AYIWAH AND ANOTHER v. BADU AND OTHERS [1963] GLR 86

DIVISION: IN THE SUPREME COURT

DATE: 11TH FEBRUARY, 1963

BEFORE: ADUMUA-BOSSMAN, MILLS-ODOI AND OLLENNU JJ.S.C.

CASES REFERRED TO

(1) Smith v. Roberts (1892) 8 T.L.R. 506

(2) Ecklin v. Little (1890) 6 T.L.R. 366, C.A.

(3) England v. Palmer (1955) 14 W.A.C.A. 659

(4) Victorian Daylesford Syndicate Ltd. v. Dott [1905] 2 Ch. 624; 74 L.J.Ch. 673; 93 L.T. 627; 21 T.L.R. 742

(5) Bonnard v. Dott [1906] 1 Ch. 740; 75 L.J.Ch. 446; 94 L.T. 656; 22 T.L.R. 399, C.A.

(6) Chapman v. Michaelson [1908] 2 Ch. 612; 24 T.L.R. 795; 52 S.J. 661

(7) Cohen v. Lester Ltd. [1939] 1 K.B. 504; [1938] 4 All E.R. 188; 108 L.J.K.B. 279; 159 L.T. 570

(8) Baba-Egbe v. Kasumu (1954) 14 W.A.C.A. 444; affirmed sub nom. Kasumu v. Baba-Egbe [1956] A.C. 539, P.C.

(9) Lartey v. Pabi (1958) 3 W.A.L.R. 424

[p.88] of [1963] GLR 86

(10) Owusu v. Nyamekye, S.C. Cyclostyled Judgments, July – December, 1960, p. 68

(11) Majolagbe v. Larbi [1959] G.L.R. 190

(12) Browne v. Dunn (1894) 6 R. 67, H.L.

(13) Cooper v. Slade (1858) 6 H.L.C. 746; 10 E.R. 1488, H.L.

NATURE OF PROCEEDINGS

APPEAL from a judgment of Apaloo J. delivered in the High Court, Kumasi, on the 16th May, 1961, (unreported) wherein he upheld the plaintiffs-respondents’ claim for inter alia cancellation of a mortgage deed on the grounds of illegality. The facts are fully set out in the judgment of Adumua-Bossman J.S.C.

COUNSEL

Victor Owusu for the appellants.

Hayfron-Benjamin, Snr., for the respondents.

JUDGMENT OF ADUMUA-BOSSMAN J.S.C.

This appeal is against a judgment dated the 16th May, 1961, of the High Court, Kumasi, which upheld the plaintiffs-respondents’ claim for (a) cancellation of a mortgage deed dated the 28th March, 1958, made between the plaintiffs-respondents as mortgagors and the first defendant-appellant as mortgagee, on the ground of “illegality resulting from harshness relating to the rate of interest charged”; and (b) injunction to restrain the sale of the property comprised in the said mortgage deed. The judgment, however, dismissed the first defendant-appellant’s counter-claim for £G1,275 the amount due for principal and interest under the said mortgage deed. The parties will be referred to shortly as plaintiffs and defendants respectively throughout the rest of this judgment.

From the pleadings the main issue which became outstanding for determination was whether the actual sum paid by the first defendant to the plaintiffs as principal money advanced was £G720, repayable with £G555 as interest thereon, as alleged by the plaintiffs, or whether the sum paid as principal money advanced was £G1,200 repayable with £G75 as interest thereon, as alleged by the first defendant. In the words of the learned judge, “the only serious issue between the parties is the amount of money lent and the interest charged.”

When the action eventually came up for trial, the second plaintiff alone appeared and gave evidence in support of the claims by herself and her mother, the first plaintiff. The defendants, however, had the assistance of counsel, Mr. Victor Owusu, and on their side also the first defendant alone gave evidence. It is one of the main grievances of the defendants that as the onus was on the plaintiffs and their case depended solely on the second plaintiff’s evidence, the learned trial judge should have held that it was not sufficiently proved, but he rather held it adequately proved and gave judgment granting the reliefs claimed. Before dealing with defendants’ counsel’s arguments on this ground, I would deal first with a new ground of appeal which was introduced just before the commencement [p.89] of [1963] GLR 86 of the hearing of the appeal, that:

“The amendment allowing [introducing] re-opening of the loan transaction was bad in law, since the Loans Recovery Ordinance, Cap. 175 has no application to the case before the court; wherefore, all the evidence led in support of that amendment was wholly inadmissible.” The introduction of this new ground was due to the fact that on a hearing date prior to that on which hearing actually started, the plaintiffs, then represented by counsel, applied “for leave to amend the statement of claim and writ by deleting the words `cancellation of mortgage deed,’ and substituting `re-opening of the loan transaction.’“ The application was opposed, but the learned Commissioner of Assize and Civil Pleas who then presided over the court granted “leave to amend.” The defendants’ counsel arguing this ground read section 3 (1) of the Loans Recovery Ordinance1 and submitted that the court has jurisdiction to re-open a loan transaction only when the moneylender has instituted an action to enforce his rights under the transaction, but that it was not open to a borrower to bring an action to claim re-opening of a loan transaction, as the plaintiffs in the instant case by their amendment purported to do. Plaintiffs’ counsel’s answer to this was that although leave to amend was granted, by the terms of Order 28, r. 7, the plaintiffs had to write, or cause to be written out, the proposed amendment into the statement of claim and writ on the court’s file and thereby make or effect the amendment within the period prescribed by the rule; but as they failed to do this the leave granted ipso facto became void. Order 28, r. 7 is as follows:

“(7) If a party who has obtained an order for leave to amend does not amend accordingly within the time limited for that purpose by the order, or if no time is thereby limited, then within fourteen days from the date of the order, such order to amend shall, on the expiration of such limited time as aforesaid, or of such fourteen days, as the case may be, become ipso facto void, unless the time is extended by the Court or a Judge.”

The provisions of rule 7 undoubtedly contemplate and prescribe the taking of implementary steps by a party who has obtained leave to amend. Rule 7, together with rules 8, 9 and 10 contain the necessary directions as to the steps to be taken to implement the grant of leave to amend; and as in the instant case, after the grant of leave to amend, the plaintiffs did not have the proposed amendment written into the original writ and statement of claim on the court’s file, nor had a newly amended writ and statement of claim filed with copies for service, in substitution for those originally filed, nor paid any amendment fee, it seems clear that plaintiffs’ counsel’s submission was well-founded and unanswerable. The defendants’ counsel’s assumption that the leave granted operated to bring into existence an effective amendment might have been justified if the amendment had been ordered by the court proprio motu. So, for example, in Smith v. Roberts,2 an action arising from the circumstances that the activities of the plaintiff, [p.90] of [1963] GLR 86 a landlord, by his architect, in repairing premises occupied by the defendant, a tenant, disturbed the latter’s occupation and she vacated without notice to the landlord who thereupon sued for rent for the vacated period, and the tenant pleaded eviction and breach of covenant for quiet enjoyment, Denman J. who tried the action in the Queen’s Bench concluded his judgment in favour of the defendant with the following material and pertinent pronouncement concerning amendment3:

“…[At the time he brought this action for rent] he was doing acts which rendered the occupation of the premises by her impossible; and he kept the key, and has since then himself made use of the premises. There was then a complete `change of possession’ with the assent of both the parties. … The defences set up were not consistent with this, but might be amended, and would be deemed to be so.”

There is also the case of Ecklin v. Little4 a slander action in which the defamatory words proved at the trial were slightly different from those set out in the statement of claim and, despite the fact that plaintiff’s counsel had not availed himself of the trial judge’s offer to grant him amendment, the Court of Appeal felt disposed on their own initiative to amend. Denman J. said5: “We have thought it necessary to amend the statement of claim into the words proved by Miss Jack.” Ecklin v. Little (supra) was followed and applied by the West African Court of Appeal in England v. Palmer6 where the court on its own initiative allowed amendment of the statement of claim by adding the words “in possession” after the word “owner” wherever that appeared in the writ of statement of claim, in a case where the issue contested was whether the plaintiff had possession of the premises allegedly trespassed upon. It is in cases and circumstances such as those above referred to that counsel might have some excuse in assuming that the amendment was effectually made by the terms of the court’s order itself without any necessity for any implementary steps on his part or risk of the court’s order becoming ipso facto void. It would seem to be advisable, however, for counsel for the party in whose favour an amendment has been ordered, even if on the court’s own initiative, to enquire about, and, if necessary see to its implementation. As the plaintiffs’ counsel has pointed out therefore it is clear that the trial of the action proceeded on the basis of the original writ and statement of claim certainly as far as the trial judge was concerned; it is patent that he did not notice any amendment and decided the case on the original claims for reliefs appearing on the face of the writ and statement of claim. That is put beyond doubt by the introductory sentences of his judgment that:

“In this action the plaintiffs claim cancellation of a deed of mortgage executed between the plaintiffs and the defendants, on the ground that the interest charged was harsh and illegal and a perpetual injunction restraining the defendants from selling the mortgaged premises.”

