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JUDGMENT:
The Plaintiff herein commenced
an action against the Defendant
and obtained judgment on
admissions for the following
reliefs:
“1. An order for the
recovery of the sum of Nine
Hundred and Thirty Seven Million
Three Hundred and Three Thousand
One Hundred and Forty Seven
Cedis and Nineteen Pesewas
(¢937,303,147.19)
2. Interest on the
sum of Nine Hundred and Thirty
Seven
Million, Three Hundred and Three
Thousand One Hundred and Forty
Seven Cedis and Nineteen Pesewas
(¢937,303,147.19) from February
2007 to date of final payment.
3. Costs
4. Further or
other reliefs as to this
Honourable Court
may see just.”
The Defendant subsequently took
out Third Party Proceedings
against the Third Parties herein
claiming the following reliefs:
“a. Indemnity for
the entire claim against the
Defendant by the
Plaintiff
b. Payment to the Plaintiff of
any judgment award arising from
the claim.”
The issues set down for
determination are as follows:
1.
Whether or not as a result of
financial facilities obtained by
Defendant for 2nd 3rd
Party from ECOBANK LIMITED, and
secured by Plaintiff, Defendant
became indebted to Plaintiff.
2.
Whether or not Defendant’s
indebtedness to Plaintiff arose
from
the inability on the part of 2nd
Third Party to pay off the
facility to Defendant.
3.
Whether or not facilities
extended to 2nd 3rd
Party were secured
by 1st 3rd
Party.
4.
Whether or not arising from the
3rd Party
Proceedings, the 3rd
Parties are liable to Defendant
for the outstanding facilities
extended to them by Defendant
which was sourced from ECOBANK
and secured by Plaintiff which
indebtedness compelled Plaintiff
to sue Defendant.
5.
Whether or not 3rd
Parties are liable to indemnify
or contribute
by way of refund to Defendant
who was compelled to settle same
to Plaintiff as a result of the
3rd Parties default.
6.
Any
other directions deemed fit by
this Honourable Court.
The grounds for the Third Party
Notice were that in about
October 2003, the 2nd
Third Party, Potomac Investment
Limited (“Potomac”) applied to
the Defendant Company for a loan
facility for its business
operations. Plaintiff provided
a guarantee for the Defendant to
obtain a facility from Ecobank
Ghana Limited (“Ecobank”) to
enable it advance the loan
facility to Potomac. The loan
facility to Potomac was secured
by a guarantee given by Dr. Sam
E. Jonah (1st Third
Party). The Defendant contends
that as at January 31, 2007
Potomac had made three (3)
payments totalling
¢292,000,000.00 (GH¢29,200.00)
thereby leaving an outstanding
balance of ¢607,536,105.06
(GH¢60,753). It is therefore
Defendant’s contention that it
should be fully indemnified by
the Third Parties herein.
In defence to the Third Party
Notice, the Third Parties denied
the allegations and averred that
apart from the fact that Potomac
applied for a facility from the
Defendant which facility was
guaranteed by Dr. Sam Jonah.
Their case is that the facility
has been paid off by Potomac and
therefore the Third Parties are
not indebted to the Defendant.
In further defence the Third
Parties contend that they never
agreed expressly or impliedly to
indemnify Defendant in the
latter’s borrowing transaction
with Ecobank and therefore the
Defendant is not entitled to be
indemnified as claimed.
The position of the law on
indemnifying a party is
enunciated in Halsbury’s Laws of
England, 4th Edition
vol.20; Para 347 and 348 as
follows:
“Rights of indemnity arise from
contract, express or implied
from an obligation arising from
the relation of the parties or
by state. Whether in any
particular case any right of
indemnity arises and the extent
of any such indemnity will
depend upon the terms of the
contract or statement in
question or to the nature of
this relationship. A right to
indemnity based on an implied
contract or an obligation
imposed by law may arise in
various ways. Such a right may
arise where money is paid at the
request of another. Similarly
where a person has been
compelled by law to pay or being
compellable by law has paid to
another which the third party
was ultimately liable to pay so
that the third party obtains the
benefit of the payment by the
discharge of the liability, the
person who made the payment may
recover the amount of the
payment from the third party.”
