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JUDGMENT:
Plaintiff issued a Writ of
Summons for the following
reliefs:
“a. Enforcement/forfeiture of
assets used as security in
consent judgment dated September
24, 2009 (schedule below).
SCHEDULE
ALL THAT PIECE OR PARCEL
OF LAND in extent 1.60
hectares (3.95 Acres) more or
less being parcel No.58 Block 16
Section 050 with building
thereon, popularly known as the
GFDC Silos situate and lying off
the Dadeban Road, North
Industrial Area Kaneshie, Accra
in the Greater-Accra Region of
the Republic of Ghana and
delineated on Registry Map No.
004/050/1991 in the Land Title
Registry, Victoriaborg, Accra
and being the piece or parcel of
land shown and edged with pink
colour on Plan No. 157/2008
annexed to the Land Certificate
No. GA27381 Vol 25 Folio 633.
b. An order directing the
Defendant/Judgment Debtor to
immediately handover the Deed of
Assignment recited in the Deed
of Settlement dated April 14,
2009 (executed by the
Defendant/Judgment Debtor and
the Plaintiff/Judgment Creditor
to the Plaintiff/Judgment
Creditor or in the alternative
c. An order directing the
Registrar of this Honourable
Court, to prepare, sign and
convey the appropriate Deed of
Assignment (copy of which is
attached) on behalf of the
Defendant/judgment Debtor to the
plaintiff/Judgment/Creditor in
terms of the “terms of
settlement” dated April 14,
2009, filed in this Honourable
Court on April 16, 2009, and
entered as Consent Judgment
dated September 24, 2009.
d. Judicial Sale of
property popularly known as GFDC
Silos
e. Damages
f. Any other order or
orders as this Honourable court
may deem fit.
g. Costs”
Plaintiff’s claim is in respect
of the Terms of Settlement filed
on 16th April 2009
(Exhibit “B”) and adopted as
Consent Judgment on 24th
September 2009 (Exhibit “C”) in
suit number RPC/273/07. It is
Plaintiff’s claim that Defendant
has failed to honour promises
its made in Exhibit “B” to pay
Plaintiff the “consent judgment
amount” of US$2,500,000 within
six (6) months of the Consent
Judgment.
Plaintiff’s further claim is
that the promise to advance
US$1.5m to Defendant is
severable “as it has nothing to
do with Defendant
Judgment/Debtor’s obligations in
respect of the consent judgment”
amount of US$2,500,000.
Plaintiff contended further that
in any case, the said promise of
a loan was “not premised on any
consideration offered by the
Defendant/Judgment Debtor and
for that matter is unenforceable
at law”, and at best Defendant
may maintain a separate action
for breach of alleged warranty.
Plaintiff also denied that a
legitimate fi:fa had been levied
on the property in dispute and
any embarrassment or “distress”
to the Defendant as alleged by
him, had been occasioned by its
dishonest, unscrupulous and
deceitful character”.
Mr. Kwabena Appenteng, Managing
Director of Plaintiff Company
(P.W.1) tendered in evidence a
copy of the draft “Assignment”
(Exhibit “E”) prepared by the
parties but yet to be executed
by the Defendant and handed over
to him. His evidence was that
the referral of Plaintiff’s
indebtedness to UT Collection
Ltd had caused grave distress
and embarrassment to Plaintiff
Company as their names are
regularly published in the
national daily newspapers as
debtors to the National
Investment Bank (NIB).
Henry Jones Mensah, Operations
Manager at Plaintiff Company
(P.W.2), tendered in evidence
copies of the Writ of Summons
indicating that NIB had indeed
obtained judgment in the sum of
GH¢3,892,408.57 against
Plaintiff herein for defaulting
to settle its indebtedness on a
credit facility advanced to it.
P.W.2 also tendered in evidence
documents as further proof of
their assertion that Plaintiff’s
indebtedness had been referred
to UT Collection Limited for
recovery (Exhibits “G”, “H” &
“J”)
Defendants defence to the plaint
as captured in paragraph 4 of
its Statement of Defence is that
“it is the Plaintiff who must
first make a payment of One
Million Five Hundred Thousand US
Dollars (US$1.5million) to the
Defendant”. They also aver that
Plaintiff’s indolence in
enforcing the terms of
settlement has created
substantial embarrassment to
Defendant Company since other
Judgment Creditors against the
Defendants had attached the
properties mentioned therein.
No representative of Defendant
Company gave evidence.
Defendant however called a
witness, George Amissah Eshun,
one of the lawyers who
represented the Defendant in the
settlement conferences which
culminated in the Terms of
Settlement (Exhibit “B”). His
evidence was that it was agreed
between the parties that the
Defendant would submit to
judgment in the sum of US$2.5m.
