KUMASI - A.D 2017
CAL BANK LIMITED - (Plaintiff/Appellant)

CIVIL APPEAL NO:  H1/43/2016


The Plaintiff/Appellant bank is the creditor of the 1st Defendant/Respondent. The 2nd Defendant/Respondent is the guarantor of the debt. When the Respondents failed to honour the debt owed by 1st Respondent, the Appellant sued the Respondents with the following claims.


Recovery of the sum of GH¢418,764.43 being the loan facilities granted by the Plaintiff to the 1st Defendant together with interest thereon, as of 13th September, 2013 the repayment of which the 2nd and 3rd Defendants guaranteed.


Recovery of the sum of GH¢44,363.44 being the over withdrawn Current Account which the


Plaintiff made available to the 1st Defendant but which the Defendant has since refused and or failed to pay back to the Plaintiff despite repeated demands.


Interest on the aforementioned reliefs (a) and (b) above at the prevailing bank rate from 13th September, 2013 till date of final payment.


Or in the alternative


An order for the judicial sale of properties on Plot No. 5 Block ‘C’ Kwadaso South East, Kumasi and Plot No. 28 Block ‘A’, Sector 2A, Nkawkaw belonging to the 2nd and 3rd Defendants respectively who guaranteed the repayment of the said loan, granted to the 1st Defendant.


General damages.


Any other relief(s) deemed just and or fit by the Honourable Court.


At the pre-trial settlement conference in the Commercial Division of the High Court, Kumasi, the

Respondent admitted the debt and entered into terms of settlement to pay the debt as follows:


Terms of settlement


That the Defendants admit owing the Plaintiff the sum of GH¢404,467.54 in respect of relief (a) of the Writ of Summons.


That the Defendants also admit liability to the Plaintiff in respect of relief(s) b, c, d of the Writ of Summons.


That the disputed amount of GH¢14,296.89 be set down for trial.


That the usual default clause applies.


That the above terms be entered as consent judgment.


The settlement was entered as consent judgment on 24th October 2014. Barely three weeks after submitting to judgment, the Respondent filed an application to pay the judgment debt in instalments on 13th November 2014. The reason for this application can be located in paragraphs 8, 9 and 10 of the supporting affidavit found on page 16 of the Record of Appeal (ROA)

8. That the Defendants/Judgments/Debtors make this application in the light of the difficulties that their business has suffered since the Plaintiff/Judgment Creditor advanced the loan facility.

9. That the cumulative effect of these difficulties have greatly affected the profit levels of the Defendants/Judgments/Debtors.

10. That in the circumstances the Defendants pray a schedule of payment of GHS4000 per month minimum and increase it as and when business and profit margins improves (sic) to enable me effectively settle the Judgement Debt.


The Appellant resisted the application. After hearing the parties, the trial judge ruled that the Respondents pay the judgment debt in monthly instalments of GH¢5,000 starting from 31st December 2014. It is against this ruling that the Appellant has appealed on the following grounds -

i. The Honourable Court erred when it failed to exercise its discretionary power in a judicial manner in granting an instalmental payment of GH¢5,000.00 in respect of a judgment debt of GH¢448,830.98.

ii. The Honourable Court erred as it failed to consider the case put up by the Plaintiff/Judgment/Creditor in its said Ruling.

iii. The Ruling is against the weight of evidence on record.

iv. Further grounds may be filed on receipt of the record of appeal.


After a re-hearing of the proceedings and the submissions of counsel, we are satisfied that the trial judge failed to exercise his discretion in a judicious manner and this order needs to be reversed and set aside.


Both Counsels cited relevant case law setting out the settled principles for an appellate court disturbing a decision and interfering with the exercise of a trial court’s discretion. These include only where there are exceptional circumstances such as when the discretion was exercised on wrong or inadequate materials, or that the court gave weight to irrelevant materials or failed to take relevant matters into account. These are the principles articulated in Ballmoos v Mensah 1984/86 1GLR 724. Again, where the appellate court is satisfied that the trial court reached a conclusion which would work manifest injustice as stated in Nkrumah v Serwaa and Others 1984/86 1GLR 190 at 191.


Counsel for Respondent also cited Article 296 of the 1992 Constitution, and Sappor v Wigatap Ltd 2007-2008 SCGLR 679 where the Supreme Court had stated that an appeal against a decision based on the exercise of a court’s discretionary jurisdiction would succeed in only clearly exceptional cases where the judge failed to act judicially.


Article 296 of the 1992 Constitution reads:


Where in this constitution or in any other law discretionary power is vested in any person or authority That discretionary power shall be deemed to imply a duty to be fair and candid;


The exercise of the discretionary power shall not be arbitrary, capricious or biased either by resentment, prejudice or personal dislike and shall be in accordance with due process of law;


He also cited Kyenkyenhene v Adu 2003-2004 1 SCGLR 142 where the Supreme Court had held that a decision in which a court had exercised discretion could only be reversed if the decision is arbitrary, capricious and uninformed.