[p.91] of [1963] GLR 86

Irrespective, however, of the plaintiffs’ counsel’s reply that there was in fact no amendment to constitute any good basis for the defendants’ counsel’s argument, and assuming that there had been in fact an effective amendment whereby a claim had been introduced at the instance of the plaintiffs for the re-opening of the loan transaction, the defendants’ counsel’s argument would still be wrong, for it is clearly not correct that the claim to re-open a loan transaction on the grounds that it is harsh and unconscionable is open only to the moneylender or mortgagee, but not to the borrower or mortgagor. While section 3 (1) of the Ordinance confers upon the court power “to re-open moneylending transactions in suits by Creditors” – as indicated in the marginal note – subsection (2) of the same section, in unambiguous terms, confers the same power of re-opening moneylending transactions:

“at the instance of the borrower, or surety, or other person liable… and the Court shall have power, notwithstanding any provision or agreement to the contrary, to entertain any application under this Ordinance by the borrower or surety, or other person liable . . .”

The Loans Recovery Ordinance is in fact a reproduction locally of the English Money-lenders Act, 1900,7 s.1, and two cases decided shortly after the passing of the Act in each of which it was the borrower who instituted the action claiming re-opening of the loan transaction as being harsh and unconscionable, put beyond doubt this question of the borrower’s right to sue and maintain that claim for re-opening of the loan transaction and for accounts.

The first is Victorian Daylesford Syndicate Ltd. v. Dott,8 a Divisional Court case in which Buckley J. in stating the facts, referred to the unconscionable nature of the loan transaction by stating that the defendant’s interest on £G500 advanced for roughly nine months amounted to no less than £G1,928 13s. 9d. and then proceeded as follows:

“The plaintiffs say two things – first, that the defendant being a money-lender not registered under the Money-lenders Act, 1900, the contract is void; and secondly, that even if that is not so, the terms are harsh and unconscionable.

Upon the first question the relevant provisions of the Act are two—namely, first, that a money-lender, which this defendant is, must register himself under the Act; and, secondly, that he shall not enter into any agreement in the course of his business as a money-lender otherwise than in his registered name . . . It follows from this that the defendant has committed a breach of that clause of the Act of Parliament which requires him . . . to contract in the course of his business as a money-lender in a registered name. The next question is whether the Act is so expressed that the contract [which is made] is prohibited so as to be rendered illegal… The short effect of the statute as it seems to me, is this—that it provides that a money-lender’s contract must be in that money-lender’s registered name; otherwise [p.92] of [1963] GLR 86 a penalty is imposed upon him, the result being that the act done is an act forbidden by statute, and is illegal . . . For these reasons I come to the conclusion that the contract under which the defendant was to receive certain sums was an illegal contract on which he cannot sue. The result is that his counterclaim fails . . .” The second is Bonnard v. Dott,9 in which Collins M.R. who presided in the Court of Appeal referred to the relevant facts and the consequential legal position as follows:

“This is an appeal from a decision of Kekewich, J., in a money-lending case, in which the borrower sought to re-open the transaction with the lender, as coming within the Money-lenders Act, 1900. Kekewich, J., in going into the whole question, first decided the issue that the defendant was a money-lender, and then proceeded to grant relief under section 1, on the ground that the transaction was `harsh and unconscionable’. The defendant put in a counterclaim, and on that counterclaim the question of the defendant’s own position came up for discussion, viz., whether he was or was not a person entitled to put in a counterclaim at all. It now appears that he was not in a position to enforce his counterclaim by reason of his not having registered himself as a money-lender under the provisions of the Act. That fact having come out at the trial, in my opinion, it is open to the respondent to support the judgment of Kekewich J., on the ground of the defendant’s incapacity to enter into the transaction at all, as well as on the ground on which Kekewich J. proceeded, subject to the burden on the respondent of submitting to the terms imposed upon him by that judgment as the condition of obtaining relief, there having been no cross-appeal by the respondent. Therefore, I think that we are justified in considering this case in one aspect only and in confining ourselves to the question of the defendant’s incapacity… If it turns out that the money-lender was not in a position to act on his contract at all, that disposes of the whole case, and that turns upon the provisions of sub-section 1 of section 2 of the Money-lenders Act, 1900, dealt with by Buckley, J., in a case against the same defendant-Victorian Daylesford Syndicate Limited v. Dott. The learned Judge there had to consider what was the position of a money- lender who had failed to comply with the provisions in that sub-section as to registration, and who had entered into a money-lending contract. The learned Judge having those clauses [of the Act] before him, came to the clear conclusion that the transaction was illegal . . . I agree entirely with Buckley, J.’s decision and I think that this appeal fails.”

It is to be observed that in each of the two cases above referred to the defendant was found to be a moneylender within the Act who by reason of a breach of the provisions of the Act as to registration and contracting in the registered name, rendered his contract unenforceable; and secondly, that although the action in each case was by the borrower who only claimed that the court might re-open the transaction and order what might be found to be fairly due to the defendant, the court clearly declared that the defendant was not entitled to be paid anything at all, in so far as the court was bound to declare what the rights of the parties are in each

[p.93] of [1963] GLR 86 action. In the Victorian Daylesford Syndicate case, Buckley J. after dismissing the defendant’s counter-claim continued as follows10:

“In the action the plaintiffs say that they do not wish to rely upon the non-registration of the defendant; that they are desirous that the man should have what is a fair return for his money; and they ask me to act upon section 1 of the Act and find what is fairly due. I cannot put myself in that position. I have held that the contract is void. I cannot then set myself to see whether under Act of Parliament I ought to set it aside, because there is nothing to set aside, and I cannot say how its terms ought to be reduced, because there are no terms to reduce.” In the end he made something in the nature of a consent order, for he said11: “The plaintiffs say this: `we do not seek to get back the £25 a month, viz, the 60 per cent on the £G500; let him keep that’. I can put that into the order: the plaintiffs voluntarily offering to allow the defendant to retain the 60 per cent, order the defendant to repay the other sums, and to restore the shares.”

Then in the Bonnard case where the trial judge, possibly from the plaintiff’s attitude that all he wanted was for the court to re-open the transaction and determine what was fairly due to the defendant, did as the plaintiff required and reduced the interest charges and the plaintiff refrained from appealing when the defendant appealed against the dismissal of his counter-claim, Collins, M.R. observed that12: “If the Respondent were not barred by his failure to appeal the position would be this: That the defendant is a person who is declared by the Court to be a money-lender, and who by his omission to register himself finds himself under a statutory incapacity to enforce the bargain which he has made. The consequence of that is that whether it is the borrower or the lender who brings the matter before the Court, the transaction is absolutely void. The lender cannot compel the borrower to return the money lent, while the borrower, being one of the classes which the Act was presumably designed to protect, can compel the lender to return the securities for the loan . . .”

The decision in the first case (Victorian Daylesford Syndicate Ltd. v. Dott)13 which was affirmed and adopted by the Court of Appeal in the second case (Bonnard v. Dott14) has been adopted and applied in several other subsequent decisions, notably Chapman v. Michaelson,15 Cohen v. Lester Ltd.16 and Baba-Egbe v. Kasumu17 affirmed by the Privy Council as Kasumu v. Baba-Egbe,18 all of which were actions at the instance of the borrower or debtor. In the light of those cases which were decided on [p.94] of [1963] GLR 86 statutory provisions identical with the provisions of our Loans Recovery Ordinance and Moneylenders Ordinance19 it would seem that the decision in Lartey v. Pabi20 must be considered a decision per incuriam. Furthermore, those decisions or authorities constitute the most effective and conclusive answer to defendants’ counsel’s submission that it is incompetent for the borrower to claim re-opening and accounts.

