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JUDGMENT
BROBBEY J.A.:
This is an appeal
against the decision of an Accra High Court in which
summary judgment was given against the defendant for
certain sums of moneys in both Cedis and American
Dollars which were owed to the plaintiff. The defendant
is described as the appellant herein and the plaintiff
as the respondent.
The grounds of appeal
filed by the appellants were that
(a) "The High Court
Judge erred by granting the summons for summary judgment
since the pleadings were fraught with triable issues not
amenable to summary judgment.
(b) Additional grounds
may be filed upon the receipt of a certified copy of the
judgment."
No additional grounds
were filed. The appeal was therefore argued on the basis
of only one ground.
In sum, the basic
issues between the parties were as follows: the
respondent claimed that it was owed moneys by the
appellant. The amounts owed were in two different
currencies of US Dollars and Ghana Cedis. According to
the respondent, both sums remained unpaid as at the time
the writ of summons was issued against the appellant for
them.
The appellant's answer
to the Dollar claim was that he had fully paid that
amount. He supported that claim with exhibit 3, a
statement of account which clearly indicated that the
appellant owed nothing on the Dollar account.
In reply, the
respondent averred that the appellant owed on both the
Dollar and Cedi account. When the appellant paid some
sixty thousand Dollars into the Dollar account, the
respondent changed that amount into Cedis and used it to
pay off the Cedi amount owed. From the wording of
exhibit F, a letter written by the respondent to the
appellant, it is apparent that the respondent converted
the Dollars into Cedis at its own exchange rate and used
the money to pay the Cedi debt before informing the
appellant of its action.
The appellant disputed
the authority of the respondent to use the Dollar amount
to pay off the Cedi debt. That alone raised a triable
issue which was not capable of being resolved by summary
judgment. The use of summary proceedings to resolve that
issue was wrong.
There are a number of
issues which arise from the use of the Dollars to pay
off the Cedi debt. These include the issues of set off
available to the respondents, the mandate which the
respondent had in the management of the appellant's
accounts and even the rate of the Cedi to the Dollar
used by the respondent in converting the Dollar into
Cedis. These cannot be commented upon now since the case
will be remitted to the trial court for re-trial on the
claim for the debt owed in Dollars. They however create
the unmistakable impression that there were triable
issues which had to be investigated before final
conclusion on liability for the debt could be reached.
The rule was summed up in the House of Lords case of
Jacobs v. Booths Distillery Co. (1901) 85 LT 262 as
follows;
"Where there is a
triable issue, though it may appear that the defence is
not likely to succeed, the defendant should not be shut
out from laying his defence before the court either by
having judgment entered against him or by being put
under terms to pay money into court as a condition of
obtaining leave to defend the action."
The Dollar aspect of
the case did not lend itself to the entry of summary
judgment.
The appeal will
consequently be allowed in part, that is, in respect of
the claim for the Dollar amount owed to the respondent.
The claim for the Cedi
amount raised different considerations. The appellant
admitted owing the amount claimed. His defence to the
claim was that before he was granted that amount which
resulted in the Cedi debt, the Deputy Managing Director
of the respondent bank demanded a loan from him. That
resulted in the payment of forty million Cedis being
given to that deputy director. It was part of the
appellant's case that that amount given to the deputy
director had to be paid before he would be obliged to
pay his own debt owed to the bank on the Cedi account.
That argument did not
find favor with the trial judge. She therefore entered
summary judgment on the Cedi debt against the appellant.
For at least four
reasons, the trial judge was right in entering judgment
against the appellant. The reasons are as follows;
Firstly, the appellant knew that he had to borrow money
from the respondent, a bank, which is a limited
liability company with a distinct legal entity; Mr
Sekyere Abankwa who allegedly demanded the money before
the appellant would be given the money was not the
lender who lent him the money which has been described
as overdraft facility from the bank. Secondly, it
appeared that Mr. Abankwa was not served with the
proceedings for the court to assess his reaction to the
allegation. That implies that even if the allegation
were to be false, the appellant did not provide
sufficient basis from which the trial court could have
evaluated the truth or otherwise of that allegation
against Mr. Abankwa. Thirdly, the allegation against Mr.
