IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL DIVISION)
ACCRA - A.D 2018
UNIBANK ( GHANA) LIMITED
MAGNA INTERNATIONAL TRANSPORT LTD AND OTHERS - (Defendants)
DATE: 22 ND OCTOBER, 2018
SUIT NO: BFS/312/14
JUDGES: ERIC K. BAFFOUR, ESQ. JUSTICE OF THE HIGH COURT
Plaintiff claim the following reliefs endorsed on its amended writ issued against the Defendants:
a. An order for the recovery of an amount Five Million Five Hundred and Twenty Two Thousand Two Hundred and Two Ghana Cedis Thirty One Pesewas (GH¢5,522,202.31) being the loan facility granted to the 1st Defendant by the Plaintiff.
b. Interest on relief (i) supra at 25.95% per annum with effect from 31st of October, 2014 till date of final payment.
c. Penal interest on relief (i) from 31st of October, 2014 till date of final payment
d. Cost of instituting this action including solicitor’s cost
e. Such further order(s) as this honourable court deem fit.
Or in the alternative
f. Judicial sale of legal mortgage property on parcel No 909, Block 2, section 2001 situate at Tantra Hill, Accra belonging to the 4th Defendant.
g. A judicial sale of the legal mortgage over property on parcel No 389, Block 10, section 114 situate at East Legon, Accra belonging to the 5th Defendant.
h. A judicial sale of legal mortgage over property situate at East Legon, Accra belonging to the 6th Defendant.
Plaintiff claim to have advanced a number loan facilities to the 1st Defendant. The first of it being an offer of $488,565.00 at an interest rate of 14% per annum and a default rate of 21% per annum for the purpose of financing the acquisition of 25 vehicles under a contract with Zain and which was required to be repaid within a period of 24 months. To Plaintiff 1st Defendant secured the loan with an assignment of the 25 vehicles purchased, a legal mortgage over a property situate at Tantra Hill and joint and several guarantees of the 2nd and 3rd Defendants.
The second facility is alleged to be an amount of One Million Three Hundred and Fifteen Thousand Nine Hundred and Forty-Four US Dollars ($1,315,944.00) granted to 1st Defendant at an interest rate of 12.5% per annum for the purpose of financing the acquisition of 35 vehicles under a contract that 1st Defendant had with Vodafone Ghana. And that this loan was to be repaid in 24 equal monthly principal of $54,831.00 plus interest of 12.5% per annum with the expiry date for the loan being 30th of November, 2012. That there was also an offer letter of 3rd November, 2010 with an overdraft facility of $200,000.00 and the interest rate of 27.95% per annum. This second loan facility was secured with the following securities: a legal mortgage over property at Tantra Hill belonging to 4th Defendant, another one at East Legon being the property of 5th Defendant, a legal mortgage of property at East Legon belonging to 6th Defendant, a lien/set off over fixed deposits of Gh¢100,000.00 and a joint and several guarantees of directors executed by the 2nd and 3rd defendants.
Plaintiff avers that there was yet another loan dated 1st March, 2011 where 1st Defendant was granted a facility of $500,000.00 at an interest rate of 12.5% per annum for purchase of 28 vehicles and intended to be repaid within 24 months. And this loan agreement also had an overdraft component of GH¢400.000 to augment the working capital of the 1st Defendant. This loan was secured with the assignment of 99 vehicles and 28 of the vehicles to be purchased by the loan, a legal mortgages over properties at Tantra Hill and East Legon belonging to 4th and 5th Defendants respectively among other securities.
To Plaintiff at the request of 1st Defendant all the loans were consolidated and restructured by an offer letter of 29th of June, 2011 in the sum of Two Million Seventy-Two Thousand and Five Hundred and Twenty-Seven US Dollars Sixty One cents ($2,072,527.61) and the restructured loans were to be repaid in 24 equal months. That this also had an overdraft facility of GH¢300,000.00 and that all the overdraft facilities were also restructured in the sum of Ghc627, 418.15 to be repaid in 12 equal installment. Plaintiff contend that there was again another restructure of the dollar loans of 1st Defendant in the sum of $2,015,869.54 and that the 1st Defendant duly accepted the terms of the restructured facilities. However, per a request made by 1st Defendant the dollar loan was converted into a cedi facility to be repaid in 18 equal installments. That 1st Defendant has failed to make good its indebtedness to the Plaintiff. And despite repeated demands on 1st Defendant to repay the loans it has failed to do so and that 2nd and 3rd Defendants as guarantors have also failed to make good the default of 1st Defendant whiles 4th to 6th Defendants secured the loans with their properties at Tantra Hill and East Legon. Plaintiff apprehend that unless compelled by the court the monies would not be repaid by the Defendants and hence the claims before the court.
