Author: William Nartey

PATENT REGISTRATION IN GHANA

In an ever increasingly competitive global market, new and unique innovations are being rolled out and/or developed almost daily. The value of these innovations lies within their protection as intellectual property.

 

Intellectual property according to World Intellectual Property Organization (WIPO) refers to creation of the mind such as inventions, designs, literary and artistic works and images used in commerce. ^[[1]] Intellectual property can be an income generating corporate asset. By protecting a company’s intellectual property, the company is vested with rights to exploit or commercialize the intellectual property to generate revenue. ^[[2]] Intellectual properties are protected by law to create an environment where innovations and creativity are able to flourish. Examples of the Intellectual property that are protected are Copyrights, Patents and Trademarks.

 

A Patent refers to an exclusive right granted over an invention. The invention can be a process, product or anything that provides a new way of doing something generally. Patents provide the owner of the patented product exclusive rights to the invention. This means the owner has the right to stop anyone from commercially exploiting the patented product. Patents are territorial which means they exist and are guided within the jurisdiction of the country it was registered.

Patents are important because they protect inventions and innovations from infringement.  In the Massachusetts Circuit Court ruling in the patent case of Davoll et al. v. Brown, Justice Charles L. Woodbury wrote that “only in this way can we protect intellectual property, the labors of the mind, productions and interests are as much a man’s own…as the wheat he cultivates, or the flocks he rears in his Judgement on the Violation of Patent right case against the Plaintiff (William C. Davoll and others, 1845).  ^[[3]] His statement highlights the importance of patents in our society.

 

The purpose of this article is to explain the procedures involved in getting a Patent registered in Ghana in accordance with Patent Act 2003, (Act 657).

 

APPLICATION FOR REGISTRATION OF PATENT

A patent registration is first filed at the Registrar General’s department specifically the Ghana Patent Registry along with the following formal documents;

1. A request containing a petition for the grant of the patent, a description of the inventio with title included and the description should be clear that a person with ordinary skill in the art can carry out the invention and drawings of invention in some cases
2. The particulars of the inventor or the applicant of the patent.
3. One or more claims defining the matter or reason or purpose for which the patent is sought
4. An abstract providing detailed technical information on the invention

 

Although it is not a legal requirement, a prior art search is a key preliminary step to filing a patent as similar patents are likely to invalidate the patent.

Application fees must be paid, and applications must be submitted in triplicate. A single invention or a collection of innovations that together comprise a single creative notion must be the subject of the application.

Upon receiving a patent application, the Registrar will perform a preliminary examination to determine whether the application contains a petition for the award of a patent, the title of the invention, and the specifics of the inventor or applicant. Thereafter, a filing date will be assigned. The application’s filing date is the day it was received after meeting the aforementioned prerequisites. The Registrar will then review the application to check for formal conformity. The invention’s patentability is evaluated as a last stage through a substantive review. An invention is Patentable when it is statutory, novel, useful, and non-obvious.

Following the substantive examination which looks at the invention’s novelty, inventive step, ability to be used in industry, exclusion from patentability, as well as other factors like the ability to reproduce the invention as disclosed in the application, the clarity of the claims, and whether any amendments go beyond the disclosure of the application as originally filed. by or on behalf of the Registrar, a decision to grant or deny a patent is made. According to the legislation, a decision on a patent application must be made no later than two (2) years following the start of the application’s inspection. In reality, it requires more time than two (2) years. Up until the point at which a decision must be made about the application, the applicant may withdraw or modify the application.

 

The Registrar will then publish the grant of a patent in the Commercial and Industrial Bulletin and issue a certificate for the grant of patent to the applicant. The patent applicant has a responsibility of renewing the patent annually by paying the annual fees which will be paid in advance beginning a year after the filing. A patent is valid for 20 years commencing from the filing date after which the Patent becomes public domain which means its free for public use.

 

An agent may submit a patent application on the inventor’s behalf. If the applicant is not the inventor, a statement defending the applicant’s eligibility for the patent must be included with the request. There is a necessity for representation by a legal practitioner who resides in and practices in Ghana where the applicant or inventor does not typically reside in Ghana or has its regular place of business outside Ghana.

 

All non-English documentation submitted to the Registrar must be accompanied by English translations that have been validated to the Registrar’s satisfaction.

 

PATENT PROTECTION EXCLUSIONS

According to Section 2 of Act 657 the following are some inventions that are excluded from Patent protection even if they fall within the meaning of Section 1 of the Act.

(a) discoveries, scientific theories and mathematical methods;

(b) schemes, rules or methods for doing business, performing purely mental acts or playing games;

(c) methods for treatment of the human or animal body by surgery or therapy, as well as diagnostic methods practiced on the human or animal body; this provision shall not apply to products for use in any of those methods.

(d) inventions, the prevention within the country of the commercial exploitation of which is necessary to protect public order or morality, which includes: (i) the protection of human, animal or plant life or health; or (ii) the avoidance of serious prejudice to the environment; if the exclusion is not made because the exploitation is prohibited,

(e) plants and animals other than micro-organisms;

(f) biological processes for the protection of plants or animals other than non-biological and micro-biological processes; and

(g) plant varieties. ^[[4]]

 

CONCLUSION

There are several advantages to owning a patent.  Some of these include;

1. I) using it as a bargaining tactic to gain a tactical or competitive edge when dealing with competitors; and
2. ii) enhancing a business’s reputation for technical expertise or ability. These benefits could contribute to an improvement in a company’s market value or reputation.

 

It is highly recommended that businesses that develop functional inventions must secure them through the registration of their patents.

 

 

 

[1] https://www.wipo.int/about-ip/en/#:~:text=Intellectual%20property%20(IP)%20refers%20to,and%20images%20used%20in%20commerce.

[2] https://www.mondaq.com/patent/697640/patent-protection-in-ghana

[3] 1 Woodb.& M.53, 3 West.L.J.151,7 F. Cas.197, No.3662, 2 Robb.Pat.Cas. 303, Merw.Pat.Inv. 414

[4] https://www.aripo.org/wp-content/uploads/2018/12/PatentAct2003.pdf

 

 

 

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

 

A Vesting Assent is a legal document which transfers the ownership of normally immovable property of a Deceased person to the beneficiaries. Osborn concise law dictionary 8th edition– defines vesting assent as the instrument whereby a person’s representative, after the death of a tenant for life or statutory owner vests settled land in a person entitled as tenant for life or statutory owner. The Administrator(s) or Executor(s) of the Estate of the Deceased are the persons to execute this Vesting Assent. The Administrator(s) or Executor(s) if they are beneficiaries of the Estate can vest the property in themselves. Administration of Estates Act, 1961, Act 63 governs/regulates the administration of estates in Ghana.

In the case of OPANIN YAW OKYERE V. OPANIN APPENTENG AND AKUA ADOMAA SUPREME COURT· CIVIL APPEAL NO. J4/17/2008 · 23 NOV 2011· The Honourable Court indicated that Section 1(1) of the Administration of Estates Act, 1961, Act 63 states that the movable and immovable property of deceased person shall devolve on his personal representatives with effect from his/her death. When a person dies testate or intestate, his/her estate dissolves on the executor or personal representative until vesting assent is executed for and issued to the beneficiaries or devisees; the beneficiaries and devisees have no title or locus standi over the estate until the vesting assent has been duly executed. This means that the beneficiaries do not have capacity to deal with the estate even though they are beneficiaries. Capacity goes to the root of every case and where the capacity of a party is challenged especially that of the Plaintiff, the court must first resolve that issue because a person without capacity cannot be given a hearing even though he may have an iron cast case. Capacity to institute an action is a precondition to the institute of an action in court – Yorkwa v Duah [1993/3] GBR 278.

The court in the Yorkwa case expatiated on the issues affecting vesting assent. The court indicated that if the law is that a beneficiary or devisee has no title to sue or be sued until the grant to him/her a vesting assent, then what does such a person do in a situation where the estate is being mismanaged? It answered this question by stating that at equity, such a person should be able to mount an action to protect the estate, or to save it from being dissipated or wasted. The plaintiff in such an action will be acting on the basis of his/her expectant interest in the estate, not in his/her capacity as a title holder under a will or grant at customary or statutory law.

The court then outlined the development of the law with regard to the vesting of property of a deceased over the years. At common law prior to the enactment of the Land Transfer Act, 1897 of England, the real estate of a deceased did not vest in his personal representative, but passed immediately to his/her heir or devisee, as the case may be. There was thus no need for probate or letters of administration. An executor or an administrator would not have any rights over the devised property, since it was already vested in the devisee. This position was changed by the Land Transfer Act, 1897, which, however, never applied in Ghana. Under that Act, in relation to deaths occurring after 1897, all the property of a deceased became vested in his or her personal representative. The personal representative had full powers of management and could therefore sell the property vested in him or her in order to pay debts owed by the estate. To transfer title to a devisee, a personal representative had to execute a conveyance or an assent. An assent did not need to be in writing. Any conduct of the personal representative which showed that he had assented to the gift was sufficient. This led to the unsatisfactory situation where to establish the title of a devisee, he or she might have to prove facts showing the personal representative’s assent. This mischief was cured by the provision in the Administration of Estates Act, 1925 that no assent made after 1925 could pass a legal estate in land unless it was in writing and signed by the personal representative. This had the effect of making provision for a proper paper title for the interests of devisees. This provision made it clear that a devisee’s title was based on the assent and not on the will. The Administration of Estates Act, 1961 of Ghana adopted the tenets of the 1925 Act of England and  the current Ghanaian law is no longer the common law position as it was prior to the enactment of the Administration of Estates Act, 1961.

The relevant sections of the Act 63, ie sections 1 (1), 2 (1) and 96 (1) are as follows:

“1. (1) The movable and immovable property of a deceased person shall devolve on his personal representatives with effect from his death …

2. (1) The personal representatives shall be the representative of the deceased in regard to his movable and immovable property…
3. (1) A personal representative may assent to the vesting, in the form set out in the Third Schedule to this Act, in any person who (whether by devise, bequest, devolution, appropriation or otherwise) may be entitled thereto…”

It is therefore imperative that before administering the estate or carrying out the intentions of a testator, the will must first be read and admitted to probate and where the deceased died intestate, letters of administration obtained. Thereafter, a beneficiary of any real estate under the will or under the intestacy must have a vesting assent executed in his/her favour by the executors to whom probate has been granted or the grantees of the Letters of administration. Even after the vesting assent had been executed, it would still not have any legal efficacy until after it had been registered under the then Land Registry Act, 1962 (Act 122) now the Land Act, 2020 (Act 1036).

