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Interest – Judgment – Rate –
Judgment for liquidated sum –
Interest to be calculated at
rate prevailing when amount due
to date of judgment – Courts
(Award of Interest) Instrument
1984 (LI 1295).
Judgment – Ghana pounds –
Exchange rate – Judgment debt to
be converted at forex bureau
rate of exchange prevailing at
date of judgment.
Upon the death of the
plaintiff’s father in 1958, the
defendant, the brother and
executor of the will of the
deceased, handed over to the
plaintiff two suits as his share
of his father’s estate. The
defendant had concealed the fact
that the deceased had in fact
bequeathed to the plaintiff four
suits and the sum of ŁG10. The
plaintiff discovered the truth
thirty years later and
instituted an action in the High
Court, against the defendant for
the remaining two suits, the sum
of ŁG10 bequeathed to him or its
equivalent in cedis plus
interest at the current bank
rate from the date the amount
became due to the date of
judgment. On 3 March 1992,
judgment was given in his
favour. On appeal the
defendant’s counsel contended
that the learned trial judge
failed to fix the rate at which
the sum of ŁG10 was to be
converted into cedis and invited
the court to fix the rate at ˘2
being the exchange value when
the pound was replaced by the
cedi as legal tender under the
Bank of Ghana Act 1963 (Act 182)
s 13. On this score, he
contended, the plaintiff’s
entitlement was ˘20. He
contended further that the
interest ought to be calculated
at simple not compound interest
at the rate for each year.
Held:
(1) Where a party claimed
a sum of money in foreign
currency and alternatively, the
equivalent of that sum in local
currency, then, in the absence
of any agreement to the
contrary, the rate of exchange
applicable would be the forex
bureau rate at the date of the
judgment, in this case 3 March
1992. The defendant ought to put
into the plaintiff’s hands such
amount in cedis that, in the
financial market, would give him
nothing less than ŁG10. To do
otherwise would rob him of his
entitlement.
(2) For liquidated
claims, interest was calculable
under the Courts (Award of
Interest) Instrument 1984 (LI
1295) at the same rate from the
date when the amount became due
to the date of judgment at
simple, not compound interest.
The trial judge was right in
applying the prevailing bank
rate on the principal sum, or
its equivalent in cedis, from
the date the amount became due
to the date of judgment.
APPEAL from the judgment of the
High Court, Cape Coast to the
Court of Appeal.
Sekyi Hughes
for the appellant.
E B Oduro
for the respondent.
LUTTERODT JA.
After the death of the father of
the plaintiff-respondent (I
shall hereafter refer to him as
the ‘plaintiff’) in 1958, the
defendant-appellant, his uncle,
gave him two suits as his share
of his late father’s property.
Unknown to him, his father had,
under his will, bequeathed to
him four suits and the sum of
ŁG10. When he got to know of
this, almost some 30 years
later, he instituted an action
in the High Court Cape Coast,
against the defendant, the
executor who was granted probate
in 1962 to administer the
estate.
In that action the plaintiff
sought among other things, (a)
an order compelling the
defendant as executor and
administrator of the estate to
pay to the plaintiff the sum of
ŁG10 or its equivalent in cedis
in addition to two suits in
accordance with the will and (b)
interest at the current bank
rate on ŁG10 or its equivalent
in cedis from when it became due
to the date of judgment.
On 3 March 1992, judgment was
given in favour of the
plaintiff. The defendant being
dissatisfied with the judgment,
appealed on a number of grounds.
However, on the appeal coming
for hearing, counsel abandoned
all the other grounds and rested
his case on Ground One and two
of the additional grounds. His
criticism of the judgment was
that the learned trial judge
failed to fix the appropriate
cedi rate at which the sum of
ŁG10 was to be converted. He
therefore asked that we fix the
rate at ˘2 to the pound.
What is the basis for saying so?
He contended that if we looked
at the Bank of Ghana Act 1963
(Act 182) s 13, we would
discover that at the date
probate was granted, that Ghana
pound which was then legal
tender in Ghana was to be
replaced by the cedi at the
exchange rate of ˘2. He urged
therefore that since under the
will the plaintiff was entitled
only to ŁG10, what he was
legally entitled to when it
became due, ie when probate was
granted, was ˘20.
I find it difficult to accept
his argument. Quite apart from
it not being warranted by law,
it is unjust, unreasonable and
unconscionable. Given the
present state of our currency
laws, I think that where a party
puts in a claim for a certain
sum of money in foreign currency
and prays alternatively for the
equivalent in local currency, in
the absence of any agreement to
the contrary, the rate of
exchange that should be applied
would be the forex bureau rate.
That rate is legal and does give
a true picture of the local
currency equivalent of the
foreign currency in question.
What the poor plaintiff is
entitled to therefore is ŁG10 as
at the date of judgment.
Certainly if the defendant
cannot put ŁG10 into his hands,
he ought to place into his hands
at least such amount in cedis,
which in our financial market
would give him nothing less than
ŁG10. To do otherwise, i.e. to
put such cedis as would fetch
him less than ŁG10, would amount
to robbing him of his
entitlement. Consequently, much
as I agree that the learned
trial judge omitted to spell out
the rate of exchange, the
correct rate of exchange should
be the forex bureau rate as at 3
March 1992.
The next complaint against the
judgment is that the learned
judge erred in awarding interest
from the date the ŁG10 became
due to the date of judgment.
Counsel’s contention is that
interest ought to be calculated
at simple, not compound,
interest and, more importantly,
at the rate existing for each
specific year. So that if the
rate existing in, say 1963 or
1964, was 1% per annum that was
the rate that ought to be used;
and should that rate have
increased to 5% the following
year that would be the rate at
which interest ought to be
calculated.
Again, I do not agree with
counsel. For in liquidated
claims, interest is awarded in
compliance with the Courts
(Award of Interest) Instrument
1984 (LI 1295). By this
Instrument, interest is worked
out at the same rate from the
date when the amount became due
to the date of the judgment or
order. Consequently, the judge
was right in concerning himself
with the prevailing bank rate on
the principal sum or its
equivalent in cedis from the
date that the amount became due
to date of judgment. I however
agree with learned counsel that
this is to be calculated at
simple and not compound
interest. In the result, subject
to the order that the cedi
equivalent of the sum of ŁG10
shall be calculable at the forex
bureau rate prevailing at the
date of judgment and subject
also to the order that interest
be awarded at simple interest, I
would dismiss the appeal.
Essiem JA.
I agree.
Amuah JA.
I agree.
Appeal dismissed.
S Kwami Tetteh, Legal
Practitioner |
