GROUP CHAGNON INT. v. ACCRA METROPOLITAN ASSEMBLY & ANOTHER
2012
COURT OF APPEAL
GHANA
CORAM
- MARFUL-SAU, J.A. (PRESIDING)
- ADJEI, J.A.
- ACKAH-YENSU, J.A
Areas of Law
- Constitutional Law
- Administrative Law
- Contract Law
- Civil Procedure
2012
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
The Court of Appeal (per Dennis Adjei, J.A.) reviewed a procurement contract between a Canadian supplier and the Accra Metropolitan Assembly for waste management equipment worth US$8.38 million, financed by an EDC credit facility (85%) contingent on a 15% local payment. Although the 15% was not paid, the plaintiff notified EDC it had been received, prompting EDC to disburse the 85%. The 1st defendant appealed a High Court judgment awarding the unpaid 15% to the plaintiff. The appellate court held the transaction was an international business transaction requiring parliamentary approval under Article 181(5). Because no parliamentary approval was obtained, the contract was unconstitutional and void. Independently, the AMA lacked capacity to incur the expenditure as it was not budgeted and did not go through tender. The court emphasized the constitution’s supremacy over statutory remedies and reiterated that courts do not enforce illegal contracts. The appeal succeeded; the High Court’s judgment was set aside.
JUDGMENT
DENNIS ADJEI,J.A.:
On 27th July, 2005 the High Court Accra (Fast Track Division) gave judgment in favour of the Plaintiff/Respondent (hereafter called the plaintiff) against the Defendants/Appellants (hereafter called the defendants) jointly and severally for all the reliefs endorsed on the plaintiff’s writ of summons.
The defendants being dissatisfied with the judgment of the trial High Court filed separate notice of appeals against same to this court to reverse the judgment. On 17th July, 2012 the 2nd defendant’s appeal was struck out for non compliance under rule 20(2) of the Court of Appeal Rules C.I. 19. The only appeal to be determined by this court is the appeal filed by the 1st defendant on 2nd August, 2005.
The brief facts of the case were that on 4th December, 1997, the plaintiff entered into a sale agreement with the Defendant which was described by them as ‘procurement contract’ for the plaintiff to supply waste management equipment costing $8,382,928.00 to the 1st defendant. The government of Ghana agreed to pay for the entire purchase price of the equipment and the payment was to be made from the existing credit facility it had with the Export Development Corporation (EDC) of Canada. Export Development corporative was to pay eighty –five percent (85%) of the purchase price from the Credit facility of $20,000,000.00 granted to the government of the Republic of Ghana and the remaining fifteen percent (15%) was to be paid from the local source. The payment of the 85% by EDC was contingent upon the payment of the local component of 15%. Even though the local component was not paid, the 1st defendant negotiated with the plaintiff to inform EDC that it had been paid and in pursuance to the information by the plaintiff that it had acknowledged receipt of the 15% EDC paid the 85 percent amounting to $7,125,494.00 to the plaintiff. The plaintiff has up to date not been paid the 15% and it is the subject matter of the suit which has culminated in this appeal. The defendants are alleging fraud on the part of the plaintiff because it knew that the local component of 15% had not been paid but it told EDC that it had been paid and as a result of that fraudulent representation, EDC paid its component of 85 percent to the plaintiff. It was also the case for the defendants that the transaction between them and the plaintiff should have been given parliamentary approval under Article 181 of the Constitution of the Republic of Ghana 1992 and failur