Turning now to the ground that the trial judge should have held that the plaintiffs’ case was not sufficiently proved counsel submitted that the onus was upon the plaintiffs but was not discharged by the evidence given by the second plaintiff alone; that her evidence on the outstanding controversial issues as to the principal money lent and the interest charged there on, was contradicted by the evidence of the first defendant, which, counsel contended, was supported by the contents of the mortgage deed (exhibit 1). Moreover, although there was corroborative evidence available which could have been adduced, that is to say from the first plaintiff, she was not called. Counsel therefore contended that the plaintiffs failed to prove their case. He cited Majolagbe v. Larbi21 and expressed reliance on the fourth decision set out in the headnote that: “Where corroborative evidence must exist, the Court expects a party who makes an averment which the other party denies, to adduce such corroborative evidence in support of his own.” Subsequently, in the final reply, he expressed reliance on another case, Kingsley Owusu v. Abena Nyamekye.22 In that case the defendant-respondent admitted a debt, the value of goods sold and delivered, and pleaded payment which the presiding Commissioner of Assize and Civil Pleas held to have been proved by her evidence. On appeal to this court it was held that:

“Upon the defendant’s plea the onus shifted upon her to prove payment. This burden, in our view, she failed to discharge, and upon the evidence, judgment should have been entered for the plaintiff; but the learned Commissioner misdirected himself in assuming that the onus remained on the plaintiff and wrongly concluded that he was not impressed by the plaintiff’s evidence, and accepted the mere allegation of payment by the defendant without proof, and entered judgment for the defendant.”

With regard to the cases cited and relied on, it is sufficient to say that they are neither of them in pari materia, nor does either of them purport to lay down a proposition that in no instance or under no circumstance whatsoever can the court accept the evidence of a sole or single witness, merely because his testimony is contradicted by the evidence of another witness. It must obviously depend on the circumstances of each particular case. In the instant case the record discloses circumstances, to some of which the learned judge referred, which entitled him to accept the second plaintiff’s evidence in preference to that of the first defendant. Of these, the first is that she deposed to a number of material occurrences and incidents in respect of which her testimony was not challenged at all by any [p.95] of [1963] GLR 86 question by the defendants’ counsel in cross-examination; and it may well be that her unimpeached veracity in respect of those matters on which her evidence was unchallenged proved the deciding factor in persuading the learned judge as to her veracity in respect of those matters on which her evidence was challenged. In this connection the plaintiffs’ counsel drew attention to her evidence as to the first defendant’s demands or requests for drinks as “knocking fees,” and the supply by the plaintiffs of schnapps to him on each of the two occasions when he gave them moneys on loan. Not a single question in cross- examination was put to the second plaintiff concerning the schnapps which she asserted they supplied to the first defendant. His counsel admitted this, and stated that he and his client considered these drinks allegedly supplied to the first defendant a trifling and unimportant matter. So indeed it may be, but true testimony as to that can obviously affect credit as to other matters very considerably. Again, in connection with another question of fact in the case, the second plaintiff’s evidence was quite unchallenged by any cross-examination—and that is the object and purpose, as disclosed by the plaintiffs to the first defendant, for which the loan was required. According to the second plaintiff, she informed the first defendant that she required the loan to settle an account with the Ghana Commercial Bank and that she even intimated quite clearly to the first defendant that she would return for a further amount if the first amount should prove insufficient to settle her account completely; that accordingly when she was told that ¢200 more was required she returned and applied for £G250. This very crucial evidence was not challenged with a single question in cross-examination. When, however, the first defendant was giving evidence, then in answer to the second plaintiff’s cross-examination, he contradicted her partially by testifying that:

“When you first came, you said you would pay that sum to the bank. You returned three days later and said you wanted another £G600 to complete your building.”

But as pointed out by Herschell L.C. in the House of Lords case of Browne v. Dunn23:

“It seems to me to be absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness is not speaking the truth on a particular point, to direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain,… to argue that he is a witness unworthy of credit…I have always understood that if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him.”

