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Company law -
Contract -
Termination of the contracts -
Company Registration
- Non-compliance with the
rules - Seeking
clarification
of court ruling -
HEADNOTES
On the 6th of June
2016, we unanimously dismissed
the appeal brought by the 1stdefendant/appellant/appellant
and respondent in this motion
against the decision of the
Court of Appeal which had
affirmed an earlier decision of
the High Court (Commercial
Division) Accra in favour of the
plaintiff/respondent/respondent
and applicant herein. The
Applicant herein filed the
present motion on 7th July
2016 barely a month after our
decision seeking a clarification
‘to parts of the judgment of
this Honourable Court dated June
6, 2016’ citing reliance on Rule
5 of CI 16. Rule 5 of CI 16
provides that: “5. Where
provision is not expressly made
by these Rules regarding the
practice and procedure which
shall apply to a cause or matter
before the Court, the Court
shall prescribe the practice and
procedure that in the opinion of
the Court the justice of the
cause or matter requires.”
HELD :-
The parties in this transaction
are governed by their
‘Undertakings’ hence interest is
calculable on the terms agreed
to in exhibits 3, 4 and 10.
The substitution of an award of
the outstanding balance under
the undertaking from both
plaintiff and 1st defendant
jointly;
Ordinarily the contract in
respect of the transaction was
entered between International
Rom Ltd, the applicant herein
and Ghana Telecom, now Vodafone
and respondent herein for civil
works on the latter’s
properties. However, in order to
execute the contracts it was
necessary for the applicant
company to obtain loans from the
2nd defendant bank
which bank demanded an
undertaking from both the
applicant and respondent to the
effect that payments arising
from the contract would be made
by the respondent in the joint
names of the applicant and the 2nd defendant.
The respondent having failed to
honour the undertaking in that
it failed to or reneged from
effecting all payments under the
contract in the joint names, as
undertaken under the exhibits 3,
4 and 10, it thereby contributed
immensely to the non-payment of
the loan hence its liability. It
was the applicant who for its
part sought the loan from the 2nd defendant
bank and has the obligation to
pay off the loan extended to it
under the three exhibits
referred to supra. Consequently
by their joint failure to honour
their obligation to pay off the
loan, they are jointly
accountable. There is indeed no
ambiguity or uncertainty about
this order. It is as clear as it
stands.
Interest chargeable on half
payment of judgment debt by 1st Defendant
but not released to Plaintiff as
a result of stay of execution.
We are under no obligation to
answer this last issue simply
because it is not a matter that
arises from our judgment under
consideration. We accordingly
decline to answer it.
In conclusion, save for issue
(a) which has been clarified,
issues (b) and (c) require no
other clarifications beyond what
is stated herein.
STATUTES REFERRED TO IN JUDGMENT
CASES REFERRED TO IN JUDGMENT
NDK Financial Service Ltd v
Ahaman Ltd and 2 ors, CM
J8/29/2016 on 10th March
2016
kofoh Estates Ltd vs Modern
Signs Ltd &Anor (1996-97) SCGLR
224,
BOOKS REFERRED TO IN JUDGMENT
DELIVERING THE LEADING JUDGMENT
AKAMBA, JSC
COUNSEL
TONY LITHUR ESQ. WITH HIM MRS.
E. EMEAFAH HARDCASTLE AND IRETTE
OFFOSU- ASANTE FOR THE 1ST DEFENDANT/APPELLANT/APPELLANT.
THADEUS SORY ESQ. WITH HIM EFUA
NTIM (MISS) LED BY EMMANUEL
AMOFAH.
FOR THE
PLAINTIFF/RESPONDENT/RESPONDENT.
RULING
AKAMBA, JSC:
On the 6th of June
2016, we unanimously dismissed
the appeal brought by the 1stdefendant/appellant/appellant
and respondent in this motion
against the decision of the
Court of Appeal which had
affirmed an earlier decision of
the High Court (Commercial
Division) Accra in favour of the
plaintiff/respondent/respondent
and applicant herein.
