MOCHCOM GHANA LIMITED VS GUARANTY TRUST BANK (GHANA) LIMITED
2024
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP JUSTICE AYITEY ARMAH- TETTEH
Areas of Law
- Banking and Finance Law
- Contract Law
- Corporate Law
- Evidence Law
- Civil Procedure
2024
HIGH COURT
GHANA
CORAM
AI Generated Summary
Mochcom Ghana Limited maintained cedi and dollar accounts at Guaranty Trust Bank (Ghana) Limited, while its sister company, Links Procurement & Development Ghana Limited, took a GH ,593,000 invoice discounting loan and defaulted. After an inflow from Christie Limited, Mochcom instructed its GTBank relationship manager to pay US$80,000 to Bilal Hamza for business expenses. GTBank refused, restrained the account, and later unilaterally debited US$102,230.54 from Mochcom dollar account to set off Links Pro debt, claiming a verbal agreement. The High Court, per AYITEY ARMAH-TETTEH J., rejected preliminary objections that a board resolution was required or that Mr. Charles Kofi Mochiah lacked authority to testify, presuming board authorisation and finding no statutory requirement for a written resolution. Applying evidence rules, the court found no proof of any oral agreement and reaffirmed the strict contractual duty of banks to honor customer instructions on in-credit current accounts. The court held GTBank breached its contract, awarding recovery of US$102,230.54 with commercial interest from 17 January 2022, general damages of GH ,100,000, and costs of GH ,55,000.
[1] The Plaintiff, Mochcom Ghana Limited (Mochcom) is a limited liability company registered under the laws of Ghana.
The Defendant, Guaranty Trust Bank (Ghana)Limited is a limited liability company incorporated in Ghana and licensed by Bank of Ghana to offer banking services to the general public.
Plaintiff has been a customer of Defendant bank since 2011 when it opened two corporate accounts, a cedi current account and a United States of America dollar account.
Links Procurement & Development Ghana Limited (Links Pro), a sister company of the Plaintiff is also a customer of the Defendant Bank.
Mr. Charles Kofi Mochiah is the sole shareholder of both Companies and also the Managing Director for both Companies.
He is also the sole signatory to the accounts of both companies domiciled in Defendant’s bank.
Links Pro obtained an Invoice Discounting line (availed as a Time loan) of GH¢1, 593, 000. 00 per an offer letter dated 27 July 2020. Links Pro defaulted in the repayment of the facility.
Defendant used an amount of USD 102, 230. 54 standing to the credit of Plaintiff to repay part of the loan of the Links Procurement & Development Ghana Limited. [2] The case raises a couple of questions including the competence or otherwise of the instant action and the capacity or authority of the Plaintiff’s representative to testify on behalf of the Plaintiff.
Also, the question of a separate legal personality of a corporate entity arises and whether the Managing Director of Plaintiff instructed Defendant to use the credit balance in Plaintiff’s account to defray part of the indebtedness of Links Pro.
PLAINTIFFS’ PLEADINGS[3] The Plaintiff in its pleadings avers that on 17th January 2022 through its Managing Director Mr. Charles K. Mochiah instructed its Relationship Manager with the Bank to pay out the sum of $80, 000. 00(Eighty thousand United States Dollars) from its dollar account number 202111377220 with the Defendant to one Bilal Hamza.
According to Plaintiff at the material time, the said account was funded with a credit balance of $103, 874. 95 (One Hundred and Three Thousand, Eight Hundred and Seventy-Four United States Dollars, Ninety-Five Cents). However, the Defendant refused to honour the said payment instructions. [4] It is the further case of Plaintiff that Defendant subsequently without any justification put a restraint on its account and thereby disabled Plaintiff from transacting on the said account.
According to Plaintiff later wit