This evidence as to the purpose for which the second loan was required is, in my view of decisive importance because it furnishes the reason, according to whether it is the second plaintiff’s evidence or that of the first defendant on that point which can be believed, why a relatively

[p.96] of [1963] GLR 86 moderate amount of £G250 was applied for, as alleged by her, or why the substantial amount of £G600 was applied for as alleged by the first defendant. In short the truth as to the object or purpose for which the second loan was required would lend support to either of the two conflicting versions as to what amount was really lent. Accordingly the absence of any challenge by cross- examination of the second plaintiff’s evidence on that point and indeed the first defendant’s partial admission that the purpose for which the first loan at least was applied for was disclosed to be, as the second plaintiff testified, for settlement of her indebtedness to the bank, are matters fraught with extreme significance in the evaluation of the respective cases of the parties, as we shall presently find they were in fact treated by the learned trial judge.

Dealing still with the same ground that the plaintiffs’ case should have been held not sufficiently proved—in the second place, it will be observed that the gist of the second plaintiff’s testimony, which was that the true facts of the transactions were not those which were set out in the mortgage deed (exhibit

1) was in a large measure accepted by the first defendant, even though the latter denied the former’s testimony as to the sums actually paid as principal amounts lent, and the interests charged thereon. The first defendant’s substantial acceptance of the second plaintiff’s testimony impugning the accuracy of the mortgage deed was, by his admission, that the transaction was not a single one as represented in the mortgage deed, but two distinct transactions. His evidence was, “I advanced them money twice; on the first occasion I gave them £G600 . . . On the second occasion they had a further £G600.” In this respect it should be remembered that the first defendant was under a statutory duty to cause to be set out in the mortgage deed nothing but the most accurate and true details of each and very borrowing transaction which took place between him and the plaintiffs. That duty was imposed by the Moneylenders Ordinance, s. 12(3) which provides that:

“No contract by a borrower or his agent for the repayment or securing of money lent…by a moneylender, or for the payment . . . of interest on money so lent, and no security given… in respect of any such contract shall be enforceable, unless a memorandum in writing of the contract be made and signed by the parties to the contract . . . The memorandum aforesaid shall contain all the terms of the contract, and in particular, shall show separately and distinctly:—(a) the date on which the loan is made; (b) the amount of the principal of the loan; and (c) the rate of interest per centum per annum payable in respect of the loan . . .” In Cohen v. Lester Ltd.,24 decided with reference to the English Moneylenders Act, 1927,25 s. 6, in substantially identical terms with section 12(3) of our local Moneylenders Ordinance above set out, it was held that the failure to set out the exact and precise details for four separate and distinct loan transactions, in each of four separate documents, memoranda or notes relating to the said four separate transactions, [p.97] of [1963] GLR 86 constituted a breach of that section of the Act. Tucker J. (as he then was) in the course of his judgment stated as follows26:

“There is no question in this case raised with regard to the rate of interest being excessive or anything of that kind, but it is said and admitted that the provisions of the Moneylenders Act, 1927, section 6, were not complied with, on the grounds that: (a) the note or memorandum of contract in respect of the said transactions and/or the copy thereof did not show that it was a term thereof that in the event of default of payment of any instalment, the jewellery (held as security) might be sold by the defendants;

(b) the note or memorandum of contract in respect of the first transaction did now show (i) any agreement that part of the amount contracted to be advanced should be deducted and paid to Messrs Percy aforesaid; (to redeem and receive from them the jewellery now held on deposit as security) and (ii) the amount so deducted; (c) the note or memorandum in respect of the 2nd, 3rd and 4th transactions did not show how the amounts to be paid by the plaintiff in respect of the previous transaction were made up – that is to say, the respective sums allocated to principal and interest respectively; (d) the note or memorandum in respect of the 3rd and 4th transactions did not show that the amounts stated by the defendants to be due in respect of the previous transactions should be deducted by them from the principal moneys to be advanced.”

From the above indications of the kinds or types of omissions of details from the note or memorandum which, in that case, were held to constitute non-compliance with the statutory duty of having a document made embodying the terms of the loan transaction, it is apparent that the strictest accuracy, nay, the most scrupulous exactitude, is required in the matter of the inclusion or insertion of the details of each separate and distinct transaction in the document intended to embody each particular transaction. It seems plain enough therefore that the first defendant’s mortgage deed fails to satisfy the exacting requirements of that material section 12 (3) of the Ordinance at any rate in so far as it did not set out separately and distinctly the two transactions which he himself in his evidence admitted, and he undoubtedly confessed to a breach of his statutory duty. In those circumstances the learned judge was entitled to assume that the first defendant failed to comply with the requirements of the Ordinance, with no other object but to secure some of those unfair advantages over borrowers against which the Ordinance was directed, and therefore to regard with suspicion his evidence concerning the controversial issues as to the amounts advanced as principal moneys and the interests charged thereon. In the end he came to the conclusion that the “first defendant is an unscrupulous moneylender”; but before coming to that conclusion he proceeded first to weigh up and evaluate the whole of the available evidence on the two issues, and ended by discrediting the first defendant’s version of the evidence. It only remains therefore to ascertain now how far he was right or wrong in the manner of his consideration and appraisal of the respective cases. [p.98] of [1963] GLR 86

