
JUDGMENT  
The Plaintiff is a State Agency established by an Act of Parliament with the responsibility to collect tax revenue for and on behalf of the Government of Ghana.  The Defendant, on the other hand, is an insurance company registered under the laws of Ghana. 
The material facts which gave rise to the matter before me are stated in Plaintiff’s statement of claim as corroborated in material aspects by the testimony of Plaintiff’s witness, Mr. Samuel Bentil and supported by the documentary evidence adduced by the Plaintiff in support of its case. It is the testimony of Plaintiff’s witness that he is a Tax Administrator who has been working with the Plaintiff (from the then CEPS) for over twenty-seven (27) years.  He testified that he is currently the Head of the Debt Management Section of the Debt Management, Compliance and Enforcement Unit of the Office of the Commissioner General, Head Office and the facts to which he testified came to his knowledge in connection with his duties as the Head of Debt Management of the Ghana Revenue Authority and its dealings with Novel Commodities Ghana Limited, a Customs Licensed Bonded Warehouse Operator.  
According to Plaintiff, as part of the requirement for Novel Commodities Ghana Limited to obtain a licence to engage in the business of bonded warehousing of goods under the Customs, Excise and Preventive Service (Management) Act, 1993, P.N.D.C.L. 330, as amended, it was required by 
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the Plaintiff, as condition precedent, to take out a bond guaranteeing payment in full of all revenue that would be lost to the State arising from the non-payment of customs duties, excise duties and all other lawful taxes exigible on the goods warehoused under bond in the licensed premises.  To this end, Novel Commodities Ghana Limited executed a bond for the security of the goods warehoused in its premises for the period of 10th April, 2013 to 9th April, 2014 in the sum of Five Million Ghana Cedis (GH¢5,000, 000.00) with the Defendant. The said warehouse bond was referenced as Bond No. P/102/41/4106/2012/3/Warehouse No. T/287.  A copy of the bond agreement executed between the Defendant and Novel Commodities Ghana Limited was tendered in evidence by the Plaintiff and marked as Exhibit “A”.   
It is the Plaintiff’s case that per the terms of the bond agreement, Defendant (hereinafter, referred to as “Guarantor/Defendant”), irrevocably and unconditionally guaranteed for and on behalf of Novel Commodities Ghana Limited (hereinafter, referred to as the “Principal Debtor”) to pay in full all revenue lost to the State arising from the non-payment of customs duties and all other lawful taxes exigible on goods warehoused under bond in the licensed premises. Furthermore, under the terms of the bond agreement, Plaintiff was required to notify Defendant of any loss, omission, default or breach or law which may lead to a claim under the bond within one year after the expiration of the bond.   
Plaintiff states that an audit it conducted into the activities of the Principal Debtor in May, 2013 revealed a short fall of Ten Million Seven Hundred and Eighty Three, Four Hundred and Fifty Eight, Fifty-five Pesewas (GH¢10,783,458.55).  According to the evidence of the record, though the stock check exercise was conducted from May 13, 2013 and May 14, 2013, the audit reconciliation actually started from March 28, 2012 to consider all transactions conducted in the warehouse.  Consequent upon this audit exercise, by Exhibit “B”, Plaintiff, therefore, demanded from the Principal Debtor the payment of the shortfall together with a pecuniary penalty to mark the offence and serve as a deterrent, in the total amount of Twenty One Million, Five Hundred and Sixty-six Ghana Cedis, Ten Pesewas (GH¢21,566,917.10). In accordance with the terms of the bond agreement, Plaintiff, by a letter dated 25th February, 2014, made a formal demand on Defendant for payment under the bond for the full amount of the security of GH¢5,000,000.00.    
It is the case of the Plaintiff that several demands and visits to Defendant to make payment under the bond security has yielded no result.  According to the testimony of Plaintiff’s witness, on 21st October, 2013, the Debt Management, Compliance and Enforcement Unit issued a Final Demand Notice, Exhibit “C”, which was served on the Principal Debtor, but it failed to honour its debt.  By reason of this failure to pay the debt, the Commissioner General. According to the testimony of the witness, on 13th January, 2013 issued a Warrant of Distress against the Principal Debtor authorizing the levying of distress on the property of the company.  The Warrant of Distress is marked in evidence as Exhibit “D”.  
