MERCHANT BANK (GHANA) LTD vs. GHANA PRIMEWOOD PRODUCTS LTD. [1989]DLCA642

Date	1989-07-06
Suit No.
Citation No.	[1989]DLCA642

OSEI-HWERE JA

AMPIAH JA

ESSIEM J.A.

S. KWAME TETTEH FOR THE PLAINTIFF-APPELLANT.

SEKYI-HUGHES FOR THE DEFENDANT-RESPONDENT.

[1989]DLCA642
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													<main id="main" class="content" style="min-height: 60rem" >MERCHANT BANK (GHANA) LTD<o:p></o:p>&nbsp;vs. <o:p></o:p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; GHANA PRIMEWOOD PRODUCTS LTD.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p>[COURT OF APPEAL, ACCRA] <o:p></o:p>[1989-90] 2 GLR 671<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

DATE:
6
JULY 1989<o:p></o:p>

</div>COUNSEL:&nbsp;&nbsp; <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 0in 0in">

S. KWAME TETTEH FOR THE PLAINTIFF-APPELLANT.<o:p></o:p>

SEKYI-HUGHES FOR THE DEFENDANT-RESPONDENT.<o:p></o:p>

</div>CORAM:
<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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OSEI-HWERE, AMPIAH AND ESSIEM JJ.A.<o:p></o:p>

</div><o:p>&nbsp;</o:p>JUDGMENT OF AMPIAH J.A.<o:p></o:p>By a
debenture dated 8 February 1983 and registered as No. 125/1986 with the Lands
Registry, the plaintiff-bank, the appellants in this appeal, secured a charge
over the fixed assets (present and future) of the defendant-company, the
respondents herein, for the latter’s indebtedness to the plaintiff-bank. On the
same date, a deed of mortgage (registered with the Lands Registry as No.
126,1986) was made between the plaintiff-bank and the defendant-company whereby
the defendant-company mortgaged their immovable properties described therein to
the plaintiff-bank as security for banking facilities extended to the
defendant-company. In pursuance of the said debenture and mortgage and other
security documentation attached thereto, the plaintiff-bank advanced to the
defendant-company overdraft facilities totalling as at 26 September 1986,
¢78,705,838.52 plus a guaranteed facility of Export Credit Guarantee Department
(E.C.G.D.) bills in pound sterling of £1.2 million. Under the said debenture
and mortgage, the defendant-company undertook to pay to the plaintiff-bank such
sums as would become due to the plaintiffs from time to time.<o:p></o:p><o:p>&nbsp;</o:p>According
to the plaintiff-bank, the defendant-company failed and refused to pay the debt
as agreed upon. Whereupon, the plaintiff-bank exercising their rights under
sections 87 and 240 of the Companies Code, 1963 (Act 179) and the Mortgages
Decree, 1972 (N.R.C.D. 96), brought an originating summons for the enforcement
of their rights against the defendant-company. The defendant-company entered
appearance to the summons but before the matter could be set down for hearing,
the parties entered into a settlement and filed the terms of the settlement. By
those terms it was agreed, apparently irrespective of the terms of the
debenture and mortgage between the parties, that:<o:p></o:p>“1 . . .
in respect of the following sums which now are or shall be payable by the
defendants to the plaintiffs, that is to say: (a) the debt outstanding as at
the date of this action— ¢78,705,838.52; (b) the debt balance on the receiver
and manager’s account— ¢7,396,932.90;<o:p></o:p>&nbsp;(c) accrued interest and penalty on (a) and
(b) above— ¢7,577,322.4; (d) cedi equivalent of future E.C.G.D. bills totalling
£218,339; (e) future repayment instalments under Bank of Ghana ‘soft loan’
totalling ¢15,892,326.40; and (f) accruing interest and penalty on (a) to (e)
above, the defendants shall pay to the plaintiffs during the 1987 calendar
year, a minimum of ¢60 million in the following manner: (i) a minimum of ¢4
million monthly from 1 January to 30 June, (ii) a minimum of ¢5 million from 1
July to 30 September, (iii) a minimum of ¢7 million monthly from 1 October to
31 December. PROVIDED ALWAYS that:<o:p></o:p>(a) all
payments shall be made on or before the last day of the relevant month; (b)
payment of the outstanding balance shall be negotiated by the parties by 31
December 1987 failing which either party shall be at liberty to apply; and (c)
in the event of default the debt shall immediately become due and the
plaintiffs shall be entitled without further order to levy execution therefor.
2. That in consideration of the foregoing the receiver and manager, Mr. George
Victor Okoh, appointed out of court on 4 September 1986 by the plaintiffs in
respect of the defendants’ movable assets be discharged.”<o:p></o:p><o:p>&nbsp;</o:p>On 24
February 1987, with the consent of the parties, the court entered judgment in
terms of the settlement.<o:p></o:p><o:p>&nbsp;</o:p>In view
of certain steps subsequently taken by the plaintiff-bank to execute the
judgment on the terms of the settlement, the defendant-company filed a motion
on 16 February 1988 praying that the court stay any execution of the judgment
and order payment of the balance of their indebtedness to the plaintiff-bank by
instalments in accordance with the terms of the settlement. The plaintiff-bank
did not deny taking those threatening steps to execute the judgment but
contended that as at the</main>