By our decision, we affirmed the
judgment of the Court of Appeal
save for a variation. We
substituted an award for the
payment of the outstanding
balance under the undertaking
given by the plaintiff/applicant
to the 2nd defendant
but which monies were paid to
other banks. We consequently
entered an award for the
recovery of the outstanding
balance under the undertaking
from both (plaintiff) applicant
and (1st defendant)
respondent jointly.
The Applicant herein filed the
present motion on 7th July
2016 barely a month after our
decision seeking a clarification
‘to parts of the judgment of
this Honourable Court dated June
6, 2016’ citing reliance on Rule
5 of CI 16.
Rule 5 of CI 16 provides that:
“5. Where provision is not
expressly made by these Rules
regarding the practice and
procedure which shall apply to a
cause or matter before the
Court, the Court shall prescribe
the practice and procedure that
in the opinion of the Court the
justice of the cause or matter
requires.”
Reading the ruling of the court
in a similar application seeking
clarification by this court in
the case of NDK Financial
Service Ltd v Ahaman Ltd and 2
ors, CM J8/29/2016 on 10th March
2016, I stated that:
“This being the last and final
court of the land, in a
situation in which the rules of
court or any other relevant
statute, do not prescribe
particular practices or
procedure as the justice of a
cause or matter may require, it
is appropriate to grant the
application, provided there is
substance in it and regardless
of the form in which it has been
intituled. This is in consonance
with the duty of the courts to
do substantial justice on the
issue/s before it. A court of
justice has a duty to render its
decisions with sufficient
clarity so as not to leave
parties in any doubt/s as to the
outcome of its pronouncements.
Where doubts are evident or
uncertainties obvious from the
court’s orders, rulings or
judgments, it is appropriate to
seek the intervention of the
court in appropriate
circumstances to clarify the
doubts. (See Okofoh Estates Ltd
vs Modern Signs Ltd &Anor
(1996-97) SCGLR 224, holding
1).”
We would consequently deal with
the issues raised before us.
The Applicant has listed the
following three points as
requiring clarification namely:
(a) The rate of interest
chargeable on the outstanding
indebtedness and whether
compound or simple interest;
(b) The substitution of an award
of the outstanding balance under
the undertaking from both
plaintiff and 1stdefendant
jointly; and
(c) Interest chargeable on half
payment of judgment debt by 1st Defendant
but not released to Plaintiff as
a result of stay of execution.
We would address the three
issues in the same order that
they were raised.
(a) The
rate of interest chargeable on
the outstanding indebtedness and
whether compound or simple
interest.
In our judgment we ordered that
the 2nd defendant be
entitled to the payment of the
balance under the Undertaking by
both the (plaintiff) applicant
herein and the (1st defendant)
respondent herein. Ordinarily
such an order was clear enough
but for the entrenched positions
taken by the parties. It is
clear from the record of appeal
that three Undertakings were
tendered in evidence in proof of
those transactions. These are exhibit 3
dated 6th June 2008
(Page 314 Vol 3 of ROA); exhibit
4 dated 12th August
2008 (Page 318 Vol 3 of ROA);
and exhibit 10 dated 4th January
2008 (Page 327, Vol 3 of ROA). These
exhibits together provide the
answers to the terms of the
undertakings entered between the
Applicant herein as borrower and
2nd Defendant as
Lender for which the Respondent
provided the undertaking. The
three exhibits bear different
interest rates. For instance,
under exhibit 3 (See Page 315
of Vol 3 ROA) the interest
chargeable on the facility is
stated as “13% per annum based
on the actual number of days
elapsed in 365 days and payable
as a single bullet payment of
principal and interest three
months after disbursement. This
clause together with clause 7
below shall continue to be
applicable after judgment in any
court proceedings by Fidelity
bank to recover the Borrowing,
until the date of final
repayment of the Facility.”
The undertaking provides a
default clause to the effect
that “All payments in default
will attract interest at the
rate of 3% Compound Interest per
annum above the stated Interest
Rate on the overdue balance of
Principal plus Interest from the
date on which the payment falls
due until the date on which it
is received by Fidelity.”
