GHANA HOME LOANS LTD VS ANTHONY BOATENG SEKYERE & ANOR
March 16, 2016
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP JUSTICE JEROME NOBLE-NKRUMAH
Areas of Law
- Contract Law
- Banking and Finance Law
- Property and Real Estate Law
- Commercial Law
March 16, 2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
In the High Court (Commercial Division) at Accra, Ghana Home Loans (GHL) sued borrowers who obtained a $124,800 mortgage to purchase a four-bedroom house at Salamander Street, Community 18, Lashibi, Accra. The facility carried 13.05% interest over 15 years and was secured by a mortgage over the property. GHL disbursed the first tranche of $87,568.55 to the vendor and deducted $6,031.45 as closing costs, withholding the remaining $31,200 until the vendor provided transfer documents from Tema Development Company. The defendants had possession of the property but defaulted in May 2013. The court found GHL acted as the defendants’ agent and could withhold funds to protect the transaction, and that repayments and interest should be calculated on the total facility amount. However, applying the penalty doctrine from Dunlop and Adjei v. Oteng, the court refused the 22.5% default rate, instead applying 13.05% from 12/12/13, awarding $135,261.24 and costs of GHC 20,000.
By a writ of summons, the plaintiff claims from the defendants jointly and severally:
A] An amount of $135,261.24, being the outstanding balance on a facility granted to the defendants.
B] Interest on the said amount from 12/12/13 to the date of final payment at a rate of 22.5% per annum.
C] Costs.
After the service of the writ with the accompanying statement of claim, the defendants entered appearance but filed no defense, compelling the plaintiff to file a motion for default judgment. Before that could be moved, the defendants filed their defense. After an unsuccessful pretrial settlement, the matter was set down for trial. The plaintiff called one witness.
From the pleadings and record of evidence, it is clear that the parties agreed on a facility of $124,800.00 [per exhibit CD3], which is a mortgage facility in respect of a 4-bedroom property. Repayment was to be within 15 years at an interest rate of 13.05% [subject to changes described in the mortgage program]. According to the plaintiff, the facility dated 7/8/12 was secured by a mortgage over the same property, a 4-bedroom property on Salamander Street, Community 18, Lashibi, Accra.
From the evidence adduced, it is not in doubt that the disbursement to the vendor of the property was to be in two tranches [exhibit DA1]. It is also not in doubt that out of the facility amount of $124,800.00, an amount of $87,568.55 has been paid out to the vendor as the first tranche, while an amount of $6,031.45 has also been deducted by the plaintiff as closing cost for the defendants.
It is further not in doubt from the evidence that an amount of $31,200.00, being the remainder of the loan, remains undisbursed and is being withheld by the plaintiff. I find accordingly that these amounts are the total facility amount, disbursements, and balance remaining respectively. It is also not in doubt that documents evidencing the transfer of title from the Tema Development Company to the defendants have not been submitted. It is for this reason that the plaintiff is holding onto the balance.
It is now the case of the plaintiff that the defendants began servicing the facility until they defaulted sometime in May 2013. Events thereafter have led to the present action. The defendants’ case, on the other hand, is that in spite of the fact that only the first tranche of $87,568.55 has been disbursed to the vendor, the plaintiff is charging interest on the entire mortgage amount.
This is a civil suit, and theref