PATHWAY MICRO FINANCE v. CYNTHIA OKYERE & ANOR
2018
HIGH COURT
GHANA
CORAM
- DR. RICHMOND OSEI-HWERE
Areas of Law
- Contract Law
- Evidence Law
- Commercial Law
2018
HIGH COURT
GHANA
CORAM
AI Generated Summary
The plaintiff sued the 1st defendant to recover GHC52,663.00 for a defaulted loan. The 1st defendant claimed illiteracy and misunderstanding of the interest rate. The court determined that the 1st defendant was literate and understood the loan terms, including the 5.5% monthly interest rate. The mutual mistake and unconscionability claims were dismissed. The penalty clause of 3% per week was struck down as extravagant. The court ruled in favor of the plaintiff for repayment of the loan with interest.
JUDGMENT
v
The plaintiff by his Writ of Summons filed on 25th July, 2017 claim against the defendants jointly and severallyas follows:
a. A repayment of an amount of GHC52, 663,000.00 (Fifty-two thousand six hundred and sixty-three Ghana Cedis) being the total debt owed (principal, interest plus penalty) by the 1st defendant as at May 2016.
b. Interest on the sum from May 2016 till date of final payment.
c. Cost inclusive of solicitor’s fee.
Upon service of the writ on the defendants, the 1st defendant filed a defence to the claim on 11th October, 2016.
After an unsuccessful attempt at settlement, the following issues were set down for trial by the court:
a. Whether or not the plaintiff advanced an amount of GHC40, 000.00 to the 1st defendant at a concessionary rate of 5.5% per annum or 6.6% per annum.
b. Whether or not there was a mutual mistake with regards to the interest rate applicable.
c. Whether or not the loan transaction is unconscionable
d. Whether or not the 1st defendant is liable to pay the amount as endorsed on the writ of summons or any part thereof.
e. Whether or not the plaintiff is entitled to its claim against the 1st defendant.
The Plaintiff’s Case
It is the case of the plaintiff that in May 2016 it advanced a loan facility of GHC40,000.00 (Forty Thousand Ghana Cedis) to the 1st defendant for the purpose of trading as indicated in the Customer Loan application form (Exhibit A). The 1st defendant used House No. 85 Kromosi Kwanwoma (Exhibit B) as collateral for the facility. It is the case of the plaintiff that the 1st defendant made some repayments but started defaulting somewhere along the line. The plaintiff posits that the defendant is under an obligation to pay the principal plus the interest and penalty that has accrued from the date of the grant till date of final payment.
The Defendants’ Case
The 1st defendant submitted a witness statement on behalf of the 2nd defendant and on her own behalf. It is the case of the 1st defendant that she is an illiterate and that the plaintiff never took time to explain the terms of the loan facility to her before she signed up. She also claims that she was not made aware of the huge and unconscionable nature of the interest rate of 66 percent. According to the 1st defendant she committed herself to pay the loan facility faithfully under the impression that the interest rate was 5.5 percent. It is also her case that she was made to believe that the insurance covering the facility co