KUMASI - A.D 2016
ZENITH BANK - (Plaintiff)

SUIT NO:  BFS 68/2016

This is a motion on notice praying this Honourable Court for an order setting aside the judgment in default of appearance entered against the Applicants herein and for leave to enter late appearance.


The Plaintiff/ Respondent herein commenced this action on the 25th February, 2016 by way of Writ of Summons accompanied by Statement of Claim against the Applicants/Defendants (1st, 3rd and 4th Defendants) herein and five (5) other Defendants.


The Plaintiff claimed against the Defendants as follows:


Recovery of the sum of GHC 482, 164.90 as at 22nd January 2016.


Interest at the agreed rate on the said sum from 23rd January, 2016 up to the date of full and final payment.


Cost including Lawyer’s fee.


The processes were duly served on the applicants herein, who by the court’s record failed to enter appearance as required by Order 9 r 1 of the High Court (Civil Procedure) Rules, 2004 (CI 47).


Consequently, the Plaintiff moved for final judgment against the 1st, 3rd and 4th Defendants/Applicants herein and on the 22nd April 2016 the court gave Plaintiff judgment in “default of appearance” for all the reliefs sought.


It must be noted that the other Defendants were not served with the process and so the default judgment was not entered against them. Subsequently, entry of judgment was filed on the 22nd of June, 2016 and the same was successfully served on the Applicants.


It is this judgment in default of appearance which has necessitated the application currently before me. Same was filed on the 22nd of August, 2016. In support of the application is an affidavit sworn on behalf of the Applicants.


The Applicants asserted in their affidavit that they have duly discharged their payment obligations under the loan agreement and that they are greatly damnified by the Plaintiff’s action. It was further deposed that if given the chance to enter an appearance Defendants will successfully challenge the Plaintiff’s assertion that they have not repaid the loan with interest. Applicants attached a proposed statement of defence, marked Exhibit A to the affidavits in support of the motion.


Indeed, the gravamen of the Applicants’ case is that they have a reasonable defence to the suit and thus prayed the court to set aside the judgment in default of appearance against them and grant them leave to enter late appearance.


In moving the motion, Counsel for the Applicant added another ground to the affidavit evidence in support in support of the motion. In justifying why they failed to enter an appearance, Counsel submitted that the Applicants failed to do so as they believed that the action had been brought against them in error. According to Counsel, the Applicants’ records reflected that they were not indebted to the Plaintiff and that it was the desire of the Applicants to take steps to bring the error to the attention of the latter, hence their failure to enter appearance and file a defence.


This piece of evidence was not deposed to in the affidavit as part of the facts Applicants intended to rely upon in seeking the orders contained in the motion paper. Submissions of these facts were, however, not objected to by Counsel for the respondent and as such (the facts submitted) form part of the evidence to be considered in the determination of this motion. The court relies on the case of Edward Nasser & Co. Ltd v McVroom & Another [1996-1997] SCGLR 468 which held that an unpleaded evidence if not objected in evidence forms part of the record.


Counsel for the Applicants cited the case of Haruna v Arts Council [1992] 2 GLR 1 and prayed this Honourable Court to apply the High Court’s holding that even though the explanation given by the Defendant for the default was unreasonable, the court should not shut down the door of justice in the face of the Defendant who seeks to put forward a reasonable defence in a suit. Counsel submitted that in an action for recovery of money there can be no better defence than the defence that the Defendant does not owe the money.


The Plaintiff/ Respondent filed a counter affidavit aimed at controverting the deposition in the affidavit in support of the motion. In the affidavit in opposition, Respondent challenged Applicants’ assertion that they have duly discharged all payment obligations to them. Respondent attached 1st Defendant statement of accounts marked as exhibit Exhibit “AAK1” in a bid to demonstrate that the Applicants are indebted to them. They also attached Exhibit “AAK2” a letter written by the chairman of the 1st Defendant company to the Plaintiff/Respondent allegedly acknowledging the debt and apologising to the latter for their failure to fulfil their payment obligations under the loan agreement. According to Plaintiff /Respondent, the said letter was in response to a demand notice served on the Applicants early on.


In response to the submissions of Counsel for the Applicant, Respondent’s Counsel prayed the court to dismiss the application, as the same is unmeritorious. Counsel argued that the Applicants were not interested in mounting a defence and indeed they had no defence at all which is why they stood unconcerned even after the motion for judgment in default of appearance was served on them. Counsel contended that Applicants have not evinced any reasonable explanation for their inability to enter an appearance and file a defence.


