Latenu Fm

Latenu Fm

GHANA’S JUDGMENT DEBT CRISIS, ITS ATTENDANT FINANCIAL GOVERNANCE PROBLEMS AND IMPLICATIONS ON NATIONAL DEVELOPMENT – FROM A LEGAL PERSPECTIVE

ace ankomah

Presented by Ace Anan Ankomah as Guest Speaker at the 6th Moderatorial Luncheon, organised by the Presbyterian Church on 28th October 2012

DEFINITION OF KEY/RELEVANT TERMS:

Judgment – The official and authentic decision of a court of justice upon the respective rights and claims of parties to an action or suit, litigated in the court and submitted to the court’s determination. Conclusion of law upon facts found or admitted by the parties or upon their default in the course of the suit. Onslow v. IRC (1890) 25 QBD 465 per Lord Esher MR: “A judgment is a decision obtained in an action…”

Final Judgment – disposes of the subject matter of the controversy or determines the litigation as to all the parties on its merits.

Interlocutory Judgment – merely establishes the right of a party to recover in general terms, determines some preliminary or subordinate point or plea, settles some step, question or default arising in the process of the action, but does not adjudicate the ultimate rights of the parties or finally put the case out of court.

Default Judgment: A judgment obtained on account of the Defendant failing to either enter appearance or file a Statement of Defence.

Summary Judgment: a judgment obtained by a plaintiff who is able show that there is no answer to his case, without having to go through a full trial, where the defendant is unable to set up a bona fide defence or raise an issue against the claim which ought to be tried. This provides early judgment in cases where the defendant has no hope of success and any defence raised will merely have the effect of delaying judgment. The court then grants judgment SUMMARILY, i.e. without the delay and expense of a full trial, because it is satisfied that no trial is necessary.

Judgment on Admissions: Judgment entered on account of an admission made by a party in his pleading, an affidavit, in discovery or under any examination under oath or affirmation in and out of court.

Consent Judgment: A judgment, the terms of which are settled and agreed by the parties, and filed in and entered by the court. In effect, they are merely contracts acknowledged in open court and ordered to be recorded, but bind the parties as fully as other judgments.

Arbitral Award: The decision or determination rendered by arbitrators upon a dispute submitted to them. Upon obtaining the leave of the High Court (after an application) it will be enforced as if it is a judgment of the court.

Mediation Agreement: A mediator intervenes between two contending parties to help reconcile them or persuade them to adjust or settle their dispute. The mediator does not make an award or pass a judgment. He helps the parties to enter into a “Settlement Agreement.” When the parties sign the Settlement Agreement, it becomes binding between them, and has the same effect as an Arbitral Award.

Debt – a sum of money due by certain and express agreement, arising upon an express or implied contract.

Judgment Debt – a debt, for the recovery of which a judgment has been entered.

HOW JUDGMENT DEBTS ARISE:

Negotiation Stage
a. Negotiation skills
b. Knowledge (technical) of the subject area
c. Contractual “give and take”
d. Preliminary “heads of agreement”
e. Memoranda of Understanding
f. Involvement of the AG’s Office/Legal Departments of the various Ministries

Drafting Stage
a. Legal advice (from the AG)
b. Reducing all heads of agreement into writing
c. Choice of Law Clauses
d. Dispute Resolution Clauses

Performance/Execution Stage
a. Fulfilling our side of contractual obligations
b. Technical expertise
c. Parliamentary approval? Loans/International Business & Economic Transactions

Dispute Resolution Stage
a. When breaches occur (causes – arrogance, lack of understanding, change of government)
b. Litigation/Arbitration/Mediation/Negotiation
c. Filing times and difficulty in obtaining responses from the relevant ministries (who is the client?)
d. Lack of expertise in civil trials and international arbitration (technicalities – substantive and procedural)
e. Legal costs (foreign lawyers)

