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JUDGMENT:
On 2nd April, 2009,
NDK Financial Services Limited
(Plaintiff in the substantive
suit), obtained judgment against
the Defendant in the substantive
suit, Rose Omaboe, trading as
Naa Abekan Lube and Energy.
By an entry of judgment filed on
8th April 2009 on
behalf of the Plaintiff, the
Plaintiff/Judgment Creditor
sought to recover from the
Defendant /Judgment Debtor the
sum of GH¢368,663.98 as at the
date of the said entry of
judgment, which amount remains
unpaid. By a praecipe of fieri
facias filed at the Registry of
this Court, two pieces of
parcels of land situate at Dome
Pillar 2, Accra, which
properties were then presumed to
be owned by the
Defendant/Judgment Debtor were
attached in pursuance of the
execution of the said judgment
of this Court in the suit.
An order for reserved price was
obtained from the Court on 3rd
December 2009 for the said two
parcels of land to be sold by
public auction at a forced sale
value of GH¢204,400.00. The
Defendant/Judgment Debtor
applied to set aside the order
for reserved price, which
application was granted and an
order made for AESL to conduct a
new valuation at the expense of
the Defendant/Judgment Debtor.
On 1st April, 2010 a
revised order for reserved price
was obtained per which order the
reserved price was fixed at
GH¢290,500.00.
The Claimant herein, Engen Ghana
Limited, has however filed a
notice of claim to the property
described as the Petroleum
Filing Station Property situate
at Dome, Accra.
Plaintiff/Judgment Creditor, now
Execution Creditor filed a
notice disputing the claim
whereupon on the application of
the Registrar of this Court
pursuant to order 44 rule 12(4)
of C.I.47, the Court directed
the attendance in Court of the
Claimant herein and the
Plaintiff/Execution Creditor for
the purpose of determining the
dispute between them. The
Claimant was designated
Plaintiff by the Court so that
it might prove its claim (it
however retains the designation
Claimant in this entire
judgment); the
Plaintiff/Execution Creditor was
made the Defendant.
The Court took evidence from the
Claimant’s representative,
Brentford Tei Mensah Nartey, in
a summary determination of the
interpleader. His evidence was
that the Defendant/Execution
Debtor is currently a dealer of
the Claimant’s service station
at Dome. The Defendant/Execution
Debtor entered into a retail
agreement with the Claimant in
the year 2008. The nature of the
agreement was a supply agreement
per which Claimant supported the
Defendant/Execution Debtor to
put up a filling station. The
Claimant installed their pumps
and tanks, and put up signage.
They also supplied fuel to the
site.
Mr. Nartey tendered in evidence,
a Deed of Mortgage with the
Defendant/Execution Debtor (
Exhibit “A”); a Deed of
Servitude (Exhibit “B”); and
Land Title Certificate (Exhibit
“C”). Mr. Nartey’s evidence was
that Exhibit “A” refers to land
lying and being at Dome in
Accra. And sited on the said
property is a filing station.
His further evidence was that
Engen Ghana Limited granted Rose
Omaboe an interest-free loan of
GH¢52,250.00, and was also paid
amounts including GH¢19,000 for
the right to register Servitude
over the property and an
additional amount of GH¢30,000.
Plaintiff/Execution Creditor
also paid an amount of GH¢10,000
to Rose Omaboe for the property
development on the site. He
also said that at the time Engen
Ghana Limited registered its
interest in the property they
did not come across any other
interest in the property.
Claimant only got to know about
the Plaintiff/Execution
Creditor’s claim through a
newspaper publication.
The Plaintiff/Execution
Creditor’s witness, Edem Menkah,
testified that the
Plaintiff/Execution Creditor
extended to the
Defendant/Execution Debtor five
(5) facilities totalling
GH¢85,000. The
Defendant/Execution Debtor
applied for the first facility
of GH¢8,000 on 19th
June 2006 and was approved on 20th
June 2006. The
Defendant/Execution Debtor
offered as security for the
facility, the parcel of land
lying and being at Dome. The
Defendant/Execution Debtor
deposited the title deed
covering the said property
(Exhibit “8”) with the
Plaintiff/Execution Creditor.
It was Mr. Menkah’s further
evidence that
Plaintiff/Execution Creditor was
not able to register a Mortgage
because in 2007 it was
discovered that Unique Trust Ltd
had a mortgage over the land in
question. Plaintiff/Execution
Creditor negotiated a settlement
with Unique Trust and the
interpleader summons was
withdrawn. They agreed to go
ahead with the sale of the
property and that they would
share the proceeds with Unique
Trust.
My examination of Exhibit “A”,
the Deed of Mortgage between the
Defendant/Execution Debtor and
the Claimant herein, reveals
that it was dated 29th
April 2008. Under the clause
titled “The Charge Security and
Continuing Cover”, this is how
it reads:
“The advance made by the
Mortgagee to the Mortgagor are
hereby secured under a First
Charge by way of Legal Mortgage
on the Mortgagor’s right, title
and interest as contained in the
Deed of Lease registered under
Title 520/2005 over ALL THAT all
that land lying and being at
DOME in the Ga district of the
Greater Accra Region, Ghana
containing an area of 0.347 Acre
registration number 1957/69
stamped as AR/2113/96 which
piece or parcel of land is more
particularly delineated on plan
attached thereto and thereon
showed edged pink.”
