Bailiffs Seize Herbert?s Building ? Rejoinder

2nd May 2006

The Editor,
The Ghanaian Times,

Dear Sir,

RE: BAILIFFS SEIZE HERBERT?S BUILDING ? REJOINDER

I write on behalf of Mr. Herbert Mensah.

Mr. Mensah?s attention has been drawn to a front page story relating to him under a screaming banner headline as stated above in the Ghanaian Times of Saturday April 29, 2006.

My client says he is very much surprised that such a story should be the lead story of the Ghanaian Times especially as he is a private citizen and such seizures by bailiffs, however misconceived, are a daily occurrence in our legal system.

However, it is my client?s considered view that if the Ghanaian Times, a national newspaper, must give prominence to such mundane matters, ignoring to apply the tax payers? resources wisely to highlight the serious and myriad developmental challenges facing the nation, the least that can be expected of it is that the story will be fair, balanced and true in all aspects. At all material times, Mr. Mensah was not in the country and at the time that your reporter claimed he got to the scene both Mr. Larry Otoo and the undersigned were there representing the interests of Mr. & Mrs. Mensah and did not leave till after 12 noon. No attempt was made to at least get Mr. Herbert Mensah?s side of the story even though everybody present including the bailiffs and policemen knew of our representation. Your reporter infact wrote in the fourth paragraph of the story that ?some associates and lawyers of Mr. Mensah prevented the team from towing away a customized cross-country Ford Navigator parked on the premises?, (he even got the model of the vehicle wrong!) so he was fully aware of our presence but because it will not fit in with the agenda of his paymasters to get Mr. Mensah?s side of the story, he ignored us completely. Yes, Mr. Mensah had to be maligned and that is exactly what your reporter did with his falsehoods. The story that was published was a jaundiced version given by only one side and was intended to embarrass Mr. Mensah and it infact caused him considerable embarrassment especially as the story was posted on the internet as well.

Since your editorial board decided that this is a story fit for public consumption, I have been instructed to do a write up to set the records straight which I hereby proceed to do.

Marketace Ghana Limited is not owned by Mr. Herbert Mensah. Mr. Herbert Mensah is one of six shareholders including Mrs. Mary Mcleod. Mr. Mensah and Mrs. Mary Mcleod were also directors of Marketace as were the other shareholders. Marketace was incorporated sometime in February 1989 and its main line of business was haulage transport. All directors contributed to the capital of the company and the understanding was that no directors? advances and loans were to be repaid until all major obligations have been met to Automotive Technical Services (ATS) and other creditors who, to the knowledge of all directors, have legal charges on the assets of the company.

Mrs. Mcleod contributed to the company in two ways. First she guaranteed a drawdown facility of ?50.000.00 for the use of the company at the Clydesdale Bank in London. The facility was drawn on an account called the Marketace U.K. account to which Mrs. Mcleod was the sole signatory. Before any drawdown Mrs. Mcleod satisfied herself that the money was going to be used for the intended purpose and she satisfied herself that indeed the previous money has been properly applied before signing a subsequent cheque. All correspondence with the bank was with her directly in her capacity as a director of Marketace and all bank statements were sent to her. The agreement with Marketace was that Marketace will pay the principal and interest and although some payments were made the company did not keep pace with the agreed rate of payment and so the bank called up the loan. As a result Mrs. Mcleod?s share portfolio was sold to make up the shortfall.

Furthermore, Mrs. Mcleod invested the sum of ?60,000.00 in Marketace in two ways i.e. firstly, a shareholder?s investment which accounted for ?25,000.00 for a 10% equity in Marketace and secondly by providing directly the sum of ?35,000.00 in the form of director?s advances. Mrs. Mcleod now claims the ?60,000.00 was a loan she advanced to Snowrad Ltd which in turn advanced it to Marketace as a loan. Snowrad Ltd is a U.K. registered company and at its inception had two shareholders and two directors, namely, Mrs. Mcleod and Mr. Mensah. There was no formal agreement or legal relationship between Marketace and Snowrad and indeed there were no shareholders or directors meeting at Snowrad to approve a grant of a loan to Marketace and there was similarly no such meeting by Marketace to apply for and receive such a loan from Snowrad.

