FABINA LIMITED vs. SHELL GHANA LIMITED [2008]DLCA7018

Date	2008-11-27
Suit No.	CIVIL APPEAL NO: H1/69/2008
Citation No.	[2008]DLCA7018

APALOO JA [PRESIDING]

YAW APPAU JA

KORBIEH JA

MR. BARTON ODURO FOR THE PLAINTIFF/APPELLANT

MR. STANLEY AMARTEIFIO FOR DEFENDANT/RESPONDENT

[2008]DLCA7018
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													<main id="main" class="content" style="min-height: 60rem" >FABINA LIMITED<o:p></o:p>(PLAINTIFF/
APPELLANT)<o:p></o:p>vs.<o:p></o:p>SHELL GHANA LIMITED<o:p></o:p>(DEFENDANT/APPELLANT)<o:p></o:p>[COURT OF APPEAL, ACCRA]<o:p></o:p>CIVIL
APPEAL NO: H1/69/2008 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;DATE: 27TH
NOVEMBER, 2008<o:p></o:p><div style="mso-element:para-border-div;border-top:solid windowtext 1.5pt;
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<p class="MsoNormal" style="margin-bottom:0in;margin-bottom:.0001pt;border:none;
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<p class="MsoNormal" style="margin-bottom:0in;margin-bottom:.0001pt;border:none;
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padding:0in;mso-padding-alt:1.0pt 0in 1.0pt 0in">MR. BARTON ODURO FOR THE
PLAINTIFF/APPELLANT. <o:p></o:p>

<p class="MsoNormal" style="margin-bottom:0in;margin-bottom:.0001pt;border:none;
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padding:0in;mso-padding-alt:1.0pt 0in 1.0pt 0in">MR. STANLEY AMARTEIFIO FOR
DEFENDANT/RESPONDENT.<o:p></o:p>

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mso-border-bottom-alt:1.5pt solid windowtext">CORAM: 
APALOO JA [PRESIDING], YAW APPAU JA, KORBIEH JA<o:p></o:p>

<p class="MsoNormal" align="center" style="margin-bottom:0in;margin-bottom:.0001pt;
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</div>JA APALOO, JA <o:p></o:p>This is an appeal by the
Plaintiff/Appellant against the judgment of the High Court, Accra delivered on
25th June 2007.<o:p></o:p>&nbsp;The appellant had appealed on two grounds to
wit, the trial judge erred in not ordering the Defendant to pay to the
Plaintiff the working capital of the Plaintiff inclusive of interest; and that
the quantum of damages awarded was on the low side.<o:p></o:p>&nbsp;The facts leading to this action in the lower
court are not complex. They have been clearly stated in the Plaintiff’s
statement of claim. According to the Plaintiff the parties entered into a
dealership agreement to operate the Defendants’ Legon Road service station
owned by the Defendant. Arising out of the Agreement Plaintiff paid ¢70 million
and additional ¢30 million for fuel and groceries respectively to the
Defendant. It is the case of the Plaintiff that other filling stations were
opened nearby by the Defendant and another Oil Marketing Company which
negatively affected its business by drastic reduction in volume of sales. An
armed robbery attack on the station which attracted adverse publicity in the
media, further worsened Plaintiff’s dwindling sales performance. The Defendant
refused to allow Plaintiff’s security guards to carry arms thus contributing to
the success of other attacks. The Plaintiff alleged that the parties discussed
means of improving the sales situation resulting in an application by the
Plaintiff for over draft facility of ¢49,300,000.00 which was paid to
Defendant. Upon receipt of the money Defendant refused to supply fuel but
rather terminated the Dealership agreement between the parties. The Plaintiff
alleged that the termination of the dealership agreement was wrongful in law
and that led to the loss of the initial ¢100.00 million as well as the
subsequent ¢49,300,000.00 raised by the overdraft facility. <o:p></o:p>The Plaintiff charged that
on account of its inability to repay the overdraft facility its Bankers had
commenced legal action against it. The Plaintiff accordingly initiated the
action in the court below to recover its working capital of ¢100.00 million
paid to the Defendant with interest thereon. The writ was endorsed with a further
claim of ¢49,300,000.00 being the sum realized from the overdraft facility
together with interest. In addition Plaintiff sued for damages for wrongful
termination of the dealership agreement.<o:p></o:p>&nbsp;By its Defence the defendant averred that
Plaintiff was granted a conditional licence to operate the filling station
which belong to the Defendant as long as the Plaintiff remained a dealer, that
in consideration of commissions to be paid to the Plaintiff by the Defendant,
the Plaintiff was to purchase and resell petroleum from the Defendant. It was
the case of the Defendant that to meet obligations under the dealership
agreement, the Plaintiff was required to have and maintain a minimum working
capital as determined from time to by the Defendant. The Defendant stated it
could not have prevented other service stations from being opened near by.
Defendant claim that the reduction in volume of sales at the station was due to
poor management by the Plaintiff and further that, armed robbery was not the
cause of Plaintiff’s dwindling sales. Defendant averred that it did not induce
the Plaintiff to take any overdraft facility. That when the ¢49,300,000.00 was
paid to Defendant the Plaintiff owed ¢63,136,136 and consequently Defendant
exercised its right of a set off to reduce Plaintiff’s indebtedness. Defendant.
insisted that monies paid by Plaintiff were used for Plaintiff’s business and
Defendant is not responsible for the Plaintiff’s loss. Defendant denied
responsibility for the action commenced by Plaintiff’s Bankers. Defendant
denied Plaintiff was entitled to an order of reinstatement.<o:p></o:p>&nbsp;When issues were joined it appears the
Defendant lost interest and after several adjournments the trial judge took
evidence from PW1 Francis B.K. Baiden the Managing Director of the Plaintiff/Company.
He tendered all the Exhibits and thereafter upon a written submission judgment
was delivered in favour of the Plaintiff in the following terms. The court
awarded ¢60.00 million for wrongful termination of the dealership agreement
with costs assessed at ¢10.00 million in favour of the Plaintiff. All other
reliefs were dismissed by the trial judge. <o:p></o:p>Arising out of this
decision the Plaintiff mounted the appeal. Counsel for the Plaintiff/Appellant
in his written submissions to this court argued in respect of his first ground
of appeal that the trial judge erred when she stated that the appellant had
made profits from the sale of the petroleum supplied to the Plaintiff/Appellant
and that there was no provision in Exhibit ‘A’ the Dealership Agreement that on
termination of the agreement the ¢100.00 million should be refunded to the
Plaintiff/Appellant. Counsel was of the view that since the
Defendant/Respondent had admitted receipt of the money, it follows that the
money belonged to the Plaintiff/Appellant, consequently the agreement having
been terminated, the money should have been returned to the Appellant as owner
thereof.<o:p></o:p>