Bona Fide Purchasers, Prior Equities, and the Supreme Court’s Warning in Agate Enterprise v Djan
Land litigation in Ghana often turns on a familiar defence: “I am a bona fide (good faith) purchaser for value without notice.” It sounds conclusive. After all, if you paid good money, conducted searches, and saw no red flags, equity should protect you. Or so many believe.
In Agate Enterprise & Transport Services Ltd v Kwame Djan & Lemet Construction Ltd [2025] GHASC 24, the Supreme Court delivered a firm reminder that the defence is not as automatic as it is often assumed to be. The decision clarifies what a purchaser must actually prove and why prior equitable interests still matter, even where legal title later changes hands.
The Dispute in Brief
Agate Enterprise & Transport Services Ltd entered into a written agreement with Kwame Djan on 23 March 2007 to purchase land at Bejuahum near Dome, Accra for GH₵1.475 billion. As part of the arrangement, Agate paid GH₵200 million to enable Djan redeem the land from an existing mortgage with Ghana Commercial Bank.
Before completion, Djan resiled from the agreement and proceeded to sell the same land to Lemet Construction Ltd, which paid the full purchase price and obtained a deed of assignment dated 26 April 2007.
Agate sued, seeking specific performance and a declaration that the transfer to Lemet was null. Lemet, in response, counterclaimed that it was a bona fide purchaser for value without notice of Agate’s earlier interest.
Both the High Court and the Court of Appeal rejected Lemet’s claim. Dissatisfied, Lemet appealed to the Supreme Court.
The Central Legal Question
Was Lemet Construction Ltd a bona fide purchaser for value without notice, capable of defeating Agate’s prior equitable interest?
The answer turned on long-settled principles of equity, but with sharp practical consequences.
Who Truly Qualifies as a Bona Fide Purchaser?
Drawing from classic equity texts and Ghanaian authority, the Supreme Court restated the three essential requirements:
1. Acquisition of a legal estate in the property
2. Payment of valuable consideration
3. Absence of notice of any prior equitable interest at the time consideration was given
Crucially, the burden of proving all three elements rests squarely on the purchaser who raises the defence.
The Court emphasised that notice is not limited to express disclosure. It may be:
actual, constructive, or imputed.
A purchaser is expected to act as a reasonably prudent buyer, not merely someone who conducted a formal search and stopped there.
Why Lemet’s Defence Failed
Although Lemet conducted a Lands Commission search and inspected the land, the Supreme Court agreed with the lower courts that this was not enough. Several factors were decisive:
Agate’s equitable interest had already arisen from a valid written agreement supported by part payment.
The land was encumbered by a mortgage, and the circumstances surrounding its redemption demanded closer scrutiny.
Lemet failed to displace the inference that a prudent purchaser, in the circumstances, ought to have made further enquiries.
Most damagingly, Agate’s prior interest was not defeated merely because Lemet later obtained a deed of assignment.
The Court reaffirmed that equity protects the first in time, unless the later purchaser strictly proves the absence of notice.
Why This Decision Matters
This judgment sends a clear message to the property market:
A Lands Commission search is necessary, but not sufficient.
Payment of the full purchase price does not automatically cleanse title.
Equitable interests created by earlier contracts remain powerful.
The defence of bona fide purchaser is not a slogan. It is a demanding legal standard.
For buyers, lawyers, and developers, the message is simple: due diligence must be real, not ritualistic.
