This is a debt recovery action in which the Plaintiff bank claimed an amount of GH¢333, 502.24 from the Defendants being the outstanding balance of three credit facilities extended to the 1^st Defendant and interest thereon.

The 1^st Defendant admitted owing an amount of GH¢183, 647.000 in its statement of defence filed on 13/04/2010. Subsequently, the Plaintiff obtained judgment on admission against the Defendants on 24/01/2011 for the sum so admitted.

The Plaintiff’s case was that it granted various facilities totaling GH¢ 291, 647 to the 1^st Defendant at its request. The initial agreed rate of interest was 22.49% per annum. These facilities were to enable the 1^st Defendant finance the purchase of machinery for its business from IKON Ltd and purchase a motor vehicle. The 2^nd Defendant secured the facilities with a legal mortgage over a residential property numbered Plot 8 Blk F Adiembra, Kumasi. In addition, the 2^nd and 3^rd Defendants provided personal guarantees for the repayment of these facilities. The 1^st Defendant refused to service the debt, hence the instant action.

The Defendants contended that the Plaintiff actually disbursed an amount of GH¢112,000.00 out of the approved term loan of GH¢ 180,000.00. Their story was that their supplier could not supply the all the machinery they requested. Thus, they directed the Plaintiff to stop paying the outstanding balance of GH¢68,000.00. It was also their case that the Plaintiff Bank refused to pay this balance to the 1^st Defendant for the purchase of raw materials to feed its machinery. As of the time of filing their defence, the 1^st Defendant alleged that it had paid a total of GH¢40,000.00 to defray its debt.

The issues to be determined by this court are stated below:

Whether or not the defendants are indebted to the plaintiff in the sum of GH¢333,502.24 or any part thereof?

Whether or not the Defendants actually received the sum of GH¢ 292,647.00 as per the agreement?

Whether or not it was agreed that the loan covering the purchase of a motor vehicle would attract an interest rate of 19.47%

Whether or not the Plaintiff bank has GH¢68,000.00 meant for the Defendant in its custody?

On the issue of the agreed interest rate as regards the auto loan, the Plaintiff’s loan recovery officer who testified on its behalf told the court that the loan amount was GH¢41, 647.00 for a period of 36 months at an interest rate of 19.4%. In support of this oral evidence, he tendered the loan agreement (exhibit A). The 2^nd Defendant who testified for himself and on behalf of the other defendants put the interest rate of the auto loan at 19.2% without supporting it with any document.

This calls for a careful scrutiny of the loan agreement (exhibit A), and more particularly, under the auto loan. Under the caption, ‘interest’, it is stated:

“SCB Base rate (currently 19.49 % p.a.) interest is payable monthly in arrears by debiting operating account. Interest is payable monthly in arrears by debiting the operating account.”

The 1^st Defendant duly executed exhibit A and ought to have known the interest rate on the auto loan contained therein. It is therefore surprising that the Defendants are in court challenging the auto loan interest rate. The Defendants failed to introduce evidence to show that the agreed interest rate on the auto loan was reviewed downwards after the agreement had been executed. Thus, the only credible and convincing evidence on the interest rate in issue is what is contained in exhibit A. I therefore find that the interest rate as regards the auto loan was 19.49%.

Did the 1^st Defendant actually receive a total loan amount of GH¢292, 647.00 from the Plaintiff Bank?

The Plaintiff’s representative said in his testimony that three credit facilities were approved for the 1^st Defendant: i) Auto loan of GH¢41,647.00; ii) Term loan of GH¢180,000 and iii) import loan of GH¢70,000.00. These add up to GH¢291,647.00. He indicated that the actual amount disbursed was GH¢223, 647.00. Explaining the amount withheld by the bank in the course of cross-examination, he stated:

“ …As I indicated earlier, the withheld amount was supposed to be the remaining part of the loan amount to be paid to IKON Company Limited upon the receipt of the machines and the customer being okay with the state of the machines. The purpose of the loan was not generic or to be used to purchase any machine. That is why the Bank refused to disburse the remaining part for the purpose of a different machine.”

This confirms the Defendant’s case that the Bank withheld an amount of GH¢68,000.00 being the last tranche of the term loan. The purpose of this term loan, which has long expired, was clearly stated on the face of the loan agreement, exhibit A. That is, to finance the purchase of machinery from IKON Co. Ltd. Could it have been used for a different purpose? I do not think so! In Reid v National Westminster Bank plc unreported, 22 Oct. 1999 (CA), quoted in Erlinger’s Modern Banking Law 4^th Ed. (Oxford University Press), page 709, it was held that failure to use the loan for the specified purpose will constitute a repudiatory breach of the loan agreement. Also, it has been held that the borrower’s freedom to dispose of the money is necessarily excluded by an arrangement that the loan was to be used exclusively for that stated purpose. See Twinsectra Ltd. V Yardley (2002) 2 AC 164 at 173, per Lord Millet. I am mindful that these authorities are merely persuasive but I think the principles stated therein are worth emulating in our jurisdiction.