The Defendant is claiming that
the Third Parties herein are
ultimately liable to indemnify
the Defendant for the payment it
made to the Plaintiff under the
said guarantee.
Since the Defendant is the one
alleging, it is trite learning
that the Defendant must prove.
In Takoradi Flour Mills v.
Samir Faris [2005-2006] SCGLR,
Ansah JSC exhaustively dealt
with the burden of proof as
follows:
“As it was the Plaintiff who
made the claim and asserted the
positive, he had to adduce
evidence sufficient to establish
a prima facie case, as required
by section 14 of the Evidence
Decree, 1975 because in law
where a fact is essential to a
claim, the party who asserts the
claim has the burden to persuade
the court of existence of that
fact. The standard of proof is
by a preponderance of the
probabilities: See section 12
(1) of the Decree section 17 (1)
states that the burden of
producing any particular fact is
on the party against whom a
finding on that issue would be
required in the absence of
further proof.”
See also Ababio v. Akwasi III
[1994-95] Ghana Bar Report, Part
II, Takoradi Flour Mills v.
Samir Faris [2005-2006] SCGLR
882 and Re:
Ashalley Botwe Lands; Adjetey
Agbosu & Ors v. Kotey & Ors
[2003-2004] SCGLR 420
The well known rule of evidence
is that although proof in a
civil case rested on the
Plaintiff, the burden was
discharged once the Plaintiff
had introduced sufficient
evidence of the probability of
his case. It would then rest on
the defendant to rebut the
plaintiff’s evidence. As stated
by Justice Mensa-Boison JA in
the case of Acquaye v. Awotwi
[1982-83] 2GLR 110, the
testimony of a plaintiff is
presumptive evidence which is
rebuttable. In Yorkwah v.
Duah [1993-94] 1 GLR 217,
the Court of Appeal explained
the principle thus:
“The onus can surely shift from
the Plaintiffs to the Defendant
as clearly provided in section
14 of NRCD 323. The shifting
will however take place only
after the Plaintiffs have
established the very basis on
which they came to Court and on
which they claim to be better
entitled to the house.”
Given the fact that the Third
Parties have denied the
Defendant’s claim, Defendant
assumed the burden of proving
their claim, namely that (i)
Defendant took a loan from
Ecobank which it on-lent to
Potomac; (ii) Dr. Jonah
guaranteed the repayment of the
said loan; (iii) the third
Parties have a legal obligation
to indemnify Defendant; and (iv)
the Third Parties are in fact
indebted to the Defendant in the
sum of ¢512,721,313.00 as at 3
January 2008. Defendant will
only discharge this burden if it
adduces cogent evidence to
establish that the facts alleged
in its claim are more probable
than not.
So, did the Defendant lead
sufficient evidence to establish
that the facilities obtained by
it from Ecobank and secured by
the Plaintiff was extended to
the 2nd Third Party,
Potomac?
The Plaintiff, Metropolitan
Insurance Company Limited,
alleged in its pleadings that
Defendant borrowed from Ecobank
the sum of GH¢200,000 (¢2
billion). Defendant has
admitted this assertion.
Defendant’s claim is that it
on-lent this sum to Potomac. In
purported proof of this
assertion, Mr. Edinam Nutsugah,
Head of Consumer and Business
Finance of Defendant Company
testified as follows:
Q: I am talking about
Metropolitan Insurance Company
with respect to this matter?
A: Metropolitan Insurance
Company obtained a judgment
against Sterling Financial
Services in respect of payment
of outstanding that were due
them from Sterling Financial
Services through its guarantee
to Ecobank, who at the time were
our bankers.
Q: Why did Metropolitan
Insurance Company obtain
judgment against Sterling
Financial Services?
A: Sterling
Financial Services was engaged
in transactions
with the client through Ecobank.
Q: Which client?
A: Potomac
Investment Limited
Q: That is the 2nd
3rd party?
A: Yes my lord. And
Metropolitan Insurance Company
has guaranteed Sterling
Financial Services.
Q: Sterling was
involved with Potomac
Investment?
A: Yes
Q: For what?
A: Sterling Financial
Services had lent facilities to
Potomac Investment, its client.
Q: So how did Metropolitan
Insurance Company come into the
picture?
