JUDGMENT DELIVERED THIS 20TH DAY OF November 2020 BY MS. JUSTICE F. BINTU ALHADI JA ",.._..

 

This action commenced before me on the 1 9th of June 2017 for  a  directions hearing; after being remitted from the  Court  of  Appeal  on  the  2nd  of  March  2017. The parties complied with the directions Order and filed all the relevant documents. It is an action that initially commenced  by Writ  of Summons  dated the 1 8th  day of December 2012 in which the Plaintiff claimed the following reliefs:

 

I. Recovery of the sum of Le 378,872.586.00 (Three Hundred and  Seventy  Eight Million Eight Hundred and Seventy Two Thousand Five Hundred and Eighty Six Leones) being owed as payment for the construction of  the Makeni Government Hospital Phase  I  and  completion  of  additional facilities for the Makeni and Moyamba Government Hospitals Phase 2 (therein called "the works").

 

1. Interest on the said sum at the rate of 25% per annum from the 26th of November 2010 to the date of judgment.

 

1. Any further or other Orders that the Court may deem fit.

 

1. Costs.

On the 1 511 of January 2013 Notice of Appearance was filed; and on the pr of

March 2013 a Defence and a Counterclaim were filed. The Defendant's Counterclaim inter alia averred that:

I. The Pioiniiff breached  clause  2.3 of  the  contraci dated  1 71' ·  August  2010 as a consequence of which the Defendant suffered loss and damage.

 

Particulars of Special Damage

 

1. Clause 2.3 of the Agreement dated 1 7th  August  2010  provides  that were the construction of the Makeni Government Hospital Phase I and additional      facilities for   the    Makeni and Moyamba Government Hospitals Phase 2 was not completed by the 1 6th of November 201O the Plaintiff  is to  pay  the  Defendant " liquidated damages at the  rate  of 2.5% of the contract sum per week for every week or part of a week during which works remain uncompleted."

 

 

The Plaintiff failed to complete the said construction work on the agreed date and has failed to complete the said construction work.

 

2. The Plaintiff has failed/refused to pay such liquidated damages to the Defendant.

 

Whereof the l st Defendant claims against the Plaintiff:

 

l. Special Damages at  the rate of  2.5% of  the  contract  sum of  Le 600,000,000 per week from the 1 7th of November 20 l O till payment.

 

1. Any further or other Orders.

 

1. Costs.

 

 

On the 28111 of February 2013 a Third Party Notice was filed by the Defendant thereby instituting an action against the 3"1 Party. The Defendant's  claim against the 3rd Party was thus:

 

I. Recovery of the sum of Le 378,872,586.00  (Three Hundred and  Seventy Eight Million Eight Hundred and Seventy Two Thousand Five Hundred and Eighty Six Leones) being claimed as payment for the construction of the Makeni and Moyamba Government Hospitals Phase 2 (therein called "the works")

 

1. Interest on the said sum at the rate of 25% per annum from the 26th day of November 20 IO to the date of judgment.

 

1. Any further Order(s) that the Court may deem fit.

 

This was followed by a Notice and  Memorandum  of  Appearance  on behalf  of  the 3rd Party dated the 4th of March 2013.

 

Summary of Submissions by Mr. L. Jenkins - Johnston Counsel for the Plaintiff

 

In his address to the Court, Counsel  submitted  that  the Plaintiff's  complaint  is that by a contract dated the 1 7th of August 20l 0, the Defendant employed the services of the Plaintiff as "Contractor" to complete the  construcf1on  of  the Makeni Government  Hospital  Phase  l  and  completing  the  additional  facilities for the Makeni and Moyamba Government Hospitals  Phase 2 (therein referred to  as "the works").

 

It was agreed that the  Defendant  would  make  further  payment  when  a certificate has been presented for such payment by the consultant; Tropical Environmental Design Associates (hereinafter referred to as TEDA) employed by the Defendant.

