BOND SAVINGS & LOANS LIMITED VS CONTINENTAL COMMODITIES TRADING LIMITED & 3 ORS.
2019
HIGH COURT
GHANA
CORAM
- HER LADYSHIP MRS. ANGELINA MENSAH-HOMIAH J.
Areas of Law
- Contract Law
- Banking and Finance Law
- Evidence Law
- Civil Procedure
- Commercial Law
2019
HIGH COURT
GHANA
CORAM
AI Generated Summary
Bond Savings and Loans Company sued the 1st–4th Defendants to recover GH¢5,564,700.28 plus contractual interest after a GH¢3,000,000 facility to the 1st Defendant, secured by an assignment of trading stock and corporate/personal guarantees from the 2nd–4th Defendants, went into default. The 1st Defendant, in receivership, did not file a witness statement or cross-examine, rendering the Plaintiff’s evidence unchallenged. The 2nd–4th Defendants argued that restructuring postponed enforcement and that the debt was repaid, pointing to a zero balance caused by software migration, and raised stamping objections to the guarantees. The court excluded the unstamped guarantees but held the guarantors liable based on their admissions and the co-extensive nature of guarantee obligations, found no proof of repayment or forbearance promise, and entered judgment for the Plaintiff with 45% interest from 1 November 2016, simple post-judgment interest, and GH¢80,000 costs.
This is a debt recovery action against the Defendants herein as principal debtor and guarantors respectively.
Whereas the Plaintiff is a Savings and Loans Company incorporated under the laws of Ghana, the 1st, 2nd and 3rd Defendants are related Limited Liability Companies; the 4th Defendant is a Director of the 1st Defendant Company.
The 1st Defendant is currently in receivership.
The reliefs sought by the Plaintiff are as follows: a) Recovery of the sum of Five Million, Five Hundred and Sixty-Four Thousand, Seven Hundred Ghana Cedis, Twenty-Eight Pesewas (GH₵5, 564, 700. 28); b) Interest on the said Five Million, Five Hundred and Sixty-Four Thousand, Seven Hundred Ghana Cedis, Twenty-Eight Pesewas (GH₵5, 564, 700. 28) at the agreed penal interest rate of 45% p. a. from 1st November, 2016 till date of final payment; c) Damages for breach of contract; d) Cost. THE PLAINTIFF’S CASE On 10th April 2015, the Plaintiff averred that it extended a credit facility to the 1st Defendant at its request, at an interest of 35% per annum, and penal interest of 45% per annum, for a period of 12 months.
As security for repayment of the facility, the Plaintiff alleged that the 1st Defendant charged and assigned all its trading stocks to the Plaintiff.
Whereas the 2nd and 3rd Defendants executed corporate guarantees, the 4th Defendant issued the Plaintiff with a personal guarantee.
Upon default by the 1st Defendant, the Plaintiff asserted that various demand notices were sent to the Defendants, including the Receivers and Managers of the 1st Defendant.
The outstanding balance on the facility was allegedly communicated to the Receivers and Managers as well, but they have refused to respond to the Plaintiff’s request to settle the indebtedness of the defendants.
It is the case of the Plaintiff that as at 31st October 2016, the defendants were jointly and severally indebted to the Plaintiff in the sum of GH₵5, 564, 700. 28, which remains unpaid to date.
In its Amended Reply, the Plaintiff averred that the 1st Defendant informed the Plaintiff of the re-structuring of 1st Defendant’s business.
THE CASE OF THE 1ST DEFENDANT According to the Receivers and Managers of the 1st Defendant, they have not received sufficient information to enable them confirm or deny the averments in paragraphs 7 to 16 of the Plaintiff’s Amended Statement of Claim.
However, they denied that the 1st Defendant has defaulted in re-payment of the facility, but conceded that the Plaintiff issued ou