IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL DIVISION),
ACCRA- A.D 2019
AMALGAMATED BANK LTD - (Plaintiff)
PRICELINE CONSULT LTD AND 6 OTHERS -(Defendant)
DATE: 26 TH MARCH, 2018
SUIT NO: BFS/299/11
JUDGES: GEORGE K. KOOMSON JUSTICE OF THE HIGH COURT
EDDIE YAO HARVEY FOR PLAINTIFF
KWESI COLEMAN FOR 2ND & 3RD DEFENDANTS
NKRABEA EFFAH-DARTEY FOR HIMSELF AND 1ST, 4TH,5TH AND 6TH DEFENDANTS
On the 8th of August, 2011, the Plaintiff issued a Writ of Summons against the defendants, jointly and severally, asking for the following reliefs:
1) The sum of GH¢3,999,038.67 Interest on the said sum at contractual rate of 22% from January ending 2011 to the date of final liquidation of the judgment sum.
3) Any other relief as this Honourable Court may deem fit.
The 1st, 4th, 5th, 6th & 7th Defendants counterclaimed for a decree of specific performance to compel Plaintiff to stick to the agreement reached. The 2nd & 3rd Defendants also counterclaimed against the 1st Defendant as follows;
1) An order for the recovery of all sums paid to the 1st Defendant by the 2nd Defendant.
2) Interest on all sums paid to the 1st Defendant by the 2nd Defendant from January, 2012 till date of final payment.
The case of the Plaintiff is that the 1st Defendant entered into a Memorandum of Understanding with 2nd Defendant for the Plaintiff to finance a fleet of vehicles which the 1st Defendant was selling to members of 2nd Defendant on hire-purchase. Pursuant to this MOU, the 1st and 2nd Defendants applied for a loan facility from the Plaintiff in 2007. The Plaintiff contends that it granted the loan facility to the 1st and 2nd Defendants in the sum of GH¢1,800,000.00 with a contractual interest rate of 22% per annum. The Plaintiff further contends that the Directors of 1st Defendant Company executed a Resolution accepting all the terms and conditions contained in the facility offer letter. Plaintiff states further that the 4th Defendant executed a legal mortgage over his property at East Legon in favour of the Plaintiff. The 2nd Defendant also passed a written resolution in support of the facility. The 2nd Defendant co-executed the loan facility with the 1st Defendant.
It is further the case of the Plaintiff that the 4th 5th 6th and 7th Defendants executed a deed of guarantee dated 30th October, 2007 in which they expressly guaranteed the repayment of all sums due under the facility. The Defendants are alleged to have defaulted payment of the facility. The Plaintiff contends that at the time the Plaintiff issued the writ of summons, the Defendants owed the Plaintiff a sum of GH¢3,999,038.67. The case of the 2nd and 3rd Defendants is that they did not request or took any loan from the Plaintiff and therefore did not provide any security or guarantees for the purposes of the loan. They contend that a memorandum of understanding was executed between them and the 1st Defendant. It is the case of the 2nd and 3rd Defendants that it was the 1st Defendant who informed the 2nd Defendant that it had applied for a loan facility from the Plaintiff to enable it supply the vehicles pursuant to the MOU. According to them, the 1st Defendant informed them that one of the conditions for the grant of the loan facility was for 2nd Defendant to execute the loan agreement together with the 1st Defendant, 2nd and 3rd Defendants further contends that the Plaintiff did not disburse any funds under the loan facility to them. They contend further that as at 31st January, 2008, they had paid a total sum of GH¢297,920.00 to the 1st Defendant as deposit payment for the supply of the vehicles pursuant to the MOU.
It is the case of the 2nd and 3rd Defendants that they are not liable to pay up on the facility because at all material times the Plaintiff was aware that the facility was being made available to the 1st Defendant to enable it supply the vehicles to the 2nd Defendant. It is further the case of the 2nd and 3rd Defendants that the 1st Defendants supplied 146 vehicles under the MOU. They contend further that they paid a total of GH¢2,003,500.00 to the 1st Defendant as at January, 2012. 2nd 3rd Defendants therefore deny any liability to the Plaintiff and contends that any outstanding balance ought to be paid by the 1st Defendant.
The 1st 4th 5th 6th & 7th Defendants on their part admitted the grant of the facility. Their case is that certain payments have been made to the Plaintiff. They further dispute the interest calculations on the facility. It is noted that the court appointed, on the 22nd March, 2017, Dr. Adu Antwi to go into the accounting records relating to the loan transaction between the Plaintiff, on the one hand, and 1st and 2nd Defendants on the other part.
