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

IN THE SUPERIOR COURT OF JUDICATURE IN THE COURT OF APPEAL ACCRA CORAM: HENRY KWOFIE JA (PRESIDING) ANTHONY OPPONG JA RICHARD ADJEI-FRIMPONG JA SUIT NO. H1/96/2022 DATE: 19TH JANUARY, 2023 CONFRASILVAS GHANA LIMITED ..... .... APLPLICANT/APPELLANT VRS 1. MABANI SEVEN COMPANY LIMITED .... RESPONDENT/RESPONDENT 2. PROFICA LIMITED 3. MAN ENTERPRISE GHANA LIMITED ..... DEFETS/JUDGMENT/ DEBTORS 1. INTERNATIONAL FINANCE CORPORATION 2. NEDERLANDSE FINANCIERINGS MAATSCAPPIJ VOOR ONTWIKKELINGSLANDEN N. V 3. THE OPEC FUND FOR INTERNATIONAL ..... APPLICANTS/APPELLANTS 1 J U D G M E N T RICHARD ADJEI-FRIMPONG JA: This appeal raises an issue of considerable commercial and corporate law importance. In the main, it turns on who, between a secured creditor under a debenture and an execution creditor of a judgment must have priority over funds standing to the credit of the debtor company. Does the nature of the charge or security and also the fact of its registration ma>er to the determination? At the court below, the learned judge found for the execution creditor. In the strength of her conviction, she refused an application brought before her to set aside a garnishee order absolute made in favour of the execution creditor. The secured creditor disagrees and is before us on appeal. In brief, the events culminating in the dispute unfolded this way. The applicant/ appellant (hereinafter ‘appellant’) in 2015 advanced two facilities referred to as Hotel Loan Facility and Mall Loan Facility in the aggregate sum of US$ 57,500,000 to the judgment debtor company. The facilities were secured by a debenture dated 9th December 2016. The Guaranty Trust Bank Limited (GT Bank) was appointed the security agents of the appellants. The debtor-company assigned to GT Bank (for the appellant’s benefit), by way of first priority security, its rights, title and interest in its project documents and receivables including insurance proceeds. At the material time, the respondent/respondent (hereinafter ‘respondent’) had commenced an action in the Court below against the debtor-company and 2 others for the recovery of monies said to have arisen from the detention and use of certain 2 construction equipment belonging to the respondent. The court below on 10th March 2020 delivered judgment in favour of the respondent. In the execution of the judgment, the respondent commenced garnishee proceedings by obtaining an order nisi against a number of companies including Vanguard Assurance Company Limited (Vanguard). On 18th September, 2020, the court below conducted the garnishee proceedings and examined the Head of the legal Department of Vanguard. At the close of his examination and discharge, a garnishee order absolute was made for the payment of the sum of US$ 724,743.13 with costs fixed at GHC30,000.00. It remains the appellant’s contention that, at the time of the examination of its head of legal, its prior security interest contained in the debenture had been brought to the a>ention of Vanguard by a le>er from GT Bank dated 15th September 2020. However, the head of legal “failed, refused or neglected” to bring the fact to the a>ention of the court below. Thus, the court was denied knowledge of the existence of the security in making the order absolute. Not only that, a representative of GT Bank was present at the garnishee proceedings, and could have drawn the court’s a>ention to the existence of the prior security interest. However, as it would transpire at the proceedings, upon the discharge of the head of legal of Vanguard and on making the order absolute, no further witness was examined by the court. On account of the foregoing, the appellant brought an application before the court below seeking an order to set aside the garnishee order absolute. The learned trial however refused the application. By way of highlights, the learned judge was not satisfied on the evidence that the Head of legal of Vanguard had notice of the charge at the time he was examined in the 3 garnishee proceedings. The contention therefore that he failed, refused or neglected to bring the fact to the a>ention of the court was rejected. Further, contrary to appellant’s position, the learned judge thought that the funds in question were a judgment debt and not insurance proceeds. In any event, she took the view that the proceeds were a floating charge that had not crystalized in law. She held that by virtue of the a>achment in execution, the respondent had priority over the appellant. Consequently, she declined se>ing aside the garnishee order absolute holding same to have been properly granted. In this court, the appellant’s grounds of appeal are as follows: 1. The High Court judge erred in finding that Appellants failed to prove that the 15th September 2020 LeAer from GT Bank notifying the Garnishee of the Appellants prior secured interest over the insurance proceeds was received before the Garnishee Order Absolute was granted. 2. The High Court judge erred in finding that the Appellants did not have priority over the insurance proceeds as at 18th September 2020 because their security over the proceeds had not yet crystallized as at that date. 3. The High Court erred in finding that the Garnishee Order Absolute was properly granted. 4. The High Court judge erred in dismissing the Appellant’s application to set aside the Garnishee Order Absolute dated 18th September 2020. We noted at the beginning of this discourse that the issue of priority is at the heart of this dispute. Whether or not the garnishee order absolute was properly granted and indeed whether the dismissal of the appellant’s application was proper as contained in 4 grounds 3 and 4, largely depend on the fundamental question of priority under the ground 2. For convenience therefore, we propose to consider grounds 2, 3 and 4 together. We shall however a>end first to ground 1 which impeaches the trial judge’s finding that the 15th September 2020 le>er from GT Bank notifying the Vanguard of the appellant’s prior secured interest was not received before the order absolute was granted. It is apparent that by the said ground, the appellant requests of us to interfere with a finding made by the learned trial judge. We can accede to the request if on our analysis of the record, the finding was perverse by reason of any of the known grounds such as that, the trial court took into account ma>ers which were irrelevant in law or excluded ma>ers which were critically necessary for consideration or came to conclusion which no court properly instructing itself would have reached or that the court’s finding was not a proper inference drawn from the facts. See AZAGBA & ORS VRS NEGOV & ORS (1964) GLR 450; FOFIE VRS ZANYO (1992)2 GLR 475. The le>er of 15th September 2020 which is at the center of controversy here was marked as Exhibit FNA 7. In it, reference is made to the Facility documents and the debenture together with the assignment to GT Bank. (Exhibits FNA 1 and FNA 2). On the issue at bar, the following paragraphs thereof are worth reproducing to ease reference. “4. Under the debenture, MSCL [the debtor] assigned, to the Security Agent (for the benefit of the Lenders), all its rights, title and interest in, and to, all monies payable by the insurers to MSCL under the Bonds and all other benefits and rights thereunder (the Insurance Proceeds as security for its obligations towards the Lenders. 5 5. The Garnishee Order was issued to us as well (in our capacity as MSCL’s Bank). At the court hearing on 18th September 2020, we will ask the High Court to discharge the Garnishee Order by confirming to the High Court that the accounts of MSCL and the Insurance Proceeds are subject to security in favour of the Security Agent (on behalf of the Lenders) under the Debenture. 6. Please acknowledge receipt of this notice to act in accordance with the instructions contained herein and on the terms of the form of acknowledgement set out below and send such acknowledgement to the address below: Guarantee Trust Bank (Ghana) Limited 25 A, Castle Road, Ambassadorial Area, Ridge, Accra, Ghana…” Noticeably, the front page of Exhibit FNA 7 bears a stamp containing the inscription “VANGUARD ASSURANCE CO. LTD ACCRA. Beneath the stamp, appears a handwri>en “Received” beneath which a date “16/09/2000” also handwri>en is indicated. This is the basis of the appellant’s claim that Vanguard received the Exhibit FNA 7 yet, the head of its legal department failed, refused or neglected to bring it to the a>ention of the trial court in the garnishee proceedings. The affidavit evidence put forth by the appellant was contained in the following paragraphs of the affidavit of one Frank Nimako Akowuah. [page 9 Vol 1, ROA]. “12. That by a leAer dated 15th September 2020, GT Bank (acting as Security Agent for the appellant) notified the Head of the Legal Department of Vanguard Assurance Company Limited of Exhibits FNA 1, FNA 2 and 6 FNA 6 and the garnishee proceedings scheduled for 18th September 2020 (a copy of the 15th September 2020 leAer is aAached and marked as Exhibit FNA 7). 