In conclusion, in the absence of the vesting assent executed in favour of the beneficiary or devisee and registration of same, any purported sale of the real estate by the beneficiary or the devisee will be of no legal consequence and the purchaser thereof will have no valid title since that beneficiary would not have the requisite capacity to grant an interest in the property.

Author: Vida N. Odonkor Esq.

 

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

THE LAW OF AGENCY IN GHANA.

The principal-agency relationship is one of the fundamental pillars of modern commerce. Individuals and organizations (small and large) manage some of their activities through agency relations where the actions carried out by the agents on behalf of the individual or organization, become binding on the individual or organization.

Agency is a fiduciary relationship which exists between two persons when one, called the

Agent is considered in law to represent the other, called principal.  The nature of this relationship is such that the agent is able to affect the principal’s legal positions in respect of strangers to the relationship by the making of contracts, including the disposition of property.

 

In simple terms, an agency relationship consists of the principal and the agent where the principal gives the agent legal permission to act on the principal’s behalf.

An example of agency relationship is a real estate agency relationship between the real estate agent and a land owner, where the land owner gives the agent legal permission to sell the land owner’s property to clients. Another example would be an agent for an artist in the music industry, where the agent is given the authority to enter into contracts and make important advertisement deals on behalf of the artist. Also, an agency relationship exists between a lawyer and his client.

The three main legislations governing commercial relations in Ghana are the “Contract Act of 1960 (Act 25)”, the “Companies Act of 2019(Act 992)” and the Sale of Goods Act of 1962 (Act 137). Apart from the Real Estate Agency Act,2020 which deals with agency relationship in the real estate industry, the laws in Ghana relating to commerce do not provide for a specific discipline of the agency institution.  Nonetheless, case law and the general principles on the subject at common law, provide a guide for a better understanding of the agency relationship. For example, in the case of the State v Asantehene’s Divisional Court Exparte Kusade [1963] GLR 238, Korsah CJ (as he then was) explained the agency relationship as follows:

“where one has so acted as from his conduct to lead another to believe that he has appointed someone to act as his agent, and knows that other person is about to act on that other person’s behalf, then unless he interposes, he will, in general be estopped from disputing the agency, though in fact no agency really existed.”

Certain characteristics run through the various definitions. These are;

1. Agency may come into being through a contract which may be express, implied or presumed by law,
2. An agent acts with the principal’s authority,
3. The agent must consent to acting on behalf of the principal,
4. Agent affects the principal’s legal relationship with a third party.

 

THE AUTHORITY OF THE AGENT

The agent is a person who has power to act on behalf of another person, the principal, and to affect the principal’s legal position. The relationship between the Principal and a  third Party depends on the scope of the Agent’s power. The agency relationship between the Principal and the Agent is based on consent between the Principal and the Agent. The Principal is bound to the Third Party by acts which he has authorized or appears to have authorized the Agent to do. Between the Agent and the Third Party, the Agent may incur personal liability if he claims authority he doesn’t have. The law recognizes the Agent as having power to bind the Principal in four situations:

1. Where the Principal gives prior consent to the Agent’s action, the Agent has actual authority.
2. Where the Agent acts without prior authority of the Principal, but the Principal gives retrospective consent by ratification
3. Where the Agent acts without the consent of the principal, but the law deems the principal to have consented –Agent of necessity
4. Where the Agent acts without the Principal’s consent but the Principal is estopped from denying the Agent’s authority: the Agent is said to have apparent authority.

.

Let’s now discuss the types of authority or permission an agent may be given in an agency agreement or relationship.

1. Actual Authority: where the Principal gives his prior consent to the actions of the Agent. Actual authority is therefore based on the agreement between the principal and the Agent. Actual authority need not be in writing. All that is needed is consent which does not necessarily need to be reduced into writing. In a commercial context, such an agreement may be reduced into a formal contract between the principal and the agent. In this case, the Agent is entitled to be paid for his services and would be liable for breach of contract if he fails to perform his contractual duties. There is nothing against the Agent acting for free; all that is required is an agreement between the Principal and the Agent. As a general rule, there is no need for formalities in the appointment of an agent. The agreement between the Principal and the Agent can be express or implied. Actual authority may be express actual authority or implied actual authority.
2. Apparent Authority: The Principal may be bound by acts done by the Agent without the Principal’s consent or even in breach of the Principal’s express prohibition if his words or actions give the impression that he had authorized the acts done by the Agent. Apparent authority is therefore the authority which a person appears to have to act on another’s behalf.

The position of the law on actual and apparent authority was explained by Diplock J in Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd as follows:

“an actual authority is a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. To this agreement the Third party is a stranger; he may be totally ignorant of the existence of any authority on the part of the agent. Nevertheless, if the agent does enter into a contract pursuant to the actual authority it does create contractual rights and liabilities between the principal and third party. An apparent authority on the other hand, is a legal relationship between the principal and the third party created by a representation made by the principal to the third party, intended to be in fact acted on by the third party, that the agent has authority …To the relationship so created the agent is a stranger.”

1. Agency of Necessity: A person who acts in an emergency to preserve the property or interest of another may be treated as an agent of necessity. As in cases of apparent authority, an agency of necessity can arise even where there was no existing relationship between Principal and Agent. In this situation, the actions of the agent will be deemed to be authorized even though no actual authority was given. Like cases of apparent authority, agency of necessity can arise in spite of the fact that there is lack of authority from the Principal. Unlike cases of apparent authority, agency of necessity can give the Agent rights against Principal where there is already an existing agency relationship between Principal and Agent, an agency of necessity may also be explained on the basis of implied authority.

 

DUTIES OF THE AGENT

Duty to carry out his responsibility; Obey; Duty of Care and Skill; Duty not to make a covert profit; Duty to Account; and Duty not to delegate his assignment. The agent also has a duty to avoid conflicts of interest.

DUTY OF THE PRINCIPAL

Subject to the terms of the agreement, the principal must pay the agent for the Agent’s services. An agreed-upon amount or a commission may be due to the agent. In the absence of such an arrangement, the compensation will be determined by the situation.

 

REMEDIES AVAILABLE TO THE PRINCIPAL AND AGENT WHEN THE CONTRACT OF AGENCY IS BREACHED

Agent’s Remedy

Action: Where the agent has finished his work and the principal has refused to pay the remuneration, the agent shall bring an action to recover the money.

Set Off: Where the principal brings an action against the agent for breach of duty and recovery of any amount due him, the agent may reply by setting off against such claim any amount due him Where the principal has not discharged any of his duties by way of remuneration or indemnity, the agent may exercise the right of lien (detention) over goods belonging to the principal which is in the Agent’s possession. He may keep them till the principal has satisfied any claims of the Agent.

Principal’s Remedy

Dismissal: The principal has the right to dismiss the agent when he misconducts himself in the performance of his duties. Some acts that might call for dismissal are fraud, negligence, deceit and among others. Prosecutions Where the Agent’s misconduct takes the form of a criminal offence, the principal beside his remedy in damages can also bring the appropriate criminal proceedings against the agent to seek redress.

OTHER REMEDIES

Termination:

By the act of the parties; Since the principal and the agent agreed to create the agency relationship, either of them may also withdraw from the said agreement. This is done by giving notices. The agent may do this by giving a notice of renunciation or the principal giving a notice to the Agent. Third parties must also be notified not to deal with the agent as the agent will no longer have authority to act on the principal’s behalf.

Death, insanity or bankruptcy; The death, insanity or bankruptcy of either the principal or the agent may also terminate the relationship. Where the principal is also a company, winding up or dissolution will also terminate the agency. See Gordon V. Essien [1992] 1 G.L.R. 232

Frustration:

When the property which is the subject matter of the agency is destroyed or in any way ceases to exist, the agency will come to an end.

Closure of business; When the principal has ceased to carry on the business in respect of which the agent was employed.

Execution; If the agent was appointed for a fixed term or to carry out a particular work, the execution of that work or the given time being due terminates the relationship between the parties.

 

Conclusion

From the above, it is in the interest of both parties i.e, the agent and principal to clearly and expressly spell out the terms of their agency agreement. This should include terms on whether it is an exclusive or nonexclusive agency; the duration of the agency, limitations of the agent’s authority, renumeration of the agent, that the agents’ acts bind the principal so long as they are in good faith, that the agency agreement constitutes the entire agreement between the parties and that no oral agreement can change the agreement and lastly how to terminate the agency

 

 

 

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

 

 

Marriage is a beautiful thing but comes with uncertainties. Divorce is a reality when parties to a marriage are unable to work out their differences and /or conflicts, often after trying. During divorce proceedings one thing that is paramount among other things is who gets what and of what quantum when the divorce is finalized. Where the couple are able to agree on who gets what share of the properties acquired during the subsistence of the marriage, the court may adopt those terms of settlement between the parties. However, where the parties are unable to agree, the court would based on set principles and laws, determine the division of property among them.

The laws on spousal property have evolved over the years. From spouses having to prove substantial contribution towards the acquisition of marital property as in the case of Mensah v Mensah (1998-1999) to the presumption that properties acquired during the subsistence of the marriage should be shared on the principle of equality is equity.

Generally, properties acquired jointly during the subsistence of the marriage are shared equitably. It is trite law that no two cases are the same and therefore each case must be determined on its own merits and peculiarities.

In Boafo v Boafo [2005 -2006] SCGLR 705, the Supreme Court held that the principle of equitable sharing of property jointly acquired by a married couple would ordinarily entail the equality principle, unless one spouse could prove separate proprietorship or agreement or a different proportion of ownership. The court stated that the provision in Article 22(3) (b) of the 1992 Constitution and Section 20(1) of Matrimonial Causes Act 1971 (Act 367) only made provision for the equitable distribution of property jointly acquired without laying down the proportions in which such property might be distributed. The reason for that omission was the question of what was “equitable”, in essence, what was just, reasonable and accorded commonsense and fair play, was a pure question of fact, dependent purely on the particular circumstances of each case. The proportions would therefore, be fixed in accordance with the equities of any given case. How would this be arrived at when a spouse has no evidence to back his or her claim?

