On 29^th January 2014, the Plaintiff filed an amended writ of summons and statement of claim in which it claimed against the Defendants, the following reliefs:

a. Defendants pay the Plaintiff the amount of GH¢46,727.82 being outstanding balance on the overdraft facility granted to the Defendants

b. Interest on the said amount from 31^st July 2013 to date of final payment at the prevailing bank rate

c. Costs occasioned by this action.

d. A perpetual injunction preventing the Defendants either by themselves, privies or agents from letting out the property used in securing the loan facility to any 3^rd party without the leave of the Honourable Court.

It was the Plaintiff’s case as set out in its Statement of Claim that on or about 8^th November 2010 and at the 1^st Defendant’s request, the Plaintiff approved an overdraft facility of GH¢25,000.00 which attracted an interest rate of 32.50 % per annum. It was further agreed between the parties that in case of default, any sum unpaid would attract a penal interest rate of 6% per annum above the indicated interest rate.

Plaintiff also averred that the 2^nd and 3^rd Defendants provided security in the form of a legal mortgage over property situate at Ablekuma.

The Defendants in their Amended Defence and Counterclaim filed on 12th March 2015 admitted receiving a banking facility from the Plaintiff. They however contended that the performance of the terms and conditions of the contract was frustrated by an act of God which was a torrential downpour of rain which caused flooding and led to the destruction of their stock in trade.

As a result, they said they brought their predicament to the Plaintiff’s notice. Not only did the Plaintiff ignore this state of affairs but continued to charge interest on the facility. They therefore put forth the following counterclaim:

i. A declaration that the contract between the parties had been frustrated by an act of God being the supervening act for which reason there was no need for the Plaintiff Bank to be surcharging the Defendants further interest on the facility which they very well knew had been caught by a supervening act.

ii. A further declaration that what the Defendants owe the Plaintiff was the principal sum plus the interest that accrued at the time of the occurrence of the supervening act and no more so as the contract between the parties had been frustrated by an act of God being the supervening act.

iii. An order for the payment to the Plaintiff by the Defendant of only the principal sum plus the interest that accrued at the time of the occurrence of the supervening act and no other.

iv. An order for the parties to go into account to ascertain how much the Defendants owe the Plaintiff as at the occurrence of the supervening act.

v. Any further order or orders as this Honourable Court may deem fit.

The following were set down as issues for trial:

1. Whether or not the Defendants owe the Plaintiff the total sum of GH¢46,727.83 being the outstanding balance on the facilities granted them?

2. Whether or not the Plaintiff is entitled to the said sum with interest thereon from the 31^st day of August 2013 to the date of final payment at the prevailing bank rate?

3. Whether or not the contract between the parties had been frustrated by an Act of God to wit, torrential downpour of rain which caused tremendous flooding leading to the total destruction of the Defendants property and stock in trade?

4. Whether or not the Plaintiff Bank was made aware of the disaster being the tremendous flooding which led to the total destruction of the Defendants’ property and if so what did the Plaintiff Bank do?

5. Whether or not the Plaintiff Bank upon being notified by the Defendants of the tremendous flooding which led destroyed the Defendants’ property and stocks in trade were still surcharging the Defendants with interest on the aforesaid facility and if so whether or not they had the right in law and equity to do so?

6. Whether or not the Plaintiff Bank was entitled to the principal sum plus interest quoted on its writ of summons in view of the supervening act which led to the destruction of the Defendants’ business?

7. Any other issue(s) arising from the pleadings.

The general rule in evidence is as stated in Ababio v. Akwasi (1994/95) 2 GBR 774 is hat a party whose pleadings raised an issue essential to the success of its caase assumes the burden of proving such issue. And as ;per Re: Ashalley Botwe Lands; Adjetey Agbosu & Ors v. Kotey & Ors (2003/2004) SCGLR 420, the burden of producing evidence in any given case was not fixed, but shifted from party to party at various stages of the trial, depending on the issue(s) asserted and/or denied.

It is not in dispute that the Plaintiff extended a facility of GH¢25,000.00 to the 1^st Defendant. Exhibit

B is an overdraft agreement between the Plaintiff and the 1^st Defendant. The facility offered was GH¢25,000.00. The purpose of the amount was to augment the borrower’s working capital in the sale of aluminum products. The agreement was signed on 1^st Defendant’s behalf by the 2^nd Defendant on 8^th November 2010 and was to expire on October 31^st 2011. (See Exhibits A, B, 1 and 2).

