Nortey v Hassan (A2/36/23) [2025] GHADC 120 (5 May 2025)

IN THE DISTRICT COURT AT LA HELD ON MONDAY THE 5TH DAY OF MAY, 2025. BEFORE HER WORSHIP ADWOA BENASO ASUMADU-SAKYI, SITTING AS MAGISTRATE SUIT NO: A2/36/23 ANGELIQUE NORTEY H/No. A3 Goldings Estate Adjiringanor-East Legon Accra >>> PLAINTIFF VRS. ABU HASSAN NO. 23 Skies Street Airport-Hills, Accra >>> DEFENDANT PARTIES: absent LEGAL REPRESENTATION: Letitia Adamwaba Buntugu for the Plaintiff Doris Bangful with Yolanda Yena for the Defendant JUDGMENT _______________________________________________________________ INTRODUCTION The Plaintiff filed this instant suit on the 9th March, 2023 against the Defendant and prayed for the following reliefs; 1. An Order compelling the Defendant herein to pay the Plaintiff an amount of GH¢ 260,000 being the outstanding principal together with accrued interests on the Financial Assistance given to the Defendant in August 2022 aforementioned. 2. An Order for the payment of an amount GH¢ 78,000 being accrued agreed interests at the rate of 10% per month of GH¢ 260,000 aforementioned from November 2022 to February 2023. 3. Accruing interests at the rate of 10% per month on the said amount of GH¢ 260,000 from February 2023 till date of full and final payment. OR in the Alternative; 4. Judicial Sale of the property used as security for the Financial Assistance aforementioned. 5. General damages for breach of contract. 6. Cost including Solicitor’s fee. The plaintiff’s case is that she is a business woman based in Accra whilst the Defendant is also a businessman. She goes on to state that the Defendant was introduced to her by Kofi Dixon on or about August 2022 for financial assistance to undertake a business venture. She states that she issued an Absa Cheque with no. 956620 to the tune of Two Hundred Thousand Ghana Cedis (GH¢ 200,000) to the Defendant. Continuing, the plaintiff said that a financial assistance agreement was entered into by both parties and same was executed on 22nd August, 2022 and pursuant to the agreement the Defendant was expected to make repayment of an amount of Two Hundred and Sixty Thousand Ghana Cedis (GH¢ 260,000) on or before the 24th of November, 2022. The Defendant provided documents of his parcel of land situate at Airport Hills, Accra as security for the money he was given and handed same to the Plaintiff. She further stated that on the 24th of November, 2022 the Defendant issued a Stanbic Bank Cheque with No. 000035 with a face value of Two Hundred and Sixty Thousand Ghana Cedis (GH¢ 260,000) but this stanbic bank cheque was dishonoured and the Defendant pleaded for two extra weeks to settle the indebtedness but he failed to do so. She further states that despite several attempts to recover the outstanding debt which included a formal demand notice from her lawyers proved futile. She states that as at the time this instant case was filed the total indebtedness stood at Three Hundred and Thirty Eight Thousand Ghana Cedis (Two Hundred and Sixty Thousand Ghana Cedis (GH¢ 338,000) as a result of the accrued interest thereon. She tendered into evidence a copy of the financial assistance agreement executed between the parties which was marked as Exhibit A, a copy of the defendant’s title documents he used as security which was marked as Exhibit B, a copy of the cheque issued by the Defendant which was marked Exhibit C and a copy of messages shared between the parties on the indebtedness and his readiness to pay her the amount he owed and marked as Exhibit D. The Defendant denied all the averments contained in the Plaintiff’s statement of claim. He states that he was introduced to the Plaintiff as a money lender. He states that he entered into a loan transaction agreement with the Plaintiff and that he provided security for the loan by handing over the documents to his parcel of land situate at Airport Hills, Accra. He also states that the Plaintiff is a money lender and by law she needs a license to operate as one. He also states that he issued a Stanbic Bank Cheque with No. 000035 with a face value of Two Hundred and Sixty Thousand Ghana Cedis (GH¢ 260,000) but asked her not to present the cheque while he takes other steps to repay the loan. He states that the Plaintiff did not act in good faith in their dealings when she presented the cheque even though he asked her not to. He also states that on the 5th of October, 2023 he issued a stanbic bank cheque with number 000035 with a face value of Two Hundred and Sixty Thousand Ghana Cedis (GH¢ 260,000) which is the principal sum and the interest. She repeated her assertions and maintained that the money advanced to the Defendant was a financial assistance and not a loan. If a determination is made that the transaction was a loan then that would mean she was an unregistered money lender and thus would be subject to the laws regulating money lenders. The Defendant filed a Notice of Intention to Defend on the 9th of June, 2023 and the parties were ordered to file written statements on the 19th of July, 2023. The Plaintiff complied with this order and filed her Statement of Claim on the 9th