MERCHANT BANK LTD v. DAMAX CONSTRUCTION CO. LTD. & ORS
2016
HIGH COURT
GHANA
CORAM
- SAMUEL K. A. ASIEDU
Areas of Law
- Contract Law
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
The plaintiff sought to recover a loan default amount from the defendants, leading to a dispute over a conditional debt reduction. The court found that the condition for the debt reduction was not clearly communicated, thus, the plaintiff could not revert the debt to its original amount. The judgment favored the plaintiff for a reduced amount of GH₵73,743.64 with interest.
JUDGMENT
By a writ of summons issued on the 22nd May 2012 the plaintiff claims against the defendants:
a. An order for the recovery of GH₵668,504.42 being the balance due and owing as at April 2, 2012 on account of credit facilities extended to 1st defendant by plaintiff on July 27, 2007 repayment of which was guaranteed by 2nd, 3rd, 4th and 5th defendants but settlement of which defendants have failed to make good several demand notices notwithstanding.
b. Interest on the said sum of GH₵668,504.42 at the rate of 22.5% per annum calculated at the close of each day and payable at the end of every month on compound basis from April 2, 2012, up to and inclusive of the date of final payment.
c. Costs, including legal fees, assessed at 10% of the aggregate sum due and payable under the facilities.
The defendants entered Appearance and filed their Defence after the service on them of the Writ and Statement of Claim. A Reply was subsequently filed by the plaintiff and after an unsuccessful pre-trial settlement proceeding, the matter was set down for hearing at which; the plaintiff gave evidence through a representative and then called one witness to close its case. The defendants also gave evidence through the 2nd defendant and closed their case.
From the pleadings the court finds that the defendants have admitted that the plaintiff is a corporate body which provides banking and financial services to members of the public. The court also finds that the defendants have admitted that the 1st defendant is a limited liability company which deals in real estate development and the supply of sand, stones and building blocks. Again the defendants have admitted by their statement of defence that the 2nd, 3rd, 4th and 5th defendants are all directors of the 1st defendant company.
From the pleadings the court finds that upon the request of the 1st defendant the plaintiff made available to the 1st defendant various facilities including an overdraft, a short term loan and a medium term loan in the year 2007 on terms stipulated in the agreement entered between the parties which was received in evidence as exhibit A.
It is also not in dispute that the overdraft facility and the short term loan were to expire on the 31st July, 2008. Again it is not in dispute that the medium term loan was also to expire on the 30th April, 2008. The court further finds from the pleadings that the 1st defendant company executed a legal mortgage and thus created a charge over all that piec