Gold Coast Securities Ltd. v. Raoul Abou-Chedid
May 26, 2016
COURT OF APPEAL
GHANA
CORAM
- V.D. Ofoe, J.A. (Presiding)
- F.G. Korbieh, J.A.
- L.L. Mensah, J.A.
Areas of Law
- Contract Law
- Corporate Law
- Evidence Law
May 26, 2016
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
Justice F.G. Korbieh, JA concurred with Presiding Justice V.D. Ofoe’s lead judgment dismissing an appeal that challenged the trial court’s enforcement of a share transfer agreement (exhibit E) and the order to pay US$700,000 to the transferor. Addressing the appellant’s arguments, Korbieh explained that clause 12(c), requiring endorsement of the 2006 audited accounts and 2007 management accounts, was intended to protect the transferee from later liabilities, not to operate as a condition precedent to transfer. Relying on section 18(2) of the Evidence Act, he upheld the trial judge’s inference that the parties waived the endorsement obligation, noting evidence that the appellant ultimately held 83% of shares and controlled five of six directors, with witnesses confirming corporate changes. Clause 10 made the share sale transfer form a collective obligation, while clause 11 assigned the company secretary responsibility for shareholding changes and certificates. He concluded the shares were lawfully transferred and affirmed the payment obligation, rendering the appeal unmeritorious.
F. G. KORBIEH, J. A. I have had the privilege of reading before-hand the thought-provoking judgment just delivered by my learned brother, Ofoe, J. A. and I agree completely with everything he has said.
Of course I also agree with him that this appeal should be dismissed as being unmeritorious.
I however want to high-light one or two areas of the reasons for dismissing the appeal that I think needs elaboration.
The facts have been sufficiently set out in the lead judgment and so I need not repeat them here.
One of the main contentions of the appellant is that the trial judge was wrong in his judgment because there was no evidence on the record to support the finding of fact that the parties had waived the pre-condition in exhibit E (the share transfer agreement) to the effect that the respondent (as transferor) would indorse the 2006 Audited Accounts and the 2007 Management Accounts as a confirmation of the state of affairs of the company.
According to counsel, the trial judge had therefore substituted a case proprio motu, which was inconsistent with the case the respondent had put forward himself.
That being the case, he further argued, it was wrong for the trial judge to order that the appellant pays US$700, 000. 00 to the respondent as payment for the shares.
One however has to look at clause 12(c) of exhibit E critically to see what the effect of that pre-condition was meant to have.
For a better or more proper understanding of the provision in clause 12(c) I will reproduce the full text of the provision. “The transferor shall endorse the 2006 Audited Accounts and the 2007 Management Accounts as a confirmation of the state of affairs of the company, and that no later disclosure of liabilities will be accepted by the Transferee.
Any later disclosure of liability will be debited against the Transferor’s account. ”The appellant’s argument seems to limit the interpretation of this provision to only first two lines of the provision.
It is trite law that the provision must be read as a whole.
It is quite clear that this provision was put there to protect the appellant from future liability claims the respondent might make against it.
Its effect was that the respondent could not later on bring up a liability claim against the company (and for that matter the appellant). It was therefore not a pre-condition that affected the transfer of the shares in any way and the failure of the respondent to endorse the accounts could therefore not invalidate the