In the instant action, the term loan was for a period of 60 months from October, 2007 and it was tied down to a specific purpose. There is no evidence to show that the parties entered into a subsequent agreement to vary the purpose as stated in exhibit A. Moreover, this facility has long expired and the undisbursed amount cannot be assessed. In effect, the GH¢68.000.00 is not an amount meant for the 1^st Defendant for a purpose unrelated to that stated in exhibit A and which can be assessed at its convenience. The agreement was time bound and for a specific purpose. Hence, the intention of the parties must be respected by the court.

On the basis of the foregoing, I have no difficulty at all in arriving at the conclusion that an amount of GH¢68,000.00 which formed part of the term loan was not disbursed to the Defendant and this was in line with the term loan agreement.

The remaining issue, which seems to be the most important now, is whether or not the Defendants owe the Plaintiff Bank an amount of GH¢ 333,502.24? I have already indicated that judgment on admissions has been entered against the Defendants in the sum of GH¢183, 647.00 together with interest at the prevailing Bank rate. It is the difference of GH¢149,855.2 which the Plaintiff is contesting in this forum. Whilst the Defendants contend that interest was calculated on the entire loan, the Plaintiff maintains that interest was not calculated on the undisbursed amount. This is the actual bone of contention between the parties as regards the amount owed.

The law on proof in civil suits is well settled. It was restated by Kpegah JA (as he then was) in

Zambrama v Segbedzi (1991) 2 GLR 221 as follows:

“… a person, who makes an averment or assertion; which is denied by his opponent, has the burden to establish that his averment or assertion is true. And he does not discharge this burden unless he leads admissible and credible evidence from which the fact or facts he asserts can properly and safely be inferred. The nature of each averment or assertion determines the degree and nature of that burden.”

This principle was applied in Continental Plastics v IMC Technique GMBH (2009) SCGLR 298 at 307 per Georgina Woode CJ.

It is also provided under section 11(4) of the Evidence Act, 1975 NRCD 323 as follows:

“In other circumstances the burden of producing evidence requires a party to produce sufficient evidence which on the totality of the evidence leaves a reasonable mind to conclude that the existence of the fact was more probable than its non-existence”.

In discharging this burden, a party must introduce evidence which is essential to that party’s case as required under section 14 of NRCD 323 which states:

“Except as otherwise provided by law, unless it is shifted a party has the burden of persuasion as to each fact the existence or non-existence of which is essential to the claim or defence that party is asserting.”

The burden of persuasion usually rests on the same party who bears the evidential burden as was held in Sumaila Bielbiel v Adamu Dramani & AG (2012) SCGLR 370. The court stated:

“Ordinarily, the burden of persuasion lies on the same party as bears the burden of producing evidence. However, depending upon the pleadings or what facts are admitted, the evidential burden can move to a defendant…”

From the pleadings in the instant action, the evidential burden as well as the burden of persuasion on the issue of the quantum of the 1^st Defendant’s indebtedness rests on the Plaintiff first. In discharging this burden, the Plaintiff’s representative told the court that the actual amount disbursed was the sum of GH¢223,647.00. On the specific details of the three facilities, the Plaintiff’s representative stated:

“The auto loan was GH¢41, 647.00 which attract an interest rate of 19.4% per annum subject to changes in market conditions. The tenor was 36 months. As at 05/09/2007, 33 months were outstanding. The auto loan was to expire on 31/01/2010. The term loan was GH¢180,000.00…The tenor of this loan was 60 months. The loan was subject to interest rate of 22.49% per annum subject to changes in market conditions. This was to expire on 31/10/2012.The customer was to pay a monthly instalment of GH¢ 5,203.33. The loan was an import loan of GH¢70,000.00 for the purchase of raw materials. The tenure was 90 days. The interest rate was 22.49 % subject to changes in market conditions… Not all the GH¢291,647 was disbursed. The actual amount disbursed was GH¢223,647.”

As regards the payments made, the Plaintiff’s representative said the 1^st Defendant made payments in seven months and the same ceased. At the time of the issuance of the writ, the 1^st Defendant had paid GH¢ 15,377.68 in respect of all the three loans as opposed to the Defendants’ assertions that an amount of GH¢40,000.00 had been paid. He tendered a detailed statement of account of the 1^st Defendant as exhibits F, F1 to F6. In cross-examination, the Plaintiff’s representative told the court that the 1^st Defendant’s indebtedness was arrived at by applying the interest during that period on the amount of loan disbursed to the customer on compound interest basis. Counsel for the Defendant challenged this answer by suggesting that the amount endorsed on the writ is the product of GH¢291,647.00 at 24.9%.