The overdraft was intended basically to purchase 2 tractor units and two trailers, which was done. Also part of the money was used for office equipment in London for Mrs. Mcleod and she was paid a salary out of the overdraft. None of the officers of Marketace in Ghana took a salary. There is no legal linkage between Snowrad and Marketace and yet the claim by Snowrad against Marketace includes salary and National Insurance and PAYE ? ?16,897.14; monies lent by Mrs. Mcleod to Snowrad ? ?1500; Mrs. Mcleod?s telephone bill ? ?1,000.00; Accountancy fees ? ?6,600.00 (which includes fees for members of her family for work done at Snowrad Ltd.). Since Snowrad did not engage in any trading activity any way, how could all these charges have become due? And since Snowrad is not even a subsidiary of Marketace how can all these claims be for its account?

In order to be able to make these ridiculous claims, Mrs. Mcleod fraudulently induced Mr. Herbert Mensah to resign as a director and to surrender his 33% shareholding ostensibly because Snowrad had not engaged in any business and she had been advised to liquidate the company to avoid paying unnecessary charges. Mr. Mensah did surrender his shares and resigned as a director on 12th June 1991. Shortly thereafter on 22nd June 1991 Mrs. Mcleod commenced her action making these claims on behalf of Snowrad. She subsequently applied for and had Snowrad joined to the action as Co-Plaintiff.

When pressure started mounting on Mrs. Mcleod to make good the draw-down facility she had guaranteed for Marketace, it was explained to her that the failure of Marketace to make the agreed quarterly payment to Clydesdale Bank was due to delayed payments to Marketace for services rendered. This also affected the ability of Marketace to honour agreed payments under a hire purchase agreement with Automotive Technical Services (ATS). Marketace?s cashflow problems were compounded by the seizure of its vehicles by Customs Excise and Preventive Services (CEPS) on the mistaken belief that they were part of the assets of International Tobacco Ghana Ltd. (ITG).

Prior to filing the writ in court, Mrs. Mcleod?s solicitors sent a written proposal for settlement of her claims to Marketace who decided to consider it on the understanding that Mrs. Mcleod does not draw Marketace into court and that any repayments agreed upon would have to be linked to the performance of Marketace. Mrs. Mcleod unfortunately made adverse comments directly to ATS and other major creditors whereupon ATS seized Marketace?s four tractor heads and consequently Marketace ceased operations.

The statement of claim filed in court on 13th February 1992 on behalf of Snowrad (Co?Plaintiff) provided in paragraph 3 as follows:

?Of the ?136.070.00 claimed by the Plaintiff in her writ of summons and Statement of Claim herein as subsequently amended, ?76,150.00 is in fact owed to the co-plaintiff as per the following particulars:

1. In or about October 1989, the Plaintiff raised a loan of ?60,000.00 secured by a mortgage on her own house for the Co-Plaintiff to give to the 1st Defendant through the 1st Defendant?s U.K. account, a loan of ?51,900.00 which was urgently required by the 1st Defendant Company.

2. The said loan of ?51,900.00 was to be repaid by agreed instalments with interest as agreed.

3. ?35,000.00 out of he said sum of ?51,900.00 was to be a short-term loan payable by October 1990 at an interest rate of 20% per annum and such interest which has accumulated to ?5,250.00 has not been paid and the 1st Defendant is still liable to pay this to the Co-plaintiff.

4. The balance of ?19,000.00 after the deduction of the two sums of ?51,900.00 and ?5,250.00 from the ?76,150.00 owed to the Co-plaintiff is made up of Management fees agreed to be paid to the Co-plaintiff by the 1st Defendant which have been due since June 1989 and have not been paid by the 1st Defendant.?

