TF FINANCIAL SERVICES v. FBY PHARMACEUTICALS & ANOR
2018
HIGH COURT
GHANA
CORAM
- ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
Areas of Law
- Civil Procedure
- Contract Law
2018
HIGH COURT
GHANA
CORAM
AI Generated Summary
Justice Angelina Mensah-Homiah of the Ghana High Court delivered a ruling on a preliminary limitation issue in a commercial lending dispute. The plaintiff, a limited liability lender of business and consumer loans, alleged that the first defendant, a registered pharmaceutical company, borrowed GHC 11,200 in May 2010 to supply pharmaceuticals to the fourth defendant, who undertook to issue joint cheques to both the plaintiff and first defendant but did not. The second and third defendants allegedly guaranteed the loan. On 28 April 2017, the plaintiff sued to recover GHC 369,801.54, claimed as outstanding in January 2017. The first and second defendants contended the action was statute-barred. Applying sections 4(1)(b) and 19(1)(a) of the Limitations Act, the court found part payment on 13 August 2012 and a demand notice in April 2013, which caused a fresh accrual of the cause of action. Counting six years from August 2012, the court held the suit was timely and ordered discovery and witness statements.
RULING
It is provided under section 4 (1) (b) of the Limitations Act 1972, NRCD 54 that:
4. Actions barred after six years
(1) A person shall not bring an action after the expiration of six years from the date on which the cause of action accrued, in the case of
(b) an action founded on simple contract.
It is also provided under section 19 (1) (a) of NRCD 54 that:
19. Fresh accrual on part payment
(1) For the purposes of this Act, the right of action accrued on, and not before, the date of the payment,
(a) where a right of action has accrued to recover a debt, and the person liable for the debt makes a payment in respect of the debt; but for the debt for the purposes of this provision payment of interest in whole or in part shall be treated as a payment in respect of the principal debt.
BACKGROUND FACTS.
The Plaintiff is a Limited Liability Company which grants business and consumer loans. The 1st Defendant is a Registered Pharmaceutical Company who is alleged to have taken a loan of GHC 11,200.00 from the Plaintiff in May, 2010, for the supply of Pharmaceutical Products to the 4th Defendant, who undertook to issue cheques for payment in the joint names of the Plaintiff and 1st Defendant, but failed to do so. The said loan was allegedly guaranteed by the 2nd and 3rd Defendants. On 28/04/2017, the Plaintiff instituted the instant action against all the Defendants to recover the sum of GHC 369,801.54 said to be the balance outstanding as at January, 2017.
The 1st and 2nd Defendants filed their statement of defence on 06/06/2017, and averred in paragraph 10 thereof that the Plaintiff’s action is statute barred. The particulars of Limitation given by the 1st and 2nd Defendants are:
That the debt became due for repayment in September 2010.
That since September 2010 the Plaintiff has not made any demand for repayment until issuing this writ.
That it has been more than 6 years since the alleged debt has been due for payment.
The Court ordered the lawyers in this case to file legal arguments on this preliminary issue.
Counsel for the Plaintiff filed her submissions on 28/03/2018, she relied on sections 4(1) (b) and 19 (1) of NRCD 54, referred to supra, and argued that the 1st Defendant made some part payments in the year 2012. Further a demand notice was served on the 1st Defendant in April, 2013. To that extent, counsel for the Plaintiff argued that there was a fresh accrual of the cause of action from the period of the part-payment up to the ti