IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT
ACCRA - A.D 2019
PRUDENTIAL BANK LIMITED -(Plaintiff)
GYAMFUA ABABIO INVESTMENTS LIMITED & OTHERS - (Defendants)
DATE: 21ST JANUARY, 2019
SUIT NO: BFS/22/2016
JUDGES: DR. RICHMOND OSEI-HWERE, J
ADINA AVRIL AKUOKO (MS) FOR PLAINTIFF/JUDGMENT CREDITOR/APPLICANT
MUJEEB RAHMAN AHMED FOR DEFENDANT/JUDGMENT CREDITOR/ RESPONDENT
Before me is an application for an order for reserved price for the auction of the 1st and 3rd defendants’/Judgment Debtors’/Respondents’ immovable property in fulfilment of a judgment debt. This application raises procedural issues which border on execution of judgments. The background to the application is narrated below:
On 3rd November, 2016 parties to the suit filed terms of settlement and on 8th November, 2016 the same was adopted by the court as consent judgment. Upon default of the terms of settlement by the Defendants/Judgment Debtors (hereinafter called the Respondents), the Plaintiff/Judgment Creditor (hereinafter called the Applicant) filed an Entry of Judgment on 9th June, 2017 and commenced the execution process by issuing a Writ of fierifacias (fifa) to attach two immovable properties which were used as security for the various facilities advanced to the Respondents. Thereafter, the two immovable properties described as an industrial property and a Hotel were both valued and valuation reports dated December 2017 and November, 2017 respectively were provided by the valuer. In December, 2017, the court granted the applicant herein an order for reserved price in respect of the Industrial Property which is situate at Plot 5B Block XVIII, Adum, Kumasi. However, according to the applicant all attempts to auction the Industrial Property have proved futile. This application is, therefore, focused on the Hotel i.e. Royale Lamerta Hotel situate at Plot 2, Block S, West Nhyieso Extension, Kumasi.
The grounds of the application are contained in the affidavit in support filed on 29th September, 2018. The applicant is praying the court to fix the reserved price of the property, Royale Lamerta Hotel situate at Plot 2, Block S, West Nhyieso Extension, Kumasi at GHC10,424,200.00.
The Respondents are opposed to the application and have demonstrated the grounds in an affidavit in opposition filed on 30th October, 2018.
In his written submission, counsel for the respondent cited a plethora of legal authorities and invited the court to dismiss the application since the whole execution process is flawed. Counsel’s submissions are summed up as follows:
Counsel contended that the Entry of Judgment filed by the applicant is never the judgment that was pronounced by the court and to that extent the same is null and void and incapable of invoking an execution process including the instant application.
Counsel also submitted that granted the entry of judgment was valid, the rules of practice and procedure requires the applicant to have sought leave of the court to go into execution. He particularly cited Order 44 rule 1 and 3(1)(d) of the High Court (Civil Procedure) Rules, 2004 (CI 47) and invited the court to declare the writ of fifa issued by the applicant null and void, as it was issued without leave of the court.
Counsel also questioned the form of the writ of fifa. He charged that there is a defect on the face of the writ of fifa, as the applicant failed to endorse on the face of the writ the fact that the movable properties are incapable or are not enough to make good the judgment debt as required by law.
He argued that since the lifespan of a writ of fifa is 12 months, the execution process is null and void since it was not done within the 12-month statutory period.
He submitted that the exhibits attached to the application ought to have been verified in compliance with Order 20 rule 14 of CI 47 and since the same was never done the court must strike down the alleged offending processes.
Time was also spent by counsel to controvert the validity of the execution process relating to the alleged sale of the said Industrial Property. He argued among others that the notices of auction failed to meet the 21-day statutory requirement.
Counsel also submitted that since the loan was contracted by the 1st Respondent and its property i.e. the Industrial Property is being auctioned to liquidate the loan, the applicant cannot attach the property of the 3rd Respondent. This is so because in counsel’s estimation the respondents were not sued jointly and severally.
In her written submission in support of the application for reserved price, counsel for the applicant submitted as follows:
i. That the judgment being executed is and remains a consent judgment.
ii. That the said consent judgment was appropriately entered.
iii. That due process was followed in attaching the two properties i.e. an industrial property belonging to 1st Respondent and a Hotel belonging to the 3rd Respondent.
Counsel for the applicant prayed the court to dismiss the points of law raised by counsel for the respondent and grant the application for reserved price.
I shall now proceed to determine the legal issues raised by counsel for the respondent and flowing from the conclusion drawn, I shall determine the merit of the application.