The statement of defence of the Defendants generally admit of having taken the various loans but the answer as to whether they owe Plaintiff the sums stated in the reliefs have been one of confessions and avoidance. First Defendants claim that an overdraft facility in the sum of GH¢200,000.00 has been paid off. And in respect of the other allegations, Defendants claim to have made several payments to the Plaintiff that have not been taken into account in reducing their indebtedness. And asked that reconciliation be done to reflect that the amount he owes was far less than the monies being claimed by the Plaintiff. With the pretrial conference unable to achieve settlement between the parties the following issues were set down for determination
1. Whether or not the 1st Defendant is indebted to the Plaintiff in the sum of GH¢5,522,202.31
2. Whether or not the 2nd and 3rd Defendant are jointly and severally liable to the Plaintiff for the 1st Defendant’s indebtedness
3. Any other issues raised by the pleadings.
I think one other issue raised by the pleadings is whether 4, 5 and 6th Defendants that were later joined to the suit are also jointly and severally liable for any liabilities of 1st Defendant and if so their properties could be possessed by Plaintiff. When the trial commenced Plaintiff testified through its representative, Ekow Arthur and over thirty documents were admitted as exhibits on behalf of Plaintiff and included the following: a loan facility granted 1st defendant dated 30th April, 2010 as Ex ‘B’, an overdraft facility granted 1st defendant as Ex ‘C’, a loan facility of November 3, 2010 as EX ‘D’, a loan facility dated March 1, 2011 as Ex ‘E’, loan facility restructuring letter dated June, 29, 2011 as Ex ‘G’, an overdraft facility letter dated March 22, 2012 as Ex ‘J’, a loan facility dated June 13, 2012 as Ex ‘L’, a valuation report on the property situate at East Legon as Ex ‘M’, a mortgage dated 30th of May, 2011 between 1st defendant and 5th Defendant as Ex ‘N’, a land certificate in the name of 5th Defendant as Ex ‘P’, valuation report on the Tantra hill property as Ex ‘Q’, a valuation report concerning another property in the name of 6th Defendant as Ex ‘T’, directors guarantee as Ex ‘W’, a board resolution as Ex ‘Y’, a mortgage between Plaintiff and 4th Defendant as Ex ‘DD’, etc. Defendants on the other hand testified through its representative, Kwasi Amoah Fredy-Thompson and tendered a request letter to Plaintiff for a restructure of the loans as Ex ‘1’, a letter requesting a conversion of the dollar facilities into cedi loan was tendered as Ex ‘2’ and a list of what defendant claim to be the total payments made to the Plaintiff as Ex ‘3’, an application for various auto loans by 1st Defendant as Ex ‘4’, 5, 6, 7, 8
IS 1ST DEFENDANT INDEBTED TO THE PLAINTIFF TO THE TUNE OF GH GH¢5,522,202.31?
From the pleadings, Defendants do not dispute taking various loans from Plaintiff for the purchase of vehicles and to boost its operating capital. It only states that it has made various payments to the
Plaintiff and calls for reconciliation of accounts. Accordingly on the 18th of January, 2016 the court in the exercise of its powers under Order 28 appointed Mr. Antwi Boasoako, Director of Finance of the Judicial Service as the referee to go into accounts with the parties and reconcile the figures to find the exact amount owed by the Defendants in view of the defence of the Defendants that the amount it owed was far less than what the Plaintiff was claiming. The referee submitted its report and same was admitted as Ex ‘CE1’ which states the total indebtedness of 1st defendant as at 31st October, 2014 as Gh¢5,522,202.31; whiles the total indebtedness together with interest as at 11th of October, 2017 was stated as Gh¢9,543,525.89. There was some challenge as to whether the referee produced two reports and when confronted he gave answers which I find to be reasonable in the following:
“Q: Prior to the preparation of Ex ‘CE1’ did you prepare any other report
A: It is only workings, we call it working papers; the actual work of reconciliation. So that is not a report, it is a working to arrive at a report
Q: So was there any other workings apart from this exhibit prepared
A: No My Lord, I depended on the documents available to me to generate the report”.