The 2^nd Defendant gave evidence for himself and on behalf of the 1^st and 3^rd Defendants. He told the court that an amount of GH¢69, 940.00 of the term loan was not given to the 1^st Defendant. He explained that the initial machines which they purchased were defective and all their materials were damaged in the process. Consequently, they wrote to the Bank and requested to use the undisbursed amount for the purchase of raw materials but the bank declined their request. According to him, the Bank’s refusal to disburse the last tranche of the term loan resulted in the inability of the 1^st Defendant to continue production and to make further payments. As regards the payments on the loans, the 2^nd Defendant tendered a statement of account in respect of an account numbered 0100158963900 (exhibit 1). Based on exhibit 1, he told the court that five monthly payments were debited to this account, making a grand total of GH¢8,410.15. Apart from these, he told the court that two deductions of GH¢7, 245.00 and GH¢4, 596.00 were made against the same account on 14/02/2008 and 06/01/2008 respectively. Then, on 06/06/2008 and 16/06/2008, US $ 7,000.00 and US$1,182.00 were deducted from the 1^st Defendant’s dollar account. During the period under review, the 2^nd Defendant indicated that nine cash payments were made to offset the 1^st Defendant’s indebtedness.

In respect of this, he tendered exhibits 2, 2A to 2H.Since the commencement of this action, the 2^nd Defendant said a total amount of GH¢147,000.00 has been paid into court. He then summed up all the payments and deductions on the account to arrive at GH¢190,730.00 as the amount paid. Continuing, the witness deducted the GH¢190,730.00 from the principal amount of GH¢ 222,332.00 which was disbursed to arrive at GH¢31, 601.45. This is what he admitted as the 1^st Defendant’s indebtedness to the Plaintiff.

In cross-examination, the 2^nd Defendant admitted that the cash deposits made per the exhibit 2 series came up to GH¢15,200.00 and that the cedi equivalent of the deductions against the dollar account were GH¢ 7,084 and GH¢1,014.00 respectively. He also agreed that the total amount paid prior to the institution of this action was GH¢43,723.58, but disagreed with the Plaintiff’s position that a total amount of GH¢ 12,778.55 was used to clear excesses.

To enable the court to effectively determine the quantum of the 1^st Defendant’s indebtedness to the Plaintiff, both counsel were ordered to show a step by step calculation of how the agreed interest was calculated on the disbursed amount of GH¢223,647.00. Indeed, this is a battle of figures. I will reproduce the calculations made by both parties in the ensuing paragraphs:

PLAINTIFF’S COUNSEL’S ADDRESS

PORT LOAN CALCULATIONS

RRATION                                   PAYMENT                    DATE OF                         BALANCE

                                                      GH¢                           PAYMENT                               GH¢

49% for a month                           70,000                        10/09/2007                   @30/09/2007 = 71,311.90

nus                                                1,682.03                      01/10/2007                   @ 2/10/2007 = 69,629.87

nus                                                1,682.03                      31/10/2007                   @ 1/11/2007 = 67,947.84

49% for a month                                                                                                   @ 30/11/2007 = 68,868.69

stomer was unable to pay out

60 days as agreed this created

ess/overdrawn account so

erest rate changed to 42% p.a.

mpounding daily on daily balances

ease refer to paragraph 7.2 of Exhibit “A”).

% of 68,868.69 for 31 days                                                    @ 30/12/2007 = 71,368.20

/11/07 – 30/12/07)                              

s payment                                  1,682.03            31/12/2007   @31/12/2007 = 69,686.17

% of 69,686.17 for 31 days                                                      @30/01/2008 = 72,215.35

/12/07 – 30/01/08)                              

s payment                                  1,682.03             31/01/2008    @31/01/2008 = 70,533.32

% of 70,533.32 for 14 days                                                        @13/02/2008 = 71,678.12

/01/08-13/02/18)                                 

s payment                                   7,245.85            14/02/2008     @14/02/2008 = 64,432.27

% of 64,432.27 for 118 days                                                       @11/06/2008 = 73,796.95

/02/08 – 11/06/08)                              

s payment                                    8,282.55            12/06/2008     @12/06/2008 = 65,514.40

% of 65,514.40 for 4 days                                                             @15/06/2008 = 65,816.47

/06/08-15/06/08)                                                         

s payment                                    4,596                 16/06/2008      @16/06/2008 = 61,220.47

% of 61,220.47 for 308 days                                                         @19/04/2009 = 87,242.26

/06/08-19/04/09)                                                         

s payment                                    1,600                  20/04/2009      @20/04/2009 = 85,642.26

% of 85,642.26 for 29 days                                                             @18/05/2009 = 88,546.38

/04/09-18/05/09)                                                         

s payment                                     1,700                 19/05/2009         @19/05/2009 = 86,846.38

% of 86,846.38 for 42 days                                                               @29/06/2009 = 91,144.10

