AMEL GHANA LTD VRS. COUNTY FARMS AND PROCESSING LTD (OCC/10/2024) [2025] GHAHC 50 (11 April 2025)

IN THE HIGH COURT OF JUSTICE COMMERCIAL DIVISION KUMASI HELD ON FRIDAY THE 11TH DAY OF APRIL 2025 BEFORE HIS LORDSHIP JUSTICE CHARLES KWESI BENTUM - HIGH COURT JUDGE ----------------------------------------------------------------------------------------------------------- SUIT NO: OCC/10/2024 AMEL GHANA LTD - PLAINTIFF 2nd Floor Cannon House EY Building Cantonment – Accra VRS COUNTY FARMS AND PROCESSING LTD - DEFENDANT Plot No. 10B Abrepo – Kumasi -------------------------------------------------------------------------------------------------------- TIME: 09:39AM. JUDGMENT: The Plaintiff and Defendant entered into a Finance Lease Agreement on 1st October, 2021, upon an offer by Plaintiff on 27th September, 2021. This Agreement was referred to by the Plaintiff as Agreement (A). The parties subsequently on 28th July, 2022, entered into another Finance Lease Agreement, upon an offer, by Plaintiff on 12th July, 2022. This Agreement was referred to by the Plaintiff as Agreement (B). Both finance lease agreements were contractual and under terms. This notwithstanding, the contractual relationship is primarily and generally also 1 regulated by statute or legislation. This is the Finance Lease Act, 1993, PNDCL 331. Section 21 of this Act defines Finance Lease Agreement. It provides: “finance lease agreement” means a written agreement between two parties by which the lessor undertakes to lease to lessee for the lessee’s use only and against payment of mutually agreed lease rentals over a specified non- cancellable period, (a) either the lessor’s own already acquired assets, or (b) an asset that the lessor agrees to acquire from a third party, known as the supplier, chosen and specified by the lessee so that the lessor retains full title to the asset during the period of the lease, and, under which, subject to agreement by the lessor, the lessee may exercise an option to purchase the asset outright after the period of the lease at a price agreed on by the parties.” 2 This definition exposes the “anatomy” of the agreement the parties in this suit decided to contract. In the peculiar facts of this case, the lessor is the Plaintiff whiles the Defendant is the lessee. The Plaintiff, as lessor acquired from a third party known as Mantrac Ghana Ltd, herein known also, as the supplier, two hydraulic excavators, 330GC and 320GX in respect of Agreements (A) and (B) respectively. Per Section 21 of the Financial Lease Act, the lessor, that is the Plaintiff herein retains full title to these two assets, the 330GC and 320GX Excavators during the period of the lease. Under the law, the assets, that is the excavators, is acquired by the lessor or the Plaintiff for the lessee’s, the Defendant’s use only and against payment of mutually agreed lease rentals, over a specified non-cancellable period. The Act defines non-cancellable lease. It provides: “non-cancellable lease” means a lease that is cancellable only (a) on the occurrence of a remote contingency, (b) by mutual agreement, or (c) by operation of law;” 3 From the above definition of non-cancellable lease, the Act, contemplates a cancellation of the lease. However, by not using the word “includes” in the definition, the Act restricts cancellation to an occurrence of a remote contingency or cancellation by mutual agreement of the parties or by operation of law only. It is not in dispute in the case of the parties before the Court that, both mutually provided for a termination clause in their Agreements (A) and (B). That the termination shall only be exercisable by the lessor and in no case shall this right accrue to the lessee. The Act again, defines total lease rentals. It provides: “total lease rental” means the total sum of money, payable by the lessee under a finance lease agreement, exclusive of a sum of money payable as management fee, service charge or as a penalty or as compensation or damages for breach of the finance lease agreement.” The definition of total lease rental makes certain how much the lessee will be obliged to pay under a finance lease agreement and in this case, by the Defendant to the Plaintiff without the Plaintiff adding management fee, service charge, penalty, compensation or damages for breach of the finance lease agreement. 4 With this background, this delivery shall walk through the precinct of the Finance Lease Act measuring its provisions in tandem with Agreements (A) and (B). The Plaintiff’s Case in Summary. In summary, the Plaintiff, pleaded that, on 8th October, 2021, the parties herein executed a Finance Lease Agreement subject to terms and stipulations which according to the Plaintiff, the Defendant has continuously breached and violated in all terms material and continuous to operate in the breaches without intention to honour its obligations to Plaintiff. According to the Plaintiff, Agreement (A) was for the purchase and leasing to Defendant, the Hydraulic Excavator 330GC with registration number GB 7932 – 21 which was delivered to Defendant. The Plaintiff averred that, this equipment in Agreement (A) was purchased at the price of Gh₡1,547,520.00 payable in respect of the facility amount in 36 monthly instalments. As already stated, the Plaintiff pleaded also that, the parties executed a Finance Lease Agreement on 28th July, 2022, subject to terms and conditions and referred to this agreement, as Agreement (B). 