NDK FINANCIAL SERVICES VRS. CEEKABS LIMITED AND OTHERS (CM/RPC/1271/2019) [2024] GHAHC 469 (24 October 2024)

IN THE SUPERIOR COURT OF JUDICATURE IN THE COMMERCIAL DIVISION (COURT 1) OF THE HIGH COURT OF JUSTICE ACCRA, HELD ON THURSDAY THE 24TH DAY OF OCTOBER, 2024 BEFORE HER LADYSHIP JUSTICE SHEILA MINTA SUIT NO.CM/RPC/1271/2019 NDK FINANCIAL SERVICES - PLAINTIFF VS 1. CEEKABS LIMITED - DEFENDANTS 2. CEPHAS ADZRAGO 3. MABEL AGBI 4. SOCIAL INVESTMENT FUND --------------------------------------------------------------------------------------------------- JUDGMENT INTRODUCTION The Plaintiff is a non-banking financial institution in the business of lending money and the 1st Defendant its customer. The 2nd Defendant is the Managing Director of the 1st Defendant Company and the 3rd Defendant also a Director of 1st Defendant both of whom were guarantors in a facility transaction between the Plaintiff and the 1st Defendant. The Plaintiff says that sometime in July 2017, following the request by the 1st Defendant a loan facility of GHS940,000.00 was granted and disbursed to 1st Defendant to enable it complete the construction of socio-economic infrastructure P a g e 1 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS projects awarded it by Social Investment Fund, the 4th Defendant herein. The Plaintiff avers that the loan was secured by a Mortgage of 2nd Defendant’s property and as a further security for repayment of the said facility the 2nd and 3rd Defendants both executed a deed of guarantee in respect thereof. The Plaintiff further says that as security for the repayment of the facility 4th Defendant undertook to pay all sums when due under the contract in the joint names of the Plaintiff and the 1st Defendant. According to the Plaintiff the Defendants have failed to honour the terms of the loan agreement and the repayment of the facility has long expired. Plaintiff posits that 4th Defendant has also failed to pay all sums when due to the Plaintiff. The 4th Defendant denies any liability owed to the Plaintiff and says that it only warranted to ensure that payments in respect of the contract was paid jointly in the names of the Plaintiff and 1st Defendant and nothing more. The 1st, 2nd and 3rd Defendants also deny owing the Plaintiff the amount it alleges in the suit. The Plaintiff therefore on 13th September, 2019 issued a Writ of Summons and Statement of Claim against the Defendants for the following reliefs:- i. Recovery of the sum of GHS1,705,766.32 against the Defendants jointly and severally. ii. Interest on the sum of GHS1,705,766.32 at the rate of 5% per month compounded calculated on a 30 day per month basis from 9th August, P a g e 2 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS 2019 till date of final payment against the Defendants jointly and severally. iii. A default charge of 2.5% of the total judgment debt (exclusive costs). iv. A warrant to recover possession of the mortgaged property. v. Costs. PLAINTIFF’S CASE The Plaintiff’s case is that on 13th July, 2017, a request was made by the 1st Defendant to it for a facility to enable it complete the construction of socio- economic infrastructure projects awarded by Social Investment Fund, the 4th Defendant herein. That Plaintiff disbursed a loan facility of sum GHS940,000.00 to 1st Defendant and the terms and condition of same were contained in the facility agreement of 13th July, 2017. Plaintiff tendered Exhibit “A” and Exhibit “B” being a Letter of Approval of Additional facility of GHS940,000.00 and Facility Agreement between the parties respectively all dated 13th July, 2017. Plaintiff further avers that per the terms of the agreement the said facility was to attract an interest rate of 5% per month compound calculated on a thirty (3) day per month basis, collectible in monthly in arrears. That the interest amount which remains unpaid at the end of any calendar month shall be added to the principal and the consolidated balance shall attract interest at the said rate of 5% until the whole debt is paid. Plaintiff again avers that the facility was to be retired by 29th December, 2017. P a g e 3 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS The said facility was secured by 2nd Defendant’s property situate at Dawhenya as contained in Plaintiff’s Exhibit “C” (Deed of Mortgage) also dated 14th September, 2017 which said Deed was registered at the Collateral Registry of the Bank of Ghana. The facility was further secured by Directors’ Personal Guarantee by 2nd and 3rd Defendants as contained in Exhibit “D”. Again, the Plaintiff avers that as another layer of ensuring security for repayment, Social Investment Fund (SIF) the 4th Defendant herein, also undertook to pay all sums when due under the contract between the 1st Defendant and the 4th