CHY TRADING LTD. VRS. BIGLEBB CONSTRUCTION & CRUSHING LTD. AND ANOTHER (CM/RPC/0600/2019) [2025] GHAHC 27 (28 January 2025)

IN THE SUPERIOR COURT OF JUDICATURE IN THE COMMERCIAL DIVISION (COURT 1) OF THE HIGH COURT OF JUSTICE ACCRA, HELD ON TUESDAY THE 28TH DAY OF JANUARY, 2025 BEFORE HER LADYSHIP JUSTICE SHEILA MINTA SUIT NO. CM/RPC/0600/2019 CHY TRADING LTD. - PLAINTIFF VRS. 1. BIGLEBB CONSTRUCTION & CRUSHING LTD. - DEFENDANTS 2. GIOVANNI ANTONELLI ---------------------------------------------------------------------------------------------------- JUDGMENT By the Plaintiff’s pleadings, it is a company incorporated in Ghana that carries on the business of importation and sale of petroleum products as a distributor. That its predecessor Unique Oil Company Limited and nominated representative, Gaso Petroleum Limited had an oral contract with 1st Defendant for the supply of diesel for which there was an outstanding debt owed it by the Defendants. Plaintiff therefore issued a Writ of Summons and Statement of Claim against the Defendants jointly and severally as follows:- a. Recovery of the sum of Five Hundred and Fifty-Two Thousand, Six Hundred and Twenty-Seven Ghana Cedis, Ninety-One Pesewas (GH¢552,627.91) being the debt owed the Plaintiff by the 1st Defendant pursuant to the sale of petroleum products agreement made between Plaintiff and Defendants which they have failed to pay. P a g e 1 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. b. Recovery of interest on the amount of Five Hundred and Fifty-Two Thousand, Six Hundred and Twenty-Seven Ghana Cedis, Ninety-One Pesewas (GH¢552,627.91) at the commercial bank rate from the date of sale till date of final payment. c. An order to lift the corporate veil of 1st Defendant in order to find 2nd Defendant equally liable for the debt as 2nd Defendant is using 1st Defendant as his alter ego to evade his legal obligations. d. Costs occasioned by the suit including legal fees; and e. Any other order as the Court will deem fit. Defendants’ case is that the Plaintiff is not entitled to the reliefs claimed as Plaintiff is not known to the Defendants and Plaintiff has failed to show evidence of any transaction between the parties in this suit for which these claims are being made. SUMMARY OF PLAINTIFF’S CASE It is Plaintiff’s case that per an arrangement between Unique Oil Company and Plaintiff Company dated 22nd September, 2015, Plaintiff was assigned the debts of Unique Oil which were intended to be recovered by the Plaintiff from the debtors of Unique Oil. That 1st Defendant happened to be one of those companies that purportedly owe Unique Oil. In paragraphs 5, 6 and 7 of the Plaintiff’s Statement of Claim it averred as follows:- “5. Plaintiff states that by an assignment debt dated 22nd September, 2015 made between Plaintiff as assignment and Unique Oil Company Limited, a limited liability company, as assignor, the assignor transferred all its debts to the Plaintiff since the assignor was indebted to the Plaintiff. 6. Plaintiff states that its assigned debts were meant to be recovered and proceeds used to liquidate the debt owed by the assignor to the Plaintiff herein for petroleum supplied to the assignor. 7. Plaintiff states that its predecessor Unique Oil Company Limited orally agreed with the 1st Defendant for the supply of petroleum products…” P a g e 2 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. Plaintiff further stated that as a result of this contract, supplies were made to 1st Defendant for which there is an outstanding debt due and owed it by both 1st Defendant and 2nd Defendant (who is alleged to be the alter ego of the 1st Defendant Company). It is based on this assignment of debts of Unique Oil to Plaintiff that its claim is being made against the Defendants. In support of the Plaintiff’s case the following were tendered:- 1. Exhibit “A Series” - Dishonoured cheques of 1st Defendant issued to Gaso Petroleum. 2. Exhibit “B” – A unsigned Statement of Account of 1st Defendant (Biglebb Construction) prepared by Unique Oil Company with an outstanding of GHS552,627.91. 3. Exhibit “C” - Assignment of debt Agreement between Unique Oil Company Ltd. and Plaintiff (Chy Trading Ltd) dated 22nd September, 2015. 