The interest calculable under exhibit
4 (See page 319 of Vol 3, ROA) is
the “Fidelity Bank base rate of
25.7% plus a margin of 1.3 %
(i.e. 27%) per annum. Interest
will accrue in arrears based on
the actual number of days
elapsed in 365 days and payable
together with the principal
installment due on January 31st,
April 30th and July
31st 2009. There is
also a default clause under
which all payments in default
will attract interest at 3%
Compound Interest per annum
above the stated Interest rate
on the overdue balance of
Principal plus Interest from the
date on which the payment falls
due until the date on which it
is received by Fidelity.
The agreed interest attractable
under exhibit 10 (See Page
327 of Vol 3 ROA) is 19%
calculated on the actual number
of days elapsed on a 365
day/year basis.
The import of our order was to
direct the parties to work out
the details of payments against
outstanding balances based upon
the three undertakings entered
between them. Since the three
exhibits bear different interest
rates, the same shall guide the
calculations to be offset
against any payments. This order
accords with Rule 1 of CI 52,
the Court (Award of Interest and
Post Judgment Interest) Rules,
2005. The rule provides:
“Rule I-Order for payment of
interest
1. If the court in a civil cause
or matter decides to make an
order for the payment of
interest on a sum of money due
to a party in the action, that
interest shall be calculated
(a) at
the bank rate prevailing at the
time the order is made, and
(b) at
simple interest
but where an enactment,
instrument or agreement between
the 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 “
The parties in this transaction
are governed by their
‘Undertakings’ hence interest is
calculable on the terms agreed
to in exhibits 3, 4 and 10.
(b) The substitution of an award
of the outstanding balance under
the undertaking from both
plaintiff and 1st defendant
jointly;
Ordinarily the contract in
respect of the transaction was
entered between International
Rom Ltd, the applicant herein
and Ghana Telecom, now Vodafone
and respondent herein for civil
works on the latter’s
properties. However, in order to
execute the contracts it was
necessary for the applicant
company to obtain loans from the
2nd defendant bank
which bank demanded an
undertaking from both the
applicant and respondent to the
effect that payments arising
from the contract would be made
by the respondent in the joint
names of the applicant and the 2nd defendant.
The respondent having failed to
honour the undertaking in that
it failed to or reneged from
effecting all payments under the
contract in the joint names, as
undertaken under the exhibits 3,
4 and 10, it thereby contributed
immensely to the non-payment of
the loan hence its liability. It
was the applicant who for its
part sought the loan from the 2nd defendant
bank and has the obligation to
pay off the loan extended to it
under the three exhibits
referred to supra. Consequently
by their joint failure to honour
their obligation to pay off the
loan, they are jointly
accountable. There is indeed no
ambiguity or uncertainty about
this order. It is as clear as it
stands.
(c ) Interest chargeable on half
payment of judgment debt by 1st Defendant
but not released to Plaintiff as
a result of stay of execution.
We are under no obligation to
answer this last issue simply
because it is not a matter that
arises from our judgment under
consideration. We accordingly
decline to answer it.
In conclusion, save for issue
(a) which has been clarified,
issues (b) and (c) require no
other clarifications beyond what
is stated herein.
(SGD) J. B. AKAMBA
JUSTICE OF THE
SUPREME COURT
(SGD) ANIN YEBOAH
JUSTICE OF THE SUPREME COURT
(SGD) V. AKOTO –
BAMFO (MRS)
JUSTICE OF
THE SUPREME COURT
(SGD) A. A.
BENIN
JUSTICE OF THE
SUPREME COURT
(SGD) YAW APPAU
JUSTICE OF THE SUPREME COURT
COUNSEL
EMMANUEL AMOFAH ESQ. FOR THE
PLAINTIFF/RESPONDENT/
RESPONDENT/APPLICANT.
TONY LITHUR ESQ. FOR THE 1ST DEFENDANT/APPELLANT/APPELLANT/RESPONDENT |
