AMTAN (GH) LTD AND ANOTHER vs. GHANA COMMERCIAL BANK [2001-2002] 1 GLR 495

AMTAN (GH) LTD AND ANOTHER v GHANA COMMERCIAL BANK

[2001-2002] 1 GLR 495

Division: HIGH COURT, ACCRA

Date: 21 JULY 2000

Before: APPAU J

Practice and procedure—Judgment debt—Payment by instalments—Remedy discretionary—Applicants in breach of loan agreement with respondent bank—Respondents obtaining judgment on principal loan and interest—Court granting applicants’ motion to pay judgment debt by instalments—Failure of applicants to comply with orders of court—Respondents attaching applicants’ properties for sale—Whether court to grant another application by applicants to pay judgment debt by instalments in view of previous record of applicants.

In 1995 the respondent-bank entered into an agreement with the applicants to advance a loan facility of ¢250 million to the latter to be paid within a period of three years and for which the applicants used their property as security. The applicants breached the terms of the agreement and the respondent-bank obtained judgment against them in the sum of ¢441,004,931.57 with interest on same at 40 per cent. The court subsequently granted an application by the applicants to pay the judgment debt of ¢600 million and interest by instalments and ordered them to make a down payment of ¢125 million and thereafter defray the remaining judgment debt by paying eight monthly instalments of ¢60 million beginning in April 1999 and ending in November 1999. The applicants paid the down payment of ¢125 million but again failed to honour the terms of payment. From April 1999 to June 2000, a period of about one year and two months, the applicants had paid only ¢20 million instead of the complete liquidation of the judgment debt. Subsequently, the respondents brought a writ of fi fa attaching the applicants’ movable and immovable properties in satisfaction of the debt. The applicants then brought the instant application praying the court to give them another chance to pay the judgment debt on an instalment basis and that they would not fail the court again.

Held, dismissing the application: the practice of allowing judgment debtors to pay their judgment debts by instalments as an equitable remedy, obliged the courts in exercise of their discretion to act with caution and circumspection. It was imperative that they did not lose sight of the interests of the winning party which should be paramount, otherwise their discretion might tend to subvert the very foundation of justice. In the instant case, since notwithstanding the fact that

[p.496] of [2001-2002] 1 GLR 495 the applicants and the respondents entered into a valid contract which provided remedies for breach which both parties were expected to respect, the court interfered and granted an application to pay by instalments in favour of the applicants, and yet the applicants failed to honour the terms of payment ordered by the court, it would be unjust and unfair to the respondents if the application was to be granted. Accordingly, the application would be refused and the respondents ordered to go into full execution of the judgment in the way their own agreement specified.

APPLICATION by the applicants-judgment debtors seeking leave of the court to pay their judgment debt and interest by instalments following the issue of a writ of fi.fa attaching their movable and immovable property for sale by the respondents after the applicants had failed to comply with the terms of a previous order made in their favour by the court. The facts are sufficiently stated in the ruling of the court.

Samuel Asamoah for the applicants.

Anthony W Essiedu for the respondents.

Appau J. The defendants-judgment debtors-applicants (hereinafter referred to as the applicants) are praying this court to grant them leave to pay an outstanding judgment debt owed to the plaintiff-judgment-creditor-respondents (hereinafter referred to as the respondents) on instalment basis. The judgment debt has been outstanding for the past two years and over. The applicants’ application which was supported by three separate affidavits was strongly opposed by the respondents in a detailed affidavit in opposition filed on 24 September 1999.

In their first affidavit in support of the application filed on 5 August 1999, the applicants indicated that though they were granted a similar order by this court in March 1999 to pay the same judgment debt on instalment basis they could not fully comply with the said order as a result of certain constraints. According to them, the respondents obtained judgment against them on 16 November 1998 in the sum of ¢441,004,931.57 with interest on same at a rate of 40 per cent from 1 October 1997 till the date of final payment plus costs of ¢20 million. After making some part payment, the court granted them an order to pay the remaining judgment debt and interest on monthly instalment basis of ¢60 million, beginning from 31 March 1999 for eight successive months, ie ending in November 1999. However, they could not honour the terms of payment due to financial constraints as their business slumped. They were therefore praying the court to give them

[p.497] of [2001-2002] 1 GLR 495 another chance or opportunity to pay the remaining judgment debt at ¢50 million every quarter or three months. The applicants’ application was prompted by a writ of fi.fa issued against them by the respondents for the attachment and sale of the applicants’ movable and immovable properties in satisfaction of the judgment debt and interest which was then running around ¢600 million at the time when the applicants defaulted under the first terms of payment.