5 According to the Plaintiff, Agreement (B) was for the purchase and leasing to Defendant, the Hydraulic Excavator 320GX with registration number GB 6057 –22 which was delivered to Defendant. The Plaintiff averred that, this equipment in Agreement (B) was purchased at the price of Gh₡1,317,712.50 payable in respect of the facility amount in 36 monthly instalments. It is the Plaintiff case that, in respect of both Agreements (A) and (B), the Defendant breached its terms when within some months into the agreement, the Defendant began to default in payments despite several demands. The Plaintiff alleged, in respect of Agreement (B) only that, the Defendant leased to a third-party, the equipment under this agreement for illegal mining operations, causing the military to seize the equipment and currently with the 4th Infantry Battalion in Kumasi. The Plaintiff contends that, this without equivocation amounts to a fundamental breached of the agreement. It is in respect of the alleged breaches of both Agreements (A) and (B) that, the Plaintiff is in this Court, claiming against the Defendant, the reliefs endorsed in the Writ of Summons and repeated in the Statement of Claim. Summary of the Defendant Case. 6 Apart from paragraph 38 of the Statement of Claim which is a repeat of Plaintiff’s reliefs in the Writ of Summons, the Defendant denied each and every allegation of fact contained in the Statement of Claim spanning paragraphs 1 to 37. The Defendant alleged that, the Plaintiff with the view, to overreaching it and being unjustly enriched, has in collusion with allied/sister/related entities, particularly Mantrac and Activa, crafted a sinister scheme by which it was tricked into purchasing equipment ostensibly from Mantrac with phantom funds provided by the Plaintiff and an illusory insurance scheme provided by Activa. The Defendant further alleged that, the Plaintiff has imposed a compound interest on it citing paragraph 12 of the Statement of Claim. The Defendant alleged that, the Plaintiff’s greed, avarice and insatiable desire to exploit it, seeks to recover the machinery, as well as outstanding payment allegedly owed by it, as well as all sums derived from them, prior to the alleged default. The Defendant stated that, by the Plaintiff's own showing in paragraph 25 of the Statement of Claim, the seeking of recovery of possession from them, when the equipment is with the 4th Infantry Battalion is manifestly misconceived because, the Plaintiff, knowing where the equipment is, 7 ought to have added 4th Infantry Battalion as a necessary party, to whom orders can be directed by the Honourable Court. It is the case of the Defendant again that, the equipment was seized from a house where it was being kept at Tontokrom and not during its use in illegal mining and contended that, the Plaintiff is not entitled to the reliefs sought in whole, part thereof or at all. The Defendant relying on paragraphs 1 to 11 of the Statement of Defence, counter-claimed to recover Gh₡963,000.00 made to the Plaintiff in respect of the equipment and a further amount of Gh₡460,000.00 said to be payment as deposit before the machinery were handed over to them as well as Gh₡30,000.00 being insurance payment in respect of the machinery. To this claim in the Statement of Defence, the Plaintiff filed a Reply and also a Defence to the Counter-Claim. Issues Set Down for Trial. The parties were unable to settle their differences at Pre-Trial Conference. The following Issues were therefore certified as the Issues to be tried: 1. Whether or not the Defendant breached the terms of the Financial Lease Agreement. 8 2. Whether or not the Plaintiff fraudulently colluded with sister companies to trick the Defendant into purchasing the equipment under Agreements (A) and (B). 3. Whether the Plaintiff’s practice of compounding interest against the Defendant is lawful under the terms of the financial lease agreements and applicable law. 4. Whether or not the Plaintiff is entitled to recover possession of the leased equipment given the Defendant’s alleged breaches. 5. Whether the Defendant is estopped from adopting a position that contradicts its prior conduct, given that it signed and executed the agreements and subsequently received benefits thereunder. The Issues, Burden of Proof visa vis the Evidence Adduced and Evaluation of same. It is not in dispute that, Plaintiff's cause of action is in contract and drilled down to an alleged breach of Agreements (A) and (B) by the Defendant. How has the Defendant breached the two separate Agreements according to Plaintiff? The Plaintiff alleges from its pleadings that, the Defendant defaulted in payments in respect of Agreements (A) and (B). This named breach is common to both agreements. 