/05/09 – 29/06/09)                                                      

s payment                                      1,700                30/06/2009        @30/06/2009 = 89,444.10

% of 89,444.10 for 38 days                                                              @06/08/2009 = 93,439.55

/06/09-06/08/09)                                                         

s payment                                       1,700               07/08/2009        @07/08/2009 = 91,739.55

% of 91,739.55 for 31 days                                                              @06/09/2009 = 95,069.13

/08/09-06/09/09)                                                         

s payment                                        1,700              07/09/2009          @07/09/2009 = 93,369.13

% of 93,369.13 for 30 days                                                                @06/10/2009 = 96,646.64

/09/09-06/10/09)                                                         

s payment                                         1,700             07/10/2009           @07/10/2009 = 94,946.64

% of 96,946.64 for 33 days                                                                 @08/11/2009 = 98,619.19

s payment                                          1,700           09/11/2009              @09/11/2009 = 96,919.19

% of 96,919.19 for 32 days                                                                   @10/12/2009 = 100,552.39

/11/09-10/12/09)                                                         

s payment                                          1,700            11/12/2009               @11/12/2009 = 98,852.33

% of 98,852.33 for 8 days                                                                      @18/12/2009 = 99,765.99 

RM LOAN

Principal Disbursed: GH¢112,000

Interest Rate: 22.49%

ration: 27 months 18 days as at the date of the claim (10/09/2007 – 18/12/2009)

m Loan of GH¢112,000.00 AT 22.49%          Principal          Interest            Total

                                                                  GH¢112,000.00    GH¢57,916.67 GH¢169,916.67

is of interest calculation:

Principal disbursed:  GH¢112,000.00

e: 22.49

ration: 27 months, 18 days

Interest (I) = Principal (P) × Rate (R) × Time (T)

                                               100

Interest for 27 months:                                                                                               

            P×R×T            =          112,000 ×        22.49 × 27                    = 68009760 = 56,674.48

            100                                          100      × 12                 1,200              

Interest for 18 days:                                                                                                                           

            P×R×T                        = 112,000 × 22.49 × 18          = 45,339,846 = 1,242.19

            100                           100 × 365                              36500      

al Interest for the period: GH¢ 57,916.67

al Balance on Term Loan: Principal + Interest (112,000 + 57,916.67)

Total = GH¢169,916.67

TO LOAN

to Loan of GH¢41,647 for 28 months at

49% p.a

                          Principal        Interest                  Total

                        GH¢41,647     GH¢18,663.54    GH¢60,310.54

is of interest calculation:

ncipal disbursed: GH¢41,647.00

e: 19.49

ration: 27 months, 18 days

erest (I) = Principal (P) × Rate (R) ×Time (T)

                                    100                                                                 

erest for 27 months:                                                   

            P×R×T =         41,647 × 19.49 × 27    =          21,915,900.81      = 18,263.25

            100                              100 × 12                                    1,200

erest for 18 days:                                                       

            P×R×T =         41,647 × 19.49 × 18    =          14,610600.54        = 400.29

            100                              100 × 365                                36500             

al Interest for the period: GH¢18,663.54

al Balance on Term Loan : Principal + Interest (41,647 + 18,663.54)

Total  = GH¢60,310.54

TAL BALANCE ON ALL LOANS: IMPORT LOAN + TERM LOAN + AUTO LOAN = 765.99 + GH¢169,916.67 + GH¢60,310 = GH¢329,992.66

Deposits and funds transferred towards settling the debt

Cash Deposit (GH¢)   Date

1.         1,600   20/04/2009

2.         1,700   19/05/2009

3.         1,700   30/06/2009

4.         1,700   07/08/2009

5.         1,700   07/09/2009

6.         1,700   07/10/2009

7.         1,700   09/11/2009

8.         1,700   11/12/2009

9.         1,700   12/01/2010

TOTAL = 15,200

Debits made   

Cash Debit (GH¢)       Date

i.          1,682.03          01/10/2007

ii.          1,682.03          31/10/2007

iii.         1,682.03          30/11/2007

iv.        1,682.03          31/12/2007

v.         1,682.03          31/01/2008

vi.        7,245.85          14/02/2008

Total 15,656.00

Funds transferred towards the settlement of the debt

Amount transferred     Date

i.          GH¢7,084.00  12/06/2008

ii.          GH¢4,596.00  16/06/2008

iii.         GH¢1,198.55  16/06/2008

Total = GH¢12,878.55

Total Payments made by customer towards settlement of debt

GH¢15,200.00 + GH¢15,656.00 + GH¢12,878.55 = GH¢43,734.55

as the submission of Plaintiff’s counsel that from the foregoing analyses, the Plaintiff has been able to ve its case on the balance of probabilities and is thus entitled to judgment. Counsel made reference to amount endorsed on the writ as outstanding and what has been demonstrated to be outstanding. He ued that the marginal difference between the sum claimed that is,GH ¢333,502.24, and the outstanding t demonstrated herein (i.e. GH¢329,992.66), is attributable to the fact the sum claimed was generated the Plaintiff’s software which could calculate the outstanding debt especially the daily overdraft interest to a very precise degree as opposed to the manual calculations herein. He therefore submitted that eed the 1^st Defendant owed the Plaintiff in the sum claimed, i.e. GH¢333,502.24 and that was based on sum disbursed to the 1^st Defendant as loan (GH¢223,647.00) and interest thereon including the penalty interest.