13. That by Exhibit FNA 7, GT Bank further notified Vanguard Assurance Company Limited that the 1st defendant’s proceeds had been assigned to GT Bank pursuant to Exhibit FNA1 and that it will bring Exhibit FNA 2 to this Honourable Court’s aAention and request that the court discharges the Garnishee. 14. That Vanguard Assurance Company Limited acknowledged receipt of Exhibit FNA 7 on 16th September by stamping as received. 15. That on 18th September 2020, this Honourable Court conducted the garnishee proceedings and examined the Head of Legal Department of Vanguard Assurance Company Limited and even though Exhibit FNA 2 had been brought to the aAention of Vanguard Assurance Company Limited, the Head of its legal Department failed, refused or neglected to bring Exhibit FNA 2 to the aAention of the Honourable Court. (a copy of the record of proceedings dated 18th September is aAached and marked Exhibit FNA 8.) 16. That Exhibit FNA 8 shows that although GT Bank’s representative was in court on 18th September 2020 for the hearing of the garnishee proceedings, that representative was not examined by the Honourable Court as the plaintiff’s lawyer requested that the remaining garnishees be discharged. 17. That I am informed by Daniel Ofori-Amoah, a GT Bank representative, and I verily believe the same to be true that Miriam Sarpong aAempted to 7 bring Exhibits FNA 2 and the status of the security over the assets of the 1st defendant to this Hounourable Court’s notice, however they were not heard because the GT bank had been discharged.” The respondent unequivocally denied paragraphs 12, 13 and 14 of the above in an amended affidavit in opposition of Julius Nketiah. [page 63-75 Vol 2 ROA]. Save admi>ing the garnishee proceedings, paragraph 15 was denied. The paragraphs 16 and 17 were also denied. It was stated in further reaction that the trial judge rightfully discharged GT Bank and that there was no need to examine the representative. In addition, the representative of GT Bank had failed to file any process and had not also raised any objection during the proceedings. He therefore, opines the respondent, must have been satisfied with the examination of the Head of Legal of Vanguard. To state for the record, the appellant filed a supplementary affidavit on 23rd June 2020 to which were a>ached Exhibits FNA 5A and 5B series. [Page 130-175, Vol 2 ROA] The ma>ers deposed to did not touch on the issue of Exhibit FNA 7. The appellant’s further supplementary affidavit filed on 30th June 2020 was rejected by the court by its ruling dated 27th July 2021. [page 247-249, VOL 2, ROA] The appellant assumed the onus of proof of the receipt of Exhibit FNA 7 by Vanguard and also that the Head of its legal failed, refused or neglected to bring it to the a>ention of the trial judge. The legal burden rests upon the party who has made a particular allegation, the substantiation of which is essential to his case. It was thus required of the appellant to adduce evidence that meets the test of sufficiency to convince the court that on all the evidence, the existence of the fact alleged was more probable than its non- existence. 8 The trial judge rightly allocated the burden upon the appellant in addressing the two issues bordering on Exhibit FNA7. i.e., whether or not Exhibit FNA7 was received by the Garnishee (Vanguard Assurance Company Limited) prior to the making of the garnishee order absolute and whether the head of legal of Vanguard failed, refused or neglected to bring to the a>ention of the court, the existence of Exhibit FNA7. She stated: “In respect of these two (2) issues, Applicant’s case is that GT Bank informed the Head of Legal of the Garnishee by a leAer dated 15th September, 2020 (Exhibit FNA 7) that the judgment Debtor had assigned its proceeds to them through their security agent (GT Bank). That the Garnishee acknowledged receipt of the said Exhibit FNA7 which was duly stamped. This allegation was however denied by the Respondent in its amended affidavit in opposition. Applicant therefore bears the burden of proof to establish that the Garnishee was indeed notified of the said Exhibit FNA 7 which was duly acknowledged by its officer in charge and duly stamped.” She then observed: “With the receipt of the said Exhibit FNA7, its acknowledgment and stamping, by officers of the Garnishee in issue, Applicants ought to have led credible evidence to confirm same to the court. Applicant’s deponent, one Frank Nimako Akowuah who describes himself as a Lawyer and partner at the Applicant’s Solicitors firm is not an officer of the Garnishee and so cannot be deemed to have personal knowledge of the stamping of the said Exhibit by the Garnishee. The affidavit in support that he deposed did not indicate the name of the officer of the Garnishee who allegedly received the said Exhibit FNA7. A look at the page 3 of Exhibit 9 FNA7 indicates that the Garnishee was to execute an acknowledgement to confirm receipt of the said Exhibit. There is however no indication on the said Exhibit that this was done as it has been left blank. The fact that the officer of the Garnishee who is alleged to have received the said Exhibit FNA7 remains unknown in addition to the failure to execute the said acknowledgement lends credence to the conclusion that the said Exhibit FNA7 was never brought to the aAention of the Garnishee…In the light of all these omissions by Applicants to prove by admissible and credible evidence that Exhibit FNA7 was delivered to and received by the Garnishee Officer who acknowledged receipt of same by stamping it and executing the acknowledgement aAached, the Court is not convinced with the requisite degree of proof that the said Exhibit FNA7 was brought to the Garnishee’s notice” On the second issue of whether the head of legal of Vanguard failed, refused or neglected to bring to the a>ention of the court, the existence of Exhibit FNA7, the view the trial judge took was essentially that when the head of legal testified before her, it became clear that Exhibit FNA7 had not been brought to his a>ention. This was because the witness stated that he had no objection to the funds held with Vanguard on behalf of debtor being paid to the respondent. The learned judge further reasoned that as head of legal of the Garnishee and by extension an officer of the court, had Exhibit FAN7 had in fact been brought to his notice at the time of the garnishee proceedings, he would have drawn the court’s a>ention to it. She was thus not satisfied that the head of legal of Vanguard failed, refused or neglected to bring to a>ention, the existence of Exhibit FNA7. 10 Learned Counsel for the appellant challenges the conclusions of the learned trial judge in particular her finding that the appellants failed to prove that Exhibit FNA7 was brought to the notice of Vanguard. This indeed is the crux of the first ground of appeal. Counsel states that the appellant adduced sufficient evidence to prove that Exhibit FNA7 was received and acknowledged by Vanguard. He contends that by the affidavit evidence of the deponent Frank Nimako Akowuah, some evidence had been adduced by the appellant such that the evidential burden shifted onto the respondent to dislodge. However, instead of adducing evidence in rebu>al, all the respondent could do by the affidavit in opposition, was to barely deny the affidavit evidence of the appellant’s deponent. Counsel submits that the deposition by the deponent together with the a>ached Exhibit FNA7 was as effective as evidence given in a witness box unlike pleadings which would require further adduction of evidence to establish a fact. Therefore, when the respondent merely denied the deposition without any evidence, the balance of probabilities tilted in favour of the appellant. BANAHENE VRS ADINKRA & ORS (1976)1 GLR 346; RE OKINE (DECD); DODOO & ANOR VRS OKINE & ORS (2003-2005)1 GLR 630 cited. Additionally, Counsel posits that by the denial that Vanguard received and stamped Exhibit FNA7, what the respondent was alleging was that the stamp was a forgery. That being the case, the respondent assumed the onus of proving the allegation of forgery beyond reasonable doubt in accordance with the provision in Section 13(1) of the Evidence Act (NRCD 323). This, the respondent could not have done by a bare denial without a scintilla of evidence. 