YEBOA AND ANOTHER v. BOFOUR [1971] 2 GLR 199

DIVISION: IN THE COURT OF APPEAL

DATE: 14 JULY 1971

BEFORE: AZU CRABBE J.S.C., AMISSAH AND ARCHER JJ.A.

CASES REFERRED TO

(1) Litchfield v. Dreyfus [1906] 1 K.B. 584; 75 L.J.K.B. 447; 22 T.L.R. 385; 50 S.J. 391.

(2) Edgelow v. MacElwee [1918] 1 K.B. 2005; 87 L.J.K.B. 738; 118 L.T. 117.

(3) Olds Discount Co., Ltd. v. John Playfair, Ltd. [1938] 3 All E.R. 275; 159 L.T. 332; 82 S.J. 648.

(4) Hong v. Choong Fah Rubber Manufactory [1962] A.C. 209; [1962] 2 W.L.R. 43; [1962] 2 All E.R. 1163; 105 S.J. 1082, P.C.

(5) Victorian Daylesford Syndicate, Ltd. v. Dott [1905] 2 Ch. 624; 74 L.J.Ch. 673; 93 L.T. 627; 54 W.R. 231; 21T. L.R. 742; 49 S.J. 725.

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

(7) Browning v. Morris (1778) 2 Cowp. 790; 98 E.R. 1364.

(8) Lodge v. National Union Investment Co., Ltd. [1907] 1 Ch. 300; 76 L.J.Ch. 187; 96 L.T. 301; 23 T.L.R. 187.

(9) Chapman v. Michaelson [1908] 2 Ch. 612; 24 T.L.R. 795; 52 S.J. 661; affirmed on appeal, [1909] 1 Ch. 238; 78 L.J.Ch. 272; 100 L.T. 109; 25 T.L.R. 101, C.A.

(10) Kasumu v. Baba-Egbe [1956] A.C. 539; [1956] 3 W.L.R. 575; [1956] 3 All E.R. 266; 100 S.J. 600, P.C.

(11) Ayiwah v. Badu [1963] 1 G.L.R. 86, S.C.

(12) Cropper v. Smith (1884) 26 Ch.D. 700; 53 L.J.Ch. 891; 51 L.T. 729; 33 W.R. 60, C.A. [p.204] of [1971] 2 GLR 199

(13) Tildesley v. Harper (1878) 10 Ch.D. 393; 48 L.J.Ch. 495; 39 L.T. 552; 27 W.R. 249, C.A.

(14) Attorney-General v. Corporation of Birmingham (1880) 15 Ch.D. 423; 43 L.T. 77; 29 W.R. 127, C.A.

(15) Rainy v. Bravo (1872) L.R. 4 P.C. 287; 27 L.T. 249; 36 J.P. 788; 20 W.R. 873; 9 Moore (N.S.) 35; 17 E.R. 427, P.C.

(16) James v. Smith [1891] 1 Ch. 384; 63 L.T. 524; 39 W.R. 396.

(17) Bobo v. Anthony (1931) 1 W.A.C.A. 169.

(18) Wyatt v. Rosherville Gardens Co. (1886) 2 T.L.R. 282.

(19) Amakom Sawmill & Co. v. Mansah [1963] 1 G.L.R. 368, S.C.

(20) In re Coles and Ravenshear [1907] 1 K.B. 1; 76 L.J.K.B. 27; 95 L.T. 750; 23 T.L.R. 32, C.A.

(21) Chahin v. Boateng [1963] 2 G.L.R. 174, S.C.

(22) In re Robinson; Clarkson v. Robinson [1911] 1 Ch. 230, C.A.

(23) Birmingham and District Land Co. v. London and North Western Railway Co. (1887) 34 Ch.D. 261; 56 L.J.Ch. 956; 55 L.T. 699; 35 W.R. 173, C.A.

(24) Eastern Shipping Co. v. Quah Beng Kee [1924] A.C. 177; 93 L.J.P.C. 72; 130 L.T. 462; 40 T.L.R. 109, P.C.

(25) Tularley v. Abaidoo [1962] 1 G.L.R. 411, S.C.

NATURE OF PROCEEDINGS

APPEAL AND CROSS-APPEAL from a decision of a circuit court wherein the judge held that loan transactions between the plaintiff and the first defendant offended against the provisions of the Moneylenders Ordinance and therefore they were null and void. The facts are fully set out in the judgment of Azu Crabbe J.S.C.

COUNSEL

J. Reindorf for the first and second appellants.

E. D. Kom (E. C. Djamson with him) for the respondent.

JUDGMENT OF AZU CRABBE J.S.C.

The plaintiff’s action in this case was brought against the three defendants for:

(a) a declaration that the deed of mortgage, under which the second defendant purported to sell the plaintiff’s house to the third defendant, was null and void on the ground that the loan transaction was oppressive and unconscionable as offending against the provisions of the Loans Recovery Ordinance, Cap. 175 (1951 Rev.);

(b) a declaration that the plaintiff was the owner of the said house, which was offered as a security for the loan advanced by the first defendant to the plaintiff; and

(c) N¢400.00 damages for trespass and unlawful attachment of the plaintiff’s property. It was alleged by the plaintiff in his statement of claim that the first defendant was a moneylender, and in the statement of defence filed on behalf of the defendants it was partially admitted that the first defendant was a moneylender only in 1966 when the first loan was made, but that [p.205] of [1971] 2 GLR 199 the second loan in 1967 was a friendly assistance, and was without interest. At the trial evidence was led to show that the first defendant had been engaged in money-lending business.

The plaintiff’s case was that on 15 July 1966, he obtained a loan of N¢800.00, with an interest of N¢400.00 from the first defendant, and offered his compound house plot No. 05/3 situated at Berekum, and a cocoa farm at Sewhi, as securities for the loan. A document was prepared on this transaction. Of this loan, only N¢644.00 was paid in cash to the plaintiff, because the first defendant deducted N¢40. 00 as drink, N¢60.00 was paid to the first defendant’s agent, one Kwabena Mfum, for his services, and N¢56.00 went to one Yaw Agyei as drink and “professional fees.” On 31 December 1966, the plaintiff paid the sum of N¢600.00 to the first defendant as part-payment on account, and got a receipt for the amount paid. The first defendant, thereafter, charged interest of N¢300.00 on the outstanding balance of N¢600. 00, and, in the new deed of mortgage dated 8 March 1967, that was subsequently prepared, it was made to appear, on the first defendant’s instructions, that the first defendant was advancing the plaintiff a loan of N¢900.00, free of interest. At the end of the 1970 cocoa season, when the plaintiff could not find money to repay the loan in full, he went to the first defendant and pleaded with him to extend the time for repayment. The first defendant agreed to one month’s extension. But three days after this agreement had been reached, the plaintiff’s house was sold by the second defendant on the instructions of the first defendant at a public auction at Berekum for N¢1,719.00. The house was bought by the third defendant. It was therefore contended by the plaintiff: (1) that the loan agreement dated 8 March 1967 executed in favour of the first defendant under which the first defendant purported to exercise the power of sale did not truly and accurately represent the loan transaction; (2) that the requirements of the Moneylenders Ordinance, Cap. 176 (1951 Rev.), were not complied with; (3) that since the loan transaction sinned against the Loans Recovery Ordinance (supra), the power of sale exercised by the first defendant was null and void and of no effect.

