MRS. AGNES OSEI vs. A-LIFE CO. LTD., FIRST ATLANTIC MERCHANT BANK LTD. [2014]DLCA15089

Date	2014-12-04
Suit No.	SUIT NO.: H1/35/2014
Citation No.	[2014]DLCA15089

OWUSU J.A. (PRESIDING)

OFOE J. A. TORKORNOO J. A.

SAMANI ZAKARI FOR APPELLANT

IRIS AGGREY OLEANS FOR RESPONDENT

[2014]DLCA15089
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													<main id="main" class="content" style="min-height: 60rem" >MRS. AGNES OSEI<o:p></o:p>(PLAINTIFF/JUDGMENT-CREDITOR/RESPONDENT)<o:p></o:p>vs.<o:p></o:p>A-LIFE CO. LTD., FIRST ATLANTIC MERCHANT BANK LTD.<o:p></o:p>(CLAIMANT/APPELLANT)<o:p></o:p>[COURT OF APPEAL, ACCRA]<o:p></o:p>&nbsp;<div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0in 0in 1pt;">

SUIT NO.: H1/35/2014&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;&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;DATE: 4TH DECEMBER 2014<o:p></o:p>

</div>CORAM<o:p></o:p>OWUSU
J.A. (PRESIDING), OFOE J. A. TORKORNOO J. A.<o:p></o:p><div style="border-top-width: 1.5pt; border-top-color: windowtext; border-left: none; border-bottom-width: 1.5pt; border-bottom-color: windowtext; border-right: none; padding: 1pt 0in;">

<p class="MsoNormal" align="center" style="margin-bottom:0in;margin-bottom:.0001pt;
text-align:center;border:none;mso-border-top-alt:solid windowtext 1.5pt;
mso-border-bottom-alt:solid windowtext 1.5pt;padding:0in;mso-padding-alt:1.0pt 0in 1.0pt 0in">JUDGEMENT<o:p></o:p>

</div>GERTRUDE
TORKORNOO, J. A:<o:p></o:p>The statutes around which this dispute
rages are the Mortgages Act 1972 NRCD 96,
the Land Title Registration Law, 1985, PNDC
Law 152&nbsp; and Land Registry Act 1962 Act 122.<o:p></o:p>One Mrs. Agnes Gertrude Osei, the
Respondent herein commenced suit number L305/2002 in the High Court as
plaintiff and against A-Life Co Ltd &amp; Another as defendants. She obtained
judgment on 13th June 2008 and in her capacity as judgment creditor,
attached property known as Plot No 17 and 17a Park Avenue Teshie Nungua
Estates. First Atlantic Merchant Bank, the Appellant herein, filed a notice of
claim to the attached property which was disputed by the judgment creditor. In their
affidavit of interest attaching the said Legal Mortgage, counsel for Appellant
stated that ‘the attached property is the
subject of a legal mortgage dated 25th August 2005 and made between
A-Life Company Ltd as the Mortgagor therein and the Claimant herein, after
consent has been secured from the State Housing Corporation Limited’.<o:p></o:p>In his affidavit in response to the
affidavit of interest, counsel for the respondent argued that the contention
that the attached property is unavailable for the purpose of attachment because
of the mortgage deed alleged by the appellant is without merit and untenable.
It was his argument that by Section 72 (1) of the Land Title Registration Law,
1985, PNDC L 152, a mortgage created after the law shall be in a prescribed
form and shall have no effect unless it is registered in accordance with PNDCL
152. Further, by the Land Title
Registration – Declaration of Registration District (Accra District 01)
Instrument, 1992 (LI 1536) made on 17th July 1992 and gazetted
on 31 July 1997, all those parcels of land situate within (inter alia) Teshie
Nungua Estates where the attached properties were declared a registration
district pursuant to section 5 of PNDCL 152. <o:p></o:p>He contended that the mortgage dated 25th
August 2005 is of no effect because it is not registered in accordance with
PNDC L 152. He also argued that at the time the mortgage was created, the 1st
defendant and claimant were aware of the pending suit and that the property in
issue could be attached in execution of any judgment obtained by the
Respondent. Thus, the mortgage of the judgment debtor’s property in 2005 when
the suit was pending was intended to put the property beyond the reach of the
plaintiff as a judgment creditor and was therefore in fraud of creditors. Finally,
it was his contention that even if the mortgage was registered under PNDCL 152,
the registration would be no bar to the plaintiff attaching and selling the property
in satisfaction of the judgment obtained against the 1st defendant.<o:p></o:p>The appellant’s counsel denied these
allegations in a supplementary affidavit of interest and argued that the suit
did not preclude the judgment debtor from dealing with the property especially
since the mortgaged property was not the subject-matter of the judgment
creditor’s action. It was his contention that the mortgage was necessitated by
credit facilities extended to the judgment debtor which facilities remain
outstanding and unpaid. <o:p></o:p>It is within this affidavit that he
contended that PNDCL 152 had not abolished equitable mortgages and the
equitable right of the appellant in the property, created by the lodgment of
the title document over the property with it, predates the judgment obtained by
the judgment creditor in 2008. He also contended that if the creditor had
conducted a search at State Housing Company before attaching the property, she
would have found an encumbrance on the property by reason of the consent given
by State Housing Company to mortgage the property to the claimant and the entry
of the claimant’s name in the record books of the State Housing Company as the
mortgagor of the property. Counsel attached to this affidavit Terms of
Settlement reached between the appellants and the judgment debtors in a
different suit and dated November 2011, under which the judgment debtors would
settle their indebtedness to the claimant through various payments. There was
no agreement to utilize the security given in the subject matter of the suit. <o:p></o:p>Apart from the affidavits, counsels
filed statements of the cases they rely on. After considering arguments filed
by both counsels, the learned high court judge ruled that by Section 1 (3) of
the Mortgages Act 1972 (NRCD 96), a mortgage may only be created in an interest
in immovable property which is alienable. He said that for interest or title to
be ‘mortgageable, it must be one which
the prospective mortgagor has a capacity to alienate by himself. Thus no
individual can on his own, mortgage a communally owned or corporate property
unless such an i</main>