Zagloul REAL Estates LTD v. British Airways LTD
1998
SUPREME COURT
Areas of Law
- Contract Law
- Property and Real Estate Law
- Civil Procedure
- Corporate Law
- Administrative Law
1998
SUPREME COURT
AI Generated Summary
Zagloul Real Estate Company Ltd sued British Airways Ltd, as assignee of British Caledonian Airways Ltd, to enforce statutory obligations under PNDCL 150 requiring external companies to pay rent in convertible currency. BCAL had paid ¢40 million in cedis for a 25-year lease and procured an indemnity from Zagloul to repay that amount if statutory compliance in foreign currency was later required. The High Court granted declarations and an order compelling compliance with PNDCL 150 and rejected any refund beyond ¢40 million. The Court of Appeal affirmed compliance but remitted the refund issue for retrial. On Zagloul’s appeal, the Supreme Court held the lease and indemnity were illegal and void, set aside the remittal as futile, affirmed the High Court’s judgment, and ordered British Airways to comply with PNDCL 150. Equity was unavailable to adjust the refund to present value, and as assignee British Airways bore the covenants touching the land.
Bamford-Addo JSC. I have had the privilege of reading in advance the comprehensive judgement of my brother Acquah JSC which sets out the full facts of this case. I agree with him and my reasons are as follows: The plaintiff-appellants (hereinafter called the plaintiffs) took action at the High Court against the defendant- respondents (hereinafter called the defendants). The plaintiffs’ claim indorsed on their amended writ of summons was for:
“(a) A declaration that under the provisions of the External Companies and Diplomatic Mission (Acquisition or Rental of Immovable Property) Law 1986 (PNDCL 150) the defendants are under a statutory obligation to pay the rent reserved under the lease executed between the plaintiffs and defendants and dated 14 October 1986, or as determined or varied by the Implementation Committee under PNDCL 150, in convertible currency through the Secretary, now the Minister, for Foreign Affairs by cheque drawn in favour of the Bank of Ghana to the credit of the plaintiffs, notwithstanding anything to the contrary in the said lease with effect from the date of coming into effect of the said lease, namely 1 October 1986.
[p.432] of [1997-1998] 2 GLR 428
(b) A declaration that upon the payment in convertible currency by cheque drawn in favour of the Bank of Ghana through the Minister for Foreign Affairs to the credit of the plaintiffs of any such rent from the date of coming into force of the said lease, the plaintiffs shall be obliged to pay to the defendants the sum of ¢40 million only by way of a refund of the rent for 25 years under the said lease paid in advance by the defendants to the plaintiffs and no more.
(c) An order directing the defendants to comply with the provisions of PNDCL 150 in all respects so far as the same affect the lease entered into between the plaintiffs and the defendants aforesaid.”
The plaintiffs, a limited liability company incorporated under the laws of Ghana in 1986, leased property by a lease agreement to the erstwhile British Caledonian Airways Ltd (BCAL) for 25 years and by virtue of the lease agreement, BCAL paid a total sum of ¢40 million rent to the plaintiffs. Later, with the consent of the plaintiffs, British Caledonian assigned the remainder of its lease to British Airways Ltd, another external company.
The lessee of the property, being an external company, was under the obligation provided by the External Companies and Diplomatic Missions (Acquisition or Rental of Immovable Property)