9 The Plaintiff however, alleged another breach against the Defendant in respect of only Agreement (B) and it is that, equipment under this Agreement was leased to a third-party by the Defendant for illegal mining operations. The two separate alleged breaches namely default in payments and the alleged leasing of the Hydraulic Excavator 320GX to a third-party for illegal mining operations led fundamentally to Issue (1) set down to be tried. To reiterate, Issue (1) is whether or not the Defendant breached the terms of the Financial Lease Agreement. On the basis of Issue (1), Issue (4) arose as to whether or not the Plaintiff is entitled to recover possession of the leased equipment given the Defendant’s alleged breaches. The Court allocates the burden of proof of Issues (1) and (4) to the Plaintiff and further imposes on it, the statutory obligations under Sections 10(1) and 11(1) of the Evidence Act, NRCD 323 in the following terms respectively: “10(1) For the purposes of this Decree, the burden of persuasion means the obligation of a party to establish a requisite degree of belief concerning a fact in the mind of the tribunal of fact or the court.” 10 “11(1) For the purposes of this Decree, the burden of producing evidence means the obligation of a party to introduce sufficient evidence to avoid a ruling against him on the issue.” In both Sections 10(1) and 11(1) supra, the law maker uses the language or phrase “…a fact in the mind…” and “…ruling against him on the issue” respectively. Under Section 10(1), the fact sought to be established as far as Issue (1) is concerned is the allegation of breach of the parties agreements. Under Section 11(1), the word “issue” therein for which sufficient evidence must be introduced as far as Issue (1) is concerned is the same allegation of breach of the parties agreement. In Ackah v Pergah Transport Ltd & Ors (2010) SCGLR, 728, 736, Adinyira JSC (as she then was) summed up the law. "It is a basic principle of law on evidence that a party who bears the burden of proof is to produce the required evidence of the facts in issue, that has the quality of credibility short of which his claim may fail …it is trite law that, matters that are capable of proof must be proved by producing sufficient evidence so that, on all the evidence, a reasonable mind could conclude that, the existence of fact is more probable than its non- existence. This is the requirement of the law on evidence under Sections 10(1) and (2) and 11(1) and (4) of the Evidence Act, 1975 (NRCD 323)" 11 Evaluation of the Breach by an alleged Default of Payments and Leasing of Excavator 320GX to a third party. The Court begins with the alleged default of payments under the two agreements. It shall however, interrogate same under Agreement (A) before Agreement (B). For a proper understanding of whether or not Defendant defaulted in payments under Agreement (A), the Court will interrogate the monetary issues arising therefrom. The Plaintiff tendered Exhibits “A”, “A(1)”, “B”, “C’ and “D” as part of its evidence. Exhibit "A" provides that, on 21st July, 2021, the Defendant acting per its Chief Executive Officer, one Dr Kwame Antwi, requested for the leasing of a Bulldozer (New SEM 816 Dozer) and New Caterpillar 330 GC Hydraulic Excavator on a finance lease to enhance Defendant’s operations with regards to tree removing and earth moving. By reason of Exhibit “A”, the Plaintiff wrote an Offer Letter to the Defendant dated 27th September, 2021, offering it a finance lease of CAT330GC in the facility amount of Gh₡1,238,016.00 under a facility term of 36 months and at an Interest Rate of 19.5% per annum for the tenor of the agreement intended to be executed and payable by instalment of 36 months in arrears. This Offer Letter is Exhibit “B”. 12 The Defendant on the basis of the terms offered in Exhibit “B” signed per its Chief Executive Officer, Dr Kwame Antwi, Exhibit “C” on 1st October, 2021, accepting the offer. Thus, the Defendant confirmed the acceptance of the facility subject to the conditions as stipulated in the offer. Exhibit “D” is the Financial Lease Agreement itself distinct from the Offer Letter of Exhibit “B”. Section 1(2) of the Act provides that, where the asset is to be acquired by the lessor before the Financial Lease Agreement is finally made, the prospective lessor and lessee shall enter into a written agreement which shall cover (a) a statement to the effect that the parties have agreed to enter into a finance lease agreement, (b) a description of the asset to be acquired under the lease, the estimated price of the asset and the total lease rentals