Dua v. Afriyie and Others [1971] 1 GLR 260

Material Facts:

The appellant lent money to the first respondent, which was guaranteed by the other respondents. The transaction was evidenced in writing and stated that the amount lent was £G600. According to the appellant, the first respondent had only paid £G126 and had defaulted in repaying the balance of £G474. He therefore instituted an action in the Circuit Court to recover the balance.

The respondents admitted to borrowing money from the appellant but argued that he charged £G200 as interest, charged £G40 as a customary drink, and only gave them £G360 in cash. The respondents then claimed the transaction was harsh and unconscionable and prayed for it to be reopened under the Loans Recovery Ordinance, Cap. 175 (1951 Rev.). This contention was denied by the appellant, who maintained that he gave out £G600 to the respondents without any deduction.

Procedural History:

At the Circuit Court, judgement was given in favour of respondents as the court held that the loan was harsh and in violation of the Moneylenders Ordinance, Cap. 176 (1951 Rev.) and was therefore irrecoverable. The appellant appealed.

Issue:

Whether or not the respondent had the burden of proving that the appellant was a moneylender?

Arguments of the Appellant:

1. That the trial judge simply accepted that the appellant was a money lender because the evidence led did not justify that finding.
2. That the judge simply relied on the presumption raised by Section 3 of the Moneylenders Ordinance. That this presumption did not relieve the respondents of proving that the appellant was a moneylender.
3. That the appellant was not a moneylender and could not be punished under the Moneylenders Ordinance, because per the case of Newton v. Pyke (1908) 25 T.L.R. 127, merely lending out money to others on several occasions does not make one a moneylender. For a person to be a moneylender, there should be evidence of a degree of system and continuity, and the respondent must provide such evidence.

Holding:

The respondent did not have the burden of proving that the appellant was a money lender.

Ratio Decidendi:

Per common sense,

if one party alleges that another is a moneylender, he should show [by evidence] some continuity and system about his work.

However, this common sense reasoning is displaced by Section 3 of the Moneylenders Ordinance, Cap. 176 (1951 Rev.) which 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.

In light of this provision, once it was clear that the appellant lends money with interest, it was presumed that he was a moneylender, and he had the burden of proving otherwise. In explaining the effect of Section 3 (supra), the court said:

The statute thus creates a rebuttable presumption in favour of a person who alleges that another is a moneylender provided he shows that that person lent money even on one occasion at interest. From a purely evidential point of view, if the person against whom such proof is offered elected to offer no evidence, then a court would be justified in holding him to be a moneylender and visiting him with the penalties and disability prescribed by the Moneylenders Ordinance.

…

It seems to me therefore that to escape the clutches of the Moneylenders Ordinance, the appellant must displace the statutory presumption by evidence. That evidence must be directed to showing that he is not a moneylender within the meaning of section 3 of the Ordinance, that is, that his business is not that of moneylending or that he does not carry on or advertise himself or announce himself or hold himself out in any way as carrying on business as a moneylender. In a sense, the appellant will have to establish the negative. In this wise, section 3 of the Ordinance seems to reverse the well-known rule of the law of evidence that he who affirms must prove and not he who denies. But this clearly is a legislative policy expressed in unambiguous language and it is not for us to question the wisdom of the legislature. It is plain that the whole object of the Moneylenders Ordinance is to protect borrowers from exploitation by moneylenders. It is therefore not surprising that Parliament would want to go to great lengths to achieve this even if this results in setting at nought well established rules of law.

Principle in Case:

1. There is a general rule that he who affirms must prove and not he who denies.
2. However, an exception to that rule is that where a statute requires he who denies to prove, he must prove. Put differently, a statute may impose the burden of proof on a party other than the one who alleges.