2022
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
This appeal arises from the High Court, Koforidua’s decision to stay proceedings against all four defendants on the basis that the 1st Defendant was under receivership pursuant to Act 930. The Plaintiff company had extended an overdraft and revolving credit totalling GHS 3 million to the 1st Defendant company in 2014, secured by mortgages from the 2nd, 3rd, and 4th Defendants. Following default, the Plaintiff sued for repayment or judicial sale. Defendants sought a stay, relying on a Bank of Ghana press release revoking licences of certain microcredit companies under Act 774 and requesting the Registrar to commence winding-up. The Court of Appeal held Act 930 did not regulate the 1st Defendant, exhibit A did not show receivership, no winding-up had commenced to justify a stay, and therefore set aside the High Court’s ruling, directing the case to proceed and awarding costs.
MENSAH-HOMIAH, JA
The High Court, Koforidua in a very terse ruling dated 19th October 2020, stayed proceedings in the instant action against all four defendants, pursuant to the Banks & Specialised Deposit Taking Institutions Act 2016 (Act 930). We have been called upon to determine among other things, whether or not 1st Defendant Company falls within the entities regulated under Act 930, and whether the ruling is justified in law.
In this appeal against the High Court ruling, Plaintiff/Appellant and Defendants/ Respondents would be simply referred to as Plaintiff and Defendants, respectively.
A brief background to the case would be useful. On 24th September 2014, Plaintiff company granted an overdraft facility of One Million Ghana Cedis (GHS 1,000,000.00) and a revolving Line of Credit of Two Million Ghana Cedis (GHS 2,000,000.00) to 1st Defendant company on agreed terms. It is said that, 2nd, 3rd and 4th defendants mortgaged their properties as security for repayment of these credit facilities. When 1st Defendant defaulted on the facilities, Plaintiff sued Defendants jointly and severally for repayment of the outstanding amount of Three Million Eight Hundred and Seven Thousand Seven Hundred and Ninety-Six Ghana Cedis and Twenty-five Pesewas (GHS3,877,796.25); or in the alternative, judicial sale of the mortgaged properties.
Pursuant to an order of the trial court, the parties filed their respective witness statements and case management conference (CMC) commenced. While the CMC was ongoing, Counsel for Defendants filed a “motion on notice for an order of the court staying proceedings”. The gravamen of the application was that, the Bank of Ghana (BoG) had withdrawn the license of 1st Defendant company and had placed it under Receivership. Counsel for Plaintiff strenuously opposed the application and argued that civil proceedings would be stayed against a defendant company only when the Receiver takes over the company together with its assets and liabilities. In her concise ruling dated 15th October, 2020, the trial judge delivered herself thus:
“I have taken judicial notice of the fact that the 1st Defendant is under receivership and per the provisions of Act 930, I am unable to continue with this instant suit.
Accordingly, proceedings in this case (sic) is adjourned sine die.”
Aggrieved by this ruling, Plaintiff caused a notice of appeal to be filed on 5th November 2020 against the entire ruling, on the following grounds:
a. The learned Trial Jud