payable by the prospective lessee, (c) a statement that the asset is being acquired by the prospective lessor in connection with the lease agreement 13 which, to the knowledge of the supplier, is to be made between the prospective lessor and lessee, and (d) a statement as to whether or not the prospective lessee has selected the asset and selected supplier without relying on the skill and judgment of the prospective lessor. Section 1(2) supra is the reason for Exhibits “B” and “D”. This is because the law says that, before the Financial Lease Agreement is finally made, the prospective lessor and lessee shall enter into a written agreement. So, there are two Agreements envisaged. The prior agreement, which in this case, is embodied in Exhibit “B” and accepted by the Defendant per Exhibit “C”, is stipulated to contain the particulars under Sub-Section 2(a) to (d) of Section 1 of the Financial Lease Agreement between the Plaintiff and the Defendant. There is no doubt, from the narration so far in this delivery that, the parties agreed to enter into a Finance Lease Agreement. There is also no doubt about the description of the assets between the parties. Exhibit “B” per Sub-Section 2(b) provided for the estimated price of the asset, in this case CAT330GC as well as the total lease rentals payable by the Defendant. 14 What is the estimated price of the asset or the Excavator CAT330GC stated in the written agreement before the Finance Lease Agreement was finally made per Section 1(2). Exhibit "B" provided the amount of the facility as GH₡1,238,016.00. Section 2 provides for the Finance Lease Agreement as already stated and Sub-Section 1(a) and (b) provides as follows: “(a) a statement of the price of the asset and the total lease rentals payable under the finance lease agreement, (b) the amount of each rental by which the total lease rental is to be paid and the date or the mode of determining the date on which each rental instalment is payable,” The Court gleans from Sub-Section 2(b) of Section 1 and Sub-Section 1(a) of Section 2, the use of the description “the estimated price of the asset and total lease rental and “a statement of the price of the asset and the total lease rentals” respectively. The Finance Lease Act in its Section 21 does not define “price of the asset” and “the estimated price of the asset”. 15 Reading the Act as a whole, this Court interprets “estimated price of the asset” in its literal meaning, to be a price contemplated and not an actual price purchased. Further, the Court interprets "price of the asset" without a preface “estimated” literally to mean the actual price at which the asset is purchased. So, the estimated price of the CAT330GC, stated in the Offer Letter, Exhibit “B” is the facility amount of GH₡1,238,016.00. The price at which the asset herein was actually purchased is that stated in Exhibit “D”, the Finance Lease Agreement as GH₡1,547,520.00. The Defendant agreed to the terms of Exhibit "B" to made a down payment of 20% of the total equipment price payable upfront. That is 20% of the asset price of GH₡1,547,520.00. Thus, by a simple mathematical calculation, 20% of GH₡1,547,520.00 is GH₡309,504.00. It is confirmed by Exhibit “D” that, the Defendant made a down payment of GH₡309,504.00. Having made the down payment, the Defendant reduced its debt of the asset price by GH₡309,504.00 and thus, bringing the facility amount to be paid in 36 instalments monthly, in arrears to GH₡1,238,016.00 as stated in Exhibit “B”. 16 Since this discussion, is to discover the alleged breach of payment by the Defendant, the Court is interested in knowing not just the facility amount of GH₡1,238,016.00 but how much of this, is the total Interest payable for the tenor of 36 months. This by a simple mathematical calculation is the 36 months tenor multiplied by 19.5% Interest Rate per annum per the facility amount of GH₡1,238,016.00. The total Interest for the tenor of 36 months is GH₡241,413.12. From this figure or amount, it should be easy to find how much the Defendant was to pay each month as Interest and Principal which is GH₡10,990.48 and GH₡34,389.33. Therefore, the monthly amount payable by the Defendant, every single month, being monthly Interest plus monthly Principal, sums up to GH₡45,379.81. The Plaintiff who is alleging that, the Defendant defaulted in monthly payment must provide evidence of default in the payment of GH₡45,379.81 and how the aggregate of this amount transformed from default arrears of Gh₡197,457.85 to Gh₡712,110.96. The Plaintiff cannot provide evidence of an allegation of fact unless that, allegation of fact has been pleaded. The Plaintiff must tell the Court which specific months in the 36 monthly instalments payments in Agreement 17 (A) is in default in its pleadings and further state for the benefit of giving notice to the Court and the Defendant, the first month of the alleged breach and any subsequent ones. So, the Court reverts