The first defendant denied the plaintiff ‘s allegations and gave different versions of the two loan transactions. He said that in 1966 the plaintiff came to him for a loan of N¢1,200; he agreed and asked for a security. The plaintiff offered his farm and a house. The first defendant stated that he asked the plaintiff to get a document prepared. After the document had been prepared, the plaintiff sent it to the house of the first defendant where it was executed. The first defendant then paid the sum of N¢1,200.00 to the plaintiff. When this amount became due for repayment, the first defendant said he instructed the second defendant to demand payment from the plaintiff, who paid N¢300.00 on account, and asked for time to pay the balance. Some time later the plaintiff paid the balance in the presence of the second defendant and other witnesses. The plaintiff again, subsequently in 1967, asked for a further loan of N¢900.00 from the first defendant. The first defendant asked him to get a document prepared [p.206] of [1971] 2 GLR 199 to cover this amount. The document was accordingly prepared and executed, and the loan of N¢900. 00 was given to the plaintiff. When the loan became due for repayment, the first defendant instructed the second defendant to make a demand for it, and to sell the securities if the plaintiff defaulted. The plaintiff, accompanied by some friends, went to plead with the first defendant for an extension of time, but the first defendant said he referred them to the second defendant. The first defendant said that later he heard the house of the plaintiff had been sold, and that the second defendant brought to him the sum of N¢900. 00 as the proceeds of the sale.

One of the main issues at the trial was: “Whether or not the transaction does not offend against the Moneylenders Ordinance (Cap.176) and should not be re-opened under the Loans Recovery Ordinance.” In his judgment the learned circuit judge examined the evidence at great length and held that the first defendant was a moneylender, but that at the time he granted the loans to the plaintiff he had not renewed his licence. He continued his judgment thus:

“I have to ask myself this question: Is it established that the first defendant gave the plaintiff a friendly loan without interest? I have come to a firm conclusion that it is not so established. On the facts and the inferences to be drawn, it would be ridiculous and monstrously unjust to hold otherwise.”

Then followed a passage in which the learned circuit judge firmly rejected the first defendant’s version of the transaction and made some very crucial findings of fact. He said:

“The first defendant and his witnesses deliberately told lies to this court in order to give a different version of what took place on the alleged loan transactions. They were all involved. The evidence of the plaintiff and his first witness was presented with clarity and with abundant candour. I find the plaintiff and his first witness truthful witnesses. I accept their version of what happened. The plaintiff has therefore satisfied me that he obtained a loan of £G400 and an interest of £G200 was charged. I hold that the document exhibit A does not contain the correct account of what happened. It offends against the Moneylenders Ordinance. The document exhibit 1 also does not contain a correct account of what transpired.”

Exhibit A was the original mortgage deed for £G600 (¢1,440.00) dated 25 July 1966, and exhibit 1 was the original mortgage deed for N¢900. 00 dated 8 March 1967.

I am satisfied that the findings made by the learned circuit judge are amply supported by the evidence. And the effect of these findings is that there had been an infringement of the provisions of sections 4, 12

(3) and 13 of the Moneylenders Ordinance, Cap. 176 (1951 Rev.). These were the inferences which the learned circuit judge drew from the facts proved.

Very little has been said about section 4 of Cap. 176, in this appeal, yet I think that section touches the fundamental right of the first defendant to enforce the loan agreement with the plaintiff. The section requires

[p.207] of [1971] 2 GLR 199 everyone who carries on business as a moneylender to register his business and to renew his registration annually. The word “moneylender” is defined in section 2, so far as material, as follows: “‘Moneylender’ means and includes every person whose business is that of moneylending or who carries on or advertises or announces himself or holds himself out in any way as carrying on that business, whether or not he also possesses or owns property or money derived from sources other than the lending of money and whether or not he carries on the business as a principal or as an agent; but shall not include . . .

(c) any person bona fide carrying on the business of banking or insurance or bona fide carrying on any business, not having for its primary object the lending of money, in the course of which and for the purposes whereof he lends money; or

(d) any person or body corporate exempted from the provisions of this Ordinance by Order of the

Governor in Council . . .”

In this appeal one of the grounds of appeal is stated in these terms:

“The learned trial judge erred in holding that the loan transactions were void under the Moneylenders Ordinance since:

(a) the said Ordinance was never pleaded by the plaintiff; and

(b) there was evidence, accepted by the judge, on which he should have ruled that first defendant was not a moneylender within the meaning of the Ordinance.”

There can be no doubt that subground (a) is, with respect, clearly misconceived, for the plaintiff expressly pleaded the Moneylenders Ordinance in paragraph (13) of his statement of claim.

With regard to subground (b) the primary question to determine is whether the first defendant carried on moneylending business. The Moneylenders Ordinance is not intended to apply to every person who lends money at an interest to his relations or friends by way of financial assistance. The Ordinance applies only to a person who really carries on the business of moneylending as a business. This is a question of fact to be decided by the court upon the particular facts of each case. In Litchfield v. Dreyfus [1906] 1 K.B. 584, Farwell J. said at p. 589 that:

“But not every man who lends money at interest carries on the business of money-lending. Speaking generally, a man who carries on a money-lending business is one who is ready and willing to lend to all and sundry, provided that they are from his point of view eligible. I do not of course mean that a money-lender can evade the Act by limiting his clientele to those whom he chooses to designate as ‘friends’ or otherwise: it is a question of fact in each case.”

Farwell J. went on to say at p. 590 that:

“The Act was intended to apply only to persons who are really carrying on the business of money-lending as a business, not to

[p.208] of [1971] 2 GLR 199 persons who lend money as an incident of another business or to a few old friends by way of friendship. This particular Act was supposed to be required to save the foolish from the extortion of a certain class of the community who are called money-lenders as an offensive term. Money-lending is a perfectly respectable form of business. . . . But the Legislature in casting its net has cast it very wide; and if a man is carrying on the business of a money-lender he is within the Act, although he may be free from all blame morally. The question in each case is, Does he carry on the business of a money-lender? That depends on the facts of the case.”