In Mensah v Mensah [2012]1 SCGLR 391, it was held that once the property was acquired during the subsistence of the marriage, the respondent by operation of law had an interest in it. In this case it was established that both parties at the beginning of their marriage did not have money/properties. The parties worked together to acquire the properties even though the respondent could not quantify her contribution in monetary terms. It is worthy of note that the principle that properties acquired during the subsistence of the marriage is joint property is not applicable generally. Again, the sharing of spousal property is no longer dependent upon the substantial contribution principle but rather property acquired during marriage is presumed to be joint property. Here again, the properties acquired are presumed to be jointly acquired which can be rebutted with evidence.

In Quartson v Quartson [2012]2 SCGLR 1077 and in Arthur v Arthur (No. 1) [2013 – 2014] SCGLR 543, the court affirmed the principle in the Mensah v Mensah’s case holding in the Quartson case that in partitioning properties acquired during marriage, the court must consider the equities of the particular case. While in Arthur’s case, it held that properties acquired during the subsistence of the marriage is presumed to be jointly acquired property. This presumption is however rebuttable in instances where a spouse acquires the property through a gift or succession or loan facility which has not been repaid as stated in the case of Peter Adjei v Margaret Adjei supreme court. J4/06/2021. 21 Apr, 2021. Even though it can be argued that the chores performed by the other spouse in the marriage provided a conducive atmosphere for the repayment of the loan, that is the principle laid down now.

In the case of Fynn v Fynn [2013 – 2014] 1 SCGLR 727, the court held that there are situations where within the marriage, parties may acquire property in their individual capacity and this position is buttressed by Article 18 of the 1992 Constitution of Ghana which says that “(1) Every person has the right to own property either alone or in association with others. (2) No person shall be subjected to interference with the privacy of his home, property, correspondence or communication except in accordance with law and as may be necessary in a free and democratic society for public safety or the economic well-being of the country, for the protection of health or morals, for the prevention of disorder or crime or for the protection of the rights or freedoms of others”. This decision affirms the principle held in the Arthur v Arthur’s case in that once a spouse can rebut the presumption that properties acquired during the subsistence of the marriage is jointly acquired then a spouse can acquire individual properties during the subsistence of marriage.

 

Legal basis for the distribution of jointly acquired properties during the subsistence of the marriage upon divorce.

The distribution of jointly acquired property has been greatly influenced by the 1992 Constitution of Ghana particularly Articles 22(2) and (3) which deals with property rights of spouses, Article 35 (5) which deals with protection of rights by courts and Section 20 of the Matrimonial Causes Act, 1971 [Act367]. The general principle that can be gleaned from the various decisions of the courts and the text of the Constitution is that any property that is acquired during the subsistence of the marriage, is presumed to have been jointly acquired by the couple and upon divorce, should be shared between the couple on the principle of equality is equity. This principle applies to all the forms of marriages, be it Customary, Ordinance or Mohammedan marriage. This presumption is however rebuttable as stated earlier.

Therefore, as seen in the Arthur case, if a spouse can show by way of evidence that he or she single handedly acquired the property even during the subsistence of the marriage, then the presumption of jointly acquired property fails as seen in the Fynn case. Meaning it is only the property that has been shown by way of evidence, that both parties contributed towards their acquisition, be it direct or indirect, pecuniary or substantial contribution, which will be recognized as jointly acquired property to be shared on an equality is equity basis.

In the case of Mensah v Mensah [1998-1999] SCGLR 350 it was held that “property jointly acquired during marriage would become joint property of the couple and such property should be shared equally on divorce because the ordinary incidents of commerce had no application in marital relationship between husband and wife who had jointly acquired property during marriage”. The court also found that the couple had no properties at the start of their marriage and therefore both parties contributed substantially towards the acquisition of the matrimonial properties. In this instance the property jointly acquired during the subsistence of the marriage includes properties that were acquired by gift or inheritance. However, the Arthur v Arthur case introduced the presumptive ownership principle that properties acquired during marriage are jointly acquired by the couple unless rebutted.

Therefore, in the cases of Quartson v Quartson, Arthur v Arthur and Fynn v Fynn, a spouse no longer has to prove a direct or indirect, pecuniary or substantial contribution towards the acquisition of properties during the subsistence of the marriage to be entitled to a share of those properties. But where there is evidence that proves a spouse’s contribution, that evidence needs to be adduced to quantify his or her share of the properties on equity bases. This position was arrived at because chores such as cooking, cleaning, washing, nurturing, etc. that wives typically perform in the home creates an enabling environment for the acquisition of the properties. It is worth noting that not all wives perform their chores dutifully and where it is proven that a wife did not perform her chores dutifully, then she does not stand to benefit from the properties acquired during the subsistence of the marriage as seen in the case of Rimmer v Rimmer [1952] 1 QB 63 at Pg 73 and the Fynn v Fynn case.

Again, in the Fynn v Fynn case the court opined that a spouse can acquire a personal property during the subsistence of the marriage. Hence applying article 18(1) of the 1992 constitution which says that “Every person has the right to own property either alone or in association with others”. In a similar manner, the Arthur v Arthur case made it clear that a property acquired by gift or inheritance does not form part of jointly acquired property during the subsistence of the marriage as the other spouse did nothing or contributed nothing towards the acquisition of that property.

From the foregoing it is important that a spouse is minded regarding retaining records or evidence of their contribution towards the acquisition of properties during the subsistence of the marriage. This is because if a spouse can prove that he personally acquired a property during the subsistence of a marriage then the other spouse is unlikely to have a legitimate claimed interest in the said property especially where that spouse cannot show by evidence any contribution to the union except where that spouse can show the performance of household chores.

Section 20 of the Matrimonial Causes Act, 1971, Act 367 provides that: (1) The Court may order either party to the marriage to pay to the other party a sum of money or convey to the other party movable or immovable property as settlement of property rights or in lieu thereof or as part of financial provision that the Court thinks just and equitable. (2) Payments and conveyances under this section may be ordered to be made in gross or by instalments. Meaning that a spouse is entitled to either one of the provisions stated in this section.

 

The court defined marital property in Arthur v Arthur (No. 1) [2013 – 2014] 1 SCGLR 543 at pg. 560 as “we are bound to follow this holding of the Supreme Court in Mensah v Mensah. Marital property is thus to be understood as property acquired by the spouses during marriage, irrespective of whether the other spouse has made a contribution to its acquisition.” At pg. 565 the court further said “it should also be emphasized that, in the light of the decision of the Supreme Court in Mensah v Mensah, it is no longer essential for a spouse to prove a contribution to the acquisition of marital property. It is sufficient if the property was acquired during the subsistence of the marriage”. If this is the case, then why should a spouse be entitled to only one house upon the death of his or her spouse intestate? This is a question that needs to be answered through legislation.

In conclusion, the principles that would be considered when the court is determining who gets what and of what quantum during a divorce are firstly, that the properties acquired during the subsistence of marriage are presumed to be jointly acquired which shall be shared equitably between the couple upon divorce. This presumption can be rebutted and if proven, a spouse’s claim to an interest in marital property may be defeated. Secondly, property that is acquired during the subsistence of the marriage through gifts or inheritance or an unliquidated loan facility is classified as personally acquired properties of the acquiring spouse. Thirdly, a spouse can acquire personal property during the subsistence of the marriage. To conclusively establish the applicability of the foregoing principles to a matter before the courts a party must adduce sufficient evidence as explained in this article.

 Author:  Vida Narkie Odonkor

 

 

 

 

 

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

 

INTRODUCTION

Twitter’s bird (Larry T Bird) , Nike’s Swoosh, McDonald’s M,

What do these have in common? If you guessed that they are all trademarks, you guessed correctly.

“Trademark” is a common word that is used in both common and legal parlance. In this article, we explain trademarks from a legal point of view, with a particular focus on Ghana’s laws.

Trademark is a word, name, symbol, or device used to indicate the source, quality and ownership of a product or service. A trademark is used in marketing as a recognizable sign, design or expression which identifies products or services of a particular source from those of others. The trademark owner can be an individual, business organization, or any legal entity. A trademark may be located on a package, a label, a voucher or on the product itself. In this article, the words “trademark” and “trade mark” being the American and British spellings will be used interchangeably.

Ghana’s Trade Marks Act, 2004 (Act 664) defines “trademark” in section 1 as any sign or combination of signs capable of distinguishing the goods or services of one undertaking from the goods or services of other undertakings including words such as personal names, letters, numerals and figurative elements.

 

WHY ARE TRADEMARKS LEGALLY PROTECTED?

Creating a trademark to identify products from a particular source takes a lot of hard work and creativity. Thus, where a person by the ingenuity of his adverts or the quality of his product induces consumer responsiveness to a particular name, symbol, form of packaging, etc, and has thereby created a thing (property) of value; the creator of that property is entitled to protection against third parties who seek to deprive him of his property.

 

RIGHTS CONFERRED FOR TRADEMARK REGISTRATION IN GHANA

Act 664 provides certain rights to holders of trademarks in Ghana. Section 9 gives trademark holders the following rights and protections:

1. No one apart from the trademark owner can use the trademark in respect of any good or service without the owner’s consent. Using a trademark in such a manner without the owner’s consent constitutes infringement.
2. The registered owner may institute court action against any person who infringes a registered trade mark by using the mark without permission or performs acts which make infringement likely to occur.
3. Where others use a sign that is similar or identical to a registered trademark is used for identical or similar goods and services, it is presumed that this will lead to the likelihood of confusion among the public.
4. The registered owner can legally prevent others from using similar signs for similar products which could lead to confusion and an application to register that trademark may be rejected.
5. The above-mentioned rights do not extend to acts in respect of articles which have been put on the market in any country by or with the consent of the registered owner.
6. A person who infringes the right of a registered owner of a trade mark by knowingly using a trade mark for goods or services without the consent of the registered owner commits an offences and is liable on summary conviction to a fine not exceeding 250 penalty units or a term of imprisonment not exceeding one year or to both.

 

REGISTERING A TRADEMARK IN GHANA

The first step in registering a trademark in Ghana is to conduct a search at the Registrar-General’s Department before applying for registration. Although this step is optional, it is important to ensure that no identical trademark has been registered or is pending registration.

Trademark Form No. 2 is used for the application of Trademark. An applicant is required to attach four (4) representations of the trade mark with a prescribed fee of $ 200.00 or its Cedi equivalent. Applicants whose principal places of business are located outside Ghana are required to apply through a legal entity in Ghana.

Each application shall be for registration in respect of goods in one class only of Schedule 1 to the Trademark Regulations.

Every application to register a trademark shall be accompanied by three additional representations of the mark, which shall correspond exactly with the representation on the application. If the mark is to be registered in more than one class, then two additional representations for each class after the first shall be supplied.