of August, 2023 and the Defendant filed his Statement of Defence on the 22nd of August, 2023. The Plaintiff then filed a Reply to the Statement of Defence on the 31st of August, 2023. The Defendant was granted leave to amend his statement of defence and he filed same on the 7th of November, 2023 and the Plaintiff filed an amended Reply on the 17th of November, 2023. After pleadings closed the Court ordered the parties to file their respective witness statements simultaneously on the 22nd of November, 2023. The Plaintiff filed her witness statement on the 22nd of February, 2024 and the Defendant filed his witness statement on the 16th of February, 2024. Case management conference was conducted on the 14th of March, 2024. Hearing commenced on the 20th of June, 2024 and was completed on the 21st of January, 2025. Although there were no issues set down as issues to be determined for trial, I have set the following issues down as issues for determination; 1. Whether or not the GH¢200,000 given to the Defendant was a loan or financial assistance. 2. Whether or not the plaintiff is a money lender or carried on the business of money lending. 3. Whether or not the property used by the Defendant as security can be a subject matter of judicial sale. APPLICABLE LAW The law is trite that a party who asserts a fact assumes the responsibility of proving same and thus the burden of producing evidence as well as the burden of persuasion is therefore cast on that party and the standard required is provided for by the virtue of sections 10,11 and 12 of the Evidence Act, 1975 (NRCD 323). The above stated provisions have received judicial blessings by the Supreme Court who has pronounced on them in the past to be the nature and standard of proof in civil cases. This position of the law has been reiterated in the case of Ackah v. Pegrah Transport Ltd And Others [2020] SCGLR 728 where in unanimously dismissing an appeal, the Supreme Court held as follows; “It is a basic principle of the law on evidence that a party who bears the burden of proof is to produce the required evidence of the facts in issue that has the quality of credibility short of which his claim may fail. The method of producing evidence is carried and it includes the testimonies of the party and material witnesses, admissible hearsay, documentary and things (often described as real evidence), without which the party might not succeed to establish the requisite degree of credibility concerning a fact in the mind of the court or tribunal of fact such as a jury. It is trite law that matters that are capable of proof must be proved by producing evidence so that on all the evidence a reasonable mind could conclude that the existence of the fact is more probable than its non-existence. This is a requirement of the law on evidence under sections 10(1) and (2) and 11(1) and (4) of the Evidence Act, 1975 (NRCD 323),” See the case of Ababio v. Akwasi IV [1994-1995] GBR 774 The Court has a duty to examine the evidence on record and determine whether the Plaintiffs have met the burden of proof. It is settled law that he who alleges must prove his case on the strength of his own case. This principle was enunciated in the case of Owusu v. Tabiri and Another [1987-88] 1 GLRR as follows: “It was a trite principle of law that who asserted must prove and win his case on the strength of his own case and not the weakness of the defence”. In civil cases the standard of proof is by a preponderance of probabilities which was defined in the case of GIHOC Refrigeration and Household v. Jean Hanna Assi [2005-2006] SCGLR 458 as a party’s ability to persuade the Honourable Court that the existence of a relevant fact is more probable than not. The Plaintiff therefore has a duty to prove her case by leading sufficient evidence to convince the court that her story is probably true. As espoused in the case of Zabrama v. Segbedzi [1991] 2 GLR 223 at page 246 where the court held as follows: “a person who makes an averment or assertion, which is denied by his opponent, has the burden to establish that his averment or assertion is true. And, he does not discharge this burden unless he leads admissible and credible evidence from which the fact or facts he asserts can properly and safely be inferred. The nature of each averment or assertion determines the degree and nature of that burden”. This notwithstanding, in cases where one receives money from another person on which interest is charged, a presumption arises that the money is a loan. Thus this presumption shifts the burden to the provider of the funds which in this case is the Plaintiff to establish the negative, that it to prove that the money given was not in fact a loan. This principle was established in the case of Ahenfie Cloth Sellers Association v. Philomena Mensah, Tina Mavis Dodd, David Afriyie & Ben Mensah (2010) JELR 68496 (SC), where Justice Brobbery, stated as follows: “The established rule is that the onus on the lender is one of the rare occasions where a party will be required to prove the negative, i.e. to prove that she is not a money lender.” The Plaintiff’s case