ROYAL MAGMA GHANA LTD. VRS. COMEXAS LTD. (CM/RPC/0155/2023) [2024] GHAHC 472 (15 October 2024)

IN THE SUPERIOR COURT OF JUDICATURE IN THE COMMERCIAL DIVISION (COURT 1) OF THE HIGH COURT OF JUSTICE ACCRA, HELD ON TUESDAY THE 15TH DAY OF OCTOBER, 2024 BEFORE HER LADYSHIP JUSTICE SHEILA MINTA SUIT NO. CM/RPC/0155/2023 ROYAL MAGMA GHANA LTD. - PLAINTIFF VRS. COMEXAS LTD. - DEFENDANT --------------------------------------------------------------------------------------------------- JUDGMENT INTRODUCTION The Plaintiff is a company registered under the laws of the Republic of Ghana. The Defendant is also a company engaged in the business of clearing and freight forwarding. On 10th October, 2018, the parties entered into negotiations for the rental of Plaintiff’s container handler, for the purposes of offloading shipping containers of Defendant. The parties had an understanding that the arrangement between them would run for a period of three (3) months commencing from October 2018 to December 2018. However, in the same month of October 2018, just 2 weeks into the trial phase and after the completion of eighty-six (86) moves by the Plaintiff the Defendant decided not to continue with the said arrangement. Plaintiff then invoiced Defendant for US$6,146.15 inclusive of VAT which was challenged by the Defendant on the ground that the basis of the calculation of the 86 P a g e 1 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. moves was wrong. Plaintiff’s response is that the Defendant having unilaterally terminated the agreement entitled Plaintiff to revert to its usual charges for short term rentals hence the figure of US$6,146.15 demanded is what ought to be paid and based on the GPHA short term rate. The Defendant challenging the said figure of US$6,146.15 refused to pay same and issued a cheque covering eight-six (86) moves at the rate of US$10 per move. This said cheque was refused by the Plaintiff and caused its lawyers to issue a Writ of Summons and a corresponding Statement of Claim on the 11th of November, 2022 against the Defendant for the following reliefs:- a) An order directed at the Defendant to pay the amounts owed and outstanding to the Plaintiff in the sum of US$6,146.15 inclusive of VAT payable in Ghana Cedis at the prevailing exchange rate. b) An order directed at Defendant to pay interest on the outstanding amount in the sum of US$6,146.15 inclusive of VAT payable in Ghana Cedis at the prevailing exchange rate. c) Costs. d) Legal fees. The Defendant in response to Plaintiff’s Writ of Summons and Statement of Claim, filed a Statement of Defence on the 16th of January, 2023. BRIEF SUMMARY OF THE PARTIES CASE P a g e 2 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. Plaintiff’s Plaintiff in its Witness Statement filed on 13th February, 2024 contended that the rental arrangement entered into between the parties was based on the following terms: • That the Container Handler was rented out based on at least 300 TEUS per month. • That the rental period was to be for an initial trial period of three (3) months, commencing in October, 2018 and ending on the 31st of December, 2018. • That the Parties upon conclusion of negotiations, based on the volume of work agreed not to use the Ghana Ports & Harbours Authority (GPHA) approved rates but rather a discounted rate. The Plaintiff relied on Exhibit “A”, which was a series of email correspondences between the representatives of both parties as the basis for the agreement. Plaintiff’s case is that the Defendant had unilaterally abrogated the agreement before the completion of the trial period. That this disentitled the Defendant from paying the discounted rate originally agreed upon and therefore demanded the sum endorsed on the Writ as the GPHA rate which Plaintiff is entitled to for short term arrangements. This is what amounts to Six Thousand One Hundred and Forty-Six United States Dollars and Fifteen Cents (US$6,146.15) inclusive of VAT. The Plaintiff contended that since Defendant unilaterally terminated the trial process, the discount Plaintiff offered would not apply and therefore Plaintiff is entitled to revert P a g e 3 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. to the approved GPHA rates as it is the standard practice in the industry for the two weeks Plaintiff worked for Defendant. In support of its case Plaintiff also tendered in evidence as Exhibit “B Series” being correspondence acknowledging revised charges in short term rentals of Container Handler and plant log sheets detailing the quantum of work done and the charges levied on the Defendant during the rental period. Plaintiff further tendered Exhibit “C” being a demand notice for payment from the Defendant. Defendant’s The Defendant admitted entering into verbal negotiations with the Plaintiff for the rental of the Plaintiff’s equipment, a Reach Stacker for a test run of three (3) months. The