Abankwa sounded simply ridiculous. If the appellant
himself had forty million Cedis of his own to give as a
loan to someone working in the bank, why would he go to
the bank to borrow as overdraft the same amount of forty
million Cedis which he knew would have attracted
interest and bank charges? He did not state that he too
charged Mr. Abankwa any interest. Common sense alone
would lead to the conclusion that no business man would
do what he said he did with the bank or with Mr.
Abankwa.
Fourthly, the most
serious factor which militated against the appellant on
the alleged payment to Mr. Abankwa was what the money
paid was intended to be. Was it an inducement or bribe
to Mr. Abankwa for the purpose of securing the overdraft
from the bank? The appellant did not disclose why he had
to pay money to Mr. Abankwa apart from what appeared in
his statement of defence that Mr. Abankwa demanded to be
paid forty million Cedis before he would be granted the
overdraft of forty million Cedis and he did give that
amount to him. If it was a bribe, then the appellant
surely did not expect a court of equity and conscience
to have aided him to use bribe which is a crime as a
defense to a civil debt to a bank. If he meant to use
the bribe to found a cause of action against Mr.
Abankwa, the law was clearly against him. The applicable
principle is ex turpi causa non oritur actio, which
literally means that no one can found an action on an
illegality. See Schandorf v. Zeini [197] 2 GLR 418, CA.
and St John Shipping Corporation v. Joseph Rank Ltd.
[1957] 1 QB 267 at 288.
Quite clearly, the
appellant did not disclose any triable issue in respect
of the Cedi debt for which it should have been allowed
to go to trial to adduce evidence. As it was held in
Jones v. Stone (1894) AC 122
"Summary judgment is
intended only to apply to cases where there is no
reasonable doubt that the plaintiff is entitled to
judgment and where therefore it is inexpedient to allow
a defendant to defend for the mere purpose of delay"
Defence for the purpose
of delay seemed to be the undisputed impression that the
defense put up by the appellant to the Cedi claim
created.
For these reasons, the
trial judge was right in rejecting his defence as a sham
and entering summary judgment against the appellant.
In the end, the appeal
succeeds in part. The appeal against the claim for the
$60,149.91 is allowed. The appeal against the Cedi debt
fails and is dismissed. The case should be remitted to
the trial court for evidence to be taken on the Dollar
claim for that claim to be decided on its merits.
SGD.
S. A. BROBBEY
JUSTICE OF APPEAL
BADDOO, JA:
This is an appeal
against the Summary judgment delivered by the High
Court, Coram Ashong-Yakubu J, on the 30th of July 1999.
FACT OF THE CASE
The facts of the case
as disclosed by the statement of claim of the plaintiff
in the pleadings are that, the plaintiff is a Banking
Institution in Ghana, licensed to borrow and lend money.
In August 1997, the 1st Defendant a Limited Liability
Company requested a loan of 50,000 US dollars from the
plaintiff, to enable the Company execute an Export Order
for the supply of 85,000 metric tonnes of Robusta Coffee
to overseas buyers.
Defendant further
requested and received an additional loan of ¢40,000,000
from the plaintiff for the purchase of some coffee for
shipment to his buyers in July 1998.
The two facilities were
personally guaranteed by the second Defendant who also
offered as an additional collateral security, house No.
A352/15 Dansoman, Accra. A mortgage deed was executed
between the Bank and the second Defendant, to create a
legal charge over the said house at Dansoman.
It was also agreed that
the 50,000 US dollars loan was to be repaid by the 28th
of February 1998, while the overdraft facility was to
have been repaid by monthly payment from 20th July 1998.
At the time of issuing the writ on the 6th of April 1999
the plaintiff claims that the Defendant has failed or
refused to settle its indebtedness in spite of verbal
and written demand for payment by the plaintiff.
Bank charges and
interest, on the unpaid loans, have increased the
amounts due to the paid. These will continue to attract
interest at the prevailing bank rate, until repayment.
Statement of Defence
In response to the
especially indorsed writ filed by the plaintiff on
13/4/99, the Defendant entered appearance on 21/4/99 per
his Attorney and filed his defence on 6/5/99.