11 For the respondent it is submi>ed that the appellant failed to adduce credible evidence to prove that Exhibit FNA7 was received and acknowledged by the Vanguard. Counsel argues that by the denial of the deposition of the appellant, the authenticity of the stamp on Exhibit FNA7 was put in issue. The appellant was therefore obliged to adduce evidence to establish that the stamp emanated from Vanguard and the document was actually received by it. In agreement with the learned trial judge, Counsel contends that the deponent of the appellant’s affidavit, a lawyer and partner in the firm of Solicitors of the appellant had no personal knowledge of the official stamp of Vanguard. He was not shown to be the one who delivered Exhibit FNA7 to Vanguard neither is there evidence to identify the one supposed to have received the document and stamped it. The deposition by such a person could not have been accepted as proof of the allegation. Counsel refers to Sections 60 and 139 of the Evidence Act (NRCD 323) and the case SELORMEY VRS THE REPUBLIC (2001-2002)1 GLR 144 on the requirement of personal knowledge of a witness to ma>ers he testifies to including showing that the authenticity or identity of a document tendered was what he or the party calling him to tender claimed. In the words of Counsel: “We submit that with the stamp and writings on Exhibit FNA7 being in issue and the deponent of the Appellants not having personal knowledge of the stamp of the Garnishee and also the writings, the Appellants ought to have led further evidence to establish the genuineness of the stamp and writings and thus proven that indeed Exhibit FNA7 was received by the Garnishee.” The above submission by Counsel for the respondent misses one critical feature of affidavit evidence. As generally understood, an affidavit is a document containing 12 statement of facts which the deponent swears to be true to the best of his knowledge. It is a documentary evidence in itself and be>er so when it has a>ached to it an exhibit. We take the view that affidavit evidence is unlike averments in pleadings the denial of which generates a fact in issue. In law, affidavit evidence is evidence just like viva voce evidence. We are persuaded on this point by the following statement of the learned author IAN DENNIS, “The Law of Evidence” 4th ed., (Sweet & Maxwell) P. 504-505: “Testimony is the evidence of a witness, normally given on oath. The sworn statements of the witness are offered to the court as evidence of the facts stated, in other words as statements that are true because the witness says they are. The term is often used to refer only to oral testimony in court but in many types of civil proceeding a witness may give testimony in the form of an affidavit. This is a formal wriAen statement made on oath, for the purpose of being used as evidence in the proceedings. Affidavits are thus distinguished from statements in documents not made on oath, and from transcripts of statements made on oath in other proceedings. Affidavits normally constitute the only evidence in interlocutory proceedings, proceedings for judicial review and certain other proceedings. Statute occasionally makes provision for the use of affidavits in criminal proceedings.” [Emphasis added] To the same effect, the Nigerian Court of appeal in SOY AGENCIES VRS METALUM LTD (1991)3 N. W. L. R. (Pt. 177) 35 at 42 noted thus; “Affidavit evidence is documentary evidence which is prima facie admissible in law like oral evidence in court.” 13 In this jurisdiction, it is se>led practice that in any cause begun by originating notice or in some cases in regular trials or generally in interlocutory applications, evidence may be given by affidavit. An affidavit meant for use in such cases stands as evidence. Whether or not a particular affidavit evidence meets the test of sufficiency is determinable by the trial court in accordance with the ordinary rules of evidence. In this sense, we agree with Learned Counsel for the appellant that the depositions contained in paragraphs 12 to 17 of the affidavit of Frank Nimako Akowuah including the a>ached Exhibit FNA7 with the stamp and date stood as evidence. On our reading of the reasoning of the trial judge, she seems not to have considered the depositions of Frank Nimako Akowuah as evidence. Apparently, she considered them as a collection of statements which required adduction of evidence to prove. We believe it was this consideration that led her to conclude that the appellant did not adduce any credible evidence to prove that Exhibit FNA7 was brought to the notice of Vanguard. That, in our considered view was erroneous. According to PHIPSON ON EVIDENCE, the evidential burden may be satisfied by any species of evidence sufficient to raise a prima facie case. (12th ed., para 10) and we are satisfied that the affidavit evidence contained in paragraphs 12-17 with the Exhibits a>ached including Exhibit FNA7 met this threshold. And since the evidential burden would shift onto the respondent who must lose on the issue if no evidence was led by it, the finding against the appellant was in error. It may well be that as lawyer with the Solicitors of the appellants the deponent did not work with Vanguard and had no personal knowledge of how Exhibit FNA7 was received and stamped. It may well also be that the acknowledgement a>ached to Exhibit FNA7 was not completed and returned. Nonetheless, Frank Nimako Akowuah 14 made the deposition on the authority of the appellant to swear to ma>ers which came to his knowledge in the course of his duties as a lawyer. For purposes of adducing affidavit evidence, this was sufficient to shift the evidential burden onto the respondent to adduce evidence in rebu>al. We are convinced by the appellant’s argument that by the bare denial of the respondent, the evidence left was the depositions by Frank Nimako Akowuah which though not beyond doubts, were capable of tilting the balance of probabilities in favour of the appellant. This is more so when by the denial of the respondent, an allegation of forgery was imputed of the stamp as well as the writing “Received” and the date. Such posturing of the respondent should have excited something more than a stark denial. On the whole we think that there is good ground to reverse the finding of the trial judge that Exhibit FNA7 was not brought to the notice of Vanguard. We substitute a finding that Exhibit FNA7 was brought to the notice of Vanguard. We are led by this to another limb of the appellant’s argument which as we comprehend goes thus, even if Exhibit FNA7 was not brought to the notice of Vanguard, (a position strongly resisted), the debenture itself, Exhibit FNA2 had been registered both under the Companies Act (179) and the Borrowers and Lenders Act (Act 773) which steps constituted notices to the world, hence binding on Vanguard and the High Court itself. Therefore, once the fact of registration and its effect were brought to the a>ention of the trial court, it ought to have granted the application to set aside the Garnishee Order Absolute. Counsel refers mainly to Section 118 of Act 179 and the decision of this court in the unreported case of DR TONY ANTWI MENSAH VRS ATHENA FOODS COMPANY 15 LTD & AGRICULTURAL DEVELOPMENT BANK (Civil Appeal No. H1/190/2014, 12th March 2015, CA). On this authority Counsel submits: “Given that 1st defendant used its assets as security for the loans from Appellants and which security Appellants duly registered with the Collateral Registry and Registrar General’s Department, The Head of Legal of Vanguard by the said registration is deemed to know of its existence even in the absence of Exhibit FNA7. Further as this notice is to all including the court, the High Court judge, she [sic] was legally bound to set aside the Garnishee Order Absolute when her aAention was brought to the error she had made in ordering the payment of the insurance proceeds subject to the charge, and thus erred with her failure to do so.” The trial judge’s position on the above which was shaped by the view of Counsel for the respondent was that registration of a charge did not determine priority. She quoted the provision in Section 121 of the Companies Act (Act 992) and posited: “In summary, registration of a charge gives validity to the charge created and also serves as notice of the existence that a charge has been created. However, it does not confer priority.” Obviously, the learned trial judge misconceived the point the appellant put across. The appellant, from a glance of the passage above did not say that registration conferred priority. Far from suggesting that registration is not significant to the determination of priority, all we understand the appellant as saying is that registration by law constituted notice to the world. Therefore, assuming Exhibit FNA7 was not brought to the a>ention of Vanguard, by virtue of the effect of the registration which is notice to the world, the trial judge when subsequently prompted ought to have paid due recognition and set aside the order absolute. Any understanding apart from this is out of context. 