Defendant’s story is however that the parties did not agree on a 300 TEU arrangement, rather, the agreed rate was Nine Dollars (US$9.00) per move being the discounted rate agreed upon by the parties. The Defendant further contended that throughout the 2-weeks trial period, the Plaintiff only made 86 moves which entitled it to only Seven Hundred and Forty-Five dollars (US$745.00) and not the figure demanded. The Defendant averred that it offered to improve the rate to Ten Dollars (US$10.00) per move amounting to Eight Hundred and Sixty Dollars (US$860.00) but this offer was rejected by the Plaintiff. According to the Defendant at best the Plaintiff is entitled to One Thousand One Hundred and Eighteen Dollars (US$1,118.00) or its cedi equivalent based on the GPHA P a g e 4 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. rate of Thirteen Dollars (US$13.00) per move. The Defendant also tendered Exhibit “1” being email correspondence between the parties. Settlement broke down at pre-trial settlement conference, and so at the close of pleadings the following issues were set down for trial. ISSUES SET DOWN FOR TRIAL 1. Whether or not there is a legally binding Agreement between the Plaintiff and Defendant. 2. Whether or not the Defendant is in default of its obligations under the Agreement entered into with Plaintiff on October 10, 2018. 3. Whether or not Defendant can unilaterally terminate the Agreement between Defendant and Plaintiff. 4. Whether or not Plaintiff is entitled to recover the Contract sum of Six Thousand One Hundred and Forty-Six United States Dollars and Fifteen Cents (US$6,146.15) from the Defendant. 5. Whether or not Defendant’s action of unilaterally terminating the contract constitutes a breach of the contract or agreement between the parties. ANALYSIS OF ISSUES Issue 1 Whether or not there is a legally binding Agreement between the Plaintiff and Defendant. P a g e 5 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. A contract is said to be a binding agreement that creates legal obligations recognized by law. According to Sir Frederick Pollock, a contract refers to a promise or a set of promises that the law will enforce. In the book titled ‘The Law of Contract in Ghana’ by Professor Christine Dowuona-Hammond, it was stated that the Courts often concern themselves with three basic issues in order to determine whether or not there is in existence, any contract. i. What exactly is the promise or promises that have been made by the parties? The purpose of this is to determine the terms of the contract which defines the scope of the contractual liability undertaken by the parties. ii. Does the promise or do the promises create any legal obligation? iii. What remedy is available to the aggrieved party upon a breach of the contract? It is not in doubt that the parties had an arrangement on or about the 10th of October, 2018 for the rental of Plaintiff’s container handlers. The purpose of the arrangement was to offload Defendant’s containers. The parties agreed to test run their arrangement for an initial trial period of three months, commencing 10th October, 2018 and ending on the 31st of December, 2018. Agreement to agree or negotiate may be unenforceable for being an incomplete agreement. See Walford vrs. Miles [1992] 2 AC 128 where it was held that, “an agreement where one party for consideration agreed for specified period of time to not negotiate with anyone else for the sale of a property can be enforceable.” If the agreement to negotiate for a specific period exists, then it can be enforceable for the parties to be bound by its P a g e 6 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. terms. See Tullow Ghana Ltd vrs. Skylimit Structure Builders Co. Ltd. [2018] DLCA 4768. The purpose of any trial period is to allow parties the opportunity to decide whether they intend to proceed with a contract or not. Both parties agreed that the arrangement between them was to rent Plaintiff’s equipment to the Defendant on a trial basis for a period of three months after which the parties will execute a contract if the trial is considered satisfactory. Trial periods or testing periods in contractual agreements allows both parties to assess their needs and make adjustments or terminate same if necessary. Plaintiff’s Exhibit “A” revealed details of negotiations between the parties in respect of the said rental arrangement. From the evidence before the Court there was an understanding to discount the rate during the trial period, which was for three (3) months. There is clearly a legally binding agreement between the parties. In Fidelity Investment Advisors vrs. Aboagye Atta [2003-2004] 2 GLR 188, the Court of Appeal held that the question of what issues are relevant and essential in a suit, was a matter of law entirely for the judge to determine in the case. Issues 2, 3 and 5 would be merged and disposed of together. 