The report of Dr. Adu Antwi was filed on the 17th July, 2017. It was tendered in evidence as exhibit CE1. Reference to Exhibit CE1 shall be made in the course of this judgment.
The issues which requires my adjudication in this matter are as follows;-
i. Whether or not the plaintiff is entitled to any relief against the 2nd Defendant.
ii. Whether or not the Plaintiff is entitled to recover any outstanding balance from the Defendants.
iii. Whether or not the 1st, 4th, 5th, 6th & 7th Defendants are entitled to their counterclaim against the Plaintiff
iv. Whether or not the 2nd and 3rd Defendants are entitled to their counterclaim against 1st Defendant.
I shall resolve all the issues together in accordance with the law and evidence adduced in the case, as they all have a single strand, that is, legal effect of the loan facility agreement, running through them. It is the case of the Plaintiff that the loan facility was granted to 1st and 2nd Defendants. The 1st
Defendant admits this fact. The 2nd Defendant admits executing the loan facility agreement but deny taking any loan from the Plaintiff that is why they did not offer any security or guarantee for that purpose to the Plaintiff. It is to be noted that the transaction between the parties was in writing. In matters of this nature, it is useful for the court to ascertain the true or actual intentions of the parties.
This can be seen from the written agreements.
Lord Neuberger in this speech in the case of ARNOLD v BRITTON (2015) AC 1619, stated:
‘When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean”,
to quote Lord Hoffman in CHARTBROOK LTD v PERSIMMON HOMES LTD (2009) AC 1101, paragraph 14. And it does so by focusing on the meaning of the relevant words, in this case the clause 3 (2) of each of the 25 leases, in their documentary, factual and commercial context. That meaning has to be assessed in the light of The natural and ordinary meaning of the clause;
i).Any other relevant provision of the lease
ii).The overall purpose of the clause and lease;
iii). The facts and circumstances known or assumed by the parties at the time that the document was executed; and
iv).Commercial common sense; but
v) .Disregarding subjective evidence of any party’s intentions...”
The Supreme Court, in the case of P.Y. ATTAH & SONS LTD v KINGSMAN ENT LTD [2007-2008] 2 SCGLR 946 held that:
“In considering every agreement, the paramount consideration was what the parties themselves intended or desired to be contained in that agreement.
The intentions should prevail at all times. The general rule was that a document should be given its ordinary meaning, if the terms used therein were clear and unambiguous. In conflicting situations like those in the instant case, the process of determining the intentions of the parties should be objective. Objective approach in that context, implied the meaning that the words in the document would convey to a reasonable person seised with the facts of the case....”
In GORMAN & GORMAN v ANSONG  SCGLR 174, the Supreme Court in dealing with how interpretation of documents should be done stated:
“The general rule regarding the construction of documents was that the court must give effect to the intention of the parties as found in the document and not what was intended to have been written, so as to give effect to the intention expressed. The court would be hesitant to construe private documents outside the four corners of the document for good reason. Contracts and other written documents between private individuals were presumed, unless otherwise proven, to represent the intentions of the parties. Thus, any undue influence by the court, would fly in the face of the sanctity attached to such documents. However, the general rule was not in anyway absolute. Ultimately, interpretation of contracts or documents of any kind must give effect to the true intent of the parties. The courts were in duty bound to give effect to the parties’ written intentions. But the courts must also consider, in appropriate cases, surrounding circumstances, which had the effect of elucidating the intentions of the parties.”
In the case before me, the 1st and 2nd Defendants executed Exhibit C, which is the agreement between the Plaintiffs and 1st and 2nd Defendants. I shall make reference to relevant portions or clauses in Exhibit C’ for emphasis. Now, the opening paragraph of Exhibit ‘C’ states:
“Amalgamated Bank Limited (“the Bank”) offers to provide Priceline Consult Limited and Ghana Road Transport Union (GPRTU) (together referred to as “the Borrower”) with banking facility (the facility) subject to the terms and conditions set out herein and on the attached general terms and conditions applicable to term loans and other banking facilities”.
