OTOO VRS. IPY BUSINESS LINK CO LTD AND OTHERS (OCC/07/2023) [2025] GHAHC 59 (31 January 2025)

IN THE HIGH COURT OF JUSTICE, COMMERCIAL DIVISION, HELD AT KUMASI ON FRIDAY THE 31ST DAY OF JANUARY 2025 BEFORE HIS LORDSHIP JUSTICE CHARLES KWESI BENTUM - HIGH COURT JUDGE -------------------------------------------------------------------------------------------------------- SUIT NO. OCC/07/2023 PROFESSOR EMMANUEL OTOO - PLAINTIFF of Fumesua – Ashanti VRS 1. IPY BUSINESS LINK CO LTD - DEFENDANTS 2. PHILIP ANYIMAH 3. ISAAC ZIDAH All of Fumesua - Ashanti ------------------------------------------------------------------------------------------------------ TIME: 09:08AM. JUDGMENT: The Plaintiff’s substantive claim, against the Defendants, jointly and severally, is for them to pay to him, the sum of GH₡469,200.00. According to the Plaintiff, this amount, he is claiming, is the outstanding of the Principal and Interest of money, he invested in the 1st Defendant Company. 1 From the evidence before the Court, the basis of the Plaintiff’s claim, is contingent on two documents, admitted into evidence as Exhibits “A” and “A (1)” as well as “B” and “B (1)” without objection. This is what Exhibit “A” states inter alia: “CERTIFICATE OF SHAREHOLDING This is to certify that PROF EMMANUEL OTOO has bought 2000 number of shares in the IPY BUSINESS LINK COMPANY LIMITED a company duly registered under the laws of Ghana for a period of 120 months. The said shares(s) was/were bought on the date of 23/01/21 The share-holder stands to earn 6% on his or her share after a maturity of 30 working days. Besides, the share-holder will get his or her seed capital after investment period. SHARE-HOLDER: Signature (SGD.). NAME: PROF EMMANUEL OTOO ……………………………………… CONTACT: 0244527425 …………………………………….. DIRECTOR 1 DIRECTOR 2 Signature SGD Signature SGD NAME: PHILIP ANYIMAH NAME: ISAAC ZIDAH 2 CONTACT: 0557755660 CONTACT: 0243214379” Exhibit “B” is also in similar terms as follows: CERTIFICATE OF SHAREHOLDING This is to certify that PROF EMMANUEL OTOO has bought 1,200 number of shares in the IPY BUSINESS LINK COMPANY LIMITED a company duly registered under the laws of Ghana for a period of 120 months. The said shares(s) was/were bought on the date of 18/11/21 The share-holder stands to earn 6% on his or her share after a maturity of 30 working days. Besides, the share-holder will get his or her seed capital after investment period. SHARE-HOLDER: Signature (SGD.) NAME: PROF EMMANUEL OTOO ……………………………………… CONTACT: 0244527425 …………………………………….. DIRECTOR 1 DIRECTOR 2 Signature SGD Signature SGD NAME: PHILIP ANYIMAH NAME: ISAAC ZIDAH 3 CONTACT: 0557755660 CONTACT: 0243214379” The Defendants tendered the same documents in their case as Exhibits “1” and “2”. Exhibits "A" and "A(1)" as well as "B" and "B(1)" embody the terms of the Contract between the Plaintiff on one hand and the 1st Defendant represented by 2nd and 3rd Defendants, its Directors, on the other. The main terms of the Contract as expressed on the face of Exhibits “A” and “B” reveals that, the Plaintiff purchased some number of shares in the 1st Defendant Company for specified periods, that is 2,000 shares for 120 months on 23rd January, 2021 and 1,200 shares for 120 months on 18th November, 2021, respectively. The 1st Defendant Company, on the face of Exhibits “A” and "B" bound itself to pay 6% of the number of shares purchased by the Plaintiff, after what 1st Defendant Company stated, as a maturity of 30 working days. The Plaintiff is also per the Exhibits, entitled to his seed capital after the investment period. Exhibit “A (1)” provides that, the duration of the investment plan is at least twelve (12) months period renewable. The same Exhibit “A (1)” stated the investment duration as ten (10) years. Exhibit “B (1)” also provides that, the duration of the investment plan is at least twelve (12) months period renewable. The same Exhibit “B (1)” stated the investment duration as (120) months. 