We find that unfortunately, the decision of the trial judge fell squarely into all these categories necessitating reversal. It was a decision which would work manifest injustice, the discretion was exercised on wrong grounds and the court failed to take relevant matters into account.


The extremely salient factor of fact in this case is that the judgment that the Respondent sought to discharge in instalments of GH¢4,000 a month was a consent judgment arrived at through Terms of Settlement. Thus it was an agreement, arrived at through the free will of the Respondent who sought the discretion of the court.


One of the fundamental pillars of the law of contract is the doctrine of sanctity of contract. Again and again, it has been said and settled that a court of law cannot make contracts for parties or change their contract. In Volta Aluminium Co. Ltd. v Tetteh Akuffo and others [2003-2004] SCGLR 1158, the Supreme Court registered this position in its holding 2 on page 1160:


Per Dr. Date-Bah JSC – “Generally the fairness of a contract is not a matter for the courts, unless a statute so prescribes. The refusal of common law courts to intervene to set aside contracts on the grounds of their assessment of the contract’s fairness is meant to avoid the re-opening of bargains. In the interest of freedom of contracts, the courts do not wish to interfere to determine for the parties what their bargain ought to be”.


Per Baidoo JSC – “A court can set aside a contract if it is illegal or void or avoidable. But where the parties have entered into a valid contract, the court should not interfere merely because one party is not happy”.


Thus when parties have bound themselves through terms of settlement, the court’s only duty is to enforce that agreement. It cannot give a decision that alters the terms of settlement, without their continued consent or unless relevant conditions exist.


This was a situation where the application was presented three weeks after the parties concluded their terms of settlement and entered same as a consent judgment. In his application to pay the judgment debt in instalments, the Respondent did not refer to any situations that occurred after he entered the terms of settlement. The application was premised on conditions that he urged prevailed before the terms of settlement.


Thus the only inference the court ought to have made was that the Respondent entered into the terms of settlement knowing clearly well he could not abide by his own covenants and representations. With all respect, that is the most manifest ill will and bad faith any court could be presented with. It would be against public policy for courts to accept presentations from a party who fails to honour his loan contract and is brought to court; who uses the auspices of the court to enter into a second agreement and then immediately turns round to tell the court to change that second agreement for him.


Apart from the failure to take into account the relevant contractual nature of the terms of settlement, the failure to appreciate the issues of bad faith and the lack of any intervening event between the terms of settlement and the application to pay the debt in instalments, I can also see that the trial judge failed to properly appreciate the context within which the rules of court allow a court to order that a judgment debt be paid in instalments.


Counsel for Respondent referred to Order 41 rule 8 (1).


Order 41 rule 8 (1) reads


Where any judgment or order direct the payment of money, the court may, for any reason, order that the amount shall be paid by instalments, with or without interest and the order may be made at the time of giving the judgment, or at any time afterwards by the same or any other Judge and may be rescinded upon specific cause shown at any time


I must point out that this rule refers to when the court gives the judgment or makes the order using its judicial authority. The exercise of discretion under this rule cannot be extended to situations where the parties have settled their own judgment or order in the form of an agreement and cannot show to the court that any unforeseeable situation which has rendered their agreement impossible to perform has occurred.


I must say that had the Appellant not submitted to the application and presented a counter arrangement for the payment in instalments, it would be the position of the law that a court could not even change the terms of a consent judgment outside of the agreement of the parties. The jurisdiction to entertain the application would not even reside in the court.


In this situation, the Appellant was willing to change the terms of settlement if the Respondent would first pay a lump sum of 80% of the debt, and this is what, in my evaluation, gave the court the power to exercise his discretion. In these circumstances, the counter proposal of the Appellant should have been properly taken into account by the learned trial judge. But the court ignored this proposal, and focused on the averments of the Respondent found in their statement of defence filed before the terms of settlement, and purported to exercise his discretion to allow the Respondent to pay the debt ‘on manageable terms that will not cause any great financial hardships on the Plaintiff Respondent.’ We are disturbed by the words “not cause any great financial hardships on the Plaintiff/Respondent”.


How can a debt of more than GH¢400,000 with interest running be paid by instalments of GH¢5,000 a month without such a payment schedule causing great financial hardship for the creditor? Every citizen must know and every court must take judicial notice of the business fact that the loans that banks give are obtained through costs to them, and interest does not represent just profit, but capital, and costs to banks. Thus an order such as this which will keep the bank out of its money for years can only work manifest injustice. The appeal is allowed and the ruling of the High court set aside. Costs of GH¢2,000 in favour of the Plaintiff/Appellant.