By a writ of summons issued on the 22^nd May 2012 the plaintiff claims against the defendants:

a. An order for the recovery of GH₵668,504.42 being the balance due and owing as at April 2, 2012 on account of credit facilities extended to 1^st defendant by plaintiff on July 27, 2007 repayment of which was guaranteed by 2^nd, 3^rd, 4^th and 5^th defendants but settlement of which defendants have failed to make good several demand notices notwithstanding.

b. Interest on the said sum of GH₵668,504.42 at the rate of 22.5% per annum calculated at the close of each day and payable at the end of every month on compound basis from April 2, 2012, up to and inclusive of the date of final payment.

c. Costs, including legal fees, assessed at 10% of the aggregate sum due and payable under the facilities.

The defendants entered Appearance and filed their Defence after the service on them of the Writ and Statement of Claim. A Reply was subsequently filed by the plaintiff and after an unsuccessful pre-trial settlement proceeding, the matter was set down for hearing at which; the plaintiff gave evidence through a representative and then called one witness to close its case. The defendants also gave evidence through the 2^nd defendant and closed their case.

From the pleadings the court finds that the defendants have admitted that the plaintiff is a corporate body which provides banking and financial services to members of the public. The court also finds that the defendants have admitted that the 1^st defendant is a limited liability company which deals in real estate development and the supply of sand, stones and building blocks. Again the defendants have admitted by their statement of defence that the 2^nd, 3^rd, 4^th and 5^th defendants are all directors of the 1^st defendant company.

From the pleadings the court finds that upon the request of the 1^st defendant the plaintiff made available to the 1^st defendant various facilities including an overdraft, a short term loan and a medium term loan in the year 2007 on terms stipulated in the agreement entered between the parties which was received in evidence as exhibit A.

It is also not in dispute that the overdraft facility and the short term loan were to expire on the 31^st July, 2008. Again it is not in dispute that the medium term loan was also to expire on the 30^th April, 2008. The court further finds from the pleadings that the 1^st defendant company executed a legal mortgage and thus created a charge over all that piece or parcel of land situate and being at Kuntunse near Pokuase in favour of the plaintiff bank.

From the evidence on record, particularly exhibit C, the court finds that the 2^nd, 3^rd and the 4^th defendants on the 10^th March, 2006 executed a Guarantee in favour of the plaintiff and, by that, they bound themselves to pay, on demand, any sums of money owing by the 1^st defendant on account of facilities made available to the 1^st defendant by the plaintiff.

It ought to be pointed out that despite the fact that exhibit A, the loan agreement, was executed by the parties in the year 2007, the said exhibit included an existing loan, that is the Medium Term Loan, which had been re-structured by the plaintiff to enable the 1^st defendant to make payment. Moreover, the Guarantee was executed by the 2^nd, 3^rd and 4^th defendants “in consideration of the plaintiff granting or continuing to advance or otherwise giving credit or affording banking facilities or other accommodation for as long as the plaintiff think fit to the 1^st defendant”. It is the opinion of this court therefore that exhibit C provides a good security for any debt determined to be owing on the facilities made available to the 1^st defendant by the plaintiff.

From the evidence on record, the court finds that the re-payment of the debt became difficult for the 1^st defendant company and so the 1^st defendant made a request to the plaintiff to consider a reduction of the debt outstanding. There is evidence on record to the effect that the plaintiff accepted the request made by the 1^st defendant and consequently wrote exhibit F to the 1^st defendant in which the plaintiff notified the 1^st defendant that it (plaintiff) had reduced the 1^st defendant’s total indebtedness to a sum of GH₵200,000. The plaintiff also advised, in exhibit F, that the 1^st defendant settles the debt within a period of three months from the date of exhibit F which is April 22, 2010.

It is clear from the evidence that the 1^st defendant could not pay the debt within the three months. The plaintiff therefore wrote, per exhibits D, D1, and D2, to the 1^st defendant that it had re-instated the original debt owed by the 1^st defendant before exhibit F was written. This debt is stated, according to the plaintiff, to be GH₵667,665.

The reason given by the plaintiff for the action it took in purportedly re-instating the debt is that, the reduction of the debt was based upon the condition that the 1^st defendant pays the reduced debt within three months from the date of exhibit F and that once the 1^st defendant failed to pay within the three months, the reduction no longer holds.

The 1^st defendant had denied that the reduction of the debt was conditional and it has been contended on behalf of the 1^st defendant that the plaintiff cannot unilaterally re-instate the debt.

Indeed this sum up the gravamen of the dispute between the parties.

For the purpose of determining the issue in contention the court wishes to quote the relevant portions of the letter, exhibit F, written by the plaintiff and which has generated the instant misunderstanding between the parties. It reads as follows:

“RE: REQUEST FOR WAIVER OF PORTION OF DEBT AND ACCRUED INTEREST.

We refer to the above request and advise that the Bank has agreed to accept GH₵200,000 (Two Hundred Thousand Ghana Cedis) in full and final settlement of your indebtedness.

It is further advised that you would be required to settle the debt within three months from the date of this letter.”

In the opinion of the court it is clear from exhibit F that the first paragraph of the letter communicated to the defendants, the acceptance of their request which they had earlier made to the plaintiff to waive part of the overall indebtedness of the defendants to the plaintiff. The second paragraph of the letter also stated the period within which the plaintiff expected the defendants to complete payment of the debt.