4 So, what then has provoked the Plaintiff to run to this Court to seek a Principal relief for GH₡469,200.00 as Principal and Interest of his money which he invested in the 1st Defendant Company? This is what the Plaintiff stated at paragraphs 11, 12 and 13 of the Statement of Claim in answer to the above question. “11. The Plaintiff avers that, the Defendants paid his monthly earnings in full in January and February 2022. 12. The Plaintiff repeats the immediately preceding paragraph and says that, payment of his monthly earnings (income) stopped after February, 2022, until June, 2022, when the Defendants made another arrangement to enable the Defendants pay all the outstanding but did not materialised. 13. The Plaintiff says that, since then, every effort to persuade the Defendants pay the Plaintiff's outstanding balance of GH₡149,200.00 have proved futile.” The Defendants did not admit the above averments and denied same at paragraph 2 of their Statement of Defence. The Defendants explained that, 1st Defendant’s operations were going well at the time the Plaintiff acquired his shares in the 1st Defendant so, he was paid dividends in January and February 2021, but its operations were hit heavily by global crisis. According to the Defendants, because 1st Defendant’s operations are in the petroleum sector, the global oil crisis and the covid-19 pandemic made it impracticable for the 1st Defendant Company to remain profitable and to pay dividend to the Plaintiff and other 5 shareholders as was envisaged when the Plaintiff acquired his shares in the 1st Defendant Company. The Defendants averred also that, it was indicated to the Plaintiff that, he stood to earn 6% of his share value monthly after 30 working days based on the operational returns of the 1st Defendant Company. The Court, construing the entirety of the Defendants Defence to the Plaintiff's averments at paragraphs 11, 12 and 13 of the Statement of Claim poses the question as follows: Is there a term of the Contract embodied in Exhibits “A” and "A(1)" as well as Exhibits “B” and “B(1)” that provided that, the Plaintiff stood to earn 6% of his share value monthly, after 30 working days based on the operational returns of the 1st Defendant Company. This Court has painstakingly scrutinised the above Exhibits to find whether there is any such condition precedent for the payment of Plaintiff’s earnings based on the existence of operational returns of 1st Defendant Company. The Court never found such condition from the above Exhibits. The effect is that, in the absence of any such condition, the 1st Defendant Company was contractually bound under the terms of Exhibits "A" and "A(1)" as well as "B" and "B(1)" to pay 6% of Plaintiff’s share value to him after a maturity of 30 working days without fail. The Court holds the 1st Defendant Company to the mandatory statutory dictates of Section 26 of the Evidence Act NRCD 323 which provides as follows: “Except as otherwise provided by law, including a rule of equity, when a party has, by his own statement, act or omission, intentionally and deliberately caused or permitted another person to believe a thing 6 to be true and to act upon that belief, the truth of that thing shall be conclusively presumed against that party or his successors in interest in any proceedings between that party or his successors in interest and such relying person or successors in interest.” Further, it was held in Pickard v Sears [1837] 6 Ad. & El.469 thus: “Where one by his words or conduct wilfully causes another to believe in the existence of a certain state of things, and induces him to act on that belief, or to alter his own previous position, the former is precluded from averring against the latter a different state of things as existing at that time.” On the basis of the above authorities, the 1st Defendant Company is estopped from hiding behind the so-called global oil crisis, covid-19 pandemic and a non-existent condition, that is, “operational returns” to avoid its contractual obligations to the Plaintiff as stipulated in Exhibits “A” and "A(1)" as well as "B" and "B(1)". The Plaintiff pleaded at paragraph 9 of the Statement of Claim that, he introduced one Sheila and her husband, Phillis Abebrese, Marrian Ackah and Esther Boakye to the Company and was earning 1% monthly income of GH₡650.00. The Plaintiff further pleaded at paragraph 10 of the Statement of Claim that, based on the Agreement between the parties, he was paid GH₡19,200.00 representing 6% of his total investment and GH₡650.00 representing 1% of monies invested by those he introduced to the 1st Defendant Company amounting to a total of GH₡19,850.00 per month. The Defendants at paragraph 2 of their Statement of Defence denied the said paragraphs 9 and 10 of the Statement of Claim. 