An Accra High Court has refused a motion filed by Deloitte and Touché to segregate two out of the 10 issues to be determined preliminarily in a case between Dram Oil & Trading Limited, and Deloitte &Touché.

In a motion on notice for an order setting down preliminary issues for trial filed by Deloitte and Touché, the issues set down for the ruling were whether or not an earlier judgment by Justice Buadi in the 29^th May, 2019 ruling finally determined the issues relating to the Deloitte’s approach in the preparation and issuance of the Audit Report dated 4^th March, 2019, and whether or not Dram Oil  can relitigate the issues relating to Deloitte’s approach used in the preparation and issuance of the Audit Report dated 4^th March, 2019.

Dram Oil’s response to the affidavit in opposition to the motion on notice for an order to set down two out of eight issues for the trial as preliminary issues for trial stated that the two segregated issues are a subject of stark dispute since Dram Oil contends that Justice Buadi did not deliver a final “Judgement” but an Interlocutory decision/ruling.  Dram Oil averred that Justice Aryene’s 18th May 2015 Judgment in Dram Oil’s favour was the only final Judgment and ignoring or treating as irrelevant in the conduct of the Audit, the subject-matter of negligence in the approach and preparation of the Audit Report was never an issue for determination before the Justice Buadi-presided Court.

The lawyer explained that Justice Buadi’s only duty was to determine the extent of the liability found by the Court to be due for payment to Dram Oil from Vihama Energy Limited, as was adjudged by Justice Aryene’s final Judgment in dated 18th May, 2015.

Dram Oil  again stated in its response  that on account of the position of the two parties on the two issues (Issues no. 7 and 8), the resolution of those Issues cannot be achieved without taking evidence from appropriately qualified witnesses to be called by the parties, and it would therefore serve no useful purpose to separate the trial of those two issues preliminarily, when in line with the Rules of Court, a more cost effective, speedy and effective justice would be achieved where all the Issues that have now been set down for trial are determined at one trial.

Dram Oil’s prayed that if the application were to be granted, the circumstances of the present case would present the real likelihood of a scenario of two separate trials, and such a scenario does not accord with the purpose of the rules, especially at the late stage of civil proceedings in respect of the suit.

The court agreed with the Dram Oil and dismissed the motion filed by Deloitte. The court in dismissing the motion indicated that the separate trials should only be made in special circumstances or on special grounds because it is a departure from the beneficial object of the law that all disputes between parties be tried together, and the applicant has not demonstrated any special circumstances to warrant such an order.

The court thus awarded a cost of GH2000 against Deloitte.

Background of the case

In 2011, Oil Marketing Company, Dram Oil entered into a distribution agreement with Vihama Energy Ltd whereby Dram Oil would import petroleum products into Ghana and Vihama Company Limited through its government approved bulk distribution (BDC) license would store, distribute and sell the products on a wholesale basis to oil marketing companies (OMC’s) on behalf of Dram. Subsequent to this agreement, Dram secured a finance facility from Cal Bank and imported 16m litres (13,244mt) of gasoline into Ghana at a cost of $950 per metric ton. The cargo was discharged into the storage facility of the Bulk Oil Storage and Transport (BOST) Company, a government owned company, on the 29^th of December 2011.

Upon arrival, Vihama refused to sell the cargo claiming that it had its own cargo to sell and could therefore only sell the Dram cargo after it had disposed of its own cargo. As the Cal bank’s facility granted to Dram Oil was a 90day facility, it became apparent that Dram would be unable to amortise the loan as per schedule. To that end Dram Oil entered into another agreement with another BDC Licensed company to sell the cargo. Cal bank objected to the arrangement  and insisted that Dram Oil works with Vihama. Consequently,  a tri- partite agreement at the insistence of Cal bank was executed between all three parties on the 23^rd of January 2012 which was to govern the operation of the transaction. During this period, not a single drop of the Dram cargo had been sold and remained unsold deep into February with Dram Oil facing a default situation with Cal bank. However, the price of the cargo kept on rising on the market and reached its highest peak of $1200 per metric ton in March making it a significantly profitable transaction which would amortise the debt completely despite the delay. At this point Vihama reverted by using strong arm tactics and against the executed distribution agreement offered to purchase all of the cargo from Dram Oil at a wholesale price to help it resolve its situation with Cal bank. Two contracts were therefore executed between the Managing Director of Dram Oil and Vihama for the sale of the cargo of 13,244 metric tonnes on the 29^th of February 2012 and early March 2012. Vihama subsequently started selling the cargo and made payments to Dram Oil accordingly enabling it to amortize the loan with Cal Bank.

On completion of the payments however, there was still some amounts outstanding to Cal bank on the transaction. Cal Bank Thus, sought to demand payment of the overdue sums from Dram Oil. The matter ended up in court and Dram Oil enjoined Vihama to the suit against the wish of CAL Bank on the basis that

1.The overriding agreement was the tri-partite agreement

2. The subsequent agreement between Dram Oil and Vihama was unlawful

3. Vihama, as per the tr-partite agreement had therefore not rendered accounts of the sales of the cargo sold in March 2012 to Dram and Cal bank.

On this basis, therefore, the parties could not ascertain any indebtedness until full accounts had been rendered on the sales of the cargo.

Vihama opposed this argument on the basis that it had legitimately purchased the cargo on the 29^th of February and early March and so had full proprietary rights to the cargo and subsequent sales and so did not need to render accounts.

On the 18^th of May 2015 before Justice Novisi, the court gave judgment in favour of Dram Oil and held that the subsequent sales contract of the 29^th of February 2012 and early March 2012 were unlawful as Cal bank was not a party to these contracts and that the overriding agreement was the tri-partite agreement signed on the 23^rd of January 2012. She further ordered that an independent auditor be appointed to audit the accounts of Vihama to determine the monies received by Vihama from the sales of the cargo under the tripartite agreement of the 23^rd of January 2012 with further orders to be made by the court on receipt of the auditor’s report.

Deloitte was subsequently appointed by the order of the court with Dram Oil as payee for its services.

Deloitte presented its final report to the court which adopted the report in its entirety.