The Defendants are questioning whether the Plaintiff is entitled to continue to charge interest on the loan when as put by the Defendants the contract was frustrated by a supervening act. This supervening act being torrential rains resulting in a natural disaster i.e. flooding. When did the natural disaster occur? The Defendants say it occurred on 10^th and 11^th October 2011. Although they testified that they informed the Plaintiff about the natural disaster which beset their business on 10^th and 11^th October 2011 four days after the event, there was no evidence of this. They only tendered Exhibit 3 which was dated 27^th November 2012 in evidence.

Exhibit 3 was written on 27^th November 2012 and addressed to The Head, Pre Recoveries Det. SG SSB Kokomlemle. Its contents are as follows:

Dear Sir,

RE: DEBT REPAYMENT

Thank you for your letter of notification. It was shocking to note that my indebtedness has risen to such an amount. It was not iintentional to have abandoned my business. Our company suffered a flood disaster in September last year (2011). The flood which was triggered by the construction of the Mallam overpass bridges. The blockage of the Awoshie main waterway to allow the quick construction of the overpass triggered off the disastrous flood, which took our then residence, a three bedroom apartment house at Awoshie which also served as a wholesale storage facility to the business. …..

We shut down the business for four months and later reopened in January 2012.  ….  All my effort to reach you and get you to know our problems through the Kaneshie Branch of SG-SSB could not connect to the right authorities.

Please this is my humble request kindly spread the outstanding debt to the period of 24 months payment structure and remove 20% off from payment contributions because I cant be able to raise such money.

This letter was signed by the 3^rd Defendant.

In cross-examination, the following was elicited from the 2^nd Defendant who gave evidence on behalf of all 3 Defendants:

Q. The natural disaster happened between the 10^th and 11^th October 2011. Is that correct?

A. Yes. My Lord.

Q. And when did you notify the Bank?

A. My Lord we notified the Bank 4 days after. We began visiting our branch the Kaneshie Business Office.

Q. Did you say 4 days after the event?

A. Yes if I could remember.

Q. Do you have any evidence of the notification?

A. My Lord, the first and earlier notification, we did not put anything on paper. We went to the branch and we met the Branch Manager and the Loan Officer. And what my loan officer told me was he admitted he knew about the disaster and he asked me if I had insured the loan.

Q: Have a look at Exhibit 3, is that the letter of notification to the Bank?

A. This was the letter written after pre-recovery department of the Bank paid us a visit. But all our visits to the Bank inviting them to come and give us advice and support did not yield any fruit.

Q: Tell the court the date on Exhibit 3?

A: The date on Exhibit 3 is 27^th November 2012.

Q. So you will agree with me that this is your first official notification of the natural disaster to the bank.

A: No. My Lord.

Q. Was there any written letter before the 27^th November 2012 notifying the bank of the natural disaster?

A: Yes there was.

Q: Where is evidence of same?

A. My Lord we wrote a letter to Kaneshie Branch. This letter was submitted to the account officer. This letter came out after several visits and there was no response.

Q. Do you have a copy of that letter since the Bank does not have a copy of the said letter?

A. At the end of it all we were told that the loan officer was involved in an accident.

Q. Are you telling the court that you don’t have a copy of the said letter notifying the bank of the said natural disaster?

A: The truth is that we don’t have a copy.

The Defendants have also tendered Exhibit 4 which is a letter from the National Disaster Management Organisation (NADMO). This letter is dated 24^th October 2014. It is addressed to the Head, Recoveries Department of the Plaintiff Bank. The contents are as follows:

Dear Sir/Madam,

OCTOBER 10^TH – 11^TH FLOODS THAT HIT GA SOUTH MUNICIPALITY

We write to inform you officially about the rains on 10^th -11^th October 2011 respectively, which flooded most parts of the Ga South Municipality.

NADMO (Ga South) visited the affected areas to rescue victims and assess the extent of damage in the early hours of Wednesday 12^th October, 2011.

According to an impact assessment that was conducted revealed that houses and properties worth millions of Ghana cedis were destroyed by the floods.

A house and a store owned by Mr. and Mrs. Amos Rita Adjorlolo Igwe which contained building material accessories and electrical appliances were carried away by the floods at Mallam Kokroko.

In view of the above, we write to confirm the destructions of Mr. and Mrs. Amos Rita Adjorlolo Igwe’s house, store and personal belongings and hope you would provide them with all the necessary assistance.

Counting on your utmost co-operation.