 

REVIEW/EXAMINATION OF TRADEMARK FORM No. 2 BY THE TRADEMARKS OFFICE

The Registrar examines whether the Trademark application is in conformity with the requirements of Section 1, Subsection (1) and (2) of Section 4, and Section 5 of the Trademarks Act, 2004, Act 664. If the Registrar objects to the application, he shall inform the applicant of his objections in writing, and unless within two months the applicant applies for a hearing or makes a considered reply in writing to those objections, he shall be deemed to have withdrawn his application.

 

GROUNDS FOR REFUSAL OF REGISTRATION

Section 5 of Act 664 allows the Registrar to refuse the registration of a trademark on the following grounds:

1. It is a trade name;
2. it is incapable of distinguishing the goods or services of one enterprise from the goods or services of another enterprise;
3. it is contrary to public order or morality.
4. It is likely to mislead the public or trade circles with particular reference to the geographical origin of the goods or services, their nature or characteristics.
5. It is identical to or is an imitation of or contains as an element, an armorial bearing, flag, emblem, name, abbreviation or initials of the name, official sign or hallmark adopted by a State, intergovernmental organization or organization created by an international convention unless authorized by the competent authority of that State or organization.
6. It is identical to or confusingly similar to or constitutes a translation of a trade mark or trade name which is well known in the country for identical or similar goods or services of another enterprise, or the trade mark is well known and registered in the country for goods or services which are not identical or similar to those under application but the use of the trade mark will indicate a connection between those goods or services and the owner of the well-known trade mark and the interests of the owner of the well-known trade mark are likely to be damaged by the use of the trade mark.
7. It is identical to a trademark of another owner already on the register or identical to a trade mark the subject of an application with an earlier filing or priority date for the same goods or services or closely related goods or services or if it resembles that trade mark so closely that it is likely to deceive or cause confusion.

 

PUBLICATION AND OPPOSITION OF TRADEMARK

All Trademark applications accepted by the Registrar are published in the Industrial Trademarks Bulletin (Journal) for a period of two (2) months. Within this period any interested party/person may file for a notice of opposition to the registration in a prescribed manner.

CERTIFICATION OF TRADEMARK

In the event where there is no opposition to the approved Trademarks, the proprietor of a Trademark will request for the issuance of his trade mark certificate.

A certificate of Registration of Trademark is then issued to the applicant and the registered trademark is valid for a period of ten (10) years from the filing date of the application.

 

RENEWAL OF TRADEMARKS AND OTHER INFORMATION

Renewal of trademarks are made every ten (10) years.

• NB: Non-use for five (5) years following registration makes the registration vulnerable to cancellation.
• SCHEDULE OF TRADEMARK FEES
• TRADEMARK SEARCH: $ 110.00
• TRADE MARK APPLICATION: $ 200.00
• CERTIFICATION OF TRADE MARK: $ 200.00

 

 

 

 

______________________________________________________________________

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

 

 

Author: Memuna Saani

INTRODUCTION

Most people who have been to the Registrar-General’s Department in Accra for a transaction can attest to how busy and crowded it usually is, which inevitably leads to delays in the completion of services.  The Registrar General’s Department was established under the Ordinance 1950 during the Colonial days. It became a department of the Ministry of Justice and Attorney General in 1961. From this time onwards, it has provided multiple essential services to the Ghanaian populace. 

Before the coming into force of the Companies Act 2019 (Act 992), the Registrar General’s Department (RGD) was responsible for ensuring efficient and effective administration of entities inter-alia the registration of Businesses, Industrial Property, Marriages, Administration of Estates and Public Trust, and for providing accurate data for national and economic development.

 

With the multiplicity of its functions, it is not surprising then that the Registrar-General’s Department was stretched, overburdened, and in need of a change. This change was accomplished by the establishment of the Office of the Registrar of Companies.

 

THE ROLE OF THE REGISTRAR OF COMPANIES

The new Companies 2019, Act 992 has caused a separation in some of the functions of the RGD as they relate to the registration of businesses. The coming into force of Act 992 means that these duties have now been entrusted to the Registrar of Companies.  Section 353 of Act 992  as follows:

“(1) The object of the Office of the Registrar of Companies is to register and regulate all types of businesses in conformity with this Act and any other relevant enactments. 

(2) To achieve the object, the Office of the Registrar of Companies shall

 (a) register

(i) business names in accordance with the Registration of Business Names Act, 1962 (Act 151), 

(ii) companies, 

(iii) partnerships in accordance with the Incorporated Private Partnerships Act, 1962 (Act 152), and 

(iv) professional bodies pursuant to the Professional Bodies Registration Act, 1973 (N.R.C.D. 147), other than professional bodies established by an Act of Parliament;

(b) appoint inspectors, a receiver or manager to ensure the effective compliance with the Act; 

(c) discharge duties and perform functions of the Office as the Official Liquidator under the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180); and 

(d) manage the finances and fixed assets of the Office of the Registrar. 

(3) The Registrar shall appoint a receiver or manager in accordance with subsection (2) of section 261.”

 (4) Without limiting subsection (1), the Office of the Registrar has the duty to undertake public education programmes to educate the general public engaged in business activities on the operation of companies, partnerships and business names.

 

HAS THE REGISTRAR-GENERAL BEEN RENDERED REDUNDANT?

Although, most people identity the Registrar-General with the registration of business, the transfer of this duty to the Registrar of Companies has not rendered the Registrar-General redundant in any way. The RGD has a host of other functions that it continues to perform even after one has been assigned to the Registrar of Companies. 

 

The following are duties that the Registrar-General through the Registrar-General’s Department (RGD) continues to perform:

 

1. Registration of patents under the Patent Act 2003, Act 657. A patent is a legal privilege given by a State Authority to inventors (and other people who derive their rights from the inventor) for a set amount of time, preventing others from using, producing, or commercializing a patented product or method. The patented invention becomes public knowledge at the end of the period during which the privilege is granted. The Registrar-General is the Registrar of Patents. Any inventor in Ghana, who creates an invention can have his invention patented either as a National Patent or one could register under the African Regional Industrial Property. Currently, the legislation provides 10 years of initial protection, which can then be renewed for an additional 10 years, for a total of 20 years. After that, the innovation would become public domain, allowing anybody to freely reproduce or copy it.

 

1. Registration of industrial designs under the Industrial Designs Act 2003 (Act 660). The Department’s registration of textile patterns is yet another crucial duty. Owners of textile designs may submit an application to the Department to have their designs registered in accordance with the Textiles Designs (Registration) Decree. The Registrar has the same authority to consider resistance and objection cases in textile designs just as it does with other intellectual properties. 

 

1. Registration of trade marks under the Trade Marks Act, 2004, Act 664. The administration of the Trade Marks Act, 1965 and the Regulations enacted thereunder is another important duty of the Registrar General’s Department. According to the Act, the Registrar-General may register upon request any mark or sign that is or is planned to be applied or attached to items that are being sold in the market in order to set them apart from comparable commodities and to link them to a certain trader. By distinguishing the source or origin of particular products from other comparable products, trademarks serve to protect the public from misunderstanding and deception. They also serve to safeguard the trade and business of the trademark owner as well as the goodwill that is associated with his trademark. 

The Registrar-General as the Registrar of Trade Marks has power under the Act to hear applicants whose designs have been rejected. The Registrar also has power to hear counter cases. He may award costs against any of the parties appearing before him. He has power to subpoena witnesses to testify before him, and the witnesses have the same privileges and immunities as before the High Court. Appeals from his decisions lie to the High Court.

1. Administrator-General under the Administration of Estates Act 1961 (Act 63). According to the Administration of Estates Act, 1961 (Act 63), the Registrar-General is the Administrator-General for Ghana and, as such, administers various estates of people who pass away in the nation either without having made any wills or without having done so at all. Any Will may name the Administrator-General as its only executor. The general public in Ghana is gradually becoming more and more aware of how the Administrator-General and his staff carry out their duties under the Act in a fair and effective manner. As a result, there are now more estates under his management.

 

1. Public Trustee under the Public Trustee Ordinance, 1952. The Registrar-General also acts as the Public Trustee of Ghana. As a result, he may be chosen to serve as a Custodian Trustee or an Ordinary Trustee of any property by an individual or the Court. By special Acts of Parliament, the Registrar-General may on occasion be charged with dissolving particular statutory or quasi-statutory organisations. The benefit of appointing the Public Trustee is that, in the extremely unlikely event that a loss results from any breaches of trust on his part, the State agrees to make up for such loss, saving the trouble and costs of appointing a new trustee at otherwise normal successive and recurrent times and needs.

 

1. Registration of marriages under the Marriage Ordinance (CAP. 127). As the country’s Principal Registrar of Marriages, the Registrar-General is in charge of all marriage districts where the Marriage Ordinance (Cap. 127) registers for marriages are kept. The Registrar General is in charge of collecting, keeping, and maintaining the records of all marriages performed in accordance with the Ordinance. In addition, he grants special licenses to parties planning a wedding when, in his opinion, unusual or exceptional circumstances prevent them from complying with the requirement that they give 21 days’ notice of their intention to wed.

 

1. Registration of books and newspapers under the Book and Newspaper Registration Act, 1961. Under this Act a copy of every book which is published in Ghana together with all maps, prints or other engravings belonging thereto, and also of any second or subsequent edition which is published shall or shall continue to be, within one month after the day on which such book is first taken out of the press delivered free of charge by the printer to the Registrar-General’s Department. The Department is obliged to maintain a Register of books and newspapers printed in Ghana. The definition of “book” in the Act includes newspaper. The Registrar-General is required to publish a memorandum detailing specific information on the books that were registered. The Register may be searched and inspected by anybody.

 

1. Serving as Custodian of Assets under the Custodian of Assets Decree, 1972. The Registrar-General is the custodian of assets under this Decree, and in relation to any assets forfeited under any enactment, he has the responsibility for: locating and creating an inventory of any such assets; collecting any rents due in relation to immovable property, and such other monies due as the Government may direct; taking such measures to safeguard any such assets as he may think fit; and maintaining accounts of all funds which come into his possession in accordance with this Decree.

 

CONCLUSION 

Rather than causing friction or creating redundancy or obsolescence, the delegation of the duties of registration of businesses which used to be part of the functions of the Registrar General’s Department to the Registrar of Companies has been beneficial as it has reduced the workload on the Registrar General Department thereby ensuring that both entities are efficient and effective in their administrative duties. 