In Edgelow v. MacElwee [1918] 1 K.B. 205, an action was brought to recover the sum of £80 due on a cheque given for money lent. The defence was that the plaintiff, who was a solicitor, carried on the business of a moneylender and was not registered under the English Money-lenders Act, 1900 (63 & 64 Vict., c. 51). McCardie J. who heard the case, first stated the definition of “money-lender” in section 6 of that Act, which is in the same terms as the definition in section 2 of our Moneylenders Ordinance, and then proceeded to say at p. 206 as follows:

“A man does not become a money-lender by reason of occasional loans to relations, friends, or acquaintances, whether interest be charged or not. Charity and kindliness are not the bases of usury. Nor does a man become a money-lender merely because he may upon one or several isolated occasions lend money to a stranger. There must be more than occasional and disconnected loans. There must be a business of money-lending, and the word ‘business’ imports the notion of system, repetition, and continuity: see Newton v. Pyke ((1908) 25 Times L.R. 127), per Walton J.; Fagot v. Fine ((1911) 105 L.T. 583), per Bankes and Lush JJ.; and Newman v. Oughton ([1911] I K.B. 792), per Ridley and Avory JJ. The line of demarcation cannot be defined with closeness or indicated by any specific formula. Each case must depend on its own peculiar features. It is ever a question of degree. But if it appears that the transactions are sufficiently numerous to require the inference that a system and business of money-lending is carried on, then the requirements of the definition in s. 6 of the Act of 1900 are fulfilled and the question arises whether the case falls within the exceptions indicated in that section.”

In Halsbury’s Laws of England (3rd ed.), Vol. 27, para. 27, there is a comprehensive statement on what constitutes moneylending business. It is stated at pp. 18–19 as follows:

“It is a question of fact in each case whether a person is carrying on the business of moneylending. In order to establish that he is carrying on such a business it is not sufficient to prove that he has occasionally lent money at a remunerative rate of interest; it is necessary to prove some degree of system and continuity in his moneylending transactions and something more than loans to friends or relatives. In considering whether a person is carrying on

[p.209] of [1971] 2 GLR 199 a business of money-lending all loans made by him must be taken into account.”

In deciding whether in any particular case the agreement is a money-lending agreement or otherwise, the court will first have to look into the nature of the agreement entered into: see Olds Discount Co., Ltd. v. John Playfair, Ltd. [1938] 3 All E.R. 275 at p. 277. The onus of proving that someone is carrying on the business of moneylending lies on him who asserts it. Once this is proved, the provisions of the Moneylenders Ordinance will apply to the loan agreement, and the onus shifts to the person giving the loan to bring himself within any of the exceptions specified in section 2 of the Ordinance. But it is sufficient for the person raising the question of moneylending to prove the basic facts which give rise to the presumption under section 3 of the Moneylenders Ordinance. Section 3 provides that, “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 be a moneylender until the contrary be proved.” If the initial burden of establishing the basic facts under section 3 is discharged, then there is a prima facie case to answer, and the other party must rebut the presumption.

I should like to refer in this connection to the case of Hong v. Choong Fah Rubber Manufactory [1962] A.C. 209, P.C. as an aid in the construction of section 3 of our Moneylenders Ordinance. In that case the Privy Council found it necessary to construe section 3 of the Malayan Moneylenders Ordinance (1951), which is similar in its terms to section 3 of our Ordinance. Delivering the opinion of the Privy Council, Lord Devlin referred to section 3 of the Malayan Ordinance and then said at p. 218 as follows: “To lend money is not the same thing as to carry on the business of moneylending. In order to prove that a man is a moneylender within the meaning of the Ordinance, it is necessary to show some degree of system and continuity in his moneylending transactions. If he were left to discharge this burden without the aid of any presumption, a defendant might frequently be in a difficulty. He might have had only one or two transactions with the moneylender and he might find it difficult to obtain evidence about the business done by the moneylender with other parties. Section 3 enables a defendant to found his claim on proof of a single loan made to him at interest, it being presumed, in the absence of rebuting evidence, that there were sufficient other transactions of a similar sort to amount to a carrying on of business.” Then on the shifting of the burden of proof Lord Devlin said at p. 219 that:

“It appears to their Lordships that if a defendant gives evidence that the plaintiff lent a sum of money at interest, that may be prima facie evidence—such as to make it necessary or desirable for the plaintiff to call evidence in answer to it—but it does not put any legal burden on to the plaintiff unless the evidence is accepted. If,

[p.210] of [1971] 2 GLR 199 at the end of the day, after hearing all the evidence on both sides, the judge does not accept it, that is to say, if he refuses to find that the plaintiff lent a sum of money at interest, then there is no presumption under section 3 that the plaintiff is a moneylender: for the simple reason that the defendant has failed to establish that fact which he must establish if he relies on section 3, namely, that the plaintiff lent a sum of money in consideration of a larger sum being repaid. But if at the end of the day the judge holds that that fact has been established, that is, that the plaintiff did lend a sum of money at interest, then there is a compelling presumption that the plaintiff is a moneylender and the judge must hold him to be so unless on the rest of the evidence in the case the plaintiff has established that he is not a moneylender.”

In this case the evidence of the first and second defendants clearly shows that the first defendant was engaged on numerous and systematic moneylending activities. After examining the nature of the agreement in this case and other loan transactions by the first defendant, the learned circuit judge said in his judgment as follows:

“There is sufficient evidence before me which shows that the first defendant is a moneylender although at the time that he granted the alleged loans, he had not renewed his licence. References were made to similar loan transactions in which the plaintiff and the second defendant had been engaged. Properties had been mortgaged and in some cases they had been sold by auction. In my view it is plain beyond argument that a loan transaction which has all the characteristic of a business-like transaction, and carried out in the manner described by the plaintiff, interest must have been charged and those who arranged and helped in one way or the other should have collected some money for their services and help.”

In another passage the learned circuit judge said:

“I have managed to get to the kernel of the dispute between the plaintiff and the first and second defendants. In my view it is plain beyond argument that the plaintiff borrowed £G400 from the first defendant. The first defendant charged an interest of £G200 and a document exhibit A was prepared. When the plaintiff was unable to pay the whole amount, an interest of £G150 was added to the balance of £G300 and a new document exhibit 1 was prepared.”

In my view there is abundant evidence on record to support the conclusion of the learned circuit judge that the first defendant was a moneylender, and Mr. Reindorf has not been able to point out any piece of evidence, accepted by the learned circuit judge, from which an inference can be drawn that the first defendant was not a moneylender within the definition of section 2 of the Moneylenders Ordinance. Section 5 of the Moneylenders Ordinance provides penalties for breaches of section 4, and the relevant provisions of section 5, so far as

[p.211] of [1971] 2 GLR 199 this case is concerned, seem to be the following:

“5. If any person …

(b) carries on business as a moneylender without being in possession of a valid moneylender’s licence authorising him so to do; or …

(d) enters into any agreement in the course of his business as a moneylender with respect to the advance or repayment of money or takes any security for money in the course of his business as a moneylender, otherwise than in his authorised name; he shall for each offence be liable on summary conviction—

(1) if other than a body corporate, to a fine not exceeding one hundred pounds and in the event of a second or subsequent conviction to imprisonment for three months or a fine of one hundred pounds or both; and

(2) in the case of a body corporate, to a fine of one hundred pounds and in the event of a second or subsequent conviction to a fine of five hundred pounds:

Provided that no prosecution shall be instituted under paragraph (b) without the consent of a Law

Officer.”