4. Exhibit “D” – Company Profile of Gaso Petroleum Limited with allotment of shares to Chy Trading Ltd. DEFENDANT’S CASE The Defendants’ defence is that the Plaintiff is unknown to them and that there was never a contractual or commercial relationship between the parties in this suit for Plaintiff to institute this action against them. The Defendants posited that the 1st Defendant is a limited liability company, and that the 2nd Defendant is merely a Director and has never been the alter ego of the 1st Defendant for him to be joined to the suit in the first place. The Defendants’ case is therefore that the 2nd Defendant ought not to have been joined as there is no valid legal reason to lift the veil of incorporation. They further stated that Defendants are not proper parties to the instant suit as Plaintiff did not have the capacity to sue them. By the Defendants’ processes there is no evidence of any contractual agreement with Unique Oil Company and 1st Defendant with a debt before the Court capable of P a g e 3 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. assignment in any form to the Plaintiff. The Defendants further stated that any commercial relationship they may have had with Unique Oil Company Ltd. is not capable of assignment to any third party without the knowledge and consent of the 1st Defendant and consequently any purported assignment of any contractual rights to the Plaintiff by Unique Oil Company Ltd is invalid and of no legal effect. The Defendants therefore deny any indebtedness to Unique Oil Company Ltd. for the sum claimed and further deny using any tank and pump belonging to Unique Oil Company Limited. That the 1st Defendant has its own tanks and pumps and has never had a need for any tank and pump belonging to Unique Oil Company Limited. The Defendants did not tender any documents before the Court. ISSUES FOR TRIAL Upon the close of pleadings, the following issues were set down for trial; 1. Whether the Plaintiff had an oral contractual agreement with the Defendants? 2. Whether the Defendants owe the Plaintiff the sum of Five Hundred and Fifty-Two Thousand, Six Hundred and Twenty-Seven Ghana Cedis Ninety-One Pesewas (Gh¢552,627.91) being the sum of petroleum products sold to the Defendants? 3. Whether the Defendants breached the agreement? 4. Whether the Defendants are using the pump and tanks belonging to the Plaintiff? 5. Any other issues(s) arising from the pleadings. BURDEN OF PROOF The Court is guided by the general rules of evidence in reaching a conclusion on which of the party’s case, upon the evaluation of all the evidence adduced at trial, would help persuade it on whose story is more probable than the other to warrant a judgment in that party’s favour. The position of the law is that the standard of proof (burden of persuasion) in all civil cases or matters is by preponderance of probabilities. P a g e 4 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. And the general rule is that a party whose pleadings raises an issue essential to the success of the case assumes the burden of proving that issue. In Ackah vrs. Pergah Transport Limited [2010] SCGLR 728, the apex Court held as follows:- “It is a basic principle of the law on evidence that a party who bears the burden of proof is to produce the required evidence of the facts in issue that has the quality of credibility short of which his claim may fail. The method of producing evidence is varied and it includes the testimonies of the party and material witnesses, admissible hearsay, documentary and things (often described as real evidence), without which the party might not succeed to establish the requisite degree of credibility concerning a fact in the mind of the Court or tribunal of fact such as a jury.” In the case of Adjetey Agbosu & Ors vrs. Kotey & Ors [2003-2004] SCGLR 420, Brobby JSC as he then was explained the obligation of a Defendant in defence to a claim as follows:- “A litigant who is a Defendant in a civil case does not need to prove anything. The Plaintiff who took the Defendant to Court has to prove what he claims he is entitled to from the Defendant. At the same time, if the Court has to make a determination of a fact or of an issue and that determination depends on evaluation of facts and evidence the Defendant must realize that the determination cannot be made on nothing. If the Defendant desire the determination to be made in his favour then he has a duty to help his own cause or case by adducing before the Court such facts or evidence that will induce the determination to be made in his favour.” In case of Bank of West Africa Ltd. vrs. Ackun [1963] 1 GLR 176, Sarkodee- Addo JSC as he then was stated as follows:- “…But the burden frequently shifts, as the case proceeds, from the person on whom it rested at first to his opponent. This occurs whenever a prima facie case has been established on any issue of fact or whenever a rebuttable presumption of law has arisen… P a g e 5 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. The issue must be proved by the party who alleges the affirmative in substance, not merely the affirmative in form.” ANALYSIS The Plaintiff sued the 1st Defendant Company for the alleged business conducted with it and against the 2nd Defendant who is a director of 1st Defendant only for the reason that 2nd Defendant is alleged to be the alter ego of 1st Defendant Company without proof. There is also no evidence that 2nd Defendant offered to be personally held liable for the debts of 1st Defendant Company. The 2nd Defendant ought not to have been sued. CAPACITY OF THE