NDK FINANCIAL SERVICES LTD. vs. HAROLD NTORINKANSAH AND OTHERS [2014]DLSC2921

Date	2014-07-31
Suit No.	CIVIL APPEAL NO.J4/39/2013
Citation No.	[2014]DLSC2921

ATUGUBA J.S.C. (PRESIDING)

ANSAH J.S.C.

ADINYIRA (MRS) J.S.C.

BONNIE J.S.C.

AKOTO-BAMFO (MRS) J.S.C.

PEASAH BOADU ESQ. FOR THE PLAINTIFF/RESPONDENT/APPELLANT.

THADDEUS SORY ESQ. (WITH HIM RICHMOND NUMBO SAAKA) FOR THE 2ND

DEFENDANT /APPELLANT/RESPONDENT.

[2014]DLSC2921
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													<main id="main" class="content" style="min-height: 60rem" >NDK FINANCIAL SERVICES
LTD.<o:p></o:p>vs.<o:p></o:p>HAROLD NTORINKANSAH AND
OTHERS<o:p></o:p>&nbsp;[SUPREME COURT, ACCRA]<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">

CIVIL APPEAL NO.J4/39/2013&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;DATE: 31TH
JULY, 2014<o:p></o:p>

</div>COUNSEL:&nbsp;&nbsp; <o:p></o:p>PEASAH BOADU ESQ. FOR THE
PLAINTIFF/RESPONDENT/APPELLANT.<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">

THADDEUS
SORY ESQ. (WITH HIM RICHMOND NUMBO SAAKA) FOR THE 2ND DEFENDANT
/APPELLANT/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;
padding:0in 0in 1.0pt 0in">

<p class="MsoNormal" style="margin-bottom:0in;margin-bottom:.0001pt;text-align:
justify;mso-outline-level:1;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">ATUGUBA
J.S.C. (PRESIDING), ANSAH J.S.C., ADINYIRA (MRS) J.S.C., BAFFOE BONNIE J.S.C., AKOTO-BAMFO
(MRS) J.S.C. <o:p></o:p>

</div><o:p>&nbsp;</o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

JUDGMENT<o:p></o:p>

</div><o:p>&nbsp;</o:p>ATUGUBA,
JSC (FOR THE MAJORITY)<o:p></o:p>This is an appeal by only
the 2nd Defendant/Appellant/Respondent against the judgment of the
Court of Appeal dated the 15th day of November, 2012.&nbsp; The only part of the decision complained of
as per the Notice of Appeal is “The part of the judgment allowing ground (a) of
the grounds of appeal.”&nbsp; The grounds of
appeal are per the said Notice of Appeal as follows:<o:p></o:p>“(a)&nbsp;
the learned Justices of the Court of Appeal, erred in law when they held<o:p></o:p>that Sub-section (1) of
Section 44 of the Insurance Act, Act 724 is not limited to contracts of
insurance created under the Motor Vehicle (Third Party Insurance) Act but every
contractor (sic) of insurance entered into by the insurer after the
commencement of Insurance Act, Act 724<o:p></o:p>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The learned Justices of the Court of Appeal erred in law when
they held that the credit guarantee bonds issued in favour of the
plaintiff/Respondent by 2nd Defendant/Appellant were contracts of
insurance.<o:p></o:p>(c) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The learned Justices of the Court of
Appeal erred in law when they held that the credit guarantee bonds issued by
Glico to the 1st Defendant was silent on the specific sum that Glico
would pay should the 1st Defendant default in paying credit to
facilities granted it by NDK and therefore lacked certainty contrary to the
provision under section 44(1) of the Insurance Act, Act 724.<o:p></o:p>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The learned Justices of the Court of Appeal erred in law when
they failed to consider the fact that the guarantee bonds were issued by the 2nd
Defendant/Appellant….”<o:p></o:p>Brief
Facts<o:p></o:p>In this case the
Plaintiff/Appellant (hereinafter called the Plaintiff) and the Second
Defendant/Respondent (hereinafter called the defendant) are two financial
institutions, which worked together to secure financing for two companies
controlled in part by Harold Ntorinkansah, Hansas Complex and Addicent Foods
Limited.&nbsp; The credit facilities extended
to the companies called for a repayment schedule on a monthly basis, with
insurance added to the total borrowed.&nbsp;
The credit facility contracts mandated that in the event of a default,
“the whole amount of the outstanding loan and all accrued interest and other
amounts owing hereunder will become repayable forthwith and demand in writing
made by NDK at any time.”<o:p></o:p>As a prerequisite for
issuing these credit facilities, the plaintiff further required the companies
to secure credit guarantee bonds from an insurance company in order to
guarantee payment, which in this case was the Second Defendant.&nbsp; Upon the defendant’s securing of this
repayment guarantee, the Plaintiff extended the credit facilities to the
companies. <o:p></o:p>The Second Defendant
issued several credit guarantee bonds, covering the amounts extended as a part
of the credit facilities to the defendant companies.&nbsp; The purpose of these bonds was to ensure the
repayment of the Plaintiff should any type of future default occur on the part
of the 1st Defendant.&nbsp; Each
credit guarantee bond stated the specific sum for which the bond covered.<o:p></o:p>The relevant part of these
guarantee contracts reads that, “If the
Customer shall fail to repay to the Bank the said facility then we Glico…will
upon demand of the Bank pay to the Bank any sum that is due and owing to the
facility.&nbsp; This guarantee shall remain in
force so long as there is any sum due and owing from the Customer to the Bank
on the facility”. (e.s)&nbsp; This
contract is the basis for the Second defendant’s liability in the case that the
Defendant should default on any part of their obligations to the Plaintiff.<o:p></o:p>Months after the signing
of this contract, the Defendant failed to make good their obligation to service
the credit facilities put forth to them by the Plaintiff.<o:p></o:p><span</main>