SUPER PAPER PRODUCTS CO. LTD vs. KYOMATSU TRADING CO LTD. AND 3 OTHERS [2014]DLCA5232

Date	2014-05-22
Suit No.	SUIT NO. HI/31/2010
Citation No.	[2014]DLCA5232

KUSI-APPIAH J.A (PRESIDING)

OFOE J.A

DZAMEFE J.A

ANTHONY KWAKYE FOR PLAINTIFF/APPELLANT

GEORGE ESHUN FOR DEFENDANTS/RESPONDENTS

[2014]DLCA5232
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													<main id="main" class="content" style="min-height: 60rem" >SUPER PAPER PRODUCTS CO. LTD<o:p></o:p>(PLAINTIFF/APPELLANT)<o:p></o:p>vs.<o:p></o:p>KYOMATSU TRADING CO LTD. AND 3 OTHERS<o:p></o:p>(DEFENDANTS/RESPONDENTS)<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:0in 0in 1.0pt 0in">

SUIT
NO. HI/31/2010&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; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; 22ND MAY, 2014<o:p></o:p>

</div>COUNSEL:<o:p></o:p>ANTHONY
KWAKYE FOR PLAINTIFF/APPELLANT<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

GEORGE ESHUN FOR
DEFENDANTS/RESPONDENTS<o:p></o:p>

</div>CORAM:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p>KUSI-APPIAH
J.A (PRESIDING), OFOE J.A, DZAMEFE J.A<o:p></o:p><div style="mso-element:para-border-div;border-top:solid windowtext 1.5pt;
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<p class="MsoNormal" align="center" style="margin-bottom:0in;margin-bottom:.0001pt;
text-align:center;border:none;mso-border-top-alt:solid windowtext 1.5pt;
mso-border-bottom-alt:solid windowtext 1.5pt;padding:0in;mso-padding-alt:1.0pt 0in 1.0pt 0in">JUDGMENT<o:p></o:p>

</div>OFOE, J.A.<o:p></o:p>The
plaintiff is a Ghanaian registered company. 1st and 3rd defendants are
Chinese registered companies. The 4th defendant was the Managing
Director of the plaintiff companies at the same time the Managing Director of
the 3rd defendant company. As for the 2nd defendant it is
the case of the plaintiff that he was falsely put up, with his knowledge, by
the 4th defendant as the Managing Director of the 1st
defendant company but behind the scenes it was the 4th defendant who
was in charge of that company. The main allegation of the plaintiff is that the
4th defendant in his dual position as Managing Director of these two
companies and with the influence that he had over the 1st defendant
company manipulated all these Chinese companies and succeeded in defrauding the
plaintiff company of several millions of dollars. The 4th defendant
had the collaboration of the 1st and 2nd defendants in
perpetrating this fraud. The plaintiff’s allegation continued, that the fraud
was perpetuated through over invoicing and double pricing of machinery and
equipment that the plaintiff bought from the 1st and 2nd
defendant on the advice of the 4th defendant. It was to seek redress
in claiming these monies that were fraudulently paid in excess to the 1st
and 2nd defendant that it went to court seeking to set aside the
contract, exhibit A, that formed the basis of the transaction and retrieve any
monies overpaid to the defendants. <o:p></o:p>The brief facts of this
case can be stated as follows: <o:p></o:p>The plaintiff on the
advice of its managing director, the 4th defendant, agreed to expand
its products from producing toilet rolls to include other paper products. This
expansion required acquisition of additional machinery and equipment which
initially was to be procured through finance sourced by 3rd
defendant company. When all approvals from the relevant governmental agencies
had been procured for the importation of the said equipment and machinery and
an agreement exhibit B had been signed between the plaintiff and the 3rd
and 4th defendants for the supply of these machinery, the 4th
defendant disclosed to the plaintiff company that the 3rd defendant
was no longer able to discharge its duty procuring the funds for the import of
the required machinery and equipment for the plaintiff. The 4th
defendant recommended another Chinese company to take over this duty of
sourcing for funds from the 3rd defendant. The recommended company
was the 1st defendant company. This was accepted by the plaintiff
company. Fresh proforma invoices for the importation of the machinery and
equipment had to be submitted by the 1st and 2nd defendants,
who formed the basis of an agreement, exhibit A, between the plaintiff and the
1st defendant company spelling out each parties obligations. Mr. C.O.
Nyanor, the chairman of the plaintiff company signed for the plaintiff company.
One of the issues between the parties for resolution by the court was whether
this agreement was executed by the 4th defendant on behalf of a Mr.
T. A. Lai, the 1st defendant’s Managing Director, or it was executed
by T. A. Lai himself. It is the case of the plaintiff that it was the 4th
defendant who executed this agreement in Ghana for the 1st defendant
in the presence of a staff of the plaintiff company, making it look as if it
was signed by the 2nd defendant and that the agreement was never
executed by T. A. Lai or any officer of the 1st defendant company. <o:p></o:p>The machinery and
equipment were imported and delivered all right but plaintiff contended that
some of the invoices were fraudulently inflated with items which could not be
part of the cost of the machinery because they were all post landing charges. Other
questionable costs on the invoices, according to the plaintiff, were amounts
which the 1st defendant, by the contract exhibit A, should have paid
for but because of the fraudulent manipulation of the invoices plaintiff rather
paid for them. Plaintiff questioned also payment of salaries to the engineers
brought in by the defendants to install the Stock Preparatory Machinery, cost
of the construction of Chestroom, cost of installation of the machinery and
equipment and disputed the payment for commissioning of the said machinery. The
defendants in violation of the contract also failed to supply the laboratory
equipment and failed to impart the technical knowhow to the plaintiffs to
enable its own workers operate the machinery and equipment. Important equipment
like the Digesters and Straw Cutters which would have enabled the plaintiff to
make use of local materials for producing pulp for paper were abandoned by the
1st defendant uninstalled. It is the price quotations on the invoices
concerning all these matters which formed the grounds for the allegation of
fraud against the defendants. The particulars of fraud provided by the
plaintiff were:<o:p></o:p>“1.1st and 2nd
defendants were involved in over invoicing and manipulation of import prices.<o:p></o:p>