PLAINTIFF TO INSTITUTE THE CURRENT SUIT The issue of capacity has been raised by the Defendants and so this must be addressed first. The capacity issue raised in my view is in the context of locus standi. The Plaintiff’s case is that the action was brought pursuant to the assignment of debts of Unique Oil to it for the recovery of debts owed by Defendants. It is the Defendants’ assertion that the Plaintiff has not shown that it has the capacity to institute the current action against the Defendants as it failed to demonstrate how Unique Oil was acquired by it nor produced any document authorizing it to institute any action for sums allegedly owed Unique Oil Company Limited. The Defendants also submitted that the Plaintiff did not put forth the incorporation documents of Unique Oil Company Ltd. to support this assertion it made on oath through its witness during cross examination that the Plaintiff is the majority shareholder of another entity known as Gaso Petroleum. At any rate, the Plaintiff being the majority shareholder of Unique Oil Company Limited or Gaso Petroleum (two companies) does not accord it locus standi to enforce commercial obligations owed to any of the two companies. That the companies are separate legal entities, is an established legal principle in Company Law known as Solomon vrs. Solomon [1897] AC 22. On 29th May, 2024 the following were recorded during cross-examination of Plaintiff’s Witness by Counsel for the Defendants:- P a g e 6 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. Q: In your witness statement, specifically paragraph 7- read out. So, in your Witness statement, paragraph 7 you state that Plaintiff’s predecessor entered an oral agreement with the Defendant to install a tank and a dispensing pump. And then in paragraph 17 you state that the defendants are still using the Plaintiff company’s tank among others. Is that correct? A: Yes, my Lady. Q: The Plaintiff in this regard, being CHY Trading Limited has not installed any pumps or given same to the Defendant. Is that correct? A: No, CHY Trading Limited, was the majority equity shareholder of Unique Oil Company Limited. As the majority shareholder, the resources of Unique Oil Company Limited are owned by CHY Trading Limited, and for this reason has interest in the utilization of the resources. Unique Oil Company Limited used the resources provided by the majority shareholder for the installation of the tanks and the dispensing pumps. Capacity founded on the grounds of shareholding by Plaintiff therefore fails completely. Per Plaintiff’s assertion, Exhibit “C” enabled it to take over the management of Unique Oil which included the recovery of all debts of Unique Oil and also that Plaintiff owes shares in that other entity known as Gaso Petroleum. Defendants averred that they never conducted any business with the Plaintiff and therefore challenged the Plaintiff’s locus standi in instituting this Writ. The Plaintiff also tendered Exhibit “D”, the company profile of Gaso Petroleum in which Plaintiff herein is a named shareholder. Can Exhibits “C” and “D” cure the issue of capacity issue raised by the Defendants? In Kesseke Akoto Dugbartey Sappor & 2 Others vrs. Solomon Dugbartey Sappor & 4 Others [J4/46/2020] the Supreme Court per Prof Mensa-Bonsu JSC observed:- “What is capacity? The Black’s Law Dictionary defines ‘capacity’ or ‘standing’ as “A party’s right to make a legal claim or seek judicial enforcement of a duty or right. Thus, P a g e 7 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. one’s ability to appear in Court to make a claim, hinges on whether one is recognized in law as having sufficient interest in any matter to seek a hearing on any particular issue. The sufficient interest must remain throughout the life of the case, or one’s legal ability to stay connected with a case making its way through the Courts would be lost.” The Plaintiff is as legal entity who can sue and be sued, must therefore be able to establish a nexus between Plaintiff and the Defendants in respect of the debt being claimed in this suit failing which they must fail. 1st Defendant admitted that per Exhibits “A Series” some debt is owed Gaso Petroleum by 1st Defendant but not Unique Oil or Plaintiff. From the evidence before the Court the question then is, has the Plaintiff been able to establish the fact that it has sufficient interest in this matter to make those claims against the Defendants? Unfortunately, this cannot be answered in the affirmative as the liability of the 1st Defendant from the evidence has been established only in connection with Gaso Petroleum who is not a party to this suit. Even if the 1st Defendant owes Unique Oil, the Plaintiff’s explanation that the debt of Unique Oil has been assigned to Plaintiff without stating the exact debt in the agreement to assign debt between Unique Oil and Plaintiff is problematic. The only explanation