16 We appreciate the force in the appellant’s argument and save one reservation which we point out immediately, it makes a good impression on us. We disagree that registration of a charge with the collateral registry under the Borrowers and Lenders Act (Act 773) the applicable law at the time constituted notice to the world. The Act made no such provision. Perhaps the law maker in Act 773 contemplated a registration under the Companies Act (Act 179) which had the notice effect and hence provided rather that registration with the Collateral Registry shall be in addition to the registration requirement with the Registrar of Companies under Section 107 of Act 179. In any event, what Act 773 provided for was the ‘effect of non-registration’ under Section 25(3) which stipulated: “(3) A charge which is not registered in accordance with subsection (1) is of no effect as security for a borrower’s obligations for repayment of the money secured and the money secured shall immediately become payable despite any provision to the contrary in any contract.” Short of the foregoing we wholly agree that registration of a charge under Section 107 of Act 179 constituted notice to the world in terms of the provision under Section 118 of the Act. It states: “The registration of any particulars under the foregoing sections in this Part of this Code shall constitute actual notice of such particulars, but not of the contents of any document referred to therein or delivered therewith, to all persons and for all purposes as from the date of registration.” Professor Gower in the Final report of his Inquiry into the Working and Administration of Company Law in Ghana commented on the above provision as follows: 17 “Although, as I shall later indicate, I do not recommend that filing of documents at the Companies Registry should constitute notice (see section 141 below), in this particular case it is clearly appropriate that registration should constitute notice of the particulars registered. The rule laid down in this section is in accordance with the existing English common law: see Wilson v. Kelland (20102 Ch. 306.” Writing on Registration of Particulars of Charges in his seminal work, COMPANY LAW IN GHANA (3rd ed., Avant Associates Ltd. page 293) Professor Philip Ebo Bondzi Simpson observes: “The purpose of registration is to provide notice to the world at large to enable them to be ware in their dealings with a company so that they are not misled but may take informed decisions. If the nature of the charge on the company’s property excludes it from being generally available to members of the unsuspecting public because it already is in the possession of the charge, it becomes unnecessary to register it.” Learned Counsel for the appellant referred us to this court’s decision in the unreported case of DR TONY ANTWI MENSAH VRS ATHENA FOODS CO LTD & ANOR Civil Appeal No. H1/190/2014 (12th March 2015). The court in that case was addressing two main issues one of which, material to our discourse, was the effect of registering a mortgage (created over plant and machinery) with the Registrar of companies. The court speaking through Marful Sau J. A inter alia held: “With regards to the chaAels, that is the plant, equipment and machinery, since they are movables and their mortgage did not affect land, all the appellant needed 18 to do was to register the mortgage as a charge with the Registrar of Companies. This appellant did and as such had legal charge or security in the plant, equipment and machinery with notice to the whole world including the respondent therein. I therefore hold that the appellant has interest in the movable properties and the said properties must be excluded and discharged from aAachment under the writ of execution levied by the respondent.” As one can see, the court was not addressing the issue of whether registration constituted notice to the world. The point was therefore an obiter. Nonetheless, by reason of our preceding observation on the point, we adopt the position as reflective of the true legal position and hold that registration of a charge with the registrar of companies constituted notice to the world. We entertain no doubt that the appellant registered the debenture with the Registrar of Companies on 19th December 2016. If any doubt exists, the appellant’s Exhibit FNA4 as well as a search result from the Registrar of Companies dated 30th September 2020 part of the respondent’s Exhibit JN3 series clear it. We hold that the notice of the registration bound the world. Therefore, when the court’s a>ention was drawn to it whilst dealing with the application to set aside the order absolute, it ought to have recognized its legal effect and acted upon it. Failing to do so occasioned an error to the decision. However, whether or not by the error, the trial judge should have aside the order absolute as the appellant ask of us, is a conclusion to abide our decision on the grounds 2, 3 a n d which we have for the reason given proposed to resolve together. For the foregoing reasons however, we resolve ground 1 in favour of the appellant. At the heart of the three grounds as already pointed out is the determination of who between the appellant and the respondent must have priority over the funds in 19 question. To our minds, the nature of the funds and the charge created thereon are stoutly determinative of the issue of priority. First, were the funds insurance proceeds as contended by the appellant or judgment debt as found by the trial judge in favour of the respondent? Two main reasons informed the trial judge’s decision that the funds were a judgement debt. The first was her reading from the testimony of the Head of Legal of Vanguard contained in the record of the garnishee proceedings (Exhibit FNA8). It was that the respondent in a different suit, had obtained judgment against Vanguard and other insurance companies which debt Vanguard had applied to se>le by instalments hence the funds a>ached were a judgment debt. The second reason was based on her observation from the debenture (Exhibit FNA2) that the entities that took up the insurance policies did not include Vanguard. Learned Counsel for respondents submits before us that the appellant did not adduce evidence of any requirement of the respondent to arrange insurance bonds through the project contractor and that the appellant’s claim founded on insurance proceeds was a departure from its case. Counsel also agrees with the learned trial judge that the funds were a judgment debt. We must confess our difficulty coming to terms with the notion that the funds were a judgment debt. As the name suggests, a judgment debt is a debt either in damages or a form of monetary award pronounced upon by a court of competent jurisdiction. Put differently, it is a debt occasioned by a decree of a court which mandates a person, in this sense, a judgment debtor to se>le. The Black’s Law Dictionary says it is “a debt that is evidenced by a legal judgment or brought about by a successful lawsuit against the debtor.” (8th ed., p.433). Therefore, a judgment debt is what the court has ordered. It 20 cannot be understood to mean what the debtor has in his hands to pay in compliance with the decree. The testimony of the Head of legal of Vanguard in the garnishee proceedings (Exhibit FNA 8) went this way: “Q. Do you know the 1st defendant/judgment/debtor? A Yes Q. Do you have any transaction with it A Yes Q. In what capacity A The 1st defendant obtained judgment against five insurance companies including Vanguard Assurance Company Ltd. which I represent. We came to court with an application to pay the judgment debt by instalments starting from 30th September 2010 and ending on 28th February 2021 of USD 333,333.33. That is the amount we owe them.” The term (judgment debt) properly understood and put within the context of the testimony of the Head of Legal of Vanguard, the judgment debt would be referrable to the sum awarded against Vanguard and not any of the instalments in its hands to pay. Put shortly, none of the instalments was a debt. Logically therefore, the sum ordered by the trial court to be paid under the order absolute was not a debt. We dare ask, how can money to se>le a debt itself be a debt? The trial judge clearly misdescribed the funds. Were the funds insurance proceeds? 