 

______________________________________________________________________

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

 

Author: Barbara Ewoenam Kukah

 

Introduction

Almost every couple that gets married, does so hoping for a long and happy married life. However, for various reasons, marriages come to an end. Marriages may end through death, nullity, or divorce – however, this article will focus on divorce as a means of dissolution of marriage. Because marriage is not only a social or religious institution, but also a legal one which is authorised and affirmed by the state, when it ends, it has to be done by legal means. Thus, divorce can be defined as the formal dissolution of a marriage through legal proceedings. In Ghana, it may be commenced in the district court, circuit court, or high court.

In Ghana, the procedure for obtaining a divorce is governed by the Matrimonial Causes Act (1971) Act 367, and the High Court Civil Procedure Act, 2004 (C.I 47). These laws provide that every action for divorce must be commenced by a petition. However in order to obtain a divorce for a marriage within the first two years of marriage, one has to first seek leave of the court before filing a petition. 

Ground for Divorce

The courts will only grant the divorce petition on the sole ground that the marriage has broken down beyond reconciliation. For the purpose of showing that the marriage has broken down beyond reconciliation the petitioner shall satisfy the court of one or more of the following facts:—

(a) that the respondent has committed adultery and that by reason of such adultery the petitioner finds it intolerable to live with the respondent; or

(b) that the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent; or

(c) that the respondent has deserted the petitioner for a continuous period of at least two years immediately preceding the presentation of the petition; or

(d) that the parties to the marriage have not lived as man and wife for a continuous period of at least two years immediately preceding the presentation of the petition and the respondent consents to the grant of a decree of divorce; provided that such consent shall not be unreasonably withheld, and where the Court is satisfied that it has been so withheld, the Court may grant a petition for divorce under this paragraph notwithstanding the refusal; or

(e) that the parties to the marriage have not lived as man and wife for a continuous period of at least five years immediately preceding the presentation of the petition; or

(f) that the parties to the marriage have, after diligent effort, been unable to reconcile their differences.

 

Timeline For Court Proceedings 

Once a petition is filed in court, the length of time it takes in court varies depending on various factors such as the willingness of the parties to consent and come to a mutual settlement, the reliefs sought (a case where custody or children or financial settlement is sought may take longer than one where these reliefs are not being sought), and the court’s schedule, among others.

 

It is however possible to have an estimation of the duration based on the timeline given by Order 65 of the C.I 47. The steps involved in divorce proceedings in the high and circuit courts of Ghana are shown below:

1. Petition 

Every divorce proceeding in the Ghanaian courts begins with a petition. It is served on the Respondent by the court bailiff and must be served personally on the respondent.

2. Entry of appearance 

The Respondent after being served with the petition has eight (8) days within which to enter an appearance.

3. Filing of answer

After entering an appearance, the Respondent is required to file an answer to the petition within fourteen (14) days.

4. Reply

The Petitioner may then choose to file a reply to the Respondent’s answer. This is to be done within fourteen (14) days after being served with the answer.

5. Close of pleadings

Eight days after the reply is to be filed, pleadings will close. This means that the parties can no longer serve each other written documents and the matter can be set down for trial in the courtroom.

6. Setting down for trial

Fourteen days after pleadings close, the petitioner or his lawyer is to write to the Registrar to inform him that the matter is ready to be set down for trial, and pay the fee for service of the notice of trial. The Registrar shall then set the matter down for trial and serve the notice of trial on the Respondent within fourteen (14) days. If the petitioner or petitioner’s lawyer fails to do this, the Respondent or Respondent’s lawyer may either apply for the matter to be struck out or to be set down for trial. 

7. Trial

Once the matter is set down for trial, the parties are to file their witness statements and call their witnesses to be examined in court. The duration of the trial depends on the court’s schedule, the number of witnesses who are called, and the duration of cross examination.

8. Motions

During the proceedings, either of the parties may file motions to ask the court for some orders, eg. Paternity test, maintenance pending trial (etc). These may also affect the length of the time the case spends in court.

9. End of trial

This takes place after all witnesses have been examined. The judge shall then ask the parties to file written addresses by a certain date and give a date for judgment

10. Judgment

This is to be given within six weeks of the close of the case. Though this is the prescribed time for judgments, sometimes there are delays. If there is an unreasonable delay, a party may inform the Chief Justice to request a date for judgment to be given by the judge. 

11. Execution of judgment 

After judgement is given, the parties then obey the court’s judgement. Payment of monies, sale of properties, custody of children and any other order given by the court is done within this time. 

 

Conclusion

Knowing the timeline provided by the rules of court is very helpful to parties to divorce proceedings in knowing what to expect and managing their expectations of the process. It must be borne in mind though, that although this is what is prescribed, in reality, the process may be either much faster or much slower than that prescribed.

__________________________________________________________________________________________________________

Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

Author: Barbara Ewoenam Afua Kukah

In our day to day lives, we have interactions with others that can be classified as contracts. A contract has been defined as a set of promises enforceable by law. At its core, a contract is a legally enforceable agreement between two or more parties where each party makes a promise (to provide services, goods, etc) to the other in exchange for a consideration from the other person (payment, goods, service, etc). 

Everyday examples of contracts include buying groceries, downloading and using mobile applications, enrolling in schools and courses, and purchasing bus tickets. Even though we enter into various agreements and transactions on a daily basis, not all of them will be classified as contracts. For an agreement to be considered a contract, it must meet certain requirements. An agreement will be classified as a contract if it involves an offer which has been accepted, is made by parties who have the legal capacity to enter into contracts, is meant to be legally enforceable, and adequate consideration is given for it. 

For many transactions, most people do not sign formal contract documents. However, there are still a number of transactions for which a written contract is either required or highly advisable – whether for employment, purchase of property, sale of goods, or contract for services among others. It is also advisable to have a lawyer draft the contract in order to ensure that it fully covers the scope of the agreement, protects the interests  of the parties, and complies with necessary legal requirements. Regardless of whether you are signing an already drafted contract, or drafting an agreement, there are certain important elements that you should ensure are included in it. 

The Parties 

Who are the parties to this agreement? What are their names and addresses? It is important to clearly define who the people entering into the contract are. Ideally, the contract should state the names and addresses of the parties. Clearly stating who the parties are helps to determine who has obligations under the contract, who has liabilities and who can enforce the contract (privity of contract). 

Privity of contracts is a common law doctrine that provides that only a person who is a party to a contract can enforce the contract and also benefit from it. In the case of Tweddle v Atkinson [1861] EHWC QB J57, two men (John Tweddle and William Guy), agreed to pay some money to Tweddle’s son (William Tweddle) who was getting married to Guy’s daughter.  Guy died before making the payment, and his estate refused to make the promised payment. William Tweddle sued Mr. Atkinson who was the executor of Guy’s estate, but the court held that he was not a party to the original contract and could not sue to enforce it, even if he was the beneficiary under that contract. 

It is however true that in Ghana, the Contracts Act, 1960 (Act 25) has abolished the common law rule on privity of contracts subject to certain exceptions. Sections 5 and 6 of Act 25 permit a party who is entitled to a benefit under a contract to enforce that contract even without being a party to that contract. 

In spite of this, it is always advisable to ensure that the parties to a contract are clearly stated before entering into the contract. 

Effective date, termination and duration

When does the contract take effect? How long will it last, and when will it end? It is very important to define this before entering into the contract. Some contracts may stipulate that it commences on a date specified within the contract agreement, while others may commence on the date of the last signature. Yet others may commence once an action or condition  is performed, such as payment being made. 

With regards to the duration and termination of contracts, some contracts have no expiration date and will continue in force until either party takes an action, terminates it or until some other occurrence terminates it. Others will terminate after the performance of the contracts while others have a fixed period (1 year, six months, etc) and will automatically terminate at the end of that period.

Being clear on when a contract commences and terminates helps to know when liability commences and ends. It also helps to determine whether a party is within the period of performance or has breached a term of the contract, as well as when a party can cease performance without incurring legal liability.

The Scope of the Agreement

The scope of a contract refers to the expected services or work agreed to be done under the contract. It is important for a contract to fully set out the duties each party is expected to perform. For instance in a tenancy agreement, it is important to set out which party is responsible for maintenance and repairs, as well as payment of taxes and duties. Similarly, in a contract for renting of equipment, it is important to state which party would be responsible for cleaning and maintaining the apartment and repair of the equipment in the event of damage. 

Outlining the scope of a contract guides the parties in the performance of their duties, removes ambiguities concerning performance of duties, and identifies who bears liability for a breach. 

Consideration 

One of the main features of a contract is the exchange of consideration. Consideration is anything given in exchange for the promise of another party. In the case of Thomas v. Thomas (1842), 2 QB 851, it was defined as follows: “Consideration means something which is of value in the eye of the law, moving from the plaintiff; it may be some detriment to the plaintiff or some benefit to the defendant, but at all events it must be moving from the plaintiff.”

The meaning of consideration has evolved over time to simply mean a promise, act, or forbearance, which is given in exchange for the promise of another person. Act 25 of Ghana has specified that consideration does not need to flow from the promisee. This means that a party to a contract may perform an act in exchange for consideration offered by a person who is not a party to the contract. Also, consideration need not be adequate, but it must be sufficient. The courts will not concern themselves with whether the promise given by one party is equal in value to the promise given by the other party. As long as there is no vitiating factor and each party receives what they want, the consideration will be deemed to be sufficient. Thus in the case of Adjabeng v. Kwabla [1960] 7 GLR 37, where a man sold his land for £40 but his son felt it should have been worth £200, the court held that in the absence of fraud or misrepresentation, inadequacy of consideration cannot be grounds for avoiding a validly made sale.

Consideration can take many shapes and forms. It is therefore very important to clarify what you are giving and what you are receiving in return before entering into a contract.  

Liabilities and force majeure

Liability refers to the responsibility that is placed on a contractual party for claims, obligations, losses, or damage that may arise out of the contract. Liability clauses are placed in contracts to outline the circumstances in which liability will arise, which parties will bear liability and the extent of the liability each party may face. In some circumstances, limitation of liability clauses will also be inserted to place a cap on the liability to be incurred by  a party and protect individuals or businesses from severe losses arising from liability claims. It is essential to have  a well written clause that sets out such liabilities clearly in order to avoid disputes and litigation later. 

Force majeure is a clause in a contract that protects a party from obligation or liability for a breach that is caused by extraordinary events beyond the control of that party. These events could be a fire, earthquake, flood, tornado, storm, pandemic, war, labour strike, and terrorism, among others. Predictable events (such as seasonal weather), self-induced frustration (eg. intentionally burning down a building), and negligence will usually not be covered by force majeure clauses.

