FORMS CAPITAL LTD VS FREEMAN GT COMPANY LTD. & ORS

The liability of the first three defendants in this suit has already been settled by the court upon an application for judgment in default of defense mounted by the Plaintiff. The court differently constituted granted the prayer of the Plaintiff in terms of the following reliefs endorsed on the Plaintiff’s writ of summons:

a. Payment of the sum of Twenty Four Thousand, Five Hundred and Fifty Nine Ghana Cedis (Gh¢24,559.00) being sum outstanding on the loan as at 31st May, 2014 on loan granted to the 1st defendant repayment of which was guaranteed by the 2nd and 3rd defendants.

b. Payment of the sum of Gh¢24,899.00 being sum outstanding on the second loan as at 6th June, 2014 on loan granted to the 1st defendant repayment of which was guaranteed by the 2nd and 3rd defendants.

c. Interest on the 1st loan at the contractual rate of ten percent (10%) per month from 1st June, 2014 to date of final payment.

d. Interest on the second loan at the contractual rate of ten percent (10%) per month from 7th of June, 2014 to date of final payment.

e. Cost of a full recovery basis.

What is left in this suit for determination is relief c. on the endorsement on the writ of summons and which is stated as follows: “A declaration that the Plaintiff relied on the undertaking of the 4th defendant to pay the contract sum in joint names of the Plaintiff and the 1st defendant in taking a decision to grant the loan to the 1st defendant.” The background to the claim of the Plaintiff can be discerned from the 22 paragraph statement of claim that accompanied the issuance of the writ.

Plaintiff claims that per a facility letter of 21st of August, 2012 it advanced a loan of Gh¢25,000.00 to the 1st defendant for the purposes of executing a contract awarded by the 4th defendant to the 1st defendant with the repayment period being three months. According to the Plaintiff, the loan should have been repaid by 20th of November, 2012. The 4th defendant undertook to pay the contract sum in the joint names of the 1st defendant and the Plaintiff and it was that undertaking relied on by the Plaintiff that informed its decision to award the contract to the 1st defendant.

To the Plaintiff, the 1st defendant later requested a further loan to enable it to complete the contract the 4th defendant awarded it and it did accede to that request and made a further advancement of Gh¢15,000.00 to the 1st defendant. In the Plaintiff’s reckoning, the 1st defendant has failed to make good its repayment te