MRS. AGNES OSEI vs. A-LIFE CO. LTD. AND FIRST ATLANTIC [2014]DLSC3524

Date	2014-12-04
Suit No.	CIVIL APPEAL NO. H1/35/2014
Citation No.	[2014]DLSC3524

OWUSU J. A (PRESIDING)

OFOE J.A.

TORKORNOO J. A.

SAMANI ZAKARI FOR APPELLANT

IRIS AGGREY OLEANS FOR RESPONDENT

[2014]DLSC3524
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MRS. AGNES OSEI

&nbsp;[COURT OF APPEAL, ACCRA]

CIVIL
APPEAL 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;DATE: 4TH
DECEMBER, 2014

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COUNSEL:&nbsp;&nbsp;

SAMANI ZAKARI FOR APPELLANT,

IRIS
AGGREY OLEANS FOR RESPONDENT

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CORAM:

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&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;

JUDGEMENT

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GERTRUDE TORKORNOO, J. A:

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.

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’.

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.

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.

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.

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.

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 individual has the consent and concurrence of
the community or members of the corporation to do so on their behalf. Any
unauthorized mortgaging of communal or corporate body will render the
transaction ineffective’. He went on to cite Section 3 (1) (a) of NRCD 96
which directs that a mortgage is not enforceable unless it is