COURT OF APPEAL
DATE: 22 FEBRUARY 1971
APALOO, LASSEY AND SOWAH JJA
CASE REFERRED TO
Newton v. Pyke (1908) 25 T.L.R. 127.
NATURE OF PROCEEDINGS
APPEAL from the judgment of his honour Judge Okai delivered at the Circuit Court, Sunyani, dismissing the appellant’s action for the recovery of a loan.
COUNSEL
Joe Reindorf for the appellant.
A. Adjetey for the respondents.
JUDGMENT OF APALOO J.A.
This appeal is from the judgment of the Circuit Court, Sunyani (his honour Judge Okai), dated 11 January 1968. The judgment, dismissed a claim by the appellant to recover from the respondents £G474 or N¢948.00 being the balance of money lent by the appellant to the first respondent and guaranteed by the other respondents.
The transaction was evidenced in writing and was produced in evidence. It states that the first respondent received from the appellant the sum of £G600 “being money borrowed without interest.” The agreement then stipulates the dates when repayments were to be made and the amount of such repayment. This was invariably shown as £G50. The appellant’s complaint was, that the first respondent made default with the payment and by November 1964, he had paid only £G126. The writ was taken out to recover the unpaid balance. The respondents admit the loan transaction and the fact that only £G126 out of it was repaid. But they averred that in truth the actual sum they received from the appellant
[p.262] of [1971] 1 GLR 260
was £G360. According to them, the appellant agreed to grant them a loan of £G400. He was to charge interest of £G200. Thus their total agreed indebtedness was £G600. This was what was stated in the document which the appellant caused to he prepared. But when they came to receive the physical cash, the appellant deducted from it £G40. This sum was said to be a permitted customary deduction called “Nteani” or “Drink.” The respondents therefore claimed that the transaction was harsh and unconscionable and they prayed that it be re-opened under the Loans Recovery Ordinance, Cap. 175 (1951 Rev.). The appellant disputed this version of the facts and stuck to his story that he gave out to the respondents £G600 in cash without any deduction and entirely without interest.
A serious issue was therefore joined between the parties on the facts. The learned circuit judge resolved this in favour of the respondents. He held accordingly that the appellant contravened various provisions of the Moneylenders Ordinance, Cap. 176 (1951 Rev.), and that the loan was therefore irrecoverable. It is this conclusion that the appellant sought to reverse by this appeal.
Mr. Reindorf for the appellant did not question the learned judge’s conclusion on the facts. This is an extremely simple issue of fact and eminently suited for the determination of a tribunal of first instance. I do not think counsel would have met with any success if he had attempted to displace those findings. But his main complaint was that the evidence led did not justify the finding that the appellant was a moneylender. It was said the judge did no more than rely on the presumption raised by section 3 of the Moneylenders Ordinance. It was said that that presumption did not relieve the respondents of proving that the appellant was a money-lender and that, in any event, there was evidence which rebutted that presumption. Counsel therefore submitted that as the appellant was not shown to be a moneylender, the transaction was not affected by the some what punitive provisions of the Moneylenders, Ordinance. For authority, he relied on the English High Court case of Newton v. Pyke (1908) 25 T.L.R. 127.
The headnote in Newton v. Pyke reads:
“Whether a person is carrying on business as a money-lender is in each case a question of fact. It is not enough to bring a person within the purview of the Moneylenders Act, 1900 to show that he has on several occasions lent money at remunerative rates of interest; to bring him within the Act a certain degree of system and continuity about his transactions must be shown.”
This is the decision of Walton J. in 1908 and I think, with respect, that it accords with common sense that if one party alleges that another is a moneylender, he should show some continuity and system about his work. No one of ordinary sense would say a person is a moneylender simply because he lent money on one occasion and took a little interest. But our legislation by section 3 provides otherwise. It says, in so far as material, “any person who lends money at interest or who lends a sum of money in consideration of a larger sum being repaid shall be presumed to
[p.263] of [1971] 1 GLR 260
be a moneylender until the contrary be proved.” The statute thus creates a rebuttable presumption in favour of a person who alleges that another is a moneylender provided he shows that that person lent money even on one occasion at interest. From a purely evidential point of view, if the person against whom such proof is offered elected to offer no evidence, then a court would be justified in holding him to be a moneylender and visiting him with the penalties and disability prescribed by the Moneylenders Ordinance. Mr. Reindorf admits that no provision similar to section 3 of our Ordinance exists in the English Moneylenders Act, 1900 (63 & 64 Vict., c. 51), on which Newton v. Pyke was decided and accordingly, that decision offers no guidance in this case.
