The Plaintiff claimed against the Defendants jointly and severally, for the recovery of the sum of GH¢991,352.69 being the outstanding balance of an overdraft facility granted to the 1^st Defendant together with interest at the rate of  32% per annum from 13^th November 2009 till the date of final payment.

Alternatively, the Plaintiff prayed the court for an order of judicial sale of properties situate at No. 115 Kaneshie Housing Estate and Plot No. E180/17 Kotobabi Down belonging to the 4^th Defendant as well as 5^th Defendant’s property at Sampaman, Mile 9 Winneba Road which had been mortgaged in favour of the Plaintiff. The Plaintiff deposed in its statement of claim that the 1^st Defendant was granted an overdraft facility in the sum of GH¢800,000.00 to augment its working capital. This was at an interest rate of 32.75% per annum, a default interest of 1% per annum and an additional penal interest of 6% on the amount which remained unpaid per month when same was due for repayment. The Plaintiff stated that as a condition precedent to the grant of the facility, the 2^nd and 3^rd Defendants as Managing Director and General Manager, undertook to be jointly and severally liable to the

Plaintiff should the 1^st Defendant, a limited liability company fail to honour its obligations.

As further security for the loan, the 4^th and 5^th Defendants mortgaged their landed properties.

The Defendants all caused Counsel to enter appearance to the suit. It was however only 4^th Defendant which delivered a Defence and a Counterclaim. In his Amended Defence and Counterclaim, the 4^th Defendant said that he used his property as security for the repayment of a facility of GH¢500,000.00 on 12^th February 2007. He contended that this loan was paid off and instead of his property being released, and in the teeth of his protests, the 2^nd Defendant took another loan from the Plaintiff using his property as collateral

He also averred that he was desirous of selling his property and the 2^nd Defendant had told him he had a business partner who would be willing to purchase it. He said several persons had promised to purchase the house at North Kaneshie which price he had quoted as $1,200,000.00. He therefore asserted that he had suffered loss and damage due to the Plaintiff’s conduct. He therefore put in a counterclaim for the sum of $1,200,000.00 being the sale price of House No. 115 North Kaneshie, Accra together with interest from 2^nd October 2008 till the date of final payment. He also prayed for the release of his title deeds on House No. E180/7 Kotobabi, Accra and House No. 115 North Kaneshie, Accra

The issues settled for trial were:

1. Whether or not the loan facility was fraudulently acquired?

2. Whether or not the plaintiff is entitled to its claim?

3. Whether or not the 4^th Defendant is entitled to his counterclaim?

Before the trial commenced terms of settlement were entered between the Plaintiff and the 1^st and 3^rd Defendants. The terms of settlement were as follows:

i. Judgment be entered against the 1^st and 3^rd Defendants jointly and severally for the recovery of the sum of GH¢2 million as the full and total sum owed by 1^st Defendant to the Plaintiff.

ii. Plaintiff shall waive further interest charges on 1^st Defendant’s overdraft account with the Plaintiff bank.

iii. The 1^st and 3^rd Defendants shall pay the Judgment Debt immediately after the date of adoption of the terms by the Court as Judgment in this matter.

iv. If the 1^st and 3^rd Defendants default in the payment of the Judgment Debt

aforesaid in the manner herein agreed, the entire amount then outstanding at the time of the default shall become immediately due and payable and the Plaintiff shall be at liberty to go into execution for the entire amount then outstanding without leave of the Honourable Court.

These terms were adopted by the Court on 20^th July 2016 and entered as Consent Judgment between the Plaintiff on one hand and the 1^st and 3^rd Defendants on the other hand and the matter between them was deemed settled.

The trial then proceeded with the Plaintiff and the 4^th Defendant alone as parties.

The Court will first examine the following issue:

Whether or not the loan facility was fraudulently acquired?

Exhibit A is an offer letter dated 31^st October 2008. The facilities listed in the facility letter are an overdraft renewal of GH¢500,000.00 and an overdraft enhancement of GH¢300,000.00. The consolidated overdraft was GH¢800,000.00. The purpose of this loan was to enable 1^st Defendant increase stock to meet high demand of goods in the market. Exhibit C is a Deed of Mortgage dated 8^th March 2007 executed in favour of the Plaintiff by the 4^th Defendant. This was in respect of House No. 115 North Kaneshie Housing Estate.