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On the execution of the Warrant of Distress, as stated by the witness, the distress team could not lay hold of any of the property of the Principal Debtor.  It is for this reason that the Plaintiff initiated the necessary steps to realise the bond security.  It is the testimony of Plaintiff’s witness that by a letter dated 25th February, 2014, marked in evidence as Exhibit “E”, Plaintiff wrote to the Defendant demanding payment of the bond sum as required under the bond agreement.  However, the Defendant failed to honour the agreement and also failed to respond to Exhibit “E”.  
The Plaintiff, therefore contends that from the foregoing, the Defendant has shown by its conduct that unless compelled by the Court, it has no intention whatsoever to pay its just debts under the bond agreement to the detriment of the Plaintiff.  
In the Plaintiff’s statement of claim, the Plaintiff claims against the Defendant the following reliefs: 
    “i. Payment on the bond of GH¢5,000,000.00  ii. Interest on (i) above at the commercial bank rate from the date of notice until date of final payment. iii. Costs.”  
The evidence of the record establishes that on 9th October, 2014, the Defendant entered appearance through P.E.K Mawuvenu, Esq., Solicitor with the Defendant’s Legal Affairs Department, who on 31st October, 2014, filed a statement of defence to the suit on behalf of Defendant, albeit, out of time.   
The following issues were set down for trial after pre-trial settlement failed: 1. Whether or not there had occasioned any loss of revenue to Plaintiff as stipulated under the bond executed by the Defendant and Novel Commodities Ghana Limited? 2.  Whether or not Plaintiff notified Defendant of any loss, omission, default or breach as stipulated under the bond executed by the parties? 3. Whether or not Plaintiff made written demand on the Defendant for the revenue loss? 4. Whether or not the Plaintiff is entitled to the payment of the bond security of GH¢5 million under the bond executed by the parties?  
Before delivering my judgment, it may be necessary to give a brief procedural history of this case. After attempts at court assisted settlement of the case failed at the pre-trial settlement level, the case was referred to this court to conduct the trial.    
It is noted, that neither the Defendant nor its solicitor appeared in court to contest the trial notwithstanding the fact that the Defendant was served with several hearing notices of the scheduled dates for trial as well as Court’s Notes through its Solicitor, as evidenced by the 
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numerous affidavits of service on the record.  In fact, on the one occasion that the Defendant was represented in court, that is, on 15th February, 2016, by one Mr. Ebenezer Edzii, a Legal Assistant, he assured the court that the Defendant did receive the hearing notice for the scheduled hearing.  To assist the Defendant, the court ensured that Counsel for Plaintiff served on the representative, personally and before the court, extra copies of the Plaintiff’s Witness Statement, list of documents intended to be relied on by the Plaintiff during the trial and also the Plaintiff’s pre-trial check list.    
The court went further to painstakingly explain to the Defendant’s representative of the consequences of the Defendant’s failure to comply with the case management orders entered by the court on 27th November, 2016, including the failure to file its witness statement and pre-trial check list with the court and to serve same on the Plaintiff and further gave the Defendant an extension of time within which to comply.  Once again, the Defendant failed to comply with those orders.  For that reason, the statement of defence filed by the Defendant was struck out by the court on 29th February, 2016 in accordance with Order 32 rule 7A of the High Court (Civil Procedure) Rules, 2004, (CI 47) (as amended) by CI 87.  
In the circumstance, the only triable issue that is material to the disposition of this suit, in my view, is as to whether or not the Plaintiff is entitled to its reliefs as endorsed on the writ of summons.   The general rule is that where a party to a civil suit raises issues that are essential to the success of his claim, he assumes the onus of proof, whether it is the plaintiff who asserts a fact or the defendant who makes a counterclaim.  In the case of BANK OF WEST AFRICA LTD. v. ACKUN [1963] 1 GLR 176-182 the court held that the onus of proof in civil cases depends upon the pleadings and the party who in his pleadings raises an issue essential to the success of his case assumes the burden of proof. In so holding the court applied the English case of HUYTON-WITHROBY U.D.C. v. HUNTER [1955] 2 All E.R. 398, C.A.  In the local case of FAIBI v. STATE HOTELS CORPORATION [1968] GLR 471-480 the court also held that “… [t]he onus in law lay upon the party who would lose if no evidence was led in the case; and where some evidence had been led it lay on the party who would lose if no further evidence was led”.  The Supreme Court in the case of ABABIO v. AKWASI III [1994-95] Ghana Bar Report, Part II, 74 also had this to say, “A party whose pleadings raised an issue essential to the success of the case assumed the burden of proving such issue. The burden only shifted to the defendant when the plaintiff had adduced evidence to establish the claim”.   