Defendant in the joint names of Plaintiff and 1st Defendant to the Plaintiff. In support of this assertion Plaintiff tendered Exhibit “E”. Plaintiff story is that the 4th Defendant failed to pay all sums when due to the Plaintiff and the contract between the 4th Defendant and 1st Defendant has been completed but the debt between Plaintiff and 1st Defendant remains unpaid. According to Plaintiff, this situation necessitated its application and obtaining a Memorandum of no Objection from the Collateral Registry for the realization of the security (Exhibit “F”). Plaintiff again says it subsequently wrote to the 1st and 2nd Defendants giving notice to possess the Mortgaged property on 22nd March, 2019 (Exhibit “G”). In support of Plaintiff’s case it tenders Exhibit “H” Series being the Customer Loan Statement of the 1st Defendant. The Defendants having failed to discharge their liabilities to the Plaintiff caused it to claim the reliefs endorsed on the Writ of Summons. P a g e 4 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS THE CASE OF 1ST, 2ND AND 3RD DEFENDANTS The 1st, 2nd and 3rd Defendants’ narrative in response to the Plaintiff’s case is that 1st Defendant was awarded a GHS2,450,000.00 contract by 4th Defendant for the construction of infrastructure projects in the Telensi and Kassena Nankana Districts sometime in 2016 and in execution of same, approached Plaintiff for some facilities. According to the 1st Defendant it initially applied for a loan of GHS260,000.00 on 14th July, 2016 which was approved and disbursed on 12th August, 2016 (Exhibit “CA1”) against its mobilization fee. Again 1st Defendant applied for additional funds of some GHS30,000.00 and GHS120,000.00 which were also approved and disbursed and as at 18th November, 2016, 1st Defendant’s indebtedness towards the Plaintiff stood at GHS282,178.56 inclusive of interest. And that GHS940,000.00 was granted 1st Defendant to enable it complete the project. According to the 1st to 3rd Defendants, 1st Defendant paid some two (2) cheques of GHS56,496.61 and GH54,832.20 to Plaintiff on 28th November, 2016 and 16th December, 2016 respectively thus reducing their indebtedness to GHS181,785.80 as at 16th December, 2016. They aver that due to financial difficulties at the time they were unable to pay the outstanding balance and as 30th June, 2017 their indebtedness stood at GHS258,442.53 which according to them represented the principal plus accumulated interests. They also admit that they subsequently applied for and were granted a further facility of GHS940,000.00 by the Plaintiff and in support of this tendered Exhibit “CA2” which is the same as Plaintiff’s Exhibit “A”. By 1st to 3rd Defendants testimony, by the time the said loan of P a g e 5 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS GHS940,000.00 was disbursed to 1st Defendant its total debt at the time stood at GHS1,500,703.85. They further aver that as part of the conditions for the loan 4th Defendant provided an undertaking to pay all monies due under the contract in the joint names of the Plaintiff and 1st Defendant and also tendered Exhibit “CA3” which is the same as Plaintiff’s Exhibit “E”. By their deposition, per the records of payments made available to them all monies due under the contract have been paid to the Plaintiff towards the indebtedness of 1st Defendant. 2nd Defendant makes an admission of executing a Deed of Mortgage as further security for the facility and tendered Exhibit “CA4” also same as Plaintiff’s Exhibit “C” and also the Directors’ Personal Guarantee of 2nd and 3rd Defendants in support of the said facility. They also tendered Exhibit “CA5” (1st Defendant’s Computed Loan Statement), Exhibit “CA6” (Letter in response to demand notice of Plaintiff dated 16th August, 2018) in which a request was being made to Plaintiff to waive interest accrued among others. Also tendered in evidence by the 1st to 3rd Defendants as Exhibit “CA7” and Exhibit “CA8” are their letters dated 11th November, 2019 and 14th November, 2019 respectively to Plaintiff with a request to freeze interest and some proposals towards the liquidation of the debt. According to them in a letter dated 15th October, 2021 (Exhibit “CA11”) they provided loan statements of both the 1st and 2nd Defendants in which they realized that some GHS400,000.00 payment made to Plaintiff had only GHS300,000.00 credit which said anomaly was later corrected. What these Defendants are saying therefore is that Plaintiff had understated their inflow by some P a g e 6 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS GHS100,000.00 which could have reduced the interest element at that given period. THE CASE OF 4TH DEFENDANT The 4th Defendant’s case is that the issues arising from the Plaintiff’s claim were as a result of the