is centred on the agreement the parties entered into which was tendered into evidence and marked as Exhibit A. Exhibit A is titled as “AGREEMENT FOR FINANCIAL ASSISTANCE”. It must be noted that even when parties who are entering into an agreement and title it as financial agreement does not make it an agreement for financial agreement. It must be stated that every document has operative and non-operative parts and the operative parts usually consists of the dates, marginal notes, titles, headings of the documents and recitals. These titles and sub headings are placed there for purposes of convenience and the courts are enjoined to not construe them to control the essence or effect of the main clauses of the document. Section 15 of the Interpretation Act, 2009 (Act 792) provides as follows: “Titles placed at the head or beginning of a subdivision' of an enactment and notes and references placed before the beginning of a provision are intended for convenience of reference only but may be as an aid to construction of the enactment”. From the foregoing it can be concluded that the mere fact that the Exhibit A is titled “AGREEMENT FOR FINANCIAL ASSISTANCE” same must not be interpreted to override the essence and effect of the agreement. In construing any document, the courts are to take into account the surrounding circumstances, the effect of the whole document and the operative parts of the documents and not to solely rely on the headings which form part of the non-operative part of the document. In the case of Bernard Anbataayela Mornah v. The Attorney-General (2013) JELR 68631 (SC), the Supreme Court explained the effect of headings in interpretation as follows: “The extent to which a heading may be relied upon by a court in giving meaning to a particular provision, and what cautions a court may exercise in that regard have been set out in Halsbury’s Laws of England (4th Edition) Reissue Vol. 44(1) para. 1411. Similar views have been expressed in Bennion on Statutory Interpretation, 5th edn., pp. 745-6. The renowned authors of these two works just referred to are all agreed that it is not right to allow the plain literal meaning of the words used in an enactment to be overridden on account of the heading. I agree with this view if only because heading is useful as a quick if it flows from the actual text of the enactment. For that reason, Bennion’s criticism 0fteh House of Lord’s contrary decision in Infrbrics Ltd v. Jaytex Ltd. (1982) AC 1 is justified. In short, the plain, ordinary words used in an enactment cannot be replaced by reason of a heading”. From the discussion above and the plethora of cases, it is clear that headings in an agreement only act as an aid to construction and cannot be interpreted to override the circumstances of the case which the Plaintiff has already admitted that the principal was given to be refunded with interest and which makes it a loan and not a financial assistance. It is trite that in determining the intention of the parties who have entered into an agreement the court must apply the objective approach and the court’s do this by interpreting the entire document, the effect it has on the parties, the conduct of the parties and the surrounding circumstances. This principle was enunciated in the case of P Y Atta & Sons Limited v. Kingsman Enterprises Limited (2006) JELR 68376 (SC) as follows: “In conflicting situations like those in the instant case, the process of determining the intentions of the parties should be objective. “Objective approach” in this context implies the meaning that the words in the document will convey to a reasonable person seized with the facts of the case. In such exercise, the entire document, the effect it has on document, the effect it has on the parties, the conduct of the parties and the surrounding circumstances will have to be taken into account”. The giving of financial assistance is known social phenomenon which happens day in day out. It was held in the case of Ahenfie Cloth Sellers Association v. Philomena Mensah, Tina Mavis Dodd, David Afriyie & Ben Mensah (2010) JELR 68496 (SC) held as follows: “Lending money is a social phenomenon. No legislature can legislate to prohibit it. If it does, it will be an exercise in futility because people cannot be stopped from borrowing money and lending it when needs arise. Even the Bible endorsed borrowing and lending in the Old Testament as will be found in Exodus 22: 25 which reads: “If you lend money to any of my people who are poor, do not act like a money lender and require him to pay interest”. What must now be determined is what makes a friendly assistance have the characteristics of a loan. Where a friendly assistance attracts interest it ceases to be a friendly assistance and becomes a loan. It was held in the case of Nana Osei Afrifa v. Eugene K. Chinebuah & Humprey Tenzagh (2019) JELR 63874 (HC), as follows: “what cannot be denied is that a friendly assistance does not attract interest. Where the money given out as friendly assistance attracts interests of 52% or 23% that transaction will cease to be friendly let alone an assistance”. It is the case of the Plaintiff that Exhibit A is not a loan agreement but an agreement for financial agreement while the Defendant is of the opinion that it is a loan. For the purposes of this judgment I will reproduce the relevant clauses of Exhibit A as follows: 3. INTEREST The Parties agree that the Financial Assistance shall attract a monthly interest of 10% over the stipulated term of three (3) months thus making the total amount payable by the Recipient at the end of the term to be GH¢ 260,000. 