From this opening paragraph of Exhibit ‘C’, the parties to the loan facility was spelt out. The borrowers are the 1st and 2nd Defendants. The 2nd and 3rd Defendants contend that they only executed Exhibit ‘C’ but the money was not disbursed to them but to the 1st Defendant. I find the explanation offered by the 2nd and 3rd Defendants untenable. Why should the 2nd and 3rd Defendants involve themselves in a facility which they know will not benefit them anyway? The fact is that the members of the 2nd Defendant were the ultimate beneficiaries of the facility that was being taken by 1st and 2nd Defendants.
In my view all the parties who executed Exhibit ‘C’ understood who the parties to Exhibit ‘C’ were and the fact that the fund were to be made available to 1st Defendant to enable it to procure the vehicles. If the 2nd Defendant says because they did not offer any security or guarantees, towards the payment of the facility, so they are not parties to the facility and could not be liable, then, they have been misinformed or ill-advised. Clause 6.3 of the loan agreement, Exhibit ‘C’, which was executed by 2nd Defendant states;
“6.3. Each GPRTU member-beneficiary shall deposit with the bank 5% of the cost of the particular vehicle whose purchase is being financed by the bank.”
The evidence on record shows that 1st Defendant collected these 5% deposits from the member beneficiaries and paid to the bank. If the 2nd Defendant had nothing to do with the facility, why should Exhibit ‘C’ make provision for members of 2nd Defendant to pay 5% as deposit. The position of the law is summed up in the maxim “nemo contra factum suum proprium venire potest (no one can go against his own deed). It is noted that in clause 9 of Exhibit ‘C’, it was stated as follows;
“Meanwhile, the Borrower may wish to and the Bank recommends that the Borrower seek independent advise in understanding the loan and the implications of the terms of this offer letter.”
It is of interest to note further that the 7th Defendant is a legal practitioner. He also represented the 1st,
4th, 5th, 6th, Defendants and himself. Having been given the opportunity to seek legal advice, it is too late for any of the parties to Exhibit ‘C’ to give an interpretation which is alien to Exhibit ‘C’, as the 2nd Defendant is seeking to do.
In the case of NKRUMAH v SERWAH [1984-86] 1 GLR 190, the Court of Appeal said that the co-defendant in her dealings with the 2nd Defendant had the full benefit of legal advice and there was no evidence that she was pressurized into executing the documents. It was held that she could not plead non est factum.
In WILSON v BROBBEY  1 GLR 250, it was held that:
“Where parties had embodied the terms of their contract in a written document, extrinsic or oral evidence would not be admissible to add to, or vary, subtract from or contradict the terms of that instrument. Thus a party of full age and understanding would normally be bound by his signature to a document, whether he read or understood it or not, and the Defendant was so bound. Mere negligence in not reading a document before signing it was not a good defence so as to establish non est factum.”
The evidence Act, 1975 (NRCED 323) provides that;
“Except as otherwise provided by law, including a rule of equity, the facts recited in a written document are conclusively presumed to be true as between the parties to the instrument, or their successors in interest.”
By this provision, whenever a conclusive presumption has been established by the facts of a case, parties to the transaction in that case will be estopped from adducing evidence to contradict or vary the terms of that transaction; See Essentials of the Ghana Law of Evidence by S.A. Brobbey, 2014 edition.
The 2nd Defendant with their eyes wide open and knowing that the whole agreement stands to benefit its members executed Exhibit ‘C’ without protesting or objecting to any of the terms and conditions.
They cannot turn round and say that because the money was paid into the account of 1st Defendant (which was not protested anyway) and also because they were not made to execute any guarantees or provide security, they are not liable. A careful reading of clauses 6.3, 8.3, 8.4, 8.5.1, etc, reveals the dis-ingenuity of the argument being made by the 2nd and 3rd Defendants.
I have examined all the evidence on record and I am of the considered opinion that the 2nd Defendant jointly took the loan from the Plaintiff with the 1st Defendant and I so hold. The 2nd and 3rd Defendants are therefore bound by the terms and conditions in Exhibit ‘C’
The question to be resolved at this stage is as to whether the Defendants defaulted payment for the Plaintiff to be entitled to relief. None of the Defendants disputed the claim of the Plaintiff that the Defendants are in default. The contention of the Defendants is that the amount the Plaintiff is claiming as the balance outstanding is not correct as it is far in excess of what Plaintiff is due. The court, with the consent of the parties, accordingly referred the parties to an independent person to go into accounts with the parties. The report was tendered as Exhibit ‘CE1’. From Exhibit ‘CE1’, the total amount disbursed under Exhibit ‘C’ was GH¢1,952,989.20. The normal interest on the facility was calculated to be GH¢5,045,048.44. Default interest came to GH¢1,092,751.59 and penal interest also stood at GH¢182,125.26. This brought the total interest under the facility to be GH¢6,319,925.29. The total repayment made under the facility stood at GH¢1,941,735.18 as at 5th December 2011.
