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JUDGMENT:
The Plaintiff has sued
Defendants jointly and severally
for the following reliefs:
“i. Recovery of the sum of
GH¢444,033.31 being the
outstanding balance of the loan
advanced to 1st
Defendant and accrued interest
as at 3rd May, 2009,
payment of which was guaranteed
by 2nd Defendant.
ii. Interest on
GH¢444,033.31 from 3rd
May, 2009, to date of
final payment.
iii. Further Order or Relief
including costs.
OR IN THE ALTERNATIVE
Judicial sale of 1st
Defendant’s property that is
House no. 7 Adom Street Oyarifa,
which said property is the
subject-matter of a Mortgage
dated 3rd April 2008,
to enable proceeds of sale to be
applied in the liquidation of
Defendants indebtedness to
Plaintiff and; Judicial sale of
2nd Defendant’s
property situate at Achimota
which said property is the
subject-matter of a Surety
Mortgage dated 3rd
April 2008 to enable the
proceeds of sale to be applied
in the liquidation of Defendants
indebtedness to Plaintiff.”
Plaintiff’s case is that on 3rd
April, 2008, upon a request by
the 1st Defendant,
the Plaintiff then known as
Unique Trust Financial Services
Limited advanced to the 1st
Defendant a loan of
GH¢159,000.00 The loan was to
attract interest compounded at
the rate of 8% per month and was
to be paid back on or before
October 2008. As security for
the facility, the 1st
Defendant mortgaged his property
situate at Oyarifa. Another
security was provided by 2nd
Defendant who mortgaged her
property situate at Achimota as
security for the due repayment
of the loan. The 2nd
Defendant also guaranteed
repayment to Plaintiff of the
loan.
The 1st Defendant
refuted the claims of the
Plaintiff on the grounds that he
is a director of a company by
name of Netco Rockville Limited
which needed Letters of Credit
(L/C) established for it and
approached Plaintiff for funds
for the payment of the deposit
for the establishment of the L/C
by UT Logistics Limited but
Plaintiff deceived, influenced
or misled him to sign the
documents in his name as the
applicant for the loan.
Furthermore, he never received
the loan and the Letters of
Credit was not established for
Netco Rockville Limited. The 2nd
Defendant also refuted the
Plaintiff’s claims on the ground
that she did not understand the
documents she was made to
thumbprint and that the document
had no jurat.
The Plaintiff’s Credit Manager,
Christiana Atuhene Acheampong
(P.W.1) testified on behalf of
Plaintiff. She tendered in
evidence the following documents
amongst others.
1.
Loan
Agreement
- Exhibit “A”
2.
Deed
of
Guarantee
- Exhibit “B”
3.
Surety
Mortgage between Plaintiff
and 2nd
Defendant
- Exhibit “C”
4.
Mortgage between Plaintiff and
1st
Defendant
- Exhibit “D”
5.
Notice
of Default dated
13/08/08 -
Exhibit “E”
P.W.1’s evidence was that 2nd
Defendant accepted the terms and
conditions of the Surety
Mortgage (Exhibit “C”) and also
the Deed of Guarantee after the
1st Defendant had
explained the contents of the
documents in the Ga Language to
the 2nd Defendant.
The further evidence of P.W.1
was that after the grant of the
facility, the 1st
Defendant made two (2) payments
and then defaulted. A Notice of
Default dated 13th
August, 2008 was tendered in
evidence as Exhibit “E”. She
also tendered in evidence a
statement of account as Exhibit
“F”, which shows that as at 3rd
May 2009 1st
Defendant was indebted to
Plaintiff in the sum of
GH¢444,033.31.
Under cross-examination, P.W.1
contended that 1st
Defendant instructed that the
money was to be used as a
deposit for the establishment of
letters of credit to be issued
by UT Logistics Limited and so
instructed that the money be
paid directly to UT Logistics
Limited, and this was
accordingly done. Daniel Amuzu,
an Accountant with Plaintiff
(P.W.2) tendered in evidence the
receipt that 1st Defendant
signed in acknowledgment of
receipt of the loan.
Henrietta Opoku Amissah,
Development Manager of UT
Logistics (P.W.3), also
testified on behalf of
Plaintiff. Her evidence was
that UT Logistics Limited
received funds from Plaintiff
for the cost of establishing an
L/C, and that the L/C was
actually established by UT
Logistics Limited through
Standard Chartered Bank Limited
(Stanchart Bank). She also
confirmed that UT Logistics
received Barclays Bank cheque
No. 136530 with a face value of
GH¢155,820.00 from Plaintiff and
explained that the sum received
was less the commission and
administrative charge of the
Plaintiff. Her evidence
remained the same under
cross-examination as she
insisted that UT Logistics
Limited had received money from
the Plaintiff. She supported
her evidence on the payment with
Exhibit “H” and “H1” which are
statements of account from
Stanchart Bank.