It seems obvious that a moneylender who has not registered his name in accordance with section 4 of the Ordinance cannot make a valid agreement in his business as to the advance and repayment of money or taking security for it. In Victorian Daylesford Syndicate, Ltd. v. Dott [1905] 2 Ch. 624, Buckley J. said at p. 629 that:

“To my mind it does not at all follow as a matter of construction of the Act that sub-clause 1 (c) does not apply to the contract of an unregistered money-lender. In my opinion it does. It follows from this that the defendant has committed a breach of that clause of the Act of Parliament which requires him, he being a money-lender, 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 is prohibited so as to be rendered illegal. There is no question that a contract which is prohibited, whether expressly or by implication, by a statute is illegal and cannot be enforced. I have to see whether the contract is in this case prohibited expressly or by implication. For this purpose statutes may be grouped under two heads—those in which a penalty is imposed against doing an act for the purposes only of the protection of the revenue, and those in which a penalty is imposed upon an act not merely for revenue purposes, but also for the protection of the public.” He then continued this judgment at p. 630 as follows:

“There is no question of protection of the revenue here at all. The whole purpose is the protection of the public. The moneylender has to be registered, and has to trade in his registered name obviously [p.212] of [1971] 2 GLR 199 and notoriously for the protection of those who deal with him. The purpose is a public purpose, and therefore upon all the authorities the act for the doing of which a penalty is imposed is an act which is impliedly prohibited by the statute, and is consequently 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 a penalty is imposed upon him, the result being that the act done is an act forbidden by statute, and is illegal. There is another consideration. Not a bad test to apply is to see whether the penalty in the Act is imposed once for all, or whether it is a recurrent penalty imposed as often as the act is done. If it be the latter, then the act is a prohibited act. Now here the penalty is imposed every time the act is done. Further, the Act goes on to provide that on a second or subsequent conviction a man may be imprisoned with or without hard labour for a term not exceeding three months. The act is an illegal act.”

The decision of Buckley J. was approved in Bonnard v. Dott [1906] 1 Ch. 740, C.A. where Collins M.R. said at p. 745 that:

“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 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 class which the Act was presumably designed to protect—see Kearley v. Thomson (24 Q.B.D. 742)—can compel the lender to return the securities for the loan, at any rate on the terms of repaying the amount lent.”

The decision in Victorian Daylesford Syndicate, Ltd. v. Dott (supra) turned upon the interpretation of the provisions of section 2 (1) (a), (c) and (2) of the English Moneylenders Act, 1900, which are in pari materia with the provisions of sections 4 and 5 of our Moneylenders Ordinance, Cap. 176 (1951 Rev.). In Victorian Daylesford Syndicate v. Dott (supra) the plaintiffs alleged that the transactions were harsh and unconscionable and claimed to have them re-opened, an account, and that the amount fairly due by them might be adjudged by the court and the defendant ordered to repay the excess received by him. But Buckley J. declined to do this, and he made the following observations, which are very pertinent to our present case at p. 631:

“In the action the plaintiffs say that they do not wish to rely upon the non-registration of the defendant; that they are desirous

[p.213] of [1971] 2 GLR 199 that the man should have what is a fair return for his money; and they ask me to act upon s. 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 the 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 Bonnard v. Dott (supra) Collins M.R. reserved his opinion on the question whether the conduct of the moneylender was such as to let in the right to relief under section 1 of the Moneylenders Act, 1900, which is in the same terms as section 3 of our Loans Recovery Ordinance, Cap. 175 (1951 Rev.). But he said at pp. 745–746 that:

“If it turns out that the money-lender was not in a position to act on this contract at all, that disposes of the whole case, and that turns upon the provisions of sub-s. 1 of s. 2 of the Money-lenders Act, 1900, dealt with by Buckley J. in a case against the same defendant—Victorian Daylesford Syndicate, Ltd. v. Dott ([1905] 2 Ch. 624).”

Romer L.J. also observed at pp. 746–747 that:

“I agree with the decision of Buckley J. in Victorian Daylesford Syndicate, Ltd. v. Dott ([1905] 2 Ch. 624) with respect to the true construction of s. 2, sub-s.1 (c), of the Money-lenders Act, 1900, as applied to the circumstances of a case like the present. I am satisfied with that decision for the reasons given by the learned judge in his judgment, and I do not desire to add anything to what he said. It follows that in the present case the contract entered into between the parties was void so far as concerned the money-lender. He obtained no rights whatever under this contract, and not only could he not maintain his counter-claim but the plaintiff could, if he had chosen, have asserted a right to relief against him even beyond that given to him by Kekewich J. in his judgment.”

As early as 1778 Lord Mansfield had declared, in Browning v. Morris (1778) 98 E.R. 1364, a case where he allowed the recovery of money paid to an organiser of an illegal lottery, that:

“But, where contracts or transactions are prohibited by positive statutes, for the sake of protecting one set of men from another set of men; the one, from their situation and condition, being liable to be oppressed or imposed upon by the other; there, the parties are not in pari delicto; and in furtherance of these statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract.”

It was, however, decided in Lodge v. National Union Investment Co., Ltd. [1907] 1 Ch. 300, which was an action to recover securities mortgaged to an unregistered moneylender, that the mortgagee will not be ordered to give up to the mortgagor the securities, except upon terms that the mortgagor repays the money actually advanced to him.

[p.214] of [1971] 2 GLR 199

The next important case to consider is Chapman v. Michaelson [1908] 2 Ch. 612. In that case the trustee of a debtor under a scheme of arrangement with his creditors brought an action against an unregistered moneylender, who had taken a mortgage from the debtor to secure a loan, for a declaration that the alleged mortgage was illegal and void under section 2 of the Moneylenders Act 5 1900. For the plaintiff it was argued that the defendant entered into the transaction in the course of his business as a moneylender, and since he entered into the agreement otherwise than in his registered name, he had committed a breach of section 2 (1) (c) of the Moneylenders Act, 1900, and the principle of Victorian Daylesford Syndicate, Ltd. v. Dott (supra) followed and adopted in Bonnard v. Dott (supra) applied, and therefore the contract was illegal and void. For the defendant it was contended that Lodge v. National Union Investment Co. Ltd. (supra) concluded this case. No offer had been made to restore the money advanced under the mortgage, and if the plaintiff came into a court of equity to obtain relief he must be put upon equitable terms. Eve J. held that the plaintiff was entitled to his declaration, and he refused to impose upon the plaintiff the equitable terms as to repayment of the actual money advanced as a condition for making the declaratory order. Distinguishing Lodge’s case, Eve J. said at pp. 620–621 that:

“I have been much pressed with the decision of Parker J. in Lodge v. National Union Investment Co. ([1907] 1 Ch. 300) … But the basis of Parker J.’s decision is undoubtedly this, that the relief which the plaintiff was seeking could only be obtained in a Court of Equity. When I say that, I do not mean that it is relief which could not have been given in any other Division, but that it was in the nature of equitable relief, and that inasmuch as the plaintiff was coming for equitable relief, the Court, in the exercise of its equitable jurisdiction, would not give that equitable relief except upon the terms that the party to whom it was given should himself do equity. But in the present case I cannot regard the declaration which the plaintiff is seeking as in the nature of equitable relief.”