The Evidence Act, 1975 (NRCD 323) (hereinafter, “NRCD 323”), encapsulates the foregoing principle in section 14 where it uses the term the “burden of persuasion” and provides that the asserting party must prove each fact of his claim, the existence or non-existence of which is essential to the claim or defence he is asserting. Section 12(1) of NRCD 323 provides a further element to the above stated general rule to the effect that in a civil case, such as the one in question, the burden of persuasion requires proof by a “preponderance of probabilities” defined in section 
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12(2) as “that degree of certainty of belief in the mind of the tribunal of fact or the court by which it is convinced that the evidence of a fact is more probable than its non-existence”.     
From the foregoing, therefore, it is clear that for the Plaintiff to succeed on its claims that it ought to be granted the right to recover from the Defendant the full amount secured by the bond, it assumes the onus of proving its assertions against the Defendant. Plaintiff is therefore duty bound to establish the requisite degree of belief in my mind by adducing enough evidence to show that the likelihood of the circumstances being alleged in its pleadings is more probable than not.  It is trite learning, after all, that pleadings cannot be substituted for evidence.   Exhibit “A”, which is the bond agreement states in relevant parts as follows:  
“THIS BOND is made between SIC INSURANCE COMPANY LIMITED … (hereinafter called the ‘GUARANTOR’ which expression shall include her successors and assigns) and NOVEL COMMODITIES GHANA LIMITED … (hereinafter called the ‘OPERATOR’ which expression shall include her successors and assigns) in favour of the Commissioner, GHANA REVENUE AUTHORITY (CUSTOMS DIVISION) …  AND WHEREAS the Operator is required by law to secure the revenue (Customs duties and taxes exigible on all goods warehoused under bond in the licensed premises aforesaid ---- AND WHEREAS the Commissioner has directed that the Operator shall give security in the sum of FIVE MILLION GHANA CEDIS (GH¢5,000,000.00) and has hereby approved of GUARANTOR as surety for the OPERATOR and Principal debtor of the Commissioner under section 318 of PNDC Law 330 --- “NOW THIS BOND WITNESSETH AS FOLLOWS:  1. That the GUARANTOR hereby irrevocably and unconditionally guarantees for and on behalf of the OPERATOR to pay in full all revenue lost to the State arising from the nonpayment of Customs duties, excise duties and all other lawful taxes exigible on goods warehoused under bond the said licensed premises. 2. The liability of the GUARANTOR specified in clause 1 of this bond shall in the event of revenue lost be limited to the face value of the bond and that the Guarantor’s liability shall under no circumstances exceed One Hundred percent (100%) of the amount guaranteed. 3. That the Guarantor hereby guarantees further that where any loss of revenue is established whilst the goods still remain under bond in the licensed premises aforesaid all revenue lost shall be paid on receipt of the first written demand without cavil or argument. 
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4. The Commissioner shall notify the Guarantor of any loss, omission, default or breach of law which may lead to a claim under this bond within one year after the expiry of this Bond……”  
A bond is usually contained in a document given by a third party in support of the obligations of another party, containing a promise to pay money immediately or on a future date.  It thereby provides an assurance or surety to the beneficiary that the contracting party will perform its obligations, and security if it does not.  A restatement of the holding of Lord Denning MR in the English case of EDWARD OWEN ENGINEERING LTD. v. BARCLAYS BANK INTERNATIONAL LTD; CA [1978] 1 All ER 976, would suggest that a contract by a third party effectively guaranteeing obligations to pay on demand within the terms of that contract, irrespective of the rights and wrongs of any dispute between the beneficiary and the principal under the terms of their separate contract, subject only to fraud, may be termed a “performance guarantee”.  