 

The Defendant made an advance payment of Le 280,730,025.00 upon the consultant presenting a certificate for  the  said  payment  On  the  26th  of November 20l 0, the consultant presented  a  payment  certificate  to  the Defendant for the sum of Le 378,872,586.00. The Defendant however refused to pay the Plaintiff the said or  any  sum of  money despite  several  demands  made by the Plaintiff through its solicitors.

 

On the 1 6th of April 2013, summary judgment was delivered in favour of  the Plaintiff. The Defendant being dissatisfied with that judgment appealed  to  the Court of Appeal and which said appeal  was  upheld and  the matter  remitted  to the High Court for trial.

 

Counsel argued ti,at the contract  between  the  Defendant  and  the  Plaintiff (Exhibit A) is the only contract between the parties. Page l  of  the said  contract reads thus " This Agreement is made the 1 7th day of August 2010 between First International Bank (SL) Limited (hereinafter called the employer) of  the  one  part and Messrs Sigma Engineering a1·1d Construction Services (hereinafter called the Contractor ..." He pointed out  ihat  there ·1s  nothing ·1n  the  contract  to ·indicate that the contract is secondary, supplemental to or dependent  on  any  other contract between other parties.

 

He said that the document is unambiguous and the nature of the agreement is clear. He submitted that none of the exceptions to  the  parole  evidence  rule  which Counsel for the Defendant has  outlined in their  address  apply. He  said  that by refusing to honour the payment certificate, the Defendant made  it impossible for the Plaintiff to continue with the other stages of the  works. He pointed out that clause 4.1 of  the  contract  states  that  the advance  payment  of Le 280,730,025.00 was mainly "to assist the contractor with his mobilization cost, purchasing of key materials and for setting up  site"  which  the  Plaintiff  did  in order to commence work.

 

Counsel submitted that the Plaintiff performed its obligations under the contract between itself and the Defendant and that the Defendant failed to perform its own obligations thereby breaching the contract.

 

 

 

Summary of Submissions by Ms. M. Dumbuya - Counsel for the Defendant

 

In her written address, Counsel for the Defendant, Ms. Dumbuya, submitted that  the entire case borders on whether  exhibit  A.  the  agreement  between  the parties is the only document that defines the contract between the parties: and whether  evidence  within  and  outside  of  Exhibit  A can be adduced to prove that the Defendant has a good case by bringing in extrinsic  evidence  that  does not form part of Exhibit A

 

She submitted  that  the  Defendant  showed  evidence  that  notwithstanding  Exhibit A and even under Exhibit A, the Plaintiff, the Defendant and the 3rd party herein ali together conducted themselves prior to  the  signing  of  exhibit  A  in such a way that by  their  collective  action  in  furtherance  of  the  construction work on the Makeni Government Hospital Phase land additional facilities for the Makeni and Moyamba Government Hospitals Phase 2, could  be  deemed  as falling within the exceptions to the rule against extrinsic evidence.

 

Ms Dumbuya argued that the Defendant gave evidence about the existence of exhibit L, which refers to a tripartite meeting held on the 6'" of August 201 O and during which it was agreed collectively that: the sum of Le 600,000,000 would be release    for    the      completion             of   the   project;    that Mr     Hamilton     of SIGMA Construction would be in charge of the  project  and  all funds  would be  released to  him  by  the  Contractor IPCS; and  that the disbursement would be done in tranches,  reviewed   and approved by the consultants before further disbursements.

 

She said that in this regard, interalia, the Defenda,1t  hos shown  evidence  that  the Defendant bank was acting as Surety/Guarantor,  which  was  further buttressed by the existence of exhibit P, which is the  Advance  Payment Guarantee from the Defendant to the Procurement Manager of the Ministry of Health and Sanitation.

 

She argued that the contract dated 1 7th August 20 IO was secondary to an agreement  between  the  Government  of  Sierra  Leone  and  the  31d   Party  herein for the construction of the Makeni Government Hospital Phase I and additional facilities for the Makeni and Moyamba Government Hospitals Phase 2. Ms Dumbuya also opined  that  notwithstanding  that  in  cross-examination,  the Plaintiff denied working with the 3rd party, the evidence in totality throughout the trial revealed that the 3rd party worked with the Plaintiff and the Defendant in furtherance of the project work.