provided by Plaintiff why Unique Oil was not the entity bringing this action is that its debts have been assigned to Plaintiff and no more. On 30th May, 2024 when 2nd Defendant was being cross-examined by Counsel for Plaintiff the following was said:- Q: Tell the Court how the defendants know Unique Oil Company Ltd? A: Unique Oil Company Ltd used to be one of our suppliers. Q: Do you know Gaso Petroleum Ltd A: Yes, I do. Q: Tell the Court how you know Gaso Petroleum Ltd. A: The fact that 1st Defendant issued two cheques to Gaso Petroleum Ltd. Q: Tell the Court, under what circumstances were these two cheques issued to Gaso Petroleum Ltd P a g e 8 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. A: As I have said I cannot remember, the cheques were issued in 2017 for supply of diesel. Then again on 3rd June, 2024 the following were also recorded during cross-examination of the 2nd Defendant:- Q: You told Unique Oil Company Ltd that Dredging International Ltd was owing 1st Defendant an amount of USD$1,200,000.00, is that correct? A: I don’t remember saying that to Unique Oil Company Ltd. Q: You also told Unique Oil Company Ltd that 1st Defendant’s outstanding debt to Unique Oil Company Ltd would be paid by you when you receive payment for the amount stated above, is that correct? A: Yes, that is the arrangement we had with Unique Oil Company Ltd that every month as we get paid we also pay them. Q: You are aware that the 1st Defendant was paid the amount of USD$1,200.000.00 by Dredging International Ltd in 2016 but you failed to pay the outstanding debt standing in the name of the 1st defendant to Unique Oil Company Ltd, is that correct? A: Yes, the money was paid but I don’t remember the date. Unique Oil Company Ltd never contacted us after payment. Q: Does 1st Defendant owe Unique Oil Company Ltd? A: At the moment, I cannot remember. Q: Does 1st Defendant owe Gaso Petroleum Ltd? A: Yes, we owe on the reference of the cheques that have been tendered. I hereby make the following observations:- 1. Gaso Petroleum may proceed against the 1st Defendant Company for those dishonoured cheques that they have admitted same in Court. 2. From the testimony of 2nd Defendant that they had an arrangement with Unique Oil that as they get paid, they also pay Unique Oil, it seems to me that Unique Oil is also at liberty to proceed against the 1st Defendant for any outstanding debt from P a g e 9 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. the transaction of the parties in respect of Dredging International Limited contract. As according to the 2nd Defendant Unique Oil never contacted them after the payment. The 2nd Defendant in the cross-examination dialogues above, admitted that some business was conducted with Unique Oil but denies owing Unique Oil by saying he did not remember. As already stated, the burden of proof lies on the Plaintiff and no documents were tendered that connected to the debt alleged by the Plaintiff. Unfortunately, Plaintiff’s Exhibit “B” (being Unique Oil’s purported statement of account in respect of 1st Defendant) was not signed and can be a self-serving document and therefore cannot be said to be proof of 1st Defendant’s indebtedness to Unique Oil. There was no invoices or waybills tendered in support of the Plaintiff’s claim on this issue. It is the Plaintiff who took the Defendants to Court so the onus is on the Plaintiff to demonstrate that it has the capacity to prosecute this claim. From the evidence before the Court I am unable to hold that the Plaintiff has demonstrated that the 1st Defendant owes Plaintiff through the assigned debts of Unique Oil Ltd. Defendants’ contention of Plaintiff’s lack of capacity or lack of locus standi to institute these proceedings therefore stands. On the issue of the assignment of debt Counsel for the Defendants have also argued that the said Exhibit “C” being an agreement which the Defendants were not party to, notice same had to be served on Defendants before it could be enforced against them. Counsel for the Defendants cited the Supreme Court case of Abivams Limited vrs. Platun Gas Oil Ghana Ltd. [2017] JELR 68807 where the apex Court interpreted Section 7 of the Contracts Act, 1960 (Act 25) and said as follows:- “(1) Subject to the relevant rule of law, and subject to any contrary intention appearing from a transaction giving rise to legal rights, a person may, after the commencement of this act, assign a legal right to another person as specified in this Act. P a g e 10 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. (2) An assignment whether given for consideration or not, of a vested right, transfers the right and interest in the assignment to the assignee and extinguishes the right and interest in the assignment of the assignor if- (a) it is absolute and not by way of a charge only; and (b) it is in writing and is signed by the assignor or the agent of the assignor; and (c) written notice of the assignment is given to the debtor or any other person against whom the right is enforceable. (3) A purported assignment of a conditional right operates as a promise to assign the right if and when condition occurs. (4) An assignment, whether given consideration or not, is valid although it does not comply with all or any of the requirements of subsection (2); but (a) a right so assigned shall not be enforced or relied on against the debtor or any other party against whom the right is enforceable, unless the assignor is a party to the proceedings in which it is sought to be enforced or relied on, or unless the Court is satisfied that it would be impossible or impracticable so to join the assignor: and (b) the assignment shall not prejudice the debtor or any other person against whom the right is enforceable unless the debtor or the other person has written notice of the assignment… Section 7 applies when it is established that there was an assignment in terms of the elements set out above, meaning there was an intent to assign, and there was writing identifying the subject-matter and specifically naming an assignee and bringing it to the notice of the debtor.” On 28th May, 2024 when Plaintiff’s Witness was being cross-examined by Counsel for the Defendants, the following were recorded:- Q: Was the 1st Defendant before the execution of the assignment of the alleged debt formally notified that this alleged debt was being assigned to the Plaintiff. P a g e 11 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. A: Yes, however it was in a meeting with the 2nd Defendant who happens to be the CEO of the 1st Defendant, and that was a verbal meeting. Q: So, there was no written notification of the assignment of the alleged debt owed by the 1st Defendant made known to it? A: The 1st Defendant was served with a copy of the executed assignment of receivables which was a formal notification to the 1st Defendant. Q: I suggest to you that no formal written notification of any alleged debt owed by the 1st Defendant Company was made known to it. A: There was a notification. The Defendant’s Witness also during cross-examination denied that 1st Defendant was notified about the alleged assignment of debt and also had the following recorded on 3rd June, 2024 under cross-examination:- Q: You are aware that the Plaintiff Company had assignment of debt with Unique Oil Company Ltd to take over receivables , is that not so? A: No, I am not aware of any official takeover. Q: I put it to you that the assignment of debt executed between Unique Oil Company Ltd, and the Plaintiff Company was served on the 1st Defendant. A: We never received such a letter or information. The Plaintiff failed to tender a copy of the notification or any formal acknowledgment of such notification. By the celebrated case of Majolagbe vrs Larbi & Ors [1959] GLR 192, if a thing is capable of proof by way of documentary evidence a person does not merely go to the witness box and repeat that averment on oath but proves it by producing other evidence of facts and circumstances from which the Court can be satisfied that his averment is true. The Defendants denied knowledge of Exhibit “C”, the Plaintiff’s merely made bare assertions without proof of Defendants knowledge of same. No evidence was led to show P a g e 12 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. that service of this notice had indeed been made to the 1st Defendant. The assignment executed between the Unique Oil and Plaintiff cannot be said to bind the Defendants. The view of this Court is still that the Plaintiff does not have a cause of action against the Defendants. CONCLUSION The Court from the analysis above clearly thinks that the Plaintiff does not have capacity by way of locus standi to institute the current suit against the Defendants. Therefore, there is no need to discuss the other issues set down for trial. In view of the observations I have made above, no order as to cost. (SGD.) SHEILA MINTA, J. JUSTICE OF THE HIGH COURT REPRESENTATIONS PARTIES: ABSENT COUNSEL: KWADWO OPOKU-SARKODIE, ESQ. HOLDING BRIEF FOR MARTIN KPEBU, ESQ., FOR THE PLAINTIFF – PRESENT SIGISMUND PHIXON-OWOO, ESQ., WITH SELASIE ATTACHIE, ESQ., HOLDING BRIEF FOR RANDALL OBENG-SAKYI, ESQ., FOR DEFENDANTS – PRESENT P a g e 13 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR. AUTHORITIES: 1. ACKAH VRS. PERGAH TRANSPORT LIMITED [2010] SCGLR 7 2. ADJETEY AGBOSU & ORS VRS. KOTEY & ORS [2003-2004] SCGLR 420 3. BANK OF WEST AFRICA LTD. VRS. ACKUN [1963] 1 GLR 176 4. SOLOMON VRS. SOLOMON [1897] AC 22 5. KESSEKE AKOTO DUGBARTEY SAPPOR & 2 OTHERS VRS. SOLOMON DUGBARTEY SAPPOR & 4 OTHERS [J4/46/2020] 6. ABIVAMS LIMITED VRS. PLATUN GAS OIL GHANA LTD. [2017] JELR 68807 7. MAJOLAGBE VRS LARBI & ORS [1959] GLR 192 P a g e 14 | 14 SUIT NO. CM/RPC/0600/2019 – CHY TRADING LTD. VS. BIGLEBB CONSTRUCTION & CRUSHING LTD. & ANOR.