Execution of Money Judgments
a. Enforcement against the State – Certificate of Particulars
b. Any role for auditing at this stage?
c. Enforcement of foreign judgments – Registration v. Commencement of fresh proceedings
d. Enforcement of arbitral awards – Leave to enforce
e. Enforcement Methods
i. Writ of fieri facias (fi.fa.) – authorises the Registrar to seize and sell the execution debtor’s property, sufficient to satisfy the judgment debt, post-judgment interest (if any) and execution costs, and directs the Registrar to pay the plaintiff the amount levied in execution
ii. Garnishee proceedings – proceedings by which a judgment is satisfied by reaching the credit or property of the judgment debtor in the hands of another person (usually a bank).
iii. Charging Orders – provides the judgment creditor with the equivalent of a mortgage over land specified in the order or on a judgment debtor’s beneficial interest in securities

RECOMMENDATIONS:

1. Judgment Debt Czar?
• In current political parlance, a ‘czar’ is somebody given authority, especially for dealing with a particular issue or problem
• Short-term solution only
• Duplicity? Public Accounts Committee of Parliament?

2. Training, Due Diligence
Continuous, rigorous External Training, Internal training, Cross-pollination, re relevant officials.

3. Wake the Auditor-General up from Slumber!!
Auditor-General has constitutional powers of “Surcharge” and “Disallowance.”
Constitution, Article 187(7)(b):
“In the performance of his functions under this Constitution or any other law the Auditor-General… may disallow any item of expenditure which is contrary to law and surcharge, (i) the amount of any expenditure disallowed upon the person responsible for incurring or authorising the expenditure; (ii) any sum which has not been duly brought into account, upon the person by whom the sum ought to have been brought into account; or (iii) the amount of any loss or deficiency, upon any person by whose negligence or misconduct the loss or deficiency has been incurred.”

These powers are reiterated and fleshed out in sections 17, 18 and 20 of the Audit Service Act, 2000 (Act 584). Under section 17 the debt created by the surcharge will be recovered as a debt by way of civil proceedings. The person surcharged also has a right of appeal to the High Court. And, the Auditor-General CANNOT revoke a surcharge except with prior parliamentary approval. Under section 20, the Auditor-General must report to Parliament (and effectively to the people of Ghana), where
• an appropriation was exceeded or was applied for a purpose or in a manner not authorised by law;
• an expenditure was not authorised or properly vouched for or certified;
• there has been a deficiency through fraud, default or mistake of any person;
• applicable internal control and management measures are inefficient or ineffective;
• the use or custody of property, money, stamps, securities, equipment, stores, trust money, trust property or any other assets has occurred in a manner detrimental to the Republic;
• resources have not been used with due regard to economy, efficiency and effectiveness in relation to the results attained; and
• any matter, which in the public interest, should be brought to the notice of Parliament.

4. Crack the Whip/Enforce the Laws!
‘Revolutionary’ False Certification:
Government Contracts (Protection) Act, 1979 (AFRCD 58)
A person who is responsible for issuing certificates for the payment of money out of public funds to contractors or any other person in respect of Government contracts, is jointly and severally liable with that contractor or that other person for the refund of the money so paid where he issues the certificate for payment

knowing that
◦ the work/service has not been performed,
◦ the goods have not been supplied, or
◦ the money was not otherwise due under the contract; or
recklessly careless whether
◦ the work had been done or not,
◦ the goods have been supplied or not, or
◦ the money is otherwise due under the contract or not; or
where in the issue of the certificate that person was grossly negligent.
Without prejudice to the civil liability, (i) that person, (ii) the contractor, and (iii) any other person who knowingly accepted a payment made in any of the above circumstances is liable to a fine of up to three times the amount of money of the improper payment or to imprisonment of up to 10 years, or to both.

Where it is proved
• that the person responsible for the certificate was bribed into issuing the certificate, or
• that the issue of the certificate was otherwise attended by a corrupt practice,
Both the ‘bribor’ and the ‘bribee’, and any other person who knowingly participated in the bribery/corrupt practice commits an offence and is liable to imprisonment (between 5 and 15 years), and a penalty equal to three times the amount of money of the improper payment.

CONCLUDING COMMENTS
Do we care?
Do we mind?
Do we simply shrug?
Does it hurt?
What keeps you up and tossing at night?
What keeps you burning during the day?
What is our stake in the enterprise, Ghana inc.?
Should the last Ghanaian leaving the realm remember to turn out the lights?
Or do we see, by faith a storm, birthed out of nothing but a cloud, no larger than the size of a man’s fist?

source: latenufmonline.com

 

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