From Exhibit CE1, the total indebtedness outstanding on the facility which was granted to the 1st and 2nd Defendants as at 17th July 2017 is GH¢4,924,862.82. This is a clear demonstration that the Defendants did not retire their indebtedness to the Plaintiff. Furthermore, the 2nd and 3rd defendants had admitted that some of the beneficiaries defaulted payment. This led the 1st defendant to seize the vehicles that payments were in default. Again 2nd and 3rd defendants admitted that they had an outstanding balance of GHS 425,000.00 to pay to 1st defendant: see exhibit ‘5’. This amount was to be paid to the plaintiff if it had been paid. I am therefore convinced that the non-payment of GHS 425,000.00 by 2nd and 3rd defendants constitutes a default. I hold therefore that the Defendants defaulted payment of the facility. As a corollary from the above, it is my view that the Plaintiff is entitled to recover the sum of GH¢4,924,862.82 from the Defendants. It is noted that the 1st and 2nd Defendants being the principal obligor, whiles the 3rd, 4th, 5th, 6th and 7th Defendants being guarantors are bound by the terms and conditions of the loan agreement. All the Defendants are accordingly liable to pay the outstanding balance to the Plaintiff.
The Plaintiff further asked for interest on the outstanding balance. On the question of interest on the amount being claimed by the Plaintiff, I would like to make reference to what the Supreme Court stated in the case of DELLE & DELLE V. OWUSU AFRIYIE [2005-2006] SCGLR 60 that:
“Whilst it is true that at common law interest was not payable on a debt or a loan in the absence of express agreement or a course of dealing or custom to that effect, under the existing statutory regime in Ghana, the courts have power to award interest on sums claimed and found to be due. Such interest is payable from the date on which the claim arose.”
Lord Denning in the case of HARBUTT’S PLASTICINES LTD V. WAYNE TANK & PUMP CO. LTD. (1970) 1 ALL E.R 236 stated that the basis of an award of interest is that the Defendant has kept the Plaintiff out of his money so he ought to compensate the Plaintiff accordingly. Again, in LONDON, CHATHAM & DOVER RAILWAY CO. V. SOUTH EASTERN RAILWAY CO. (1893) it was also stated that a person who has unjustifiably kept money which properly ought to have gone to its owner should not in justice be permitted to benefit by having that money in his possession and additionally enjoying the use of it. See also the case of GHANA COMMERCIAL BANK V.
BINOO-OKAI [1982-1983] GLR 74; AMARTEY V. SOCIAL SECURITY BANK LTD.; SOCIAL SECURITY BANK LTD. V. ROBERTSON (CONSOLIDATED) [1987-1988] 1 GLR 497; AGYEI V. AMEGBE [1989-1990] 1 GLR 351.
In the instant case, the parties agreed in Exhibit ‘C’ that interest on the facility is 22%. Having executed the agreement the 1st and 2nd Defendants are bound to pay the said interest. The 4th, 5th, 6th 7th Defendants, having guaranteed the payment of any outstanding balance on the facility are also bound by the said agreement. It is therefore my considered opinion that the Plaintiff should be entitled to interest on the sum of GH¢4,924,862.82 from 17th July 2017 to date of final payment at 22% per annum and I so hold. The 1st, 4th, 5th, 6th & 7th Defendants asked in their counterclaim for a decree of specific performance to compel Plaintiff to stick to the agreement reached. The general rule is that each party to a suit who alleges per their claim before the court that they are entitled to a relief and or reliefs must adduce evidence on the facts and issues before the court to the prescribed standard laid down by law. SECTION 14 OF THE EVIDENCE ACT, 1975 (NRCD 323) states:
“Except as otherwise provided by law, unless and until 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 he is asserting.”
The SECTION 11 (1) AND (4) OF THE EVIDENCE ACT further provides”
“11. (1) For the purposes of this Act, the burden of producing evidence means the obligation of a party to introduce sufficient evidence to avoid a ruling on the issue against that party.
11.(4) In other circumstances the burden of producing evidence requires a party to produce sufficient evidence so that on all the evidence a reasonable mind could conclude that the existence of the fact was more probable than its non-existence.”