The decision of Eve J. was approved by the Court of Appeal, which also distinguished the case from Lodge’s case. Cozens-Hardy M.R. said in [1909] 1 Ch. 238 at pp.241–242, C.A.:

“It is said that because the plaintiff comes to the Court seeking equitable relief he must do equity, and Parker J.’s decision in Lodge v. National Union Investment Co. ([1907] 1 Ch. 300) is cited in support of that contention. The simple answer is that this is not equitable relief.”

Fletcher Moulton L.J. also observed at p. 242 that: “In my opinion the considerations which affect an action for true equitable relief such as was asked for in Lodge v. National Union Investment Co. ([1907] 1 Ch. 300) do not necessarily apply to an action for a mere declaration of rights.”

[p.215] of [1971] 2 GLR 199

In Kasumu v. Baba-Egbe [1956] A.C. 539, P.C. many of the leading authorities on moneylending were reviewed in great detail. Delivering the opinion of the Privy Council in that case Lord Radcliffe commented on Lodge’s case, and said at pp. 549 and 551:

“Lodge’s case ([1907] 1 Ch. 300) was a decision of a great equity lawyer and it has stood as a decision since the year 1906. Nevertheless, it cannot be treated as having established any wide general principle that governs the action of courts in granting relief in moneylending cases …

In their Lordships’ opinion it is not possible to transfer the principle which guided the courts in dealing with claims based on the Usury Acts to claims for relief arising out of transactions rendered void or unenforceable under the system of regulation which is contained in the Moneylenders Act. For in most respects the purpose of the two sets of Acts is essentially different.”

Finally, Lord Radcliffe said at pp. 551–552:

“But the Usury Acts disappeared in 1854, and much of the Moneylenders 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 moneylender’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. The provisions of section 19 are not purposeless: they seem to assume that no loan that is not contemporaneously recorded can be established with sufficient certainty to be recognized at law. If a court therefore were to impose terms of repayment as a condition of making any order for relief it would be expressing a policy of its own in regard to such transactions which is in direct conflict with the policy of the Acts themselves. In their Lordships’ opinion the court should not place itself in such a position.” It seems to me that Kasumu v. Baba-Egbe (supra) put the seal of approval on the Eve J.’s decision in Chapman v. Michaelson (supra).

In this case the learned circuit judge found as a fact that the first defendant was engaged in moneylending business in 1967 when he advanced to the plaintiff the loan of N¢900.00 The circuit judge further [p.216] of [1971] 2 GLR 199 found that at the time of this loan transaction the first defendant had not registered himself in accordance with section 4 of the Moneylenders Ordinance. This transaction was prohibited under section 5 (a) and (d) of the Ordinance, and, therefore, the deed of mortgage dated 8 March 1967 (exhibit 1) was null and void and no property passed under it. Consequently, the first defendant acquired no title to the securities given under exhibit 1.

At the trial the plaintiff sought to reopen the transaction with the lender, and for the court to grant him relief under section 3 of the Loans Recovery Ordinance on the ground that the transaction was “oppressive and unconscionable.” But it is apparent from the evidence that the agreement is absolutely void, and therefore there is nothing to reopen. It is thus the duty of the court to declare that the first defendant was incapable of entering into any form of moneylending agreement with the plaintiff. As Adumua-Bossman J.S.C. said in Ayiwah v. Badu [1963] 1 G.L.R. 86 at p. 100, S.C.:

“[T]he 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.”

And the order which ought to have been made in this case would be that the plaintiff was entitled to recover from the first defendant the securities for the loan of 8 March 1967. In his judgment the learned circuit judge said that: “I declare the loan transactions to be void and unenforceable as prayed by the plaintiff. I give judgment against the first and second defendants.” Although the learned circuit judge did not say expressly that he was awarding the plaintiff N¢400.00 damages for trespass and unlawful attachment of his property, I think that that can be inferred from the passage I have just quoted from his judgment. Judgment for the plaintiff can only mean judgment in terms of the claim before the court. But one of the securities, the compound house, had already been seized and sold to the third defendant by auction sale before the commencement of these proceedings.

Immediately the learned circuit judge concluded delivering his judgment, and before he had signed it, counsel for the plaintiff applied for leave to amend paragraph (c) of the statement of claim so that the amount of damages claimed should read N¢4,000.00 instead of N¢400.00. Counsel for the defendants opposed the application merely on the ground that it was belated. The application was, however, granted, and the amendment was made accordingly. It was then contended on behalf of the plaintiff that the first defendant had benefited from the illegal sale, and, therefore, he must refund the profit in the form of damages. Counsel for the defendants also argued that both parties were in pari delicto, and that the plaintiff was not entitled to damages. After the argument the learned circuit judge said that: [p.217] of [1971] 2 GLR 199

“I have considered the evidence before me up to the time the statement of claim was amended. The amount realised from the sale had not been challenged in earnest except that even though the plaintiff claimed damages for N¢400.00 he alleged his house valued N¢8,000.00. The sale as such has not been challenged . . . I am however satisfied the house fetched an amount of £G871.”

The judge accordingly awarded the sum of N¢1,342.00 damages against the first and second defendants jointly and severally.

In this appeal the only ground of appeal which we think merits consideration is that stated in the original grounds as follows: “(b) That the trial was unsatisfactory since the plaintiff purported to amend his writ of summons orally immediately after delivery of judgment.”

The general principles which should guide a court in granting leave to amend pleadings have been stated in numerous cases. In Cropper v. Smith (1884) 26 Ch.D. 700 at pp. 710–711, C.A., Bowen L.J. said that: “[I]t is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights … I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace …. It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right.”

In Tildesley v. Harper (1878) 10 Ch.D. 393 at pp. 396-397, C.A., Bramwell L.J. also said: “My practice has always been to give leave to amend unless I have been satisfied that the party applying was acting mala fide, or that, by his blunder, he had done some injury to his opponent which could not be compensated for by costs or otherwise.”

The time for making amendments is governed by the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A), Order 28, r. 1, which states that an amendment may be allowed “at any stage of the proceedings.” An amendment may be allowed before, or at, or after the trial, or even after judgment or on appeal. The application for amendment may be made as soon as the necessity arises, and as a general rule the court will allow an amendment even up to the last moment, provided (i) no surprise results, (ii) it does not enable a party to set up an entirely new case or to change completely the nature of his case, (iii) it is not sought to add new parties, (iv) it will not do any injury to the opponent’s case or prejudice him in some way which cannot be compensated by costs or otherwise, (v) the application be made bona fide, and

(vi) the proposed

[p.218] of [1971] 2 GLR 199 amendment will not cause undue delay or is irrelevant or useless or would merely raise a technical point. The court will not grant leave to amend the pleadings after final decree or entry of judgment in accordance with Order 41 of the Supreme [High] Court (Civil Procedure) Rules, 1954: see Attorney-General v. Corporation of Birmingham (1880) 15 Ch.D. 432, C.A.