ENTRY OF JUDGMENT
Entry of judgment is the first step in the enforcement of the judgment or order of the court. It requires the victorious party to file at the registry of the court evidence of the rendition of a judgment by the court. This makes the result of a court proceeding effective for purposes of bringing an action to enforce it or to commence an appeal. The entry of judgment must therefore reflect the pronouncement of the court, anything short of this will make the execution process thereon null and void. The position of the law is aptly stated in the case of the Republic vrs Court of Appeal; ex parte Ghana Commercial Bank Pensioners Association [2001/02] SCGLR 883 at 890 as follows:
“… it makes that pronouncement the final judgment, which can only be enforced. But until a judgment directed or pronounced by a judge is entered it is not effective. In Holtby vrs Hodgson  24 QBD 107 at 107 Lord Esther MR said:
“in order … to get everything into one form, power is given to the judge … to direct judgment to be entered … which is the same thing as giving him power to give or pronounce judgment. Pronouncing judgment is not entering judgment; something has to be done which will be a record, and so the judgment, that the judge has pronounced is the judgment which id entered.”
In the instant application, the respondent is alleging that the entry of judgment filed by the applicant does not reflect the pronouncement of the court. The terms of settlement which formed the basis of the consent judgment entered by the court on 8th of November, 2016 states in part as follows:
“TERMS OF SETTLEMENT
The Plaintiff sued the Defendants for the recovery of the total amount of GHc4,422,923.68 with interest thereon at the commercial bank rate from 19th September, 2015 to date of final payment.
The parties hereto have mutually and amicably agreed to settle this suit as follows:
1. That the Defendants have offered to pay an amount of GHc2,800,000 as full and final settlement of their total indebtedness to the Plaintiff and the Plaintiff has agreed to this proposal.
2. That the Defendants have agreed to pay the said sum of GHc2,800,000 over a period of six (6) months effective 30th November, 2016 and should have completely paid off any outstanding balance on the negotiated sum of GHc2,800,000 by 28th April, 2017
3. That should the Defendants default in the payment of the negotiated sum of GHc2,800,000 agreed herein by 28th April, 2017 the amount of GHc1,622,923.68 waived on the original debt of GHc4,422923.68 shall be restored.
4. That upon default, interest that was frozen on the amount of GHc4,422,923.68 effective 19th September, 2015 until date of final payment shall also be restored:
5. That upon default the Plaintiff Bank shall be entitled to go into execution against the Defendants for the recovery of the Defendant's total indebtedness.
6. That these terms of settlement be adopted by this Honourable Court as Consent Judgment between the parties herein.”
The entry of judgment filed by the applicant after the judgment of the court contains the following:
“ENTRY OF JUDGMENT
This action having come off on the 8th day of November, 2016 and the Court having entered Judgment in favour of the Plaintiff and against the Defendants, it was accordingly ordered by the judgment aforesaid that the parties hereto mutually agree to settle and have the said settlement entered as consent judgment as follows:
1. That the Defendants offered to pay an amount of GHc2,800,000 as full and final settlement of their total indebtedness to the Plaintiff and the Plaintiff has agreed to this proposal.
2. That the Defendants agreed to pay the said sum of GHc2,800,000 over a period of six (6) months effective 30th November, 2016 and should have completely paid off any outstanding balance on the negotiated sum of GHc2,800,000 by 28th April, 2017.
3. That the Defendants have defaulted in the payment of the negotiated sum of GHc2,800,000 agreed herein by 28th April, 2017 and the amount of GHc1,622,923.68 waived off the original debt of GHc4,422,923.68 shall be restored.
4.That, the Defendants having defaulted, interest frozen on the amount of
effective 19th September, 2015 until date of final payment has been restored.
5. That upon default the Plaintiff Bank shall be entitled to go into execution against the Defendants for the recovery of the Defendant's total indebtedness which as at 31st May, 2017 stood at GHc5,903,601.68 plus interest thereon until date of final payment.”
After a careful study of the terms of settlement (which was entered as consent judgment) and the entry of judgment, I am at a loss as to the disparity between the two. Both documents speak for themselves. It is my considered opinion that the entry of judgment is a true reflection of the terms of settlement; which is why beside the bare assertion made by the respondents that the two are not the same, the disparity could not be pointed out by the respondents. Per the entry of judgment, the respondents having defaulted in the payment of the negotiated sum of GHC2,800,000.00 (which was due for full payment by 28th April, 2017), the original indebted sum of GHC4,422,923.68 has been restored. Also, the interest frozen on the amount of GHC4,422,923.68 effective 19th September, 2015 until date of final payment has also been restored. Thus, the total indebtedness of respondents stood at GHC5,903,601.68 as at 31st May, 2017. This is not a massaged figure. It is a true reflection of the terms of settlement entered by the court as consent judgment. Once the entry of judgment was correct the execution process was rightly activated.
