High Court Rejects Claim for Recovery of “Facilitation Fees”

The High Court, Kumasi presided over by Justice Angelina Mensah-Homiah denied a construction company, Star of the Sea Construction (“Company”) the right to recover a sum of GH¢41,000 from Samuel Mensah Abroampah (“Defendant”)^[1] who had promise to secure a contract for the Company.

The Plaintiff Company allegedly entered into an agreement with the Defendant, for the award of a six (6) classroom block contract valued at GH¢370,000. The Defendant, who was to bring the contract from the Regional Minister, requested the Company to pay GH¢45,000 to enable him to secure the contract. The money was allegedly paid in two tranches to the Defendant by cheque. The contract was never awarded. The Company lodged a complaint with the police, whereupon the Defendant refunded an amount of GH¢4,000, leaving a balance of Gh¢41,000. 

The Defendant in his Statement of Defence gave insight into how the Company decided to part with the money to him in order to secure the contract. He alleged that before the Company issued the cheques in his name, there was a meeting with the PRO of then Regional Minister at the time, the Company’s representative, a brother of the Company’s representative and he the Defendant. The PRO explained that the contract was coming from the Regional Minister, which same was agreed by the representatives of the Company. The Defendant argued that the agreement he had with the Company was illegal and consequently unenforceable. The Company however, denied the Regional Minister’s involvement and the assertion that the cheques were issued in the name of the Defendant for the benefit of the Minister. 

The main issue for consideration was whether the Company could recover the money paid to Defendant under an illegal contract. By analogy, can a drug dealer sue for the recovery of his drug if it turns out that the purchaser bought the drugs with counterfeit notes. 

The trial judge concluded that the act of the Company violated Section 92 of the Public Procurement Act, 2003 (Act 663) (as amended) which criminalises the act of “directly or indirectly influencing in any manner or attempting to influence in any manner the procurement process to obtain an unfair advantage in the award of procurement contract”. 

This was because, the contract for the award of the contract needed to undergo “restrictive tender” and all other the procurement process for a valid contract to be awarded to the Company. Thus, the act of paying the money to Defendant violated section 92 of the Act. The judge held: “It is unimaginable to think that the Plaintiff paid this huge sum and expected to be given the contract in issue on a silver platter without going through the due process. Whatever agreement that the parties entered into which culminated in the payment of the sum of GH¢45,000.00 to the Defendant was not only contrary to the Provisions of Act 663 but also an act of corruption. It was an inducement so to speak for the award of the contract in issue.”

The judge further held that: “Even if the procedure under Act 663 for the award of contracts had been followed, the illegality of the payment of GH¢45,000 to as it were directly or indirectly influence the decision making process still remains”.

Under common law, where  a contract is illegal at the time of formation, or it is formed in anticipation that it will be legally performed, the courts will not enforce the contract or provide any other remedy arising out of the illegal contract^[2].

In addition, the learned trial judge further held the corrupt act of the Company and its officers also infringed on the provisions of Sections 239(2) and 241 Criminal Offences Act, 1960 (Act 29) – Offences relating to the corruption of public officer.  Section 93 of Act 663, requires that entities and participants in the procurement process abide by the provisions of Article 284 of the 1992 Constitution (i.e. conflict of interest rules) and Act 29.  

Again, the position of the law is that a plaintiff will be unable to pursue legal remedy if his cause of action arises in connection with his own illegal act; or “where both parties, contracting on an equal footing, are aware of the illegal nature of the contract, whether it be on its face illegal or whether the common intention to carry out the contract in an illegal manner, neither party can recover anything paid or transferred thereunder”^[3].

Thus, the learned trial judge held that the Company failed to establish that it was an “innocent agent or unwilling party in the whole transaction… the Company was therefore “ in pari delicto”[in equal fault] with the Defendant. Consequently, the action of the Company to recover money paid with the intent of securing a government contract failed. 

Editorial Note:

This decision must be contrasted with the case of the City and Country Waste Limited v Accra Metropolitan Assembly where the plaintiff was able to recover the value of services rendered to the defendant under a contract which violated the  Section 67(1) of Accra Metropolitan Assembly’s Standing Orders and Sections 39, 87 and 88 of the Local Government Act, 1993 where the Supreme Court held that the plaintiff was not in pari delictowith the defendant. Consequently, the defendant would be justly enriched if the illegal contract was not enforced.

^[1]Star of the Sea Construction v Samuel Mensah Abroampah, unreported. Suit No. RPC/2/13. Judgment delivered on 10^thApril 2014. 

^[2]Levy v Yates (1838) 8 A & E 129

^[3]Chitty on Contracts (2004) 29^thEdition Volume 1, p.1038.