May 25, 2022
SUPREME COURT
GHANA
CORAM
AI Generated Summary
Expom Ghana Limited, which had assumed Trusty Foods’ assets and liabilities, maintained a Combined All Risks Insurance Policy with Vanguard Assurance. After a 10 May 2010 fire at its Tema factory, official reports by the Ghana National Fire Service and Ghana Police attributed the cause to an electrical fault. Expom filed for indemnity, but Vanguard refused, alleging fraud and arson, and asserted a breach of a Watchmen’s Clause. The High Court held Vanguard liable and awarded €4,942,311.53, interest, €400,000 debris clearance, and €500,000 costs. The Court of Appeal reversed, relying in limine on a “Security Personnel Warranty” from a “Fire and Allied Perils” document. The Supreme Court majority (Mensa‑Bonsu JSC) found that warranty extraneous to the tendered policy (Exhibit G), determined that watch duties were satisfied by the driver and carpenter, and held Vanguard failed to prove criminal allegations. Amadu JSC concurred, emphasizing statutory burdens and the insufficiency of suspicion. Pwamang JSC dissented, viewing the watchmen’s clause as a condition precedent requiring trained guards. The appeal was allowed, with the High Court judgment restored except for the €500,000 costs.
MAJORITY OPINION
PROF MENSA-BONSU (MRS.) (JSC):-
This is a case that arose over an insurance claim that was repudiated by the insurer on grounds of crime and fraud, and the trajectory that it subsequently travelled to reach the Supreme Court for determination.
Background
The plaintiff, Expom Ghana Limited, (now the appellant herein, but who shall be referred to as the plaintiff to avoid confusion with the appellant in the Court of Appeal)was a manufacturer of tomato paste. It had come into this line of business after taking over the business, assets and liabilities of another company owned by the same shareholders, by name, ‘Trusty Foods Ltd. The respondent herein, Vanguard Assurance (also referred to as1stdefendant, to avoid confusion with the respondent in the Court of Appeal), and the 2nddefendant, TM-Star Insurance Services, were an Insurance Company and an Insurance Broker respectively. Sometime in 2008, Expom Ltd took over Trusty Foods Ltd., together with all its assets and liabilities. These included an ‘All Risks Insurance Policy’ with the 1st defendant. The ‘All Risks Insurance Policy’ entered into by Trusty Foods policy was for the following: -
“All real and personal property of every kind and description of Trusty Foods Limited’s own or for which they may be held responsible including but not limited to Buildings, Plant, Machinery, Stocks, Inventory and Equipment as detailed (in the contract) as well as Public and Product liability”.
The policy, which had a validity of one year, from 20th November, 2006, to 20th November, 2007, was for a maximum value of five million Euros (E5,000,000). This was subsequently renewed for the years 2007-2008 and 2008-2009.
The whole contract had been arranged by the 2nd defendant, who allegedly, made representations to the plaintiff that the 1stdefendant was a credible insurance institution that paid claims on time.
The takeover of Trusty Foods Ltd by Expom Ltd was brought to the attention of the Insurers, who did not object. When the subsisting Insurance was due to expire in 2009, the 1st defendant prompted plaintiff to renew and this was duly done. It was therefore renewed for the period 20thNovember, 2009 - 20th November, 2010 i.e a period of twelve months; and in the name of the new company, Expom Ltd. The sum assured was fifteen million Euros (E15,000,000), and the premium was quoted as fifty thousand Euros (E50,000)This means that to the knowledge of the 1stdefendant, the contract was now held by the