AHENFIE CLOTH SELLERS ASSOCIATION PER THE PRESIDENT JOANA EWURABENA vs. PHILOMENA MENSAH & 3 ORS.

The plaintiff, Ahenfie Cloth Sellers Association, 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 loan was to be repaid over 52 weeks with interest. The first defendant paid installments for 21 weeks but defaulted thereafter. The plaintiff sued for recovery of the balance alleged to be owed. The defendants denied membership and challenged the legality and terms of the loan, alleging excessive interest and illegality under the Money Lenders Ordinance.

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...