July 28, 2022
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
The Court of Appeal, per S. R. Bernasko Essah, J.A., reviewed a High Court judgment concerning a loan extended by a non-bank financial institution to a limited liability company in the electrical engineering and construction sector. The facility, GH¢85,000 at a 4.5% compound monthly rate for seven months, was guaranteed by the 2nd and 3rd Defendants, with a commercial property mortgaged as security. After default and partial repayment, reconciliation fixed the debt at GH¢317,947.78. The High Court had applied commercial bank post-judgment interest and ordered payment of GH¢100,000 followed by GH¢20,000 monthly installments. On appeal, the Court held that Rule 2 of C.I. 52 requires the contractual rate to run to final payment where specified in writing, rejected reliance on Cap 175 absent unconscionability, and concluded courts cannot rewrite parties’ contracts. It restored the contractual post-judgment interest and directed outright payment of the outstanding judgment debt, allowing the appeal, with Ackah-Yensu, J.A. (Presiding) and George Koomson, J.A. agreeing.
S. R. BERNASKO ESSAH (MRS.), J.A.
This appeal is at the instance of the Plaintiff/Appellant herein against a Judgment of the High Court dated 15th June 2020.
The grounds of appeal are as follows:
a. The learned trial Judge erred in law in holding that post judgment interest should be at the commercial bank interest rate and not the interest rate agreed by the parties in writing.
Particulars of error
The trial Court held that the contractual compound interest rate of 4.5% per mensem should apply on the judgment debt of GH¢317,947.78 from 10th August 2019 to 15th June 2020, the date of judgment, after which the commercial bank interest rate will apply.
b. The order of the Court granting the Defendant/Respondents’ proposal to make specified monthly installments is wholly inadequate and time consuming vis-à-vis the outstanding judgment debt such that same has occasioned a grave miscarriage of justice to the Appellant
c. The judgment is against the weight of evidence.
We shall in this delivery maintain the designation of the parties as they did at the trial Court.
The factual background as agreed by the parties for the purpose of this appeal are as follows:
The Plaintiff a non-bank financial institution, granted a credit facility to the 1st Defendant, a limited liability company which carries on business of electrical engineering and construction, upon Defendants application for a credit facility of GH¢85,000. The facility was to be for a period of Seven (7) months from 5th May 2014 to 4th December 2014 at a compound interest rate of 4.5% per month.
The 2nd and 3rd Defendants gave personal guarantees to be liable in event of default by the Defendant. 2nd Defendant also mortgaged a landed commercial property as security.
The Plaintiff alleged that the Defendant having obtained the facility refused to pay the sum owed despite repeated demands. That after the legal action was commenced Defendants paid GH¢198,000 in partial satisfaction of the debt. That a debt of GH¢346,222.44 remained for payment. Plaintiff therefore sought the following reliefs from the Court:
1. Recovery of the sum of GH¢346,222.44 (Three Hundred and Forty-Six Thousand, Two Hundred and Twenty-Two Ghana Cedis and Forty-four Pesewas) being the total outstanding amount owed to the Plaintiff as at 9th August 2019 broken down as follows:
a. The sum of GH¢325,282.98 being the principal amount due and owing as at 9th August 2019 plus interest at the contractual compound interest rate of