Aikins JSC in the case of ABABIO V. AKWASI IV [1994-1995] GBR 774 in expounding this statutory position said:
“The general principle of law is that it is the duty of a Plaintiff to 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 leads some evidence to prove his claim. If the Defendant succeeds in doing this he wins, if not he loses on that particular issue.”
In the case before me, the 1st, 4th, 5th, 6th and 7th Defendants are deemed to be the Plaintiffs on their counterclaim. They therefore have the burden to lead sufficient evidence essential to the success of their case. I have examined the pleadings and the evidence led by the 1st, 4th, 5th, 6th & 7th Defendants and I must say that they failed to lead any evidence to substantiate their claim. As was held in ZABRAMA V. SEGBEDZI  2 GLR 221 @ 224 that:
“......... a person who makes an averment or assertion which is denied by his opponent, has the burden to establish that his averment 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 inability of the 1st, 4th, 5th, 6th & 7th Defendants to lead credible and sufficient evidence to substantiate their claim spells the doom of their counterclaim. The counterclaim of the 1st, 4th, 5th, 6th & 7th Defendants against the Plaintiff accordingly fails.
This brings me to the counterclaim of the 2nd & 3rd Defendants against the 1st Defendant. The 1st, 2nd 3rd Defendants conducted a reconciliation of accounts. From Exhibit ‘5’, 1st Defendant agrees that the balance which the 2nd and 3rd Defendants failed to pay to the 1st Defendant was GH¢425,000.00. It is noted that the 1st Defendant did not deny or object to Exhibit ‘5’. It can safely be concluded that as at January 2012, the 2nd & 3rd Defendants had an outstanding balance of GH¢425,000.00 to give to the 1st Defendant for payment to the Plaintiff. In their counterclaim, the 2nd & 3rd Defendant asked for the recovery of all monies paid to the 1st Defendant by them and interest thereon. I must say that I find it very hard to comprehend the counterclaim of the 2nd & 3rd Defendants against the 1st Defendant.
Once it has been established that the 2nd & 3rd Defendant had an outstanding balance to give to the 1st Defendant in respect of the payments on the vehicles, it is absurd for the 2nd & 3rd Defendants to be demanding all payments made to the 1st Defendant. It would accord to reason if the 2nd & 3rd Defendants had argued that their liability should be limited to the sum of GH¢425,000.00. However, they rather want the 1st Defendant to refund all monies paid to 1st Defendant to be refunded to them, when they know as a fact that the GH¢1,912,646.12 which the 1st Defendant paid to the Plaintiff came from members of the 2nd Defendant. I have given consideration to the evidence in the case and I am of the opinion that monies paid to the 1st Defendant by the 2nd & 3rd Defendants cannot be refunded to them.
In doing their reconciliation as appeared in Exhibit ‘5’, 1st, 2nd & 3rd Defendants failed to take into consideration that the facility that they jointly executed had an interest component. Assuming for a moment that, what 2nd & 3rd Defendants allege is anything to go by, then, the 2nd and 3rd Defendants must recognize that their non-payment of GH¢425,000.00 constitutes a breach which shall attract a penal interest in addition to the normal interest. 2nd & 3rd Defendants should further recognize that the facility that 2nd Defendant executed, for which it is bound, had an interest component of 22% per annum. With their admission of defaulting payment in the tune of GH¢425,000.00 as at January 2012, it should not lie in their mouths to be saying that they want a recovery all monies paid to the 1st Defendant (which said monies) were meant to repay the facility granted.
Again, the recognition of the 2nd & 3rd Defendants to the fact that 1st Defendant, to their knowledge seized some vehicles from some beneficiaries because of non- payment, is in itself an admission that repayment were in default for which penal interest would be applied by the Plaintiff in addition to the normal interest charges. It is therefore my considered opinion that the 2nd & 3rd Defendants should not be entitled to their counterclaim against the 1st Defendant. Accordingly, the counterclaim of 2nd & 3rd Defendants also fail. In the circumstances, I enter judgment for the Plaintiff to recover the sum of GH¢4,924,862.82 with interest at 22% per annum from 17th July 2017 to date of final payment. The counterclaim of 1st Defendant and that of 2nd & 3rd Defendants are hereby dismissed.
I award costs, which has been said to follow the cause, to the Plaintiff against all the Defendants assessed at GH¢80,000.00.