ANDREAS BSCHOR GMBH & CO. KG v. BIRIM WOOD COMPLEX LTD & BIRIM TIMBERS LTD
2016
SUPREME COURT
GHANA
CORAM
- ATUGUBA JSC (PRESIDING)
- ANSAH JSC
- BENIN JSC
- AKAMBA JSC
- PWAMANG JSC
Areas of Law
- Contract Law
- Sale of Goods
2016
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court found that the plaintiff was in breach of the implied condition that the reconditioned plant it sold to defendants was fit for its stated purpose. The Court of Appeal erred in its dismissal of the defendants counterclaim. The defendants, however, failed to prove special damages and were awarded general damages instead.
PWAMANG, JSC.
In 1988 the parties herein, who were in timber business in Ghana, entered into a business transaction worth about DM1.2 million for the supply and installation of a swan mill for the defendants/respondents/appellants, hereafter referred to as the defendants, to be paid for with the supply of timber products to the plaintiff/appellant/respondent, hereafter referred to as the plaintiff. The transaction was not covered by a properly drawn up and executed contract document as the parties must have placed trust in each other. Unfortunately, events shortly after the installation of the sawn mill proved that trust alone, without properly executed contract, was not enough to ensure a smooth business relationship and they ended up in litigation which has lasted for about twenty years.
The litigation commenced in 1994 in the High Court at Akim Oda where defendants are based and after judgment there was an appeal to the Court of Appeal. This is an appeal against the decision of the Court of Appeal dated 3rd April 2008 which set aside part of the judgment of the High Court. The High Court had in its judgment granted the counterclaim of the defendants.
After the installation of the sawn mill plant in 1991, defendants experienced some technical problems, some of which the plaintiff rectified and the others defendants had to repair by themselves. Contrary to what was agreed, the defendants initially did not supply timber products to the plaintiff in payment for the sawn mill so plaintiff demanded payment of the amount as stated in the pro forma invoice it had sent to defendants. Defendants then paid DM30, 000 but afterwards they supplied plaintiff some timber products as further payment. The timber products supplied did not fully settle the claim of plaintiff but defendants stopped further payments so plaintiff sued for its balance. When defendants were served they filed defence and counterclaimed for damages in diminution.
After a full trial the High Court gave judgment on 20th December, 1999 and held that the plaintiff did not deliver all the machinery listed in the pro forma invoice. The court further held that plaintiff breached an implied condition of the contract of sale by supplying a plant that was not of the quality and fitness for a swan mill. The court based its decision on the provisions of the Sale of Goods Act, 1962, (Act 137). The High Court judge therefore awarded damages to the defendants on their counterclaim to be deducted from the am