AHENFIE CLOTH SELLERS ASSOCIATION vs. PHILOMENA MENSAH, TINA MAVIS DODD, DAVID AFRIYIE AND BEN MENSAH

The plaintiff, an association registered as a company limited by guarantee, was formed to source loans for its members who found it difficult to obtain loans individually. The association obtained a loan of three billion old Cedis from Ghana Commercial Bank to lend to its members. The first defendant received a loan of three hundred million old Cedis guaranteed by the other defendants. The first defendant was to repay the loan with interest over 52 weeks but defaulted after 21 weeks. The plaintiff sued for recovery of the balance of 279 million Cedis. The defendants contended that the interest and charges were excessive, harsh, and unconscionable and that the transaction was illegal and unenforceable under the Money Lenders Ordinance, Cap 176.

BROBBEY JSC: This is the unanimous decision of the court. In this judgment, the appellants shall be referred to as the defendants while the respondent will be referred to as the plaintiff or the plaintiff association. The bare facts which gave rise to this litigation were as follows: The plaintiff is an association of which the PW1 is the president. According to the PW1, the association was formed with the aim of sourcing loans for its members because the members found it difficult to source loans for their businesses if they sourced the loan as individuals. The association was registered as a company limited by guarantee. The 1st, 2nd and 3rd defendants denied that they were members of the Association but the plaintiff produced evidence to prove that they were members. The association obtained a loan of three billion old Cedis from the Ghana Commercial Bank for use by its members. The first defendant applied for and was given three hundred million old Cedis as a loan which was guar...