to the Statement of Claim to find same. The Court finds the following averments at paragraph 20: “Plaintiff states that, within some months into the agreement, the Defendant began to default in payments and gave impotent excuses for the default in payments despite several demands.” The Court asks: How does this averment show in pleading, when Defendant allegedly commenced defaulting and which other months did such default continued. How is the Court to construe the claim of “some months into the agreement, the Defendant began to default in payments.” Further, the Plaintiff does not help the Court per its paragraph 20 of the Statement of Claim to know which of the two Agreements it is referring to as Plaintiff ought to bear in mind that, Agreements (A) and (B) commenced per different dates of 8th October, 2021 and 28th July, 2022. If the Plaintiff meant paragraph 20 of the Statement of Claim to apply to the two separate agreements, it would have been the more reason why it should have pleaded same with clarity. 18 In pleading, the Plaintiff took the easier way out by averring that, as at 31st December, 2023, the date of the issue of Exhibit “K” – Demand Letter that, the current arrears of Defendant, in Agreement (A) was GH₡197,457.85. The easier way continued when it stated that, the Defendant’s total outstanding amount has moved from GH₡197,457.85 to GH₡712,110.96 and to claim the latter amount as relief (c) in the Writ of Summons. The Plaintiff did not provide evidence whatsoever in its entire evidence relative to Agreement (A) under discussion in proof of the series of monthly defaults and its accumulation as default of arrears. The Court just by examining Exhibits “K” and “L”, does not find how the monthly default was computed to arrive at the amount claimed in the Writ of Summons under Agreement (A). The Court does not find same also on the face of Exhibit “M” respecting Agreement (A). It is the finding of the Court that, the Plaintiff did not plead allegations of fact with relevant particularisation and to lead evidence in support of those facts alleged. The Plaintiff in its Witness Statement provided a sub-heading labelling it “breaches, default in payment…” and yet failed to show how it came by a 19 sum of Gh₡197,457.85 and to Gh₡712,110.96 and when a particular monthly default resulted in these figures. The Plaintiff assumed that, just by stating that, the Defendant defaulted in payments and putting before the Court GH₡197,457.85 and ballooning it to GH₡712,110.96 it would have satisfied the burden of introducing sufficient evidence under Section 11(1) and establishing a requisite degree of persuasion in the mind of this Court. The Plaintiff miscalculated. The Court read the Witness Statement and Plaintiff's cross- examination of the Defendant and found same unable to provide evidence of the alleged default of monthly payments in respect of Agreement (A). Interrogation of Agreement (B). The Court shall now consider Agreement (B). The evaluation of the evidence in respect of this Agreement as to the alleged default in payments of the Hydraulic Excavator 320GX is in pari material with Agreement (A). The asset price of the 320GX Excavator according to Exhibit “J” is Gh₡1,317,712.50. The facility amount is Gh₡1,054,170.00. The Defendant made a deposit of 20% down payment of the total equipment price. Therefore, 20% of the price amount of Gh₡1,054,170.00 is Gh₡263,542.50 as confirmed by Exhibit “J”. 20 The Asset Price of Gh₡1,317,712.50 less down payment of Gh₡263,542.50 is Gh₡1,054,170.00, the facility amount. Agreement (B) was for a term of 36 months. The Interest Rate under this Agreement was 28.66%. The total Interest for the whole of the 36 months is the Asset Price multiply by the 28.66% which is Gh₡302,125.12. The Principal Amount per month is Gh₡29,282.50 whilst the Interest per month is Gh₡8,392.36 bringing the Principal plus Interest per month to Gh₡37,674.86. The Court finds that, in each month the Defendant was obliged to pay Gh₡37,674.86. The question is, did the Defendant default in this monthly payment and when did such default start and for how long or duration? Again, paragraph 20 of the Statement of Claim states that, within some months into the agreement, the Defendant began to default in payments and gave impotent excuses for the default in payments despite several demands. Like in Agreement (A), the Court asks, what does some months into the agreement mean. How does this statement of the Plaintiff answer the questions posed supra? 