The COVID-19 pandemic affected several businesses and individuals and made it impossible for several contract obligations to be fulfilled. Having a force majeure clause in a contract protects parties from such unforeseen circumstances and encourages renegotiation and flexibility in such events. 

It is thus highly advisable to have clauses in a contract that cover liability and obligations in events of default. 

Capacity of Each Party to Contract

This is the most fundamental element that determines whether the contract will be valid and enforceable or not. Capacity refers to the ability or competency of a party to enter into a contract. Generally, infants (persons who have not reached the age of majority), mentally incompetent persons, and/or intoxicated persons cannot enter into contracts except under certain  circumstances.

That notwithstanding, there are other factors and statutory provisions that may also prevent otherwise legally capable persons from entering into certain contracts. In Ghana, a person who is an undischarged bankrupt cannot serve as a director of a company. After the insolvency order is made, a bankrupt person can neither enter into a hire-purchase agreement nor operate an account with a bank or other financial institution, among others. Thus, a bankrupt person lacks the capacity to enter into certain contracts, and hence contracts made with such a person will not be legally enforceable.

Additionally, the Companies Act, 2019 (Act 992), prevents persons who have been convicted of an offence involving fraud or dishonesty, insider dealing, an offence in connection with the promotion, formation or management of a body corporate or any offence which is not a misdemeanour whether in or out of Ghana from managing companies except with leave of a court. Such persons lack the capacity to enter into an agreement to offer their services as directors of companies. 

A person may be prevented by a non-compete agreement with a previous employer from working with a competing company for a certain number of years. A non-compete agreement is an agreement that prevents an employee from competing with an employer for a certain period of time after the employment ends and from revealing the employer’s trade secrets. Such a person may thus lack capacity to enter an employment agreement with a rival company during the pendency of the agreement.

A person may also be prevented from selling or renting out a property which has a lien or other encumbrance on it. In order to avoid and/or mitigate potentially damaging losses, it is helpful to not only carry out the required due diligence before entering into a contract, but to also insert a clause that allows parties to declare any known lien, encumbrance, or restriction that would prevent them from entering the contract.

 

Governing Law

In order for a contract to be legally enforceable, it must comply with the laws of a jurisdiction and be subject to the courts of that jurisdiction. The governing law clause determines which law shall apply in the event of a dispute. It is very important because the outcome of a dispute can be influenced by the choice of law. Usually when parties are from the same jurisdiction, they tend to choose that jurisdiction’s laws as the governing law for their contract. However when the parties have different jurisdictions, it becomes even more important to specify a jurisdiction in the contract. 

Dispute Resolution

Almost everyone enters into an agreement with the hope that the contract will be successfully executed and that no breach or hindrance occurs. However, this is not always the case. From parties failing to perform their obligations, to accidents and force majeure events, and even the death of parties, there are many reasons why disputes may arise from a contract. That is why it is important to have  a dispute resolution clause which specifies how disputes between the parties will be resolved should they arise. Would the parties attempt to resolve disputes by themselves? Would they seek external help such as mediation or arbitration? Will they simply let the courts decide?

Deciding on this before the contract is signed will provide clarity, guidance, and save both money and time while also regulating the behaviour of parties once they know the repercussions of breaches and other dispute-causing events. 

Conclusion

Ultimately, the clauses in a contract will depend on the nature of the contract, the parties to the contract, specific laws to the subject contract and the bargaining power of each party. It is important to note that in spite of all precautions, contracts may not always have the intended outcome.  Nevertheless, ensuring the clauses addressed in this article are present in a contract before execution will provide  adequate protection, clarity , save time and guard against avoidable disputes  for the parties to the contract.

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Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.

CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

Author: Memuna Saani

Introduction 

In every contract, each party has obligations they are required to perform. The general rule in contract law is that, when parties enter into an agreement contemplating the performance of an obligation under the agreement by one or both parties, neither party is excused from performing their obligation. Ordinarily, the failure to perform a party’s obligations, is deemed a breach for which the affected party may sue to either ensure that the defaulting party performs or to recover damages.

 

However, after the formation of a contract, circumstances may arise which can make it legally, physically, or commercially impossible for the parties to fulfil the terms of the contract. When such events occur, the contract is said to be frustrated, and the parties are discharged from the obligations they undertook to perform under the contract.

The emergence of the novel coronavirus (“COVID-19”) outbreak in 2020 to date has had a serious impact on the performance of parties’ under many contracts. Some contracts generally contain a “force majeure” clause to excuse parties upon the occurrence of such uncontrollable and unforeseeable events. Force majeure refers to a clause that is included in contracts to limit liability against   uncontrollable circumstances including but not limited to natural disasters, war and coup d’etats, that interrupt the expected course of events and prevent parties from fulfilling their contractual obligations. 

 

Where a contract does not contain a force majeure clause, a contracting party may look to the statutory effect of frustration or the common law doctrine of frustration to relieve it from its obligations depending on the jurisdiction governing the contract. Unlike force majeure clauses which focus on the parties’ express intention on how to deal with supervening events, frustration is implied by law and thus would only be considered in the absence of an express force majeure clause.

 

This article seeks to define frustration, explain the consequences of frustration under common law and in Ghana, and conclude with a legal position in which a contracting party may plead frustration as a result of the Covid-19 pandemic.

 

What Is Frustration?

The doctrine of frustration provides one of the ways in which a contract comes to an end automatically at the time the frustrating events occur.

Lord Radicliffe in the case of Davis Contractors v. Fareham U.D.C, explained frustration as follows:

“Frustration occurs whenever the law recognizes that without default of either party, a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. It is not hardship or inconvenience or material loss itself which calls the principle into play. There must be as well such a change in the significance of the obligation that the thing undertaken would if performed be a different thing from that contracted for.”

The Supreme Court of Ghana noted in the case of Affordi v. Ghana Publishing Corporation, the doctrine of frustration presupposes conditions of factual impossibility or commercially impracticability of contractual obligations. Again, in the case of Barclays Bank v. Sakari, it stated that the doctrine of frustration will be applicable where external events of some kind, not the responsibility of either party render further performance of the contract impossible or radically different from what had been contracted for. 

When parties are discharged from performing their contractual obligations due to frustration, it only affects their future performance of the contract and not any obligation they had before the circumstances arose. It must be noted that the mere rise in cost of performance or the change in the method of payment does not render a contract frustrated. (Davis Contractors v Fareham U.D.C, Affordi v Ghana Publishing Corporation)

 

Historical Background 

The doctrine of frustration was developed to release innocent parties from obligations where the “thing is destroyed without the debtor’s act or default” and the contract purpose has “ceased to be attainable.” According to Roger Kiley in his article “Doctrine of Frustration” (published by the American Association in 1960), the doctrine was applied in situations such as where a slave died before delivery date, a horse died before it is delivered, or a painter or author of a book dies before completion of the painting or writing a book. 

The original frustration rule in England took a strict approach to non-performance of a contractual obligation. A party who fails to perform his contractual obligations, for whatever reasons, is prima facie in breach of the contract. In pre-nineteenth century law, the general rule was that a change of circumstances after a promise was made did not excuse the promisor from performance, even if it made performance impossible. This view came to be known as the rule in Paradine v Jane (1647) or the rule as to absolute contracts. 

In the case of Paradine v Jane (1647), the Defendant who had leased land from the Plaintiff was held to be liable for the rent although he had been driven from the land by invaders and was unable to use it. The court’s reasoning was that where a party creates a duty or charge upon himself by virtue of a contract, he is bound to perform the duty or pay the charge, notwithstanding any accident. It further held that the parties could have inserted a clause in the contract, which prescribes what is to be done with the rent in case of an accident. 

The law has moved on from the strict approach taken in Paradine v Jane. In Taylor v Caldwell (1863) 3 B & S 826, where a hall which was booked for concerts on four days burnt down before the first concert, the court held that the Defendant was discharged from performing, and his failure to perform was not a breach of the contract. 

Again in the case of Krell v Henry (1903) 2 KB 740, the Defendant rented the Plaintiff’s flat to view the king’s coronation procession, which was eventually cancelled. The court excused the Defendant from performance because his purpose for entering into the contract was frustrated. 

Although the law has evolved to be more liberal than the common law rule found in Paradine v Jane, it is important to note that the doctrine still operates within very narrow bounds. Twentieth century cases such as Davis Contractors Ltd v Fareham Urban District Council (1956) AC 696, National Carriers Ltd v Panalpina (Northern) Ltd (1981) AC 675 demonstrate a restrictive approach to the scope of the doctrine of frustration.

 

The Effect of the Doctrine of Frustration

The effect or consequences of the doctrine will be looked at in two-fold. The effect of the doctrine under common law and the effect of the doctrine as it relates to the Ghanaian jurisprudence.

Effect Under Common law

Under common law, the occurrence of a frustrating event automatically ends a contract. This means that frustration does not render the contract void ab intio, but rather discharges the parties from the duties of “future performance”. Rights accrued before the frustration remain enforceable while those which would have accrued but for the frustrating event,  do not come due. 

This was illustrated in Chandler v Webster[1904] 1 K.B. 493, where the plaintiff agreed to hire a room from the defendant for the purpose of viewing the coronation procession at a price of £141, payable immediately. The plaintiff paid £100, but before he paid the balance, the coronation was cancelled and the contract was thereby frustrated. The plaintiff brought the action to recover the £100. The court held that not only could the plaintiff not recover the £100 he had already paid; he was also liable to pay the balance of £41 which he owed under the contract before it became frustrated because the obligation to pay became due before the frustration occured. 

The harshness of this decision attracted criticism and was  overruled in Fibrosa Spolka Akcyjna v Fairbain Lawson Combe Barbour Ltd [1943] A.C 32 (the Fibrosa case), thereby avoiding the consequences of the rule that the contract remained full force up to the moment of frustration. In the Fibrosa Case,  an English company agreed to sell certain machinery to a Polish company for the price of £4800. Delivery was to be made in 3 to 4 months. The Polish company had paid £1000 when the war broke out and the contract became frustrated. The Polish company sued for the return of the £1000 they had paid to the English company.