21 In the debenture (Exhibit FNA2) clause 1.1 defines “Insurance Proceeds” as: “All claims and moneys received or receivable by the Chargor (whether by way of claims, returns of premia, ex gratia seAlements or otherwise) under, or in connection with, any present or future insurance or reinsurance policies (as set out under Schedule 3 and as otherwise required under the Facilities Agreement) maintained by the Chargor pursuant to the Facilities Agreement and in connection with the Project.” [page 3 of Exhibit FNA2, page 158 ROA] From the above definition, who was the chargor? Under the same clause 1.1 of Exhibit FNA2, the “chargor” refers to the respondent in the following terms: “Mabani Seven Company Limited, a private company limited by shares and incorporated under the laws of the Republic of Ghana with registration number CA-96,587 and whose registered address is at Forewin House, Plot Number 10, Kotei Robertson Street, North Industrial Area, Accra, Ghana (the “chargor”) Under the definition of Insurance proceeds stated above, there is reference to “All claims and monies received or receivable by the Chargor…under, or in connection any present or future insurance or reinsurance policies (as set out under Schedule 3 and as otherwise required under the Facilities Agreement) maintained by the Chargor pursuant to the Facilities Agreement and in connection with the project” Schedule 3 is a table found at page 20 of Exhibit FNA2 (page 175 Vol.1 ROA). Under the column of the insured are the following three entities: The Chargor, (respondent]; MSF 22 Engenharia S. A and Laurus Development Partners. Under the column of the insurers are the following entities: Star Assurance Company Ltd, Metropolitan Insurance Company Limited, Vanguard Assurance Company Limited, Phoenix Insurance Company Limited and Regency Alliance Limited. There were two policies in the schedule, namely, professional indemnity insurance which covered liabilities in relation to business and comprehensive project policy which covered liabilities in relation to construction works and erection items for construction and related third party liability. The Facilities Agreement (Exhibit FNA1) provides for the insurance requirement under Schedule 6. (p.105 107 of Exhibit FNA1, p.115 –117 Vol.1 ROA). To give a gist, the respondent (referred to in the document as the Borrower) was required inter alia to “insure and keep insured, with financially sound and reputable insurers, its assets and business against insurable losses, including the insurances specified in Part 1 of this Schedule 6.” Additional provisions on insurance in Exhibit FNA1 by way of summary included Hotel Advance Payment Bond, Hotel Performance Bond, Mall Advance Payment Bond, Mall Performance Bond and any other bond given by any person, or any le>ers of credit issued concerning the obligations of the Construction Contractor under the Construction Contract between MSF Engenharia SA and the respondent. From the above, it is obvious to us that there was sufficient evidence before the trial court to find that the debt that had arisen from the judgment in the case narrated by the Head of Legal of Vanguard related to insurance claims enforced through that action. It was not by sheer coincidence that the judgment was against five insurance companies according to the account of the Head of Legal of Vanguard. Had the trial judge paused 23 for a brief judicial thought, she would have noticed that the funds were traceable to insurance claims. From all that has been said, we think that the finding that the funds were a judgment debt was palpably erroneous and not supportable by the evidence on record. Contrariwise, it is our finding that the funds subject of the garnishee order absolute were insurance proceeds. We also reject the position of Counsel for the respondent that the appellant did not adduce evidence of any requirement of the respondent to arrange insurance bonds through the project contract. We further reject Counsel’s contention that the appellant’s claim founded on insurance proceeds was not backed by evidence. It emerged common ground that a charge was created on the funds which we have just determined to be insurance proceeds. Even in their debate as to whether the funds were a judgment debt or insurance proceeds, both sides seemed agreed that there was a charge. The point of some divergence was the nature of the charge, fixed or floating and its effect on the rules of priority. In terms of the provision in Section 89(2) of the Companies Act (Act 992) which re- enacts Section 86(2) of the repealed Companies Act (Act 179), debentures may either be secured by a fixed charge on some property of the company or a floating charge over the whole or a specified part of the undertaking and assets of the company, or by both a fixed charge on a property and a floating charge. In the view of the trial judge, the charge created was a floating charge. Her view was based on her reading of Clause 3(d) of Exhibit FNA2, a provision we shall consider in a moment. 24 The respondent devoutly follows the trial judge’s position. In the words of Counsel for the respondent: “My Lords assuming the funds are even insurance proceeds (That which is denied because there is no evidence on record to support same), we submit that the charge created under Exhibit FNA2 in respect of the insurance proceeds is a floating charge…” The reason for Counsel’s viewpoint as we gather, is what may be considered as the appellant’s lack of possession and control of the funds as opposed to the respondent’s authority to access same in the hands of Vanguard without the consent of the appellant or its Credit Agent. Specific instances are cited of payment of USD1,800,000.00 to the judgment debtor by the Garnishee prior to the application to set aside the order absolute and a subsequent payment USD1,000.000.00 in October 2020 without recourse to the appellant and with no evidence of payment to the appellant or its agent. Counsel relies on such cases as AGNEW & ANOR VRS COMMISSIONER OF INLAND REVENUE (2001)1 AC 710 and RE SPECTRUM PLUS LTD; NATIONAL WESTMINSTER BANK PLC VRS SPECTRUM PLUSLTD & ORS (2005)4 ALL ER 209. Both decisions recognize as the major insignia of a floating charge, the chargor’s ability to control and freely deal with the charge without the consent of the chargee. For the appellant, its position on the type of charge created was not clear cut. The central theme of its argument seems to be that whether floating charge or not, the charge was a secured one and as holder, the appellant must have priority over the respondent an unsecured creditor. 25 Section 90 of the Companies Act (Act 992) which re-enacts Section 87 of Act 179 spells out the statutory definition of a floating charge as follows: “90. (1) Subject subsection (2), a floating charge is an equitable charge over the whole or a specified part of the undertaking and assets of the company both present and future. (2) A floating charge does not preclude the company from dealing with the assets of the company until, (a) the security becomes enforceable and the holder of the security pursuant to a power in that behalf in the debenture or the deed securing same, appoints a receiver or manager or enters into possession of those assets; (b) the court appoints a receiver or manager of the assets on the application of the holder; or (c) the company goes into liquidation.” The provisions by and large reflect the English common law position which is captured in the following passage of the learned editors of Halsbury’s Laws of England: “Meaning of ‘floating charge’ and ‘floating security’. The terms ‘floating charge’ and ‘floating security’ mean a charge or security which is not to be put into immediate operation, but is to float so that the company is to be allowed to carry on its business. It contemplates, for example, that book debts may be extinguished by payment. And other book debts may come in and take the place of those which have disappeared. While specific charge is one which without more 26 fastens on ascertained and definite property or property capable of being ascertained and defined. A floating charge moves with the property which it is intended to affect until some event occurs or some act is done which causes it to seAle and fasten on the subject of the charge within its reach and grasp. The language used in the debenture is not conclusive; what is described as a ‘fixed charge’ may nevertheless create a floating charge if on construction, it is a charge on present and future assets which in the ordinary course of business, would be changing from time to time. It is of the essence of a floating charge that it remains dormant until the undertaking ceases to be a going concern, or until the person in whose favour the charge is created intervenes.” (Vol.7 (2), 4th ed., para 1260, p. 943) Invariably, the courts continue to wrestle with the somewhat elusive distinction between fixed and floating charges. Case law defies unanimity in approach to drawing clear lines in various fact situations. For instance in IN RE GE TUNBRIDGE LTD (1965)1 BCLC 34, a charge was held to be floating even though the debenture referred to the charge created as being a fixed charge and imposed restrictions on the sale of the security without the lender’s consent. In RE CIMEX TISSUES LTD (1995)1 BCLC 409 a charge was held to be a fixed charge. The court concluded that the debenture did not allow the borrower to deal with secure assets without the lender’s consent. In the view of the court even if the debenture had given the borrower some licence to deal with the assets, this would not have been inconsistent with the charge being a fixed charge. 