BEST POINT SAVINGS AND LOANS LTD v. EVADOX LTD & ANOTHER
2022
COURT OF APPEAL
GHANA
CORAM
- DZAMEFE JA PRESIDING
- AMMA GAISIE JA
- NOVISI ARYENE JA
Areas of Law
- Banking and Finance Law
- Property and Real Estate Law
- Civil Procedure
2022
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
The Court of Appeal, per Novisi Aryene JA, addressed an appeal by borrowers (including Evadox) challenging a High Court order that allowed a lender to realize a mortgage securing a restructured short-term loan. The borrowers had obtained GH¢1,500,000, later restructured with 4.2% monthly interest and quarterly repayments, and defaulted. The lender issued a 31 October 2017 demand notice, notified intention to realize the security, and obtained a Memorandum of No Objection from the Bank of Ghana’s Collateral Registry. A court-appointed Independent Referee, the Judicial Service’s Director of Finance, reconciled accounts and reported an amount due of GH¢1,685,302.23, which the High Court adopted. On appeal, the borrowers argued the statutory notice was invalid because it stated an incorrect amount and that fresh notice was required. The Court of Appeal adopted a purposive approach to section 32, held the notice requirement is substantive, found the borrowers knew their debt and failed to pay, and affirmed the High Court’s warrant to realize the security, awarding costs of GH¢10,000.
NOVISI ARYENE JA:
Respondent herein brought the instant action against the appellant under sections 33 and 34(2) of the Borrowers and Lenders Act, 2008, (Act 773), praying for an order or a warrant to realize the security under a loan facility granted to the appellant. Appellant opposed the application on grounds that respondent had failed to comply with the laid down procedure in the Act, and prayed the court to refuse the application. Arguments advanced by counsel for appellant in the instant appeal, in opposing the application did not find favour with the trial judge, who granted the application.
This is an appeal against the ruling of the trial High Court dated 10th April 2019. In this judgment, the applicant would be referred to as the respondent and the respondent as the appellant.
The facts of the instant action, as can be gleaned from the affidavits filed by the parties before the lower court are that, sometime in 2016, appellant applied for and was granted a short term loan facility in the sum of GH¢1,500,000.00. The facility which was for a duration of six months, attracted interest at the rate of 4.2% per month. On application by appellant on 27th February 2017, the total loan balance in the sum of GH¢1,618,641.67 was restructured at an agreed interest rate of 4.2% per month over a period of nine months. It was agreed that 1st appellant would pay the outstanding balance in three tranches at the end of every quarter. It was also a term in the restructured agreement that the principal amount, interest and other charges would become due and payable immediately upon default of payment of an instalment.
2nd appellant provided a third party legal mortgage over a piece of land (more appropriately described in the tripartite mortgage agreement attached as exhibit D to the supporting affidavit). The said property was duly registered by respondent under the Lenders and Borrowers Act with the Collateral Registry of the Bank of Ghana.
Appellant defaulted in his repayment obligations under the restructured facility. According to respondent, as at 30th March 2018, the balance on the account stood at GH¢2,618,123.18 with interest still running at the agreed rate. (See exhibit F attached to the supporting affidavit at page 28 of the ROA). Appellants failed to fulfill several promises made to redeem their obligations under the loan facility. By demand notice dated 31st of October 2017, (see exhibit G at page 29 of the ROA) respondent called in the facility