May 13, 2010
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
The Court of Appeal considered an appeal by a welfare association of market women and traders against a Commercial Court ruling that had branded the association an unlicensed moneylender and declared its transaction with member-beneficiary unenforceable. The association, led by President Joana Ewurabena Ocran, had obtained a three-billion-cedi bank facility to enhance members’ working capital and disbursed 500 million cedis to a member to be repaid weekly, guaranteed by other members. After partial repayment, the member defaulted, prompting suit. Respondents alleged moneylending and harsh charges. Relying on the Moneylenders Act’s definition and presumption, the facility letter, and bank officer testimony, the appellate court found the association acted as a conduit for a bank loan, providing financial assistance rather than operating a lending business. It rejected procedural objections, reversed the trial court’s conclusions, dismissed the counterclaim, and entered judgment for the association.
AYEBI J. A.
This is an appeal from the judgment of the Commercial Court, Accra delivered on 26th November 2007.
At the trial court, the plaintiff who is the appellant herein, claimed the following reliefs:
(i) Repayment of an amount of 210 million cedis representing 14 weeks of 15 million cedis still unpaid.
ii) Interest on the above amount at the current bank interest rate, from 21st August 2006 to the date of final payment.
iii) Any other reliefs that may seem fit to the court.
On their part, Defendants who are the respondents in this appeal, counter-claimed for: (a) A declaration that the loan transaction is illegal and unenforceable in terms of the Moneylenders Ordinance, Cap 176.
b) An order setting aside the loan transaction for being illegal and unenforceable.
c) An order re-opening the said loan transaction on the ground that the interest and other charges levied by the plaintiff on the said loan transaction is excessive, harsh and unconscionable in terms of the Loans Recovery Ordinance, Cap 175.
From the pleadings and evidence on record, the material facts are not in dispute and should be not as charged by the appellant in its reply to the respondents answer.
The appellant is a welfare association of market women and traders incorporated as a company limited by guarantee.
One of its objects is to source bulk loans from commercial banks for the benefit of its members.
In December 2005, appellant per its president Joana Ewurabena Ocran, was granted a loan of three billion cedis to enhance its working capital.
To benefit from the loan, a member must satisfy certain conditions.
The 1st respondent, a member of appellant association applied for financial assistance of five hundred million cedis.
Having satisfied the conditions, she was given the five hundred million she requested for upon the condition that the whole amount is repaid in 52 weeks at fifteen (15) million cedis per week.
The 2nd to 4th respondents stood as guarantors for 1st defendant and in default they are jointly liable.
The 1st respondent paid for 38 weeks and thereafter defaulted in the repayment of the remaining 14 weeks amounting to 210 million cedis, hence the reliefs the appellant claimed against them.
The 1st respondent said that she was given a loan of 500million by the president of the appellant.
The other respondents also admitted they stood as guarantors for 1st respondent.
Again they admitted 1st respondent has since defaulted in the payment of the remain