Plaintiff would also grant an
interest free loan of US$1.5m to
the Defendant. The sum of
US$2.5m would be paid at the
expiration of six months from
the date of execution of the
Terms of Settlement. The amount
of US$1.5m would also be paid
immediately, and would run for
six months. The amounts of
US$2,500,000 and US$1,500,000
would be due on the same day and
the facility of US$1.5m to be
granted to Defendant would be
secured with properties owned by
the Defendant at the North
Industrial Area, Kaneshie,
Accra.
Mr Eshun’s further evidence was
that a Deed of Assignment
covering the property to be used
as security was prepared and
signed by all the parties, but
Mr Appenteng reneged on the
agreement that he should pay for
the registration of the
Assignment, and thus it could
not be registered. He stated
that he took the document to the
Lands Valuation Board and the
registration was assessed at a
little below GH¢10,000. It was
agreed that Mr Appenteng would
pay that money but he never did.
The document subsequently got
missing at the Land Valuation
Board. Mr Eshun also stated that
neither of the parties had
fulfilled its obligations under
the Consent Judgment.
The issues set down for
determination are as follows:
“
1.
Whether or not paragraph 2(d) of
the Terms of Settlement herein
dated 14/4/08 is a condition
precedent to Defendants
satisfaction of his obligations
as Judgment/Debtor herein in
terms of Paragraph 2(a) (b) (c)
to Plaintiff Judgment/Creditor
herein.
2.
Whether the failure of
Plaintiff/Judgment Creditor to
satisfy paragraph 2 (d) of the
Terms of Settlement herein
discharges Defendant from
satisfying his obligations as
Judgment/Debtor herein in terms
of Paragraph 2 (a) (b) (c) to
Plaintiff/ Judgment Creditor
herein.
3.
Whether Plaintiff are entitled
to their claim or any other
claim”
In my opinion, the main issue to
be determined is an
interpretation of paragraph 2(d)
of the Terms of Settlement
(Exhibit “B”), which reads as
follows:
“That included in this Terms of
Settlement is the Defendants
undertaking to pay to the
Plaintiffs at the end of Six
months from the date of filing
of this Terms of Settlement, the
sum of One Million, Five Hundred
Thousand United States Dollars
(US$1,500,000.00) as an
Interest Free Loan, which
the Plaintiff has agreed to pay
to the Defendant upon the
execution of this Terms of
Settlement, payable in cash
and/or in kind (200,000.00 US
Dollars and 45,500 bags of Sugar
150 ICUMSA, 50 Kg. each)”
The parties herein are putting
different interpretations to
this paragraph. And when
parties, as in the instant suit,
have differing views about what
their contract means, or what
its effect on their legal rights
and obligations is, their
difference must be settled by
the court or by arbitration.
The settlement of that
difference is to a large extent
governed by the proper
interpretation (or construction)
of the contract. In arriving at
its conclusion the court applies
relatively well established
principles of construction.
In BCCI v. Ali [2001] 1 A.C.
251, Lord Bingham of
Cornhill summarised the basic
principles applied in the
interpretation of contracts as
follows:
“To ascertain the
intention of the parties the
court reads the terms of the
contract as a whole, giving the
words used their natural and
ordinary meaning in the context
of the agreement, the parties’
relationship and all the
relevant facts surrounding the
transaction so far as known to
the parties. To ascertain the
parties intentions the court
does not of course inquire into
the parties subjective states of
mind but makes an objective
judgment based on the materials
already identified.”
It is common knowledge that even
though English cases are not
binding, they are of persuasive
authority, and I am persuaded by
this authority I am citing. See
also Investors Compensation
Scheme v. West Bromwich
Building Society [1998] 1 W.L.R.
896 and Deutsche
Genossenschafts Bank v. Burn
hope [1945] 4 ALL ER 717.
In the Ghanaian case of
Biney v. Biney [1974] 1 GLR
318 at 328, Anin J.A. (as
he then was) recapitulated the
object of interpretation and the
basic relevant rules of
interpretation or construction
of deeds as:
1.
The
intention must be as near to the
mind and intention of the author
and the law would permit.
2.
The
intention must be gathered from
the written expression of the
author’s intention.
According to Lord Hoffmann
again, in the case of Mannai
Investment Co. Ltd v Eagle Star
Life Assurance Co. Ltd [1997] AC
749 at 775, the meaning
which a document (or any other
utterance) would convey to a
reasonable man is not the same
thing as the meaning of its
words. The meaning of words is
a matter of dictionaries and
grammars; the meaning of the
document is what the parties
using those words against the
relevant background would
reasonably have been understood
to mean.