In their affidavit filed on 24 September 1999 in opposition to the application, the respondents gave a historical account of the whole case before the court to establish that the applicants had on previous occasions not kept faith with the court and therefore could not be trusted anymore. According to the respondents, and as was admitted by the applicants in their own application, the applicants were granted a similar opportunity on 3 March 1999 but failed to honour the terms of payment. They were therefore compelled to go into execution as ordered by the court by attaching the properties of the applicants to be sold to defray the judgment debt. The said properties were accordingly valued by the Architectural and Engineering Services Ltd (AESL) and when they brought in an application for a reserved price to be placed on the properties by the court before the items could be auctioned or sold, the applicants raised an objection to the valuation report and suggested that they should also be made to submit a counter valuation report. That was on 19 July 1999. The court granted their prayer but after about four successive adjournments, the applicants could not submit the counter valuation report. Thereafter, ie from 4 August 1999, the docket in the case got missing from the registry of the court and up to date it has not been traced. The present docket before the court was therefore a duplicate docket built or assembled by the registry of the court with the assistance of the respondents’ solicitor. The respondents contended that the present application before the court is an abuse of the court’s process, the applicants having had the benefit of a similar application before the court which they could not honour.

After the applicants had been served with the respondents’ affidavit in opposition, they (the applicants) filed two further or supplementary affidavits in support on 11 May 2000 and 30 May 2000, not denying the depositions contained in the affidavit in opposition but enhancing the terms of payment suggested in their affidavit in support. In the first affidavit in support filed on 5 August 1999, the applicants suggested the payment of ¢50 million per quarter, ie every three months. In the second affidavit filed on 11 May 2000, the applicants suggested making a down payment of ¢50 million on or before 30 June 2000 and

[p.498] of [2001-2002] 1 GLR 495 thereafter pay ¢50 million per quarter. Then in their last affidavit filed on 30 May 2000, the applicants suggested the same down payment of ¢50 million on or before 30 June 2000 and thereafter pay ¢100 million per quarter.

In his arguments in support of the application, counsel for the applicants after admitting the allegations of bad faith on the part of the applicants which he blamed on financial difficulties arising from non-payment of jobs done by the applicants, prayed the court that the applicants would not fail the court again when granted the opportunity this time and said the applicants had given the first signal by the payment of an amount of ¢50 million to the respondents on 29 June 2000 as suggested in their affidavit filed on 30 April 2000. Counsel for the respondents on the other hand strongly opposed the application on the ground that the applicants are not people to be trusted and that since they, the respondents, know how to execute the judgment granted them, the court should allow them to do so as the applicants failed to honour or utilise all the opportunities afforded them by this court.

The issue before this court is very simple, and that is; whether or not the court should grant the applicants’ prayer after they had abused a similar prayer granted them by this court. I have always held the view that after delivering judgment in a civil matter, particularly in cases involving liquidated demands, the court should be careful not to turn round to put or place unnecessary impediments in the way of the winning party when it comes to the execution of the said judgment. One of such impediments, in my opinion, is the direction by the court after judgment that the losing party or the judgment debtor should pay the judgment debt to the judgment creditor by instalments, despite opposition to same by the judgment creditor. Normally, such a situation arises when a losing party in litigation brings an application to that effect before the trial court for consideration. If the court in the exercise of its discretion in a situation like this does not act with caution and circumspection, its further direction might tend to subvert the very foundation upon which its judgment was based, ie justice.

This common practice of allowing judgment debtors to pay their genuine judgment debts by instalments which is an equitable remedy, has engendered a general belief among many people in business, albeit erroneous, that when one owes another an obligation like the payment of money or debt under a contract or an agreement or otherwise and one is not able to pay on schedule or as agreed upon, the court would allow the debtor, no matter the situation, to pay or refund the amount in bits or on instalment basis when the matter finally lands in the

[p.499] of [2001-2002] 1 GLR 495 courts. Because of this wrong or erroneous belief or impression some people choose to enter into some transactions under certain clearly stated or expressly stated terms knowing very well that they cannot fulfil those terms but nevertheless cunningly do so with the hope of hiding behind this common practice to defeat the purpose of the contract or transaction they enter into. This is unfortunate because it is not always the case that the courts would allow or agree to instalment payments.

Though the courts are not supposed to deprive a winning party in litigation from reaping the fruits of his or her success or victory, as courts of law and equity, the courts are obliged to look into and consider any prayer or application that a losing party or judgment-debtor in litigation brings before them with regard to the satisfaction of the judgment debt and other orders. However, in doing so, the court should not lose sight of the interests of the winning or victorious party which I consider as very paramount or the first priority to be considered by the court and secondly, the nature of the transaction leading to the judgment debtor’s indebtedness to the judgment creditor.

In the instant case or application before me, it is an undeniable fact that the applicants’ indebtedness to the respondents arose from a valid contract entered into between the two parties in 1995 in which the respondents advanced a loan facility of ¢250 million with interest to the first applicant to be paid within a period of three years and for which the second applicant used his property, including that of the first applicant as security. It is also not in doubt that the applicants breached the terms of the agreement for which the respondents took legal action and obtained judgment against the applicants in this court. It is also indubitable that after obtaining judgment the applicants applied to the court then presided over by Gbadegbe J (as he then was) to be allowed to pay the judgment debt by instalments, contrary to the express provisions of the loan agreement; an application the court yielded to. It is also not in doubt that the applicants again failed to honour the terms of payment granted them by Gbadegbe J (as he then was) and when the respondents attempted to go into full execution of the judgment debt as ordered by the court, the whole docket in the case mysteriously got missing from the registry of the court. I do not want to go back to this point as I have already touched on same in the early pages of this ruling when reference was made to the respondents’ affidavit in opposition to this application which the applicants never challenged.