Counsel for the Plaintiff proceeded to demonstrate the Defendants’ position that interest was calculated the entire Term loan of GH¢180,000.00. The detailed calculations as shown in the address filed by counsel for the Plaintiff are these:

m Loan : 180,000 (Based on the assumption of the Defendants)

principal: GH¢180,000

interest Rate : 22.49%

ration: 27 months 18 days as at the date of the claim (10/09/2007 – 18/12/2009)

m Loan of GH¢180,000.00 at 22.49%            Principal                           Interest            Total

                                                                       GH¢180,000.00         GH¢93,080.87  GH¢ 273,080.87

is of interest calculation:

principal disbursed: GH¢180,000.00

e: 22.49%

ration: 27 months, 18 days

interest (I) = Principal (P) × Rate (R) ×Time (T)

100

interest for 27 months:                                                                                   

            P×R×T =         180,000 × 22.49 × 27  =          109301400      = 91,084.50                                                                   100                            100      × 12                          1,200

Interest for 18 days:                                                                           

            P×R×T =         180,000 × 22.49 × 18  =          72867600                    = 1,996.37

            100                              100× 365                     36500            

al Interest for the period: 91,084.50 + 1,996.37 = GH¢93,080.87

al Balance on Term Loan: Principal + Interest (180,000 + 93,080.87)

Total = GH¢273,080.87

interest on the Term Loan had been based on the approved amount and not the disbursed amount, the ance on the Term Loan alone would have been GH¢273,080.87. This would have resulted in overall standing balance as follows:

TAL BALANCE ON ALL LOANS: IMPORT LOAN + TERM LOAN + AUTO LOAN = 99,765.99 + ¢273,080.87 + GH¢60,310 = GH¢433,156.86

including, counsel stressed that if the interest had been based on the GH¢291,647.00, the 1^st Defendant’s

ebtedness would have stood at GH¢433,156.86 and not GH¢333,502.24 endorsed on the writ.

defendant’s counsel filed his written address on 23/01/2014. Prior to this date, he had filed a document

ed “STATEMENT OF DEFENCE OF LOAN CLAIMS FROM STANDARD CHARTERED BANK

ANA LTD”. Details of the said document have been reproduced below.

SUMMARY OF PRINCIPAL, INTEREST CALCULATED, INTEREST PAID AND CURRENT DEBT

            GH¢

PRINCIPAL    31,731.00

INTEREST CALCULATED                55,848.45

            87,579.45

INTEREST PAID FROM 30/11/07 TO 29/9/08         31,367.04       

CURRENT DEBT (PRINCIPAL LEFT + INTEREST OUTSTANDING) 56,212.41 DETAILS OF INTEREST PAID

DATE        AMOUNT(GH¢)

