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Banking - Overdraw of accounts –
Oral contact - No
execution of formal Agreement –
Property - Deposition of title
deeds as security for the credit
facility – Interest on at the
prevailing bank rate on
overdraft facility - Sale of
property – Power of Attorney –
Capacity - Whether or not the
respondent in refusing to grant
the loan in full constituted to
breach of the loan agreement -
Whether or not the plaintiff’s
attorney had capacity to
institute the action for the
reliefs sought - Order 11 rule
13 - High Court [Civil
Procedure] Rules CI 47
HEADNOTES
Between June and August of 2008,
the Respondent allowed the
appellant to
overdraw
his accounts to the tune of
Gh₵200,000 to enable him
construct a warehouse. The
parties herein did
not
execute any formal agreement
but the appellant
deposited
the title deeds of his
property
as
security for the credit facility
so granted. The appellant,
however, failed to pay off the
debit balance on his account.
The respondent thereafter
commenced this action per his
attorney at the High Court The
appellant traversed most of the
allegations and contended that
he had originally applied to the
respondent bank for a loan of Gh₵300,000
to be repaid within four years.
On the 18th of June,
2008 the respondent granted the
appellant an initial Gh₵100,000.00
which was converted into an
overdraft facility instead of a
loan facility. On the 7th
and 12th of August
2008 the appellant was given the
further sums of Gh₵80,000,00 and
Gh₵20,000 respectively. Before
the last amount of Gh₵100,000
was released, the respondent
informed the appellant that due
to a change in government the
final instalment could not be
advanced. The appellant further
alleged that failure on the part
of the respondent to give him
the entire Gh₵300,000,00 loan
led to his inability to complete
the building of the warehouse
within time and therefore
resulting in the collapse of his
business and the inability to
pay the debt However, the
parties agreed that the sum so
admitted would be paid over six
months and in installments
without computation of interest
It appeared later that the
appellant could not pay the
admitted sum within the time the
parties had agreed At the trial,
the learned judge found that the
facility in issue was an
overdraft and proceeded to
dismiss the claim of the
respondent and the counterclaim
of the appellant on the basis of
capacity. The issue of the
capacity came up on appeal and
the case was dismissed
HELD
Indeed, the Court of Appeal in
its judgment, with due respect,
did not consider the details of
the amount due and owing in the
manner the trial judge did. We
think that from the evidence if
the Court of Appeal had
critically examined the
uncontroverted facts it would
have limited the outstanding
amount to only Gh₵41,149.14
taking into consideration the
payments made by the appellants.
The appeal is therefore allowed
in part as stated supra, save
that the judgment of the Court
of Appeal is affirmed as varied.
STATUTES REFERRED TO IN JUDGMENT
High Court [Civil Procedure]
Rules CI 47
CASES REFERRED TO IN JUDGMENT
SARKODIE V BOATENG II [1982-83]
IGLR 715 SC,
FOSUA & ADU POKU V DUFIE (dec’d)
ADU-POKU MENSAH [2009] SCGLR
310,
DUAH V YORKWAH [1992-93] 1 GBR
278 CA,
ARMAH V ADDOQUAYE [1972] IGLR
109 CA,
HESSE V ACCRA MUNICIPAL COUNCIL
& OR [1964] GLR 399 SC,
ADDO V ASARE [1967] GLR 231
SG-SSB V HAJJARA FARMS LTD
[2012] ISCGLR 1
BOOKS REFERRED TO IN JUDGMENT
DELIVERING THE LEADING JUDGMENT
YEBOAH, JSC:-
COUNSEL
SULLEY SAMBIAH FOR THE
PLAINTIFF/APPELLANT/RESPONDENT.
KWAME A. BOAFO FOR THE
DEFENDANT/RESPONDENT/APPELLANT.
YEBOAH, JSC:-
The facts of this case appear
not to be controverted by the
parties. Briefly, the
defendant/respondent/appellant
(hereinafter referred to as the
appellant) was at the material
time to this action a customer
of the
plaintiff/appellant/respondent
(who for sake of brevity shall
be referred to as the
respondent.)