7 Notwithstanding the denial of the additional payment of an amount of GH₡650.00 to the Plaintiff, same was admitted under Cross-Examination of the 2nd Defendant by Counsel for Plaintiff on 10th December, 2024, as follows: “Q: I am putting it to you that, Plaintiff was taking additional GH₡650.00 as a result of other investors he introduced making his net payment on monthly basis GH₡19,850.00. A: My Lord, it is not correct because his shares amount in the Company was GH₡3,200.00. The GH₡650.00 that he talked about was not part of the shares Plaintiff acquired in the Company, so at any material time, when the Company declares dividend, then the Company pays that additional GH₡650.00.” From the foregoing, the Witness corroborates the Plaintiff’s case in relation to the fact that, apart from being paid on his investment, he also received a separate amount of GH₡650.00. The Court rejects the payment of the said GH₡650.00 as contingent on 1st Defendant Company declaring dividend. The Court finds from the evidence that, the GH₡650.00 was payable for other persons Plaintiff introduces to the 1st Defendant Company. The Court finds the existence of a Collateral Agreement to the main Agreement, Exhibits “A” and "A(1)" as well as "B" and "B(1)", albeit unwritten for which the 1st Defendant Company paid GH₡650.00 to the Plaintiff. There will have been no basis for 1st Defendant Company to be dishing out GH₡650.00 monthly to the Plaintiff in addition to his earnings on his investment, if there was no unwritten collateral agreement that, he will be entitled to 1% of the investment made by persons he introduces to the business of 1st Defendant Company. 8 By reason of the foregoing, the Court finds that, the 1st Defendant Company is indebted to the Plaintiff on the strength of Exhibit “C”, a demand notice dated 12th August, 2022, proving as a fact that, 1st Defendant Company is indebted to the Plaintiff. Exhibit “C” was tendered without objection and the 1st Defendant Company is deemed to have admitted its contents as a fact. From the totality of the evidence before the Court, it finds that, the Plaintiff is entitled to his relief (1) for the payment of GH₡469,200.00 as the outstanding of both Principal and Interest on the sum total of the GH₡200,000.00 representing 2,000 shares paid on 23rd January, 2021, to 1st Defendant Company and also the sum of GH₡120,000.00 representing 1,200 shares paid on 18th November, 2021, to 1st Defendant Company. The Court grants relief (1) and Orders the 1st Defendant Company to pay the sum of GH₡469,200.00 to the Plaintiff forthwith. The Court (Award of Interest and Post Judgment Interest) Rules, 2005 (C. I. 52) provides in Rule 1 that, if the Court in a civil cause or matter decides to make an Order for the payment of Interest on a sum of money due to a party in the action, that Interest shall be calculated at the bank rate prevailing at the time the Order is made and at Simple Interest. However, where an enactment, instrument or agreement between the parties specifies a rate of interest which is to be calculated in a particular manner, the Court shall award the rate of interest calculated in that manner. At Rule 2(2) of C. I. 52, where the transaction which result in a Judgment Debt is contained in an agreement, evidenced in writing or admitted by the parties and they specify in the instrument, writing or admission, the rate of interest, which is chargeable on 9 the debt and which is to run to the date of final payment, then