The court held that the Polish company was entitled to recover the £1000 it had paid because there was a total failure of consideration, in that it got nothing for the money paid. The House of Lords reversed the decision in Chandler v Webster, stating that the conclusion in Chandler v Webster, that the doctrine of failure of consideration did not apply where the contract was frustrated was wrong. The principle which emerged from the Fibrosa case, therefore, was that where money is paid to secure performance of a contract, and performance fails as a result of the frustration of the contract, the party who paid can recover the amount if there is a total failure of consideration.

Even after the Fibrosa case, there still remained a loophole in the common law position since it operates only in the event of total failure of consideration. This meant that, where consideration had been partly performed, the principle would not apply and a party who had already paid could not recover any part of his money. Again, the rule in Fibrosa was unfair to one party who had spent money in commencement of the performance of the contract before frustration as illustrated in the Fibrosa case, where money had been expended in building the machinery, the Defendant was left with no compensation for the money spent in preparation for the contract.

 

Consequence of Frustration Under Ghanaian Law (Modification of Frustration Under the Contracts Act, 1960)

In view of the loopholes in the common laws on the effect of frustration, the legislature in Ghana has intervened by enacting specific provisions in the Contracts Act 1960 (Act 25) to address the rights and obligations of parties to a contract which has become frustrated. 

Section 1-3 of Act 25 deals with the modifications of the rights and obligation of parties upon the frustration of a contract. The eminent author Christine Dowuona-Hammond in her book “The Law Of Contract In Ghana”(2016) at page 301-302 summed the modifications as follows:

1. When a contract is deemed to have been frustrated, both parties are discharged from further performance of the contract. (Section 1(1)).
2. All sums paid to any party under the contract before the frustration of the contract and the discharge of the parties are recoverable by the party who paid them. (Section 1(2))
3. All sums payable or due to be paid to any party under the contract before the time of discharge cease to be payable. (Section 1(2))
4. A party who has spent money on the performance of the contract can recover from the other party an amount which should not exceed his expenses or the total sum payable under the contract. (Section 1(2))
5. In computing the expenses incurred by the party, the courts may include overhead expenses, cost of personal services rendered etc. However, insurance receipts are to be ignored where there is obligation to insure under the contract. (Section 1(3))
6. The parties can agree expressly as to what should be the effects of frustration of the contract they made. If that is done, those provisions should be applied and not the provisions of the Act. (Section 3)
7. Where it appears to the court that a part of any contract which has been wholly performed before the time of discharge can properly be severed from the remainder of the contract, the court shall treat that part of the contract as if it were separate contract and had not been frustrated, and shall treat section 1 of the Act 25 as only applicable to the remainder of the contract. (Section 2)

 

From the above, the effect of Section 1 of Act 25 is that, once a contract is frustrated and the parties are discharged, monies which have already been paid are recoverable from the party to whom they were paid. Monies which are payable or due to be paid under the contract cease to be payable, whether there is failure of consideration or not.

Section 1(2) confirms the common law position as laid down in the Fibrosa case but excludes the qualification that monies are recoverable only where there is a total failure of consideration. The operation of Section 1(2) is subject to the fact that a party who has spent money on the performance of the contract can recover from the other party an amount not exceeding his expenses or the total sum payable under the contract.

This position was illustrated in R.T Briscoe (Ghana) Ltd v. Essien [1962] 1G.L.R. 265. In this case, the Plaintiffs claimed £17,784.1455 as the value of equipment and balance of cash advances given to the Defendant for the supply of logs. The Defendant pleaded that while he was performing the contract, a legislation came into force which declared Ghana Timber Marketing Board the sole buyer of Ghanaian wawa and redwoods. The performance of the said contract was thus rendered impossible and subsequently both parties were discharged by the frustration. The court held that by Section 1 of Act 25, where a contract is frustrated monies paid thereunder are recoverable, subject to a deduction for reasonable expenses incurred in the performance of the contract.

 

Conclusion

The Covid-19 pandemic has undoubtedly made it impossible for many contracts to be fulfilled. However, the success or failure of a plea of frustration based on the Covid-19 pandemic as a defence for breach of contract will be determined primarily by the factors surrounding the contract’s subject matter and the length of delay or restrictions imposed on the subject matter. The court will consider whether the party seeking to invoke frustration has established that the outbreak of covid-19 and the associated government restrictions rendered the contract’s obligations physically or commercially impossible to fulfil. 

 

Although Act 25 contains sufficient provisions to address issues of frustration, it is always in the interest of contracting parties to have a force majeure clause that contemplates unforeseen events and incorporates the parties’ intentions with regard to the handling of liabilities that arise as a result of a n uncontrollable and unforeseeable event.

 

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Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions.


CONTACT:

NARTEY LAW FIRM

TEL: +233 (0)553508582

Email:info@narteylaw.com

Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.

INTRODUCTION

In the affairs of men, there have been circumstances where out of necessity, one person has had to transfer property to another person for the benefit of a third party (Beneficiary). This relationship is referred to as a Trust. The concept of a Trust is said to have been in existence as far back as the Roman era, when soldiers before leaving for war entrusted their properties in the hands of trusted friends for the upkeep of their family. The concept is recognized to have been developed under the English common law as one of the remedies to the rigidity of the common law. 

This article seeks to briefly examine the general concept of a Trust, paying particular attention to the statutory provisions and case law governing trusts in Ghana.

 

TRUST

Generally, a Trust is an arrangement where one party (“Party A) reposes faith in another with the belief that the other executes party A’s wishes in relation to a third party. 

According to Underhill and Hayton Law of Trusts and Trustees 14th Edition, a Trust is an equitable obligation, binding a person (who is called a Trustee) to deal with property over which he has control (which is called a Trust Property) for the benefit of persons (Beneficiaries or Cestui que trust) of whom he may himself be one, any one of whom may enforce the obligation.

In the case of Soon boon Seo v Gateway Worship Centre [2009] SCGLR 278, the Supreme Court adopted the definition given by B. J. da Rocha and C. H. K. Lodoh, in their book “Ghana Land Law and Conveyancing (2nd Edition)” at pages 105-106 wherein they defined Trust as a concept in equity whereby one person (called “the Trustee”) holds the nominal or legal title in property which has been made available to him by another person (called “the Settlor”) for the benefit of some other person (called “the Beneficiary”).

DEFINITION OF TERMINOLOGIES

1. Settlor: A Settlor is a person who, under Trust law, settles property for the benefit of Beneficiaries. A Settlor may also be referred to as a Trustor, Grantor, or Donor in some legal systems. Where the Trust is created by a Will (Testamentary Trust), the Settlor is known as the Testator. The Settlor may also be the Trustee of the Trust (by declaring that he holds his own property on Trusts), or a third party may be the Trustee (where he transfers the property to the Trustee on Trusts). A Settlor may establish a trust by manifesting an intention to do so. In most countries, no formalities are required to establish a Trust over personal property, but formalities are frequently associated with trusts over real property or testamentary Trusts. The Settlor’s words or actions must be sufficient to establish an intention that another person or the Settlor himself will be Trustee of the property on behalf of the beneficiary; a general intention to benefit another person is sufficient on its own.
2. Beneficiary: A Beneficiary is the person or persons who are entitled to the benefits of a Trust arrangement. A natural person is usually the Beneficiary of a Trust, but it is perfectly possible for a company to be the Beneficiary of a Trust, and this happens frequently in sophisticated commercial transaction structures.  All Trusts, with the exception of charitable Trusts and some specific anomalous non-charitable purpose Trusts, must have ascertainable Beneficiaries. 

In general, there are no restrictions on who can be a Beneficiary of a Trust. A Beneficiary can be a minor or someone with a mental disability (in fact many Trusts are created specifically for persons with those legal disadvantages).

1. Trustee: A Trustee is a person or entity who holds and manages property or assets for the benefit of another person or entity. A Trustee may be appointed for a variety of reasons, including bankruptcy, a charity, a Trust fund, or certain types of retirement plans or pensions.
2. Fiduciary relationship: Fiduciary duties are duties enforced by law and imposed on persons in certain relationships requiring them to act entirely in the interest of another, a Beneficiary, and not in their own interest (David J. Seipp, Trust and Fiduciary Duty In The Early Common Law (2011) at page 1011).

 

STATUTES REGULATING TRUSTS IN GHANA

In Ghana Trusts are generally regulated by:

1. The Charitable Trusts Act 1869
2. Trustees Incorporation Act 1962 (Act 106)
3. The Securities Industries Act 1993 (PNDCL 333)
4. The Common law (Article 11(1) of the 1992 Constitution of Ghana)

The Trustees (Incorporation) Act, 1962 (Act 106) allows Trustees of unincorporated voluntary associations and bodies formed for religious, educational, literary, scientific, sporting, social, and charitable purposes to be incorporated and acquire immovable property. Following incorporation, the Trustee(s) are the only people who can sue and be sued in the name of the association.

Registered Trustees are given a certificate that includes information such as the qualification and number of Trustees, the method of appointing new Trustees, the custody and use of the official seal, the amount of immovable property the Trustees may own, and the purpose for which the acquired lands may be used.

 

CREATION OF A TRUST

In the case of Cofie v Forson ([1992] 1 GLR 312), the court held that creating a Trust requires certainty of intention, certainty of subject matter, and certainty of object (“the three certainties”) to be valid. This means the Settlor must have shown a clear intention to create a Trust, which can be fairly gathered from the Settlor’s expression or his conduct.   In Asante v University of Ghana ([1972] 2 GLR 86), it was   held that, when creating a Trust, no particular word would be required, provided the intention to create one can be gathered from the expressions used by the Settlor.

Regarding subject matter, Justice Adjei in his book, “Land Law, Practice and Conveyance in Ghana”, stated that “the subject matter of a Trust must be well described to make it identifiable. Where the identity of the subject matter cannot be ascertained, it may defeat the purpose of the Trust.” 

Finally, the intended Beneficiaries of a Trust must be certain, otherwise the trust is void (Morice v Bishop of Durham ([1805] EWHC CH J80). 

 Trusts must be enforceable, so there must be someone who can enforce the Trust (unless it is a charitable Trust, where the Attorney-General can bring an action).

 

CLASSIFICATIONS OF TRUSTS

• Private and Public:

1. Private Trust: A Trust established for the benefit of a single person or a group of people. It can normally be enforced by any of the Beneficiaries. It could be either express, implied, constructive, or resulting. Again a Private Trust could either clearly state the obligation of the Trustee (Perfect Obligation Trust) or be vague as to the obligations of the trustee (Imperfect Obligation Trust). 
2. Public Trust: Charitable Trusts are another name for public Trusts. It is one whose primary goal is to promote public welfare, even if it may benefit an individual or a group of individuals incidentally. If the object of the Trust is obsolete, impracticable, or uncertain, or if it may fail, the court will apply the cy pres doctrine to determine the closest purpose resembling the original Trust, to ensure that the Trust does not fail. It is enforced on behalf of the State by the Attorney General.

