NDK Financial Services Ltd v. Allied Cocoa Products Ltd
2018
HIGH COURT
GHANA
CORAM
- JUSTICE GEORGE BUADI J
Areas of Law
- Contract Law
- Civil Procedure
- Banking and Finance Law
2018
HIGH COURT
GHANA
CORAM
AI Generated Summary
NDK Financial Services Ltd, a non-banking financial institution, approved a GH¢3,500,000 loan to Trade Haulage Ghana Limited (THGL) after the defendant, a cocoa products company, issued an undertaking dated 15 January 2013 promising to pay GH¢219,730 to NDK and THGL jointly when payment for THGL’s supplied raw materials became due. THGL failed to retire the loan and later breached supply specifications; NDK obtained judgment against THGL in July 2014 and rescheduled repayment. In August 2016 NDK demanded GH¢219,730 from the defendant and sued in December 2016. Justice George Buadi held that the undertaking operated like a guarantee contingent on payment becoming due and a wrongful sole payment to THGL, neither of which occurred. He further held NDK failed to notify or join the defendant before suing THGL and that the rescheduling agreement between NDK and THGL superseded Exhibit A. The suit was dismissed, with costs of GH¢10,000 against NDK.
1 Introduction The parties in this suit are locally registered limited liability companies: plaintiff is a non-banking financial institution, whilst defendant deals in cocoa products.
The brief facts are that based upon a written undertaking defendant made for and on behalf of Trade Haulage Ghana Limited (THGL) a customer of plaintiff who on 12 July 2012 had applied for a loan facility of GH¢3, 500, 000, the plaintiff approved the said facility to THGL.
By the said undertaking dated 15 Jan.
2013, defendant undertook to pay plaintiff the sum of GH¢219, 730 to the joint names of the plaintiff and THGL when same is due for payment.
On failure of THGL to redeem the facility, plaintiff on 21 December 2016 filed this suit against defendant for recovery of the GH¢219, 730 that defendant undertook to pay.
2. 0 Statement of the parties’ case 2. 1 Plaintiff’s case According to plaintiff, THGL failed to retire the loan facility by its term i. e. 27 August, 2013, and that THGL had thereafter failed to redeem the facility despite repeated demands contrary to terms and conditions that required THGL to have retired the facility by 27 August, 2013. In consequence therefore, plaintiff instituted action in the High Court1 against THGL on 24 May, 2014 and obtained judgment against THGL two months later i. e. 23 July 2014. According to plaintiff, despite service of the entry of judgment and subsequent repeated demands on THGL of its indebtedness, it has failed to pay the judgment debt.
Ostensibly in accordance with the terms of defendant’s undertaking evident by Exhibit ‘A’, plaintiff’s claim in this suit is that it is entitled to recover the amount -GH¢219, 730 defendant undertook to pay.
In pursuance therefore, plaintiff on 15 August 2016 wrote to defendant demanding the sum i. e. GH¢219, 730, and upon failure on 21 December 2016 by writ commenced the suit for the following reliefs: i Recovery of the sum of GH¢219, 730. 00 (Two Hundred and Nineteen Thousand Seven Hundred and Thirty Ghana Cedis). ii Interest on the said sum of GH¢219, 730. 00 (Two Hundred and Nineteen Thousand Seven Hundred and Thirty Ghana Cedis) at the prevailing bank rate from 15th August, 2016 till date of final payment.
iii Costs.
2. 2 Defendant’s case Defendant denies plaintiff’s claims. It contends that the undertaking it made as in 1 Commercial Division in Suit No. BFS 143/14. Exhibit A was to the effect that payment of the sum be made to THGL only, but not to plaintiff, payable only when