In my opinion the words used in
paragraph 2 (d) do not require
the Court to look outside the
document itself; i.e. exhibit
“B”. The words, in my view, are
quite clear. A lucid summary of
the position of the law with
regard to this principle may be
found in the Judgment of Saville
J. In Vitol BV v. Compagnie
Europeane des Petoles [1988] 1
Lloyd’s Rep 574 at 576, in
which he said:
“The approach of the English law
to questions of the true
construction of contracts of
this kind is to seek objectively
to ascertain the intentions of
the parties from the words which
they have chosen to use. If
those words are clear and admit
of only one sensible meaning,
then that is the meaning to be
ascribed to them and that
meaning is taken to represent
what the parties intended. If
the words are not so clear and
admit of more than one sensible
meaning, then the ambiguity may
be resolved by looking at the
aim and genesis of the
agreement, choosing the meaning
which seems to make the most
sense in the context of the
contract and its surrounding
circumstances as a whole. In
some cases, of course, having
attempted this exercise, it may
simply remain impossible to give
the words any sensible meaning
at all in which case they (or
some of them) are either
ignored, that is to say, treated
as not forming part of the
contract at all, or (if of
apparent central importance)
treated as demonstrating that
the parties never made an
agreement at all, that is to
say, had never truly agreed upon
the vital terms of their
bargain.”
Even though there is no mention
of the payment by Defendant of
the amount of US$2,500,000.00 in
paragraph 2(d) of Exhibit “B”,
there is no dispute about the
fact that the consent judgment
amount agreed to is
US$2,500,000.00. The paragraph
in contention, 2(d) of the Terms
of Settlement (Exhibit “B”),
however introduces another
dimension to the agreement
reached by the parties.
Paragraph 2 (d) states that
Defendant undertakes to pay
US$1.5m to the Plaintiff at the
end of six months from the date
of filing the Terms of
Settlement.
From an objective reading of
paragraph 2 (d) of Exhibit “B”
the undertaking was by Defendant
and not the Plaintiff, to pay
back the interest free loan of
US$1.5m that Plaintiff had
agreed to give to Defendant upon
execution of Exhibit “B”. There
is nothing that indicates, as
was projected by D.W.1, that the
amount of US$1.5m was to be
given to Defendant immediately
upon execution of the Terms of
Settlement.
It is trite learning that a
document must be read as a
whole. Paragraph 2 (i) states
that this agreement represents
the full terms and understanding
between the parties and shall
not varied except in writing
signed by the parties.
Paragraphs 2 (e) and (g) of
Exhibit “B” also state thus:
“(e) that the sum stated in (d)
above added to the Defendants
obligation of paying the Consent
Judgment Amount mentioned in
2(a) has been secured with the
Defendants’ property known as
GFDC silos, situate and
lying off Dadeban Road, North
Industrial Area, Kaneshie,
Accra, which said legal title
and documents are hereby
surrendered to Plaintiff herein
will give the right to foreclose
to the Plaintiffs in the event
of default by the Defendants in
payment of both the
US$2,500,000.00 Consent
Judgment amount with accrued
interest and US$1,500,000.00
Interest Free Loan.”
“(g) That all costs associated
with the processing and
execution of the transaction
shall be borne by the Defendant”
Paragraph 2 (e) of Exhibit “B”
states in no ambiguous term that
the sum of US$1.5m added to the
consent judgment amount had been
secured with the Defendant’s
property known as GFDC Silos
situate and lying off Dadeban
Road at North Industrial Area,
Kaneshie, Accra. The
manifestation of this would have
been the registration of the
Deed of Assignment (Exhibit
“E”), which never happened. As
already indicated, where the
words of a document are clear
and unambiguous, no
interpretation arises and
parties may not be permitted to
introduce extraneous matters
into the text.
It also remains the case that:
“The court does not, through the
guise of interpretation, make
for the parties a bargain which
they did not themselves choose
to make. It is not for the
court, through the guise of
interpretation to substitute for
the bargain which the parties
did make a different bargain
which in its view they would
have made if they had been
better advised or had had better
regard for their own interests.”
(Megaro v Di Popolo Hotels
Ltd [2007] EWCA Civ 309)
In the circumstances, I will
find that paragraph 2(d) of
Exhibit “B” cannot be construed
as a condition precedent to
Defendant’s satisfaction of his
obligations as Judgment Debtor
in terms of paragraphs 2(a) (b)
(c) to Plaintiff/Judgment
Creditor.
The evidence placed before the
Court is that the collateral
promised in paragraph 2(d) of
Exhibit “B” is yet to be
formally delivered to Plaintiff.
