MUNGU AKONKWA v. BPR Ltd

MUNGU AKONKWA v. BPR Ltd

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2014-07-10 - Case/document no.: RCOMA 0252/14/HCC - Collection: Commercial High Court

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MUNGU AKONKWA v. BPR Ltd [Rwanda COMMERCIAL HIGH COURT – RCOMA 0252/14/HCC (Niwemugeni, P.J.) 10 July 2014] Contract law – Loan contract – Loan contract – To be served by the guaranty in the payment of the remaining debt – Agreement on the new procedure for paying – If there is money deposited on borrower’s account for reducing the payment of the loan, it cannot not leave behind the agreement made by both parties on schedule of paying. Commercial Law – Guaranty of money given to the lender of the loan – Not being given the interests on that guaranty – The borrower of loan may base on nothing requesting the lender of the loan for the interests on the money he has given for guaranty since the guaranty is for him and it is given back to him after finishing paying. Civil law – Damages for the being involved in the court proceedings and damages for the lawyer’s fees – If the one who requested for being paid damages for being involved in the court proceedings does not prove how it used them, they are determined in the appreciation of the court. Facts: Mungu Akonkwa made a loan contract with BPR amounting to 30,000,000 Frw. Within the contract they agreed up on that the bank gives to him 24,000,000 Frw while 6,000,000 Frw remaining could be the guaranty. Mungu AkonkwA has wrote to the bank requesting for that he may be given his guaranty of 6,000,000 Frw and be deposited on the debt

account in order to help him reducing it. On 28/04/2010, the Manager of BPR Kimironko Branch wrote to him notifying him that 6,000,000 Frw was deposited on his account as he requested it Mungu Akonkwa lodged a claim before Nyarugenge Commercial Court claiming that BPR went on deduction on his account 832,836 Frw for the interests instead of being 316,701 Frw while the contract was changed in April 2010. He claimed to be paid 1,548,000 Frw which is equal to the difference between the interests mentioned above, starting from the forth, the fifth and sixth month of 2010. Nyarugenge Commercial Court decided that Mungu Akonkwa has to pay to the bank the damages amounting to 500,000 Frw for involving it in the court proceedings for no ground, the procedural and lawyer’s fees. Mungu Akonkwa appealed to the Commercial High Court arguing that Nyarugenge Commercial Court ignored the letter that the Manager of BPR Kimironko Branch has wrote to him, that the court did not provide him with the interests of 6,000,000 Frw, and that the court has illegally condemned him for the damages for the involvement in the court proceedings and the lawyer’s fees. BPR argued that the letter written by its Manager does not omitthe contract, that after depositing on his account 6,000,000 Frw which was given for guaranty there has been another contract of 30/04/2010 which provided for that the parties to it agree up on that it will become effective in July 2010, that 1,157,877 Frw results from the delay which results from the delay to pay which start from April until June 2010 where he paid 316,701 Frw while he had to pay 832,836 Frw which was provided for in the initial contract since the new one provides for paying 316,701 Frw was to be charged from July 2010.

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The bank has also said that it cannot pay the interests of 6,000,000 Frw since it was the guaranty which he could get back after finishing paying. With regard to the damages for being involved in the court proceedings and the lawyer’s fees, the bank has argued that it may not be considered since what has been done there is not a fault. It has concluded submitting the cross appeal claiming for the procedural and lawyer’s fees. Held: 1. Both parties in loan contract may agreed on new procedure of paying. If there is money deposited on borrower’s account for reducing the payment of the loan, it cannot not leave behind the agreement made by both parties on schedule of paying.

2. If the borrower of loan agreed with the lender to be refund him the guaranty he/she gave, it cannot prevent from him/her paying interest of the remaining loan. He/she cannot request interest for that guaranty he refund the lender of loan.