THE EXECUTION PROCEDURE
Was leave required to issue the Writ of Execution?
Generally, a judgment creditor proceeds to enforce the judgment of the court as of right as soon as he completes the procedural formalities. No recourse of the court is required. However, there are instances where a writ of execution to enforce a judgment of the court will not be issued without leave of the court. Where leave is required before execution, proceedings initiated without such leave are incompetent and ought to be dismissed. Instances where leave is required for execution of judgment is provided under Order 44 rule 3 of CI 47 as follows:
“Rule 3—Necessity for Leave to Issue Writ of Execution
(1) A writ of execution to enforce a judgment or order may not issue without leave of the Court in the following cases
(a) where six years or more have elapsed since the date of the judgment or order;
(b) where any change has taken place, whether by death or otherwise, in the parties entitled or liable to execution under the judgment or order;
(c) where the judgment or order is against the assets of a deceased person coming into the hands of his or her executors or administrators after the date of the judgment or order, and it is sought to issue execution against the assets;
(d) where under the judgment or order, any person is entitled to relief subject to the fulfilment of any condition which it is alleged has been fulfilled, or
(e) where any goods to be seized under a writ of execution are in the hands of a receiver appointed by the Court or a sequestrator.”
Counsel for the respondent has relied heavily on Order 44 rule 3(1)(d) in his assertion that the applicant required leave of the court to go into execution. At page 8 of his written submission learned counsel stated as follows:
“By the nature of the consent judgment that was pronounced by the Honourable Court, there was a condition precedent, to the effect that it was only a default in payment as contained in the consent judgment that entitled the Plaintiff to the relief of enforcement. And once the condition precedent had occurred leave was mandatory to ground a legal and lawful execution.
To have therefore purported to go into execution without leave of court amounts to nothing in law and same stands to be set aside and we hereby pray as such.”
With all due respect to learned counsel, his assertion is at odds with the legal effect of the consent judgment and Order 44 rule 3(1)(d) of CI 47. Paragraph 5 of the terms of settlement provides:
“5. That upon default the Plaintiff bank shall be entitled to go into execution against the Defendants for the recovery of the Defendants total indebtedness.”
My understanding of this provision is that once the defendantsdefault in payment of their just debt, as agreed in the terms of settlement, the plaintiff is entitled to go into execution. In that regard,it need not seek leave of the court, as the blessing of the court has already been given in the consent judgment. Once the entry of judgment was served on the respondents, the applicant was at liberty to go into execution. In my considered opinion, it is not in doubt that the condition precedent anticipated under Order 44 rule 3(1)(d)is not referable to a default by a party under the terms of settlement herein.Such a default does not amount to the fulfilment of a condition precedent within the meaning of the rule.
Endorsement on the Writ of fifa
The writ of fifa is the commonest of all the writ of execution. It is issued upon an application made by the judgment creditor to the registrar.It is therefore directed to the sheriff, requiring and ordering him to seize and sell enough of the judgment debtor’s goods to satisfy the judgment debt. By means of this writ, execution is levied not only against chattels but also immovable property of the judgment debtor. The execution is against goods and chattels and it is where these are not sufficient for payment of the debt that execution is extended to immovable properties. Where the judgment debtor has demonstrated that he has sufficient movable properties to satisfy the debt those properties must be attached first before the immovable properties. (See Order 44 rule 2 (3)). Also, where the execution is levied against immovable property, the writ of execution must be endorsed with a statement that there was insufficient movable property to satisfy the judgment debt.(See Order 44 rule 2 (3)).
In the instant application, the applicant never endorsed on the writ of fifa the fact that there was insufficient movable property to satisfy the debt. Counsel for the respondents is inviting the court to treat this procedural lapse asa defect which renders the writ of fifa null and void. In the light of the clear procedural breach,counsel’s invitation sounds very appealing. I am, however, cautioned by Order 81 rule 1 of CI 47 which stipulates that non-compliance with rules shall not render proceedings void. It provides:
“Rule 1—Non-Compliance with Rules not to Render Proceedings Void
(1) Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these Rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order in it.”
The procedural breach has brought into focus the battle between form and substance in our civil procedure jurisprudence.In this conundrum, substance normally prevails over form especially where overreliance on form will undermine substantial justice. In the instant case, I will treat the failure to endorse on the writ of fifa a statement relating to insufficient movable property as a mere irregularity which does not affect the substance of the writ. Striking down such a process as incompetent will undermine the court’s desire to ensure effective justice. After all, the respondents never gave any indication that their movable property can defray the debt. It is also my considered opinion that the defect does not touch on the jurisdiction of the court.