Quite clearly there is no claim made by Snowrad against Mr. Herbert Mensah (who is the 2nd Defendant in the suit).

With respect to Mrs. Mcleod herself, the Amended Statement of claim filed on her behalf on 22nd January 1992 provided in paragraph 4 as follows:

?Between May 1989 and April 1991, the Plaintiff and Snowrad Limited of 45, Sterndale Road, London W14 OHT, England, at the request of the 2nd Defendant acting for and on behalf of himself and the 1st Defendant, granted to the Defendants a number of loans and became entitled to the payment of interest on such loans and to management fees and also to the refund of commissions charged on the sale of shares to pay off overdraft raised for the 1st Defendant, and of capital gains tax liability incurred and discharged in the sale of the said shares and further the Plaintiff purchased goods amounting to ?1,034.00 at the request, and for and on behalf, of the 2nd Defendant thus resulting in a total indebtedness of the Defendants in the sum of ?136,070.00 to the Plaintiff and Snowrad Limited.??

Thus the only direct claim by Mrs. Mcleod against Mr. Mensah is the sum of ?1034. Mr. Mensah?s defence that he paid ?4,000.00 to clear the debt was not denied in the reply filed on behalf of Mrs. Mcleod. Indeed she further admitted receiving the payment under cross-examination but tried to rationalize that the payment was meant for something else.

Hearing in the suit started on October 25, 1992 and P.W.I, Fiona Mcleod (daughter of Mrs. Mcleod) was allowed to mount the witness box out-of-turn. She completed her evidence on 26th October 1992 and Mrs. Mcleod began giving her evidence-in-chief the same day. On the return date of 4th November 1992 Mrs. Mcleod informed the court that she was no longer willing to continue her evidence and that rather she would prefer a reference of the matter to arbitration under a named sole arbitrator, Mr. Ben Forjoe.

Although Mr. Mensah was opposed to the request, he eventually agreed to do so on terms which were incorporated in an Arbitration Agreement dated 3rd June 1993. The Arbitration Agreement was adopted by the Court on 7th June 1993. There was no forward movement in the arbitration process until Mr. Mensah?s solicitor was notified of a hearing fixed for 21st March 2001 before Justice Ofoe in the Accra High Court. Thus for good eight (8) years nothing happened in this case. Before Justice Ofoe, a number of issues were brought to his notice by solicitors acting for Mr. Mensah, namely, that Mr. Mensah was not in the jurisdiction, that there was no legal representation for Marketace, that there was a pending application for security for costs, that in any event there was no right in the Plaintiff to continue the action in court by reason of the Arbitration Agreement and if he was still minded to go on inspite of all these outstanding matters then there was an automatic stay of proceedings after Mrs. Mcleod had finished her evidence to enable Mr. Mensah pursue his appeal to have his name struck out of the suit. None of these issues was heeded to by the judge. The hearing continued on 27th, 28th and 29th March 2001. On 29th March 2001 the hearing was adjourned to enable Mrs. Mcleod to apply for amendment to introduce a new matter, allegedly that she infact spent ?23,000.00 on Mr. Mensah and not ?1034 as she had claimed. It has taken her eight (8) years to remember this. She went away to England. The amendment application never materialized!

Upon her return, hearing resumed on 15th, 16th, 22nd, 23rd, 24th and 30th May 2001 when Mrs. Mcleod closed her case. Counsel reminded the court that Mr. Mensah was away on official business with Asante Kotoko in South Africa and so hearing was fixed for 18th and 19th June 2001. Mr. Mensah had not returned by that date so counsel requested further adjournments to 3rd, 10th and 23rd July 2001. Mr. Mensah eventually appeared in court on 24th July 2001 but the judge closed Mr. Mensah?s case without him testifying in the absence of his lawyer under very bizarre circumstances.