It seems to me therefore that to escape the clutches of the Moneylenders Ordinance, the appellant must displace the statutory presumption by evidence. That evidence must be directed to showing that he is not a moneylender within the meaning of section 3 of the Ordinance, that is, that his business is not that of moneylending or that he does not carry on or advertise himself or announce himself or hold himself out in any way as carrying on business as a moneylender. In a sense, the appellant will have to establish the negative. In this wise, section 3 of the Ordinance seems to reverse the well-known rule of the law of evidence that he who affirms must prove and not he who denies. But this clearly is a legislative policy expressed in unambiguous language and it is not for us to question the wisdom of the legislature. It is plain that the whole object of the Moneylenders Ordinance is to protect borrowers from exploitation by moneylenders. It is therefore not surprising that Parliament would want to go to great lengths to achieve this even if this results in setting at nought well established rules of law.
Mr. Reindorf submitted in the alternative that even if the statute relieved the respondents of the initial burden of proving that the appellant was a moneylender, such presumption was wholly rebutted by the evidence. This submission is hardly supported by the evidence. Apart from his bare denial that he was a moneylender, the appellant merely relied on the promissory note (exhibit A). He admitted that he had lent money to people in the past but he watered down the effect of that evidence by saying, “I sometimes help people in need if they approach me. I cannot say how often I have done so.” He did not put in the witness-box any of the persons to whom he showed that philanthropy. But one of the persons to whom he admitted giving a loan in the past, was the third respondent, Afua Tawiah. She testified that, “The plaintiff [meaning the appellant] is a teacher at Kwatri. He is also a moneylender but he has no licence for doing so. He helps people who are in need and approach him.” As an example of the type of help that the appellant renders, Afua said, “About three and half years ago, I took a loan of £G100 with interest of £G50 and he took £G10 out as customary deduction and I received £G90. I have paid it.” This evidence was not challenged in cross-examination. Indeed Afua regarded the appellant as a less rapacious type of moneylender because she said, “I went to the plaintiff for the second loan because he does not charge £G100 on £G100, as others do. I liked his rate of interest.”
The first respondent also testified to the general reputation of the appellant. He said, “I know the plaintiff through a moneylending transaction. I knew him as a moneylender.” He then proceeded to give evidence of this particular transaction. No question was directed to him in cross-examination as to how he came by this knowledge.
In my opinion, contrary to the submission of Mr. Reindorf, the evidence as a whole, buttressed the statutory presumption. It did not even begin to rebut it. I think therefore that the learned judge was right in holding that the appellant was a moneylender and visiting him with the penalties prescribed by that legislation.
Mr. Reindorf next argued I thought not very hopefully, that the learned judge was wrong in admitting the oral evidence of the actual sum lent as that evidence contradicted what was embodied in the document. He said although section 3 of the Loans Recovery Ordinance permitted a court to receive evidence of the actual sum lent, this means admissible evidence and not inadmissible evidence. But that evidence was, in the submission of counsel, inadmissible. This contention is founded on no more than the trite rule of the law of evidence that, when a transaction has been reduced to or recorded in writing, either by requirement of law, or agreement of the parties, extrinsic evidence is, in general, inadmissible to contradict, vary, add to or substract from the terms of the document. But this well-known rule is subject to a number of exceptions. One such exception noted at p. 731, para. 1798 of Phipson on Evidence (10th ed.) is:
“Extrinsic evidence is admissible to prove any matter which by substantive law affects the validity of a document or entitles a party to any relief in respect thereof, notwithstanding that such evidence tends to vary, add to or, in some cases, contradict the writing . . .”
In this case, the respondents cannot avail themselves of the relief provided them either by the Loans Recovery Ordinance,(supra) or the Money-lenders Ordinance, (supra) unless they satisfied the court of the actual sum lent and the true interest charged. They did so by oral evidence to which no objection was taken or could have been validly taken. In my judgment, the parol evidence led, contradictory of the document, was legally admissible as an exception to the “extrinsic evidence” rule. Accordingly, the learned circuit judge was entitled to give it such weight as he thought fit.
Although some questions may well be asked about the length of the judgment appealed from and as to the relevance of part of the reasoning, I think the conclusion is right and ought to be affirmed. I would therefore dismiss this appeal with costs.
JUDGMENT OF LASSEY J.A.
I agree.
JUDGMENT OF SOWAH J.A.
I also agree.
DECISION
Appeal dismissed. N.A.Y.
