FIDELITY BANK LTD VS ITAL CONSTRUCT INTERNATIONAL LTD

By a facility letter dated 12th May 2008, the plaintiff granted the defendant a short term loan of US$700,000.00. The facility, which was to expire on 15th April 2009, was at an interest rate of 12% per annum with a default interest rate of 13% per annum. The defendant executed a fixed debenture in favor of the plaintiff over her electro-welding panel production plant and machinery with a forced sale value of US$1,510,425.00. The defendant failed to abide by the terms of payment and by a letter dated 19th May 2010, applied for the restructuring of the outstanding debt, which at the said date stood at US$432,538.91. The defendant again failed to comply with the payment schedule of the restructured facility.

It is the case of the plaintiff that as of 17th June 2011, the defendant’s debt stood at US$457,671.53. The plaintiff’s claim is for the recovery of the said outstanding amount plus interest at the rate of 13% per annum from 17th June 2011 until the date of final payment and the judicial sale of the defendant’s electro-welding panel production plant and machinery. The defendant admitted the key averments contained in the plaintiff’s statement of claim but pleaded frustration.

It is the case of the defendant that the facility was to be applied for the construction of fifty housing units for members of Aluworks Staff Co-operative Credit Union (ALUSCCU) at Afienya in the Greater Accra Region. By the terms of an agreement between ALUSCCU and the defendant, ALUSCCU applicants were to be granted mortgage facilities by Ghana Home Loans to pay for the houses. The defendant averred that after paying the initial deposits, the ALUSCCU applicants refused to complete the necessary formalities for Ghana Home Loans to complete the transactions.

In further denial of the plaintiff’s claim, the defendant averred in paragraph 4 of the statement of defense that the actions and/or inactions of the members of ALUSCCU have frustrated the defendant’s contract with the plaintiff and that these supervening events were neither within the control of the defendant nor anticipated by them. It is the case of the defendant that due to these unforeseen events, she cannot liquidate her debt to the plaintiff immediately. And to the knowledge of the plaintiff, she had instituted legal proceedings against ALUSCCU beneficiaries in suit no RPC/131/10 before the Commercial Division of the High Court, Accra.

The defendant averred in paragraph 7 of the statement of defense that the invocatio