2013
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court held that the Court of Appeal erred by failing to provide convincing reasons for departing from the trial court's finding that the Respondent was engaged in money lending. The Court reinstated the trial court's findings that the transaction included excessive interest rates, making it unconscionable and illegal. The case was remanded for reassessment of the transaction terms. Additionally, the Court confirmed that a company limited by guarantee is prohibited from engaging in profit-making activities like moneylending.
ANIN YEBOAH JSC:
This is an appeal from the judgment of the Court of Appeal dated the 13/05/2010. The facts of this case appear not to be in any serious controversy. The Plaintiff/Respondent/Appellant herein, who for the sake of brevity shall be referred to in these proceedings as the Appellant, commenced an action at the High Court (Commercial Division) Accra against the Defendants/Appellants/ Respondents herein who shall be referred to as the Respondents henceforth.
The claim endorsed on the writ of summons was as follows:-
1. Repayment of an amount of 210 million cedis representing 14 weeks of 15 million cedis still unpaid.
2. Interest on the above amount at the current bank interest rate, from the 21st of August 2006, to the date of final payment.
3. Any other reliefs that may deem fit by this honourable court.
It should be noted that the main relief is not all that clear whether the action falls within contract or tort if read in isolation. The defect, however, was cured in our view by the statement of claim which was filed together with the writ of summons. Even in the statement of claim there was no averment to the effect that the Respondent was a registered association carrying out business which it was required to do under the law incorporating it. Since this serious omission was ignored by the Appellant no issue was joined on it up to this stage of the proceedings.
The Respondent pleaded that it borrows money from commercial banks to offer financial assistance to its members and in one such transaction which is the subject of this appeal it offered financial assistance to the first appellant herein whereby the second, third and fourth appellants who are also members of the Association stood as guarantors for the first appellant. It was pleaded as part of the Respondents claim that financial assistance of ¢500,000,000 was offered to the 1st Appellant to repay same in fifty - two weekly instalments of 15 million cedis. As the first appellant defaulted in paying for fourteen weeks, the Respondent resorted to legal action.
The appellants filed a common statement of defence and jointly counterclaimed against the respondent to declare the transaction as illegal and running contrary to the Moneylenders Ordinance, Cap 176 and prayed the court to set aside the transaction and re-open the whole transaction in respect of the interest exacted on the facility. It was however admitted in the statement of defence that the first appellant received the