NANA OSEI AFRIFA v. EUGENE K. CHINEBUAH & HUMPREY TENZAGH
March 15, 2019
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP ERIC KYEI BAFFOUR ESQ. JUSTICE OF THE HIGH COURT
Areas of Law
- Contract Law
- Banking and Finance Law
- Civil Procedure
March 15, 2019
HIGH COURT
GHANA
CORAM
AI Generated Summary
Justice Eric Kyei Baffour of the High Court ruled on a dispute arising from a short-term US$100,000 loan advanced by the Plaintiff to the Defendants under a written agreement dated December 1, 2016. The agreement required repayment within ten days plus a five-day grace period and fixed a 50% interest for the two-week term, with a compound 1% daily default interest. The first Defendant admitted acting as a facilitator for the second Defendant, a friend, and argued illegality and unconscionability. Defendants paid GH430,000, the cedi equivalent at the time of the loan, while the Plaintiff sought further sums and interest. Applying C.I. 52 and equitable doctrine, the court determined the 50% interest term was unconscionable and that the Plaintiff acted as an unlicensed money lender under Act 774. To avoid encouraging statutory breaches, the court refused interest and ordered repayment of the principal in US dollars or at todays cedi equivalent to preserve the value of the money.
RULING
Plaintiff had sought in his writ the recovery of an amount of One Million and Twenty Nine Thousand Five Hundred and Ninety Ghana Cedis (GH¢1,029,590.00) being the outstanding amount claimed tobe owed to the Plaintiff as well as interest on the amount from 1st, February, 2017 till date of final payment. The other reliefs may not be necessary for the determination of the matter now before the court.
Plaintiff posit that he did enter into a transaction with Defendants wherein he advanced an amount being cedi equivalent of One Hundred Thousand US Dollars ($100,000.00) to the Defendants. That the Defendants were to repay the money together with interest at 50% within ten days with five additional days as grace period. That Defendants failed to repay the monies within the ten days plus the additional five days as per the agreement the monies unpaid will attract a compound interest of 1% per each day of default.
1st Defendant did not deny the granting of such a loan by Plaintiff but only claimed that he acted as a facilitator for the 2nd Defendant who was a friend and needed money. It was further raised that the transaction was an unlawful one as Plaintiff is not a duly registered entity nor licensed to do so under the Borrowers and Lenders Act, 2008, Act 773 or the Money Lenders Act. 1st Defendant also raised as part of his defence that the agreement charging 50% as interest rate plus a compound interest of 1% per day of default as stated under the agreement was unconscionable and ought not to be allowed by the court.
Defendants have paid an amount of GH¢430,000.000 out of the total amount of GH¢1,029,590.00 claimed by Plaintiff. It is to be noted that the amount paid by Defendants represented the equivalent rate of the dollar in cedis at the time the loan was granted by Plaintiff to Defendants in December, 2016 but not the cedi rate to the dollar at the time payment was made. With the principal amount granted by Plaintiff to Defendants per the loan agreement having been paid and the only issue outstanding being that of interest on the monies paid, I was guided by Order 33 Rules 3 and 5 of the High Court (Civil Procedure) Rules, C. I. 47 which states as follows:
“3. The Court may order any question or issue arising in any cause or matter whether of fact or law, or partly of fact and partly of law, and raised by the pleadings to be tried before, at or after the trial of the cause or matter and may give directions as to the manner in which the question