In paragraph 5 of the
Statement of Defence, the 1st Defendant claimed that as
far as that records show, the Private Enterprise
Development Project (PEED) facility has been repaid by
the Company.
With regards to the
¢40,000,000 overdraft, Defendant averred in paragraph 6
of his statement of Defence that before the Company, Mr.
Sekyere Abankwa, demanded an equivalent amount of
¢40,000,000 from the Defendant before granting the
overdraft. Consequently, the Defendant after paying
¢12,000,000, had not been able to make any other
payment, because of the failure of the Deputy Managing
Director, to pay back the ¢40,000,000 he collected from
the Defendant.
Summons for Summary
Judgment
On the 6th of May 1999,
the plaintiff applied to the Court for Summary Judgment
under Orders 14 r1 as amended by L.I. 1129 on the
grounds that the Defendants have no defence to the
action.
On the 30th July 1999
the learned trial judge ruled as follows:
"Having heard
plaintiff/applicant on their motion and being convinced
as shown from the documents that there are truly no
triable issues and further that the Defendant's defence
is a sham, this Court rules as follows:
That the
plaintiff/appellant motion be granted. Summary judgment
hereby entered in favour of the plaintiff to recover
from Defendant herein as per the reliefs indorsement on
their writ of summons and statement of claim viz debt
sum of ¢49,857,467 and the cedi equivalent of the US.
Dollar sum of $60,149.91. Alternatively the judicial
sale of the property, viz House No. A352/15 Dansoman
aforesaid. Also cost of ¢10 million."
APPEAL
Against this judgment
the Defendants have appealed to this Court on the
grounds that the High Court erred by granting the
summons or summary judgment since the pleadings were
fraught with triable issues not amenable to summary
judgment.
The matter for
determination before the Court therefore is whether or
not there are triable issues disclosed in the pleadings
which are not amenable to summary judgment.
General Principles
Under Order 14 r1 a
plaintiff can apply for summary judgment in an action,
where the Defendant has been served with a statement of
claim and has filed appearance, on the ground that the
Defendant has no defence to the claim contained in the
writ.
A Defendant however can
show cause against the application for summary judgment,
by affidavit or otherwise and the Court may order the
Defendant to be examined on oath or to produce any
document if it appears to the Court that this is
desirable under the circumstances.
The Court may also, on
the hearing of the application give judgment for the
plaintiff against the Defendant on the relevant claim or
part thereof as the case may be, unless the Defendant is
able to satisfy the Court that there is an issue which
ought to be tried, or there ought for some other reason,
to be a trial of that claim or part of it.
On the other hand the
Court may give the Defendant leave to defend the action
with respect to the relevant claim or part thereof
either unconditionally or on terms.
The Court may also
dismiss the application with cost to be paid by the
plaintiff, if it appears that the case is not within
Order 14 or that the plaintiff knew that the Defendant
relied on a contention which would entitle him to
unconditional leave to defend the action.
Matter of Determination
The matter for
determination is whether or not there are triable issues
which the Court below should have tried.
In their Statement of
Defence paragraph 8, the Defendants claimed that the
Private Enterprise Export Development (PEED) loan of
50,000 US Dollars had been repaid by the 1st Defendant.
In the Supplementary
affidavit filed by the 1st Defendant it was averred that
the loan of 50,000 US dollars had been repaid by the 1st
Defendant as evidenced by Exh. 1, 2 and 3.
Now Exh. 1 and 2 are
Credit Advice from the plaintiff Company, showing that
the sum of U.S.D. 43722.36 and 16,786.24 respectively
were credited to the accounts of the 1st Defendant in
May and June 1998. The total of the two credits amount
to 60508 US dollars while Exh. 3 is the Defendant
Statement of Accounts, showing that he has discharged
all his obligations as at 3rd June 1998.
In response to Exh. 1,
2, 3, the plaintiffs claim that the payments were
applied to pay off an outstanding temporary overdraft
owed by the 1st Defendant which then amounted to
¢149,195,210.