In this connection it will be observed that he expressed cogent reasons for his preference of the second plaintiff’s evidence when, after reviewing the evidence adduced towards establishing the respective cases, he expressed himself thus:

“If I had to rely on the uncertain guide of demeanour to decide this case, I should feel no difficulty at all in accepting plaintiffs’ evidence; the second plaintiff gave evidence in a manner that impressed me. But quite apart from it, the probabilities of this case seem to me strongly to support the plaintiff’s version.” It can hardly be said he was wrong in focusing his attention upon “demeanour” and “the probabilities of the case” as the beacon lights to guide him in his consideration of the respective cases. In respect of the latter factor, was it not said by Willes J. delivering the opinion of the House of Lords in Cooper v. Slade27:

“. . . I may be excused for referring to an authority in support of the elementary proposition that in civil cases the preponderance of probability may constitute sufficient ground for a verdict. I find such an authority referred to in Mr. Best’s very able and instructive treatise on the Principles of Evidence’ – (2nd Edition, page 114). So long since as the 14th Elizabeth, Chief Justice Dyer and a majority of the other Justices of the Common Pleas laid down this distinction between pleadings and evidence that in a writ or declaration or other pleading certainty ought to be shown, for there the other party must answer to it, and the Court must adjudge upon it; . . But where the matter is so far gone that the parties are at issue…so that the jury is to give a verdict one way or the other, there, if the matter be doubtful, they may found their verdict upon that which appears the most probable, and by the same reason that which is most probable shall be good evidence Newis v. Lark, (Powd. 412).’“

And, as it is not highly improbable that the plaintiffs who were in such financial straits that they were obliged to borrow the substantial sum of £G500 for £G600 with 50 per cent. interest thereon to pay to the bank to redeem the first plaintiff’s premises should at such a time be arranging to borrow another substantial amount of £G600 for the construction of another building? In connection with this question of the second application for a further loan, it will be remembered that the parties were agreed that on the occasion of the first loan, the second plaintiff gave an intimation that she would return for a further loan if the amount of £G500 received (for £G600) should prove insufficient to liquidate her account with the bank entirely. According to the first defendant however, who also admits that there was this intimation that the second plaintiff would return for a further loan, the purpose for which the further loan was required as disclosed to him was the completion of a building of one of the plaintiffs; it is not clear which of them. It is this

[p.99] of [1963] GLR 86 latter rather improbable situation that the learned trial judge felt obliged to disbelieve and therefore rejected when he said:

“I accept the second plaintiff’s evidence that she informed the first defendant that if that amount proved insufficient to meet her indebtedness she would return. She in fact did.”

By that finding, which in my view was amply warranted, the trial judge not only accepted the second plaintiff’s version of the facts but inferentially rejected the first defendant’s version. I entirely agree, moreover, as held by the learned judge, that the probabilities were strongly in favour of the plaintiffs’ version of an additional money to discharge the obligation with the bank, rather than the first defendant’s version of a further loan for the completion of a house belonging to one of the plaintiffs. Turning to the question of the interests charged also, the learned judge appears to have considered the probabilities, and could not see any tangible reason made available in the first defendant’s evidence why, he being entitled to charge fifteen per cent. on the first £G500 and twelve per cent. on the amount in excess of £G500, should charge as low as nine and three-eighth per cent. (less than ten per cent. on the total amount of loan), particularly having regard to the fact which he pointed out that far from the first defendant showing any generous and kind disposition, he rather showed the disposition of the Shylock type of moneylender, in that as soon as the time fixed for payment elapsed, he promptly resorted to steps to enforce his rights of sale of the mortgaged property reserved under the mortgage deed. He also referred to the further evidence of the first defendant about the interest charged when, in answer to him, the first defendant said: “When I gave the first loan I had £G37 10s. interest . . . The clerk who prepared the document told me I should charge the £G37 10s. on the £G600.” As to this when regard is had to the fact that on his own evidence the clerk did not come into the picture at all until the occasion of the second loan when the mortgage deed covering both transactions came to be prepared and executed, it is obvious that his evidence that the clerk told him to charge £G37 10s. on the first loan can clearly not be believed, and that, as pointed out by the learned judge, the greater likelihood is that the clerk at the time of the making of the mortgage deed advised him what interest to insert in the document to be on the safe side. There were therefore many cogent reasons to some of which the learned judge expressly referred, why, although the second plaintiff alone gave evidence, her evidence was to be preferred to that of the first defendant on the controversial facts, and I am satisfied the learned judge amply justified his preference for the plaintiffs’ case. That ground of appeal therefore fails.

