2016
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
The Plaintiff sought reimbursement from the Defendants after fulfilling the guarantor role when the Defendants defaulted on a loan. The trial court affirmed the Plaintiffs legal capacity to sue, based on an assignment of rights from the original lender, and dismissed the Defendants' defenses of fraud and frustration. The trial courts judgment was affirmed on appeal, with emphasis on the proper authorization presumed under corporate litigation rules and the presumption of foreign law similarity. Additional grounds of appeal were dismissed for not being filed with leave. The courts application of Ghanaian law was upheld due to lack of proof of New York law, reaffirming that issues of capacity are fundamental and must be proven by cogent evidence when challenged.
JUDGEMENT
TORKORNOO (MRS), J.A.
The Plaintiff Respondent (hereinafter referred to as Respondent) commenced this action by an attorney Mrs. Claris Efa Quayson. The Respondent’s case against the Defendants/Appellants was that the 1st Appellant had obtained a credit facility of US$901,765 from First International Bank of United States of America. They had failed to honor their repayment obligations and as guarantor to the lender on the debts, the Plaintiff had been called to pay the debt of principal with interest. It had paid the said debt to First International Bank and was now seeking reimbursement from the Appellants.
Its case was that the 2nd and 3rd Appellants had executed unconditional guarantees to pay the 1st
Appellant’s debts and also executed promissory notes to that effect. The Respondent claimed for:
1. The total sum of One million, Six Hundred and Twenty Two Thousand, Seven Hundred and Thirty-Two United States Dollars (US$1,622,732.00) being the outstanding amount and unpaid balance on the total credit facility plus ordinary accrued interest and post maturity interest as of December4, 2009.
2. Interest at the rate of 4.5% per annum above LIBOR on the Outstanding Sum from December 4, 2009 to date of final payment.
3. Cost incurred in this matter; and
4. Any other order (s) as this Honorable Court may deem fit.
In a 30 paragraph defence, the Appellants did not deny the fact of obtaining the loan and their failure to repay. The 2nd and 3rd Appellants also did not deny issuing guarantees to repay the debt. However, they set up legal defences against being called on to pay the debt as well as a counterclaim. It was their defence that the Plaintiff was not entitled to its claims because of fraud and the operation of the doctrine of frustration.
In addition to raising these doctrines as shields against the claim, the Appellants raised an objection to the forum in which the action had been commenced in paragraphs 27 of their defence. In paragraph 28, they also raised a defence against the capacity of the Plaintiff with these words.
28. The Defendants shall also contend that the Plaintiff has no capacity to institute the present suit.
Then in paragraph 29, the Defendants alleged a defence against the writ with these words.
29 The Defendants say that the writ before the court is incompetent and same cannot operate to invoke the jurisdiction of the court’.
They went on to counterclaim for:
Counter claim
a. A declaration that the contra