The facilities for which the 4^th Defendant had mortgaged his property was for an overdraft amount of ¢3 billion (old cedis) and an import finance of $200,000.00. These amounts were to support 1^st Defendant’s working capital requirements to increase stock and to also facilitate import business. The 4^th Defendant has averred in his witness statement that the 2^nd Defendant had told him the facility was to be used to produce bio-diesel.

He averred further that the transaction in respect of the facility granted to the 1^st Defendant was fraudulent. He particularized the fraud he complained of as:

(a) When on the 12^th day of February 2007, Plaintiff agreed to grant banking facilities to the 1^st Defendant to import equipment for the production of bio-diesel, it failed to do due diligence or any due diligence at all.

(b) Plaintiff as a reputable bank before approving such a colossal sum for the importation of equipment for the production of bio-diesel which from the invoice did not show the country of manufacture, should have been alerted that the proforma invoice was dubious. The proforma invoice was a sham as it came from a company in Lebanon owned by the wife of the 2^nd Defendant.

(c) Plaintiff wrongfully failed and/or refused to do an independent valuation of the machines and went ahead to dispose the facility knowing well the 1^st Defendant would not be able to pay so that my properties could be sold and used to repay the loans.

The 4^th Defendant tendered in evidence, Exhibit 5 which is a proforma invoice addressed to Green Fuel Biodiesel (Ghana) Ltd. The total cost of the invoice is $4,072,887.30. However, the 4^th Defendant had told the court in his witness statement at paragraph 4 as follows:

In the course of my interaction with the 2^nd Defendant he persuaded me to use the said property as a security for a facility of GH¢500,000.00 which he was seeking from the Plaintiff.

In cross-examination on 13^th April 2017, the following information was elicited from him:

Q: Mr. Kukubor you offered your property situate at North Kaneshie and Kotobabi as collateral for a facility granted by the Plaintiff to the 1^st Defendant. Not so?

A: Yes. My Lor

Q: The said facility which was originally in the sum of GH¢500,000.00 was granted in February 2007. Not so?

A: Yes. My Lord.

Q: In October 2008 the said facility was enhanced to GH¢800,000.00

Yes. My Lord.

Q: And upon its enhancement you continued to use your properties as security for the repayment of the facility.

A: Yes. My Lord

Exhibit 4 is a Deed of Guarantee made between 4^th Defendant and the 1^st Defendant dated 1^st January 2009. In that Deed, the 4^th Defendant had agreed to release the documents covering his landed properties to cover a financial facility granted to 1^st Defendant by the Plaintiff for a period of 1 year. The 4^th Defendant has not been able to tell the court the correlation between the Biodiesel Proforma Invoice of over $4 million made out to Green Fuel Bio-Diesel Ltd and the sum of GH¢800,000.00 for which he had put up his property as collateral in favour of the Plaintiff. All the evidence put forth by the Plaintiff was in respect of a facility of GH¢800,000.00.

This facility was to increase the 1^st Defendant’s stock-in-trade. Though the Defendant has alluded to fraud in the disbursement of the facility to the 1^st Defendant and has given particulars of what he terms the Plaintiff’s lack of due diligence, he had not proven that either the Plaintiff or 1^st Defendant was fraudulent. See the case of Dzaisu v. Ghana Breweries Ltd (2007/2008) SCGLR 539 it was held that a bare assertion of a party of his pleadings in the witness box without proof did not shift the evidential burden onto the other party.

In The Republic v. High Court Accra: Ex parte Aryeetey (Ankrah Interested Party)( 2003/2004) SCGLR 398 the court at p. 407 quoted with approval Davy v. Garrett (1877) 7 Ch.D 473 @ 489 thus:

“In the Common Law Courts no rule was more clearly settled than that fraud must be distinctly alleged and as distinctly proved, and that it was not allowable to leave fraud to be inferred from the facts.”

See also the case of Boateng (No. 2) v. Manu (No. 2) (2007/2008) SCGLR 1117 @ 1126 where it was held that a finding of fraud is not to be made without clear and cogent evidence upon the subject. See also Okofoh Estates Ltd v. Modern Signs Ltd (1996/97) SCGLR 224 where the court at p. 255 stated:

“No court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever.”

The Court has not been able to find as a fact that there were any fraudulent dealings between Plaintiff and 1^st Defendant when the former granted the overdraft facility to the latter. In short, the allegations of fraud remain unproven. The next issues are whether or not the Plaintiff is entitled to its claim or the 4^th Defendant to its counterclaim?

