NDK Financial Services Limited v. Korase Limited and 2 Ors
2016
HIGH COURT
GHANA
CORAM
- HER LADYSHIP JUSTICE AKUA SARPOMAA AMOAH (MRS.)
Areas of Law
- Contract Law
- Civil Procedure
- Equity and Trusts
2016
HIGH COURT
GHANA
CORAM
AI Generated Summary
The case involves a loan dispute where the Plaintiff granted loans to the 1st Defendant for a bridge construction project, with the 2nd and 3rd Defendants acting as guarantors. Despite the Defendants' partial completion of the project and subsequent partial payment, they defaulted on the repayment terms, leading the Plaintiff to seek recovery of the outstanding debt or judicial sale of collateral. The Defendants attributed their default to delayed payments from the Department of Feeder Roads and Plaintiff's refusal to release project funds. The court ruled in favor of the Plaintiff, finding the Defendants indebted and entitled to recover the outstanding amount along with interest, reinforcing principles related to burden of proof, loan repayment enforcement, unconscionable contracts, and the principle of pacta sunt servanda.
The Plaintiff is a body corporate registered under the laws of Ghana and engaged in the business of providing loans and general financial and investment services.
The 1st Defendant is a Limited Liability Company registered under the laws of Ghana and operates as a firm of civil engineers and building contractors.
The 2nd and the 3rd Defendants are directors of the 1st Defendant Company and are said to have acted in a joint and several capacity as guarantors for the repayment of a loan advanced to the 1st Defendant by the Plaintiff.
The Plaintiff avers that by a letter dated the 28th of December, 2012, the 1st Defendant applied to Plaintiff for a loan facility of One Hundred and Sixty Thousand Ghana Cedis (GH¢160, 000. 00) to enable the 1st Defendant undertake a contract it had been awarded by the Department of Feeder Roads to construct a bridge (hereafter referred to as the Bridge Project) at Kwahu Bepong in the Eastern Region.
The said facility was approved by Plaintiff on 18th day of January, 2013 at an interest rate of five percent (5%) for a period of six (6) months commencing on the date of approval and expiring on the 18th day of July, 2013. The stipulated interest rate was five percent (5%) per month, compound to be calculated on a thirty (30) day per month basis, and payable monthly in arrears.
The facility was secured by a Deed of Mortgage in respect of landed property situate at Achimota, executed by the 2nd Defendant in favour of Plaintiff and also with a Deed of Guarantee executed by the 2nd and 3rd Defendants in their joint and several capacities as directors of the 1st Defendant Company.
The 1st Defendant, again by a letter dated the 19th of June, 2013 applied for an additional facility of Thirty Thousand Ghana Cedis(GH¢30, 000. 00) to be utilized for the same Bridge Project.
An amount of Twenty Five Thousand Ghana Cedis (GH¢25, 000. 00) was approved by Plaintiff in respect of the additional facility for a period of three (3) months commencing July 2, 2013 and expiring on October 2, 2013 at an interest rate of four and half percent (4. 5%) per month compound, calculated on a thirty (30) day per month basis and payable in arrears.
This additional facility was equally secured with the Mortgage Deed and Deed of Personal Guarantee used in securing the initial loan facility.
It is the Plaintiff’s case that the Defendants in spite of persistent demands on them to make good their indebtedness to Plaintiff are in default of their repayment o