AGRICULTURAL DEVELOPMENT BANK vs D & K EVERFRESH FOODS GH. LTD & ORS
2025
HIGH COURT
CORAM
- HER LADYSHIP JUSTICE MAVIS AKUA ANDOH (MRS
Areas of Law
- Banking and Finance Law
- Property and Real Estate Law
- Evidence Law
- Civil Procedure
- Contract Law
2025
HIGH COURT
CORAM
AI Generated Summary
The Plaintiff, a Bank of Ghana licensed financial institution, sued a food products company (1st Defendant), its managing director (2nd Defendant), and a property owner (3rd Defendant) to recover GH a0953,881.27 arising from a 2013 temporary overdraft and sought, in the alternative, judicial sale of the 3rd Defendants properties (parcels 1041 and 1042 at La Bawaleshie, East Legon). The High Court previously granted summary judgment against the 1st and 2nd Defendants. In the present trial solely against the 3rd Defendant, the Court found no evidence of a new mortgage securing the overdraft; Exhibit D was signed by the Plaintiff and the 2nd Defendant, not the 3rd. Applying Section 5 of the Mortgages Act (NRCD 96), the Court held a mortgage secures only the specific obligation stated in the deed; the 2012 mortgage for a GH a0100,000 loan (later repaid) could not secure the overdraft without fresh consent. The Plaintiff failed to prove the 3rd Defendants liability, judicial sale was refused, and no order as to costs was made.
On 19 th May 2021, the Plaintiff sued the Defendants jointly and severally for the recovery of the following reliefs;
1. An order for the payment of GHS953, 881.27 being the total outstanding balance of the credit overdraft facility as at 12 th April 2021, granted by the Plaintiff to the 1st Defendant, guaranteed by the 2nd Defendant and further secured by a Mortgage over two plots of land, noted as parcel Nos. 1041& 1042, Block 20 Section 114, La Bawaleshie, East Legon upon Land Certificate GA 7220 Vol. 53 Folio 176.
2. Interest on the said amount of GHS953.881.27 at the agreed rate of 30.47% from the 13 th of April 2021 up to the date of final payment.
3. Alternatively, an order for the judicial sale of two plots of land with buildings thereon noted as parcel Nos. 1041& 1042, Block 20 Section 114, La Bawaleshie, East Legon, upon Land Certificate GA 7220 Vol. 53 Folio 176 the property of the 3 rd Defendant.
4. Cost.
BRIEF FACTS
The Plaintiff is a Financial Institution licensed by the Bank of Ghana to engage in the business of banking and it offers a full range of banking products and services under the laws of Ghana. The 1 st Defendant is a Company engaged in the production of high quality food products locally and internationally. The 2 nd Defendant is the Managing Director of the 1 st Defendant and a Guarantor of the facility extended to 1 st Defendant by Plaintiff. The 3 rd Defendant used his property comprising two plots of land with a building thereon, situate at La Bawaleshie, East Legon as Mortgage to secure the repayment of a loan facility.
According to the Plaintiff, it initially granted a loan facility of GH¢100,000.00 to 1 st Defendant on 19 th November 2012 and this loan was secured by a Mortgage over the said two plots of land described as parcel Nos.1041 & 1042, Block 20 Section 114, La Bawaleshie East
Legon, upon Land Certificate GA 7220 Vol. 53 Folio 176 and stamped as LVD 21751/2012.
This initial loan was repaid, but the security was however retained for another facility, an overdraft facility of GH¢75,000.00, which is the subject matter of this action now.
In or around April 2013, the Plaintiff claims that, the 1 st Defendant applied for a temporary overdraft facility of SeventyFive Thousand Ghana Cedis (GH¢75,000.00) to enable them to pay customs duties. This overdraft facility was further secured by an unlimited shareholder guarantee executed by the 2 nd Defendant and stamped as LVDN/9058/12, and the said overdraft facili