the rate of Interest shall be payable until the final payment. The Plaintiff per relief (2) seeks Pre-Judgment Interest on GH₡469,200.00 at the agreed rate of 6% per month from 1st November, 2022, to date of Judgment. This relief shall be refused because by Plaintiff’s own showing, the GH₡469,200.00 stated in the Writ of Summons is constituted by outstanding Principal and Interest and the Court understands that Interest to be Pre-Judgment. The Court cannot award another Pre-Judgment Interest to the Plaintiff under relief (2). The Plaintiff per relief (3) seeks Post Judgment Interest on GH₡469,200.00 at the agreed rate of 6% per month from the date of Judgment to date of final payment. On the face of the parties agreement, the 6% stated therein constitute Interest payment on Principal sum. This relief is therefore granted as prayed. From the Writ of Summons, the Plaintiff’s claim is against all the Defendants jointly and severally. The Court cannot grant Plaintiff’s reliefs jointly and severally to include 2nd and 3rd Defendants. The allegation against the 2nd and 3rd Defendants is contained in paragraph 14 of the Statement of Claim wherein the Plaintiff says that, he has been deceived by the 2nd and 3rd Defendants. The 2nd and 3rd Defendants, according to paragraph 3 of the Statement of Claim are Directors of 1st Defendant. A Company is an artificial legal person and can only act through human beings it constitutes as Directors. The Plaintiff did not particularise any acts such as required under Order 11 r 12(a) of C. I. 47 to make the Court find distinctly such conduct that, may be attributed to the 2nd and 3rd Defendants personally as distinct from the 1st Defendant. The Plaintiff failed to do so. 10 The Court refers to Morkor v Kuma (The East Coast Fisheries case [1998 -99] SCGLR 620. I borrow from the Summary of the case as per the Scholarly and Seminal Work of Ferdinand D. Adadzi, the Modern Principles of Company Law in Ghana at page 25 as follows: “In a Sale Agreement between the parties for some metric tones of fish, the 1st Defendant which was a Company, the Chief Executive and Shareholder of this Company entered into the Sale Agreement on behalf of the Company and when the Company defaulted in payment of the remaining amount, it was sued together with the Chief Executive. The trial Court held that, the Chief Executive Officer of the Company was liable. On Appeal, the issue for determination was whether the Appellant was a proper party to the Suit. It was held that, the proper Defendant in an action on a contract is the person (or persons) who made the promise, the breach of which created the cause of action. Since the Appellant had been sued jointly with the 1st Defendant, she would be a proper party to the suit only if specific personal liability were established against her, or the veil of incorporation could be lifted to make her acts synonymous with those of the Company or vice versa.” On the authority of Morkor v Kuma and having regard to the 2nd and 3rd Defendants acting for and behalf of 1st Defendant Company in relation to the transaction with the Plaintiff that, birthed Exhibits “A” and “A(1) as well as "B" and "B(1)", the Court finds that, the 2nd and 3rd Defendants are not proper parties to the suit and accordingly, invokes Order 4 r 5(2)(a) of C. I. 47 to non-suit the 2nd and 3rd Defendants. 11 The Plaintiff's action succeeds in terms of relief (1) for the payment by 1st Defendant Company to him, an amount of GH₡469,200.00 as Pre-Judgment Principal and Interest. The Court refuses relief (2) for the reason stated supra. The Court grants relief (3) for Post-Judgment Interest on GH₡469,200.00 at the agreed rate of 6% Interest per month from the date of Judgment to date of final payment. The Court awards costs of Ten Thousand Ghana Cedis (GH₡10,000.00) against the 1st Defendant Company in favour of the Plaintiff. (SGD.) H/L JUSTICE CHARLES KWESI BENTUM (JUSTICE OF THE HIGH COURT) LEGAL REPRESENTATION: Isaac Bobi for the Plaintiff. Clinton Tonto holding brief of Nana Kwasi Boatey for the Defendants. 12