BASSIL v. KABBARA AND ANOTHER [1966] GLR 102

Division: SUPREME COURT

Date: 31 JANUARY 1966

Before: SARKODEE-ADOO C.J., APALOO AND SIRIBOE JJ.S.C..

CASES REFERRED TO

(1) Savage v. Rotibi (1944) 10 W.A.C.A. 264.

(2) Ademola II v. Thomas (1946) 12 W.A.C.A. 81.

(3) Asante v. C.F.A.O. (1956) 2 W.A.L.R. 177, W.A.C.A.

NATURE OF PROCEEDINGS

APPEAL from a judgment of Acolatse J. in the High Court, Accra, wherein he gave judgment for the respondents in a money-lending transaction. The facts are fully set out in the judgment of Apaloo J.S.C. COUNSEL K. Narayan for the appellant.

J. C. Armah for the respondents.

JUDGMENT OF APALOO J.S.C.

On 12 February 1963, the appellant (hereinafter called the plaintiff) brought an action against the respondents (hereinafter referred to as the defendants) in the High Court, Accra, claiming the sum of £G1,922 being principal and interest due from the defendants to the plaintiff in a moneylending transaction. The plaintiff was, at all the times material to this case, a licensed money-lender. The first defendant seems, on the evidence, to be the sole proprietor of an unincorporated company which goes by the name of Ghana Furniture and Manufacturing Co. The plaintiff advanced various sums of money to the defendants and the receipt of these sums was duly acknowledged. The first defendant issued post-dated cheques for the repayment of the loans but these cheques were dishonoured on presentation. As neither defendant was willing or able to pay these sums after receiving notice of dishonour, the plaintiff sought to recover the aggregate value of them by action.

The defendants answered that neither the cheques which were issued in repayment of the loans nor the receipts which were given in acknowledgement represented the true transactions. They said the loans were in fact much smaller than what the documents ex facie show and that the interest charged was excessive and that the whole transaction sinned against various sections of the Moneylenders Ordinance1 on which they specifically relied. They also say that no [p.104] of [1966] GLR 102 contemporaneous record of the loan transaction was made in obedience to the mandatory provisions of the Moneylenders Ordinance. Accordingly, the defendants pleaded that the loans were irrecoverable. Although there is no direct evidence what sort of business the second defendant company carries on, it seems that it also manufactures steel gates. They claimed that they manufactured some steel gates for the plaintiff which were at the date of the action unpaid for. Accordingly, they counterclaimed for the amount which according to them was due.

When evidence concluded, the learned trial judge Acolatse J. (as he then was) reserved judgment. As the defendants relied on various sections of the Moneylenders Ordinance, it became necessary for the learned judge to read and familiarize himself with such sections of the Ordinance as were relied on. While going through the Ordinance for the purpose of preparing his judgment, he noticed section 29 which prescribed the time within which actions to recover loans affected by the Ordinance should be brought. As neither party relied on any statute of limitation, the learned judge, instead of writing his judgment, invited argument as to the applicability of the section. When the parties appeared, no further evidence was heard but the judge invited submissions from counsel on the applicability of the Ordinance. As is only to be expected, counsel for the defendants submitted that the statute of limitation applied and put the plaintiff out of court. It was contended for the plaintiff that as that section was not relied upon by the defendants, it would not be right to rely on it to his detriment.

After this, the court then further adjourned and the learned trial judge proceeded to prepare his judgment. He rejected in toto the case of the defendants and was forthright in condemning them for seeking to avoid the payment of their just debts by reliance on various provisions of the Moneylenders Ordinance. On all the issues which were joined, the learned judge found for the plaintiff and held that the various sections of the Ordinance on which the defendants relied did not avail them. He however felt himself constrained by section 29 of the Ordinance to dismiss the suit on the ground that the action was barred by lapse of time. He held that the defendants failed to substantiate their counterclaim and dismissed that also. The defendants did not appeal against that part of the judgment which dismissed their counterclaim and whether the learned judge was right or wrong in dismissing it, is not an issue in this appeal. The plaintiff however feels aggrieved by the dismissal of the suit and hence this appeal.

[p.105] of [1966] GLR 102

It was submitted for the plaintiff that the learned judge was wrong in invoking the limitation provision of section 29 in dismissing the action as the defendants did not plead the statute of limitation or rely in their statement of defence on any facts which show an intention to rely on the statute. Counsel referred us to the statement of defence and in particular, to paragraphs (6) and (7) in which some sections of the Moneylenders Ordinance were specifically pleaded. For authority, the cases of Savage v. Rotibi,2 Ademola II v. Thomas,3 Asante v. C.F.A.O.4 and Order 19, r. 16 of the Supreme [High] Court (Civil Procedure) Rules, 1954,5 were cited and relied on.

For the defendants, it was contended that as some specific sections of the Moneylenders Ordinance were relied on, the plaintiff was put on notice as to the whole Ordinance. In any event, counsel argued that as the section relied on by the judge prescribed the period within which an action such as this could be brought, the judge was entitled to take cognisance of the law whether it is pleaded or not. In my opinion, the contention of counsel for the defendants cannot be sustained. I think there is a distinction firmly maintained between contracts which are illegal per se and in relation to which neither party can invoke the aid of the courts and those which are merely unenforceable. In the former case, the court is itself entitled to take cognisance of the illegality and refuse to lend its aid to its enforcement. The plea of limitation falls in the latter case and a person entitled to rely on a statute of limitation may waive it or not just as he pleases. But if he intends to rely on it, he is obliged by the mandatory provisions of Order 19, r. 16 either to plead it specifically or to plead such facts as would evince an intention to rely on it. The cases on which counsel for the plaintiff relied entirely support this.

In this case, the defendants were professionally represented and were advised to take advantage of some specific sections of the Ordinance. Accordingly, in omitting to rely on this particular provision, it is reasonable to presume that the defendants chose to waive it. That being so, the learned trial judge was not entitled to raise it on their behalf and, as the circumstances show, in the teeth of opposition by the plaintiff.

In my opinion, the contention of the plaintiff is not merely a pleading point but seems to me to be one of substance. The section on which the learned trial judge relied itself contains provisos which [p.106] of [1966] GLR 102 he disposed of without the adduction of evidence and had the defendants pleaded the section in their defence, the plaintiff might well have led evidence which would bring him into one of the provisos. In inviting merely argument but not evidence on the applicability of the section, the learned judge disabled the plaintiff from meeting the defence. What happened in this case exemplifies the wisdom of the mandatory requirement of Order 19, r. 16 that a defence like that of the plea of limitation, must be pleaded either expressly or by necessary implication.

I think therefore that this appeal must be considered on the footing that no question of limitation arises. Looked at that way, it is manifest that the plaintiff must succeed. As I have said, the learned trial judge held, contrary to the defendants’ contention, that the interest charged was not excessive and that the form of the loan contract conformed with the requirements of section 12 of the Ordinance. It follows that the defendants made no valid answer to the plaintiff’s claim and the plaintiff should have had judgment. Accordingly, I would allow the appeal and set aside the judgment appealed from. In lieu of it, I would enter judgment for the plaintiff against the defendants for the sum of £G1,922 or its equivalent in cedis plus interest at the rate of eighteen per cent per annum from 16 August 1961 to 31 October 1963.

JUDGMENT OF SARKODEE-ADOO C.J.

I agree.

JUDGMENT OF SIRIBOE J.S.C.

I also agree.

DECISION

Appeal allowed.

E. D. K.