Counsel for the Respondent relied on the case of Ghana Commercial Bank v Tabury (1977) 1GLR 329 where it was held that a guiding principle applied by the court in setting aside judgment in default of appearance is that the Applicant must satisfy the court that they could have set up some serious defence and that useful purpose could be served by setting aside the judgment. Counsel invited the court to dismiss the application as the Applicants have no reasonable defence to the suit.


Judgment in default of appearance is regulated by Order 10 of CI 47. Order 10 r 8 specifically gives the court the discretionary power to set aside judgment in default of appearance. It states: 

“The court may, on such terms as it thinks fit, set aside or vary any judgment entered in pursuance of this Order.”


When dealing with an application to set aside judgment in default of appearance, the court considers two main guiding principles:

a. That the applicant has given a satisfactory explanation for his failure in entering appearance; and

b. That he has an arguable defence to the claim.

[See Alphoneso O. Aryeetey and Anor v Royal Investment Co. Ltd. And 18 Others, Civil Appeal

No. H1/201/2005 (29th November, 2005) CA. See also Ghana Commercial Bank v Tabury (supra)]


Is the Applicants’ excuse reasonable?


It is my respectful view that Applicants threw caution to the wind when they failed to file an appearance based on the belief that they had been wrongly sued. Two options were available to Applicants if they truly believed in that assertion: they could have approached the Plaintiff for an amicable settlement or they could have simply filed an appearance to contest the claim. In fact, the latter option appears to be the most prudent among the two since entering an appearance can still afford Applicants the opportunity to pursue an out of court settlement. Unfortunately, Applicants sat down unconcerned and remained silent when the application for judgment in default of appearance was served on them. Their interest in the case was only activated when Entry of Judgment was served on them. In sum, Applicant’s explanation for their failure to enter an appearance can best be described as untenable. I therefore hold that the Applicants have no satisfactory excuse for not entering appearance.


This brings us to an assessment of the next guiding principle: do the applicants have reasonable defence to the claim?


Having perused all the documents filed herein and having considered the arguments advanced by Counsel for the parties, I am in no doubt that in spite of the unreasonable explanation for the delay in entering appearance; there is a substantial defence to the claim.


Applicants made a bare denial of their indebtedness without showing any evidence of payment. Meanwhile, respondent’s evidence of applicants’ indebtedness (Exhibit AAK1) does not speak for itself, in my view – evidence has to be led in explanation of the alleged indebtedness. In Exhibit AAK2 1st Applicant/Defendant admitted being indebted to the Respondent but the document was silent on the amount of money involved. It would have been helpful if the Respondent had attached the demand notice which triggered the 1st Applicant’s response in Exhibit AAK2. That would have determined whether indeed the demand was in relation to the amount indorsed on the writ of summons.


In the light of the above, I cannot conclude that the applicants’ defence is manifestly insupportable to warrant a dismissal of the application. The application is therefore worthy of a sympathetic consideration. I have come to this conclusion in spite of applicants’ failure to evince good reasons for the default. I am exercising my discretion in favour of the applicants to enable substantial justice to be done, as they have a reasonable defence.


In relying on the ethos of substantial justice, I am emboldened by the Supreme Court’s decision in the case of Major Mac Dorbi and W. O. Saviour v Richard Adom Frimpong and 2 Others Civil Appeal No.


J4/45 2011 (30th January, 2013). In that case, the appellant, W. O. Saviour who had not filed an appearance participated in the trial and emerged victorious. The Supreme Court saved the judgment in favour of the said W. O. Saviour after the Court of Appeal had set it aside. The Supreme Court speaking through Atuguba JSC stated:

“From the record of appeal and the Court of Appeal held it to be fundamental, W.O. Saviour did not enter appearance let alone file a defence. He however participated to the hilt in the proceedings and emerged from them as a victorious counter claimant. As to this we wish to point out that the battle for substantial, as opposed to technical and fastidious justice, has been irreversibly won. At the time of the institution of the consolidated suits herein, as noted by Kanyoke J.A. in the Court of Appeal, the new High Court (Civil Procedure) Rules 2004, C.I. 47 had come into force. The comprehensive terms of Order 81 rule 1(1) and 2(2) have indubitably given statutory stamp to the ancient maxim cuilibet licet renunciare juri pro se introducto, i.e. a person can waive what the law has ordained for his own advantage. In Obeng v. Boateng (1966) GLR 689 Amissah J.A. (as J) did not invalidate the participation in the proceedings of certain third parties who had filed no appearance thereto.”


Accordingly, the Judgment in default of appearance dated the 29th day of April, 2016 which was entered for the Plaintiff/Respondent herein is hereby set aside. The Defendants are to enter appearance and file their defence within fourteen (14) days from the date hereof.


Cost of GHC 2,000 is jointly and severally awarded against the Applicants in favour of the Respondent. Applicants are to pay the cost before filing the processes.