 

Ms Dumbuya maintained that the surrounding circumstances of the  matter, does not differ from what is contained in exhibit A. She said that the surrounding facts and circumstances are not in contradiction to the content of Exhibit A. What it does she opined, is that they clarify exhibit A especially regarding what was arrived at and agreed at various preliminary meetings.

 

Counter-Claim

 

Counsel for the Defendant, Ms Dumbuya, submitted that she relied on all the evidence presented to the Court for the Defence and  also  its  counter-claim against the Plaintiff for failing to adhere to the terms of clause 2.3 of Exhibit A.

 

She also espoused that, according to Exhibit A. the Plaintiff contracted to pay the Defendant liquidated damages for failure to  complete  the  project  within the said stipulated time at the rate of 2.5% of the contract sum per week of every week or part of a week during which the project works remain uncompleted. The Defendant's Counterclaim therefore she submitted, is for the said liquidated damages.

 

Third Party Proceedings

 

Ms Dumbuya submitted that throughout the trial, there is uncontroverted evidence that the 3rd party is liable to the Defendant for failing to have a liquidated account with cash inflow to enable the Defendant to honour agreed/accepted requests for payment

 

She said that there was no dispute throughout the trial about the existence and legality of the Advance Payment Guarantee, Exhibit J, issued to the  3,j party by  the Defendant and signed by the Company Secretary and Director of the Defendant. She referred to exhibit L wh;ch shows that  the 3rd party is  a  key oarty to the entire process; and  to  exhibits E and   F where the 3rd  party was mentioned in both exhibits from the Plaintiff and the Defendant.

 

Summary of Submissions by Mr. C. F. Edwards (Late) Counsel for the Third Party

 

No submissions were made by Counsel.

 

ANALYSIS AND FINDINGS

 

The first question that arises is this: does exhibit A, which is the agreement signed between the Plaintiff and the Defendant on the  1 7th of  August  2010, constitute the only agreement between the two said parties?  Counsel  for  the  Defendant, Ms. Dumbuya argues otherwise. She submitted that, since the said  parties together with the third party had conducted themselves prior to the written agreement of the 17th August 2010 in such a way as to deduce that, by their collective action in furtherance of the construction work on the  Makeni  Government Hospital Phase l and additional facilities for the  Makeni  and Moyamba Government Hospitals Phase 2, it could  be deemed  as  falling  within the exceptions to rule against extrinsic evidence.

 

As a general rule, where the parties have entered into a contract in writing,  the terms of the written contract shall govern the operation of the  contract  and as such, extrinsic evidence is not admissible to add to, or subtract  or  vary  the contract. As Lord Denman CJ in Goss v Lord Nugent ( 18331 5. B  &  Ad.  58,64  stated: " if there is a contract which has been reduced  into  writing,  verbal  evidence is not allowed to be given of what passed between the parties, either before the written instrument was  made, or during  the time  that it was in a  state of preparation, so as to add to or subtract from, or in any  manner  to  vary  or qualify the written contract."

 

However, thete are exceptions to the rule usually known  as  "parole  evidence" rule. This is where under certain circumstances, "parole evidence" can be applicable; and Ms Dumbuya submits that some of the issues in this case, rest on the exceptions such as: evidence as to the true nature of the Agreement and Evidence as to Supplementary or Collateral terms.

 

In my considered opinion, there is no doubt and the Plaintiff has not denied this, that a tripartite meeting was held on the 61h of August 2010 in which there were discussions about Mr. Hamilton of Sigma Construction  completing  the  projects and   being  in  cha1ge;   and   that   Le   600  Million   would   be  released  to  him.

