MABANI SEVEN COMPANY LIMITED vs STAR ASSURANCE COMPANY LIMITED & 4 ORS.
February 18, 2019
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP JUSTICE GEORGE K. KOOMSON
Areas of Law
- Civil Procedure
- Contract Law
- Commercial Law
- Construction Law
- Insurance Law
February 18, 2019
HIGH COURT
GHANA
CORAM
AI Generated Summary
This High Court of Ghana ruling, by Justice George K. Koomson, addresses Mabani Seven Company Limiteds application for summary judgment against five insurance companies who issued advance payment on-demand bonds to secure MSF Engenharia S.A.s performance under a construction contract in Accra. The bonds, covering hotel, retail, and residential components, obligated Star Assurance, Vanguard Assurance, Metropolitan Insurance, Regency Alliance Insurance, and Phoenix Insurance to pay specified USD sums upon Mabani Sevens first demand. The Defendants resisted, raising fraud allegations and, in the 4th Defendants case, initiating third-party proceedings. The court analyzed Order 14 summary judgment standards, contract interpretation rules, and the autonomous, on-demand nature of performance bonds, relying on Ghanaian and English authorities. It held the sureties obligations were independent of underlying disputes between Mabani Seven and MSF, found no triable defence, rejected reliance on Order 14 rule 12, and concluded third-party proceedings could not negate liability. Summary judgment and costs were awarded against each Defendant.
In this application, the Plaintiff/Applicant (hereinafter called the Plaintiff) prays the Court to enter Summary Judgment under Order 14 of the (High Court Civil Procedure) Rules 2004 (C. I. 47) against the Defendants/Respondents (hereinafter called the Defendants). A brief summary of the facts given rise to this case is that, on the 23rd September, 2015, the Plaintiff entered into a construction contract with a company called MSF ENGENHARIA SA (MSF) for the construction of the Plaintiff’s project in Accra.
The Defendants on the 29th September, 2015 also executed an advance payment bond with the MSF for the benefit of Plaintiff.
I shall make references to these bonds in the course of the ruling.
In the course of time, the Plaintiff made a demand for the payment of the bond on the Defendants.
The inability of the Defendants to pay the Plaintiff has brought the parties to Court.
The core issue requiring my adjudication in this application is as to whether or not the Defendants should be allowed to defend the cause.
I have read the application and the various affidavits filed by the parties in this matter.
I have also read the respective legal submissions filed by Counsel on the issue.
I have given consideration to Order 14 Rule 1 of C. I 47 which provides:
“Where in an action a Defendant has been served with a statement of claim and has filed appearance, the Plaintiff may on notice apply to the Court for judgment against the Defendant on the ground that the Defendant has no defence to a claim included in the writ, or to a particular part on such a claim, or that the Defendant has no defence to such a claim or part of claim, except as to the amount of any damages. ”Further consideration has been given to the principles governing the grant or otherwise of applications of this nature.
The Supreme Court, in the case of SAM JONAH v DUODU-KUMI [2003-2004] SCGLR 50, stated the objective of Order 14 Rule 1 of C. I 47as follows: ”The objective or Order 14 is to facilitate the early conclusion of actions where it is clear from the pleadings that the Defendant therein has no cogent defence.
It is intended to prevent a Plaintiff being delayed where there is no fairly arguable defence to be brought forward. ” (See Halsbury’s Laws of England, 4th Edition, 516). What we are, therefore, required to do in this appeal is to ascertain whether, on the totality of the pleadings and all matters before the High Court at the moment it delivered the summary judgment, th