1st Defendant’s
evidence, on the other hand, was
that he did not receive any
money from the Plaintiff and no
L/C was established. His
further evidence was that it was
Netco Rockville Ltd., a limited
liability company that
approached the General Manager
of UT Logistics in Tema, Richard
Abban, to import cement at a
time when there was shortage of
cement in the country. 1st
Defendant’s further evidence was
that US$300,000.00 was too much
money for a “small company like
ours to lose” and upon advice
from the said Richard Abban,
they went to UT Financial
Services Limited for a facility.
The evidence was that he was
supposed to be the originator or
the one who took the loan “with
my mother as a co-guarantor.”
He said he never received a
cheque, neither did he receive a
loan; he never instructed
anybody to give a cheque to
anybody; he was subsequently
informed that he had defaulted
on a facility granted to him.
He stated further that he never
made the two instalment payments
towards retiring the facility.
He however conceded that he
explained the contents of the
loan documents to the 2nd
Defendant in Ga.
Looking at Exhibit “A”, the Loan
Agreement, it is clear that
Plaintiff did give a loan
facility of GH¢159,000 to 1st
Defendant under the terms and
conditions already stated
above. The properties to be
used as security were listed in
schedule II, and 2nd
Defendant was stated as the
Guarantor/Surety in schedule
III. There was also a jurat
with the thumbprint of the 2nd
Defendant. Again both
Defendants signed/thumb printed
Deeds of Mortgage. I will
therefore find that 1st
Defendant took the facility of
GH¢159,000.00 from the
Plaintiff.
The further evidence adduced on
behalf of Plaintiff by P.W.1,
was that 1st
Defendant instructed the
Plaintiff to issue the cheque
for the loan amount to UT
Logistics and he signed an
official receipt to that
effect. According to P.W.1, 1st
Defendant stated that UT
Logistics was establishing an
L/C for him and therefore he
wanted the Plaintiff to make
that payment to UT Logistics.
In Exhibit “G”, the Official
Receipt signed by the 1st
Defendant, it stated
categorically that the 1st
Defendant had received an amount
of GH¢159,000.00 “being a
loan from Unique Trust Financial
Services”. It also stated
that the payment was made by way
of CHEQUE NO. 136530. So the
question is; who was the cheque
issued to? 1st
Defendant under
cross-examination denied ever
receiving the cheque. This is
what he said:
“Q Isn’t it a fact that at
the time you applied for the
facility, you know that the
facility was for the benefit of
Netco Rockville?
A: No it was not a fact. I
applied for the facility, and
during those times there were
problems within Netco Rockville
as a company. And therefore
until those issues within the
company were resolved, i didn’t
want to step in and take that
responsibility because of the
inner struggle, so that applying
the loan and receiving it would
have given me that leverage to
now make sure that the internal
inconsistency or the problems
that the company was having have
been resolved before I hand over
the personal loan I have taking
to UT Logistics.
Q: At the time you applied
for the loan from UT financial,
isn’t that a fact that you
informed them that it was meant
for an establishment of an L/C
Netco Rockville?
A: I don’t remember My
Lord.
Q: What is your educational
background?
A: I have an MBA, I have a
BSC, I have MSA finance and i
have Doctorate in International
Economics and Finance.
Q: With this background,
don’t you think it was prudent
that you ensure that you
actually received or the
beneficiary received the
facility before you signed the
receipt?
A: My Lord when you deal
with a situation where
everything is so in a rush, in
48 hours you have to receive a
loan, there are so many
documents that you have to sign
from the time you applied for
the loan until you receive it.
So that part of the package or
the paper work that you have to
fill is that receipt. I filled
it in anticipation that as soon
as the cheque was signed, which
I was told that the cheque has
gone up for signature, I know
that it was coming down and I
was going to get my cheque.
I must state here that I cannot
accept1st Defendant’s
evidence that he did not
remember that he informed
Plaintiff that the loan he was
taking was for the establishment
of an L/C for Netco Rockville,
when his earlier evidence was
that he went to UT Logistics
with another director of Netco
Rockville, Jakins Baker,
purposely for the establishment
of an L/C. I find this piece of
evidence it incredulous. His
further evidence was that the
company could not raise the
money required to be deposited
and were thus advised to go to
Plaintiff.1st
Defendant stated further under
cross-examination as follows:
Q: What I am saying is that
Mr. Abban who was the officer
you dealt with, you went to UT
Logistics as a representative of
Netco Rockville together with
another Director, is that not
correct?