The question which is of the greatest importance is: “What time is ‘the last moment’?” The answer, I think, can be found in the few cases I am about to cite. The first case is Rainy v. Bravo (1872) 36 J.P. 788, P.C. In that case the defendant, after the publication of a libel, and before action was brought, destroyed the letter containing the libellous words. No evidence was given on the part of the defendant, and no objection was taken by the court during the trial to the witnesses, who gave evidence as to the substance of the letter containing the libel. At the conclusion of the trial, the trial judge adjourned the case sine die for consideration of his judgment, and on the 17 December announced in open court that he would deliver his judgment on the 21st of that month. On the 21 December 1869, the trial judge proceeded to give his judgment in which he criticised the evidence of the plaintiff’s witnesses, as speaking only to the substance of the libel, and proposed to the plaintiff that he should elect to be non-suited; but the plaintiff submitted that he preferred that the declaration should be amended to make it correspond exactly with his proof. The trial judge refused the application to amend, and declined to hear any further argument, and warned the plaintiff not to address him or interrupt the proceedings whilst he was reading his judgment. He gave judgment for the defendant, mainly on the ground that the witnesses spoke to the substance, and not the exact words contained in the letter. The plaintiff subsequently appealed from an order refusing a new trial to the Judicial Committee of the Privy Council, where Sir Montague Smith, in delivering the opinion of their Lordships, said at p. 789:

“Their lordships certainly think that, the respondent having himself destroyed the letter, an amendment ought to have been allowed, provided that the application for it had been made at the right time, and that, if made, proper conditions had been imposed. The appellant, according to the proper rule of practice, ought, in their lordships’ opinion, to have applied for the amendment at the end of his case. At the end of his case it must have been apparent that there was a variance between the evidence of the witnesses and the statement of the libel in the declaration, and then, before the judge had pronounced his decision, or had begun to consider his decision, was the proper time for the appellant to have applied to him for an amendment of the declaration. That, however, the appellant did not do, but took his chance of a decision on the materials which were then before the judge. However, when the judge, after having taken time to consider, was delivering his judgment, and giving his reasons for it, the appellant, then perceiving that the judgment was to be against him, applied, for the first time, to the learned judge to make the amendment. Their lordships do not say that it was too late for the learned judge

[p.219] of [1971] 2 GLR 199 to have exercised the power of amendment if he had thought fit to do so; but it is a matter entirely within the discretion of the judge at the trial whether, at so late a period, he will make the amendment or not, and the Chief Justice on this occasion declined to make it. . .”

Then after considering whether their lordships ought to interfere with the trial judge’s exercise of his discretion Sir Montague continued as follows:

“Their lordships would be at all times most reluctant to interfere with the discretion of the learned judge in cases of this kind, when he has exercised it upon a full apprehension of all the circumstances before him; but there is a circumstance in this case which induces them to think that they may properly use, on this occasion, the power which they undoubtedly possess of directing the allowance of an amendment to be made, even at this last moment.”

The plaintiff’s appeal was allowed, and it was directed that an order for a new trial be made, with leave to the plaintiff to amend his declaration as he should think fit, on terms that the defendant be allowed to plead afresh, and the plaintiff paying the costs of the trial and all subsequent costs already incurred in the court below.

The second case is James v. Smith [1891] 1 Ch. 384. There, the plaintiff, by his statement of claim, alleged parol agreement between the defendant and himself that the defendant should bid on behalf of the plaintiff for a house which the plaintiff wished to purchase. But the defendant attended the sale and bid for and purchased the house, which he claimed to hold for his own benefit. The plaintiff claimed a declaration that the defendant purchased the house as his agent, and that he was a trustee for the plaintiff, and that the defendant be ordered to convey the house to the plaintiff. The defendant denied the allegation and stated that he relied on section 4 of the Statute of Frauds. At the close of the plaintiff’s evidence in support of his case, the point of law raised by the pleadings was argued. For the plaintiff it was contended that section 4 of the Statute of Frauds did not apply, and section 7 which had not been pleaded could not be set up as defence. It was further contended that it was too late to amend the pleadings. For the defendant it was argued that section 4 was inserted by mistake for section 7, and that this was a proper case for amendment. In the course of his judgment Kekewich J. said at p. 389 that:

“Here the Defendant has pleaded the 4th section; and it is admitted now that on the 4th section he must fail, and that he must rely on the 7th section. Then I am asked at the last moment to allow an amendment to be made so that his defence may read that he will rely on the 7th section. I have said frequently, and I repeat it, that there is no Judge on the Bench who is more willing to allow amendments even at the last moment than I, provided there is no surprise; but I think I should be going too far if I were to allow it in this action, and it would be introducing a laxity which I ought not to introduce. A party relies on a particular section of the statute, and when he finds the

[p.220] of [1971] 2 GLR 199 authorities to be against him he says, ‘I should like to rely on something else.’ To sanction that would, it seems to me, make pleading even more loose than it is at present, and I think I ought not to allow that amendment. Therefore, although I hold the 7th section of the Statute of Frauds to be applicable, I think it is not properly pleaded, and is not available to the Defendant.”

In the first case, Rainy v. Bravo (supra), the amendment was sought whilst the trial judge was delivering his judgment, and it was held that the plaintiff should have been allowed to amend upon terms even though the application to amend was belated. In James v. Smith (supra) the application for the amendment was made after the case for the plaintiff had closed; the application was refused because it would have introduced a laxity in pleadings.

In Priest Bobo v. Anthony (1931) 1 W.A.C.A. 169, in which Rainy v. Bravo (supra) and James v. Smith (supra) were cited, an application for an amendment was made after the close of the defendant’s case, but this was objected to on the ground that by the amendment the claim became a new writ. An offer made to counsel for the defendant to re-open the defendant’s case and call further evidence was not accepted. Whereupon judgment was given for the plaintiff on his claim as amended. The West African Court of Appeal held that the trial judge was right in allowing the amendment at the late stage in the proceedings, for as Sawrey-Cookson J., who read the leading judgment of the court, observed at p. 175: “And there can be no doubt, as Mr. Coussey argued before us, that the case was fought throughout on broad issues, viz., had the three mortgagors Anni, Gamor and Kokuo any right title and interest in all that area of land, and all the creeks situated thereon, which could be passed to and vested in defendant, or were the plaintiffs entitled to a declaration of ownership in respect of the creeks or the land or in respect of the creeks and the land. Those being the broad issues it is difficult to understand how it can successfully be argued that an amendment which came about as the result of certain admissions by the defendant’s witnesses and of the receiving in evidence of the Native Tribunal’s judgment (exhibit T) which affected those issues, could result in surprise or injustice to the defendant.”