In the opinion of the court the letter, exhibit F, never stated that the waiver was being given on condition that the defendants would pay the reduced debt within a period of three months. The letter cannot be said to have conveyed or created any impression in the minds of the defendants that if they did not pay the reduced debt within the three months period they were going to lose the benefit of having the debt reduced to GH₵200,000. The reduction of the debt to GH₵200,000 was not tagged to the defendants being required to do or abstain from doing any special thing; at least, that impression does not arise from the letter. What is rather clear from exhibit F is that the reduction of the debt to GH₵200,000 was in response to an earlier request made by the defendants for the Bank to waive a portion of the debt and the interest which the defendants owed the plaintiff.

In the opinion of the court for a condition to be created and binding on a party the wording of the alleged condition must be clear, explicit and unambiguous. It must leave no doubt in the mind of the party expected to fulfill the condition that he has an obligation to perform failing which he cannot take the benefit of an advantage being offered.

“A condition is a term of a contract which is so essential to the very nature of the contract that its breach entitles the injured party to rescind the contract and sue for damages.”

See The Law of Contract in Ghana by Christine Dowuona-Hammond, published by Frontiers Printing

Publishing Company, Accra (2011) page 142. A term of a contract will be held to be a condition

“if it is expressly so provided by statute; if it has been so categorized as the result of previous judicial decision; if it is so designated in the contract or if the consequences of its breach, that is, the right of the innocent party to treat himself as discharged, are provided for expressly in the contract, or; if the nature of the contract or the subject-matter or the circumstances of the case lead to the conclusion that the parties must, by necessary implication, have intended that the innocent party would be discharged from further performance of his obligations in the event that the term was not fully and precisely complied with”

See A. G. Guest’s contribution in Chitty on Contracts (28^th ed.), Vol.1, published by Sweet &Maxwell (1999) page 602 paragraph12-040.

In the instant matter, it is the second sentence in exhibit F (quoted above) that stipulates that the reduced debt should be paid within a period of three months from the date of that letter but clearly that sentence does not state that upon the failure of the defendant to pay the reduced debt within the period given the old debt shall be restored. And, there is nothing in exhibit F to suggest that the parties intended a restoration of the old debt should the defendant fail to pay the reduced debt within the period of three months.

In other words, exhibit F did not state expressly that the payment of the reduced debt within three months was a condition precedent to the defendant having the benefit of the reduction and in the opinion of the court it cannot be inferred by necessary implication that the enjoyment of the benefit of the reduced debt was conditional upon its payment within the period of three months. A condition in a contract is said to be precedent if it provides that the contract is not to be binding until the specified event occurs.

In the circumstance, the court will hold that the payment of the debt of GH₵200,000 within the period of three months was not a condition precedent for the reduction of the debt and for that reason it does not lie within the rights of the plaintiff to say that they are entitled to revert to the old debt because the reduced debt has not been paid within three months.

It is not in dispute, from the evidence on record, that exhibit F was written on the 22^nd day of April, 2010. The parties agree that before the waiver granted by exhibit F, the debt owed by the defendants was GH₵668,504.42. Although the plaintiff’s representative seems, in his evidence in chief, to doubt that the defendant paid GH₵70,000 after the 22^nd April, 2010 to the plaintiff towards the liquidation of the debt, he admitted under cross examination that after exhibit F had been written to the defendants in April 2010, the defendants paid an amount of GH₵72,000. This payment made by the defendants was also acknowledged by the only witness called by the plaintiff who went ahead to tender in evidence exhibit J in proof of the said payment. Indeed this evidence is corroborative of the evidence of the defendant and the court has no reason not to accept it. As stated in Asante vs. Bogyabi [1966] GLR 232 at page 240 that

“Where admissions relevant to matters in issue between parties to a case are made by one side, supporting the other, as appears to be so in the instant case on appeal, then it seems to me right to say that that side in whose favour the admissions are made, is entitled to succeed and not the other, unless there is good reason apparent on the record for holding the contrary view”

That being so, it is wrongful for the plaintiff to sue for the recovery of the amount of GH₵668,504.42 on the 22^nd day of May 2012 when they issued the writ against the defendants in view of the apparent fact that on the date of the writ the defendants were not indebted to the plaintiff in the sum endorsed on the writ of summons.

Even so, the parties have agreed that the plaintiff is a tenant of the 1^st defendant by virtue of the fact that the plaintiff is in occupation of a premises rented to it by the 1^st defendant. There is evidence on record that by virtue of the landlord/tenant relationship between the plaintiff and the 1^st defendant an amount of GH₵54,256.36 being rent owing to the 1^st defendant was applied by the plaintiff to pay part of the debt owed by the 1^st defendant. This was done on the 30^th day of September, 2013. Thus currently, the total payment made by the 1^st defendant to the plaintiff is GH₵126, 256.36. When one deducts the amount paid from the reduced debt of GH₵200.000, one would be left with an outstanding sum of GH₵73,743.64.

The court would therefore enter judgment in favour of the plaintiff against the defendants in the sum of GH₵73,743.64. The plaintiff shall recover interest at the rate of 22.5% from the 22^nd April 2010 to the date of final payment.