AGRICULTURAL DEV. BANK LIMITED VS WEBB BUILDERS LIMITED & ANOR
2018
HIGH COURT
GHANA
CORAM
- JUSTICE GEORGE BUADI J.
Areas of Law
- Contract Law
- Banking and Finance Law
- Evidence Law
- Civil Procedure
2018
HIGH COURT
GHANA
CORAM
AI Generated Summary
In this case, the Plaintiff, a local bank, sued the 1st Defendant, a corporate entity, and its managing director (2nd Defendant) for failure to repay a loan and interest. The court held that the 1st Defendant owed the Plaintiff GH¢1,549,309.65 plus interest upon concluding that no agreement existed to restructure the repayment or freeze the interest payment. Allegations of inducement and misrepresentation by the Plaintiff were unfounded. The court rejected the excuse that repayment was contingent on proceeds from the GETFund contracts and enforced the loan's terms and conditions.
1. 0 Background 1. 1 Plaintiff is a local banking institution.
1st defendant is a corporate entity and a customer of the bank, whilst 2nd defendant is its managing director, who plaintiff bank claims executed a Contract of Indemnity that guaranteed and secured repayment personally of a loan facility the bank granted 1st defendant, which the bank claims had fallen due and had remained unpaid.
1. 2 Plaintiff commenced this suit by a writ of summons on December 14, 2016 initially against 1st defendant.
On January 12, 2018, upon leave of the court, plaintiff joined 2nd defendant to the suit, culminating in the amendment of the writ for the following reliefs against defendants jointly and severally: a Recovery of One Million Five Hundred and Forty Nine Thousand Three Hundred and Nine Cedis and Sixty-Five Pesewas. (GH¢1, 549, 309. 65) being unpaid balance on the loan facility granted the Defendants.
b Interest on the above sum at the rate of 33. 16% per annum from 7th September, 2014 until the date of final payment.
c Costs.
2. 0 Statements of parties’ case 2. 1 Plaintiff’s case Plaintiff’s case is that upon request of 1st defendant for a loan to augment its working capital to complete construction of a project, the plaintiff pursuant to a Facility Offer Letter dated September 17, 2013 granted a short-term loan of GH¢572, 315 to 1st defendant.
On October 10, 2013, per a resolution of the Board of 1st defendant dated September 7, 2013 accepted the terms and conditions for grant of the facility that included interest rate of 33. 16% per annum repayable within 12 months period.
According to plaintiff, 1st defendant had earlier executed a deed titled‘Assignment of Receivables’ dated August 29, 2011, stamped as LVDN/L7397A/11 by which it assigned to plaintiff its contract proceeds worth GH¢973, 377 from the Ghana Education Trust Fund (GETFUND)and to also secure any facility plaintiff may grant to 1st defendant, including interest, legal fees, bank charges, court costs and associated expenses incidental to any legal action that shall be taken by plaintiff towards recovery should 1st defendant default on its part to pay any of its debts to plaintiff.
Plaintiff claims that no money has been received from this security till date, and that 1st defendant had failed to retire the facility in spite of several demands though the 12 months duration has expired despite defendant’s acknowledgment demand notices and consequential promises to repay its outstanding inde