A: Metropolitan Insurance
Company guaranteed the source of
funds from Ecobank for Potomac
Q: So after Metropolitan
Insurance Company had guaranteed
the facility that you were
obtaining from Ecobank that you
were going to on-lend to Potomac
Investment, what happened?
A: Potomac Investment was
unable to meet its obligation
entirely to us and in 2007
Ecobank called on the guarantee
because we also, our overdraft
position was negative. So when
Ecobank called on the guarantor,
that is Metropolitan Insurance
Company, they paid up and then
made a legal demand on us. They
paid Ecobank.
Q: Did Metropolitan
Insurance Company pay Ecobank.
After they had paid Ecobank,
what did they do?
A: They sued Sterling for
the amount plus cost that they
paid to Ecobank.
Q: What was the
amount that you were sued for?
A: My lord we were sued for
GH¢69,000 plus, I can’t quite
remember the exact figure.
Q: So when Metropolitan
issued a writ claiming that
money against you, what did you
do?
A: My lord we
paid the amount to the legal
firm that...
Q: Metropolitan Insurance
Company had sued you what did
you do?
A: We paid up
Metropolitan Insurance company.
Q: What did you
do?
A: Then in turn we
instituted 3rd party
proceedings against the 1st
and 2nd third party
in this matter.
Mr. Nutsugah tendered in
evidence a series of documents
(Exhibits “A” to “M” to support
Defendant’s assertion that they
on-lent the loan from Ecobank to
the 2nd Third Party,
Potomac. However in none of
these exhibits did it state that
the Defendant herein advanced
the Ecobank loan to Potomac.
The loan agreement covering the
loan from Ecobank to the
Defendant was tendered in
evidence through Mr. Nutsugah as
Exhibit “1”. In the said
Exhibit “1”, Ecobank on 2nd
March 2005 approved a loan of
¢1.5 billion (GH¢150,000.00) to
the Defendant to finance the
Defendant’s lending to Potomac
to buy steel pipes from South
Africa. The purpose for the
loan as stated in Exhibit “1” is
as follows:
“Purpose” : To finance
borrowers loans to be granted to
Potomac in respect of
acquisition of steel pipes from
South Africa to fulfil
obligations under LPO’s issued
by various buyers in the mining
industry. Facility may be used
to back the establishment of
L/Cs”.
The facility was for a period up
to 180 days from date of initial
disbursement”. Mr. Nutsugah,
the Defendant’s representative,
conceded under cross-examination
that Defendant did not on-lend
the entire Ecobank loan to
Potomac. This is what he
said:
Q: You will agree with me
when I say Sterling did not go
and borrow 1.5billion from
Ecobank and hand that money over
to Potomac?
A: No.
Q: But you agree with me?
A: Yes I do agree that we
didn’t hand the entire 1.5
billion loan to Potomac.
Q: Look at the statement of
account you have presented to
court, Exhibit Q. Exhibit Q is
the revised repayment schedule
which you have presented to this
court is that not correct?
A: That is correct
In my opinion, it is very clear
that at the time Defendant
borrowed the money from Ecobank,
Potomac had already applied for
specific facilities from
Defendant for which the
Defendant was going to lend
money to Potomac anyway. The
onus was on the Defendant to
establish that it was the money
that it got from Ecobank that it
on-lent to Potomac, and this in
my opinion Defendant failed to
do.
I will therefore find that
Defendant has not proved on the
balance of probabilities that
the facility it received from
Ecobank was on-lent to Potomac.
I have stated above that
Defendant contends that the
Ecobank loan which it
purportedly on-lent to Potomac
was guaranteed by the 1st
Third Party, Dr. Jonah.
However, the evidence led does
not support Defendant’s
contention that Dr. Jonah
guaranteed the amounts advanced
by Defendant to Potomac. In his
evidence Mr. Nutsugah testified
that “all the facilities were
guaranteed by the 1st
3rd Party.” And
yet, the two (2) documents that
the Defendant was relying on,
Exhibits “N” and “P”, did not
support the Defendant’s case.
Mr. Nutsugah’s evidence under
cross-examination was as
follows:
Q: And that Potomac
Investment loan was secured by a
personal guarantee provided by
the 1st third party
that it is Dr. S.E. Jonah per a
letter dated 11th
February 2005?
A: That is
correct my lord
Q: Exhibit P is
the guarantee by Dr. Sam Jonah?
