Supreme Court orders DVLA to reimburse Foto-X for driver's licence cards

The Supreme Court has partly upheld an appeal by Foto-X Ltd against the Driver and Vehicle Licensing Authority (DVLA), ruling that PVC cards used to produce Ghanaian driver’s licences qualify as state-reimbursable “value books”.

The decision means the DVLA is required to reimburse Foto-X for the cost of the cards, subject to reconciliation of payments already made.

The ruling, delivered by Justice Ackaah-Boafo and reported by thelawplatform.online, also restored a trial court finding that the revenue-sharing arrangement under the 2006 agreement between Foto-X and the DVLA comprised four components rather than three.

However, the Supreme Court rejected Foto-X’s separate claim that the parties had entered into a binding 10-year contract in 2012.

According to the judgment, Foto-X entered into an agreement with the DVLA in 2006 to design, install and operate a system for producing driver’s licences at 26 centres across the country.

The company claimed it invested about US$2.77 million in the project and was entitled to 80% of net revenue generated from licence fees, with the DVLA retaining 20%.

However, a major dispute later arose over who was responsible for the cost of the PVC cards used to produce the licences.

Foto-X argued that the cards qualified as “value books” under the Financial Administration Regulations, 2004 (L.I. 1802), meaning the state was responsible for reimbursing the cost.

The company also pointed to an Audit Service classification of the cards as value books and previous reimbursement payments facilitated through the Controller and Accountant-General’s Department.

The DVLA disagreed, arguing that the cards were ordinary consumables and did not fall within the legal definition of value books.

The Supreme Court’s majority, however, found that the cards qualified as value books because they functioned as official state property and were central to a public revenue-generating function.

The Court also held that the negotiation minutes incorporated into the 2006 agreement supported Foto-X’s position that “Form” should be treated as a fourth component in the revenue-sharing formula.

On the disputed 2012 agreement, however, the Court sided with the DVLA. It found that key terms, including the duration, scope and pricing of the proposed arrangement, had not been conclusively agreed.

The Court therefore rejected Foto-X’s claim that a binding 10-year contract had been concluded.

Justice Asiedu dissented on the value-books issue, arguing that the PVC cards were ordinary consumables and that Foto-X’s own proposal indicated that the DVLA was not expected to invest its resources in the project.

The Supreme Court consequently allowed the appeal in part, restoring the trial court’s findings on the value-book classification and the four-component revenue-sharing formula while upholding the rejection of the alleged 2012 contract.

Monetary awards of GH¢53,788.88 and £6,625.98, with interest, previously upheld by the Court of Appeal, were left undisturbed.

MA