26 Aug PVI GROUP INC. (GH) LIMITED V GHANA AIRPORTS COMPANY LIMITED, SUPREME COURT (CIVIL APPEAL NO. J4/37/2024) – 15TH JANUARY 2025
“…Internationalism is the accepted approach to the interpretation of deeds and documents…the task of the interpreter is to ascertain the intention of the parties as their written agreement. In undertaking this exercise, the intention must be gathered from within the four corners of the document.”
PVI Group (the Plaintiff) and Ghana Airports Company Limited (the Defendant) were parties to a sub-lease agreement dated 23rd August 2012 (the Agreement) under which the Defendant undertook to construct a multi-storey car park and allocate 300 parking spaces to the Plaintiff. Although both parties accepted that the Defendant owed an obligation to build and allocate the 300 spaces, the Agreement contained no express completion date for the works. The Plaintiff relied on a prior sublease dated 2001, along with alleged prior understandings between the parties, to assert that a completion date had been agreed upon. The Defendant, however, maintained that the operative Agreement governing the parties’ relationship contained no provision specifying a completion date for the works.
The Plaintiff therefore sued in the High Court for, among other reliefs, a declaration that the Defendant’s failure to construct the 300 parking spaces within the stipulated time constitutes a breach of contract. The High Court held that the Defendant had an obligation to construct and allocate the 300 parking spaces, but the Agreement contained no completion date. Any implied requirement to perform the obligation within a reasonable time had therefore not been breached by the Defendant. The High Court’s decision was affirmed by the Court of Appeal.
In a subsequent appeal to the Supreme Court, the apex court considered whether those concurrent factual findings and the legal approach to the construction of the document were correct.
The Supreme Court, in resolving the appeal, addressed the following issues;
- How should a written sub-lease which imposes an obligation for performance be interpreted, in the absence of an express provision on the timeframe within which to perform?
- Can an earlier contract or the parties’ prior dealings to the execution of the sub-lease be relied upon to fill in missing terms, namely completion date?
- Was there sufficient evidence to establish that the Defendant had unreasonably delayed performance, and therefore breached its obligation to construct and allocate the 300 parking spaces?
The Plaintiff argued that a completion date or other timing obligations should be inferred from earlier agreements and the parties’ prior dealings. The Defendant, however, argued that the operative Agreement did not adopt or incorporate a completion date. Furthermore, the Defendant argued that, it was only required to complete the project within a reasonable time. The Defendant adduced evidence to show that it had been actively seeking an investor to enable the work to be carried out.
The Supreme Court began by reiterating the established intentionalist approach to contractual interpretation, namely, that the focus lies on the parties’ intention as expressed in the instrument itself, and that such intention must be ascertained from within the four corners of the document. The Court declined to import terms from a prior sub-lease in order to rewrite or supplement the Agreement, particularly where the Agreement did not refer to the earlier instrument. The Court emphasized that any evidence seeking to imply or incorporate previous dealings as a contractual term must be clear and positive, and must demonstrate that the parties intended such incorporation.
On the issue of implied time for performance, the Supreme Court affirmed the settled principle that where a contract is silent, performance must be rendered within a reasonable time, a question that ultimately turns on the facts. The Court found that there was sufficient evidence of the Defendant’s ongoing efforts to secure an investor to partner with it for the construction of the car park. It held that, in the absence of any express intention to the contrary, a default or delay in the realization of such efforts could not, in itself, be deemed unreasonable. The Plaintiff, by contrast, failed to produce any positive evidence demonstrating that the delay was unreasonable. In light of these findings, the Supreme Court saw no basis to interfere with the concurrent findings of the trial court and the Court of Appeal.
The Supreme Court dismissed the appeal and affirmed the following findings of the High Court and the Court of Appeal;
- The Agreement did not stipulate a completion date for the construction of the 300 parking spaces;
- The Court would not read into the Agreement a timeline contained in a prior agreement which the Agreement did not incorporate; and
- On the evidence, no unreasonable delay was proven by the Plaintiff.
Insight: A written agreement must be interpreted according to the intention of the parties as expressed within the four corners of the document. Unless the agreement expressly refers to and incorporates a prior contract, that earlier contract cannot be treated as forming part of it. Where an agreement imposes an obligation but is silent as to the time for performance, the law implies that the obligation must be performed within a reasonable time. What constitutes a “reasonable time” is a question of fact and will depend on the particular circumstances of the case.
This publication may provide a summary of legal issues, but it is not intended to give specific legal advice. If you require legal advice, please speak to a qualified lawyer, who may include a qualified member of our legal team at B&P ASSOCIATES (info@bpaghana.com).
AUTHOR:
Ernest Kofi Boateng
Legal Associate