A: Yes it is my
lord.
Q: It is dated 19th
May 2004?
A: Yes my lord
Q: So it is not
the guarantee in your claim?
A: My lord we
have two.
Q: That 1 exhibit
P is not the guarantee dated 11th
February?
A: No it is not.
Q: It is
therefore has nothing to do with
Ecobank facility?
A: No, it does
not
Q: The Ecobank
facility was granted in 2005?
A: Yes my Lord it
was.”
Exhibit “N” is dated 11th
February 2005; and even though
in the said exhibit Dr. Jonah
indicated that he was
guaranteeing payments on
loans/facilities granted to his
son, Ben Esson-Jonah, for the
next five (5) years, the letter
stated that the guarantee was
for all “loan facilities”
up to $300,000, and it was
“following an application he
made in the name of Potomac
Investments Ghana Limited.”
Also, in Exhibit “P”, dated 19th
May 2004 Dr. Jonah gave a
guarantee valid for 12 months
for loan facilities up to
$250,000 “following an
application made by Ben
Esson-Jonah in the name of
Potomac.” These two
guarantees therefore could not
be for the entire ¢1.5 billion
facility that Defendant obtained
from Ecobank which it claims it
on-lent to Potomac.
I will find therefore that the
Defendant has again not led
cogent evidence to prove that
Potomac guaranteed the
GH¢1.5billion that Defendant
claims it on-lent to Potomac.
The Third Parties have
emphatically denied that they
are indebted to the Defendant,
and therefore in spite of the
fact that I have made a finding
that the Defendant has not
proved that it on-lent the loan
it received from Ecobank to
Potomac, I shall nonetheless
examine the evidence before the
Court to determine whether or
not Potomac indeed owes the
Defendant the amount being
claimed at all.
The Defendant’s claim, is that
as at 3rd January
2008, Potomac was indebted to it
in the sum of ¢512,721,313
(GH¢51,272.13). As stated above,
Mr. Nutsugah tendered in
evidence Exhibits “A” to “M” as
proof of Defendant’s assertions.
Under cross-examination, Mr.
Nutsugah testified that Potomac
obtained between 12-15
facilities from the Defendant on
a revolving basis. He also
agreed that Defendant did not
hand over the entire facility of
¢1.5 billion to Potomac. Mr.
Nutsugah also tendered in
evidence as Exhibit “Q”,
Potomac’s Statement of Account
which indicates that Potomac
owes Defendant an amount of
GH¢1,114,379 as at 31/03/11.
Potomac does not deny borrowing
money from Defendant Company.
Ben Jonah, the Managing Director
of Potomac confirmed in his
evidence that Exhibits “B” – “M”
covered loan applications to
Defendant and approvals of the
said applications. The Third
Parties however deny owing the
amount being claimed, and led
evidence to rebut the evidence
adduced on behalf of the
Defendant.
Counsel for Potomac tendered in
evidence through Mr. Nutsugah, a
“Revised Repayment Schedule
(Exhibit “4”) given by Defendant
to Potomac, indicating an
outstanding balance of
¢1,035,180,760 (GH¢103,518.00)
as at 31/11/07. Ben Jonah’s
evidence was that Defendant’s
computation was wrong. The
basis of this contention is that
firstly, Defendant used the
wrong dates to calculate the
interest, and secondly, some of
the payments that were made to
Metropolitan Insurance Co. Ltd
were not captured as per their
schedule. He said that Potomac
made payments to the Plaintiff
through Metropolitan Insurance
Co. Ltd for onward transfer to
the Defendant Company; Potomac
made the payments either by
cheque or cash.
According to Ben Jonah, a
payment made in August 29, 2006
was not recorded. The said
payment was made by cash. This
is what Ben Jonah said:
Q: According to the table
Exhibits “4” and “Q”, certain
payments
were made by you?
A: Yes please.
Q: And the opening balance as at
23rd March 2009 Nine
Hundred
and Forty Five Million old Ghana
Cedis?
A: Yes Please.
Q: 95,400 Ghana?
A: Yes please.
Q: And that table record the
payment made by you?
A: Not all
Q: Do you know of any particular
payment which is nor recorded?
A: Yes please.
Q: Which payment?