27 By far the classic statement of the indicia of floating charge is the oft-cited passage in the judgment of ROMER L. J in RE YORHSHIRE WOOLCOMBERS ASSOCIATION LTD (1903)2 CH 284: “I certainly think that if a charge has the three characteristics that I am about mention, it is a floating charge. (1) If it is a charge on a class of assets of a company present and future; (2) if that class of assets is one which, in the ordinary course of the business of the company, would be changing from time to time; and (3) if you find that by the charge it is contemplated that, until some further step is taken by or on behalf of those interested in the charge, the company may carry on its business in the ordinary way as far as concerns the particular class of assets I am dealing with.” Of the three characteristics identified by ROMER L. J, whether the borrower is free to continue to deal with the assets without the consent of the lender is often considered the most crucial test. A tall list of cases would exemplify this observation. We will only refer to the view of HOFFMAN J in RE BRIGHTLIFE LTD (1986)3 ALL ER 673 at 677 which was relied on by LORD MILLET in AGNEW VRS IRC (supra). What the learned judge found as the significant feature of the debenture in the case was that the company was free to collect its debts and pay the proceeds to its bank account. He went on: “Once in the account, they would be outside the charge over debts and at the free disposal of the company. In my judgement a right to deal in this way with the charged assets for its own account is a badge of a floating charge and is inconsistent with a fixed charge.” 28 See RE SPECTRUM PLUS LTD NATIONAL WESTMINSTER BANK PLC VRS SPECTRUM PLUS LTD & ORS (Supra). In Exhibit FNA2, the charge is created as follows: “CREATION OF THE SECURITY The Chargor, as continuing security for the payment of the Secured Liabilities, as the legal and beneficial owner of the relevant charged assets, and in favour of the Security Agent (for the benefit of each of the Lenders) hereby: (a) assigns, by way of first priority security, its present and future rights, title and interest in, under and to, the Project Documents and Receivables; (b) assigns, by way of first priority security, its present and future rights, title and interest in, under and to, all the Insurance Proceeds; (c) charges, by way of first priority fixed charge, its present and future rights, title and interest in, under, and to the Project Accounts and the Deposits; and (d) charges, by way of first priority floating charge, its present and future rights, title and interest in, under and to all other assets of the Chargor not specifically charged under Clause 3(a) to Clause 3(c) above.” 29 From what we gather from the authorities cited, the language used in the debenture is not a conclusive determining factor and there is hardly one clear touchstone that serves to distinguish a fixed from a floating charge. The preponderance of the authorities however points to the test of whether the borrower is free to control and continue to deal with the charged assets without the lender’s consent as most crucial. We are amenably guided by this test. Under the Schedule 6 of the Facilities Agreement (Exhibit FNA1) which is on the subject of insurance, the following provision is made for the Application of Proceeds (of insurance) under Clause B(c)(i): “Application of Proceeds. (i) The Borrower shall use any insurance proceeds it receives for loss or damage to any asset solely to replace or repair that asset, except to the extent that it is required to apply such proceeds in prepayment of the Loans in accordance with Clause 7.2 (Mandatory prepayment- Compensation/Insurance Proceeds)” The provisions under the Mandatory Prepayment-Compensation/Insurance Proceeds under Clause 7.2 of Exhibit FNA1 create an exceptional situation where net proceeds of certain insurance claim in excess of USD500,000 may be forwarded into the Compensation Account “in order to prepay the outstanding loan using such amount on the next Interest Payment; provided that if an Event of Default has occurred and is continuing, such amount shall be applied to immediately prepay the Outstanding Loan”. 30 Even then, the Borrower shall not be required to make a prepayment to the extent that: “(i) within 180 days of such receipt, it proposes a plan for the application of such Compensation and/or Insurance Proceeds to the repair or replacement of any asset or otherwise in respect of either Sub-Project and with respect to such plan either (i) the Borrower demonstrates that such plan will restore or repair the relevant asset to the same condition and the nature as existed prior to the relevant insurance event applying funds available to the Borrower or (ii) such plan is otherwise acceptable to the Lenders; and (ii) The relevant amounts are actually in applied in accordance with such plan and within the timeframes set out in such plan (or such longer periods as the Required Lenders may agree).” It remains a cardinal principle of interpretation of documents that the various provisions must be read as a whole to ascertain the parties’ joint intention. Reading the above provisions together, we find that on the whole, the parties intended that the Borrower, in this case the respondent would ordinarily control and deal with insurance proceeds as and when they came without the consent of the Lender, the appellant. We find the exception created so limited and restrictive to outweigh this intention. Aside the above, the evidence points to a lack of control and possession of the appellant of the proceeds. If the evidence of the Head of Legal of Vanguard is anything to go by, then by 18th September 2020, an amount of USD1,800,000.00 had been paid to the respondent. Again, in October 2020 after the order absolute, a further USD1,000,000.00 was paid to the respondent. These payments depicting the appellant’s lack of control and possession of the insurance proceeds, feed into the impression we have gathered 31 from the provisions in Exhibit FNA1 that the respondent was to wield control over the insurance proceeds. We do not find any legal or factual basis to ground the creation of a fixed charge. In the final analysis, we are led to the conclusion that the charge created was a floating charge and so we hold. Having determined the nature of the funds and the charge created thereon, what does the law say about the issue of priority between the appellant as secured creditor of a floating charge and respondent the unsecured execution creditor? We must at the very outset state that the Borrowers and Lenders Act, 2020 (Act 1052) has made significant inroads into the prior law on the question of priority between the competing interests in this case. Learned Counsel for the appellant would disagree with this position. His view which stands to be debunked is contained in his Reply to the respondent’s wri>en submission thus: “We further submit that contrary to the respondent’s submissions that Act 1052 changes the law on the effect of a registered charge, Act 1052 does not contain any significant change in the law governing the effect of registration of charges under Act 773. Section 25(1) of Act 773 provided for the registration of charges at the Collateral Registry within the 28 days of creation. Section 22(1) of Act 1052 repeats this. Section 25(3) of Act 773 provided that a charge that is not registered is not effective. Section 25(2) of Act 1022 repeats it. Thus, no changes have been made to the law that is applicable to this mater.” From our angle, what Counsel did not advert his mind to is the newly enacted provisions in Section 14 of Act 1052 on Achieving third party effectiveness and Section 50 on Judgment