Standard Chartered Bank Ghana Limited suffered a heavy
legal blow last Thursday 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 it had at all material times had
enough funds in his accounts but the bank kept dishonouring his cheques despite
his giving the green light to the bank to honour his cheques.
“Defendants consistently refusing 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 others, 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 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.
He gave an outline of the particulars relating to the
extent of damage he had suffered and said “even though the plaintiff paid
several millions of dollars being rent income from plaintiff’s Adwoa Adjeiwaa
house and income from his warehouses at Tema into Accra Business Bay Limited,
One World Real Estate Management Limited and Ghana Heights Limited accounts
with the defendant bank, the defendant continuously refused to honour cheques
drawn on the account of the said companies with the defendant bank on the
grounds that the accounts were dormant, even though at all material times that
the defendant failed to honour the cheques, there were sufficient funds in the
respective accounts,” the plaintiff averred.
Standard Chartered Bank denies
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.
“The defendant avers that the position is the same for
the other particulars of loss and damages.”
It also denied claims that it had conspired with its
officers to injure the plaintiff and his businesses and further refuted
plaintiff’s assertion that he had suffered losses because of the defendant.
The bank argued that “the plaintiff’s economic
forecast has no bearing directly or indirectly with the running of his personal
account with the defendant and the whopping sums of money projected by the
plaintiff is a figment of his own imagination”.
The defendant stated among other issues that “the
strenuous attempt to connect the plaintiff’s personal account with his
so-called three companies is an afterthought which totally undermines the
plaintiff’s conspiracy theory against his own bank (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 was of 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 in 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 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.
The Commercial Court in Accra will on January 7, 2015
decide whether or not to stop the Ghana National Petroleum Corporation from
accessing a $700 million loan facility until the final determination of a suit
brought against the GNPC by three Members of Parliament (MPs).