Exhibit “8” is the Indenture
tendered in evidence by the
representative of the
Plaintiff/Execution Creditor as
the Title Deed deposited with
them by the Defendant/Execution
Debtor. The said Indenture is
dated 10th August,
2004 between the
Defendant/Execution Debtor and
one Paul AyitteyTetteh. The
Indenture was presented at the
Lands Commission in August 2004,
was stamped as AR/6774/2004 and
bears Land Registry No.
520/2005. The schedule
described in the said Indenture
is as follows:
“ALL THAT PIECE OR PARCEL OF
LAND together with the building
thereon situate lying and being
at DOME in the Ga District of
the Greater Accra Region of the
Republic of Ghana containing an
approximate Area of 0.347 Acre
and bounded on the North West by
the Transferor’s land measuring
88.5 feet more or less; on the
South West by the Transferor’s
land measuring 135.7 feet more
or less; on the South East by
the Transferor’s land measuring
115.5 feet more or less and on
the North East by a proposed
Road measuring 123.1 and 30.1
feet respectively more or less
which piece or parcel of land is
more particularly described and
delineated on the site plan
hereto attached and thereon
shown edged pink.”
The Land Certificate (Exhibit
“C”) also describes the land in
question as follows:
“ALL THAT piece or parcel of
land in extent 0.14 hectare
(0.33 of an acre) more or less
being Parcel no. 25 Block 11
Section 157 situate at Dome in
the Greater Accra Region of the
Republic of Ghana aforesaid as
delineated on Registry Map no.
006/157/1993 in the Land Title
Registry, Victoriaborg, Accra
and being the piece or parcel of
land shown and edged with pink
colour on Plain No. 414/2008
annexed to this
Certificate.....”.
The area of the parcel of land
on the site plan inserted in
Exhibit “8”, is stated as
measuring “0.347 Acre OR 0.141
Hectares” which indicates that
the area of the land described
in the Land Title Certificate
(Exhibit “C”) is the same. In my
opinion therefore, we are
looking at the same piece or
parcel of land which was used as
security for facilities granted
to the Defendant/Execution
Debtor by both the
Plaintiff/Execution Creditor and
also the Claimant. The Mortgage
Deed (Exhibit “A”) referred to a
lease document registered under
Title 520/2005, and this appears
to be the same document that was
deposited with the
Plaintiff/Execution Creditor.
The Land Title Certificate
(Exhibit “C”) does not make
reference to the Title Deed but
as stated above, it is clear
that it refers to the same piece
of land.
How the Claimant got the details
of the property as stated in the
Deed of Mortgage (Exhibit “B”),
I do not know. Since there is no
evidence before the Court to
show how. I have taken note of
the fact that Defendant/
Execution Debtor’s interest in
the land in question was even
wrongly described as a lease in
the Deed of Mortgage when it is
a freehold. The evidence placed
before the Court is that the
Defendant/Execution Debtor did
not deposit or even show the
title deed (Exhibit “A”) to the
Claimant. The Claimant’s
representative’s evidence was as
follows:
“Q: What were the documents
that Naa Abeka gave to you?
Could you describe the document?
A: My. Lord, if my memory
serves me right and upon
information from the previous
retail manager, she presented
the diagram showing the land
which was given to Engen Ghana
Limited for the purpose of a
retail service station as to the
exact document presented at the
time i cannot exactly speak to
those facts as i was not the
incumbent at that time.”
The question however is whether
Claimant had committed any
negligence before giving
Defendant the loan. There is no
evidence before the court
showing that the Claimant made
any attempt to find out where
the Title Deed/Indenture was.
All the Claimant did was quote
the particulars of the indenture
in the Deed of Mortgage. I am
wondering whether a company like
the Claimant should proceed to
grant a facility in this
manner. I am of the opinion
that the Defendant/Execution
Debtor would have done something
improper, if not something
fraudulent, going for the Land
Title Certificate knowing very
well she had encumbered the
property with the
Plaintiff/Execution Creditor.
Claimant’s representative’s
testimony was that their
inquiries from the Defendant/
Execution Debtor did not reveal
that there was anyone who had an
interest in the land in
question. This is obviously a
misrepresentation by the
Defendant/Execution Debtor.
Now, the issue is; would the
Claimant also be held to have
done something improper? I
would say, yes. Claimant, in my
opinion, contributed in
promoting, knowingly or
unknowingly or at worst
negligently to the wrongdoing.
The Claimant had a duty to, at
least sight the title documents,
before giving out the facility
to the Defendant/Execution
Debtor. Claimant further allowed
Defendant/Execution Debtor to
proceed with the same document
to get the Title Certificate for
Claimant after they gave the
Defendant/Execution Debtor the
facility.