D.W.1’s evidence was that the
documentation had not been
completed because Mr Appenteng
(P.W.1) had failed to provide
funds for the processing of the
said documents. There is nothing
in Exhibit “B” to support
D.W.1’s evidence that Mr.
Appenteng was to provide the
money for registering the Deed
of Assignment and which
obligation he had failed to
fulfil, and I will so find.
So, is the Defendant for any
reason discharged from
satisfying its obligations as
Judgment/Debtor? I have already
made a finding that the granting
of an interest free loan of
US$1.5m is not a condition
precedent to Defendant’s
satisfaction of its
obligations. Indeed, the
parties herein agreed in Exhibit
“B” that Defendant shall pay the
consent judgment amount. In my
opinion, Defendant owes and
therefore must pay. I will
therefore find that Defendant is
not discharged from paying its
due debt.
Plaintiff is however praying
that the Court orders the
enforcement of or forfeiture of
the assets used as security in
the Consent Judgment. It is
trite learning that consent
judgment is as sacrosanct as any
other judgment and a party has
every right to enforce the
judgment unless there is a stay
of execution. If parties have
contracted by way of Terms of
Settlement which is then adopted
as Consent Judgment, it has a
judgment. And the normal means
of enforcing judgments are
provided in the Rules.
Therefore Plaintiff ought to be
able to enforce the Consent
Judgment. The Court cannot
order forfeiture of assets used
as security for a facility; the
right of the Consent
Judgment/Creditor is to sell the
said assets. At best, the
Plaintiff herein can fall on a
mortgage.
All the laws on mortgages state
that a mortgagor is entitled to
sell the assets used as security
for a facility when there is a
default, hence the court orders
judicial sale. If the mortgagee
pays off the loan facility, then
properties/assets uses as
security should be returned upon
payment. When there is a loan
contract and the borrower has to
pay back the loan, the security
is always security for a
facility. And where a mortgage
has been created, the principle
is that once a mortgage, always
a mortgage.
In my opinion, an equitable
mortgage would have been created
in the instant suit, even though
the execution and registration
of Exhibit “E”. This is because
an equitable mortgage is an
intention to submit to a
mortgage, and there must be the
presence of certain elements of
a mortgage. In the instant suit
Paragraph 2 (e) provides
requisite elements. It is trite
learning that equity looks to
the intent and not the form.
The position of the law is that
the Court can order sale in
equitable mortgage. This
position was stated in Gwira
v. State Insurance Corporation
[1991] 1 GLR 398 SC.
However, in the instant suit,
Plaintiff cannot even rely on an
equitable mortgage because the
facility envisioned in Exhibit
“B” for which the assets in
question were to be used as
security, was never granted to
Defendant. The security
therefore has lapsed since no
loan facility was given. I will
therefore find that there is no
mortgaged property for which the
Court can order a judicial sale
since the loan if US$1.5m was
never granted to the Defendant;
the debt was never contracted.
Plaintiff is also praying that
the Court orders the Registrar
to prepare, sign and convey the
appropriate Deed of Assignment
on behalf of the
Defendant/Judgment Debtor to the
Plaintiff/Judgment Creditor.
Where for instance the parties
have agreed to sign an
assignment and the purchaser has
paid for the property but the
vendor is refusing to hand over
the said property, then the
Court can make the kind of order
Plaintiff herein is asking. In
the circumstances of the instant
matter it is inappropriate for
the Court to do so.
With regard to the relief for an
award of damages, general
damages are awarded in respect
of damage as the law presumes to
result from an infringement of a
legal right or duty (Delmas
Agency Ghana Limited v. Food
Distributor International
Limited [2007-2008] SCGLR 748).
The purpose of the award is to
put the innocent party in nearly
the same position as he would
have been had the other party
not breached the contract.
Plaintiff has not established
that there has been a breach of
contract; the issue is with the
enforcement of judgment and
therefore the Court cannot make
any such award.
Inclusion, I will hold that in
as much as the Plaintiff I have
made a finding that Plaintiff is
entitled to be paid the Consent
Judgment amount of US$2.5m, I
cannot grant Plaintiff any of
the reliefs it is seeking. I
will accordingly dismiss same.
My finding is that Plaintiff is
entitled to enforce the Consent
Judgment, and have held so.
Nonetheless, the Plaintiff
compromised its right when it
entered into the Terms of
Agreement with the Defendant and
agreed to grant it a loan
facility. Both parties have
failed to fulfil their
obligations as agreed in the
Terms of Settlement. Each party
should therefore bear its own
costs; I will not make any order
as to costs.
(SGD)
BARBARA
ACKAH-YENSU (J)
JUSTICE OF THE HIGH COURT
COUNSEL
NANA ATO DADZIE
- PLAINTIFF
JAH JOSIAH
- DEFENDANT |