Between
June and August of 2008, the
Respondent allowed the appellant
to overdraw his accounts to the
tune of Gh₵200,000 to enable him
construct a warehouse. The
parties herein did not execute
any formal agreement but the
appellant deposited the title
deeds of his property known as
plot No. 31 Block ADB Parakuo
Estate, Adiembra, Kumasi as
security for the credit facility
so granted.
The appellant, however, failed
to pay off the debit balance on
his account. The respondent
thereafter commenced this action
per his attorney at the High
Court,
(Commercial Division) Kumasi,
for the following reliefs:
a.
Recovery of the sum of one
Hundred and Thirty-one Thousand,
one hundred and Forty-Nine Ghana
Cedis, fourteen Ghana pesewas
(Gh₵131, 149.14) inclusive of
interest being outstanding
balance of an
overdraft
facility extended to
defendant by plaintiff.
b.
Interest
at the
prevailing bank rate from 1st
May 2011 till date of final
payment.
c.
Penal interest of 10% per annum
from 1st May, 2011
till date of final payment.
d.
And or in the alternative
Judicial sale of property
situate at plot No. 31 block
ADB, Parakuo Estate, Adiembra,
Kumasi, in satisfaction of the
facility.”
The appellant traversed most of
the allegations and contended
that he had originally applied
to the respondent bank for a
loan of Gh₵300,000 to be repaid
within four years. On the 18th
of June, 2008 the respondent
granted the appellant an initial
Gh₵100,000.00 which was
converted into an overdraft
facility instead of a loan
facility. On the 7th
and 12th of August
2008 the appellant was given the
further sums of Gh₵80,000,00 and
Gh₵20,000 respectively. Before
the last amount of Gh₵100,000
was released, the respondent
informed the appellant that due
to a change in government the
final instalment could not be
advanced. The appellant further
alleged that failure on the part
of the respondent to give him
the entire Gh₵300,000,00 loan
led to his inability to complete
the building of the warehouse
within time and therefore
resulting in the collapse of his
business and the inability to
pay the debt.
Based on the above allegations
the appellant contended that
the
conduct of the respondent in
refusing to grant him the loan
in full constituted to breach of
the loan agreement and
therefore proceeded to
counterclaim against the
respondent for the following
reliefs:
1.
An order directing the plaintiff
to release the last instalment
of Gh₵210, 00 to enable him
complete the project.
2.
In the alternative the plaintiff
be made to pay to the defendant
damages for breaching the loan
agreement.
3.
An order directing the plaintiff
to release his title deeds to
him.
The respondent filed a reply and
defence to counterclaim and
contended that the appellant
rather insisted on a loan
agreement but the respondent
offered to grant an overdraft to
appellant to the tune of
Gh₵100,000,00 whereupon the
parties executed an agreement.
Thereafter Gh₵80,000 and
Gh₵20,000 were given to the
appellant which he accepted.
The respondent denied the
counterclaim of the appellant in
the reply and defence to
counterclaim.
As the suit was commenced at the
Commercial Division of the High
Court, parties appeared before a
judge for pre-trial settlement
conference. The appellant
partly submitted to judgment to
the tune of Gh₵90,00.00 on 17th
of August, 2011.
However,
the parties agreed that the sum
so admitted would be paid over
six months and in installments
without computation of interest
within the period when the
payment would be made. There
was default clause which the
parties also agreed. The
learned judge made a full record
of the partial settlement of the
claim for the outstanding
balance thereby leaving the
court to resolve only three
simple issues at the trial.
It appeared later that the
appellant could not pay the
admitted sum of Gh₵90,000.00
within the time the parties had
agreed
and as at 20/01/2012 he had paid
only Gh₵54,998.
At the trial, the learned judge
found that the facility in issue
was an overdraft and proceeded
to dismiss the claim of the
respondent and the counterclaim
of the appellant.
