JSC INVESTMENT LTD. (PLAINTIFF/RESPONDENT) vs. ACTIVITY VENTURER FINANCE CO. LTD. (DEFENDANT/APPELLANT) [2010]DLCA7839

JSC INVESTMENT LTD. (PLAINTIFF/RESPONDENT) vs. ACTIVITY VENTURER FINANCE CO. LTD... [2010]DLCA7839

Date	2010-06-17
Suit No.	CIVIL APEEAL NO.H1/124/2010
Citation No.	[2010]DLCA7839

HENRIETTA ABBAN JA PRESIDING

MARFUL-SAU JA

ADUAMA-OSEI JA

[2010]DLCA7839
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													<main id="main" class="content" style="min-height: 60rem" >JSC INVESTMENT LTD.<o:p></o:p>(PLAINTIFF/RESPONDENT)<o:p></o:p><span lang="EN-US" style="font-size:12.0pt;
line-height:115%;font-family:&quot;Book Antiqua&quot;,serif;mso-fareast-font-family:&quot;Book Antiqua&quot;;
mso-bidi-font-family:&quot;Book Antiqua&quot;;color:#00B0F0">vs.<o:p></o:p>ACTIVITY VENTURER FINANCE CO. LTD.<o:p></o:p>(DEFENDANT/APPELLANT)<o:p></o:p>[COURT
OF APPEAL, ACCRA]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0cm 0cm 1.0pt 0cm">

CIVIL
APEEAL NO.H1/124/2010&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; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;DATE:
17TH JUNE, 2010<o:p></o:p>

</div>CORAM:<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0cm 0cm 1.0pt 0cm">

HENRIETTA
ABBAN JA PRESIDING, MARFUL-SAU JA, ADUAMA-OSEI JA<o:p></o:p>

</div><o:p>&nbsp;</o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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</div>MARFUL-SAU JA:
This appeal is taken from the judgment of the High Court (Commercial Division)
dated the 8th of June, 2010. By a writ of summons filed on the 7th
of October, 2008, the Plaintiff claimed the following against the Defendant:<o:p></o:p>‘’a.
$180,000 being entitlements due to the Plaintiff under the Agreement.<o:p></o:p>&nbsp; b. Interest on the said amount due to the
plaintiff from the 12th of June 2008 date of termination till date
of final payment.’’<o:p></o:p>In
this appeal the Plaintiff will be referred to as the Respondent while the
Defendant will be known as the Appellant. The facts of the case are quite
simple.&nbsp; The parties herein entered into
a contract on the 1st November 2006, by which the Respondent was
engaged to manage investment fund provided by the Appellant. Under the Fund
Management Agreement which regulated the rights and obligations of the parties,
the Respondent was to be paid 2.5% of the committed capital as management fee
per annum. From the record of appeal the committed capital was US $10,000,000.00
and therefore the Respondent’s management fee was to be US$250,000.00 per
annum. The appointment of the Respondent as the Fund Manager was terminated by
the Appellant on the 12th of June 2008. The Respondent therefore
claimed the amount of US$180,000.00 which by paragraph 8 of the statement of
claim is made up as follows:-<o:p></o:p>i)
US$62,000.00 being the Respondent’s quarterly fee for the immediate preceding
quarter before the termination.<o:p></o:p>ii)
US$ 118,000.00 being the balance of the Respondent’s Annual Operating Expenses
from 12th June 2008 to December 2008.<o:p></o:p>It
is clear from the record of appeal that Respondent based its claims on clause
14. 1.2. of the Fund Management Agreement which will be referred simply as the
Agreement. The said clause provides as follows:-<o:p></o:p>‘’
The company may terminate the appointment of the Fund Manager by written notice
taking immediate or subsequent effect, attaching a certified copy of a
resolution of the Board deciding upon such termination, at any time. Provided
always that where the company terminates with cause, it shall pay the Fund
Manager a termination fee equal to the Fund Manager’s fee for the immediately
preceding quarter plus another quarterly fee of equal amount for the quarter
following the notice of termination. Where the company terminates without
cause, it shall pay to the Fund Manager: (i) the Fund Manager’s quarterly fee
for the immediate preceding quarter and (ii) balance of the Fund Manager’s
Operating Expenses for the year of termination as approved in the Fund
Manager’s Annual Budget specifically pertaining to the investment of the
company’s Committed Capital’’<o:p></o:p>The
undisputed fact in this appeal is that the termination of Respondent’s
appointment was without cause and as such by the terms of the above clause in
the Agreement the Respondent was entitled to two payments namely; the manager’s
quarterly fee for the immediate preceding quarter before the termination and
the balance of the Manager’s Operating Expenses for the year of termination as
approved in the Manager’s Annual Budget. Indeed these entitlements were
supposed to be the claim of the Respondent at the court below. The record of
appeal revealed that before the trial commenced the Appellant paid the
Respondent the Fund Manager’s quarterly fee for the immediate preceding quarter
for terminating the appointment of the Respondent. The Appellant however
contended that the Respondent never submitted any budget for approval so it was
not entitled to any Operating Expenses as required under clause 14.1.2 of the
Agreement. The sole issue at the trial therefore was whether the Respondent was
entitled to any operating expenses as per the Agreement. At the trial itself the
Respondent testified through the Managing Director, Patricia Sarfo and no
witness was called. The Appellant also testified through the Investment
Accountant, Sampson Asumadu and did not call any witness either.<o:p></o:p>In
his judgment the trial court held that even though the Respondent could not
prove the existence of an approved budget containing the operating expenses,
the parties in the course of performing the Agreement had evolved a practice
which made it unnecessary for the Respondent to submit annual budgets. The
trial court further made a finding that Appellant’s own witness corroborated
the practice and as a result entered judgment for the Respondent on its claim
for US$118,000.00 representing the balance of the annual operating expenses. It
is against this judgment that the Appellant has appealed praying this court to
reverse the decision of the court below and grant its counterclaim.<o:p></o:p>&nbsp;Pursuant to the leave of this court Appellant
amended its Notice of Appeal on 20th January 2010. In the Notice of
Appeal the Appellant formulated six grounds of appeal as follows:-<o:p></o:p>1.
The judgment was against the weight of evidence adduced at the trial.<o:p></o:p>