June 24, 2022
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
Basak Micro-Credit Services sued to recover a loan extended to a Tamale-based shea butter businessman, guaranteed by a second defendant, under an October 24, 2019 agreement that fixed interest at 12% per month and a 20% per month penalty on default. After defendants admitted liability on the principal and accrued interest, the High Court entered judgment for GH46,971, awarded interest at the prevailing bank rate from March 11, 2020 to final payment, and costs of GH4,000. On appeal, the plaintiff argued that the court should have applied the agreed 12% monthly interest until judgment and 20% monthly post-judgment under C.I. 52. The Court of Appeal held that although parties are bound by their agreement, the plaintiff did not seek those contractual rates in the application; the trial court correctly awarded interest consistent with relief (b). The appeal was dismissed in limine.
S. R. BERNASKO ESSAH (MRS.), J.A.
This is an appeal at the instance of the Plaintiff/Appellant against the ruling of the High Court, delivered on the 26th of May 2020. The grounds of appeal are as follows:
1. That the trial judge erred in law when he assessed the interest rate chargeable on the judgment debt at the prevailing bank rate.
2. The learned trial judge misdirected himself on the issue of the chargeable interest rate on the judgment sum entered in favour of Plaintiff/Appellant.
By way of brief background to the appeal, the Plaintiff doing business in the name and style of Basak Micro-Credit Services, lent money to 1st Defendant/Respondent, a business man based in Tamale and engaged in Shea butter production and marketing. The 2nd Defendant/Respondent guaranteed the due repayment of the loan and interest thereon. The parties signed a loan agreement dated the 24th of October 2019. The 1st defendant having defaulted in the repayment of the loan the Plaintiff instituted an action seeking the following reliefs:
a. Recovery of GH46,971 being the principal sum and interest accrued on GH30,000 loan granted to 1st defendant and guaranteed by 2nd defendant.
b. Interest on the said sum from the date of filing the Writ to date of final payment at commercial lending rate.
c. Damages for breach of contract.
d. An order for the sale of 785 boxes of Shea butter stored at Tiehisuma Sheabutter Production Centre located at Gurugu, Tamale and the proceeds be used to pay the Plaintiff for the debt due, interest and for all incidental costs; or alternatively
e. Perpetual injunction to restrain the 1st defendant, his agent, assign, privies or whatsoever named to refrain from dealing with the said boxes of Shea butter without express consent of Plaintiff and/or in any manner that is inconsistent with the interest of the Plaintiff as at 10th March 2020 and for interest on the said sum. Upon application by the Plaintiff, judgment on admission was entered on the 26th of May 2020 in favour of the Plaintiff.
The Plaintiff/Appellant will in this delivery be referred to as the Plaintiff, and the Defendants/Respondents the Defendant or Defendants as the context permits.
Defendants having filed a Statement of Defence, Plaintiff applied for Judgment on Admission in respect of relief (a) endorsed on the Writ of Summons and the Court ruled as follows:
“Application is granted as prayed for. I enter judgment for the plaintiff against the defendant to recover an amount o