Lastly, I would refer to the case of Wyatt v. Rosherville Gardens Co. (1886) 2 T.L.R. 282, which seems more directly in point. This was an action brought by the plaintiff to recover £200 damages from the defendants for injuries sustained by the plaintiff by the bite of a bear which belonged to the defendants. The trial was before Mr. Baron Huddleston and a jury, and after the summing-up, the jury without retiring, found a verdict for the plaintiff and awarded him £500. Immediately after the verdict was delivered there followed this dialogue at p. 283:

“Mr. Robson asked leave to amend his claim, which only claimed £200, in order that it might cover the jury’s finding.

Mr. Willoughby objected.

[p.221] of [1971] 2 GLR 199

Mr. Baron Huddleston.—Why not?

Mr. Willoughby.—Such a thing, my lord, is never done.

Mr. Baron Huddleston.—Indeed, it is; and I shall certainly permit it.

Mr. Willoughby.—Will your Lordship grant a stay of execution? There would be no difficulty in paying the £500 into Court.

Mr. Baron Huddleston.—Upon what grounds do you ask for a stay?

Mr. Willoughby.—I should go for a new trial upon the ground that the verdict is against the weight of evidence, and the damages excessive.

Mr. Baron Huddleston.—Then, most decidedly, I refuse your application. In my opinion the jury are perfectly right, and I should have found the same way. I give judgment for the plaintiff for £500.” The authorities clearly establish that the granting or refusal of an application for leave to amend pleadings, even at the last moment in the proceedings, is a matter entirely within the discretion of the trial judge. And this discretion to allow amendment will be exercised in order that the real issues between the parties may be finally determined. The Court of Appeal will not interfere with the exercise of that discretion unless it is satisfied that the judge applied a wrong principle or can be said to have reached a conclusion which would work a manifest injustice between the parties.

The object of the amendment sought in the present case was to enable the court to award such damages as would fully compensate the plaintiff for the loss of his house. I cannot see what injustice the defendants would suffer by this amendment, since the house itself was sold for £G871 (N¢1,742.00) and the judgment awarded only N¢1,342.00 damages against the first and second defendants. Amendments are in the discretion of the judge, and I am satisfied that in this case the trial judge exercised his direction properly in allowing the plaintiff to amend his claim. In any case the court itself had power under Order 28, r. 2 of the Supreme [High] Court (Civil Procedure) Rules, 1954, to amend the figure claimed for damages on the writ and to award the damages found justified by the evidence: see Amakom Sawmill & Co. v. Mansah [1963] 1 G.L.R. 368, S.C.

The plaintiff has also cross-appealed against the decision dismissing the claim in respect of the third defendant upon a ground which is carelessly stated, vague, and utterly unintelligible, and Mr. Reindorf, who appeared as amicus curiae in the cross-appeal, took a preliminary objection to the form in which the ground of the cross-appeal had been stated. He submitted that the terms in which the ground had been stated did not conform with the mandatory provisions of rule 8 of the Supreme Court Rules, 1962 (L.I. 218), and particularly with sub-rule 4 which provides as follows:

“No ground which is vague or general in terms or which discloses no reasonable ground of appeal shall be permitted, save the general ground that the judgment is against the weight of the evidence,

[p.222] of [1971] 2 GLR 199 and any ground of appeal or any part thereof which is not permitted under this rule may be struck out by the Court of its own motion or on application by the respondent.”

Mr. Kom, for the plaintiff, submitted that the judgment was in two parts and that it was apparent on the face of the record that the plaintiff’s cross-appeal was directed to the second portion of the judgment. He said that the court should not allow the form of the cross-appeal to defeat the ends of justice, and he cited the dictum of Collins M.R. in In re Coles and Ravenshear [1907] 1 K.B.1 at p. 4, C.A. in which the learned Master of the Rolls said:

“Although I agree that a Court cannot conduct its business without a code of procedure, I think that the relation of rules of practice to the work of justice is intended to be that of handmaid rather than mistress, and the Court ought not to be so far bound and tied by rules, which are after all only intended as general rules of procedure, as to be compelled to do what will cause injustice in the particular case.” In my view, the intention of the plaintiff to appeal from that part of the judgment affecting the third defendant is clear from the notice of appeal and from all the surrounding circumstances. I do not think the third defendant has suffered, or will suffer, any substantial injustice by the plaintiff’s breach of rule 8 (4). I would therefore reject the preliminary objection. Even if the plaintiff had not cross-appealed, this court has power under rule 32 to grant the only relief to which the plaintiff is entitled by law: see Chahin v. Boateng [1963] 2 G.L.R. 174, S.C.

The learned circuit judge dealt very briefly in his judgment with the case against the third defendant. He said that there was no allegation of fraud or collusion, and summarised the case for and against the third defendant as follows:

“Third defendant claims by right of purchase and it is for the plaintiff to prove that she is not a bona fide purchaser for value without notice of the fraud. The plaintiff has to prove that she was aware of the defect due to the operation of the Ordinance i.e. that the principal lent was not what was stated on exhibit 1 or that she knew that the amount of £G450 was not given to the plaintiff. In the pleadings the plaintiff did not make any allegations that the third defendant knew about the defects in the loan transactions. All the plaintiff had to say in court was that he was fifteen yards away when the auction took place. He learnt that the third defendant was the buyer. Third defendant has given account of what happened at the sale. She was the highest bidder. No one stopped her from buying the house. It is therefore plain in my judgment that the third defendant was a bona fide purchaser for value. Also third defendant had no knowledge of the defects in the document. See sections 23 (1) and 26 (2) of the Moneylenders Ordinance, Cap. 176 (1951 Rev.).”

[p.223] of [1971] 2 GLR 199

The learned circuit judge then concluded his judgment thus:

“In view of the cases I have referred to on ‘a bona-fide purchaser for value and registration,’ I have come to a conclusion with regret but with conviction that I cannot declare the interest acquired by the third defendant to be illegal for I can only hold a contrary view irrationally or perversely or possibly for discreditable reasons. I dismiss the action against the third defendant. Costs against the plaintiff—N¢100.00.” With all due respect to the learned circuit judge, he seems to have confused the concept of “bona fide purchaser for value” and the principle of “registration.” The question of registration does not arise in this case, and any cases on registration under the English Acts are unhelpful in the determination of the rights of the third defendant.

The third defendant bought at an auction sale the property of the plaintiff, which had been given as a security for a loan advanced by the first defendant. Exhibit 1, which purported to be the agreement for the loan transaction, has been declared illegal and absolutely void, and consequently, the power of sale which sprung from it was tainted with the illegality.