30/11/07          992.76

31/12/07          1,438.94

31/1/08            1,711.42

29/2/08            2,329.03

31/3/08            2,857.28

30/4/08            3,355.63

30/5/08            3,193.24

30/6/08            4,250.34

31/7/08            5,319.22

29/8/08            3,364.09

29/9/08            2,555.09

31,367.04

STATEMENT OF DEFENCE OF LOAN CLAIMS

FROM STANDARD CHARTERED BANK GHANA LIMITED

SCHEDULE OF LOAN GRANTED

                                                                               GH¢

1.  AUTO LOAN                                             41,647.00       

IMPORT LOAN                                              70,000.00       

TERM LOAN                                                  180,000.00     

                                                                        291,647.00     

LESS: TERM LOAN SUSPENDED              69,315.00       

TOTAL LOAN DISBURSED                                    222,332.00                                         

2.  AUTO LOAN DISBURSED                      41,647.00       

LESS: PAYMENT                                         23,610.00                                

OUTSTANDING PRINCIPAL                                  18,037.00                                            

ADD: 1 YEAR INTEREST (19%)                  3,427.00                                                          

5 MONTHS INTEREST (19%)                      1,428.00

LOAN OUTSTANDING (PRINCIPAL+INTEREST) 22,892.00                                           

3. IMPORT LOAN                                          70,000.00       

TERM LOAN                                                 180,000.00                                                                  

LESS: SUSPENDED PAYMENTS               69,315.00                                                                                           

PAYMENT FOR MACHINERY                               110,685.00

TOTAL IMPORT & TERM LOAN DISBURSED       180,685.00                                                     

LESS: PAYMENTS                                                    19,991.00                   

                                                                                     160,694.00    

ADD: 1 YEAR INTEREST AT (22.4%)                         35,995.45                

5 MONTHS INTEREST AT (22.4%)                                                   14,998.00

TOTAL PRINCIPAL & INTEREST LOAN OURTSTANDING        211,687.45

4.  SUMMARY OF LOANS & INTEREST OUTSTANDING         

AS AT 19^TH MARCH 2010   

TERM AND IMPORT LOAN                                                        211,687.45

AUTO LOAN                                                                                 22,892.00

OUTSTANDING LOAN BEFORE COURT ACTION                               234,579.45

LESS: PAYMENTS THROUGH COURT                                     147,000.00

TOTAL PRINCIPAL & INTEREST LOAN OUTSTANDING          87,579.45

BREAK DOWNS OF PRINCIPAL& INTEREST OUTSTANDING                                   

PRINCIPAL                                                                                     31,731.00

INTEREST                                                                                       55,848.45

                                                                                                         87,579.45

(SGD)

bert Ofori & Partners (Chartered Accountants)

Appears Counsel misunderstood the specific directions given by the court as regards the addresses. It s the duty of Counsel to demonstrate how the interest was calculated, according to the Defendants

dence to arrive at the figure which he thinks is the 1^st Defendant’s indebtedness. From the document t referred to, counsel engaged the services of a professional accountant to prepare a statement. The said countant was probably not furnished with the full information as regards the applicable interest. unsel for the Defendant ought to have known that the address stage is not meant for the introduction of w evidence. Nothing prevented the 1^st Defendant from engaging the services of a professional and ling him as a witness. That way, counsel on the other side would have been able to cross-examine him. my view, the document prepared by Robert Ofori & Partners (Chartered Accountants) cannot be mitted as part of the evidence in support of the 1^st Defendant’s case at this point. The court can also not y on it as it was not prepared by counsel himself as part of his written address.

17/02/2014, counsel for the Defendants filed another document which he described as a reply to intiff’s written submissions. In the said document, counsel submitted that the loans were not disbursed the approved date of 05/09/2007 and the use of that date as the basis for interest calculation was ong. Counsel further drew the court’s attention to the inconsistencies in the amount endorsed on the intiff’s writ and the amount stated in the address as representing principal and interest. He argued that amount endorsed on the writ consisted of GH¢291, 647.00 as principal and GH¢41, 855.24 as interest. wever, the figures given in the Plaintiff’s evidence and address are GH¢223, 647.00 as principal and ¢105, 947.60 as interest, all amounting to GH¢329,992.66.

applying the law on proof in civil suits, the evidential burden as well as the burden of persuasion of se figures from which the quantum of the 1^st Defendant’s debt could be inferred, first rest on the intiff. I have subjected the calculations made by counsel for the Plaintiff as well as his submissions to a eful scrutiny. In doing so, I paid particular attention to clauses 7, 7.1, 7.2, 7.3 and 10 of exhibit A. It will useful to set them out and I proceed to do so:

INTEREST

7.1 The interest rate may be varied by the Bank subject to any changes that may become necessary as a result of measure taken by the monetary control authorities and/or as may become necessary to reflect current market conditions.

7.2 Interest is to be calculated in accordance with the usual practice of the Bank from time to time. The Borrower agrees that the Bank’s right to compound interest shall continue notwithstanding that the relationship of the Bank and customer may cease to exist by reason of a demand or otherwise until the date of full payment. The Bank shall not be required to notify the Borrower prior to any variation of the rate of interest or additional interest and failure to notify the Borrower of any such change shall not prejudice in any way whatsoever the recovery by the bank of any interest charged subsequent to any change or at all.

7.3 If any sum is not paid when due or is in excess of the facility amount, the sum overdue or in excess shall attract 42% p.a. for local currency accounts and 15% for foreign currency accounts.

10. SET OFF, COMBINATION OR CONSOLIDATION OF ACCOUNTS.

The Bank shall be entitled ( but not be obliged) at any time and without notice to the Borrower to combine, consolidate or merge all or any of the Borrower’s accounts and liabilities and to the Bank anywhere whether in or outside the Republic of Ghana and may transfer or set off any sums in credit in such accounts in or towards the satisfaction of any of the Borrower’s liabilities whether actual or contingent, primary or collateral notwithstanding that the credit balances on such accounts and the liabilities on any other accounts may not be expressed in the same currency and the Bank is hereby authorised to effect any necessary conversions at the Bank’s own rate of exchange then prevailing.”