3. If the one who requested for being paid damages for being involved in the court proceedings does not prove how it used them, they are determined in the appreciation of the court. Appeal is baseless; Appellant has to pay to the bank 300,000 Frw for the procedural and lawyer fees in appeal instance. Statutes or statutory instruments referred to: Law no 15/2004 of 12/06/2004 relating to evidence and its production, article 28 No case referred to. Judgment I. BRIEF BACKGROUND OF THE CASE [1] Mungu Akonkwa Deo sued BPR Ltd before Nyarugenge Commercial Court claiming to be paid 1,548,000 Frwwhich is equal to the difference between 832,836 Frw and 316,701 Frwwhich he was illegally requested to pay during the 4th, 5th and 6th of 2010, since from April 2010 it could receive 316,701Frwper month, instead of receiving 832,836 Frw it received before since the contract has changed. He requested that he may pay the interests of 1,548,000 Frw amounting to 4,141,519 Frw, and be paid 6,000,000 Frw that the bank did not give to him when it gave to him the loan which amounts to 2,868,463 Frw since he was given 24,000,000 Frw instead of giving to him 30,000,000 Frw which is in the contract. [2] Before Nyarugenge Commercial Court, Mungu Akonkwa was condemned to pay to the bank the damages for involving it within the court proceedings for no ground, the procedural and lawyer’s fees which amounts

to 500,000 Frw. MUNGU AKONKWA was not satisfied with that decision and appealed to this court, on the grounds that the court ignored the article 28 of the law relating to the evidence and its production, on the ground that the court has stated that no interests of 6,000,000 Frw that the bank has to pay to him, and on the ground that the court has illegally provided the bank with the damages for being involved in the court proceedings and the lawyer’s fees which amounts to 500,000 Frw.

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II. ANALYSIS OF LEGAL ISSUES Within this case the court is going to examine if the grounds for the appeal have really basis, and examine the damages claimed by the bank in the appeal instance.

1. Has really the court ignored the article 28 of the law relating to evidence and its production? [3] That article provides for that: “a letter from one party to another shall be used as evidence against its author, even if it has not been signed, as long as it can be established that it emanated from the authoring party. It shall constitute an extra-judicial admittance even if it contains recognition of the right contested”. Mungu Akonkwa argues that the court ignored the letter that the Branch Manager of BPR Ltd, Kimironko Branch has written to Mungu Akonkwa demonstrating that 6,000,000 Frw were deposited on the account on 28/04/2010 reducing the loan, that that letter correspond to what is mentioned in the bank booklet and within the statement account, but the bank went on requesting him to pay the money amounting to 832,836 Frw instead of requesting 316,701 Frw. [4] BPR Ltd argues that that letter does not replace the contract, that within the contract that both parties have made, Mungu Akonkwa was given 30,000,000 Frw and agreed to give 20% of the loan for guaranty, and it was seized for the period of the whole debt as it is proven by the article 2 of the contract, that Mungu Akonkwa had no other guaranty on the account when they granted him 30,000,000 Frw. The bank goes on saying that the plaintiff has deplored saying that he had the problem and requested that he may be

given the guaranty of 6,000,000 Frw and be deposited on the debt account to help him to decrease the debt, and immediately another new contract of 30/04/2010 was made for him, which provides for in its article 4 that the parties to it agree up on that it would become effective in July 2010. [5] The bank explains that Mungu Akonkwa has started paying the little money on what he had to go on paying until the new contract starts being respected, this made him to have the arrears1,157,877 Frw since from the fourth month until sixth month of 2010 he paid 316,701Frw instead of paying 832,836 Frw knowing that what they have agreed up on will be performed in July 2010. The bank says that the letter that Mungu Akonkwa claims, it clearly demonstrates that what has been done between parties it was made their in agreement, which is proven with that contract and with the letter they wrote to each other. That the 28 on which they base appealing has no relation with what the letter explains. [6] The article 4 of the contract of 30/04/2010 states that: « The reimbursement of the remaining balance would be made monthly within 48 phases. The first one starts on the 10th July 2010 and the last on 10th June 2014 »: This article demonstrates that this new procedure of payment had to start being respected in July 2010; it means that it is when Mungu Akonkwa had to start paying 316,701 Frw. To say that the Branch Manager has told Mungu Akonkwa that 6,000,000 Frw was deposited on the account to reduce the debt, does not leave behind that within the contract that both parties has agreed up that the new procedure for payment starts being respected in July 2010. This ground for appeal therefore is baseless.

