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JUDGMENT
RICHARD ADJEI-FRIMPONG JA:
This appeal raises an issue of considerable commercial and corporate law importance.
In the main, it turns on who, between a secured creditor under a debenture and an
execution creditor of a judgment must have priority over funds standing to the credit of
the debtor company. Does the nature of the charge or security and also the fact of its
registration maker to the determination?
At the court below, the learned judge found for the execution creditor. In the strength of
her conviction, she refused an application brought before her to set aside a garnishee
order absolute made in favour of the execution creditor. The secured creditor disagrees
and is before us on appeal.
In brief, the events culminating in the dispute unfolded this way. The applicant/
appellant (hereinafter ‘appellant’) in 2015 advanced two facilities referred to as Hotel
Loan Facility and Mall Loan Facility in the aggregate sum of US$ 57,500,000 to the
judgment debtor company. The facilities were secured by a debenture dated 9th
December 2016. The Guaranty Trust Bank Limited (GT Bank) was appointed the
security agents of the appellants. The debtor-company assigned to GT Bank (for the
appellant’s benefit), by way of first priority security, its rights, title and interest in its
project documents and receivables including insurance proceeds.
At the material time, the respondent/respondent (hereinafter ‘respondent’) had
commenced an action in the Court below against the debtor-company and 2 others for
the recovery of monies said to have arisen from the detention and use of certain
construction equipment belonging to the respondent. The court below on 10th March
2020 delivered judgment in favour of the respondent. In the execution of the judgment,
the respondent commenced garnishee proceedings by obtaining an order nisi against a
number of companies including Vanguard Assurance Company Limited (Vanguard).
On 18th September, 2020, the court below conducted the garnishee proceedings and
examined the Head of the legal Department of Vanguard. At the close of his
examination and discharge, a garnishee order absolute was made for the payment of the
sum of US$ 724,743.13 with costs fixed at GHC30,000.00.
It remains the appellant’s contention that, at the time of the examination of its head of
legal, its prior security interest contained in the debenture had been brought to the
a>ention of Vanguard by a le>er from GT Bank dated 15th September 20