However, I am not convinced that  this was  an  agreement  that  was a  collateral or supplementary term to the main contract that was signed  on  the  1 7th  of August  2010; neither  was it evidence as to  the  true  nature  of  the  agreement. If

this was the case, judging that this meeting happened before the main agreement/contract was signed on the 1 7th of August between  the Plaintiff  and the Defendant; why were  the  terms  purported  to  have  been  agreed  not included in the later written agreement of 1 7th August 201 0?

 

Exhibit t( is a credit facility to the 3rd party by the Defendant bank dated I st of November 20 I 0. This facility was granted after the contract of 17th August 2010 between the Plaintiff and the Defendant. Whilst Exhibit L is  a  letter addressed to the 3rd party stating that the account of the  3ra  party is  being credited with the  sum of Le 280,730, 025; which was the I st tranche of payment and  which was to  be released by the 3rd party to the Plaintiff; (letter dated 17 th August 2010). The letter referred to a meeting on the 6th  of  August  2010, a  tripartite meeting where   it was agreed, according to the letter, that the 3rd party will release funds to the Plaintiff. The question that  arises is  why  was this purported  agreement  not made a part of the written contract between the Plaintiff and the Defendant or even attached as an appendix; since it was held earlier on the 6th of August 2010?

Why was the letter written to the Plaintiff by the Defendant on the 21 st  of September 2010, not copied to the 3rd Party, when it was copied to the

consultant - TEDA?

 

I also note that on the 6th of August 20 I 0, a letter was written by the 3rd party to the Defendant that did not refer or include the plaintiff, nor was a copy of the letter sent to it. Since the Plaintiff was part of this meeting and he supposedly agreed to the resolutions of that meeting, why were the terms so agreed not incorporated into the written contract of the 1 7th of August 2010?

 

Also, given that the Defendant is a properly constituted corporate institution in  which transactions are formal and documented, where are the minutes and resolutions of the meeting in which the Plaintiff agreed and signed? In my mind there are more questions than answers to  the  conduct  of  the  Defendant bank. It is clear that the Plaintiff entered into an agreement in writing with the Defendant bank. Why should it be the responsibility of  the  3rd  party 10  pay  the Plaintiff?  It just doesn't add up!

From the letter of the 22r,d of September 2010 written by the Plaintiff to the

Defendant. on the completion of Makeni Govmnment Hospital, the Plaintiff copied the consultant but not the 3rd party. This was clearly a statement that the

agreement was between the Plaintiff and the Defend0t1t and not the 3rd Pariy (Exhibit N).

 

In a letter dated 8th December 2010, the Plaintiff wrote to the Defendant referring to a request for payment from the consultant to pay to the Plaintiff the sum of Le 378,872,586 with regard to the completion of outstanding works and correction of defects at Makeni Government Hospital (phase I).

 

The supplementary or collateral terms should have been identified as such and signed by the parties involved including the Plaintiff and the  Defendant. Additionally, the evidence of a signed guarantee to the Government of  Sierra Leone on behalf of the 3'd party is not the business of the Plaintiff. The Plaintiff's agreement is between the Plaintiff and the Defendant.

 

PHIPSON ON EVIDENCE at p 1900 paragraph 1901 states that: 'where a contract

.........purports to be contained in a document which the court infers was not intended to express the whole agreement between the parties, proof may be given of any omitted or supplemental oral term, expressly or impliedly agreed between them before or at the time of executing the document........' It is my view that there is no evidence or proof to show that there was any omitted or supplemental oral term, expressly or impliedly agreed between them either before or at the time of executing the agreement.

 

Did the Plaintiff meet the deadline for the certificate to be issued and  paid upon? From the facts of the case, he was late in completing some stages However,  it  is  clear  that  the Plaintiff    was being starved of funds by the Defendant and it became impossible for him to carry on his duties. In other words, the Defendant was clearly in breach of its own obligations to the Plaintiff.

 

Counterclaim

 

For  reasons  stated  above,  there 1s  no     case here for a counterclaim by the Defendant.

