Standard Chartered Bank Ghana Limited (Stanchart)
suffered a heavy legal blow yesterday when the Fast Track High Court ordered it
to pay $14 million to a businessman for wrongfully refusing to honour cheques
issued by him.
The bank was also slapped with GH¢30,000 cost, and
further directed to pay the amount with interest, with effect from August 2012
to the day of final payment.
Mr Akwasi Boakye Osei, the plaintiff in the case, had
prayed the court to award a total of $18.7 billion in special and general
damages but the court, after considering the evidence adduced in the case,
settled on $14 million.
The court, presided over by Mr Justice K. A.
Ofori-Atta, held that the plaintiff and his witnesses had led ample evidence to
warrant the grant of his claims.
It, however, held that the plaintiff failed to lead
specific evidence on why special damages of $2.1 billion should be awarded to
him and, accordingly, refused to grant it.
Case of plaintiff
Mr Osei, a customer of Standard Chartered Bank brought
the action against the bank, in May 2014 after the bank failed to honour five
cheques he had issued to two churches, the Accra Metropolitan Assembly (AMA),
the Internal Revenue Service (IRS) and an outdoor advertising company.
His beef was that the bank had caused him
embarrassment, huge financial losses, the potential to face court action from
revenue agencies and the threat to lose his property following threats from the
Accra Metropolitan Assembly (AMA) to auction his property on the Oxford Street,
Osu to defray his indebtedness to the assembly.
The plaintiff said he had at all material times had
enough funds in his accounts but the bank kept dishonouring his cheques despite
giving the green light to the bank to honour the cheques.
“Defendants consistently refused to honour plaintiff’s
cheques when at all material times the plaintiff’s account with the defendant’s
at Osu Branch, Accra was on credit and defendant had sought for and plaintiff
had confirmed that payments be made,” the plaintiff had argued.
Particulars of loss and damages
Listing the particulars of loss and damages as a
result of the bank’s inaction, Mr Osei said, among other things, that he had
lost business with DDP Outdoors Ltd to the tune of $2 million; $15 million loss
of business prospects in Adwoa Adjeiwaa building; $1 million loss of image to
two churches and loss of $45 million revenue due to the refusal of tenants at
Adwoa Adjeiwaa building to renew their tenancy.
According to the plaintiff, the bank had caused him to
lose the prospect of raising funds to undertake a multi-million project similar
to the Adwoa Adjeiwaa building project.
He said due to the bank’s failure to honour a February
13, 2012 cheque he had issued to the then IRS, the IRS had withdrawn a five per
cent withholding tax granted to one of his properties.
“By reason of the matters aforesaid, plaintiff has
been injured in his businesses and has been put into considerable trouble,
inconvenience, expense and has suffered loss and damage,” the plaintiff averred
in his amended statement of claim.
Stanchart
In its statement of defence, the bank denied the
plaintiff’s claims and said it acted in accordance with best banking practices
to protect the plaintiff from fraudsters.
According to the bank, it could not reach the
plaintiff to confirm whether or not payment should be made to some payees while
at some material times, he did not have enough funds to match the face value of
some of his cheques.
“The defendant further avers that the plaintiff’s
alleged loss of image with the two churches and the projection of future loss
as unilaterally determined by the plaintiff for 15 years relating to the Adwoa
Adjeiwaa Building and Tema Warehouse are not only fanciful but also ludicrous
and unreasonable as they are totally unrelated to the plaintiff’s banking
transactions with the defendant.
Describing the plaintiff’s claims as ridiculous, the
bank averred that “the plaintiff is wrongly allocating blame for his personal
problems which have as now assumed corporate gab,” adding that “the plaintiff
is not entitled to his mandatory claim or any at all”.
Decision of court
But in a two-hour-long judgement, the court expressed
the view that the plaintiff was entitled to some of his claims and submitted
that the bank’s decision to write “account dormant” on the plaintiff’s cheque
to the IRS exposed the plaintiff to criminal prosecution from the IRS and also
risked being blacklisted in the banking industry for up to three years.
The court held that the bank had subjected Mr Osei to
ridicule and humiliation by its refusal to honour the plaintiff’s cheques a
number of times.
It also accepted Mr Osei’s explanation that his
account at the bank was not dormant as was being alleged by the defendant.
Mr Justice Ofori-Atta said there was no basis for the
bank to dishonour the plaintiff’s cheques and accordingly entered judgement
against the bank.
The parties called 10 witnesses each.
Cost
Counsel for the plaintiff, Mr J. K. Agyemang, pleaded
with the court to award $1.4 million cost against the bank but counsel for the
bank, Mr Samuel Atta Akyea, opposed the request.
Mr Akyea argued that the value of the five cheques
which were dishonoured by the bank did not total $100,000 and also reminded the
court that “you said no direct special damages. You have only awarded general
damages,” and urged the court to allow the parties to bear their own costs.
Mr Agyemang did not take kindly to Mr Akyea’s
statement and said “the plaintiff succeeded and is entitled to cost”.
He described the bank’s action as irresponsible and
said it was surprising the lawyer now had the “audacity to say we are not
entitled to cost”.
He advised the the defendant’s counsel to plead for a
reduction and “not to say we are not entitled to cost”.
The court eventually awarded GH¢30,000 cost in favour
of Mr Osei.
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