Confrasilvas Ghana Ltd. -vrs- Mabani Seven Company Ltd. [2022] GHACA 41 (19 January 2022)

Confrasilvas Ghana Ltd. -vrs- Mabani Seven Company Ltd. [2022] GHACA 41 (19 January 2022)

The appellant's charge was a floating charge over insurance proceeds. Under the law applicable at the time (prior to Act 1052), a floating charge must crystallize before it can take priority over an execution creditor. The appellant failed to prove crystallization of the charge before the garnishee order absolute was made. Therefore, the execution creditor (respondent) had priority, and the garnishee order absolute was properly granted.

Citation
[2022] GHACA 41
Parties
Applicant/appellant: Confrasilvas Ghana Limited; Respondent/respondent: Mabani Seven Company Limited; Defendant/judgment Debtor: Profica Limited; Defendant/judgment Debtor: Man Enterprise Ghana Limited; Applicant/appellant: International Finance Corporation; Applicant/appellant: Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N.V.; Applicant/appellant: The OPEC Fund for International Development
Court
Court of Appeal
Jurisdiction
Ghana
Judgment Date
19 January 2022
Procedural Posture
Civil Appeal / Judgment on Appeal
Outcome
appeal dismissed
Legal Topics
Priority of Charges, Garnishee Proceedings, Secured Transactions, Debentures, Floating Charge, Crystallization of Charges
Source Language
English
Commercial Law Corporate Law Priority of Charges Garnishee Proceedings Secured Transactions Debentures Floating Charge Crystallization of Charges

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Parties

Confrasilvas Ghana Limited

Applicant/appellant

Mabani Seven Company Limited

Respondent/respondent

Profica Limited

Defendant/judgment Debtor

Man Enterprise Ghana Limited

Defendant/judgment Debtor

International Finance Corporation

Applicant/appellant

Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N.V.

Applicant/appellant

The OPEC Fund for International Development

Applicant/appellant

Procedural Posture

Civil Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether a secured creditor under a debenture has priority over an execution creditor in respect of funds held to the credit of the debtor company
  2. 2 Whether the nature and registration of the charge affects priority
  3. 3 Whether the garnishee order absolute was properly granted

Ratio Decidendi

The appellant's charge was a floating charge over insurance proceeds. Under the law applicable at the time (prior to Act 1052), a floating charge must crystallize before it can take priority over an execution creditor. The appellant failed to prove crystallization of the charge before the garnishee order absolute was made. Therefore, the execution creditor (respondent) had priority, and the garnishee order absolute was properly granted.

Court Disposition

appeal dismissed

Orders

  • Garnishee order absolute dated 18th September 2020 upheld
  • Costs of GHC 10,000 awarded to the respondent