The trend is that the court allows flexibility in the interpretation and application of its rules in order to ensure that justice is done. Our Supreme Court has consistently rejected the use of technicalities in the resolution of cases. In GIHOC Refrigeration & Household Products v. Hanna Assi [2005-2006] SCGLR 458 at page 492, Modibo Ocran JSC in recognition of the flexible approach adopted by the courts stated:
“At any rate, even at the trial level, the High Court Rules have maintained sufficient flexibility both in the old and the new Rules of procedure to allow courts to make such orders dealing with the proceedings as it considers just, or necessary for doing justice to the case.”
This explains why in Major Mac Dorbi and W. O. Saviour v Richard Adom Frimpong and 2 Others Civil Appeal No. J4/45 2011 (30th January, 2013) the Supreme Court saved a judgment in favour of the said W. O. Saviour after the Court of Appeal had set it aside. In that case, the appellant, W. O. Saviour who had not filed an appearance participated in the trial and emerged victorious. Substantial justice as opposed to technical justice emerged victorious in that case.
The result is that the writ offifa issued by the applicant remains valid. The non-verification of the exhibits attached by the applicant in this application is also treated as a mere irregularity which does not affect the substance of the application.
Lifespan of a writ of fifa
Order 44 rule 9 (1) and (2) of the High Court Civil Procedure Rules CI 47 of 2004 reads as follows:
“Order 44 rule 9 (1). For the purpose of execution, a writ of execution shall be valid in the first instance for twelve months beginning with the date of its issue.
9 (2). Where a writ has not been wholly executed the court may by order extend the validity of the writ from time to time for a period of twelve months at any time beginning with the date on which the order is made, if an application for extension is made to the court before the day on which the writ would otherwise expire”
Counsel for the respondents’ contention that the lifespan of the writ has gone beyond the 12-month statutory period and as such invalid is respectively borne out of the misinterpretation of Order 44 rule 9 (1) and (2). From the record, the writ of fifa was issued on 11th August, 2017 and was expected to expire on 11th August, 2018. However, once the property is attached within twelve months, as in the instant case, the writ of fifa was executed within the meaning of Order 44 rule 9. It is not about the execution of the judgment to its finality. That may indeed take more than twelve months to fulfill. The Supreme Court made a pronouncement on this issue in the case of Ghana Commercial Bank vrs J. K.
Ackah Enterprise Ltd and 2 Others, Civil Appeal No. J4/60/2013 dated 9th April, 2014 where Anin Yeboah, JSC stated the opinion of the court at page 8 of the judgment as follows:
“In our opinion, the execution of a writ of fifa is done by the sheriff through a bailiff. The other implementary processes set out in the Auction Sales Law of 1989 which enjoins the execution creditor to value the attached property, asking the court for reserved price, advertisement and auction are left in the hands of the execution creditor. If a writ of fifa is executed by a bailiff by attaching the property within a year of its issue from the registry, it is valid. The other procedural formalities referred to above may take years but the writ of fifa would not be invalid as contended by counsel.
It is a fact of notoriety that after a property is attached and valued for reserved price, an execution debtor may under the rules of court apply to pay the judgment debt by stated installments which the courts may oblige. This may run into a period of more than twelve months yet the writ would be deemed as valid provided it was executed within the twelve months.”
Attachment of the subject property
On the issue of whether the 3rd Respondents property which is the subject of this application can be validly attached in execution of the judgment, my short answer is that so far as the property was used as collateral to secure the loan the same can be attached in execution.
Issues relating to the Industrial Property
It must be emphasised that the subject matter of this application is the property namely Royale Lamerta Hotel situate at Plot 2, Block S, West Nhyieso Extension, Kumasi. As observed early on, this property was attached together with the said Industrial Property which is situate at Plot 5B Block XVIII, Adum, Kumasi and the latter property is slated for sale by public auction. It is observed that counsel for the respondents has spent considerable time and effort in his written submission to the court to attack the execution process relating to the Industrial Property particularly the alleged breach of the mandatory 21-day statutory notice prior to the public auction. I am unable to consider counsel’s arguments in respect of that property and the competence of the pending sale. In fact, doing so would in my considered opinion amount to an exercise in futility since the Industrial Property is not the subject of the instant application. Counsel may save his queries relating to that property for another application.
For the foregoing reasons, the application succeeds. It is hereby ordered that the property, Royale Lamerta Hotel situate at Plot 2, Block S, West Nhyieso Extension, Kumasi shall be sold not below the forced sale value of GHC 10,424,200.00.