AHENFIE CLOTH SELLERS ASSOCIATION PER THE PRESIDENT JOANA EWURABENA vs. PHILOMENA MENSAH & 3 ORS. [2010]DLSC6137

AHENFIE CLOTH SELLERS ASSOCIATION PER THE PRESIDENT JOANA EWURABENA vs. PHILOMEN... [2010]DLSC6137

Date	2010-07-21
Suit No.	CIVIL APPEAL NO. J4/7/2010
Citation No.	[2010]DLSC6137

BROBBEY JSC (PRESIDING)

ANSAH JSC

OWUSU (MS) JSC

YEBOAH JSC

ARYEETEY JSC

GEORGE ABORGAH FOR THE DEFENDANTS/APPELLANTS/APPELLANTS.

F. K. YEBOAH FOR THE PLAINTIFF/RESPONDENT/RESPONDENT.

[2010]DLSC6137
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													<main id="main" class="content" style="min-height: 60rem" >AHENFIE CLOTH SELLERS
ASSOCIATION PER THE PRESIDENT JOANA EWURABENA<o:p></o:p>[PLAINTIFF/RESPONDENT/RESPONDENT]<o:p></o:p>vs.<o:p></o:p>PHILOMENA MENSAH &amp; 3
ORS.<o:p></o:p>[DEFENDANTS/APPELLANTS/APPELLANTS]<o:p></o:p>[SUPREME
COURT, ACCRA]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

CIVIL APPEAL NO. J4/7/2010&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; DATE: 21ST
JULY, 2010<o:p></o:p>

F.
K. YEBOAH FOR THE PLAINTIFF/RESPONDENT/RESPONDENT.<o:p></o:p>

<p class="MsoNormal" align="center" style="text-align:center;line-height:115%;
border:none;mso-border-top-alt:solid windowtext 1.5pt;mso-border-bottom-alt:
solid windowtext 1.5pt;padding:0in;mso-padding-alt:1.0pt 0in 1.0pt 0in">JUDGMENT<o:p></o:p>

</div>BROBBEY JSC <o:p></o:p>This
is the unanimous decision of the court.&nbsp;
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.&nbsp; 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.&nbsp; The association was
registered as a company limited by guarantee.&nbsp;
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.
<o:p></o:p>The
association obtained a loan of three billion old Cedis from the Ghana
Commercial Bank for use by its members.&nbsp;
The first defendant applied for and was given three hundred million old
Cedis as a loan which was guaranteed by the second, third and fourth
defendants.&nbsp; The three billion Cedis was
to have been paid to the bank within a period of 52 weeks and it attracted
interest of 29 per cent per annum.&nbsp; The
plaintiff did not state the exact rate of interest attracted by the loan to the
first defendant.&nbsp; The 1st defendant was
to have repaid her loan of three hundred million Cedis at the rate of nine
million Cedis per week but within the same 52 weeks. At the rate of nine
million Cedis per week, the 1st defendant would have paid four hundred and
sixty eight million Cedis within the 52 weeks.&nbsp;
The 1st defendant paid the weekly nine million Cedis for 21 weeks, after
which she stopped or failed to pay any more money to the plaintiff.&nbsp; The plaintiff therefore took action against
her and the other defendants in their capacities as guarantors for the recovery
of ¢79 million Cedis which she alleged was the balance owed on the three
hundred million Cedis loan.&nbsp; That
transaction between the plaintiff and the defendants was evidenced by exhibit
A. <o:p></o:p>The
parties do not dispute that by the agreement on the facility given to the first
defendant, she was to have paid GH¢46,800.00 from the GH¢30,000.00 loaned to
her. The difference was GH¢16,800.00.&nbsp; By
simple arithmetical calculation, the difference of GH¢16.800.00 on the
GH¢30,000.00 amounted to 52 per cent.&nbsp;
That included the 29 per cent charged by the bank.&nbsp; In other words, the Association charged 52
per cent for lending the GH¢30,000.00 to the first defendant. If the 29 per
cent were to be deducted from the 52 per cent, the plaintiff would have charged
23 per cent as interest on the amount lent to the first defendant. <o:p></o:p>At
the trial court, the defendants contended that "the terms, interest and
other charges levied on the said loan are harsh, excessive and unconscionable in
terms of the Loans Recovery Ordinance, Cap 175(1951 Rev.). "In further
answer to the claim, the defendants averred that the transaction was
"illegal and unenforceable in terms of the Money lenders Ordinance, Cap
176. "They therefore counterclaimed that the loan transaction was illegal
and unenforceable in terms of the Moneylenders Ordinance cap 176 and for an
order "re-opening the transaction on the ground that the interest and
charges were excessive, harsh and unconscionable." <o:p></o:p>The
trial High Court gave judgment in favour of the plaintiff.&nbsp; The defendants appealed against the judgment
to the Court of Appeal where they lost to the plaintiff again.&nbsp; It was against the judgment of the Court of
Appeal that the defendants have appealed to this court, initially on two
grounds, to which were added three more grounds.&nbsp; The five grounds will be read out as and when
they are discussed in this judgment. <o:p></o:p>APPLICABLE LAWS <o:p></o:p>The
law on money lending in Ghana has been discussed in a number of cases,
particularly in Yeboah v Bofour [1971] 2 GLR 199, Ayiwah v Badu [1963] 1 GLR
96, SC and Dua v Afriyie [1971] 1 GLR 260, all of which were based on the Money
lenders Ordinance, Cap 176 and the Recovery of Loans Ordinance, Cap 175. cap
176 was repealed in 2008 by the Non Bank Financial Institutions Act, 2008 (Act
774), s. 47(1).&nbsp; However, since the 1992
Constitution prohibits retroactive legislation, Act 774 cannot retroactively
affect transactions which took place before the coming into force of that Act.&nbsp; The transaction involved in the instant case
took place in 2004.&nbsp; It cannot be
affected by legislation which came into force in 2008. cap 175 has not been
repealed.&nbsp; It follows that both Cap 175
and Cap 176 are applicable to the transaction involved in the instant dispute. <o:p></o:p>1ST AND 2ND GROUNDS OF
APPEAL <o:p></o:p>Counsel
for the defendants argued together grounds (a) and (b) of the grounds of
appeal.&nbsp; Those grounds were: <o:p></o:p>'a The judgment was against the weight
of evi</main>