The point I would like to stress here is that the claim by counsel for

[p.500] of [2001-2002] 1 GLR 495 the respondents in his arguments that the applicants have not kept faith with the court and the respondents by failing to honour the first instalments payment granted them is an unquestionable fact. This being the case, so says counsel, the applicants’ hands are soiled and therefore could not be admitted to the court of equity. The respondents’ counsel argued further that the present application which is the second in a series is an abuse of the court’s process and therefore should not be entertained.

Before I say anything further in respect of the application, I would like to give a skeletal account of the applicants’ first application filed on 9 December 1998, the response by the court on 3 March 1999 and then the applicants’ conduct thereafter.

The applicants’ application dated 7 December 1998 and filed on 9 December 1998 was moved for and on behalf of the applicants by one Kwasi Blay, Esq who was then counsel for the applicants and the affidavit supporting same was sworn to by one Justice Amoah who described himself as the managing director of the first applicant company. It was the same Justice Amoah who swore to the first two affidavits in support of this motion filed on 5 August 1999 and 11 May 2000 whilst the third affidavit filed on 30 April 2000 was sworn to by one Bernard Acquah who said he was the general manager of the first defendant company.

In that application, ie the first one dated 7 December 1998 and filed on 9 December 1998, the applicants’ prayer was that they should be made to pay their indebtedness to the respondents on monthly instalment basis of ¢25 million commencing from January 1999 after making a lump sum payment before the commencement of the monthly instalment payments. The judgment debt and interest was then around ¢600 million.

This application which was slated to be heard on 23 December 1998 was never heard until 3 March 1999. From 23 December 1998 to 3 March 1999 when the application was finally heard and determined, the applicants never made any effort to pay anything to the respondents to reduce their indebtedness. The court, nevertheless granted their prayer but not under the terms they proposed. The court ordered the applicants to make a lump sum payment of ¢125 million and thereafter defray the remaining judgment debt on eight monthly instalment basis of ¢60 million beginning from April 1999 and ending November 1999.

The applicants duly made the down payment of ¢125 million in March 1999 but failed to honour the monthly term payments starting from April 1999. In fact, in April 1999 the applicants did not pay

[p.501] of [2001-2002] 1 GLR 495 anything at all, then in May 1999 they paid only ¢10 million. Again, in June 1999 they did not pay anything, and in July 1999 they paid only ¢10 million.

After this the applicants did not pay anything again until the respondents took steps to go into full execution by attaching the properties mortgaged for the loan necessitating the present application before me. So in effect, from April 1999 to 29 June 2000 (a period of about one year and two months), the only amount the applicants had paid was ¢20 million instead of a total or complete liquidation of the whole judgment debt. This was indicated by the applicants themselves in their affidavit in support filed on 5 August 1999.

This means that even if the court had granted the terms proposed by the applicants themselves in their application, ie to pay ¢25 million every month beginning from January 1999, the applicants would still not have been able to pay under those terms. The applicants therefore knew very well that they could not pay the ¢25 million a month as they proposed in their application filed on 9 December 1998 and that they only filed the application to deceive the court. This is the very reason why I support totally the respondents’ counsel’s contention that the applicants are not people to be trusted for the court to grant them a second opportunity to liquidate their indebtedness on instalment basis.

Quite apart from the question of trust and bad faith on the part of the applicants, the applicants and the respondents did enter into a valid written contract to which both of them were bound. The contract provided remedies for breach which both parties were expected to respect. The courts should therefore not be seen or in other words, should be slow in stepping in to interfere in such matters contrary to the express will or provisions in the contract, unless the justice of the case calls for such an interference. Since the court did in fact interfere when called upon by the applicants to do so in March 1999 and consequently made an order in favour of the applicants despite the respondents’ opposition to same, the applicants, having failed to honour the terms of payment ordered by the court varying the parties own contractual obligations, it would be unjust and unfair on the part of the respondents if the court accedes to the present request by the same applicants to interfere again.

If the court does anything like that, it would buttress the wrong notion being held by many that the courts are not the best places or fora for creditors to seek redress against their debtors. People who enter into contractual relations mindful of the risks involved in the said transaction, should not be assisted by the courts unduly to derogate [p.502] of [2001-2002] 1 GLR 495 from their own obligations under the contract or transaction, otherwise it would amount to an undermining of the authority of the courts themselves and an erosion of the confidence people have in the courts as the citadel of justice.

I will, therefore, refuse the application and order the respondents to go into full execution of the judgment in the way their own agreement specifies.

The application is accordingly dismissed. No order as to costs.

Application dismissed.

AD