In order to give effectiveness to the bond agreement, its terms must be construed.  From the excerpts of the clauses of the bond agreement reproduced above, the following terms can be identified: 
(i) The Defendant irrevocably and unconditionally guaranteed for and on behalf of Novel Commodities Ghana Limited to pay in full all revenue lost to the State arising from the non-payment of customs duties and all other lawful taxes exigible on goods warehoused under bond in the licensed premises.  
(ii) Plaintiff was required to notify Defendant of any loss, omission, default or breach of law which may lead to a claim under the bond within one year after the expiration of the bond.   
(iii) That upon the proven breach of the principal debtor’s obligations the guarantor guarantees the payment of all revenue lost on receipt of the first written demand without cavil or argument.  
(iv) The liability of the GUARANTOR, in the event of a breach of the principal debtor’s obligations, was limited to the face value of the bond, being, Five Million Ghana Cedis (GH¢5,000,000.00). 
These relevant terms of the bond agreement indicate that the Defendant, referred to as “Guarantor” in the bond agreement, agreed not only to guarantee the performance of the Principal Debtor’s obligations under its contract with the Plaintiff but also agreed further that the performance of the Guarantor’s liability under the agreement would be expressly conditional upon the occurrence of the proven breach by the Principal Debtor of its obligations.  For the Plaintiff to be able to collect 
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on the bond in accordance with its terms, therefore, the express condition of a breach by the Principal Debtor of its obligations thereunder must have occurred.  In the Law of Guarantees, Fourth Edition by Geraldine Andrews and Richard Millet, Sweet and Maxwell 2005 at page 122, this is what the learned authors had to say: 
“By far, the most common type of condition precedent to the liability of the surety is an express provision which requires that the creditor should take some specified step, such as giving him notice of the default, making a demand on the surety or on the principal, or suing the principal, before he starts proceedings against the surety. In the absence of such an express provision the creditor may proceed against the surety without prior notice to him or demand against him and without taking any proceedings against the principal.... Express conditions precedent are likely to be strictly construed in accordance with the general approach to constructions of contracts of suretyship.”   
Plaintiff led testimony and evidence to convince the court that the audit it conducted to consider all transactions conducted in the warehouse of the Principal Debtor from March 28, 2012 to May, 2013 revealed a short fall of Ten Million Seven Hundred and Eighty Three, Four Hundred and Fifty Eight, Fifty-five Pesewas (GH¢10,783,458.55), in breach of the Principal Debtor’s obligations under the bond agreement.  See Exhibits “A” and “B”.   
The question that arises, then, is whether a demand could be made on the Defendant Guarantor to indemnify the Plaintiff against this loss for the full value of the bond in the face of this proven breach of the Principal Debtor’s obligations?  
The excerpt of Exhibit “A” reproduced above contains a further express provision that for the Defendant Guarantor to discharge its liability to the Plaintiff, Plaintiff was required to make a written demand on the Defendant, notifying Defendant of any loss, omission, default or breach of law which may lead to a claim under the bond within one year after the expiration of the bond.  In other words, the Plaintiff could sue the Defendant to perform its obligations under the bond only after a written demand had been made on the Defendant, and that demand ought to have been done within a year of the Principal Debtor’s breach occurring. Failing to give the requisite notice would therefore lead to a discharge of the Defendant.  See The Law of Guarantees, supra, where the authors state that: “A failure on the part of the creditor to comply with a condition precedent in the guarantee (for example to give notice to a breach or default by the principal) will serve to discharge the surety.” 
I am satisfied from the evidence and the testimony before me that the Plaintiff did make a demand on Defendant upon the default of the Principal Debtor in the manner agreed to in the Bond Agreement. Indeed, by the letter dated 25th February, 2014, marked in evidence as Exhibit “E”, the Plaintiff made a formal demand on Defendant for payment under the bond for the full amount of the security of GH¢5,000,000.00.   This formal demand was also made within a year upon the 
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said breach coming to the attention of the Plaintiff as the audit of the Principal Debtor’s activities was concluded in May 2013 and the formal demand notifying the Defendant of the breach was made in February 2014.  Further, I am satisfied that the Plaintiff has adduced sufficient evidence to support a finding that the Defendant failed, refused and neglected to fulfill its obligations in breach of the terms and conditions governing the bond agreement.    