21 The Court has examined the Exhibits tendered under Agreement (B). Exhibit “G” is the Offer Letter and cannot speak to the fact of default of monthly payments. Exhibit "J" is the Financial Lease Agreement and cannot speak to the fact of monthly default. Exhibits “K” and “L” as in Agreement (A) does not show monthly default payments. Exhibit “K” purports to show arrears of Gh₡160,455.44 said to be over due of 65 days and ballooned to Gh₡1,143,751.84. Section 2(1)(b) of the Financial Lease Act, provides that, the Financial Lease Agreement between the parties shall contain the amount of each rental by which the total lease rental is to be paid and the date or the mode of determining the date on which each rental instalment is payable. The date on which each rental instalment is payable makes it easier for the Plaintiff in this proceedings to show that, from a particular month and date and subsequently, the Defendant defaulted in those months for which it has been able to contend that, the figures in Exhibits “K” and “L” are factual. This is not what has happened in this case and as stated in the analysis of Agreement (A), the Plaintiff erroneously thought that, by claiming recovery of the amount stated in the Writ of Summons as default amounts, same will convince this Court. This cannot be. 22 The Court did not find Exhibit “M” as proof of monthly default of the Defendant. The Court is not unmindful of Defendant's request for deferment in some forthcoming payments and same obliged by Plaintiff. That will not constitute default since the Plaintiff deferred payment. The Court therefore finds under Issue (1) that, the Plaintiff failed to introduce evidence of the alleged default. Exhibit “P” by which Defendant states that, Plaintiff will receive payment later today in respect of GC330 Machine for Agreement (A) does not only show default but cannot be generalised to include Agreement (B). Still on Issue (1), the Plaintiff claimed that, the Defendant breached Agreement (B) under interrogation by hiring Excavator Machine 320GX to a third party. The Court finds that, the Plaintiff failed to prove that, the Defendant indeed, hired the equipment to a third party for community mining. This is what Dr Antwi on behalf of the Defendant said to Linda, a Representative of the Plaintiff in Exhibit “P” inter alia: “Hello Linda, You will receive payment later today in respect of the GC330 machine as it has resumed working 23 However in the case of the GX 250 machine something unfortunate has happened Someone hired it to do community mining in the Manso area. Some soldiers have seized the machine about a month ago It is now in Kumasi barracks I have been trying to retrieve it without recourse to your company But they are making it difficult for me” Exhibit “J” paragraph 9.6 provides: “The Lessee shall not sell, let, part with possession of or abandon the Equipment, transfer the rights or delegate or cede or assign his obligations under this Agreement unless the Lessee has obtained the Lessor’s prior written consent …” The Court has examined Exhibit “P” and found that to be the documentary proof of the alleged leasing to a third-party, Plaintiff's Excavator under Agreement (B) for illegal mining contrary to the provision supra. In Exhibit “G” under Agreement (B), the Hydraulic Excavator Track described therein is CAT320GC. However, when the actual Financial 24 Lease Agreement was executed by the parties in Exhibit “J”, the make/model of the Hydraulic Excavator Track was stated as 320GX. The Court, at all material time found the Plaintiff per paragraph 17 and its relief (B) to asset the Hydraulic Excavator under Agreement (B) to be 320GX. The documentary evidence produced in proof that, the equipment under Agreement (B) was leased to a third-party by the Defendant for illegal mining operations and same seized and in custody of the 4th Infantry Battalion in Kumasi per Exhibit “P” is GX250. The almighty question is whether 320GX and GX250 are the same figures with alphabetical suffix and prefix respectively. The Court finds the answer to be the negative. The result is that, when Plaintiff brought evidence to proof the allegation that, the Hydraulic Excavator Track 320GX has been leased to a third-party, it boldly brought evidence of GX250 Machine per Exhibit "P". The Plaintiff from its showing per the email Exhibit “P” has failed to proof that, the Defendant breached Agreement (B) by leasing, as it alleged that, its Excavator 320GX was leased to a third-party contrary to Agreement (B). The Court shall turn to Issue (3) on whether the Plaintiff’s Practice of Compounding Interest against the Defendant is lawful under the Terms of Financial Lease Agreement and Applicable Law. 25 Under this Issue, the Defendant states at paragraph 6 of the Statement of Defence that, the Plaintiff imposed Compound Interest as per paragraph 12 of the Statement of Claim. The Plaintiff indeed, stated at paragraph 12 of its Statement of Claim that, it compounded Interest daily. Per its Reply at paragraph 10, the Plaintiff stated that, both parties to the contract wholly agreed to the application of the 5% Interest Rate and further stated that, same is evidenced by the execution of the contract by both Plaintiff and Defendant. The Plaintiff further stated that, the said Interest Rate cannot be deemed as unlawful as in any case, compound interest is not inherently unlawful under the laws of Republic of Ghana and Plaintiff is authorised to enter into such terms and further that, all the terms of the contract are compliant with law. The Court has reverted to examine the entire pleadings of the Plaintiff. The Plaintiff at paragraph 12 of the Statement of Claim mentions only Agreement (A) and says that, the parties agreed among other terms that, if an event of default occurs, a default Interest Rate shall apply and such rate shall be the Interest Rate charged plus five percent (5%) per annum compounded daily. 