Thus while the
Defendants claim that the payments on exhibits 1, 2, 3,
were for the liquidation of the Private Enterprise
Development loan, the plaintiff claim that they were for
the repayment of an outstanding temporary overdraft owed
by the Defendant.
Clearly there seems to
be some controversy and the controversy is whether or
not the 60508.60 US dollars paid by the 1st Defendant
was for the repayment of an outstanding overdraft which
is not the subject matter before any Court.
It seems to me that
this dispute raises a triable issue, which should have
been tried by the Court. It will be instructive to
quote what Taylor J said in the case of Duncan v.
Kawoaco Ltd. [1981] GLR 476:
"The principles which
the Courts had for years applied in dealing with summons
under Order 14 were well known. The defence to be set up
need only show that there was a triable issue and leave
to defend ought then be given unless there was clearly
no defence in law and there was no possibility of a real
defence on the question of fact. The Court will be
entitled to look at the statement of defence filed
without leave: the fact that a bona fide defence had
been delivered might very well be sufficient to enable a
Defendant to get leave to defend, although if it would
be shown that the defence was a sham, leave to the
Defendant might be refused and the plaintiff will be
given summary judgment. As Bowes LJ said in Blaiberg v.
Abrahams 1910 77 L.T.J. 255, "In deciding whether the
defence set as is the real defence or not, all the
Circumstances must be looked". When all the
circumstances are looked at what emerges is that the
Defendant has put forward a defence which if it can be
proved, the action against him must fail. It may be he
may not be able to prove it at the trial, that is not
the question. The question is the outcome of the action
on the assumption that he is able to prove what he
alleges".
The picture that
emerges from the pleadings is that the 1st Defendant has
two accounts with the plaintiff Bank, - A Dollar Account
and A Cedi Account. In both accounts, the 1st Defendant
is indebted to the Bank.
Since the 1st Defendant
operates these two accounts, it is reasonable to hold
that when he pays in cedis, it must be credited to his
Cedi Accounts, and when he pays in dollars, his dollar
accounts receives the credit. This should be the
reasonable course for the Bank to take, since it is not
easy to generate dollars in the Country, except through
the export sector.
Therefore, when the 1st
Defendant paid into his dollar Accounts the sum of 60508
US dollars, he reasonably assumed that he was
discharging his obligations in respect of the PEED loan
of 50,000 US dollars.
If he had intended to
discharge his obligation with regard to the cedi
overdraft he would have changed the dollars at the Forex
Bureau, like any reasonable person, where he would have
received a higher rate of exchange than available at the
Bank, and then pay into his Cedi Accounts.
It was unreasonable and
unfair to the 1st Defendant, for the plaintiff Bank to
unilaterally decide to exchange the 60508 U.S.D. paid in
by the 1st Defendant to liquidate the PEED loan, into
cedis at the Bank rate which is lower than the Forex
Bureau rate, and credit the Cedi Accounts of the 1st
Defendant, knowing very well that the 1st Defendant had
an outstanding dollar loan to pay.
It is my considered
opinion that there is a triable issue as to whether the
Dollar payments made by the Defendants were in respect
of the PEED loan or another facility which is not a
subject matter before this Court or any other Court for
that matter.
With regard to the
overdraft of ¢40,000,000, the 1st Defendant had admitted
obtaining the loan and paying only ¢12,000,000.
His averment that the
Deputy M.D extorted the equivalent sum of ¢40,000,000
from them before releasing the loan, is no defence to
the action, especially when there was no counter claim
against the plaintiffs Company.
For these reasons, the
appeal shall be allowed in part.
The summary judgment in
respect of the U.S.D. 60149.91 is set aside. The
Defendant is hereby granted leave to defend the claim.
Judgment is given
against the Defendant in respect of the claim of the Sum
of ¢40,000,000.
The Judicial Sale of
House No. A352/15 Dansoman in the alternative is set
aside.
The cost of ¢10 million
is also set aside. Case to take its normal course.
No cost awarded.
S. D. BADDOO
JUSTICE OF APPEAL
FARKYE, JA:
I also agree with the
judgment of my two learned brothers.
S. T. FARKYE
JUSTICE OF APPEAL
COUNSEL
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