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2. On the ground for the appeal that the court has said that no interests of 6,000,000 Frw that BPR Ltd has to pay to Mungu Akonkwa Deo. [7] Mungu Akonkwa says that the court denied providing him with the interests of 6,000,000 Frw and that it is evident that within 30,000,000 Frw he has requested as the loan, he was only given 20,000,000 Frw. It remained with 6,000,000 Frw for the security but it claims from him its interests. The bank argues that the plaintiff ignores what he agreed within the contract he made with the bank, where he had to give 20% on the loan he was promised of 30,000,000 Frw. That ignoring that contract and says that he requests the interests on the guaranty he has given to the bank it is ignoring the truth and diverting the court, since when you give a guaranty it is yours, that when you finish paying appropriately you are given back the guaranty, that you don’t claim that the bank gives you its interests for the period it has been in guaranty, the fact that he has requested it and granted it has no relation with that accepting that you have denied it to him, since he also clearly knows the content of the contract that he left it as the guaranty. [8] As proven by the security agreement of the long term deposit, Mungu Akonkwa has accepted to give the guaranty of 6,000,000 Frw on the loan he was given. He has to pay the interests for that loan. Thus, it is

not the bank which had to pay him the interests of 6,000,000 Frw, rather it is him who owed them to the bank, basing on the contract that both parties have made, and on the article 64 of the contract governing the contract provides for that: “the contracts made in accordance with the law shall be binding between parties. They shall be performed in good faith”. Basing on these grounds, the court releases that this ground for appeal raised by the plaintiff cannot be considered.

3. On the ground for appeal that the court has illegally provided the bank with the damages for being involved in the court proceedings. [9] The plaintiff argues that the court has illegally provided the bank with the damages for being involved in the court proceedings for no ground and the lawyer’s fees amounting to 500,000 Frw since as it is mentioned in the submissions of the bank, it has claimed them though lodging a counter claim and the case was being heard in the first instance, in addition to that the damages he was condemned are excessive, moreover that there has been ignoring many grounds as it was revealed. [10] The bank argues that these cannot be considered since even though there has been the error in writing and be mentioned the cross claim, it has told to the court that what it seizes with it was the counter claim, that the fact that the judge has considered what has been presented before the court it is not a fault. The fact that there has been an orthographic error and the party to the case corrected it during the hearing, the court realises that no law has the first judge has violated as Mungu Akonkwa claims it when he approved the statement of the party correcting the orthographic error during the hearing. With regard to the fact that the damages of 500,000 Frw he was condemned to pay are excessive, the court realises that the plaintiff does not prove the amount of which he accept to have been condemned, it is therefore his right of providing the damages within his discretion.

4. On the cross appeal lodged by BPR Ltd [11] The bank claims for 500,000 Frw for the procedural fees and 1,000,000 Frw for the lawyer’s fees in the appeal. The court realises that it will provide them within its discretion, since what the bank claims for, it does not prove that it is really the exact amount it has spent.

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III. THE DECISION OF THE COURT [12] The Commercial High Court: [13] Admits to receive the appeal it was seized with Mungu Akonkwa Deo. [14] Declares it baseless. [15] Decides that BPR Ltd wins and that Mungu Akonkwa Deo fails. [16] Condemns Mungu Akonkwa Deo to pay to BPR Ltd 300,000 Frw, encompassing the procedural and lawyer’s fees in the appeal instance, and pays it within 15 days from the time this judgment becomes executable, if he fails it will be taken from his property through the power of the state. [17] Held on other grounds that the decision of the judgment RCOM 1282/13/TC/Nyge be respected.