What a Certificate of Occupancy actually proves — and what it does not
A C of O is strong evidence of title. It is not conclusive proof of it, and the difference decides cases.
A recovery suit looks, at first glance, like the simplest kind of claim. Money was lent, money was not repaid, and the arithmetic is not in dispute. In practice these claims are lost with some regularity, and rarely because the debt was not owed. They are lost on documents.
The four things to be established
A claim to recover a debt is a claim in contract. The lender must establish:
- The facility — that it was granted, and on what terms. The offer letter and the borrower’s acceptance are the primary documents.
- The drawdown — that the money was in fact advanced.
- The sum outstanding — as at the date of the claim, including interest calculated on the agreed basis.
- Demand — that repayment was demanded and not made, where the facility requires it.
Each of these is proved by a document, and each document has to be admissible.
The statement of account
The statement of account is the centre of the case, and it is the most common point of failure.
Bank statements are computer-generated. The Evidence Act 2011 makes specific provision for the admissibility of statements contained in documents produced by computers, and it imposes conditions. The party tendering the document must satisfy the court that the computer was used regularly to store or process information of that kind, that the information was regularly supplied to it in the ordinary course of activities, that the computer was operating properly during the relevant period or that any malfunction did not affect the accuracy of the record, and that the information reproduces what was supplied.
Those matters are established by a certificate identifying the document, describing how it was produced, and signed by a person occupying a responsible position in relation to the operation of the device. Where the certificate is absent or defective, the statement may be rejected — and a recovery claim without an admissible statement of account is generally a recovery claim without a proof of the sum claimed.
There is also the Bankers’ Books Evidence route for copies of entries in bankers’ books, which has its own requirements as to verification.
The practical point is simple. The certificate is prepared and settled before the claim is filed, not produced in the witness box when the objection is taken.
Security, and whether it was perfected
Where the debt is secured, the lender’s position depends on whether the security was validly created and perfected.
For a legal mortgage over land, the deed must be properly executed, and where the Land Use Act requires the Governor’s consent to the transaction, an unperfected security is exposed to challenge at the moment it is relied upon.
For a charge over the assets of a company, the Companies and Allied Matters Act 2020 requires registration at the Corporate Affairs Commission within the prescribed period. A charge that is not registered may be void against a liquidator and other creditors — which means the lender ranks as an unsecured creditor precisely when security matters most.
These defects are discoverable at the time of disbursement. They are usually discovered instead at the point of enforcement.
Guarantees
A guarantee is a separate contract and is construed strictly against the party relying on it.
The guarantor’s liability does not extend beyond what the instrument provides. Where the principal contract has been materially varied without the guarantor’s assent — the limit increased, the term extended, the security released — the guarantor may be discharged altogether. Whether that has happened turns on the wording of the guarantee, which frequently contains a clause dealing with variation, and on what was actually varied.
The undefended list
Where the claim is for a liquidated sum and the lender believes there is no defence on the merits, the undefended list procedure under the High Court rules offers a shorter route.
The claim is filed with an affidavit setting out the grounds for that belief, and the court, if satisfied, enters the suit on the undefended list and sets a return date. The defendant must file a notice of intention to defend, supported by an affidavit disclosing a defence on the merits, before the return date.
If nothing is filed, or the affidavit discloses no defence, judgment may be entered without a full trial. If a defence on the merits is disclosed, the suit is transferred to the general cause list and proceeds in the ordinary way with pleadings and evidence.
The threshold is a defence on the merits — not a bare denial and not a request for time. Equally, the procedure is not available where the sum is not liquidated, and attempting it in an unsuitable matter costs the time it was meant to save.
After judgment
Judgment is not recovery. Enforcement is a separate exercise, and garnishee proceedings are the most commonly used route: money held for the judgment debtor by a third party, typically a bank, is attached by an order nisi, the garnishee is called on to show cause, and the order may then be made absolute.
Which route is appropriate depends on what the debtor has and where it is held, which is a question worth asking before the claim is filed rather than after judgment is obtained.
The pattern
Almost every difficulty described here is discoverable before proceedings begin. Assembling the documents and testing them against what the law requires is unexciting work, and it is the work that decides these cases.