The trial judge even held that
the
plaintiff’s attorney had no
capacity to institute the action
for the reliefs sought.
The respondent lodged an appeal
against the judgment of the High
Court, to the Court of Appeal,
Kumasi on two main grounds. The
Court of Appeal received the
entire evidence on record and
allowed the appeal, entered
judgment for the respondent in
the sum of Gh₵131,149.14 with
costs.
The issue of the capacity
of the respondent’s attorney was
fully considered in detail and
the court was of the opinion,
rightly so, that since no issue
was joined on the pleadings and
regards the capacity of the
respondent there was no burden
on the respondent to have proved
the capacity of the respondent’s
attorney.
The appellant has sought to
challenge the judgment of the
Court of Appeal by filing a
notice of appeal on 27/01/2017
and has listed six grounds of
appeal for our consideration as
follows:
I.
The Court of Appeal erred in
entering judgment for the
plaintiff/appellant/respondent
to the tune of Gh₵131, 149.14 as
at May 2011.
II.
The Court of Appeal erred in
entering judgment for the
plaintiff/appellant/respondent
to the tune of Gh₵131,149.14 as
at May 2011.
III.
The Court of Appeal erred in
granting interest on the amount
of Gh₵131, 149.14 at the
prevailing rates from May 2011
until date of final payment to
the
plaintiff/appellant/respondent.
IV.
The Court of Appeal erred in
holding that the plaintiff had
given the consent on
authorization to the attorney to
institute the action.
V.
The Court of Appeal erred in
holding that the
plaintiff/respondent’s attorney
had the capacity to institute
the action on behalf of the
plaintiff/appellant/respondent.
Before we proceed to address the
issues raised by the grounds of
appeal, there is one important
matter which must be addressed
by us as the final court of the
land. In actions in which the
issue of capacity is raised, the
authorities like
SARKODIE V BOATENG
II [1982-83] IGLR 715
SC, FOSUA & ADU POKU
V DUFIE (dec’d)
ADU-POKU MENSAH
[2009] SCGLR 310, DUAH
V YORKWAH
[1992-93] 1 GBR 278 CA,
establish the principle that no
matter the merits of the case of
the suitor, failure to prove his
capacity should rock the very
foundation of the action. It is
therefore the position of the
law that if a plaintiff lacks
capacity and it is so found by a
trial court, the merits of the
case should not be considered as
the proper parties to the suit
are not before the court.
Indeed, in the Sakordie’s case
(supra) the Court of Appeal and
the Supreme Court for that
matter never proceeded to
consider the merits of the case
in any manner whatsoever. In
this case the learned trial
judge, with due respect, should
have rested her judgment on the
lack of capacity without more.
Discussing the merits of a suit
when the proper parties are not
before the court is erroneous in
law. However, this point was not
raised before the Court of
Appeal.
In this appeal before us,
learned counsel for the
appellant, Kwame Boafo has urged
on this court to revisit the
issue of capacity which was
adequately considered by the
Court of Appeal against his
client. Procedurally, the
appellant as the defendant at
the trial court was enjoined by
basic rules of pleadings to find
out whether the issue of
capacity had been raised against
the respondent as a suitor. The
statement of defence was silent
on it and the statement of
defence filled in answer to the
statement of claim was
accompanied by a counterclaim
without any challenge to the
capacity but rather a
counterclaim against the
plaintiff whose attorney
allegedly lacked capacity. The
rules of pleadings enjoins
parties to specifically deny
allegations of their adversary
if in doubt. See
ARMAH V ADDOQUAYE
[1972] IGLR 109 CA, HESSE
V ACCRA MUNICIPAL COUNCIL
& OR [1964] GLR 399 SC,
ADDO V ASARE
[1967] GLR 231 and
Order 11
rule 13 of the High Court [Civil
Procedure] Rules CI 47
Failure on the part of a party
to specifically deny an
allegation of fact of an
adversary would be considered an
admission. It was therefore
wrong for the learned High Court
judge to have held that the
plaintiff’s attorney lacked
capacity. We think that the
Court of Appeal adequately
considered the issue about the
Power of
Attorney and it would serve
no purpose for us to repeat same
in this judgment. The grounds
(IV) and (V) are therefore
resolved in favour of the
respondent for this appeal to be
considered on the merits.