The 4^th Defendant stated in his Amended Statement of Defence at paragraphs 7, 8 and 9 thus:

In further answer to paragraphs 10 and 11, 4^th Defendant says that in or about September 30^th 2008, he had information that 1^st Defendant had repaid the facility and was arranging for a further facility and on October 1^st 2008, he quickly wrote a letter to the 2^nd Defendant demanding the return of his documents and copied the same to the Plaintiff’s Branch Manager and its legal department.

Upon receipt of the letter the 2^nd Defendant held a meeting with the 4^th Defendant in his office and pleaded with the 4^th Defendant to allow the 1^st Defendant as a security for the repayment of the loan but when 4^th Defendant was not yielding to the request of the 2^nd Defendant, he told 4^th Defendant that his partner was arriving from India over the week end of the 30^th day of October 2007 and who was going to buy the property so he should sign the documents so that the bank would grant the loan as time was the essence.

4^th Defendant says that when the alleged partner did not arrive he wrote a letter to the Branch Manager of the Plaintiff pleading with the Plaintiff not to disburse the facility to the Defendant until all matters relating to the reasons for his consent were resolved.

In cross-examination of Plaintiff’s representative on 28^th February 2017, the following information was elicited:

Q: How much loan did the 1^st Defendant apply for?

A:  1^st Defendant applied for a loan of GH¢500,000.00 and it was later enhanced to GH¢800,000.00.

Q: When was the loan enhanced?

A: It was enhanced in October 2008.

Q: And the original agreement was for GH¢500,000.00. Is that correct?

A: Yes. My Lord.

Q: You have told this Court that the 1^st Defendant originally was given a loan of

GH¢500,000.00 and I put it to you that this was the amount of which the 4^th Defendant used his property as security for repayment.

A: The initial facility availed to the 1^st Defendant was GH¢500,000.00 but it was later enhanced to GH¢800,000.00

Q: I put it to you that the 4^th Defendant used his property as security for repayment for the GH¢500,000.00 that was originally loaned to the 1^st Defendant.

A: That is not correct.

Q: And the 1^st Defendant paid the GH¢500,000.00 loan that was granted to it by the Plaintiff Bank.

A: That is not correct.

Q: When the 1^st Defendant had finished payment you agreed to give the 1^st Defendant a further loan.

A: That is not correct.

Q: When you enhanced the facility was it not a further loan you gave to 1^st Defendant?

A: That is correct.

Q: So you were going to use 4^th Defendant’s securities for repayment without his knowledge when you enhanced the facility.

A: That is not correct.

The Plaintiff had 2 Deeds of Mortgage executed in its favour by 4^th Defendant on 8^th March 2007 involving properties situate at Kaneshie and Kotobabi. These deeds of mortgage were to secure a facility of GH¢500,000.00 afforded to the 1^st Defendant. By Exhibit A, the Plaintiff had changed the terms of the agreement by enhancing the facility given to the 1^st Defendant. There had been an enhancement of GH¢300,000.00 bringing the consolidated overdraft to an amount of GH¢800,000.00. Did the Plaintiff offer proof that this new development had been brought to 4^th Defendant’s attention, and that he had in the light of the new development consented to the continued use of his property as collateral? In the case of Ababio v. Akwasi IV (1994/95) GBR 774 the court said:

The general principle of law is that it is the duty of a Plaintiff to prove his case as he must prove what he alleges. In other words, it is the party who raises in his pleadings an issue essential to the success of his case who assumes the burden of proving it. The burden only shifts to the defence to lead sufficient evidence to tip the scales in his favour when on a particular issue the Plaintiff led some evidence to prove his claim.

There is no indication that the 4^th Defendant’s consent had been sought in respect of this enhanced facility at the time it was signed between the parties. While the 4^th Defendant had signed a Mortgage tying his property to a loan of GH¢500,000.00 on 8^th March 2007, the 1^st Defendant had received an enhancement of the facility on 31^st October 2008. On 1^st October 2008, the 4^th Defendant wrote to the 2^nd Defendant asking that the 2^nd Defendant discontinued the use of his landed properties as collateral with the Plaintiff Bank. In copy of this letter were the Branch Manager and Legal Department of the Plaintiff Bank. (See Exhibit 2).

