National investment Bank Vrs Eastern Alloys Co Ltd. ( H1/47/08) [2008] GHACA 7 (24 July 2008);
IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL - A C C R A
CORAM: PIESARE, JA [PRESIDING]
APALOO, JA
MARIAMA OWUSU, JA
H1/47/08
24TH JULY, 2008
NATIONAL INVESTMENT BANK … PLAINTIFF/RESPONDENT
V E R S U S
EASTERN ALLOYS CO. LTD. ETC. … DEFENDANTA/APPELLANTS
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J U D G M E N T
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APALOO, JA:- Final judgment was on 29th November 2006 entered against the Defendants/Appellants in the sum of ¢1,283,616,000.00. The High Court ordered that sum to be paid to the Plaintiff/Respondent together with interest from that date at the prevailing bank rate until final payment.
The appellants dissatisfied with the decision of the trial court appealed on the sole ground that “the court erred when it held that the exigible interest rate is up to the date of final payment at prevailing bank rate.”
In support of this appeal the appellants have contended that the computation of the interest rate by the High Court was flawed in as much as the court used prevailing interest rate up to the date of payment as the exigible interest rate. According to counsel, before the coming into force of C.1. 52 which allows interest at the prevailing bank rate up to the date of final payment, the interest rate exigible after judgment was regulated by Order 42 Rule 15 of LN 140A. Counsel cited a number of cases in support of his views. He argued further that the Plaintiff/Respondent had been charging interest on compound interest basis and that having issued a writ against the Defendants/Appellants, it was wrong for the Plaintiff/Respondents to be charging on compound interest and that after the issuance of the writ the interest rule exigible was simple interest at the prevailing bank rate up to the date of judgment.
From the record both parties consented to the appointment of Eddie Nikoi Consultancy, a firm of Chartered Accountants to go into accounts between the parties.
Upon conclusion of its work the firm tendered its report. The Auditors provided three sets of figures based on simple interest including a 4% interest. The report reflected that on application of the rate of 37.5% the indebtedness of the Appellants stood at ¢1,129,512,000.00 whiles at the prevailing rate of between 30% - 51.5% the indebtedness was ¢1,283,616,000.00 and upon application of a 4% rate the debt was ¢83,960,000.00 The computations were on simple interest basis. Upon consideration of the report the court awarded the sum of ¢1,283,616,000.00 together with interest from 29/11/06 at the prevailing bank rate on simple interest basis until final payment.
The appellants firstly anchored their submissions on the authority of the White Book variously referred to as the Annual Practice. At page 714 thereof of the 1995 Edition the Learned Authors have stated thus;
“Rate of Interest; A contract to pay the debt with interest at eg. 15%
does not entitle a Respondent to levy under his execution more than
the statutory interest. The contract (or a subsequent agreement) must
state specifically that any judgment obtained for recovery of the debt
shall carry interest at a specified rate per cent and the higher rate until
payment of interest should form part of the judgment.”
In Standard Chartered Bank Vrs. Nelson [1998 – 99] SCGLR 810 the Supreme Court stated per holden 4 that:
“Interest might be awarded by a Court under the following circumstances;
(i) by the custom or trade practice, such interest was usually awarded on
moneys due and payable upon proof of such custom or trade practice.
(ii) by agreement in transactions between parties where such interest might
become payable upon action brought after default. (iii) Interest charges arising out of contracts – actually stated or implied, and (iv) by (a) statute arising under the Money Lenders Ordinance or (b) the courts (Award of Interest) Instrument, 1984 [ LI 1295]. In the instant case the Court of Appeal had rightly awarded interest on damages for conversion at the prevailing bank rate from November 1982 to date of judgment in December 1992 in terms of
LI 1295.”
It is interesting to note at this juncture that the dictum of Brobbey J (as he then was) was on the award of interest stated in Kaas Fisheries Vrs. Barclays Bank Ltd. [1989 – 90] 2 GLR 1 at 4 was criticized and overruled. In that case the Learned trial Judge referred to LN 140A, Order 42 r 15. He stated that “The concept of the same rate of interest prevailing after judgment and subsisting until final payment is not supported by authority… Interest on debt or damages awarded by a court must be exigible up to date of judgment. Thereafter no matter, what the arrangement of the parties, the only interest exigible will be what is provided by the rules governing execution.”
It appears that counsel for the appellant did not appreciate the import of his own authorities cited to this court. In our view both the White Book and the Standard Chartered case affirm the position that where the contract between the parties stipulates a particular interest rate, that rate is what is applicable and not the 4% or any other rate.
In the Heads of Agreement between the parties, the parties fixed the interest rate at 14% provided always that the said interest rate shall be adjusted in accordance with the prevailing rates prescribed by the Bank.
Attieh and Others Vrs. Koglex (Gh) Ltd. [2001 – 2002] SCGR 936, Standard Chartered Bank Vrs. Nelson [1998 – 90] SCGLR 812 and IBM Vrs. Hasnem Enterprises Ltd. [2001 – 2002] SC GLR 393 firmly laid down the principle in our view that, interest ought to be paid at the prevailing bank rate up to the date of judgment. See also Butt Vrs. Chapel Hill [2003 – 2004] SCGLR 636.
It is appropriate to note that in IBM Vrs. Hasnem Enterprises Ltd [supra] her Lordship Sophia Akuffo JSC rendered the opinion at p 407 that
“Since there was no contract between the parties stipulating the
payment of interest on any amount arising from the services of
the defendants, the trial judge correctly based his order on the
provisions of the Court (Award of Interest) Instrument 1984
(LI 1295)”
The above dictum without doubt sums up the law that where the parties relations
is regulated by agreement then it is the rate specified in the agreement that is applicable and not any other statute.
In C1 52 which came into force on 1st March, 2006 the court was mandated as
follows:
“Rule 1. Order for payment of Interest.
1. If the Court in a civil cause or matter decides to make an order for
payment of interest on a sum of money due to a party in an action
that interest shall be calculated;
- at the bank rate prevailing at the time the order is made and
- at simple interest
but where an enactment, instrument or agreement between the parties
specifies a rate of interest which is to be calculated in a particular manner
the Court shall award that rate of interest calculated in that manner.
Rule 2 - Post Judgment interest.
2(1) Subject to subrule (2) each judgment debt shall bear interest at the
statutory rate from the date of delivery of the judgment up to the date of final
payment.
2. Where the transaction which resulted in the judgment debt is
(a) contained in an instrument.
(b) evidenced in writing or
(c) admitted by the parties
and the parties specify in the instrument writing or admission the rate of
interest which is chargeable on the debt and which is to run to the date of
final payment, then the rate of interest shall be payable until the final
payment,”
This legislation no doubt conclusively and finally settles the vexed question whether or not a court could order payment of interest up to and including date of final payment. It is noted that the trial court’s order for payment was made on 29th November
- At that date C152 was already in force as at 1st March 2006. Obviously the trial court’s order was made within the purview of C152 and its validity cannot be questioned. The order that the Defendants/Appellants must pay ¢1,283,616,000 together with interest from the day of judgment at the prevailing bank rate until final payment is certainly backed by law and appropriate in the circumstances.
The appeal against the order fails and it is accordingly dismissed.
R.K. APALOO
JUSTICE OF APPEAL
I agree. E.K. PIESARE
JUSTICE OF APPEAL
I also agree. MARIAMA OWUSU
JUSTICE OF APPEAL
COUNSEL: MR. Y. OPOKU ADJAYE FOR THE DEFENDANTS/APPELLANTS.
MR. G.A. SARPONG FOR THE PLAINTIFF/RESPONDENT.
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