A: That is correct
Q: When you went to that
meeting, Mr. Abban, the officer
you dealt with, called someone
on the phone from UT Finance and
discussed your issue with the
fellow?
A: That is correct.
Q: UT Financial was
informed that the loan that you
were going to apply for was for
the fulfilment of those
conditions?
A: Yes my lord. When the
call was made, it was Netco
Rockville that was going to take
the loan not Dr. Amoafo or Madam
Kokui Tamakloe, we were not
parties to the transaction, it
was the company. So when Mr.
Abban placed a call it was on
behalf of Netco Rockville.
Q: But you went to UT
Financial to apply for the
facility?
A: That is not correct.
When we got there, because for
one reason or the other I have a
property, my mother has a bigger
property; Netco Rockville didn’t
have any property or
collateral. So I was asked to
apply for the loan and that is
how we switched from the company
to me been the securer or
procurer of the loan.
Q: You were asked to and
you agreed to do that?
A: That is correct.
Q: After that meeting at UT
Financial, and after you have
signed that receipt, there was
some communication between Netco
Rockville of which you are a
director and UT Financial on
this transaction, is that not
correct?
A: I believe so, there were
several.
Exhibit “J” is one of the
correspondences referred to
above, and it was signed by the
1st Defendant. For
purpose of emphasis, I am going
to reproduce the entire letter.
This is what it stated:
“August 18th 2008,
UT FINANCIAL SERVICES
Accra.
Attention: Mr. Ebenezer Asante
Sefa
Asst. Branch Manager
Dear Sir,
STATUS OF THE LOAN
I write to inform you that the
total amount of GH¢159,000 less
commissions we borrowed was paid
directly to UT Logistics to pay
the Letter of Credit (LC) and
Performance Bond (PB) fees for
the establishment of an LC to
import Ordinary Portland Grey
Cement into Ghana. This was the
condition under which we secured
this loan from UT financial
Services (UT).
UT Logistics issued an LC with a
validity period of thirty days
in May 2008 to the supplier.
However, our supplier failed to
supply and that has resulted in
the delay in paying off this
indebtedness. The transaction
is still a viable one with
adequate cash flows to service
all related obligations. It was
our intention to pay back
quickly the principal and
interest with proceeds from the
sale of the cement which should
have landed in Ghana over two
months ago.
As a result of the failed
performance by the previous
supplier, Mr. Richard Abban, our
relationship manager, at UT
Logistics has requested that the
new supplier must first provide
a PB and/or POP bank-to-bank as
an evidence of their capability
to supply before reissuing the
payment instrument. Since then,
we have identified new supplier
who is willing to comply to the
request of Mr. Abban by issuing
the POP and PB before receiving
the payment instrument.
However, the new supplier’s
request is to provide them with
a Bank Comfort Letter (BCL)
before honouring Mr. Abban’s
request. Several weeks ago, we
had a conversation with Mr.
Abban on the BCL, he did
indicate that to secure the BCL,
the director of finance of UT
has to identify source of funds
which would be put to support
this particular transaction and
that such funds was not
available. Again on August 18,
we reminded Mr. Abban of the
urgency to receive the BCL to
allow the supplier to provide
the POP and PBB.
We have every intention in
paying off our loan but unless
we receive the BCL from UT
Logistics to support the cement
import, it would be very
difficult to outright liquidate
the outstanding obligations. In
the meantime, we will endeavour
to pay part of the interest
charges until the BCL and other
financial instruments have been
issued to our new supplier to
enable the cement to start
arriving in Ghana by mid
October, 2008,
Yours faithfully,
(Signed)
Dr. Sampson Amoafo
cc: Legal Depart (UT Financial
Services)
Mr. Richard
Abban (UT Logistics)
Madam Korkui Tamakloe
I think this letter speaks for
itself; it says it all.
The position of the law and this
is common knowledge, is that for
every case there is a burden of
proof to be discharged and the
party who bears this burden will
be determined by the nature and
circumstances of the case. Our
Evidence Decree, 1975
(N.R.C.D 323) as interpreted
in Ababio v. Akwasi III
[1994-95] Ghana Bar
Report, Part II, 74 where it
was held that a party whose
pleadings raise an issue
essential to the success of the
case assumes the burden of
proving such issue. However 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. The well-known rule
of evidence is that although
proof in a civil case rested on
the plaintiff, that 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. Thus in
Re Ashalley Botwe Lands:
Adjetey Agbosu & Ors v. Kotey &
Ors [2003-04] SCGLR 420, it
was held as follows:
“....the burden of producing
evidence in any given case was
not fixed, but shifted from
party to party at various stages
of the trial depending on the
issue (s) asserted and/or
denied.”