4. REPAYMENT 4.1 The Recipient shall repay the entire amount of GH¢ 260,000 as full and final settlement in respect of the financial assistance given on or before the 24th day of November, 2022. 4.2 The Recipient may prepay the whole amount (Principal plus Interest) at anytime before the end of the stipulated term. 5. SECURITY The Recipient has provided as security for the Financial Assistance a piece of LAND situate lying and being at EAST AIRPORT containing an approximate area of 0.279 Acre or 0.113 Hectare including the building thereon more or less and bounded on the North-East by Assignor’s land measuring 112.3 feet more or less on the South-East by Assignor’s land, measuring 64.8, 60.31. 94.8 feet more or less on the South-West by proposed road measuring 48.3, 22.3 feet more or less which piece or parcel of land is more particularly delineated on the Plan attached thereto and thereon shewn edged pink for which the Borrower expressly claims ownership. 6. DEFAULT 6.1 If for any reason, the Recipient fails to repay the said amount or any part thereof within the stipulated period, the Recipient shall be in default. Interests shall continue to run in the event of a default by the Recipient. From the above it is clear that Exhibit A has the following clauses; interest, repayment and default which departs from a financial assistance agreement but rather takes on the shape of a loan. With this principle in mind I will now discuss the evidence adduced by the parties during the trial. A careful perusal of the record of proceedings clearly indicates that the Plaintiff admitted during her cross examination that she gave an amount of GH¢200,000.00 and that same was to be paid back with interest. This is what transpired on the 20th of June, 2024; Q. Defendant was required to pay the GH¢200,000.00 you advanced to him with interest A. Yes Q. And the interest was to be GH¢60,000.00 A. Yes Admission is defined by the 7th edition of the Black’s Law Dictionary as a voluntary acknowledgment of the existence of facts relevant to an adversary’s case. Justice Brobbey in his book, Essentials of Ghana Law of Evidence at page 112 explained admissions to mean the fact or issue which has been conceded and is no longer in contention. It is trite that where a matter is admitted by an adversary, proof is dispensed with as held in the case of Samuel Okudzeto Ablakwa and Another v. Jake Obetsebi Lamptey and Another [2013-2014]1 SCGLR 16. Also in the case of In re Asere Stool; Nikoi Olai Amontia IV (Substituted by) Tafo Amon II v. Akotia Owirsika III (Substituted by) Laryea Ayiku III [2005-2006] SCGLR 637 at 656, which was quoted with approval in Fynn v. Fynn [2013-2014] SCGLR 727 at 738, it was held there cannot be any between proof than an adversary admitting a fact in contention. With this admission by the Plaintiff there was no need to proof that interest was charged on the principal amount given by the Plaintiff and this therefore raises the presumption that the agreement between the parties was a loan agreement. Unfortunately a careful perusal of the record of proceedings clearly indicates that she failed to rebut this presumption. From the foregoing I hereby conclude that Exhibit A is a loan agreement and not financial agreement due to the clauses and the admission made by Plaintiff even though it was meant to be a financial agreement. Having concluded that the parties entered into a loan agreement and not an agreement for financial assistance I must determine whether or not the plaintiff is a money lender or carried on the business of money lending. In the case of Yeboah v. Bofour [1971] 2 GLR 199 CA, the court cited with approval the opinion of the Privy Council delivered by Lord Delvin at p. 218 that the fact that someone lends money does not necessarily mean the person is carrying on the business of money lending. It then gave parameters to be met before it can be determined that a party is indeed carrying on the business of money lending. The court held 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 rebutting evidence, that there were sufficient other transactions of a similar sort to amount to a carrying on of business.” See the cases of Ayiwah v. Badu [1963] 1 GLR 96, SC and Dua v. Afriyie [1971] 1 GLR 260. A money lender can be defined as a person whose business is that of moneylending or who carries on or advertises or announces or holds out in any way as carrying on that business, whether or not that person also possesses or owns property or money derived from sources other than the money lending of money and whether or not that person carried