2 - Whether or not the Defendant is in default of its obligations under the Agreement entered into with Plaintiff on October 10, 2018. 3 - Whether or not Defendant can unilaterally terminate the Agreement between Defendant and Plaintiff. P a g e 7 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. 5 - Whether or not Defendant’s action of unilaterally terminating the contract constitutes a breach of the contract or agreement between the parties. These issues speak on Defendant’s obligation under the rental understanding or arrangement between the parties as reflected in their memoranda. A party to a contract may be released from its obligations by agreement, performance, breach or frustration. Where a party fails to fulfill its obligations under an agreement, it is referred to as a breach of contract. According to Christine Dowuona-Hammond in her book titled “The Law of Contract in Ghana”, a breach of contract is a breach by one party. She further stated that in certain cases, a breach by one party discharges the other party from his duty under the contract. In general, contracts cannot be terminated unilaterally except where there is a specific clause in the contract to that effect. This termination clause will allow for such termination by either party. It will contain the conditions and circumstances under which a party may end the contract without mutual consent. In the absence of any such clause, a unilateral termination would typically constitute a breach of contract, subjecting the defaulting party to legal consequences. It is important to note that any form of contract breach entitles the innocent party to seek damages. At the time the trial contract commenced, the Defendant had not committed themselves to a long-term P a g e 8 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. contract. The trial period was only to see how it will work for them and so each party’s conduct would be tested by the terms of the three-month arrangement. On the 6th of May, 2024 the following was recorded when the Plaintiff’s Witness was under cross-examination by Counsel for the Defendant:- Q: Is it not the case that both parties before this Court agreed that you were going to have a trial of the business relationship before you enter into a formal contract. A: Yes, that was what we agreed, and the agreement was a 3-month trial but two weeks down the line, the contract was cancelled. Q: Were the parties not into the trial period to give themselves the opportunity to know whether they wanted a long-term contract or not. A: Yes, we were going through a trial period. Q: And during this trial period, you agree with me that either party could terminate the agreement. A: No, my Lady. Q: Why would any of the parties be restrained from terminating a trial contract, can you tell this Court? A: That was the reason why we opted for short period to try the process to see if it is workable for both parties. We could have entered into a long-term period, but because of such situations that was the reason we opted for the short-term contract. P a g e 9 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. Q: Can you show to this Court where in Exhibit ‘A’ is it indicated that this contract could not be terminated by either party. A: There is no contract in the witness statement, but I want to bring to the attention of the Court that usually before we sign a contract we negotiate certain terms before we put into writing, and because it was the beginning of their business we decided to do the trial before we sign the long term contract. As cited by Counsel for the Defendant, the case of Fish & Meat Co Limited vrs. Ichnusa 1963 1 GLR 314 at 315, Prempeh J stated that :- “It is a general rule of law that one of the modes in which an existing contract may be discharged is by the same process and in the same form as that which it is made by mutual consent.” It is not in doubt that there was no arrangement or agreement between the parties pertaining to termination during the trial period. Any such term which the Plaintiff intended to be binding on the Defendant must have been put in writing. This means that the Defendant was not at liberty to terminate the contract before the three-month period or do so at the risk of paying damages. The Defendant was therefore not at liberty to terminate the trial contract. I am unable to hold that the arrangement for the trial period could be terminated by either of the parties when the arrangement had no termination clause. The Plaintiff’s claim against the Defendant is the sum of $6,146.15 and the Defendant having denied this, Plaintiff ought to lead credible evidence to P a g e 10 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. prove that indeed the Defendant owes the said sum. It is the Plaintiff’s case that an agreement was executed between the parties being a contract for the rental of the Plaintiff’s container