contractual agreement between the Plaintiff and the 1st, 2nd and 3rd Defendants to which 4th Defendant was not privy to. According to the 4th Defendant its contract was with the 1st Defendant and in respect of the Plaintiff it only offered an undertaking to make payments due under its contract with 1st Defendant to the joint names of 1st Defendant and Plaintiff and nothing more. That pursuant to that undertaking, 4th Defendant took steps to make all payments in their joint names and in doing this, its role was just to assist the Plaintiff recover its monies from the 1st Defendant. According to the 4th Defendant the 1st Defendant has not even completed the work under the contract for any further payment and so Plaintiff has no cause of action against the 4th Defendant. In support of 4th Defendant’s case the following Exhibits were tendered:- Exhibit “4D1” – Letter of Undertaking by 4th Defendant dated 6th June, 2016. Exhibit “4D2” – Debit Advice of Opec Fund for International Development receipts and some payment vouchers. Exhibit “4D3” – Letter dated 27th January, 2019 objecting to the Interim Payment Certificate No. 5. P a g e 7 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS Settlement broke down at pre-trial conference, pleadings having closed, the following issues were set down for trial. ISSUES SET DOWN FOR TRIAL 1. Whether or not the 2nd Defendant entered into a contract dated 13th July, 2017 with the Plaintiff for a loan facility of GHS940,000.00. 2. Whether or not the 2nd Defendant executed a Deed of Mortgage over his landed property at Dawhenya as security for the repayment of the facility granted to the 1st Defendant. 3. Whether or not the Defendants have refused to repay the loan facility despite its expiry. 4. Whether or not the Plaintiff illegally registered the 2nd Defendant’s landed property situate at Dawhenya at the Collateral Registry. 5. Whether or not the Defendants have fully paid the loan facility granted to the 1st Defendant. 6. Whether or not Social Investment Fund have made all payments to the Plaintiff as undertaken under the contract. 7. Whether or not the Plaintiff is entitled to its reliefs. BURDEN AND STANDARD OF PROOF The position of the law is that the standard of proof in all civil cases or matters is by preponderance of probabilities. Section 12(1) of the Evidence Act is to the effect that in a civil case, such as the one in question, the burden of persuasion requires proof by a “preponderance of probabilities” defined in Section 12(2) as “that degree of certainty of belief in the mind of the tribunal of P a g e 8 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS fact or the court by which it is convinced that the evidence of a fact is more probable than its non-existence”. The foregoing is summed up in the Supreme Court case of Gihoc vrs. Hanna Assi [2005-2006] SCGLR 458 at 485, where, while referencing the cases of Odametey vrs. Clocuh [1989-90] 1 GLR, 14; Odonkor vrs. Amartei [1992-93] GBR 59, Tuakwa vrs. Bosom [2001-2002] SCGLR 61, Sophia Akuffo, JSC in her judgment stated thus:- “Since the enactment of NRCD 323, therefore, except otherwise specified by statute, the standard of proof (the burden of persuasion) in all civil matters is by a preponderance of the probabilities based on a determination of whether or not the party with the burden of producing evidence on the issue has, on all the evidence, satisfied the judge of the probable existence of the fact in issue…. Hence, by virtue of the provisions of NRCD 323, in all civil cases, judgement might be given in favour of a party on the preponderance of the probabilities …” The Supreme Court has also explained in the case of Okudzeto Ablakwa (NO. 2) V. Attorney General & Anor [2012] 2 SCGLR 845 @ 867 that:- “If a person goes to court to make an allegation, the onus is on him to lead evidence to prove that allegation, unless the allegation is admitted. If he fails to do that, the ruling on that allegation will go against him. Stated more explicitly, a party cannot win a case in court if the case is based on an allegation which he fails to prove or establish. This rule is further buttressed by section 17 (b) which, emphasizes on the party on whom lies the duty to start leading evidence…” P a g e 9 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS Also, in the case of Adjetey Agbosu & Ors vrs. Kotey & Ors [2003-2004] SCGLR 420 Brobbey JSC (as he then was) explained the evidentiary obligation a Defendant in defence to a claim as follows:- “A litigant who is a Defendant in a civil case does not need to prove anything. The Plaintiff who took the Defendant to court has to proof what he claims he is entitled to from the Defendant. At the same time, if the court has to make a determination of a fact or of an issue and that determination depends on evaluation of facts and evidence, the Defendant must realize that the determination cannot be made on nothing. If the Defendant desires the determination to be made in his favour then he has a duty to help his own cause or case by adducing before the court such facts or evidence that will induce the determination to be made in his favour.” The Supreme Court has also explained in the case of Okudzeto Ablakwa (NO. 2) V. Attorney General & Anor [2012] 2 SCGLR 845 @ 867 that:- “If a person goes to court to make an allegation, the onus is on him to lead evidence to prove that allegation, unless the allegation is admitted. If he fails to do that, the ruling on that allegation will go against him. Stated more explicitly, a party cannot win a case in court if the case is based on an allegation which he fails to prove or establish. This rule is further buttressed by section 17 (b) which, emphasizes on the party on whom lies the duty to start leading evidence…” It is clear, then, that for the Plaintiff to achieve victory on its claims, it assumes the onus of proving its assertions against the Defendants. Plaintiff P a g e 10 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS is therefore duty bound to establish the requisite degree of belief in the mind of the Court by adducing enough evidence to show that the likelihood of the circumstances being alleged is more probable than not; that is, it is more probable than not that it has a right to recover from the Defendants the amount of the Credit Facilities that it alleges remain outstanding and due. ANALYSIS Having discussed the law on the burden and standard of proof in civil cases, I will proceed to resolve the key issues that will help in the determination of the dispute between the parties. One need not discuss all the issues set down for trial. In Fidelity Investment Advisors vrs. Aboagye Atta [2003- 2004] 2 GLR 188, the Court of Appeal held that the question of what issues are relevant and essential in a suit, was a matter of law entirely for the judge to determine in the case. From the evidence of both parties it is not in issue that the Plaintiff granted a facility to the 1st Defendant as contained in the facility agreement executed by the parties in Exhibits “A” and ”B” as well as Defendant’s Exhibit “CA2”. It is also not in issue that pursuant to the agreement a Deed of Mortgage was executed by the 2nd Defendant as security for the facility as contained in Exhibit “C” and therefore issues 1 and 2 do not need a thorough discussion for same to be resolved in favour of the Plaintiff. I will proceed to discuss issues 3 and 5 together first, then issue 4, followed by issue 6 and my conclusion will resolve the issues between the parties as to whether 1st Defendant is indebted to the Plaintiff in the sum claimed among other reliefs. P a g e 11 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS ISSUES 3 AND 5 Whether or not the Defendants have refused to repay the loan facility despite its expiry. Whether or not the Defendants have fully paid the loan facility granted to the 1st Defendant. The Plaintiff’s business is to lend money to its customers and in this case its customer the 1st Defendant took a facility for its construction work. It is not in dispute the agreement between the parties is contained in Exhibits “A” and “B”. Per the said agreement the facility was for a period of six (6) months and 1st Defendant was enjoined to retire same by 29th December, 2017 as corroborated by 2nd Defendant in paragraph 12 of his Witness Statement. From the evidence before the before the Court, demands have been made by the Plaintiff to the 1st Defendant for payment of the outstanding on the said facility. In 2nd Defendant’s testimony in his Witness Statement he admitted to the fact that they still owe the Plaintiff and posited in paragraph 21 thus:- 21. “In another letter dated 11th November 2019 the 1st Defendant wrote to the Plaintiff proposing a payment plan and requested that interest accruing on the Loan be frozen, especially given that some payments made to the Plaintiff had not been credited to the 1st Defendant’s loan account.” Clearly from this testimony alone it shows that the facility has expired and there is outstanding balance on the 1st Defendant’s loan account which P a g e 12 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS remains unpaid hence the 1st Defendant’s letters requesting for payment plan as late as 11th November, 2019. It is worthy of note that the Plaintiff issued its Writ on 13th September, 2019. Obviously, these issues cannot be resolved in favour of the 1st to 3rd Defendants. The fact that the facility has expired does not absolve them from the claim of the Plaintiff. ISSUE 5 Whether or not the Defendants have fully paid the loan facility granted to the 1st Defendant. From the narrative immediately preceding this paragraph a finding has been made that the 1st to 3rd Defendants by their own showing have not yet fully retired the facility hence their request for a payment plan and freezing of interest. Curiously the 2nd Defendant stated in paragraph 19 of their Witness Statement as follows:- 19. “That per the records of payment available to me (from the 4th Defendant to the Plaintiff), all monies due under the contract have been paid to the Plaintiff towards the repayment of the loan and as at the date of the issuance of the writ of summons, the only amount owed by the 1st Defendant under the loan agreement was GHS195,501.10. Attached and marked as “Exhibit CA5” is 1st Defendant’s statement of the loan, per our own tracking.” Exhibit “CA5 is titled “CEEKABS LIMITED COMPUTED LOAN STATEMENTS” which is unsigned and prepared by the said company. In all the correspondence to the Plaintiff, before the Writ was issued, 1st Defendant had never mentioned the said Exhibit “CA5 for the Plaintiff to P a g e 13 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS challenge. At best, same can only be described as self-serving and does not absolve the 1st Defendant from its liability towards the Plaintiff. Again in 1st Defendant’s Exhibit “CA9” dated 20th July, 2020 Defendants’ Counsel wrote to Counsel for Plaintiff alleging that some GHS158,673.35 and GHS243,815.15 (totaling GHS402,488.50) did not reflect in Plaintiff’s records on 1st Defendant’s loan account. Unfortunately, this allegation has not been established by the 1st Defendant. From the evidence the loan was disbursed under terms and conditions which include interest rates to be charged compounded to include penal interest rate. And by the 1st to 3rd Defendants’ own showing at the time the Writ was issued they owed some money to the Plaintiff in respect of the said loan. Per the Plaintiff’s Exhibit “H” Series the debt owed it by the 1st Defendant as at 9th August, 2019 and as endorsed on the Writ was GHS1,705,766.32. The 1st to 3rd Defendants attempt to discredit the figure put forth by the Plaintiff by saying that some GHS402,488.5 been credited to the GHS940,000.00 additional loan account has no merit in view of their own Exhibit “CA9” From the heading of the facility letter, the GHS940,000.00 was meant to be additional loan as there existed an earlier loan and Plaintiff’s witness correctly pointed out the payment was effected on the other loans as well. These clarifications are confirmed in the Exhibit “H Series”. The Defendants have led no evidence to the effect that the totality of those earlier loans had been paid off. P a g e 14 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS I therefore hold that the issue of Whether or not the Defendants have fully paid the loan facility granted to the 1st Defendant is resolved in favour of the Plaintiff and hereby making a finding that the Defendants have not fully paid off the loan facility granted to the 1st Defendant. ISSUE 6 Whether or not Social Investment Fund have made all payments to the Plaintiff as undertaken under the contract. In the transactions culminating in this suit, the 1st Defendant was awarded a contract by the 4th Defendant. According to the 4th Defendant its attention was subsequently drawn to the fact that the Plaintiff granted a loan to 1st Defendant. That 4th Defendant was only required to give some form of comfort letter in a form of an undertaking to Plaintiff that all payments due 1st Defendant under the said contract would be paid to the Plaintiff. The 4th Defendant stated that it was not privy to the arrangement between the Plaintiff and the 1st to 3rd Defendants, nor was there any undertaking for it to be held liable for 1st to 3rd Defendants’ debt. All it did was to issue the said undertaking in a letter dated 6th June, 2016 with the heading: “LETTER OF UNDERTAKING RE: PAYMENT FOR CONTRACT FOR THE CONSTRUCTION OF SOCIO- ECONOMIC INFRASTRASTURE PROJECTS IN THE TELENSI AND KASSENA NANKANA DISTRICTS (LOT 5)” In the said undertaking the designated bank in which payments arising out of the said contract are to be made was Universal Merchant Bank with the P a g e 15 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS Account No. ending 6678 stated thereon. The 4th Defendant further stated that all payments due the 1st Defendant had been paid into the said account and tendered Exhibit “4D2”. The 4th Defendant further indicated that 1st Defendant has not even completed the works for which payments had to be made by 4th Defendant as contained in Exhibit “4D3” to warrant this demand by Plaintiff. In Exhibit “4D3” dated 27th January, 2019 and titled: “SUBMISSION OF OBJECTION OF INTERIM PAYMENT CERTIFICATE NO.5 ON THE