NDK Financial Services Ltd v. Allied Cocoa Products Ltd
2018
HIGH COURT
GHANA
CORAM
- JUSTICE GEORGE BUADI J
Areas of Law
- Contract Law
- Commercial Law
- Civil Procedure
2018
HIGH COURT
GHANA
CORAM
AI Generated Summary
The case involves the plaintiff, a non-banking financial institution, suing the defendant, involved in cocoa products, for GH¢219,730 on the basis of a written undertaking by the defendant to pay if THGL, the plaintiff's customer, defaulted on a loan. THGL did not meet supply specifications for cocoa products, thus the defendant contended it owed nothing. The plaintiff sued THGL and obtained a judgment, then sought to enforce the undertaking against the defendant. The court held the plaintiff's action failed due to lack of evidence of the defendant's liability under the undertaking, and the subsequent rescheduling of THGL's debt, thereby extinguishing obligations under the original undertaking.
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