2012
SUPREME COURT
CORAM
AI Generated Summary
In this Supreme Court appeal, Dr. S. K. Date-Bah JSC authored a comprehensive opinion concerning the commercial relationship between Hajaara Farms Limited and its bank. Hajaara financed ten Renault tractors via a bank loan, but the bank seized and sold all ten tractors, including five initially released under revised terms. Hajaara sued for accounts and damages; the bank counterclaimed for repayment. The High Court awarded conversion damages and dismissed the counterclaim, and the Court of Appeal largely affirmed. The Supreme Court held that while the bank committed a fundamental breach, discharge does not rescind accrued debt; Hajaara remained liable to repay the loan. Conversion damages were affirmed but set off against outstanding indebtedness. The Court adopted the lesser of two debt figures, applied bank-rate interest subject to an interest deduction as contract damages for loss of use, and dismissed a challenge to the Court of Appeal’s suo motu consolidation analysis. Several authorities, including Henderson v Merrett and Johnson v Agnew, guided the Court’s approach to concurrent liability and discharge.
J U D G M E N T
DR. DATE-BAH JSC:
The key facts in this appeal are that a farming company (the plaintiff/respondent/respondent) entered into a loan agreement with a bank (the defendant/appellant/appellant) to finance the importation of 10 tractors from France. On their arrival in Ghana, the farming company took delivery and custody of the tractors. Dissatisfied with this, the bank seized the tractors and put them in its warehouse. It released 5 of the tractors to the company only after new terms had been agreed between them. The remaining five remained in the bank’s custody until they were ultimately sold by the bank. The bank claimed to be exercising rights under the original loan agreement that it had concluded with the farming company. But this agreement was never put in evidence at the trial. Eventually, the five tractors released to the company were also seized by the bank and sold.
The farming company brought this action in 1993, claiming:
a) “that an account be taken of the proceeds obtained by the Defendants from the operation of 5 (five) Renault agricultural tractors belonging to the Plaintiffs from 1988 to date of disposal plus interest on such proceeds at the rate of 26% or the prevailing bank rate whichever is higher;
b) that an account be taken of the proceeds obtained from the sale of 10 (ten) Renault tractors belonging to Plaintiffs by defendants plus interest thereon at 26% or the prevailing bank rate whichever is higher;
c) General damages for wrongful detention and disposal of 20 (sic) (ten) Renault tractors the property of the plaintiffs by the defendants or Alternatively an order for the replacement by the Defendants of the 10 Renault tractors plus damages for their wrongful detention and or wrongful disposal.
d) An order that any sums outstanding in respect of claims (a) and (b) above be paid to the Plaintiffs by the defendants.”
The bank, in response, counterclaimed for:
a) “Account of all the jobs undertaken by Plaintiffs and the proceeds obtained from them for the use of 5 (five) Renault Agricultural Tractors from 1986 to 1992.
b) Payment to defendants of the Plaintiff’s outstanding indebtedness and interest thereon at the current Bank rate.”
From the nature of the claim and counterclaim, it would appear that the company sued in tort, whilst the bank counterclaimed in contract. The claim and counterclaim of the company and the bank respectively came before Aryeetey JA, as he then was, for trial at the High Court and he de