IMPLEMENTATION OF THE SIF/IRDP/DACF/SUB- PROJECTS IN THE KASSENA NANKANA WEST TALENSI DISTRICTS OF THE UPPER EAST REGION”, one of the recommendations made among others was:- “The project be terminated and fault accounts used to complete the works.” Thus 4th Defendant’s position is that 1stDefendant is not entitled to any money to be paid it and the Plaintiff and therefore the Plaintiff is not entitled to the reliefs against the 4th Defendant in the current suit. Firstly, can it be said that the 4th Defendant became a guarantor with liability to pay the debt of the 1st Defendant by the Undertaking to which I have referred above and secondly has the 4th Defendant breached its undertaking to make all payments for the the 1st Defendants in their joint names of the Plaintiff and 1st Defendant? From the evidence before me I don’t think so, taking into account Exhibit “4D3”. The evidence suggests that the 1st Defendant had performed unsatisfactorily and therefore payment was suspended for the 1st Defendant to be liable to make some refunds. I fund no clause in the Undertaking that entitles me to hold the 4th Defendant liable for 1st to 3rd Defendant’s debt when 4th Defendant’s contract with the 1st P a g e 16 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS Defendant has not been fully executed coupled with the fact the 1st Defendant offered to the Plaintiff other securities that can be used to redeemed the debt if any. I am therefore unable to resolve this issue in favour of the Plaintiff. ISSUE 4 Whether or not the Plaintiff illegally registered the 2nd Defendant’s landed property situate at Dawhenya at the Collateral Registry. As already stated above the 2nd Defendant is not saying that he did not execute the Deed of Mortgage Exhibit “C”, but wants the Court believe that the Plaintiff’s acts of perfecting the said deed ought to be construed as illegal. The 2nd Defendant’s beef with the Plaintiff is that having successfully transferred and registered his landed property the Plaintiff intercepted his Land Title Certificate. There is evidence that the said security was duly registered at the Collateral Registry and had to be additionally registered at the Lands Commission. Indeed, prior to December 2020, Section 25 of Act 773 imposed the obligation of registration of the collateral at the Collateral Registry and as a borrowing company at the Registrar-General’s Department. It is disingenuous to say the least, for the 2nd Defendant to accuse the Plaintiff-lender of illegality. Currently as in the past, the Borrowers and Lenders Act, 2020 (Act 1052) enjoins a Lender in whose favour a security interest is created to register same first and foremost at the Collateral Registry. The Plaintiff rightfully registered the security at the Collateral Registry from where it further P a g e 17 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS obtained a Memorandum of no Objection. It is quite clear that the 1st Defendant has not been able to show that its indebtedness to the Plaintiff has been completely liquidated and therefore I cannot hold that the Plaintiff illegally registered the 2nd Defendant’s landed property situate at Dawhenya at the collateral registry. ISSUE 7 Whether or not the Plaintiff is entitled to its reliefs The Plaintiff’s claim is for sum of GHS1,705,766.32 being 1st Defendant’s liability to it consisting of outstanding, 5% interest thereon, compounded interest calculation as at August 2019. Plaintiff is also praying the Court for penal charge of 2.5%. The 1st Defendant has gotten itself into the middle of the ocean where there appears to be no way out having executed a contract with the terms that appear to be harsh. In Volta Aluminium Co. Ltd. vrs. Tetteh Akuffo & Others [2003-2004] SCGLR 1158, the Supreme Court in its holding 2 on page 1160 per Dr. Date- Bah JSC stated as follows:- “Generally, the fairness of a contract is not a matter for the courts unless a statute so prescribes. The refusal of common law courts to intervene to set aside contracts on the grounds of their assessment of the contract’s fairness is meant to avoid the re-opening of bargains. In the interest of freedom of contracts, the courts do not wish to interfere to determine for the parties what their bargain ought to be”. P a g e 18 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS I am reiterating what I said in my earlier decision in the case of The Seed Funds Savings & Loans vrs Eagle Star Enterprise; Suit No. CM/RPC/0451/2020 where I remarked:- “I believe in sanctity of contracts but if there was a peculiar circumstance of a transaction that was not anticipated by the contract, parties must be able to properly plead it for the contract to be examined if there was any leeway that the contract terms could address or accommodate