The calculations made by Plaintiff’s counsel in his address clearly reflect the Plaintiff’s case as per its oral and documentary evidence in court, particularly the interest clauses under exhibit A. The Plaintiff did not have to consult or notify the 1^st Defendant before transferring monies from the 1^st Defendant’s Dollar account to offset part of its indebtedness. This is because per clause 10 of exhibit A, the Bank had the sole discretion to do so and the 1^st Defendant agreed to that arrangement at the time the facilities were extended to it.

The marginal difference in the amount endorsed on the writ and the amount as shown by Plaintiff’s Counsel’s calculations cannot be described as an inconsistency which goes against the Plaintiff. It is to be noted that in dealing with figures of this nature, one must make room for a little margin of error which can be written off. In this case, the difference should enure to the advantage of the 1^st Defendant.

From the arguments made by Counsel for the Plaintiff, an amount of GH¢12,778.55 said to have been used to clear excesses in the Plaintiff’s evidence cannot be correct. This amount actually went to service the loans given to the 1^st Defendant such that the total payment at the time of instituting this action was GH¢43,734.55. There is no doubt about these payments as seen from the various receipts and documents tendered on behalf of the 1^st Defendant. Consequently, the burden of persuasion on the quantum of 1^st Defendant’s indebtedness based on the principal amount and interest calculations shifted onto the Defendants.

The 2^nd Defendant, acting for the 1^st Defendant has always been aware of the applicable rates of interest to the 1^st Defendant’s default in re-payment. At all times material, he knew that his calculations of the 1^st Defendant’s indebtedness were not accurate. Evidence of this can be seen from his answers in cross-examination on 30/10/2013 as follows:

Q. Per the terms of the agreement, each facility was to attract interest?

A. Yes.

Q. So you agree with me that it will be wrong to subtract the amount you claim the 1^st Defendant has repaid from the principal disbursed and use the difference as the outstanding debt without interest?

A. We did not add interest. When the Bank wrote to us that we owed GH¢333,502.24, they had used GH¢291,647 to work the interest instead of GH¢233. We went for reconciliation. We were there for five occasions but the bank was unable to show to us any documentary proof of how the interest was calculated. THAT IS WHY WE DECIDED TO PAY THE PRINCIPAL.

The cross-examination continued:

Q. So are you suggesting that you are not to pay interest on the amount disbursed to you?

A. I am supposed to pay interest but they could not work out the interest.

The submissions made by Counsel for the Defendants that even though the loans were approved on 5/9/2007 but actual disbursements were made on 1/11/2007, 12/11/2007 and 12/2/2008 are material facts which ought to have been pleaded to enable the Plaintiff to react to the same. The 2^nd Defendant in cross-examination admitted that even though the loans were approved on 5^th September, 2007, actual disbursements were made from January to March, 2008.It is obvious from this answer and that of the 2^nd Defendant under cross-examination that they are not sure of the disbursement date. The question which needs to be determined here is whether interest was to be calculated from the date of approval or the date of disbursement?

The general practice of banks is that as soon as a loan is approved, a loan account is set up and the loan amount credited to that account. Interest is then calculated on this amount as agreed. The balance will begin to reduce when the customer makes the first re-payment. It is noticeable that monies which Banks give out as loans belong to other customers or investors. Thus, if an amount is approved and credited to a loan account but interest is not charged on the same, the lending bank incurs losses. This is not a sound business practice. It does not make economic sense. Accepting the Defendants’ argument on the date interest is to run will amount to stating that the bank could hold the money for the 1^st Defendant until a future date and that no interest is to be paid until disbursement. In my view, this argument of the Defendants has no place in banking terms. Therefore, the Plaintiff Bank was right in charging interest on the disbursed amounts from the date the loans were approved and a loan account was set up and not from the date the 1^st Defendant utilized the money.

To quote Ansah JSC in Takoradi Floor Mills v Samir Faris (2005-2006) SCGLR 882 at 884 (holding 5):

“ It is sufficient to state that this being a civil suit, the rules of evidence require that the plaintiff produces sufficient evidence to make out his claim on a preponderance of probabilities. … In assessing the balance of probabilities, all the evidence, be it that of the Plaintiff or the Defendant, must be considered and the party in whose favour the balance tilts is the person whose case is the more probable of the rival versions and is deserving of a favourable verdict.”

Having carefully considered all the evidence on record, I find that the Plaintiff’s version of the quantum of 1^st Defendant’s indebtedness is more probable than not. I accept the resultant figure from the manual calculations done on behalf of the Plaintiff Bank as accurate and more reliable. The 1^st

Defendant has been unable to persuade the court that its version is correct. In other words, the 1^st Defendant has not been able to demonstrate that interest was indeed calculated on the undisbursed amount as well.

