Bank Of Africa Ghana Ltd Vrs Alukings Systems Ltd and 2 Others [2023] GHAHC 163 (27 March 2023)

IN THE SUPERIOR COURT OF JUDICATURE, IN THE HIGH COURT OF JUSTICE, COMMERCIAL DIVISION HELD IN ACCRA ON THE 27th DAY OF MARCH 2023, BEFORE HIS LORDSHIP JUSTICE JUSTIN KOFI DORGU SUIT NO CM/BFS/0277/2021

BANK OF AFRICA GHANA LTD

PLAINTIFF VRS ALUKINGS SYSTEMS LTD & 2ORS

DEFENDANTS ========================================================== PARTIES:

PLAINTIFF REPRESENTED BY BERTHA AFRIYIE

DONKOR 3RD DEFENDANT/APPLICANT PRESENT COUNSEL: DAVID OBENG-MENSAH HOLDING BRIEF FOR

EMMANUEL

EFFAH

ANNAN

FOR THE PLAINTIFF/RESPONDENT – PRESENT DR. EUGENE ASIAMAH BOADU FOR THE 3RD DEFENDANT/APPLICANT – PRESENT ==========================================================

RULING On or about the 18th January, 2021, the Plaintiff herein, a limited liability company engaged in the business of banking issued out a Writ of Summons against the three Defendants herein praying for the following reliefs; a. Recovery of the sum of GH¢ 267, 011.22 being the outstanding balance as at 17th June, 2020 on the overdraft facility granted by Plaintiff to 1st Defendant on the latter’s request b. Interest on the said amount at the rate of forty percent (40%) per annum (inclusive of penal interest of 6% and a default charge of two (2%) from 18th June, 2020 to the date of final payment c. Costs Now, I will quote some pertinent paragraphs in the accompanying Statement of Claim which sort of incriminate the 3rd Defendant/Applicant in this suit in order to situate the application in its rightful perception. The said paragraphs are 3, 7, 9, and 9 thus; “3. The 2nd and 3rd Defendants are Directors of the 1st Defendant Company and guarantors of a facility granted the 1st Defendant by the Plaintiff which is the subject matter of the instant proceedings. 2nd Defendant is also the Managing Director of 1st Defendant Company”.

7. As a condition precedent to the grant of the facility, 2nd and 3rd Defendants on 3rd November, 2017 jointly executed a Deed of Guarantee in favour of the Plaintiff whereby 2nd and 3rd Defendants undertook to be liable to Plaintiff should 1st Defendant fail to honour its obligations to Plaintiff.

8. Plaintiff says that the 1st Defendant has failed and or refused to meet the terms and conditions of the overdrafts facility by defaulting in the terms of repayment in spite of several and repeated demands made thereof’ and “9. Plaintiff further avers that 2nd and 3rd Defendants have also failed and or refused to make good the indebtedness in terms of the Deed of Guarantee they executed in favour of the Plaintiff.” I must admit that service of the processes including the Writ of Summons on the Defendants was very arduous as they were evasive. The Plaintiff had to resort to application after application for leave to serve the Defendants by way of substituted service at every stage of the proceedings. At a point when the Plaintiff was satisfied that the Defendants were duly served but failed, refused or neglected to enter appearance to the Writ, they took out an application under Order 10 Rule 1(1) and (9) of the C. I 47 filed on 4th February, 2022 and prayed the Court to enter final judgment against the Defendants in default of appearance. Again since the application was put on notice, the application had to still go through substituted service. On the 25th July, 2022 when the Court was satisfied that the due notice of the application was given, it granted leave to the Plaintiff to move the application which was duly done and final judgment entered for the Plaintiff against

the Defendants jointly and severally for the endorsed reliefs. When the notice of judgment got to the 3rd Defendant/Applicant finally, they filed on the 25th April, 2023, the instant motion under the inherent jurisdiction to set aside the final judgment recovered against him on the 25th July, 2022. The basis of the application is that he (the 3rd Defendant/Applicant) had resigned his directorship of the 1st Defendant Company since April 2018 and so since that date had no business with the 1st Defendant Company again. As a result, the Applicant contends that he had no notice of any proceedings against him for which matter he did not contest the case. The 3rd Defendant/Applicant put his defence this way in paragraphs 8 and 9 of the Affidavit in Support “8. That I am advised by Counsel and verily believe same to be true that the doctrine of natural justice has been breached as the 3rd Defendant was not given the opportunity to be heard in the matter before this Court granted the judgment in favour of the Plaintiff 9. I am further advised by Counsel and verily believe same to be true that per the Companies Act, the 3rd Defendant /Applicant was not served at all with any of the Court processes required to have been duly served on a party to pave way for the grant of judgment in favour of the Plaintiff”. It is based on the above that the 3rd Defendant/Applicant is inviting the Court

to set aside the final judgment albeit in default of appearance and to allow the 3rd Defendant contest the case. Naturally, the Plaintiff/Respondent opposed the application and filed a 15 paragraph Affidavit in Opposition. Attached to the Affidavit are Exhibits JD to JD5 that captures all the proceedings of the applications for substituted service and proof of service through posting and in paragraphs 11 and 12 thus; “11. I am further advised and verily believe same to be true that the resignation of the 3rd Defendant/Applicant as a Director of the 1st Defendant Company does not absolve him from liability on his personal guarantee.

12. Plaintiff vehemently denies paragraphs 8 and 9 of the Affidavit in Support and states that there was no breach of the doctrine of natural justice as alleged.” The parties were then allowed to make viva voce submissions for and against the application. Indeed, reviewing the depositions and all the processes including the viva voce submissions in Court, I have come to the conclusions that but for one reason, this application should have failed. This is so because I hold as good service all the processes filed and served on the 3rd Defendant albeit by substituted service. This is so because service by substitution is a permitted procedure known to our jurisprudence and once it has been effected with the leave of the Court, it is as good as personal service. The fact also that the 3rd Defendant/Applicant had resigned his position as a Director of the 1st Defendant company also does not automatically relieve him of the procedural obligation to enter appearance and contest a case that has been brought against him whether rightly or wrongly. The personal opinion of the 3rd Defendant/Applicant regarding his liability or otherwise of an action brought against him is to me immaterial and not a defence for defaulting on your obligation to enter appearance and defend the action that has been brought against you. I have resolved to however grant the application only on the basis that

there was no actual evidence attached to the application for final judgment that prima facie shows that the 3rd Defendant/Applicant actually executed a Deed of Guarantee as a Director either in his personal capacity or in the nature of a corporate guarantee. That to me is fundamental and the offer by the Plaintiff/Respondent to furnish the Court with a copy of same to me is late in the day as the 3rd Defendant had already filed the instant motion to set aside the judgment for the various infractions identified by him. Accordingly, I grant the application and hereby set aside the judgment recovered against the 3rd Defendant/Applicant on the 25th July, 2022. This of course is without prejudice to the Plaintiff re-applying in the appropriate case. All properties of the 3rd Defendant/Applicant seized in execution and attached as a result of this judgment and which have not been sold already are to be released from attachment accordingly. I award cost of GH¢ 2, 000.00 against the Plaintiff/Respondent. (SGD)

JUSTICE JUSTIN KOFI DORGU (JUSTICE OF THE HIGH COURT) 5