The two documents were produced on 20th of March, 2016 and 27th of April, 2016. The fact of the total outstanding balance together with interest being different at different times and therefore forming the basis for counsel for Defendant to question the credibility of the report does not hold water and can easily be answered. There is no doubt that in both Ex ‘CE1’ and CE2’ the total balance as at 1st of November, 2014 stood at GH¢5, 522,202.31. The balance afterwards keep changing with the addition of penalty charges and others and any suggestion that the report is not accurate cannot be correct, I so find and hold. Under rule 4(3) of Order 28 of C. I. 47 that provides the options available to a court upon receipt of a referee’s report states as follows:
“On receiving the referee’s report the court may:
(a) Adopt the report in whole or in part
(b) Vary the report
(c) Require an examination from the referee
(d) Remit the whole or any part of the question or issue originally referred to the referee for further consideration by the referee or any other referee or
(e) Decide the question or issue originally referred to the referee on the evidence taken before the referee either with or without additional evidence”.
The court having required an examination from the referee and considering the terms of reference provided the referee to reconcile the figures for the court to know how much 1st Defendant was indebted to the Plaintiff together with interest finds no cause or justifiable ground to reject this report. It is found to be the accurate reflection and statement of the debt of Defendants to Plaintiff as at the 1st of November, 2014. Any interest as per the terms of the contracts entered into between Plaintiff and 1st defendant is also entered for Plaintiff as exigible. I take note of Ex ‘W’ being a directors’ guarantee form signed by 2nd and 3rd Defendants in their capacity as directors of 1st Defendant wherein they agreed to pay the loans upon demand. The document was not attacked at all and I find 2nd and 3rd Defendants jointly and severally liable for the repayment of the monies found to be owing and liable to be paid to the Plaintiff.
Plaintiff seeks alternative reliefs for the sale of certain properties Plaintiff claim were used as securities to secure the facilities afforded the 1st Defendant. The first is property on parcel No 909, Block 2, section 201, Tantra Hill belonging to the 4th Defendant, Isaac Osei Agyapong. Then there is property on parcel No 389, Block 10 section 114, East Legon belonging to the 5th Defendant, Yaa Bediako-Poku. Finally, the 6th Defendant, Ruby Homer is alleged to have used her property at East Legon also as security for some of the loans. Counsel for Defendant raised critical issues regarding the documentations used as security as it was only the valuation report on the property of 4th Defendant that was admitted as Ex ‘Q’. For instance regarding the Tantra Hill property this is what transpired:
Q: … Can you identify to this court, the said legal mortgage over the property on parcel No 909 Baock 2, section 201 situate at Tantra Hill in the name of Isaac Osei Agyemang
“A: I cannot seem to locate the document but I know that the said property has been perfected
Q: Yet you failed to attach that document to prove that claim
A: I will have to double-check the documents again, I cannot seem to find it
Q: I put it to you that you cannot find it because it is not included in your exhibits
A: Well noted”.
Similar cross examination was done in respect of the properties of Yaa Bediako-Poku and Ruby Homer as to whether Plaintiff met the 5th and 6th Defendants in person before the execution of the agreements and to urge them to seek independent advice. Again besides, Ex ‘N’ in respect of 5th defendant, Ekow Arthur conceded that that one of the two documents in respect of Yaa Bediako-Poku could not be found by him in the exhibits. I have, however, taken a look at Ex ‘EE’ being certificate of registration of mortgage or charge, Ex ‘FF, a registration of mortgage at the Bank of Ghana collateral Registry being floating charge over assets of 1st Defendant. And most important of all Ex ‘GG’ which is evidence of the registration of the mortgage over the properties of 4th, 5th and 6th Defendants with the details of the properties at Tantra Hill and East Legon described in Ex ‘GG’. With the registration of the mortgage, I am satisfied that the properties were used by the 4th to 6th Defendants as securities for the various loans as exhibited in Exhibits ‘EE’ and ‘FF’ and hence the registration of same in Ex ‘GG’. I accordingly grant the alternative prayers of Plaintiff for the order for the sale of the properties at Tantra Hill and the two houses at East Legon belonging to Yaa Bediako-Poku and Ruby Homer for the satisfaction of the judgment debt.
Guided by the principles governing cost, to remunerate a successful party and to cover for the expenses incurred during trial, and taking into consideration the length at which Defendant has dragged this matter that should not have stayed in court for that long with the opportunity for settlement at the pre-trial when it was clear that 1st to 3rd Defendants were jointly and severally indebted to the Plaintiff, I will exercise my discretion and award cost of 3% of the sum granted by the court in relief a of the Plaintiff’s claim.