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
On appeal from the High Court, Final1 Limited challenged orders that compelled it to grant consent for the assignment of a lease, decreed specific performance of a 2010 sale agreement, and awarded large damages to the purchaser, Prestea Sankofa Gold Ltd. The Court of Appeal, per Owusu-Dapaa JA, held that the purchaser was not a party to the 1997 sub-lease containing the covenant that the landlord’s consent "not be unreasonably withheld" and that clause did not, under section 5(1) of the Contracts Act 1960, confer any enforceable benefit on future assignees. Because the respondent lacked locus standi, every consequential order against the appellant was set aside. The court further noted errors in the trial judge’s treatment of refusal of consent as forfeiture, speculative findings on structural integrity, and overlapping remedies, but these became academic once the lack of standing was recognised. The appeal was therefore allowed in full, leaving any dispute between the vendor and purchaser to be pursued separately.
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