Liens. Section 14 provides: 32 “14. (1) A security interest created and registered under this Act is effective against a third party. (2) A security interest shall continue to be effective against a third party for as long as the registration of the security interest has not been discharged.” Section 50 of the Act has the following provisions: ”50. (1) The interest of a judgment creditor in any collateral shall have priority over any security interest in the same collateral if the security interest is not made effective against third parties at the time of execution of the judgment. (2) In this section, “time of execution” means (a) the time of seizure, if the property is seized by or on behalf of an execution creditor; or (b) the time when a judicial order is served on a person who is holding property for or on behalf of a borrower.” The provisions mean that for a security interest holder to have priority over a judgment creditor, the security must be effective against third parties at the time of execution. Third party effectiveness is achieved by registration in terms of Section 14(1). In effect, the new provisions make prior registration of a charge whether floating or fixed effective against third parties such that unsecured creditors cannot subsequently a>ach the collateral in execution of a judgment. 33 Our understanding of the new introduction by Act 1052 is that Security interest made effective against third parties are fixed in nature, meaning that they a>ach to the collateral even if at general law, they would be characterized as uncrystalized floating charge. Accordingly, an execution creditor’s interest will no longer prevail against a collateral made effective against third parties which collateral would still have been floating over but for the above new provisions under the Act. We remain resolute that the above was not the position of the law prior to the coming into force of Act 1052. Under the prior law, registration of a floating charge per se did not confer priority. Registration under the Companies Act (Act 992) (just as under Act 179) and even under Act 773 only made the charge enforceable. To enable the holder have priority over a judgment creditor, the charge had to crystalize in accordance with law. On this point, we agree with the submission of Learned Counsel for the respondent when he said: “…My Lords, section 14 of Act 1052 actually modified the existing state of the law on the registration of charges. There is no similar provision like section 14 either in Act 992 or the repealed Act 773…Therefore, the appellants cannot argue that mere registration of a charge either under Act 992 or Act 773 achieved third party effectiveness and conferred priority because this was not the state of the law prior to the commencement of Act 1052.” In a scholarly article titled PRIORITY BETWEEN A DEBENTURE HOLDER SECURED BY A FLOATING CHARGE AND AN EXECUTION CREDITOR, (1986-90) Vol. XVII UGLJ J. E. A Mills makes the following statement whilst commenting on Section 87 of Act 179 which has been re-enacted in Section 90 of Act 992: 34 “While the above-quoted statutory provisions basically codify the existing English Common Law, they nevertheless contain two important modifications that need to be carefully noted. First, there is no question of automatic crystallization under the Code. As can be seen from Section 87(1)(a), the fact that the security has become enforceable is not enough to crystallize the charge; the holder must take positive steps to either get a receiver appointed or enter into possession of the assets. It is only then that the charge will be regarded as having crystallized. Thus, default by the company or the occurrence of an event specified in the debenture securing the charge only means that the security has become enforceable. The holder must then take one of the steps specified under Section 87(1)(a) in order to have the charge crystallized. Given the drawback associated with the adoption of automatic crystallization, well articulated by Berger J., the drafters of our Code deserve our commendation for their stance on this issue.” We understand the above passage as reflective of the state of the law prior to the coming into force of Act 1052. We wholly adopt the view as our own and consequently reject the submission of Counsel for the appellant that the position of the law has remained unchanged. The next important question, having determined the change in the law is, which law is applicable to the case for purposes of determining priority between the secured holder of the floating charge and the execution creditor, that is to say the appellant and the respondent? Must it be the law before Act 1052 or the prior law? 35 It is of some interest to note that whilst arguing strongly that the law has not changed, Counsel for the appellant nonetheless states a claim that Act 1052 is applicable to this case. His argument is based on a penumbra provision under Section 87(2) of Act 1052 which states: “Where an aAempt to enforce a security interest has been made by a lender before the entry into force of this Act, enforcement may continue under the prior law or may proceed under this Act” The factual basis of Counsel’s argument is that the appellant commenced the enforcement of the security by obtaining a Memorandum of No Objection (Exhibit FNA4) under the repealed Act 773. It is argued that Exhibit FNA4 was obtained on 7th November 2019 and Act 1052 came into force on 29th December 2020. This was therefore a clear case of “an aAempt to enforce a security…before the entry into force” of Act 1052. In effect, the appellant had the choice to either proceed under the old Act 773 or under Act 1052. Thus, the application to set aside the Garnishee Order Absolute amounted to proceeding under the new law, Act 1052. For two simple reasons, we are unpersuaded by the effect Counsel for the appellant assigns to the penumbra provision under Section 87(2). First, at the time Act 1052 came into force, the Garnishee proceedings which actually determined the competing interests of the parties had concluded and the Order Absolute already given. Both the proceedings and the Order Absolute occurred on 18th September 2020 whilst Act 1052 commenced on 29th December 2020. 36 Consequently, at the time the trial court sat to determine the competing interests of the parties, the law in force was the prior law. The provisions in Act 1052 could not have been applicable as the law had not been passed. Second, we do not think an application to set aside a garnishee order absolute could come within the compass of the phrase “may proceed under this Act’ contained in the provision in Section 87(2). The phrase “may proceed under this Act” could only be referrable to any of the steps that may be taken under the provisions specified in the Act which do not include an application to set aside Garnishee Order Absolute. Indeed, by the appellant’s own showing, it had obtained a Memorandum of No Objection under Act 773. Electing to “proceed under” Act 1052 will mean proceeding under Section 62 of Act 1052 which makes provision for Memorandum of No objection and other steps towards the realization of the security. Under Act 1052, the steps a lender may take towards the realization of the security upon obtaining a Memorandum of No objection include taking possession of the collateral under Section 63, obtaining warrant for police assistance under Section 64 by having the collateral sold by auction, public tender or private sale under Section 66, and such other steps within the ambit of the Act towards realizing the security. We are certain in our minds that bringing an application to set aside a garnishee order absolute is out of the scope of proceeding under the Act. Doubtless, the application was brought under the general rules of procedure which we think are not cognizable under the special provisions of the Act. Such a wholesale interpretation of the provision will defeat the purpose of the entire provisions on enforcement of security under the Act. It will mean that any of the general procedural steps like say, a writ, certiorari (where applicable), or even an appeal will come under the phrase “may proceed under this Act”. 