it. It is desirable that financial institutions pay attention to changing circumstances of projects they sponsor or facilitate to make it possible for their customers to liquidate their debts. They should not just be interested in collecting from them exactly what they may have signed for in difficult moments but must help keep those businesses afloat in re- adjusting the contract for future business between the parties.” Unfortunately, the 1st to 3rd Defendants did not plead unconscionability for the Court to consider reopening the agreement. However, the Defendants must not be made to pay more than what is reasonably due the Plaintiff by looking closely at Plaintiff’s reliefs to see which ones it can get and which ones ought to be denied. I would like to start with penal interest of 2.5%. I agree with the decision of my brother Aseidu J (as he then was) in the case of Boateng vrs. Melbound Microfinance Company Limited [2018-19]1 GLR 791 @ 813 where he stated thus:- “Penalty interest is penal in nature and by its terminology meant to serve as punishment against the borrower. A court of law should not lend support to punishment of borrowers by their lenders in an otherwise civil commercial transaction. Interest may be exigible as return on investment for the use of P a g e 19 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS one’s money but to exact penal interest is akin to imposing punishment on borrowers in an otherwise commercial activity.” The Plaintiff had not adhered to the format of pleadings in moneylending and mortgage transactions as required by Order 59 of the High Court (Civil Procedure) Rules, 2004 (C. 47), particularly its Rule 3. For that reason, the “Exhibit H Series” is not reflecting the two types on interests being claimed in the Plaintiff’s endorsement. I am minded to disallow the penal interest of 2.5% claimed by the Plaintiff. Had the quantum of interest based on the 5% per month been distinctly reflected in the Bank Statement and those based on the 2.5% penalty similarly reflected aside the principal, it would have been easier to determine the composition of the penal interest in thee outstanding balance on the facility, in contradistinction to the quantum of the 5% interest. From the foregoing I am unable to grant the interest being claimed by the Plaintiff on the sum endorsed from July composition and the quantum of penal interest from July 2017 to date of filing of this Writ. 1st to 3rd Defendants from the evidence before the Court admit that they owe Plaintiff some money outstanding from the contract between them and yet their Counsel prays the Court to dismiss Plaintiff’s claim. From the evaluation of the testimony of both sides I find the Plaintiff’s story more probable taking into account the Plaintiff’s Exhibit “H” and 1st to 4th Defendants’ Exhibit “CA4”. Having said that the endorsement on the Plaintiff’s writ is for recovery of the sum of GHS1,705,766.32 against the P a g e 20 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS Defendants jointly and severally is more probable. The balance is composed of the outstanding on the previous loans, additional loan of GHS940,000.00 and various types of interests that have accrued but unexplained in the Account Statement. 1st to 3rd Defendants have not been able to lead credible evidence in challenge of the figure put forth by the Plaintiff save to say that they remonstrated on some occasions for rectification but nothing to protest about regarding the figure demanded in the 14th November, 2019 letter Exhibit “CA8”, wherein it pleaded for some waivers only. I am minded to hold that the 1st to 3rd Defendants have not fully paid the loan granted 1st Defendant by the Plaintiff and are therefore liable to the Plaintiff for the outstanding debt. The principle relating to loan contract is as postulated in the case of Barclays Bank (Ghana) Ltd v Sakari [1997-98] 1 GLR 746 – 767; where the court stated:- “Now, what is the obligation created under this loan contract, a breach of which would entitle the other to sue? The obligation of the bank was to advance the money, which it did, and that of the defendant was to repay the loan together with interest, if any. This is the obligation of the parties under this loan contract, and indeed, almost all loan contracts. When a bank lends money to its customer, the obligation of the customer is to repay the loan. If the loan is sought for, let’s say, a business venture, and the business flops resulting in massive financial loss to the customer, this misfortune, though P a g e 21 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS may be due to no fault of this customer, does not change the nature of the obligation of the customer to repay the loan he had contracted for. He will still be obliged to fulfil