Upon a review of the totality of the evidence before the court, this court finds that Mr. Bentil, the Plaintiff’s witness gave credible testimony on oath before this court and his testimony sufficiently corroborated the Plaintiff’s claims and documents tendered in evidence. In stating thus, I am guided by the holding of the court in the leading case of MAJOLAGBE v. LARBI [1959] GLR 190 which supports the principle that when a party makes an averment in his pleading which is capable of proof in a positive way and the averment is denied, that averment can be sufficiently proved by testimony on oath supported by some corroborative evidence.  See further the cases of KLUTSE v. NELSON [1965] GLR, 537, SC and ZABRAMA v. SEGBEDZI [1991] 2 GLR 221, CA.  Consequently the Plaintiff succeeds on its claims that it ought to be granted the right to recover from the Defendant the full amount secured by the bond,  
The court finds, however, that the Defendant failed to advance any defence in its behalf to controvert the testimony of the Plaintiff’s witness and/or the documentary evidence of the Plaintiff before this court. Indeed, the statement of defence filed by the Defendant was struck out, the Defendant did not file any evidence in support of its case and finally, the Defendant failed to attend court to cross examine the Plaintiff’s witness.    
The position of the law on not cross-examining a witness after he has given his evidence in chief, is well settled. In the case of TAKORADI FLOUR MILLS v. SAMIR FARIS [2005-06] SCGLR 882, Ansah JSC referred to the case of TUTU v. GOGO, [Civil Appeal No. 25/67 dated 28th April, 1969, unreported] digested in 1969 CC, 76, where Ollenu JA stated thus:  
“In law, where evidence is led by a party and that evidence is not challenged by his opponent in cross-examination, and the opponent did not tender evidence to the contrary, the facts deposed to in the evidence are deemed to have been admitted by the party against whom it is led, and must be accepted by the court.”   The breach of the Defendant’s obligations under the terms and conditions of the bond agreement thus gave the Plaintiff the right to sue for the recovery of the 100% of the face value of the bond security as claimed.  I therefore find that the Plaintiff has met its burden of proving that it has a right to recover from the Defendant GH¢5,000,000.00 with interest on the said sum at the commercial bank rate from the date of notice until date of final payment as per the reliefs (i) and (ii) endorsed on the writ of summons and the accompanying statement of claim.    
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From the foregoing, I am satisfied that the Plaintiffs’ action succeeds.  Judgment is entered for Plaintiff in favour of reliefs (i) and (ii) as endorsed on its writ of summons and the statement of claim.  I award costs in the sum of GH¢50,000.00 in favour of the Plaintiff against the Defendant.       
                                                                                                        (Sgd)          
    ……..……………………………………………….. JUSTICE JENNIFER ABENA DADZIE     JUSTICE OF THE HIGH COURT     (COMMERCIAL DIVISION)   
COUNSEL:      FREEMAN SARBAH, ESQ., OF THE LEGAL DEPARTMENT OF GHANA REVENUE AUTHORITY, HEAD OFFICE, ACCRA, COUNSEL FOR PLAINTIFF PRINCE EMMANUEL MAWUVENU, ESQ., OF THE LEGAL AFFAIRS DEPARTMENT OF SIC INSURANCE COMPANY LIMITED, ACCRA, COUNSEL FOR DEFENDANT  
CASES REFERRED TO:  
BANK OF WEST AFRICA LTD. v. ACKUN [1963] 1 GLR 176-182 
HUYTON-WITH-ROBY U.D.C. v. HUNTER [1955] 2 All E.R. 398, C.A.   
FAIBI v. STATE HOTELS CORPORATION [1968] GLR 471-480 
ABABIO v. AKWASI III [1994-95] Ghana Bar Report, Part II, 74 
EDWARD OWEN ENGINEERING LTD. v. BARCLAYS BANK INTERNATIONAL LTD; CA [1978] 1 All ER 976 
MAJOLAGBE v. LARBI [1959] GLR 190  
KLUTSE v. NELSON [1965] GLR, 537, SC  
ZABRAMA v. SEGBEDZI [1991] 2 GLR 221, CA. 
TAKORADI FLOUR MILLS v. SAMIR FARIS [2005-06] SCGLR 882 
TUTU v. GOGO, [Civil Appeal No. 25/67 dated 28th April, 1969, unreported] digested in 1969 CC, 76 