In the circumstance, I find that the 1^st Defendant’s indebtedness to the Plaintiff as of 18^th December, 2009 stood at GH¢329, 992.66 and not GH¢333,502.24 endorsed on the writ of summons. The Plaintiff took judgment on admissions against the Defendants in the sum of GH¢ 183,647.00 together with interest at the prevailing bank lending rate from 18/12/2009 till date of final payment. The said judgment was taken on 24/01/2011. It is on record that the 1^st Defendant has so far paid a total amount of GH¢147,000.00 of the debt arising from the judgment on admissions into court and the Plaintiff applied for the release of the same at various times. Thus, the sum of GH¢183,647.00 must be deducted from the sum of GH¢329,992.66 to arrive at the 1^st Defendant’s indebtedness to the Plaintiff as of 18/12/2009. By my calculation , the resultant figure is GH¢146,345.6.

The 2^nd and 3^rd Defendants provided personal guarantee for the repayment of the 1^st Defendant’s indebtedness to the Plaintiff. Evidence of this guarantee is contained in exhibit B. Guarantees are secondary obligations. Thus, the 2^nd and 3^rd Defendants’ liabilities as guarantors are co-extensive with that of the principal debtor, i.e., the 1^st Defendant. Therefore, their liability to pay the debt owed by the 1^st Defendant will subsist until all the debt is fully liquidated. In other words, the guarantor can only be discharged if the principal is released. See Cragoe v Jones (1873) LR 8 Exch.81.

In addition to this personal guarantee, the 2^nd Defendant also executed a legal mortgage over his property numbered Plot 8 Block F, Adiembra, Kumasi in favour of the Plaintiff. Exhibit C is proof of this legal mortgage. The liabilities of a mortgagor are clearly spelt out under section 6 of the Mortgages Act, 1972 N.R.C.D. 96 as follows:

Sec 6: “Unless a contrary intention appears expressly or by necessary implication, the mortgagor is personally liable as well as liable on the mortgage security, for the performance of the act secured by the mortgage.”

The combined effect of the legal mortgage executed by the 2^nd Defendant (exhibit C) and section 6 of N.R.C.D. 96 makes him personally liable for the debt incurred by the 1^st Defendant. The reasons given by the 2^nd Defendant for the non-payment of the debt are untenable. The bank’s obligation was to provide the money, which it did. The Defendants obligation is to repay the loan together with interest and they have defaulted. The business misfortune of the 1^st Defendant cannot be an excuse for non-payment as was held by Acquah JSC ( as he then was) in Barclays Bank v Sakari

(1996-97) SCGLR 639 at 646 as follows:

“ … The obligation of the bank was to advance the money, which it did; and that of the defendant was to repay the loan together with interest, if any. This is the obligation of the parties under this loan contract, and indeed almost all loan contracts. When a bank lends out money to its customer, the obligation of the customer is to repay the loan. If the loan is sought for, let us say, a business venture, and the business flops, resulting in massive financial loss to the customer, this misfortune, though may be due to no fault of the customer, does not change the nature of the obligation of the customer to repay the loan he has contracted for. He will still be obliged to fulfill his obligation. Thus the obligation of a borrower in a loan contract, as opposed to other types of contracts, is to repay the loan and not the performance of the purpose for which the loan was sought.”

Accordingly, judgment is entered against the three Defendants in the sum of GH¢146,345.6.

The Plaintiff has asked for interest on the Judgment debt. The basis for an award of interest was stated in Chatham & Dover Railway C0 v South Eastern Railway Co. (1893) AC 429, per Lord Herschell as follows:

“ … When money is owing from one party to another and that other is driven to have recourse to legal proceedings in order to recover the amount due to him, the party who is wrongfully withholding the money from the other ought not in justice to benefit by having that money in his possession and enjoying the use of it, when the money ought to be in the possession of the other party who is entitled to its use. Therefore, if I could see my way to do so, I should certainly be disposed to give the appellant, or anybody in similar position, interest upon the amount withheld…”

In the instant case, there is an express agreement as regards interest between the parties. They have however chosen to ask for interest at the prevailing bank rate. By rules 1 and 2 of the Court (Award of Interest and Post Judgment Interest) Rules, 2005 C.I. 52, they are entitled to interest at the agreed rate. However, looking at the penalty element involved, it appears to me that the agreed rate of interest will be on the higher side, more especially, when the Bank has the option to vary the agreed interest and compound same. In the interest of justice, I will give the Plaintiff bank what it has asked for. Interest is to be charged on the judgment debt of Gh¢ 146,345.6 at the prevailing bank lending rate from 18/12/2009 till date of final payment.

This trial was unduly delayed by the Plaintiff. It has been on the trial list since the year 2011. It took the Plaintiff over one legal year to file its documents to be relied on during the trial. Several adjournments were taken because the Plaintiff’s representative who was to give evidence was not available. All this while, the Defendants were coming to court. In view of the above and having taken into consideration the provisions of Order 74 of C.I. 47 on the award of cost, 1 award GH¢1500 as cost against the Defendants in favour of the Plaintiff.