Thereafter, 4^th Defendant caused Exhibit 3 dated 10^th November 2008 asking the Plaintiff to put a hold on the loan application until he had sorted out a few issues between himself and 2^nd Defendant. It appears that the enhanced facility was disbursed to the 1^st Defendant and the 4^th Defendant’s had had wind of this state of affairs. He accordingly asked the Plaintiff to put a hold on the loan application.

In spite of this, the Defendant on 1^st January 2009 agreed to release his documents to cover the facility for a further period of one year. (See Exhibit 4). By this document and from his evidence in cross-examination, he had signed Exhibit 4 to give postdated consent to his property being used as continuous security for the enhanced facility. However, as already stated, the Plaintiff has settled matters between itself and the 1^st and 3^rd Defendant. The sum of GH¢2 million was agreed as the full and total sum owed by 1^st Defendant to the Plaintiff. In view of the fact that the Plaintiff has settled matters between itself and the primary obligors being the 1^st and 3^rd Defendant, it cannot continue to hold onto the 4^th and 5^th Defendant’s title deeds. The court therefore orders that same be released to them. The legal position with regards to the 4^th Defendant’s case was that once he had made a counterclaim, he assumed the same onus of proof as the Plaintiff did in making out his claim. See the cases of Malm v. Lutterodt (1963) 1 GLR 1 and Appiah v. Asamoah (2003/2004) SCGLR 226 and Section 11 of the Evidence Act.

The 4^th Defendant’s Counterclaim is for:

a. $1.2 million being the sale price of H/No. 115 North Kaneshie, Accra

b. Interest on the said sum from 2^nd October 2008 up to date of final payment

c. Return of the title deeds on H/No. 180/7 Kotobabi, Accra and House No. 115 North Kaneshie Housing Estate, Accra.

The 4^th Defendant’s claim is for $1.2 million being the sale price of H/No. 115 North Kaneshie, Accra. He stated in his counterclaim that several persons offered to purchase his property and that he had accepted their offers yet could not go through with the sale as the Plaintiff had wrongfully refused to release his title deeds. He did not lead any evidence to show the value of his house. How did the he arrive at this figure when there were no supporting documents to show that this was the current market value figures? Did he have the property valued? And if so, where was the valuation report which would support his claim? In Zabrama v. Segbedi (1991) 2 GLR 221, the court held that the correct proposition of the law was that a person who makes an assertion or averment which is denied by his opponent has the burden to establish that his averment or assertion is true. He does not discharge this burden unless he leads admissible and credible evidence from which the fact(s) he asserts can properly and safely be inferred. This position was re-affirmed in the case of Continental Plastics Ltd v. IMC Industries (2009) SCGLR 298 @ 306-307.

One is also reminded of Blay J.S.C. in Chahin & Sons v. Epope Printing Press [1963] 1G.L.R. 163 at 168, S.C. when he said:

They (i.e. the plaintiffs-respondents), merely presented a list of articles they alleged they had lost, fixed prices to them, and without attempting in any way to prove their values, expected the court to award them damages to the tune of the amounts claimed.

So how did he expect the court to make an award in his favour when no evidence existed to prove that he was entitled to the figure which he had claimed? He neither provided a valuation report to support his contention that the market value of the property was $1.2 million nor did he call any other evidence to prove this.

He also did not call evidence in proof of his assertion that he had many people prepared to buy the property but could not go through with the sale due to the Plaintiff’s conduct in holding onto his title deeds. Did he have an agreement with the Plaintiff that he could still go ahead to sell the property although he had put it up as collateral for 1^st Defendant’s facility?

The 4^th Defendant did not seriously prosecute his counterclaim for the sum of $1.2 million being the sale price of House No. 115 North Kaneshie, Accra and same is consequently dismissed. Since the matter has been settled between the Plaintiff and 1^st and 3^rd Defendants, the Plaintiff is ordered to release the title deeds of H/No. E180/7 Kotobabi Accra and H/No. 115 North Kaneshie to the 4^th Defendant.

For the avoidance of doubt, the Plaintiff would also be precluded from proceeding against the landed properties belonging to 5^th Defendant.

The 4^th Defendant has brought about this whole situation by giving his up his properties for collateral for a loan when he was not a direct beneficiary. He is wholly to be blamed for his part in this whole transaction.

In view of this, each party is to bear its own costs.

(SGD)

JENNIFER A. DODOO

JUSTICE OF THE HIGH COURT