Counsel’s third and last ground was based on the assumption that the writ and statement of claim were amended to introduce a claim for the re-opening of the transaction; in which case he submits that the original claim for cancellation of the mortgage deed having been abandoned, the learned judge erred in holding that exhibit 1 (the mortgage

[p.100] of [1963] GLR 86 deed) is void and unenforceable. In counsel’s further submission, the plaintiffs having asked the court to re-open the transaction and go into the accounts and order what amount is reasonable to be paid by the plaintiffs, that is the relief to which they are entitled and which the court can properly and legitimately award them, but not cancellation of the mortgage deed which, by the amendment they abandoned. As to this argument, I have already referred to the reply which counsel for the plaintiffs made that, in fact, the leave granted became void and there was no amendment, and I have further pointed out why I am satisfied that plaintiffs’ counsel’s submissions are well-founded.

The very basis of defendants’ counsel’s third ground of appeal and the arguments founded upon it being non-existent, it follows that that ground of appeal and the argument founded upon it are misconceived and wholly untenable. Assuming however that there had been an effective amendment so that the only claim before the court had been one for re-opening of the transaction and an order for payment of what the court might find to be fairly due, still the authorities are clear, that once it appears to the court that the transaction offends against any provision of the Moneylenders Ordinance so that it is illegal, a trial judge is bound to have regard to the illegality and make the necessary consequential order. The cases on the Money- lenders Act, 1900, to which I have already made reference (i.e. Victorian Daylesford v. Dott and Bonnard v. Dott cited supra) are clear on this point. The leading case now on this question, however, must be regarded as Kasumu v. Baba-Egbe,28 in which Lord Radcliffe delivering the judgment of the Board of the Judicial Committee, after an exhaustive examination of the older authorities, pointed out as follows: “. . . Much of the Money-lenders Act, 1900, and the Moneylenders Act, 1927, is directed to enforcing measures of control that have no concern with the intrinsic nature of the contract made. Such requirements as that the moneylender must be registered or licensed, must use his authorized name, must procure a note or memorandum of the contract signed personally by the borrower, must keep a book in which is entered a contemporary record of the transaction, strike indifferently at all money-lender’s loans, however moderate the terms of any particular transaction. When the governing statute enacts that no loan which fails to satisfy any of these requirements is to be enforceable it must be taken to mean what it says, that no court of law is to recognize the lender as having a right at law to get his money back. That is part of the penalty which the statute imposes. There is no room to reform the terms of the loan, since the statute is not concerned with the vice of its content but with the vice of the conditions under which it was made.”

Apaloo J. was right therefore in holding upon his findings that section 26 (1) which provides that: “Any moneylender who shall take as security for any loan, a promissory note or other contract for the repayment of money lent in which the principal is to the knowledge of the lender not truly stated . . . shall be guilty of an offence . . .”

[p.101] of [1963] GLR 86 was infringed; and that by the terms of subsection (2) that, “Every such…contract in respect of which an offence has been committed under this section shall . . . be void and unenforceable”; he was bound to declare exhibit 1 void and unenforceable.

I would therefore affirm his judgment and dismiss this appeal with costs assessed at £G37 in favour of the plaintiffs-respondents.

JUDGMENT OF MILLS-ODOI J.S.C.

I agree.

JUDGMENT OF OLLENNU J.S.C.

I also agree.

DECISION

Appeal dismissed with costs

J. D.