2021
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
Tropical Glass Co. Ltd (TGCL), assignee of a 1991 lease over the assets of the GIHOC Glass Manufacturing Company, appealed a High Court judgment that found a binding sale and purchase agreement had superseded the lease and dismissed TGCL’s claims while granting Defendants’ counterclaim. The Divestiture Implementation Committee (DIC), acting for Government, had offered the assets for sale in August 1999, warning that failure to accept and pay an initial deposit would withdraw the offer. TGCL sought rescheduling and did not pay as agreed; DIC issued a revocation notice in October 2000 and later abrogated the arrangement in July 2002. On appeal, the Court of Appeal held acceptance by conduct and enforceability under Act 25 s.8(1), that contracts need not be in writing (s.11), and estoppel (Evidence Act s.26) prevented TGCL from denying the agreement. It affirmed that the sale agreement extinguished the lease, abrogation was justified, compensation was not due, and rent arrears were admitted; the appeal was dismissed and costs awarded.
ARYENE, JA
This is an appeal by the Plaintiff, Appellant herein against the judgment of the High Court delivered on 5th December 2017. The facts culminating in the instant appeal are that by a lease agreement dated 2nd May 1991, Government of Ghana acting through 1st Defendant entered into agreement with Tropical Metallic Construction Company limited for the leasing of assets of GIHOC Glass Manufacturing Company limited. The lease was subsequently assigned to Plaintiff herein.
Sometime in 1999, Plaintiff exercising its right of purchase under the Agreement wrote to 1st Defendant for the outright purchase of the subject matter of the lease. The proposal was approved by 1st Defendant who by a letter dated 6th August 1999, offered the assets of the company for sale to Plaintiff. The offer letter stated inter alia that failure to accept the offer by 23rd August 1999 and non-payment of the initial deposit by 1st of March 2000 would result in the automatic withdrawal of the offer.
Plaintiff failed to meet the terms of the sales agreement and by a letter dated 10th July 2002, 1st Defendant abrogated the agreement and took over the assets of the company for purposes of re-divesting same. Plaintiff contends that the abrogation and takeover of the assets of the Glass factory were in gross violation not only of the lease agreement but also its rights under the 1992 Constitution.
It is the case of Plaintiff that by the terms of the offer letter, failure to meet the conditions amounted to non-acceptance of the offer which should result in revocation of the offer and not breach of the twenty years lease agreement. And that failure to purchase the assets did not terminate its rights under the lease agreement. Plaintiff contended further that it never accepted the offer therefore there was no sales and purchase agreement which could extinguish the lease agreement.
Plaintiff contends further that pursuant to the lease agreement, it invested the sum of £920,000 and 25 million Ghana cedis in the company. And that since the takeover, its repeated demands for compensation for the investments made, have fallen on deaf ears.
Plaintiff’s claim was for the following reliefs:
I. Payment for the sum of Nine Hundred and Twenty thousand Pounds Sterling and Twenty-Five Million Ghana cedis.
II. Interest thereon from 10th July, 2002 till date of payment.
III. Costs.
The claim was stoutly resisted by Defendants who by an amended statement of defence filed after joinder of 2nd De