The Commercial Division of the Accra High Court has awarded damages exceeding US$1.1 million to Blue Rose Limited, a prominent Ghanaian real estate developer, in a significant breach-of-contract ruling against The Company for Habitat and Housing in Africa, widely known as Shelter Afrique.
The decision was handed down by Justice Samuel Djanie Kotey, who determined that Shelter Afrique’s refusal to release an agreed housing loan facility, despite Blue Rose’s full compliance with all pre-disbursement requirements, constituted a clear breach of contract.
On December 15, 2016, Blue Rose Ltd. and Shelter Afrique entered into a major real estate financing and development agreement in Accra. The project aimed to deliver 170 housing units, comprising two-, three-, and four-bedroom homes, complete with essential infrastructure, for sale to the public.
Under the original arrangement, Shelter Afrique was to provide US$5.2 million—covering 64% of the total project cost—while Blue Rose was to contribute US$2.9 million, representing the remaining 36%. A subsequent amendment on October 4, 2017, slightly revised the funding structure, with Blue Rose’s contribution increasing to 36.83% and Shelter Afrique’s share reduced to 63.17%.
Both agreements made it a condition precedent that Blue Rose would fully inject its equity into the project and have it verified on-site by Shelter Afrique before the first loan disbursement.
Full Compliance by Blue Rose
Court evidence showed that Blue Rose met every contractual obligation. The company injected its full equity share into the project, complied with all verification requirements, and commenced construction promptly after signing the agreement. Progress on the housing development was steady, with sales and marketing strategies aligned to the expected financing schedule.
However, despite these efforts, Shelter Afrique failed to release the agreed loan facility within the stipulated time frame. This inaction led to a 17-month delay during the project’s 36-month moratorium period—severely impacting timelines, sales projections, and overall project viability.
The delay in funding disrupted Blue Rose’s operational plans, undermining its ability to execute marketing strategies and meet financial obligations tied to the project. In a letter dated July 3, 2018, the developer formally repudiated the agreement, citing the funding delays and requesting the execution of a Deed of Discharge over the mortgage.
Justice Djanie Kotey, in his ruling, concluded that Shelter Afrique had “no lawful justification” for withholding the funds. “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,” the judge stated.
Damages Awarded
Blue Rose sought special damages totalling US$1,144,669.16. After reviewing the evidence, the court awarded the developer compensation for specifically proven expenses within that claim. In addition, general damages of GH¢500,000 were granted to address the negative impact on Blue Rose’s sales, marketing strategies, and ability to meet its financial commitments.
“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.”
Justice Kotey
The court further ordered Shelter Afrique to pay GH¢100,000 in legal costs to Blue Rose Ltd.
This ruling sends a strong message to financial institutions and development partners operating in Ghana’s housing sector. It underscores the need for adherence to contractual obligations, particularly when projects directly impact housing delivery targets in the country.
The case also highlights the challenges developers face when financing agreements break down. Delays in funding can derail timelines, inflate costs, and jeopardize the feasibility of projects aimed at addressing Ghana’s housing deficit.
For Blue Rose, the judgment represents both a legal victory and a financial reprieve, enabling the company to recover part of its losses and potentially redirect resources toward new housing initiatives.
As Ghana continues to push for increased housing development to meet growing urban demand, the outcome of this case reinforces the critical role of reliable financing in ensuring that projects move from blueprint to completion without costly disruptions.
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