Counsel for Mr. Mensah immediately filed an application to set aside the judge?s order but the application was not taken until the courts went on recess at the end of July 2001. Meanwhile the judge was transferred to Tema but over a year later this matter came on for hearing in the vacation before the same judge in Accra. Both counsel for Mr. Mensah and Mr. Mensah himself were out of the jurisdiction. Consequently, after failing to attend two other sittings in the vacation (because they were still out of the jurisdiction) the court adjourned the suit to November 26, 2002 for judgment.

On November 26, 2002 judgment was entered against Mr. Mensah for the full amount of ?136,070.00 plus interest. This default judgment was said to be jointly and severally against Mr. Mensah and Marketace. Marketace of course has ceased operation and was not represented at the trial and therefore what it meant was that the full judgment will be enforced against only Mr. Mensah. The entry of judgment served on Mr. Mensah put the final figure at ?356,503.40 with cost of ?18,000,000.00

Since the judgment was given, solicitors for Mr. Mensah have tried to set aside the default judgment so that Mr. Mensah?s side can be heard to no avail. There is now an appeal pending against the refusal to set aside the default judgment.

It is this default judgment that bailiffs (with the active direction of solicitors for Mrs. Mcleod) have been trying to enforce. They first besieged the building at Nyaniba Estates, Osu in similar fashion with armed guards on January 22, 2006. On that occasion they were shown documentation to the effect that the building was not owned by Mr. Mensah. They went away with two (2) Ford trucks which also did not belong to Mr. Mensah. A notice of claim for return of the assets taken has been filed in court. Counsel for the owner of the property, Mr. Otoo, further wrote to the Chief Bailiff attaching all documentation relating to the ownership of the property and its contents to demonstrate that Mr. Mensah did not own any of the items.

It came as a big surprise to Mr. Mensah and counsel therefore when they were informed that the bailiffs and armed policeman numbering about 30 had struck again. No doubt, the recent launch of the Nokia Service Center at the newly-named Classic House must have been what baited them to strike a second time. The Nokia Center contains very sophiscated and expensive equipment provided by Nokia. It is not owned by Mr. Mensah and try as they did, thankfully the bailiffs and armed police did not get access to these equipments. Ghana would have been the loser for it as the center is the first of its kind in West Africa and there would have been no market for the equipments in Ghana anyway.

The manner of the execution was clearly intended to embarrass Mr. Mensah and not so much to take anything of substance. The bailiffs already knew that the property did not belong to Mr. Mensah but nevertheless proceeded to dismantle air-conditioners, including even the metal stands. Curiously most of the air-conditioners that were removed were just the outside units which cannot be sold separately.

Furthermore, the bailiff said they had attached the house on their first visit. If this is so, what was the need to come back to dismantle items attached to the house. Surely, the action of 27th April 2006 was a gross abuse of the judicial process and the appropriate redress will be applied for.

The above are the facts of this case and a little diligence on the part of your reporter would have informed him that Mr. Mensah does not own Marketace Limited, he does not owe Mrs. Mcleod ?356,000.00 or any other amount, he does not own the Classic House and he does not own a ?customized cross-country Ford Navigator? if at all there is such a car. Interestingly at page 4 of the same issue of the Ghanaian Times which is the subject matter of the instant complaint there is a story under the headline ?courts urged to go easy on journalists? with a picture of Professor Kwame Karikari, Mr. Isaac Andoh and Mrs. Ajoa Yeboa Afari, editor of the Ghanaian Times lamenting the heavy fines imposed on journalists by the Courts. Surely, if journalists like your reporter continue to approach their work in such lackadaisical and reckless manner which results in injury to the hard-earned reputation of citizens they cannot expect indulgence from the courts.

I hope that the Ghanaian Times will take a cue from the sentiments expressed by your own editor in the said page 4 story and do the honourable thing.

Yours faithfully,

Philip Addison
Solicitor for Herbert Mensah