A: there is a payment that I
made in 2006 August 29th
that was not
recorded.
Q: How was this payment made?
A: It was made by cash,
Metropolitan Insurance, our
Financial
controller and their Accountant
came to my office and picked it
up.
Q: When you made the payment to
Metropolitan Insurance, they
did acknowledge receipt?
A: Yes please.
Q: Is it here with you?
A: Yes please.
Q: This is the receipt given to
you by Metropolitan Insurance?
A: Yes please.
Q: For the payment which you
said they come to your office?
A: Yes please.
Q: And this is not reflected in
Exhibits “Q” and “4”?
A: No.
Exhibits “B” to M” indeed show
that Potomac obtained various
short term credit facilities
from the Defendant. Each credit
facility came with its own
terms. In Exhibit “Q” the
opening balance is stated as
GH¢95,400.00 Mr. Ben Jonah,
Managing Director of Potomac
also tendered as Exhibit “18”,
Potomac’s computation of its
indebtedness and payments of the
amounts borrowed under Exhibits
“B” to “M”. The opening balance
on Exhibit “18” is also
GH¢95,400.00
There are payments made by
Potomac that are captured in all
three (3) Exhibits, “Q”, “4”,
and “18”, and are thus
undisputed. The point of
disagreement is with regard to a
payment of GH¢10,000 which
Potomac claims it made but is
not reflected in Exhibit “Q”.
Furthermore the value date
stated in Exhibit “Q” as the
alleged dates of payments made
to the Defendant are not the
actual dates of payment. Also,
in Exhibit “Q” the Defendant had
charged a straight-line interest
rate of 4.5% on the outstanding
balance. It is Potomac’s
contention that it never agreed
with the Defendant that it
should charge a straight-line
interest rate of 4.5%. According
to Potomac, the agreed interest
rate was 3%. It is therefore
Potomac’s contention that if the
interest rate of 3% is applied
to the outstanding balances, the
GH¢10,000 added to payments made
by it to Defendant, and actual
dates of payments made by to
Defendant recognised, then as at
27th August 2007,
Potomac had overpaid the amount
owed to the Defendant by
¢9,204,809.42 (GH¢920.48).
So, what evidence did Potomac
adduce in support of its
contention that a payment of
GH¢10,000 had not reflected in
the statement presented by the
Defendant? From the evidence
before the Court, specifically
Exhibit “19” which is the
minutes of a meeting held on 20th
May 2008, this issue was raised
by Potomac and it was stated as
follows:
“By Sterling’s own statement of
account, Potomac paid its debt
less GH¢10,000. By Potomac’s
reckoning it has paid the said
GH¢10,000 (it made 2 payments in
September 2006, but only one is
reflected in Sterling’s
statement).”
The evidence before the Court is
that the parties entered into an
arrangement whereby payment of
amounts owed by Potomac to
Defendant were sometimes paid to
Plaintiff (Metropolitan
Insurance) who then informed
Defendant of such payment. This
agreement was confirmed among
others by Exhibits “AC”, “2”,
“3”, “6”, “11” and “20”. This
arrangement was further
confirmed by the unchallenged
evidence of Albert Ghansah, Head
of Finance and Account of
Metropolitan Insurance. His
testimony corroborated Mr. Ben
Jonah’s evidence on the same
issue. According to Mr. Ben
Jonah it was in pursuance of
this arrangement that Potomac
paid the said amount of
GH¢10,000 among other payments.
Defendant does not deny that
this was the arrangement between
the Defendant and Potomac.
In proof of the assertion that
it had made the payment of
GH¢10,000 Potomac’s Managing
Director, Ben Jonah, testified
as follows:
“Q: Do you know of any
particular payment which is not
recorded?
A: Yes please
Q: Which payment
A: there is a payment that
I made in 2006 August 29th
that was not recorded
Q: How was this
payment made?
A: It was made by cash to
Metropolitan Insurance. Our
Financial Controller and their
Accountant came to my office and
picked it up.
Q: when you made the
payment to Metropolitan
Insurance, they did acknowledge
receipt.?
A: Yes please.”
