, the witness for 2nd and 3rd Defendants testified as follows: On 20th July, 2016, the Procurement & Project Management Consultancy (PPMC), the Consultants for the 1st Defendant, issued an award letter upon receipt of award notification from VRCC, to the Plaintiff for the completion of a 2-Storey Dormitory Block at Dzolo Senior High School, Dzolo Gbogame. In a letter dated 2nd August 2016, the Plaintiff wrote a letter to the 2nd Defendant accepting the terms and conditions of the awarded contract. Subsequently, the 2nd Defendant in consultation with the 1st Defendant the 1st Defendant entered into an agreement with the Plaintiff under the Public Procurement Act, 2003 (Act 663) as amended. The Plaintiff has been paid the first certificate issued and the second is outstanding. (Attached and marked as Exhibit ‘4’ is a copy of the 2nd Payment certificate issued to GETFUND). [40] The Plaintiff, 2nd and 3rd Defendants further assert that because the 1st Defendant, by statute, is the funding agency, and has the obligation under the Contract to pay the Plaintiff for the work done under the Contract. [41] I do not seem to agree with them on this submission. The Contract defines the obligations of the parties, and the parties are liable for fulfilling it, regardless of how they secure funding to pay. Under Exhibit C, the obligation to pay the contract sum lies with the 2nd Defendant as found in clause 43.1; the manner in which it secures funding does Page 13 of 15 not absolve it from paying if it is unable to secure the necessary funding from its sources. In any case, the Plaintiff does not have any contractual obligation with the 1st Defendant for the 1st Defendant to assume the obligation under Contract Exhibit C to pay the contract sum. [42] If the parties intended to place the obligation of the payment of the Contract Price of One Million, Four Hundred And Ninety-Nine Thousand, Nine Hundred and Seventy- Three Ghana Cedis, Twenty Ghana Pesewas.(Gh¢1,499,973.20) on the 1st Defendant, they would have specifically made it a term of the agreement, and the parties would have been bound by their own terms. In the absence of any such obligation on the 1st Defendant to pay the Contract Price, I am unable to ask the 1st Defendant to pay the interim payment certificate numbered 2 in the sum of Five Hundred and Two Thousand, Four Hundred and Ninety-Six Ghana Cedis and Eighty-Nine Pesewas (Ghs 502,496.89). [43] The Plaintiff argues that the 1st Defendant paid the first certificate and, as such, is liable to pay the second payment certificate, the subject matter of this suit. The response from the 1st Defendant to this submission is that it paid the money after discussing with the 2nd Defendant, and it did not undertake to pay the whole contract sum. [44] Under clause 63 of Exhibit C, the World Bank is the one that is said to provide funding for the payment of the contract sum. And the World Bank has provided funding in the form of a loan or credit facility to the 2nd Defendant [45] The parties are bound by the terms of the contract and the 2ND Defendant is obligated by the conditions contained in the Contract to pay the Plaintiff the payment certificate numbered 2 raised by the Project Manager. Whether or not the Plaintiff is entitled to interest for delays in the payment under contract numbered GET/VR/25/16 Page 14 of 15 [46] As stated earlier, the parties are obligated to fulfil their duties under the contract, and they are bound by its terms. According to clause 43.1 (supra) of the conditions of Contract, if the Employer delays payment, the Contractor shall receive interest on the late payment. Interest will be calculated from the date by which the payment should have been made until the date the late payment is made, at the prevailing interest rate for commercial borrowing. [47] In conclusion, I enter judgment in favour of the plaintiff as follows: 1. An order directed at 2nd to pay the Plaintiff the sum of Five Hundred and Two Thousand Four Hundred and Ninety-Six Ghana Cedis Eighty-Nine Pesewas (Ghs 502,496.89). 2. Interest on the said amount at the prevailing rate of interest for commercial borrowing from June 2019 to the date of final payment. 3. I award the Plaintiff costs of Ghs60,000.00 and against the 2nd and 3rd Defendants. (SGD.) AYITEY ARMAH-TETTEH (JUSTICE OF THE HIGH COURT) Page 15 of 15