KOJACH PHARMA LTD. & 2 ORS vs. HFC BANK (GHANA) LTD. [2021]DLCA10045

Date	2021-01-21
Suit No.	SUIT NO.H1/116/2020
Citation No.	[2021]DLCA10045

ADJEI J.A

SUURBAAREH J.A

MENSAH J.A

DOMINIC B. OTCHERE FOR THE DEFENDANT /APPELLANT

BRIGHT O. AGYEKUM WITH HIM MAAME SARPONG FOR PLAINTIFF/RESPONDENT

[2021]DLCA10045
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													<main id="main" class="content" style="min-height: 60rem" >KOJACH PHARMA LTD. &amp; 2 ORS<o:p></o:p>(DEFENDANTS/
APPELLANTS)<o:p></o:p>vs.<o:p></o:p>HFC BANK (GHANA) LTD.<o:p></o:p>(PLAINTIFF/RESPONDENT)<o:p></o:p>[COURT OF APPEAL, ACCRA]<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

<p class="MsoNormal" align="center" style="margin-bottom:0cm;margin-bottom:.0001pt;
text-align:center;line-height:150%;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0cm;mso-padding-alt:0cm 0cm 1.0pt 0cm">SUIT NO.H1/116/2020&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:
21ST JANUARY,2021<o:p></o:p>

</div>COUNSEL:<o:p></o:p>DOMINIC B. OTCHERE FOR THE DEFENDANT
/APPELLANT<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

<p class="MsoNormal" style="margin-bottom:0cm;margin-bottom:.0001pt;text-align:
justify;line-height:150%;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0cm;mso-padding-alt:0cm 0cm 1.0pt 0cm">BRIGHT O. AGYEKUM WITH HIM
MAAME SARPONG FOR PLAINTIFF/RESPONDENT<o:p></o:p>

</div>CORAM: <o:p></o:p>ADJEI
J.A, SUURBAAREH J.A, MENSAH 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 0cm;">

<p class="MsoNormal" align="center" style="margin-bottom:0cm;margin-bottom:.0001pt;
text-align:center;line-height:150%;border:none;mso-border-top-alt:solid windowtext 1.5pt;
mso-border-bottom-alt:solid windowtext 1.5pt;padding:0cm;mso-padding-alt:1.0pt 0cm 1.0pt 0cm">JUDGMENT<o:p></o:p>

</div>&nbsp;ADJEI,J.A:<o:p></o:p>The
Defendants/Appellants dissatisfied with the ruling delivered by the High Court
on 26th February, 2018 dismissing their application for an upward review of the
reserved price fixed by the High Court on 4th September, 2015 filed an appeal
against same to this Court on 14th March, 2018.<o:p></o:p>The
background to the appeal were that the Plaintiff sued the Defendants in the
High Court to recover the total facility it granted to the Defendants which
they have refused to pay. The parties settled the matter and filed a terms of
settlement to that effect. The terms of settlement filed on 30th September,
2014 was to be entered as a consent judgement by the trial High Court. The
trial High Court on 30th September, 2014 entered the terms of settlement filed
as a consent judgement. By the consent judgement the Defendants were to pay an
amount of GH¢3,500,000.00 to the Plaintiff and the amount was to be paid in six
equal quarterly installments from 30th September, 2014. There was a default
clause to the effect that a single default by the Defendants confers the right
on the Plaintiff to proceed with execution to recover any outstanding amount
and any accrued interest on it.<o:p></o:p>The
Defendants defaulted and the Plaintiff on 30th March, 2015 sought and obtained
leave to proceed with execution. The Plaintiff subsequently attached the
Defendants’ factory building on plot No. 5 block 11 Ayigya Kumasi and property
with plot No 11 block N, Asokwa - Kumasi. A valuation report on property No. 5
block 11 Ayigya Light Industrial Area Kumasi was issued by Prestige Property
Consulting. The valuers fixed the fair market value at GHC 7,813,400.00 and the
forced sale value for GHC 5,469,000.00. At the time of the valuation the
exchange rate for dollar to Cedi was $1 = GHC 3.80. On 2nd February, 2016, the
High Court determined the reserved price at the forced sale value of GHC
5,469,000.00 at the dollar - Cedi exchange rate of $1- GHC 3.80 without any
objection from both parties.<o:p></o:p>The
Plaintiff proceeded to sell the property and the Defendants filed a motion to
review the reserved price of the property fixed on 2nd February, 2016 upwards
based upon a valuation conducted at their instance which had fixed the reserved
price for USD 6,500,000.00 and the forced sale value for USD 4,550,000.00 as at
5th January, 2018. The application for upwards review of the forced sale value
was vehemently opposed by the Plaintiff. The High Court dismissed the
application for review on the basis that there will be no justification in the
upward adjustments of the reserved price as the delay in selling the property
was occasioned by the Defendants who purportedly promised to settle the
judgement debt.<o:p></o:p>The
Defendants dissatisfied with the ruling filed an interlocutory appeal against
same on 14th March, 2018. The two grounds of appeal set forth in the notice of
appeal are as follows:<o:p></o:p>“a. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The High Court Judge committed an error
and occasioned grave miscarriage of justice when she failed and/ or refused to
review the reserve price upwards considering the fact that the attached
property appreciates in value over time.<o:p></o:p>b. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The High Court Judge committed an error
and occasioned a grave miscarriage of justice when she relied on the assertion
by the Plaintiff/ Respondent that the attached property had not been sold or
auctioned due to proposals the Defendants/Appellants had been put forward
without any evidence on record.”<o:p></o:p>We
address ground (a) of the appeal which provides that the trial High Court Judge
committed an error and occasioned grave miscarriage of justice for failing to
review the reserved price upwards when the property has appreciated in value
over time. The Defendants caused the property to be valued and attached the
valuation report to the application. The valuation reports clearly demonstrated
that the property had appreciated in value for over hundred percent.<o:p></o:p>Forced
sale value which is also known as an execution sale, judgement sale or
sheriff’s sale is the price fixed by a valuer as the lowest price a property
shall be sold. The forced sale value is fixed by valuers to guide the sale of a
property but does not prevent the court from determining a reserved price below
it. The market value is fixed by valuers to provide for the maximum price a
property shall be sold. Market and forced sale values are fixed by valuers
after taken into accounts and carefully analysed economic, physical, legal and
institutional factors. The scientific mode of assessing the true value of a
property as well as the minimum value to guide the courts in fixing a reserved
price is influenced by economic factors such as the situation of the property,
the date of the place where the property is situated and the neighborhood data
of the property. The physical factors which are taken into account by valuers
include the physical location of the property, materials used to build the
property and their durability, the drainage and the sanitation condition of the
land. The legal factors which are taken into account in fixing market and
forced sale values are the title deeds, the nature of interest </main>