his obligation. Thus, the obligation of a borrower in a loan contract as opposed to other types of contracts, is to repay the loan and not the performance of the purpose for which the loan was sought.” As stated above, upon review of the totality of the evidence before the Court it is not in dispute that the Plaintiff advanced money to the 1st Defendant for which 2nd Defendant provided a security in the form of a Mortgage Deed of his property situate at Dawhenya, and a further Directors Guarantee was also offered by 2nd and 3rd Defendants to Plaintiff. It is trite that where a party has admitted a fact in controversy, no principle of law requires that party to prove that admitted fact. See West African Enterprises Ltd v. Western Hardwood Enterprise Ltd [1995-96] 1 GLR 155 -176. The 1st Defendant failed to pay all its debts when same became due and payable and the 2nd Defendant’s property was used to secure the facility with the 2nd and 3rd Defendant guaranteeing to liquidate any debt outstanding. Where a guarantee is in writing, the person to whom the guarantee is made is not even required to first resort to recover from the primary debtor before pursuing the guarantor for performance on the guarantee. A guarantor becomes liable for the debt or default of another because it makes business sense. See NDK Financial Serviced Ltd. vrs. Ahaman Enterprises Ltd. & 2 Ors. [Civil Appeal No. JA/23/2013, 28/11/14]. The 2nd and 3rd Defendants in P a g e 22 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS my view are jointly and severally liable with the debtor for the debt owed Plaintiff. CONCLUSION I have held earlier on that the 1st Defendant has failed to repay the facility when same become due on 29th December, 2017. The debt ballooned to the figure in Exhibit “H” which is GHS1,705,766.32 at the time the Writ was issued on 13th September, 2019. Accordingly, I will enter judgment in favour of the Plaintiff against 1st 2nd and 3rd Defendants jointly and severally as follows:- 1. Judgment for the sum of GHS1,705,766.32 which represents the total indebtedness of the 1st Defendant to the Plaintiff on the Credit Facilities as at 13th September, 2019. 2. On the claim for interest on the said sum at the rate of 5% per month compound calculated at 30 day per month basis from 9th August, 2019 till date of payment I am unable to do so because of lack of clarity on how the 5% per month and the 2.5% penal interest played out. I am therefore minded to award the Plaintiff interest on the said sum calculated at the commercial interest rate from 9th August, 2019 till date of judgment. 3. The Plaintiff’s claim for a further default charge of 2.5% is dismissed. 4. I further issue a warrant for the possession of the mortgaged property and an order for the judicial sale of 2nd Defendant’s property situate at Dawhenya to retire the judgment debt hereby created. P a g e 23 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS 5. The claim against the 4th Defendant has not been proved and is hereby dismissed. 6. I award cost of Fifty Thousand Ghana Cedis (GHS50,000.00) in favour of the Plaintiff against the 1st, 2nd and 3rd Defendants. Cost of Twenty Thousand Ghana Cedis (GHS20,000.00) is also award in favour of the 4th Defendant against the Plaintiff. SHEILA MINTA, J. JUSTICE OF THE HIGH COURT REPRESENTATIONS: PARTIES: ABSENT COUNSEL: ROBERT PAPPOE, ESQ., HOLDING BRIEF FOR ALFRED BANNERMAN WILLIAMS JNR., ESQ., FOR PLAINTIFF – PRESENT EDWARD SAM CRABBE, ESQ., WITH JOYCE SANDRA DODOO, ESQ., FOR 1ST TO 3RD DEFENDANTS – PRESENT FRANK BOAKYE AGYEN, ESQ., FOR 4TH DEFENDANT – PRESENT P a g e 24 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS AUTHORITIES: 1. GIHOC VRS. HANNA ASSI [2005-2006] SCGLR 458 AT 485 2. ODAMETEY VRS. CLOCUH [1989-90] 1 GLR, 14 3. ODONKOR VRS. AMARTEI [1992-93] GBR 59, TUAKWA VRS. BOSOM [2001-2002] SCGLR 61 4. OKUDZETO ABLAKWA (NO. 2) V. ATTORNEY GENERAL & ANOR [2012] 2 SCGLR 845 @ 867 5. ADJETEY AGBOSU & ORS VRS. KOTEY & ORS [2003-2004] SCGLR 420 6. VOLTA ALUMINIUM CO. LTD. VRS. TETTEH AKUFFO & OTHERS [2003-2004] SCGLR 1158 7. FIDELITY INVESTMENT ADVISORS VRS. ABOAGYE ATTA [2003- 2004] 2 GLR 188 8. THE SEED FUNDS SAVINGS & LOANS VRS EAGLE STAR ENTERPRISE; SUIT NO. CM/RPC/0451/2020 9. BOATENG VRS. MELBOUND MICROFINANCE COMPANY LIMITED [2018-19]1 GLR 791 @ 813 10. NDK FINANCIAL SERVICED LTD. VRS. AHAMAN ENTERPRISES LTD. & 2 ORS. [CIVIL APPEAL NO. JA/23/2013, 28/11/14] 11. BARCLAYS BANK (GHANA) LTD V SAKARI [1997-98] 1 GLR 746 – 767 12. WEST AFRICAN ENTERPRISES LTD V. WESTERN HARDWOOD ENTERPRISE LTD [1995-96] 1 GLR 155 -1 13. ORDER 59 OF THE HIGH COURT (CIVIL PROCEDURE) RULES, 2004 (C. 47) 14. SECTION 12(1) OF THE EVIDENCE ACT P a g e 25 | 25 SUIT NO. CM/RPC/1271/2019 - NDK FINANCIAL SERVICES LTD. VS. CEEKABS LTD. & ORS