37 This approach in our considered view will win no support of any canon of interpretation. The argument is therefore rejected. We hold in effect that the prior law and not the Act 1052 was applicable to determine the issue of priority in this case. Learned Counsel for the respondent had urged upon us not to apply the provisions in Act 1052 to determine the issue of priority as that will amount to a retrospective application of the Act. To this, we agree. We have already ascertained the prior law. To recap, it is that for a holder of a secured floating charge to have priority over the interest of an execution creditor, the floating must have crystallized. On how a charge crystallizes, Section 90 of Act 992 which re- enacts Section 87 of Act 179 provides: “(2) A floating charge does not preclude the company from dealing with the assets of the company until; (a) The security becomes enforceable and the holder of the security pursuant to a power in that behalf in the debenture or the deed securing same, appoints a receiver or manager or enters into possession of those assets; (b) The Court appoints a receiver or manager of the assets on the application of the holder; or (c) The company goes into liquidation. 38 (3) On the happening of an event specified in subsection (2), the charge crystallizes and becomes a fixed equitable charge on those of the assets of the company that are subject to the charge.” On the issue of crystallization, the learned trial judge delivered herself as follows: “Crystallization of a floating charge can only occur in strict compliance with the provisions of Act 992. This means that the security must become enforceable and the charge [sic] must either appoint a receiver or enter into possession of the assets. A look at Exhibit JN3 series, a leAer dated 30th September 2020 (an official record of the Registrar of Companies) shows that a Receiver has not been appointed by Applicants. Although Applicants claim that they have obtained a ‘Memorandum of No Objection’ from the Collateral Registry of the Bank of Ghana on 4th November 2019, there is no evidence before the court that they have taken possession of the said funds paid by the Garnishee to the 1st defendant judgment debtor. The processes filed indicate that in October 2020, the Garnishee paid One Million United States Dollars (US$1000,000) to the 1st defendant judgment debtor without reference to Applicant. If they had appointed a Receiver and taken possession of the funds, the charge would have crystallized and Applicants would have had priority over the funds. In other words, it would not have been possible for the Garnishee to pay the said amount to the 1st defendant judgment debtor had the charge in fact crystallized.” Before us, Learned Counsel for the appellant argues forcefully that the charge had crystallized at the time the Garnishee Order Absolute was granted. By our appreciation, 39 Counsel advances two main grounds for this contention. The first is based on two clauses in the debenture (Exhibit FNA2). The first clause 5.1, provided for crystallization on notice and the second, 5.2 automatic crystallization. According to Counsel, based on these clauses, the appellant wrote a le>er dated 1st November to its Credit Agent, GT Bank to restrict the respondent’s access to the Insurance Proceeds in the project accounts without the permission of the appellant’s permission. This was even before Exhibit FNA5 (The Memorandum of No Objection) was obtained. From our reading of the provisions under the two clauses, both are self-generating crystallization clauses. Given that the statute has provided for the events that must result in crystallization, it is objectionable the parties could not agree otherwise. In any event, as noted from the passage in the article of JEA Mills, which in this delivery, has been recognized as the true legal position, Ghana law has no place for automatic crystallization. On this account, we are in agreement with the learned trial judge that crystallization must be in strict compliance with the provisions of Section 90 of Act 992 (Section 87 of Act 197). Any form of crystallization by agreement cannot be allowed. It is a hackneyed principle of our law that where a statute has prescribed a special procedure by which something was to be done, it was that procedure alone that was to be followed. BOYFIO VR NTHC (199798)1 GLR 768; HEWARD MILLS VRS HEWARD MILLS (1992/93) GBR 239. At any rate, the evidence shows that the so-called notice served by the GT Bank failed to achieve anything. For, it was in the teeth of the said le>er that the respondent was able to access USD 2,800,000.00 from Vanguard. 40 The appellant’s second ground of crystallization was founded on Exhibit FNA5, the Memorandum of No Objection. Could a Memorandum of No Objection effect crystallization under the law It is noted that under Act 773 and indeed under Act 1052, a Memorandum of No Objection is a certification by the Collateral Registrar issued to a lender who intends to realize a security interest without a court order. If we are to go buy the provisions in Section 62 of Act 1052, such a lender shall first register a notice of such intention with the Registrar and where all necessary requirements are met, the Registrar shall issue the certification in the form of the memorandum. The requirements to be met are set out in the Bank of Ghana Rules for the Effective Implementation of the Borrowers of Lenders Act issued pursuant to Section 77 of the Act as Notice No. BG/GOV/SEC/2021/07. Under the Rule 15(2), the requirements are, the registration of the security interest to be realized, evidence of pre-agreement disclosure statement submi>ed to the Registrar, the credit agreement and other supporting documents, evidence that notice of default has been delivered to the borrower, evidence of satisfaction of Stamp duty requirement under the Stamp Duty Act (Act 698) and other documentary evidence the Registrar may require. From our standpoint, not a single one of these requirements or, all put together, will result in any of the events prescribed under Section 90(2) of Act 992 to crystallize a floating charge. Relative to the security interest in this case, it does not, in terms of Section of 90(2)(a) amount to an appointment of a receiver or manager or entry into possession by the holder of the charge. 41 With this point of view and by our earlier resolution that the mode of crystallization specified under Act 992 cannot be deviated from, we hold that the Memorandum of No Objection by the Collateral Registrar could not effect crystallization of the floating charge under the law. In support of his argument that the appellant’s interest ranked prior to that of the respondent, Learned Counsel has referred us to a couple of local and foreign cases. Of particular interest to us for obvious reasons is this court’s decision in ESM COMPANY LTD VS. EXIM GUARANTEE & BIG AIDOO (unreported Civil Appeal H1/169/17 31st May 2018) where inter alia, the question of effect of non registration of a charge under Act 773 arose. It was decided to the effect that the charge in question which had not been registered under Act 773 was of no effect. We have no issue at all with the decision. However we do not find the issue of crystallization of a floating charge under Act 179 arise and decided upon in the case. To this extent the decision is a poor authority for our course. The other cases mostly foreign which could be of only persuasive effect fail to persuade us for the reason that we are here dealing with the peculiarities of Ghana Statute Law. In the end, the appellant has failed to establish that the charge over the Insurance Proceeds had crystallized as at the time the Order Absolute was made by the trial judge. The appellant as holder of the charge could not win priority over the execution creditor, the respondent. The 2nd ground of appeal therefore fails. In this judgement we have resolve the 1st ground of appeal in favour of the appellant on the basis of the trial court not finding that the notice of Exhibit FNA7 was brought to the 42 a>ention of Vanguard and also on the basis of the court’s failure to find that registration was notice to world. However, the effect of the success of the 2nd ground of appeal which ultimately resolves the issue of priority in favour of the respondent is that, the court did not err in dismissing the garnishee order absolute neither did it err in finding that the order absolute was properly granted. In effect, the 3rd and 4th grounds of appeal also fail. And as the relief sought before this court is an order to set aside the ruling of the High Court and set aside the garnishee order absolute dated 18th September 2020, which by our conclusion we are unable to grant, the appeal also fails. Costs of GH ¢10,000.00 in favour of Respondent. SGD .............................. JUSTICE RICHARD ADJEI-FRIMPONG (JUSTICE OF THE COURT OF APPEAL) SGD I AGREE ............................ JUSTICE HENRY KWOFIE (JUSTICE OF THE COURT OF APPEAL) SGD I ALSO AGREE ............................. JUSTICE ANTHONY OPPONG (JUSTICE OF THE COURT OF APPEAL) 43 COUNSEL: DAAD AKWESI FOR APPLICANS/APPELLANTS JULIUS NKETIAH FOR RESPONDENT/RESPONDENT 44