There can be no doubt that a defective title was transmitted to the third defendant, and the question is whether she is in any way protected by the law. The sale of the plaintiff’s house was the result of a moneylending transaction which is illegal and unenforceable, and before 1941 the third defendant would not have been protected under section 3 (4) of the Loans Recovery Ordinance, for it was decided in In re Robinson; Clarkson v. Robinson [1911] 1 Ch. 230, C.A., which turned upon the construction of section 1

(5) of the English Moneylenders Act, 1900, and which is the same as section 3 (4) of our Loans Recovery Ordinance, that a purchaser or assignee for value without notice of charges or securities which were void under section 2 of the 1900 Act, was in no better position than the original holder. Since the decision in In re Robinson; Clarkson v. Robinson (supra), the rights of transferees of securities taken by moneylender in England, have been protected by the Moneylenders Act, 1911, and the Moneylenders Act, 1927. Section 23 of the Moneylenders Ordinance reproduces section 17 of the English Moneylenders Act, 1927, and subsection (1) of the Ordinance applies the provisions of the Ordinance to all assignments of debt or benefit of a loan agreement or security given for a loan. It has been contended for the plaintiff in this appeal that the principle in In re Robinson; Clarkson v. Robinson (supra) applies to this case, so that the third defendant is in no better position than the first defendant. But the proviso to section 23 (1) reads: “Provided that notwithstanding anything in this Ordinance—

(i) any agreement with, or security taken by, a moneylender in respect of money lent by him after the commencement of this Ordinance shall be valid in favour of any bona fide

[p.224] of [1971] 2 GLR 199 assignee or holder for value without notice of any defect due to the operation of this Ordinance and of any person deriving title under him; and

(ii) any payment or transfer of money or property made bona fide by any person, whether acting in a fiduciary capacity or otherwise, on the faith of the validity of any such agreement or security, without notice of any such defect shall, in favour of that person, be as valid as it would have been if the agreement or security had been valid; and

(iii) the provision of this Ordinance limiting the time for proceedings in respect of money lent shall not apply to any proceedings in respect of any such agreement or security commenced by a bona fide assignee or holder for value without notice that the agreement or security was affected by the operation of this Ordinance, or by any person deriving title under him . . .”

Subsection (2) of the same section also reads: “Nothing in this section shall render valid for any purpose any agreement, security, or other transaction which would, apart from the provisions of this Ordinance, have been void or unenforceable.”

Faced with the proviso, counsel for the plaintiff contended that the proviso applies only to voidable transactions. I do not accept this contention, for subsection (2) makes it clear that the proviso applies to both voidable and void transactions.

In this case the learned circuit judge found as a fact that the third defendant was a bona fide purchaser for value without notice of any defect in the first defendant’s title. It follows, therefore, that the third defendant acquired a valid title to the house, notwithstanding any defects in the title of the first defendant due to the operation of the Moneylenders Ordinance. The cross-appeal accordingly fails. What now is the remedy of the plaintiff who has lost his house? It is provided that in every case where the proviso to section 23 (1) precludes the borrower from recovering his security from a bona fide purchaser for value, the borrower shall have a right of indemnity against the moneylender. The right to indemnity is not the same as a right to damages, and the distinction is specially emphasized by Bowen L.J. in Birmingham and District Land Co. v. London and North Western Railway Co. (1887) 34 Ch.D. 261, C.A. where he said at pp. 274–275 that:

“What is the meaning of the expression ‘entitled to indemnity’? . . . I think it tolerably clear that the rule, when it deals with claims to indemnity, means claims to indemnity as such either at law or in equity. In nine cases out of ten a right to indemnity, if it exists at all as such, must be created either by express contract or by implied contract: by express contract if it is given in terms by the contract [p.225] of [1971] 2 GLR 199 between the two parties; by implied contract if the true inference to be drawn from the facts is that the parties intended such indemnity, even if they did not express themselves to that effect, or if there is a state of circumstances to which the law attaches a legal or equitable duty to indemnity, there being many cases in which a remedy is given upon an assumed promise by a person to do what, under the circumstances, he ought to do. I say in nine cases out of ten, for there may possibly be a tenth. Thus there might be a statute enacting that under certain circumstances a person should be entitled to indemnity as such, in which case the right would not arise out of contract, and I do not say that there may not be other cases of a direct right in equity to an indemnity as such which does not come within the rule that all indemnity must arise out of contract express or implied. But it is quite clear to my mind that a right to damages, which is all that the Defendants have here if they are entitled to anything, is not a right to indemnity as such. It is the converse of such a right. A right to indemnity as such is given by the original bargain between the parties. The right to damages is given in consequence of the breach of the original contract between the parties. It is an incident which the law attaches to the breach of a contract, and is not a provision of the contract itself.” In the same case Fry L.J. also described the distinction between indemnity and damages, both in the law of contract and in the law of torts. He said at p. 276 that:

“When a man contracts that he will do a thing, it can hardly be taken as implying a contract as to what will arise if he does not do the thing. In the same manner with regard to tort, the right to damages for tort does not arise from any implied contract that if I do a wrong I will indemnify the person wronged for the wrong I have done. It is the common law right which everybody has to damages for a wrong which has been done to him. Therefore the right to such damages is not a right to indemnity, although when you come to ascertain what the measure of damages is, it may be that indemnity will properly express that measure of damages.” See also Eastern Shipping Co. v. Quah Beng Kee [1924] A.C. 177, P.C.

The law has always been that where under a statute rights are created with specific remedies, only those remedies are available, and no other remedy can be presumed to exist; see Tularley v. Abaidoo [1962] 1 G.L.R. 411, S.C. It follows, therefore, that the award of N¢1,342.00 damages against the first and second defendants jointly and severally is null and void, and that that portion of the judgment making the award ought to be expunged.

The question that now arises is whether this court can grant the relief to which the plaintiff is entitled by virtue of the provisions of the proviso

[p.226] of [1971] 2 GLR 199 to section 23 (1) of the Moneylenders Ordinance. I think we can under rule 32 of the Supreme Court Rules, 1962 (L.I.218): see Chahin v. Boateng [1963] 2 G.L.R. 174, S.C. The relevant provisions of rule 32 are in these terms:

“The Court shall have power to give any judgment and make any order that ought to have been made … These powers may be exercised by the Court, notwithstanding that the appellant may have asked that part only of a decision may be reversed or varied; and may also be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have appealed from or complained of the decision.”

In pursuance of rule 32 this court can make an order that the first defendant make good the loss which the plaintiff has sustained in consequence of the wrongful sale of his property. Since the property was sold for N¢1,719.00, I think the justice of the case requires that the first defendant must be ordered to indemnify the plaintiff to the extent of that amount.

I would, therefore, set aside the sum of N¢1,342. 00 awarded by the learned circuit judge as damages against the first and second defendants, and I would order that the first defendant indemnify the plaintiff in the sum of N¢ 1,742. 00.

Subject to the above order, I would dismiss both the appeal and the cross-appeal.

The plaintiff is to have the costs of the appeal fixed at N¢105.05; the third defendant was not represented and there will accordingly be no order as to costs in respect of him. I would make no order as to the second defendant.

JUDGMENT OF AMISSAH J.A.

I agree.

JUDGMENT OF ARCHER J.A.

I also agree.

DECISION

Appeal and cross-appeal dismissed.

Damages of N¢1,342.00 awarded the plaintiff set aside.

Defendant to indemnify the plaintiff in the sum of N¢1,742. 00.

K. T.