The evidence before the Court as
stated above is that the
Defendant/ Execution Debtor
deposited the Title Deed
covering the land in question to
the Plaintiff/Judgment
Creditor. The
Plaintiff/Judgment Debtor did
not register a Deed of
Mortgage. The Claimant on the
other hand tendered in evidence
a Deed of Mortgage as well as a
Land title Certificate in the
name of the Defendant/Judgment
Creditor. It is trite learning
that a land title certificate
creates in favour of a
registered proprietor an
indefeasible title against all
adverse claimants of that land.
This position of the law was
stated by Prof. Kludze JSC in
the case of Brown v.
Quashigah [2003-2004] SCGLR,
930. The eminent Judge
stated that under Sections
43(1) – (4) and 48 of the Land
Title Registration Law, 1986
(PNDCL152), the rights of a
registered proprietor of land
acquired for valuable
consideration or by an order of
a court shall be indefeasible
and shall be held by the
proprietor together with all
privileges and appurtenances
attaching thereto free from all
other interests and claims
whatsoever. An indefeasible
title meant a complete answer to
all adverse claims on mere
production of the certificate.
However, an indefeasible title
was subject to over-riding
interests.
Counsel for the Claimant
contended that the Claimant was
occupying the land and they made
enquiries from her regarding any
prior interest and she did not
disclose any interest to the
Claimant. It is a fact that the
position of the law is that
possession by itself gives a
good title against the whole
world except someone having a
better legal right to
possession: Wuta-Ofei v
Danquah [1961] 1 GLR 487. In
other words, exclusive
possession of land which cannot
be otherwise be explained is
taken as evidence of ownership.
The evidence with regard to the
Land Title and possession are in
respect of ownership of the land
in dispute. However, the issue
for determination in the instant
case is not ownership of the
land in dispute; it is the
priority of mortgages. The basic
rule of priority among mortgages
is that the first in time
prevails. And it is a fact that
the Claimant has a registered
mortgage whereas the
Plaintiff/Execution Debtor does
not. Ordinarily therefore the
Claimant’s mortgage should give
it priority. This basic rule is
however subject to certain
exceptions. It may be displaced
either by statute or by express
agreement among the
encumbrancers. It is also
“subject to the operation of the
rules of equity including the
rules concerning fraud,
estoppels for gross negligence
or otherwise, purchasers for
valuable consideration without
notice of prior interests and
the priority of legal over
equitable interests where the
equities are equal”; section
19(1) of NRCD 96. And it is my
opinion that in the instant
case, the basic rule is subject
to estoppel for gross
negligence.
It is the position of the law
that a mortgage is required to
be registered, nonetheless an
equitable mortgage can be
created over equitable interests
in land and these need not be in
writing: See Section 3 (1) of
the Mortgages Decree, 1972 (NRCD
96). Informal mortgages could
be created under our law. Hence
it is possible to have a valid
mortgage even where there is an
oral agreement for a mortgage
and there is part performance by
one of the parties; e.g. if the
mortgagor deposits his title
deeds with the mortgagee. In
those circumstances the court
will hold that a mortgage has
been created, as was decided in
the case of Russel v. Russel
(1783) Bro.CC. 269; Carter v.
Wake(1877) 4 Ch.D 605 at 606
where a person deposits his
title deed by way of security
for a loan, this is sufficient
act of part performance to
create an equitable mortgage.
It is however necessary to prove
that the deeds were deposited by
way of security (Wardle v.
Oakley (1864) 36 Beav.27;
Roberts v. Croft (1857) 24 Beav.
223). There is evidence in
the instant case that the title
deed over land in question was
deposited with the
Plaintiff/Execution Creditor by
way of security.
In my opinion, the
Plaintiff/Execution Creditor
should have priority over the
land in question as compared to
the Claimant. The Land Title
Certificate (Exhibit “C”) cannot
overrun the interest of the one
with the original title deed,
the Plaintiff/Execution Creditor
given the circumstances under
which it was obtained. I am
strengthened in this position by
the dicta in the case of
Amuzu v. Oklikah [1998-99]
SCGLR, 141. In the said
case it was unanimously decided
that the Land Registry Act, 1962
(Act 122), did not abolish the
equitable doctrines of notice
and fraud. Justice Ampiah JSC
held that it is said that equity
follows the law, but equity
would not permit an Act to be
used as an instrument of fraud.
Any conduct that borders on
fraudulent behaviour should be
frowned upon; it must not be
encouraged. This dictum was
made in spite of the fact that
fraud had not been specifically
pleaded.
I have been referring to the
land covered by the Indenture,
Exhibit “A”, all along. The
evidence however before the
Court is that the Claimant
installed their own pumps and
tanks, and also put up signage
on the land in dispute. The
Claimant is therefore entitled
to remove the said pumps, tanks
and signage from the land, and I
shall so order.
In the premises, the claim is
allowed in part, and subject to
the order hereinbefore made the
land shall remain attached.
Costs of GH¢2,000 awarded
against the Claimant.
(SGD)
BARBARA ACKAH-YENSU (J)
JUSTICE OF THE HIGH COURT
COUNSEL
GEORGE BEKAI -
PLAINTIFF
JAMES ADDO -
CLAIMANT |