This piece of evidence was
corroborated by the testimony of
Mr. Ghansah, the very person
whom Potomac’s Managing Director
testified to have collected the
“disputed” payment. Mr. Ghansah
testified that he was called by
Mr. Ben Jonah to collect some
cash. He personally went for
the cash and took it to his
office in the company of two (2)
gentlemen from Potomac. He
handed over the cash to
Metropolitan’s cashier who
checked the amount and issued a
receipt for it. His evidence
was that the cash he collected
was in line with the arrangement
between the Plaintiff, Defendant
and Potomac for the former to
collect payment of Potomac’s
indebtedness. He tendered in
evidence (Exhibit “20”) as the
official receipt issued by the
Plaintiff to Potomac.
Under cross-examination, Mr.
Ghansah denied that Exhibit
“20” was a receipt for payment
of insurance premium by Potomac
and that it had no bearing to
the payment of Potomac’s
indebtedness to Defendant. He
explained that Exhibit “20” was
a manual receipt and is used
when the Defendant’s
computerized receipt systems
break down. In that event the
manual receipts like Exhibit
“20” will not have any
endorsement on it that it is a
premium or non-premium receipt.
I will accept the evidence of
Mr. Ghansah; I find him to be a
credible witness.
Potomac having established a
prima facie case that it made
the payment to GH¢10,000
therefore the persuasive burden
then shifted unto the Defendant
to lead evidence to rebut the
evidence adduced on behalf of
the Third Parties. And as
stated the Defendant’s evidence
in rebuttal was that Potomac did
not make the alleged payment and
that if any such payment was
made it was for insurance
premium.
Defendant’s Counsel raised an
issue when cross-examining Mr.
Ghansah that the words of the
amount in Exhibit “20” differ
from the amount in figures. It
is a cardinal principle in the
construction of deeds and
documents that in the case of
difference between written words
and figures in a deed, the
written words as a general rule
prevail. Thus in the instant
case the words “One Hundred
Million Cedis Only,” ought to
prevail over the figures
“¢90,000” stated in Exhibit
“20”.
I will accept the evidence of
Ben Jonah and Mr. Ghansah and
find that Potomac made a payment
of GH¢10,000 to Plaintiff which
has not been taken into account
in arriving at the Defendant’s
claim.
Potomac also contends that the
dates of payment recoded in
Exhibit “Q” were not correct.
From Exhibit “Q” Defendant
calculated interest on a daily
basis and then debited Potomac’s
account with interest on the day
payments were made by Potomac.
Thus, when payments were made by
Potomac interest that had
accrued as at that date was
subtracted from the total debit
as of that day.
In support of its case that the
disputed dates used by Defendant
were not the actual dates on
which payments were made to
them, Potomac tendered the
cheque stubs which bore the
dates when payments were
actually made to Defendant.
Exhibit “7” shows that on 2nd
June 2006, Potomac paid to
Defendant the sum of GH¢9,200.
This payment is recorded by
Defendant as having been made on
22nd June 2006.
There is a difference of 20 days
for which Defendant charged
interest on the outstanding
balance of 4.5%.
By Exhibit “9” Potomac again
paid to Defendant the sum of GH¢10,000
on 30th August 2006
which Defendant recorded as
having been made on 11th
September 2006. Defendant by
the late recording charged
Potomac interest at 4.5% for 12
days. By Exhibit “10”, Potomac
on 13th October 2006
paid the sum of GH¢10,000 to
Defendant but Defendant recorded
that payment as having been made
on 19th October
2006. Potomac was charged 6
days interest at 4.5% for the
late recording. On 10th
April 2007 Potomac made a
payment of GH¢10,000 by Exhibit
“11”. This payment is recorded
by Defendant as having been made
on 16th April,
Potomac was again charged
interest at 4.5% for 6 days.
Mr. Ben Jonah’s evidence was
that at all material times when
payments were made to Defendant,
Potomac’s accounts were in
funds. Mr. Ben Jonah’s evidence
was not challenged under
cross-examination. Defendant
having failed to lead any
evidence to contradict Exhibits
“7”, “9”, “10” and “11”, Potomac
has established its case that
payments made in Exhibits “7”,
“9”, “10”, and “11” were made on
the dates Potomac claims they
were made, and I will so find.
