The Commercial Division of the Accra High Court has awarded damages in excess of US$1.1 million to Ghanaian real estate developer Blue Rose Limited, following a failed housing finance agreement with The Company for Habitat and Housing in Africa, otherwise called Shelter Afrique.

The court, presided over by Justice Samuel Djanie Kotey, held that Shelter Afrique’s failure to disburse a contracted loan facility, despite Blue Rose Ltd.'s full compliance with all agreed conditions, constituted a breach of contract.

On 15th December, 2016, Blue Rose and Shelter Afrique signed a major real estate financing and development agreement in Accra, outlining the construction of 170 housing units comprising two-, three-, and four-bedroom houses, along with associated infrastructure, to be sold directly to the public.

Under the agreement, Shelter Afrique was to provide US$5.2 million, representing 64% of the total project cost, while Blue Rose Ltd. was to contribute US$2.9 million, representing 36%. The contract was later amended on 4th October, 2017, slightly altering the funding ratio, increasing Blue Rose's equity contribution to 36.83% and reducing Shelter Afrique’s to 63.17%.

Both contracts stipulated that Blue Rose Ltd. was required to inject its full equity contribution into the project on-site and have it verified by Shelter Afrique as a condition precedent for the first disbursement of the loan.

According to court evidence, Blue Rose fulfilled all its obligations, including the full equity injection and compliance with all pre-disbursement conditions.

Construction and related activities began promptly after the agreement was signed, and the project was progressing steadily.

However, Shelter Afrique failed to disburse the agreed loan facility in time, causing a 17-month delay during the project’s 36-month moratorium.

This delay adversely affected projected sales, marketing strategies, and overall costs, compelling Blue Rose to repudiate the agreement in a letter dated 3rd July, 2018, and demand the execution of a Deed of Discharge over the mortgage.

The High Court concluded that Shelter Afrique had no lawful justification for refusing or failing to disburse the loan facility, describing it as a breach of contract.

“There is sufficient evidence that encourages a finding that the defendant had no lawful justification for refusing and/or failing to disburse the loan facility,” Justice Djanie Kotey stated.

Blue Rose Ltd. sought special damages totalling US$1,144,669.16, and the court found the plaintiff entitled to recover part of that amount—specifically proven expenses.

On the matter of general damages, the court awarded GH¢500,000, citing the negative impact of the breach on Blue Rose’s sales, marketing, and financial obligations.

“In the letter of repudiation, the plaintiff bemoaned the effect of the failure to disburse the loan in accordance with the agreement on their projected sales... Thus, the compensation to be awarded as damages must be sufficient to erode the effect of the breach,” the judge remarked.

The court also awarded costs of GH¢100,000 in favour of Blue Rose Ltd.

Read the full judgment below: