MERCHANT BANK LTD vs. DAMAX CONSTRUCTION CO. LTD., BENJAMIN NTIRI ABOAGYE DUMAS, JOHNSON ATUOBI, GOERGE NTIRI SAFO AND MANSFIELD ASANTE NTIRI

The plaintiff bank sued to recover GH¢668,504.42 said to be the outstanding balance on credit facilities granted to the 1st defendant company, repayment of which had been guaranteed by the individual defendants. The facilities included an overdraft, a short-term loan and a medium-term loan, and were supported by a legal mortgage over land at Kuntunse and a guarantee executed by the 2nd, 3rd and 4th defendants. When repayment difficulties arose, the 1st defendant requested a reduction of the debt. By letter dated 22 April 2010 (exhibit F), the bank agreed to accept GH¢200,000 in full and final settlement and stated that the debt was to be settled within three months. The defendants failed to pay the reduced amount within that period. The bank then purported to reinstate the original indebtedness and sued for the larger sum. The central dispute was whether the reduction to GH¢200,000 was conditional upon payment within three months, such that failure entitled the bank unilaterally to restore the original debt. Portion of judgment relied on: the court’s narration beginning 'From the pleadings the court finds...' through the quotation and interpretation of exhibit F.

By a writ of summons issued on the 22nd May 2012 the plaintiff claims against the defendants: a. An order for the recovery of GH₵668,504.42 being the balance due and owing as at April 2, 2012 on account of credit facilities extended to 1st defendant by plaintiff on July 27, 2007 repayment of which was guaranteed by 2nd, 3rd, 4th and 5th defendants but settlement of which defendants have failed to make good several demand notices notwithstanding. b. Interest on the said sum of GH₵668,504.42 at the rate of 22.5% per annum calculated at the close of each day and payable at the end of every month on compound basis from April 2, 2012, up to and inclusive of the date of final payment. c. Costs, including legal fees, assessed at 10% of the aggregate sum due and payable under the facilities. The defendants entered Appearance and filed their Defence after the service on them of the Writ and Statement of Claim. A Reply was subsequently filed by the plaintiff and after an unsuccessful pre...