NDK Financial Services Ltd v. Sumaila Seidu Hudu and Anor
2017
HIGH COURT
GHANA
CORAM
- JUSTICE GEORGE BUADI J
Areas of Law
- Commercial Law
- Banking and Finance Law
- Evidence Law
- Civil Procedure
- Contract Law
2017
HIGH COURT
GHANA
CORAM
AI Generated Summary
This Commercial Division High Court case concerns facilities advanced by a non-bank creditor in Accra to Thomsedor Enterprise, owned by Sumaila Seidu Hudu, to import vegetable cooking oil, backed by assignment of 10,980 jerrycans and a mortgage by a second defendant. The plaintiff claimed GH₵383,578.29 plus interest, costs, attorney’s fees, and judicial sale, but discontinued proceedings against the mortgagor. Central to the dispute was whether the plaintiff, having taken possession of and sold the assigned stock, properly accounted for proceeds and credited them to reduce Hudu’s debt and interest. Cross-examination revealed missing entries for sale proceeds in the loan account (Exhibit J), and an auditor’s report (CE1) contained inconsistencies. Emphasizing transparency and the shifting burden of proof on facts within the plaintiff’s unique knowledge, the court refused the plaintiff’s reliefs, dismissed the action, and granted Hudu’s counterclaim except for reconciliation (moot) and attorney’s fees (unproven), with ordinary costs.
1 Background Plaintiff is a non-financial institution in Accra that grants short-term credits.
1st defendant is the proprietor trading under the name and style Thomsedor Enterprise in import and export trade.
2nd defendant mortgaged her property as security for repayment of the loans and credits plaintiff granted 1st defendant.
Default of repayment of the loans and credits and resort to rights arising therefrom forms the subject matter of this suit.
Holding both defendants jointly and severally liable, plaintiff commenced the action by a writ of summons1 against defendants for the following: a The sum of GH₵383, 578. 29 (Three Hundred and Eighty-Three Thousand Five Hundred and Seventy-Eight Ghana Cedis and Twenty-Nine Pesewas)b Interest at the monthly rate of 4. 5% per month from November 30, 2013, till the date of final payment; c Cost; d Attorney’s fee being 10% of the sum owed; and also for e Judicial sale of the 2nd Defendant’s landed property which is mortgaged and which property is described in the Statement of Claim herein.
2. 0 Plaintiff’s claim 2. 1 Plaintiff’s case is that on 18 March 2013, 1st defendant applied for a credit facility of US$270, 108. 00, then equivalent to GH₵532, 112. 76 at a rate of GH₵1. 97 per dollar to enable 1st defendant purchase and import cooking oil from Malaysia.
Upon an offer letter and loan agreement dated 27 March 2013, plaintiff approved and granted 1st defendant a credit facility of $20, 000. 00 at a rate of GH₵1. 97 per dollar as 45 days’ Documentary Letter of Credit (DLC) against shipped on board date and US$250, 108 to 1st defendant to enable it import ten (10) twenty (20) footer containers of pure vegetable cooking oil (RBD Palm Olien-CP 10) from Innovans Palm Industries SBN.
BHD, Malaysia.
2. 2 According to plaintiff the agreement was that the DLC shall attract a flat 2. 0%monthly charge of the DLC amount and shall be paid monthly before crystallization of the DLC, and that all payments plaintiff makes on behalf of 1st defendant upon crystallization of the DLC shall be treated as a loan at monthly rate of 4. 5% compound interest. Plaintiff claims that it was a term of the agreement that the facilities shall be for a period of four months expiring on 31 July 2013, at monthly interest rate of 4. 5% compound interest rate.
2. 3 Plaintiff claims further that by another letter dated 17 July 2013, 1st defendant applied for an additional facility, which was approved upon agreement dated 18 July 2013 for a