• Express or implied

1. In an express or simple Trust, a Trustee holds legal title to assets on behalf of a Beneficiary who has absolute and immediate access to the assets. Typically, the Trustee would have no active duties to perform. Although express Trusts can be formed orally, they are usually established through the use of a simple document known as a ‘Declaration of Trust.’

Express Trusts are commonly used to transfer assets to minors who lack legal capacity to deal with those assets. They can also be useful if an individual wishes to acquire shares without that acquisition becoming public knowledge. For tax purposes, Express Trusts are ‘looked through,’ which means that the Beneficiary, rather than the Trustee, is liable for any taxes arising from the Trust (Section 56 of the Income Tax Act 2015 (Act 896).

1. Implied Trust: this does not arise as a result of the intention of the parties but is rather inferred from the conduct of the parties involved. It is sometimes referred to as Presumptive Trusts. 

• Completed Constituted & Incompletely Constituted.

Completely Constituted Trust: A Trust is completely constituted where the Settlor has done everything within his power to convey the property to the Trustee to hold it for the Beneficiary. The effect of a completely constituted Trust is that the Beneficiary can enforce the Trust irrespective of the fact that she has not provided any consideration to the Settlor’s promise as captured by the Trust instrument. According to da Rocha and Lodoh (supra) (2nd Edition) at pages 105-106, a Trust may be completely constituted in two ways:

1. by the Settlor conveying the property to the Trustees; or
2. by the Settlor declaring himself to be a Trustee for the intended cestui que trust.

1. Incompletely Constituted:  This occurs where the title to the Trust property has not been transferred into the Trustee’s name. Beneficiaries may not be able to enforce them if they are not properly vested, unless the Beneficiary in question has provided valuable consideration. Typically, an incompletely formed Trust necessitates further action by the Settlor before it can be said to be “perfectly formed”(Milroy v Lord [1862] EWHC J78).

• Executory & Executed

1. Executed Trusts:  It is an Express Trust which the Testator or Settlor has marked out in appropriate technical expressions the interest to be taken by each Beneficiary. Here, the testator or Settlor is his own draftsman. And in this case, no further instrument is necessary, but the Trust is finally declared at the time of its creation.
2. Executory Trusts: It occurs when the Settlor or Testator establishes a Trust in favor of Beneficiaries, and while he may indicate a scheme for settlement, the details are left to the Trustees to fill. The quantum of each Beneficiary’s interest may be left out to be settled later. e.g. In a Will, the testator may convey a house for his children without setting out the respective rooms or interests. 

• Constructive and Resulting

1. Constructive Trust: This occurs when equity considers and treats the legal owner of a property as a Trustee, although no Trust has been formally made. Typically, the individual may have attempted to take advantage of his position in order to acquire a legal interest in a property, for instance someone who uses another person’s money to buy a property in his own name or a Trustee who renews a lease in his own name. Its goal is to prevent unjust enrichment. According to Justice Dennis Adjei, the court imposes Constructive Trust on a person who has wrongfully acquired property. Constructive trust is also referred to as involuntary trust or trust of son tort. 
2. Resulting Trusts: This type of Trust is also referred to as a remedial Trust. The benefit of a Resulting Trust is returned to the estate if the Settlor dies. Typically, it is difficult to distinguish Implied Trust from Resulting Trust because in both cases, the intention to create a Trust is only assumed. However, in the case of a Resulting Trust, the Beneficial interest reverts to the Settlor or the person who provided the funds for the purchase of the property or conveyed the property. However, in the case of an Implied Trust, this may not be the case. 

In Re Koranteng (Dec’d); Addo v. Koranteng and Others as referenced in Margaret Osei Assibey v. Joyce Gbomittah suit number No. J4/51/2011, the learned judge stated as follows:

“In essence, a resulting trust, in this context, is a legal presumption made by the law to the effect that where a person has bought property in the name of another, that other will be deemed to hold the property in trust for the true purchaser. It is a trust implied by equity in favor of the true purchaser of the estate, if he has died. The trust is regarded as arising from the unexpressed or implied intention of the true purchaser. Obviously, though for such a resulting trust to be implied, certain factual preconditions must exist and the issue is whether on the facts of the current case, a resulting trust may validly be implied. In the context of this case the main factual precondition is proof that the beneficiary of the resulting trust advanced the purchase money for the transaction. Thus, for a resulting trust to be established, there has to be proof that the purchase money was advanced by the beneficiary of the resulting trust ([1995-96] 1 GLR 252 – 270).” 

 

1. 1. Fixed Trusts is an instrument that specifies the beneficial interest each Beneficiary is to receive.
   2. Protective Trust is usually a Trust for life or some lesser period, which is intended to be determinable on the happening of specified events
   3. Discretionary Trusts leave some discretion to be exercised by the Trustees, for example, who will benefit, nature of the benefit etc.

• Trust in a higher and lower sense

1. The phrase Trust in the higher sense has been used to refer to, e.g. A government duty which is not enforceable in the courts. Example: the Bank of Ghana and DKM story, and the government of Ghana’s promise to release monies to victims.
2. A Trust in the lower sense is based on an equitable obligation which is fully enforceable in the law courts (Tito v. Waddell (No. 2) [1977]. 

 

POWERS OF THE TRUSTEE

1. Power of sale (Either by a private contract or public auction or according to the mode of sale as prescribed by the Trust Instrument).
2. Power to issue receipts for payments made in respect of the Trust Property.
3. Capacity to sue and be sued in respect of the Trust Property (Order 4 Rule 13 of the High Court (Civil Procedure) Rules, 2004 (C.I. 47).
4. Power to insure the Trust Property, even though the mere failure to insure will not amount to a breach, unless it can be shown that the Trustee did not exercise reasonable care of the property. 
5. Power to compound liabilities – Enter into a compromise, accept composition for debts and agree on time to pay the debts.
6. Power to appoint delegates by appointing agents when necessary, especially when specialized knowledge and expertise is required. 

 

DUTIES OF A TRUSTEE

1. Duty to account to Beneficiaries as to all reasonable information of how the Trust Property has been dealt with or invested.
2. Duty to allow Beneficiaries inspect all title deeds and documents relating to the Trust. And if they are in doubt, they may apply to the court for direction.
3. Duty of loyalty:  Trustee has a duty of undivided loyalty to the Beneficiaries. He is not to engage in self-dealing and must avoid conflict of interest in the management of the Trust property.
4. Duty of impartiality:  Where there is more than one Beneficiary, he is to give due attention to each of the Beneficiaries’ interest.
5. Duty not to commingle the Trust Property or assets with his personal property or assets.
6. Duty to carry out the directions of the Trust as contained in the Trust Instrument.
7. Trustee is to secure the settled property, by immediately taking possession without delay.

 

TRUSTEES BENEFITTING FROM THE TRUST

The general rule is that other than the agreed compensation for their service, Trustees are not permitted to profit directly or indirectly from the Trust. This is because Trustees are in a fiduciary relationship with the Beneficiaries and must protect and seek their interest with unquestionable commitment. The rule is primarily to ensure that Trustees do not fall into the temptation of having a conflict of interest because a Trustee who is allowed to profit personally may not act in the best interest of the Trust (Keech v. Sandford [1726]).  

 

DEFENSES FOR BREACH OF TRUST

In some cases where Trustees were sued for breaching Trust, these are some defenses that were accepted by the courts: 

1. Acquiescence and Release – When the Beneficiaries have acquiesced or freed the Trustee, either expressly or by necessary inference by their conduct, such as failing to institute an action within the requisite time limit. Infants who are Beneficiaries cannot provide a valid release unless they misrepresent their ages. If there are numerous Beneficiaries and only one acquiesced, the others may sue the Trustees for their shares, subject to the Trustee obtaining indemnification from the one who acquiesced.
2. Consent by the Beneficiaries –  When the Beneficiary consents to the breach, the legal principle volenti non fit injuria (a person who consented to, or participated in, the infliction of injury to himself, cannot be heard subsequently to complain of his injuries), unless

1. He lacked capacity
2. He was not aware of the full facts and 
3. He was induced to do so (Undue Influence).

1. 1. Lapse of time – Under the Limitation Decree, NRCD 54, Section 15, an action for breach of Trust cannot be instituted after 6 years.

• Bankruptcy – A bankrupt Trustee is ordinarily immune from suit for personal liability for decisions taken or acts done with regards to a judgment against the Trust Property or an act or decision taken pursuant to a statute.

 

FOLLOWING AND TRACING

Both following and tracing are remedies that are used to recover property which has been transferred or disposed of by a Trustee. Following is available at common law, whereas tracing is an equitable remedy.

The common law only follows and recovers property only where it is physically identifiable and not mixed up with other monies, but equity may trace a property even when it has changed its form. At common law, there is no need to establish a fiduciary relationship before following can be done; but in equity, one cannot do tracing where there is no fiduciary relationship. 

 Three conditions must be present to trace Trust Property, 

1. The property must be traceable
2. There must be an equitable title to the property to be traced (Not necessary under common law).
3. Tracing must not produce an inequitable result

 

CONCLUSION

In essence a Trust is one of the legal innovations by which a person can entrust his wishes to another to carry out for the benefit of a third party. However, unlike a Will, a Trust need not take effect upon the death of a Settlor. The formalities associated with the creation of a Trust is not as cumbersome as other legal instruments such as a Will or a deed of conveyancing. A Trust imposes an obligation on the Trustee so as to ensure that the interest of the Beneficiary is protected.

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Nartey Law Firm is a leading corporate and commercial law firm in Ghana providing legal services to individuals, domestic and international businesses. Ensuring the success of our clients’ objectives is at the core of what we do.  Comprised of a dedicated team of lawyers with extensive experience in corporate, commercial and international law and litigation, we pride ourselves with the diligent execution of all client matters, whilst guaranteeing an uncompromising standard with respect to excellence in service delivery. Some of our focus areas are Real Estate, Trade and Commerce, Banking and Finance, Regulatory Advisory, Capital Markets and Mergers and Acquisitions. 

 

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Disclaimer: This publication is for information purposes only and is not intended to constitute legal advice. If you require information on any matter discussed in this article, kindly reach out to the firm directly.