It is trite learning that in
civil proceedings, the standard
of proof required to be met by
either party seeking to
discharge the legal burden of
proof is on a balance of
probabilities. In Miller v
Minister of Pensions [1947] 2All
ER 372, Denning J described
as well settled the degree of
cogency required in discharge of
the legal burden in a civil
case. He said:
“It must carry a reasonable
degree of probability, but not
so high as is required in a
criminal case. If the evidence
is such that the tribunal can
say; ‘we think it more probable
than not’, the burden is
discharged, but if the
probabilities are equal it is
not.”
Most of the evidence adduced by
the Plaintiff was documentary;
namely Exhibits A, B, C, D, E,
F, G H, H1, 1, 1A and 1B.
Exhibit “H1”, a statement of
account from Stanchart Bank
clearly indicates that on
04/07/08, a Barclays Bank cheque
(BBG 136530) for an amount of
GH155, 820.00 was paid as
“Deposit for Cement L/C CHA”.
And the unchallenged evidence of
P.W.3 was that the Plaintiff’s
bankers was Stanchart Bank. She
also said that at any time that
Plaintiff required an L/C to be
established UT Logistics would
request Stanchart Bank to do
that on its behalf. Exhibits
“1”, “1A” and “1B” are further
proof of the establishment of
the L/C. The confirming bank was
Stanchart UK. And from the
documents, the beneficiary was
DC Weber LLC in the US. Indeed,
Exhibit “1B” states that the
said L/C issued expired
unutilised. The L/C was
therefore cancelled from the
records of Stanchart Bank and
the files were closed. In my
opinion, it is obvious from
Exhibit “J” that it was not the
fault of the Plaintiff that the
L/C expired.
Per section 25(1) of the
Evidence Decree, 1975 (NRCD
328), there is a presumption
that the facts recited in the
written documents are true. The
section provides as follows:
“25(1) Except as otherwise
provided by law including a rule
of equity, the facts recited in
a written document are
conclusively presumed to be true
as between the parties to the
instrument, or their successors
in interest.”
Section 21 of the Evidence
Decree again provides the
procedure for determining the
establishment and discharge of
proof applicable to rebuttable
presumptions. Where the burden
of proof is by the preponderance
of probabilities, the rule is
that, the Court will assume the
existence of the presumption
once the basic facts which
establish the presumption have
been proved. This presumption
will exist until the party
against whom it has been
established proves that the
non-existence of the presumption
is more probable than its
existence. In my opinion, the
Plaintiff has produced credible
evidence in support of its claim
before the Court. 1st
Defendant’s evidence that he did
not receive the loan, in my
view, is incomprehensible. 1st
Defendant led no evidence to
challenge the facts contained in
the said documents.
In the case of the 2nd
Defendant, the Plaintiff by its
evidence and the evidence of the
1st Defendant under
cross-examination established
that the 2nd
Defendant actually mortgaged her
property to secure the facility.
The 2nd Defendant at
all material time knew the
purpose of visiting the
Plaintiff’s office and handed
over to Plaintiff the title deed
of her property. In Youhana v
Abboud [1963] 1GLR 258, it
was held that where an
illiterate executed a document,
any other party to the document
who relied on it had to prove
that it was read over and if
necessary interpreted to the
illiterate. See also Zabrama
v Segbedzi [1991] 2GLR 221
CA. In the case of Kano v
Kalla & Another [1977] 2 GLR 367,
the Court of Appeal held that in
determining the issue of
protection for an illiterate who
executed documents, depending on
the circumstances of each case
the evidence needed to rebut the
presumption of an illiterate’s
ignorance of contents of
documents executed could be
circumstantial or direct or a
mixture of both. In the instant
case, there is ample evidence
that the documents 2nd
Defendant signed were read over
and explained to her in the Ga
language by the 1st
Defendant.
In conclusion, I will find that
Plaintiff has proved its case on
the balance of probabilities,
and will therefore hold that the
Plaintiff is entitled to recover
from the Defendants, jointly and
severally, the sum of GH¢444,
033.31, together with interest
at the prevailing bank rate,
from 3rd May, 2009 to
date of final payment. I will
award costs of GH¢2,000.00
against the Defendants.
BARBARA ACKAH-YENSU (J)
JUSTICE OF THE HIGH COURT
COUNSEL
CHRIS ARCHER
- PLAINTIFF
CHARLES BENTUM -
DEFENDANTS
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