2021
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
This Ghana Court of Appeal decision arises from a commercial lending dispute between the Plaintiff bank (formerly The Trust Bank) and a corporate borrower. The bank had extended facilities secured by a debenture over equipment and a legal mortgage over the borrower’s Dodowa property, later restructuring the indebtedness to GHȼ2.72 million. The borrower defaulted in July 2014, leaving an outstanding balance of GHȼ3.51 million. At trial, the High Court recognized indebtedness but reduced the recoverable sums and denied judicial sale, relying on the Borrowers and Lenders Act (Act 773) though it was not pleaded. On appeal, Welbourne J.A. held that appellate review examines the trial court’s method and conclusions, found the trial judge erred by introducing Act 773 sua sponte and misplacing the registration obligation, affirmed the availability of judicial sale under CI 47, and concluded the bank proved the entire debt through facility letters, statements, and demands. The court allowed the appeal, reinstated the full claim with contractual/default interest, permitted alternative judicial sale of the Dodowa property, and awarded costs, with Dodoo and Koomson concurring.
WELBOURNE, J.A
This appeal emanates from the judgment of the High court, Accra dated 27th April 2017.
The Background Facts
The facts are that the Plaintiff took out a writ of summons and statement of claim against the Defendant on 11th July 2014 for the following reliefs:
i. The recovery of Three Million, Five Hundred and Fourteen Thousand, Nine Hundred and Thirty-One Ghana cedis and Ninety-Three pesewas (GHȼ3,514,931.93) inclusive of interest being the outstanding balance on the said restructured loan facility granted by the Plaintiff to the Defendant which is due from the Defendant to the Plaintiff, and which remains unpaid despite several oral and written demands made to them for same.
ii. The interest on the amount of Three Million, Five Hundred and Fourteen Thousand, Nine Hundred and Thirty-One Ghana cedis and Ninety Three pesewas (GHȼ3,514,931.93) at the agreed base rate plus the agreed spread rate payable monthly in arrears and default rate before judgment and until date of final payment.
iii. Costs
Further or in the alternative
iv. An order for the judicial sale of the commercial property situate at Dodowa, Odumase in the Greater Accra Region which constituted and was a continuing security for the said restructured loan facility.
In summary, the Plaintiff previously known as the Trust Bank (TBL), upon request of the Defendant granted credit facilities to the Defendant in 2011. As security for the said facilities the Defendant executed a D
Trust Bank (debenture dated May 9, 2011 over its entire assets including but not restricted to machinery and equipment. The Defendant also executed an assignment and domiciliation of all sales proceeds supported by contracts and reputable corporate institutions acceptable to the Plaintiff.
In addition, the Defendant executed a legal mortgage in favour of the Plaintiff over its property situate off the Dodowa Road, Dodowa, Odumase in the Greater Accra Region. The Defendant consented and deposited its original title deeds relating to the said property with the Plaintiff.
When the Defendant realised that it was having difficulty with repayment of the facilities, it requested the Plaintiff for a facility, a medium term loan of Two Million, Seven Hundred and Twenty Thousand Five Hundred and Fifteen Ghana cedis and Twelve pesewas (GHȼ2,720,515.12) for the restructuring of the Defendant’s then outstanding on all facilities comprising a medium term loan of Six Hundred and Nine-Three Thousand One Hundred and Ei