26 The Plaintiff clearly did not mention Agreement (B) in the said paragraph 12 supra in terms of the averment therein and thus gave the impression to the Court that, those matters there were not provided for in respect of this Agreement. The Court has compared the two Agreements in terms of finding out whether or not the Plaintiff compounded Interest in the said Agreement and to determine whether same is lawful or not. Per Agreement (A), Plaintiff offered to Defendant an Interest Rate of 19.5% per annum. Further, per Exhibit “D” under the sub-heading “charges for late payment and penalty interest”, same provided as follows: “if an event of default occurs, a default interest rate shall apply and such rate shall be the Interest Rate charged for this agreement plus five percent (5%) per annum (the default interest rate), compounded daily for the purposes of this agreement”. Further, the parties in executing Exhibit “D” provided in paragraph 7.6 as follows: “Any amount not paid by the lessee on due date will (unless the lessor decides otherwise) accrue interest daily from the date when payment became due until receipt by the lessor of the arrears amount.” 27 What about Agreement (B)? Its Exhibit “J” also provides under the sub- heading at page 4 “charges for late payment and penalty interest", as follows: “if an event of default occurs, a default interest rate shall apply and such rate shall be the Interest Rate charged for this agreement plus five percent (5%) per annum (the default interest rate), compounded daily for the purposes of this agreement”. Exhibit "J" also provided at paragraph 7.7 at page 4 as follows: “Any amount not paid by the lessee on due date will (unless the lessor decides otherwise) accrue interest daily from the date when payment became due until receipt by the lessor of the arrears amount.” Agreements (A) and (B) shall be juxtaposed. The Court clearly finds that, it is not as claimed by the Plaintiff at paragraph 12 of the Statement of Claim that, it is Agreement (A) that, Compound Interest was exacted daily. The fact is that, the parties agreed that, Compound Interest shall be charged. So, in Agreement (A) if an event of default occurs, a default Interest Rate shall apply and this default Interest Rate according to Plaintiff, shall be the Interest Rate charged. In Exhibit “B”, the Interest Rate charged is 19.5% per annum. This means that, this same 19.5% per annum shall be the default Interest Rate to apply to the monthly default payments. 28 The Plaintiff says that, additional 5% per annum Interest Rate shall also be charged. So, in total in Agreement (A), a monthly default amount shall attract 19.5% plus 5% per annum Interest Rate which is 24.5% Interest Rate. This rate shall be compounded daily. In terms of Agreement (B), the Interest Rate per Exhibit “G” is 23.66% plus 5% totalling 28.66% Interest Rate. Per Exhibit “J”, this 28.66% Interest Rate shall be the Interest Rate charged when a monthly default occurs. In addition, 5% Interest Rate per annum also described as default Interest Rate at page 4 of Exhibit “J” shall be charged. So, just as in Agreement (A), Agreement (B) also has two separate described default Interest Rate. The question is how can there be two default Interest Rates? This is because when a monthly payment made up of monthly Principal and Interest Amount is defaulted, that default is what attracts Default Interest Rate of either 19.5% per annum in Exhibit “B” and 28.66% per annum in Exhibit "G”. So, at the application of this default Interest Rate, how can a separate 5% Interest Rate be called a Default Interest Rate to be added to either the 19.5% or 28.66% Interest Rate and then compounded daily. 