The other grounds of appeal
could be considered together by
reviewing the evidence on record
as we are enjoined to do as the
last appellate court to see
whether substantial justice was
done. The parties and the trial
judge did not find it fit to
order accounts in a simple
matter in which the plaintiff’s
claim was being disputed by the
defendant on the basis of
payments made to the bank to
reduce the indebtedness of the
appellant at the early stages of
the trial. Evidence was led by
both parties to ascertain
whether the appellant’s
indebtedness stood at Gh₵131,149.14.
It was clear from the evidence
of the respondent’s witness that
the appellant had indeed paid an
amount of Gha₵90,000,00 leaving
a balance of Gh₵41,000.00. The
appellant at the trial
cross-examined the witness on
Exhibit “B” the bank statement
of the appellant. It appeared
from the evidence that the only
witness of the respondent could
not speak to the bank statement
and the contents therein. The
mere tendering of a bank
statement may be prima facie
evidence of the state of a
customer’s financial transaction
with a bank; it may not
conclusively establish on the
balance of probabilities the
exact and accurate state of a
customer’s financial
transaction.
Counsel for the respondent has
contended that since the
appellant was allowed to
overdraw money from his
accounts, he is obliged by law
to pay the outstanding valance.
Reliance was placed on this
court’s decision in
SG-SSB V HAJJARA
FARMS LTD [2012] ISCGLR
1. From the evidence, the
appellant is not denying that he
owed the bank. The controversy
arose from the amount due and
owing to the respondent.
The respondent who sued the
appellant to recover the amount
stated in the claim was to prove
on the balance of probabilities
that the amount was the balance
to be paid by the appellant. On
the evidence the learned trial
judge found as a fact supported
by the evidence that the
respondent had failed to prove
the claim indorsed on the writ.
The trial judge also found as a
fact that the respondent as
plaintiff failed to prove that
the interest which the
respondent imposed on the Gh₵41,
149.14 and other charges were
not justified during the period
the overdraft remained unpaid.
Other charges like filing fees
to the Attorney debited to the
appellant’s account on
23/06/2011 were not
satisfactorily explained to the
trial judge.
Indeed, the Court of Appeal in
its judgment, with due respect,
did not consider the details of
the amount due and owing in the
manner the trial judge did. We
think that from the evidence if
the Court of Appeal had
critically examined the
uncontroverted facts it would
have limited the outstanding
amount to only Gh₵41,149.14
taking into consideration the
payments made by the appellants.
The appeal is therefore allowed
in part as stated supra, save
that the judgment of the Court
of Appeal is affirmed as varied.
ANIN YEBOAH
(JUSTICE OF THE SUPREME COURT)
DOTSE, JSC:-
I agree with the conclusion and
reasoning of my brother Yeboah,
JSC.
V. J. M. DOTSE
(JUSTICE OF THE SUPREME COURT)
APPAU, JSC:-
I agree with the conclusion and
reasoning of my brother Yeboah,
JSC.
Y. APPAU
(JUSTICE OF THE SUPREME COURT)
PWAMANG, JSC:-
I agree with the conclusion and
reasoning of my brother Yeboah,
JSC.
G. PWAMANG
(JUSTICE OF THE SUPREME COURT)
MARFUL-SAU, JSC:-
I agree with the conclusion and
reasoning of my brother Yeboah,
JSC.
S. K. MARFUL-SAU
(JUSTICE OF THE SUPREME COURT)
COUNSEL
SULLEY SAMBIAH FOR THE
PLAINTIFF/APPELLANT/RESPONDENT.
KWAME A. BOAFO FOR THE
DEFENDANT/RESPONDENT/APPELLANT.
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