As stated earlier, Exhibit 4 was written on 24^th October 2014.  This was a period of 3 years after the event. The writ which commenced these proceedings was issued on 29^th January 2014. This means Exhibit 4 came into being after the writ had already been issued. Prior to that, there had been no official communication between NADMO and the Plaintiff.

The Defendants have also not been able to provide any evidence that prior to 27^th November 2012, they had officially notified the Plaintiff Bank about the floods that had affected its business. Exhibit 3 from its tenor was in response to a demand notice made by the Plaintiff Bank for repayment of the debt.

In the case of Mojolagbe v. Larbi and others (1959) GLR 190, the court had this to say:

“Proof in law is the establishment of facts by proper legal means i.e. the establishment of an averment by admissible evidence. When a party makes an averment… he is unlikely to be held by the court to have sufficiently proved that averment by merely going into the witness box and repeating that averment on oath if he does not adduce that corroborative evidence which if his averment is true is bound to exist.”

Similarly, in the case of Zabrama v. Segbedzi (1991) 2 GLR 221 CA the court stated:

“The correct proposition is that a person who makes an averment or assertion, which is denied by his opponent has the burden to establish that his averment or assertion 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 nature of each averment or assertion determines the degree and nature of that burden.”

This position was re-affirmed in the case of Continental Plastics Ltd v. IMC Industries (2009) SCGLR 298 @ 306-307. So if the Defendants had evidence of their correspondence to the Bank prior to 27^th November 2012 they did not provide it to the court. A Defendant who wished to win his case was required to lead evidence on issues he desired to be ruled in his favour. As a result, the Defendants had the duty to help their own cause by adducing before the court such evidence which would ensure a finding in their favour. The issue of whether or not the Plaintiff Bank was made aware of the disaster being the tremendous flooding which led to the total destruction of the Defendants’ property is answered in the negative as all such correspondence came into existence long after the floods had occurred and only when demands had been made on the Defendants to redeem their indebtedness. There is also no evidence that the Defendants informed the Plaintiff of this disaster and proposed a renegotiation of the overdraft facility.

Furthermore, the Defendants in their evidence have catalogued a litany of woes amongst which was the flooding of 10^th and 11^th October 2011 after a heavy downpour. According to the Defendants, the flooding swept away their possessions and the goods from their business premises. But do these facts absolve the Defendants of their liabilities under the contract they signed with the Plaintiff? In Taylor v. Caldwell (1863) 122 ER 309, there was a contract for the hire of a music hall for 4 days. After the contract had been made, the hall was burnt down through no fault of either party. The Plaintiff sued the Defendant for damages for breach of contract. The court held that performance of the contract was impossible as the hall which was the subject matter of the contract had ceased to exist.

In the case of Barclays Bank (Gh) Ltd v. Sakari (1996/97) SCGLR 639 the Plaintiff Bank had sued to recover loans it had given to the Defendant. The Defendant in its defence said it had used the money given to it to purchase a truck. Proceeds of this truck were meant to be used in repaying the loan. However, it was seized by the Government at the time and could not be used to generate the funds which would eventually be used in payment of the loan.

After repeated demands, the Plaintiff took action in court to recover the money due and owing to it. The Defendant pleaded the common law doctrine of frustration arising from the unexpected seizure of the truck it had purchased.

The Supreme Court before which the matter went held that frustration occurred when an external event of some kind, which is not the responsibility of either parties rendered further performance of the contract impossible or was radically different from what had been contracted for. The court was however of the view that it was not every event affecting any term of a contract that would amount to frustration. The court held further that the basic duty of the court was to construe the contract to discover the obligation created therein – the obligation which unfulfilled by a party would entitle the other to sue for a breach of it.

In the instant case, the loan contracts indicated that the Plaintiff had granted the 1^st Defendant an overdraft facility. The maturity date of this facility was 31^st October 2011. Therefore, from the court’s understanding of the overdraft facility, the Defendants were to have completed payment together with interest by 31^st October 2011. If that was the position, the floods of 10^th and 11^th October 2011, barely 3 weeks to the maturity date should not have affected the repayment of the facility. That is to say, the payment was to be effected in a period of almost one year. If the Defendants had been diligent in making repayments over the period, whilst their business was benefitting from the overdraft facility, they would almost have finished paying at the time the floods occurred. The 1^st Defendant did not play its part by adhering to its part of the contract. The contract as in the case of the Barclays Bank case was for the Plaintiff to advance the money which it did and that of the 1^st Defendant was to pay the money together with the agreed interest. The court in the Sakari case supra put it succinctly when it stated at page 646 thus:

Now what is the obligation created under this loan contract, a breach of which would entitle the other to sue? The obligation of the bank was to advance the money which it did and that of the Defendant was to repay the money together with interest if any. This is the obligation of the parties under the loan contract, and indeed almost all loan contracts. When a Bank lends money to its customer, the obligation of the customer is to repay the loan. If the loan is being sought for, let us say a business venture, and the business flops, resulting in massive financial loss to the customer, this misfortune, though may be due to no fault of this customer, does not change the obligation of the customer to repay the loan he has contracted for. He will still be obliged to fulfill his obligation. Thus the obligation of a borrower on a loan contract, as opposed to other types of contracts, is to repay the loan and not the performance of the purpose for which the loan was sought.

Therefore, it was for the Defendants to repay the loan and not to rely on the proceeds from its business to fulfill its obligation under the contract.

This means that notwithstanding the calamities that beset the 1^st Defendant’s business, same would not exonerate it from performing its obligations under the overdraft agreement. At the time of the disaster, i.e. 11^th October 2011, the 1^st Defendant’s account had been overdrawn to the amount of GH¢23,550.06. (See Exhibit 5). At that time the contract could not be said to have been frustrated. Since this amount was due and owing just before the disaster occurred, it should not be used as an excuse for the Defendants not to pay their just debts. The issue of whether or not the contract between the parties had been frustrated by an Act of God to wit, torrential downpour of rain which caused tremendous flooding leading to the total destruction of the Defendants property and stock in trade is thereby answered in the negative.

The repayment of the loan facilities was not contingent on the success or otherwise of 1^st Defendant’s business. The Defendants’ defence of a supervening act preventing the Defendants from performing its obligations to repay the loans on the scheduled dates would in sum, be ineffective to answer the claim being made against them

The Plaintiff has sued for an amount of GH¢46,727.82 being the outstanding balance on the overdraft facility and interest on the said amount from 31^st August 2013 till date of final payment. Exhibit F attached to the Plaintiff’s Witness Statement and which is the Defendants’ Statement of Account is from January 2014 to March 2015. It does not indicate the balance outstanding as at 31^st August 2013. From Exhibit 5 attached to the Defendants’ witness statement, the court finds that the loan was outstanding in the sum of GH¢23,550.06 as at 11^th October 2011 and by 31^st October 2011, it had risen to GH¢25,049.31.

The Plaintiff is claiming 32.50 % per annum on the outstanding debt. The onus was therefore on the Plaintiff to prove that its demand was in line with the agreement it had signed with the Defendants.

It is provided for in Rule 1 of the Court (Award of Interest and Post Judgment Interest) Rules, 2005 (CI thus:

If the court in a civil cause or matter decides to make an order for the payment of interest on a sum of money due to a party in an action, that interest shall be calculated

(a) At the bank rate prevailing at the time the order is made, and

(b) At simple interest

But where an enactment, instrument or agreement between the parties specifies a rate of interest which is to be calculated in a particular manner the court shall award that rate of interest calculated in that manner.

The parties had agreed on a rate of 24.50 being the Bank’s base rate plus 8% margin bringing the total interest rate per annum to 32.50%. Interest will therefore run at the agreed interest rate of 32.50% per annum (see Exhibits 2 and B). This shall run on the sum of GH¢25,049.31 from 31^st October 2011 till date of final payment. The debt is also subject to the penal rate of 6% per annum also agreed upon by the parties, from 31^st October 2011 till date of final payment. The court will order that the debt be computed as stated above from the said date and not on the figure and date endorsed on the writ.

Exhibit C is a Land Certificate which indicates the registration of a mortgage dated 9^th November 2010 in favour of the Plaintiff over property situate at Ablekuma North East belonging to the 2^nd and 3^rd Defendants. As a result, the Defendants would be restrained either by themselves, privies or agents from letting out the property used in securing the loan facility to any 3^rd party without the leave of this Court.

The 3^rd Defendant has executed a guarantee in which she has guaranteed repayment of the 1^st

Defendant’s indebtedness. (See Exhibit D dated 8^th November 2010). In the event of the 1^st Defendant’s inability to repay the loan, she would be called upon to fulfil her guarantee.

The Defendants prayed the court for an order for accounts. When this was granted, the Defendants stated they had no money to pay for same. They therefore decided to dispense with the order for accounts. The Defendants’ Counterclaims are hereby dismissed.

Costs of GH¢8,000.00 is awarded against Defendants.

(SGD)

JENNIFER A. DODOO (MRS)

JUSTICE OF THE HIGH COURT