29 Certainly, there cannot be 5% Interest Rate called default Interest Rate when at the time of the monthly default and the application of the Principal Interest Rate, there will be no default at that point in time. This situation is best described as unconscionable and more importantly illegal. This Court should not be heard to say that, parties cannot agree between themselves to provide for Compound Interest in their dealings. What the Court must be heard to say is that, the agreement to charge Compounding Interest must be as permitted by law. The Court (Award of Interest and Post Judgment Interest) Rules (C. I. 52) provides in Rule 1 that, where an enactment, instrument or agreement between parties, specifies a rate of interest which is to be calculated in a particular manner, the Court shall award that rate of interest calculated in that manner. Section 55(2) of the Borrowers and Lenders Act, 2020 (Act 1052) provides: “A lender shall, in a credit agreement, impose on a borrower an interest rate that is calculated on an annual basis only.” 30 Per Sub-Section 3 of Section 55 penal interest rate on a delayed repayment of (a) “Where a credit agreement provides for the application of a penal interest rate on a delayed repayment of (a) The principal amount of the loan, (b) The interest on the principal amount of the loan, of (c) Both the principal amount and the interest on the principal amount of the loan the agreed penal rate shall be applied on the amount of the delayed payment only and not on the total amount of the outstanding loan” This provision is clear and in this case, where in both Agreements, the monthly payments constituted the Principal and Interest, a default according to Sub-Section 3 is that, the agreed penal rate must be applied on the monthly delayed payment only and not on the total amount of the outstanding loan. The Court has already found the monthly payment to be comprised of Principal plus Interest which is Gh₡45,397.81 for Agreement (A). This amount multiplied by (19.5% plus 5%) 24.5% per annum gives per month Gh₡11,118.05. This amount of Gh₡11,118.05 compounded daily is Gh₡11,118.05 plus Gh₡45,397.81 summing up to Gh₡56,497.81. This is how much the Plaintiff sinned against compounding Interest daily in an unlawful manner against the Defendant for Agreement (A). 31 Per Agreement (B), the Court has also already found the monthly payment to be comprised of Principal plus Interest which is Gh₡37,674.81. This amount multiply by the Interest Rate per Exhibit “G” which is 23.66% plus 5% totalling 28.66% is Gh₡37,674.81 multiply by 28.66% is Gh₡10,797.61. The amount of Gh₡10,797.61 compounded daily is Gh₡11,118.05 plus Gh₡37,674.81summing up to Gh₡48,792.86. This is how much the Plaintiff sinned against compounding Interest daily in an unlawful manner against the Defendant for Agreement (B). The Court finds that, the compounding of Interest daily sinned against statute, that is Section 55(2) of the Borrowers and Lenders Act, 2020 (Act 1052). The Plaintiff by this sin cannot and is not entitled to the recovery of the stated separate amounts in reliefs (c) and (d). The reason is that, those monetary claims are the fruit of a poisonous tree. The tree metaphorically is the compounding of Interest daily. The fruit is the monetary claim it bore as fruit on this said tree. The Plaintiff is not entitled to “eat” the poisonous fruit per its reliefs (c) and (d) and suffer unimaginable consequences and the Court will therefore deny it the said reliefs. 32 The Court now turns to Issue (4) of whether the Plaintiff is entitled to recover possession of the leased equipment given the Defendant alleged breaches. In both Agreements, the Court did not find any breach whatsoever which was proved by the Plaintiff against the Defendant. This resolves Issues (4) against the Plaintiff. The final Issue will be Issue (5) whether the Defendant is estopped from adopting a position that contradicts its prior conduct, given that, its signed and executed the agreements and subsequently received benefits thereunder. On this Issue, the Court finds from the evidence before it that, the Plaintiff purported to enforce the two Agreements its executed with the Defendant. However, it failed to keep contractual faith with the Agreements by purporting that, Defendant had defaulted in its contractual obligations when same was not the case as evidenced by its failure to proof same before the Court. The Plaintiff conducted itself in this particular respect contradictory of its signed and executed Agreements (A) and (B). The Court nonetheless does not see how Plaintiff post this conduct received benefits under the Agreements. The benefits it received were the 20% down payment and the monthly instalments payments Defendant says it paid under the Agreements. 33 The Insurance Premium paid by the Defendant was for the benefit of the Plaintiff under the Agreements but Defendant obtained same for its unilateral benefit. The Court resolves Issue (5) against the Plaintiff only to the extent of adopting a position that contradicts its stated conduct herein. Following from the analysis of Issue (5) in relation to Defendant’s Counter-Claim, the Court finds that, same does not disclose any cause of action in the Defendant and same are dismissed in its entirety. In conclusion, the Plaintiff's action is dismissed. The Defendant’s Counter-Claim is also dismissed. There shall be no Order as to costs. (SGD.) H/L JUSTICE CHARLES KWESI BENTUM (JUSTICE OF THE HIGH COURT) 34 LEGAL REPRESENTATION: Ekow Dadson with Daniel Mensah for the Plaintiff. Kwasi Afrifa for the Defendant. 35