CITY INVESTMENT CO. LTD VS HUGHES ESTATES LTD & ANOR
2016
HIGH COURT
GHANA
CORAM
- HER LADYSHIP JUSTICE JANAPARE A. BARTELS-KODWO (MRS.)
Areas of Law
- Banking and Finance Law
- Contract Law
- Property and Real Estate Law
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
This case involved a bank seeking to recover unpaid loan facilities from two defendants. The court held that the loans had not been fully repaid and that the mortgage agreement created a valid equitable mortgage. The key issue was the method of interest calculation, with the court accepting the defendant's proposed method over the plaintiff's. The court awarded the plaintiff GH¢127,867.49 as of February 2015, with ongoing interest, and restrained the defendants from disposing of the mortgaged property. The case illustrates principles of equitable mortgages, interpretation of loan agreements, and the burden of proof in civil cases.
By a Writ of Summons issued on 19th May, 2008 the Plaintiff claims against the Defendants jointly and severally as follows:
(a) An order for the payment of the sum of GH¢61, 814. 00 being balance due and owing as at the 25th day of January 2007, on account of credit facilities extended to the 1st Defendant by Plaintiff on 20th July, 2006 and 27th July, 2006, the repayment of which was secured with House No. 13 South Labadi Estates, Labadi, Accra owned by the 2nd Defendant but settlement of which Defendants have failed to make good several demand notices notwithstanding.
b) Interest on the said sum of GH¢61, 814. 00 at the rate of 5% per month from January, 2007, up to and inclusive of date of final payment.
c) An order of interim injunction restraining the Defendants from selling, pledging or in any other way disposing of the House No. 13 South Labadi Estates, Labadi, Accra pending the final determination of this suit.
d) Costs.
The Defendants responded to the claim and admitted the terms of the original loan and the extended facility.
They however denied that 1st Defendant had executed a promissory note for the repayment of the facilities in favour of the Plaintiff on the due dates in question.
They also denied that the 1st Defendant had shown poor repayment capacity causing the loan to fall into arrears.
At pre-trial the following issues were settled for trial: 1. Whether or not the first credit facility granted in the sum of GH¢40, 000. 00 has been paid leaving a balance of GH¢7, 000. 00. 2. Whether or not Plaintiff is entitled to its reliefs.
Later on the 2nd Defendant filed an amended defence and the following issues also came to the fore to be settled: 3. Whether or not the Credit Facility granted in the sum of GH¢40, 000. 00 has been paid by the 1st Defendant leaving an outstanding balance of GH¢7, 000. 00? 4. Whether or not the Mortgage Agreement executed by the 2nd Defendant on the 20th of July is valid and enforceable.
Evidence was taken from the Plaintiff through its Head of Recoveries one Isaac Odoi who told the court he knew the Defendants.
He said on the 20th of July, 2006 Defendants applied for a loan facility of GH¢7, 000. 00 and the terms were at an interest rate of 6% to assist them clear their goods from the port.
Then again on 27th July, 2006 they were granted another loan of GH¢40, 000. 00 to supplement their resources in building estate houses on the Spintex Road.
Plaintiff’s witness tendered Exhibits ‘A’ and ‘B’, two off