on the business as a principal or as agent. These cases stated above were based on the Money lenders Ordinance, Cap 176 and the Recovery of Loans Ordinance, Cap 175. It must be stated that Money lenders Ordinance, Cap 176 has been repealed by section 47(1) of the Non-Bank Financial Institutions Act, 2008 (Act 774). With the repeal of the CAP 176, the applicable statutory provision would be section 2 of the Non-Bank Financial Institutions Act, 2008 (Act 774) which provides as follows: (1) A person shall not provide any of the services Specified in the First Schedule unless that person holds a valid licence issued for that purpose under this Act The persons listed in the First Schedule of Act 774 include persons who engage in money lending operations and the Plaintiff having lent money and charging interest on the said money makes her a money lender. Having come to this conclusion, the Plaintiff is therefore caught by section 2(1) of Act 774 and therefore needs a license to operate. What must now be answered is whether the absence of the money lending license makes the agreement between the parties illegal as Counsel for Defendant is contending that the Plaintiff not having a license within the terms of the law makes the agreement illegal and unenforceable. An illegal contract is one which is null and void; it is of no effect whatsoever and is clearly unenforceable. It affects both parties to the contract and none of them can enforce it. This notwithstanding a contract or agreement which is against the provisions of a statute is not necessarily illegal. In the case of Olatiboye v. Captan [1968] GLR 146, Amissah JA held as follows: “it is not every infringement of a statutory provision that makes a contract illegal and therefore unenforceable. Where the act contemplated by the contract is prohibited by statute but was subject to a penalty which was merely for the benefit of the revenue, the contract could be enforced. Where the provisions of a statute indicated the intention of the legislature to prohibit the contract itself, then even though the penalty imposed for a breach incidentally benefited the revenue, the contract would nevertheless be illegal and unenforceable”. A contract may however be in violation of a statue and yet it may be enforceable. Such a contract can be described as voidable. It is not void but may be enforced on the satisfaction of certain conditions. In effect, contracts on money lending may be illegal which will imply that they are null, void and unenforceable ab initio in their formation, performance or enforcement. They may, on the other hand, be voidable and enforceable on the satisfaction of certain conditions and payment of certain penalties. Thus even if the agreement is deemed as an illegal, the recent case of Royal Beneficiaries Association v. Esther Okailey Asare and 3 Others (2015) JELR 64792 (CA) where the court of appeal was confronted with a similar facts held that the trial court erred when it failed to consider that the court of equity would not allow “unjust enrichment to allow the respondent who knew that the loan had been sourced from the Ghana Commercial Bank to make use of it and refuse to pay back at the least the principal amount. There is therefore a need to balance the need to deny enforceability to the contract against the need to prevent unjust enrichment of the defendant as the interest of justice requires that the courts seek to reverse the unjust enrichment of borrowers when they retain the benefits of loans procured over a period without any payment for them at a reasonable rate. See the case of Royal Beneficiaries Association v. Mrs. Vivian Mensah, Alice Badu, Vivian Owuo and David B. Mensah (2013) JELR 66534 SC. Thus in order to balance the need to deny enforceability to the contract against the need to prevent unjust enrichment I will ensure the Defendant pays the principal and interest agreed to by the parties. There is however evidence on record that the Defendant has already made payment of the principal and interest on the 5th of October, 2023 and as a result relief a has been already been satisfied. The next issue to be determined is whether or not the property used by the Defendant as security can be a subject matter of judicial sale. Section 22(6) of the Borrowers and Lenders Act, 2020 (Act 1052) provides that a lender cannot enforce a security interest registered under the Borrowers and Lenders Act unless the credit agreement is stamped in accordance with the Stamp Duty Act, 2005 (Act 689). This means that a court can only order the judicial sale of a property used to secure a the loan transaction where the property used for the security under the Borrowers and Lenders Act with the Collateral Registry and the Loan Agreement is also stamped in accordance with the Stamp Duty Act, 2005 (Act 689). There is no evidence that section 22(6) of (Act 1052) was complied with by the Plaintiff and as such this court cannot make an order for the judicial sale of the Defendant’s property to be used as security and thus the Plaintiff fails on relief d. SGD H/W ADWOA BENSAO ASUMADU-SAKYI MAGISTRATE