SPINTEX LTD. v. EVANS ATTA-EDUA
November 4, 2010
COURT OF APPEAL
GHANA
CORAM
- MARIAMA OWUSU JA, (PRESIDING)
- YAW APPAU, JA
- MARFUL-SAU, JA
Areas of Law
- Contract Law
- Corporate Law
- Civil Procedure
- Evidence Law
November 4, 2010
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
The Court of Appeal, per MARFUL-SAU JA with MARIAMA OWUSU JA (presiding) and YAW APPAU JA concurring, reviewed an appeal from the High Court, Accra that had dismissed a company e2 80 99s claim and upheld a distributor e2 80 99s counterclaim. The dispute centered on payments the distributor made directly to the company e2 80 99s Chief Accountant, Isaac Forson, who instructed cash and cheque payments to expedite orders but failed to credit them, resulting in alleged indebtedness of a2110,175,349.74 and dishonoured cheques. The Court applied section 142 of the Companies Act (indoor management rule), finding the Chief Accountant had ostensible authority to receive payments, and the distributor had no actual knowledge to the contrary, especially as supplies continued. Fraud allegations failed for lack of credible evidence, with testimony by company witnesses including Jean Adel Matter, Nii Tackie Yarboi, and Yaw Buabeng not proving deceit. The Court struck out irregular e2 80 9cadditional e2 80 9d grounds under CI 19 Rule 8 and reduced costs from GH c2 a210,000 to GH c2 a25,000, otherwise dismissing the appeal.
MARFUL-SAU JA:
This is an appeal against the judgment of the High Court, Accra dated the 31st October 2008, dismissing the plaintiff action and entering judgment for the defendant on his counterclaim. The plaintiff is thus the appellant herein and the defendant is the respondent. The appellant per the writ issued on 28-1-93 claimed the following:-
Recovery of an amount of ¢110,175,349.74
Interest at the current bank rate from 31/7/92 to date of final payment
General damages for breach of contract
In a terse statement of claim of 7 paragraphs, the appellant simply alleged that it supplied goods to the respondent between August 1990 to July 1992 worth ¢203,656,469.08. However, in July 1992 when the respondent’s account was audited his indebtedness stood at ¢110,175,349.74. The appellant further averred that the respondent had failed to settle the said indebtedness notwithstanding repeated demands.
The respondent disputed the claim and filed a 28 paragraph statement of defence and counterclaimed for the following:
The sum of ¢6,772,000 being an amount wrongfully withheld by the plaintiff since November 1992.
Interest on the said sum at the prevailing bank rate from November 1992 till the date of final payment.
By respondent’s defence and counterclaim the appellant was compelled to file a 9 paragraph reply and defence to the counterclaim which was later amended on 18-8-95: From the pleadings exchanged by the parties it is obvious that the appellant in his statement of claim suppressed material facts which formed the basis of the dispute. As the pleadings showed the amount claimed by the appellant was not a simple debt arising out of goods supplied and unpaid. Rather the real facts were that the appellant’s Chief Accountant one Isaac Forson in the course of respondent’s dealings with the appellant company, had instructed the respondent to be paying the cost of his supplies to him, the Chief Accountant, so that respondent’s orders would be processed promptly. As a result the respondent was prevailed upon by the Chief Accountant and he paid cash and issued corresponding cheques to the Chief Accountant as payment for his orders. Respondent after tendering the cash and corresponding cheques to the Chief Accountant continued to receive his supplies without any problems, till in July 1992 when his account was audited and it came to light that the Chief Accountant was not crediting the respondent account with the cash. When the cheques issued to the Chief Acc