 

Third - Party

 

On the issue of the 3rd party. there has been no representation except  that Counsel, C. F. Edwards Esq (of blessed memory) only entered appearance. No Defence or any other process was filed. It is the opinion ot  the Court  that,  from  the facts of the case, there appear to have been a  contractual  relationship between the Defendant and the 3rd party. I therefore find in  favour  of  the Defendant in the 3rd party proceedings in the sum of Le 378,872,586 (Three Hundred and Seventy Eight Million Eight Hundred and Seventy  Two  Thousand Five Hundred and Eighty Six Leones).

 

Conclusion

 

It is my considered opinion that this is really a matter between the Defendant and the third party. It appears that this is some kind of a botched up work by the third party. The bank had given some guarantees to the Government on behalf of the third party and the third party failed to perform. In order to save the bank from being called upon to pay back the advance payment guarantee and the

 

performance bond to  the Sierra  Leone  Government;  the  plaintiff  was  called  in to save the situation. The Plaintiff became aware and agreed to  do  the construction work but on an agreement dated 1 7111 August 20 l 0. I do not believe that the meetings that were held  in  which  the  Plaintiff  was  present  was collateral to the said main contract. It did not form an exception to the parole evidence rule. I believe the witness when he gave evidence to say that he was starved of funds to complete the project. Where the Defendant was the first to breach the said agreement. I cannot  see  why it  should want  to claim damages  for the pla'1ntiff's breach. Therefore.  ''the Defendant's  failure to honour payment on the certificate  submitted  to  it  in  accordance  with  the  terms  of  the agreement between the Plaintiff and the Defendant is a breach of the contract between the two parties "

 

I agree with Counsel for the Plaintiff when he said in his skeleton argument that, "the contract between the  Plaintiff  and  the  Defendant  contained  in  the document dated l 7th day of August 20 l 0 contains no term to indicate that it is secondary, supplementary or dependent on  any  other  contract  between  any other parties. The document is clear and unambiguous and the nature of the agreement is clear." I also concur that the agreement falls within the parole evidence rule which states that "once the parties have elected to enshrine their contract in a written document. the courts have held that as a general rule, the parties cannot adduce extrinsic evidence to  add  to.  vary  or  contradict  the  written document; the document is the sole repository of the  terms  of  the contract;" Jacobs v Batavia & General Plantations Trust Ltd [I 9241 l Ch. 287.

 

It is therefore my considered opinion that. the Plaintiff was aware of some relationship between the Defendant and the third party; but no evidence was adduced in court to show that the Plaintiff was bound by the terms of that relationship. The relationship between the Plaintiff and the Defendant was a separate agreement. which was in writing. signed and dated by both parties.

 

In conclusion therefore. in viev1 of the aforementioned, I make the following

Orders:-

 

 

l. The Plaintiff is to recover from the Defendant. First lnternaf1onal Bank (SL) Limited (Now called Vista Bank (SL) Limited) the sum of Le 378,872.586.00 (Three Hundred and Seventy Eight Mill'lon Eight Hundred and Seventy Two Thousand Five  Hundred  and  Eighty  Six  Leones)  being  owed  as  payment for the construction of the Makeni Government Hospital  Phase  l  and completion  of  additional  facilities  for  the  Makeni   and   Moyamba Government Hospitals Phase 2 (therein called "the works").

 

1. Interest on the said sum at the rate of l 0% per annum from the date of commencement of court proceedings to the date of judgment.

 

1. Costs of Le l 00,000,000 (One Hundred Million Leones) to the  Plaintiff's Solicitor.

 

On the Counterclaim:

 

1. No order as to the counterclaim.

 

On the Third- Party Action

 

1. The Defendant is to recover the sum of Le 378,872,586.00 (Three Hundred and Seventy Eight Million Eight and Seventy Two Thousand Five Hundred and Eighty s·1x Leones) from the Third-Party, International Procurement and Construction Services.

 

1. Interest on the said sum of l 0% per annum from the commencement of proceedings date to the date of judgment.

 

1. Costs of Le l 00 Million to the Defendant's solicitor by the Third Party.

 

i

 

Signed:       

Just1ce F. Bintu Alhadi JA