PRESTEA SANKOFA GOLD LTD. v. ELIZABETH KISSI ESSUMAN & ANOR
2025
COURT OF APPEAL
GHANA
CORAM
- EMMANUEL ANKAMAH, JA (PRESIDING)
- DR. OWUSU-DAPAA, JA
- KOFI AKROWIAH, JA
Areas of Law
- Contract Law
- Property and Real Estate Law
- Civil Procedure
2025
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
Finali Limited, developer of the Airport Hills Estate in Accra, appealed a High Court judgment that compelled it to consent to assignment of Plot 161, decreed specific performance of a 2010 sale from Mrs. Elizabeth Kissi Essuman to Prestea Sankofa Gold Limited, and awarded GH¢1,000,000 in general damages plus GH¢500,000 costs. The Court of Appeal, per Dr. Ernest Owusu‑Dapaa JA, framed the dispositive question as whether Section 5(1) of the Contracts Act 1960 allows a prospective assignee to enforce a lease covenant that consent to assignment not be unreasonably withheld. Applying an intent‑based reading, the court held Clause 2(xix) restrains the lessee and does not purport to confer a directly enforceable benefit on future purchasers. Prestea was therefore at most an incidental beneficiary lacking locus standi against Finali. The court also clarified that refusal of consent is distinct from forfeiture, noted the trial judge’s speculative structural‑integrity comment, and struck out a non‑particularised ground. The appeal was allowed; all coercive orders, damages and costs against Finali were set aside, with GH¢20,000 costs awarded to Finali.
DR. ERNEST OWUSU-DAPAA (JA):
[1]. My Lords, this appeal offers a timely occasion to reaffirm that Section 5(1) of the Contracts Act 1960, a measured statutory departure from the common law doctrine of privity of contact, was never intended to change well established land law rules on on requirement of written consent before further alienation or assignment . A lease covenant stipulating that the landlord "shall not unreasonably withhold consent to an assignment" is part of the bargain between the present parties in privity of estate. Such a covenant moderates the landlord’s control over the reversion while preserving the tenant’s commercial freedom. It does not purport to confer an immediate, enforceable benefit on a prospective assignee who, until completion, remains a stranger to both the contract and the estate. See INTERNATIONAL DRILLING FLUIDS LTD v. LOUISVILLE INVESTMENTS (UXBRIDGE) LTD [1986] Ch 513 (CA). The instant appeal has been brought by the 2nd Defendant, FINAL1 Limited (hereinafter “the Appellant”), against the judgment that the High Court delivered on 22nd November 2022. In that judgment, the trial court entered judgment in favour of Prestea Sankofa Gold Limited (hereinafter “the Respondent”) and, among other consequential orders, directed Appellant to issue its written consent for the assignment of Plot 161 within the Airport Hills residential estate, ordered specific performance and awarded the Respondent General Damages of One Million Ghana cedis (GH¢1,000 000) together with costs assessed at GH¢500 000. The court dismissed every head of relief that Mrs Essuman , the 1st Defendant, had advanced in her counter-claim and, the judge rejected the core defences raised by the Appellant.
[2]. Before us, the Appellant challenges every material limb of the trial court’s decision. It argues, first, that the learned judge wrongly characterised the legal relationship created by the Airport Hills Sub-Lease and, by doing so, conferred on Respondent a “third-party” right that the law does not in fact recognise. Secondly, the Appellant contends that the underlying Contract of Sale is void, principally because of defects in execution and because the mandatory prior consent required by the sub-lease was never obtained and further that a void instrument cannot be the subject of an order of specific performance. Thirdly, Appellant submits that the High Court misdirected itself when assessing whether its r