handler. On 6th May, 2024 when the Plaintiff’s Witness Einstein Christian was being cross-examined again by Counsel for the Defendant the following was recorded:- Q: You gave an invoice to the Defendant (Exhibit ‘B’). A: Yes, my Lady. Q: And in this exhibit you have explained that you opted not to use the rate that the parties have agreed on because the Defendant had terminated the trial contract. A: Yes, my Lady. Q: Again, where is it stated in any of the documents you have here that Plaintiff had the right to charge its own rates if the trial contract did not run its full term. A: Per Exhibit ‘A’ we gave different types of offers before the commencement of the contract, and all these rates were governed by GPHA, and sometimes what we usually do is, if it is a long-term contract then we look at amending the rate lower, but when it is a short-term engagement then we are required by GPHA to charge the approved rate. And since the contract didn’t run its full term, we resorted back to the GPHA rate, and that is what is required from us by GPHA because we are licensed by GPHA to charge those rates. And that is the basis for us resorting back to the short-term rental rates. Q: So, the basis of your invoice was not based on the trial contract. P a g e 11 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. A: No, when you normally engage us, you need to state clearly whether it is a long term or a short-term contract, based on that then we know the type of rate to apply. And since they came in for a long-term negotiation, we decided to apply the long-term rate from the onset. But since it went for a short-term period, we applied the short-term rate, which is the Exhibit ‘B’. Q: So, the Plaintiff decided to impose on the Defendant its own terms when the Defendant opted not to continue with the trial contract, is that not so? A: No, we didn’t impose our own terms, it is the GPHA terms that were applied. Q: Where in your witness statement have you referred or indicated the said GPHA terms that you claim you applied? A: If you look at Exhibit ‘A’ page 1, the rates we quoted were discounted GPHA rates. Q: Is there any document that we can look at to confirm what you just said, from your witness statement. A: No, my Lady. It is required by law that each party to a suit must adduce evidence on the issues to be determined by the Court in accordance with the prescribed standards. This position of the law is buttressed by various provisions of the Evidence Act 1975 (NRCD 323). Section 14 of the Evidence Act states: “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 of which is essential to the claim or defence he is asserting.” P a g e 12 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. On the issue of proof in civil cases the Supreme Court in the case of Ackah vrs Pergah Transport Limited [2010] SCGLR 728 as cited by Counsel for the Defendant, per Sophia Adinyira stated thus:- “It is a basic principle of 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. It is trite law that matters that are capable of proof must be proved by producing sufficient evidence so that on all the evidence, a reasonable mind could conclude that the existence of a fact is more probably reasonable than its non-existence. This is the requirement on the law of evidence.” Exhibit A: Email from Plaintiff to Defendant dated Friday, 12th October, 2018 communicating the applicable rate for movement:- >Dear Walter, > >I have look into your rate and its below the industry rate. >Since am ready to work with you, find below fyi. > >Load off truck: 9/14 usd per move > >Washing: 8/13 usd stack out & stack in & any move > >Load on truck: 9/14 usd per move for the trial contract P a g e 13 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. In reply to an email received from the Plaintiff, dated 9th January, 2019, the Defendant stated as follows: “…We are expecting an invoice from you showing $10 per movement. Based on our job cards, we have a total of 86 billable moves. Please pass by our office to collect your cheque.” It is also not in doubt that the email trail is evidence that the agreement was indeed based on the number of movements made which was 86. The email correspondence also shows that moves were charged at the rate of 9/14USD. There is no evidence from the Defendant how it arrived at the US$10 per move for which it calculated its bill for 86 moves. The Plaintiff also appeared to be imposing on the Defendant, a rate different from what was not agreed upon by the parties for the trial period. From the analysis above it is obvious that the indebtedness of the Defendant to the Plaintiff for the amount stated in the invoice has not been proved by the Plaintiff. The Defendant too has not been able to discharge its burden of persuasion by producing evidence of US$10 per move. This leads me to resort to inference. In doing so, I have cautioned myself of the distinction between inference and conjecture as held in Nyame vrs Tarzan Transport & Anor [1973] 1 GLR 8. In drawing inferences, I would be guided by the following facts; 1. There were 86 moves in two weeks. 