Potomac is also disputing the
interest rate of 4.5% applied on
the outstanding balance. In
Ghana Commercial Bank v. Odoom
[1975] 2 GLR 54, the Court
of Appeal held that where a
person claimed an interest rate
on a debt which rate was
disputed, the person claiming
the particular interest rate had
to establish the basis of that
rate of interest. This, the
person does by proving that the
interest rate had been fixed by
previously by agreement, or was
by trade usage, or based on
statutory provisions or by
customer acquiescing in the rate
of interest normally chargeable
by creditor. Where the person
failed to prove previous
agreement between parties on
rate of interest or acquiescence
by customer, or that there was
any statutory provision
regulating rate of interest,
that claim for that particular
rate of interest must fail.
Except in the instances
mentioned, debt does not carry
interest at common law; see also
Halsbury’s Laws of England, 4th
Edition [1980] Vol.32,
paragraph 108, page 54.
With the exception of Exhibit
“C2” in which the interest rate
applicable was stated as 4%
straight line per month, in all
the other offer letters tendered
in evidence (Exhibits “B”, “C”,
“D”, “E”, “F”, “G”, “H”, “J”,
“K”, “L” and “M”) the applicable
rate was 3% straight line per
month. In Exhibit “S” Potomac
requested to be allowed to pay
the outstanding debt in the
manner set forth in that
letter. By that letter Potomac
offered to pay the sum of
US$30,000 immediately and the
remainder spread over six
months. In response Defendant
wrote Exhibit “S1” dated 23rd
March 2006; In that letter
Defendant did not accept the
terms offered by Potomac in
Exhibit “S”. Defendant rather
offered different terms upon
which it will agree for Potomac
to pay the outstanding balance.
Exhibit “S1” offered among
others that Potomac immediately
pay the sum of US$40,000 and not
US$30,000 offered by Potomac.
Defendant offered to charge 4.5%
on the outstanding balance.
That letter ended as follows:
“We will prepare the approval
letter and loan agreement as
soon as we receive your positive
response to the above
requirements....”
Potomac did not propose any
interest rate in Exhibit “S”.
However in the Defendant’s
counter offer they proposed the
interest rate of 4.5%. It is
trite learning that unless and
until the counter offer was
accepted by Potomac there was no
binding agreement as to the
terms of repayment. In his
evidence Mr. Ben Jonah stated
that he did not accept the terms
of Exhibit “S1”. He was not
challenged on this piece of
evidence. The position of the
law therefore is that the
parties were bound by the terms
that existed prior to Exhibit
“S”. And as stated the exigible
interest rate was predominantly
3%.
I will find that from the
evidence before the Court there
is no basis for the Defendant
applying the interest rate of
4.5% on the outstanding balance.
I have stated above, and it is
trite learning, that Defendant
was required to lead credible
and cogent evidence to prove its
assertions. In Adwubeng v.
Domfeh [1996-97] SCGLR 660 at
670. Acquah JSC reiterated
the position of the law that,
“ while sections 11 (4) and 12
clearly provide that the
standard of proof in all civil
actions is proof by a
preponderance of probabilities-
no exceptions are made.”
In my opinion the Defendant has
not led sufficient evidence to
prove that the Third Parties are
liable to indemnify Defendant.
It appears that the basis of
the alleged right of indemnity
is Exhibits “B” to “M”. From
the quotation above from
Halsbury’s Law of England,
rights of indemnity arise from
contract and an obligation
arising from the relation of the
parties. The Defendant herein
has not established any
contractual relationship between
it and Potomac in relation to
the facility granted to the
Defendant by Ecobank. The
relations between Metropolitan
Insurance and Sterling
(Defendant) in respect of the
former’s guaranteeing of the
latter’s borrowing from Ecobank
has nothing to do with the
relationship between Defendant
and Potomac. Furthermore, there
is nowhere in the documents
covering the transactions
between the Defendant and
Potomac that the Third Parties
undertook to indemnify Defendant
in respect of its indebtedness
to Metropolitan Insurance
In conclusion, I will hold that
the Defendant has failed to
prove its case. I will
therefore dismiss the Third
Party Notice.
Costs assessed at GH¢5,000
against Defendant.
(SGD)
BARBARA ACKAH-YENSU (J)
JUSTICE OF THE HIGH COURT
COUNSEL
FOSTER GBONNEY
- DEFENDANT
KIZITO BEYUO
- 3RD
PARTIES |