2. This translates into 172 moves in a month. P a g e 14 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. 3. All things being equal, three (3) months contract could have generated about 516 moves. The Plaintiff has not been able to discharge its evidential burden that the Defendant in fact owed it the sum claimed on the endorsement. I am therefore unable to hold that the Defendant is in fact indebted to the Plaintiff in the sum of US$6,146.15 in view of the absence of proof. As stated earlier there was no evidence on how the Defendant arrived at its US$10 per move. Equity demands that the average of 9/14USD per move resulting in US$11.5 per move be applied to the three (3) month arrangement that was unilaterally terminated. This sum comes to a total of Five Thousand Nine Hundred and Thirty-Four US Dollars (US$5,934.00). Furthermore, in the arrangement between the parties there was no evidence to the effect that the Defendant could terminate the contract during the trial period. The act of terminating a contract may constitute a breach when it is done in violation of the terms and conditions of the contract. Where however there is no termination clause indicating the circumstances under which termination could take place, then you live with the duration of the contract. It is sufficient for me to rely on the case cited by the Defendant itself on this point - Fish & Meat Co Limited vrs Ichnusa (supra); “It is a general rule of law that one of the modes in which an existing contract may be discharged is by the same process and in the same form as that which it is made by mutual consent.” P a g e 15 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. It is necessary to note that an enforceable contract is governed by the terms therein. Where a party relies on an unstated term, the ruling on that point must go against him. The Defendant probably did not find the said arrangement during the trial period satisfactory, its termination could not be done unilaterally. The Defendant’s termination therefore constituted a breach of the three (3) month contract between the parties when there was clearly no exist arrangements made by them. In the absence of any provision that imposes higher rates or penalties on the Defendant for unilateral termination, the Plaintiff cannot rely on the said exit from the trial arrangement as a basis to charge arbitrary rates not agreed upon under the rental agreement. CONCLUSION From the analysis above, it appears to the Court that the Plaintiff has been unable to adduce credible evidence in support of its claim for the sum of US$6,146.15. The short- term rate alleged by the Plaintiff is not in evidence and neither is the GPHA rate also in evidence. From the evidence adduced before me both parties have stated different GHPA rates. I would have awarded to the Plaintiff, the recovery the value of 516 moves for the three (3) month period instead of the 86 moves conceded by the Defendant to be calculated at US$11.5 per move being the average rate between the 9/14USD per move which would have been US$5,934. The Defendant has always been ready and willing to pay the rates agreed on, and indeed made a call to the Plaintiff to pick up its cheque even though nothing stopped Defendant from P a g e 16 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. paying the said amount into Court when the Writ was issued. I will award to the Plaintiff 60% of the US$5,934 being US$3,560.4 as Plaintiff could have mitigated its damages. I am unwilling to award interest on the sum due Plaintiff which I have awarded by way of general damages. Judgment is entered for Plaintiff in the sum of US$3,560.4. The Plaintiff’s relief for the cost of this litigation also fails as it is the client who is responsible for the payment of legal fees and each party should bear the cost of this litigation. No order as to cost. (SGD.) SHEILA MINTA, J. JUSTICE OF THE HIGH COURT REPRESENTATIONS: PARTIES: ABSENT COUNSEL: FRANCIS TETTEH AKPOKA, ESQ., WITH BEULAH NAA KOIKOI ARMAH, ESQ., BEING LED BY GYEBI NTEM MENSAH, ESQ., FOR THE PLAINTIFF – PRESENT JOSEPH OPOKU BOATENG, ESQ., FOR THE DEFENDANT - PRESENT AUTHORITIES: P a g e 17 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD. 1. WALFORD VRS. MILES [1992]2 AC 128 2. TULLOW GHANA LTD VRS. SKYLIMIT STRUCTURE BUILDERS CO. LTD. [2018] DLCA 4768 3. FIDELITY INVESTMENT ADVISORS VRS. ABOAGYE ATTA [2003- 2004] 2 GLR 188 4. FISH & MEAT CO LIMITED VRS. ICHNUSA 1963 1 GLR 314 AT 315 5. ACKAH VRS PERGAH TRANSPORT LIMITED [2010] SCGLR 728 6. NYAME VRS TARZAN TRANSPORT & ANOR [1973] 1 GLR 8 7. ‘THE LAW OF CONTRACT IN GHANA’ P a g e 18 | 18 SUIT NO. CM/RPC/0155/2023 – ROYAL MAGMA GHANA LTD. VS. COMEXAS LTD.