March 13, 2024
SUPREME COURT
GHANA
CORAM
AI Generated Summary
Afare Apeadu used his Cal Bank shares as collateral for a loan from Ecobank Ghana Ltd to fund William Oppong Bios purchase of Daniel Oforis Cal Bank shares. After a Bank of Ghana directive temporarily suspended trading, Oppong Bio cancelled the loan and Ecobank withheld Apeadus share certificate. Apeadu previously obtained a High Court order releasing his shares, then sued Ecobank and EDC Stockbrokerage for special damages, claiming unlawful retention caused a decline in value. The High Court awarded GH6,770,440, but the Court of Appeal reversed, relying on the Supreme Courts Daniel Ofori v. Ecobank decision that, under Ghana Stock Exchange rules, Delivery versus Payment is sequential and the trade had been consummated before suspension took effect. The Supreme Court in this appeal held that its Ofori decision bound the Court of Appeal; because the consummated trade was funded by Ecobanks loan, the collateral remained valid, so Apeadu was not entitled to release or damages. The appeal was dismissed and the Court of Appeals decision affirmed.
KOOMSON JSC:
This is an appeal against the judgment of the Court of Appeal dated 22nd December, 2020 allowing the appeal against the judgment of the High Court which held that the Plaintiff/Respondent/Appellant (hereinafter referred to as Plaintiff) was entitled to an amount of Six Million Seven Hundred and Seventy Thousand Four Hundred and Forty Ghana Cedis (GH¢6, 770, 440. 00) as special damages for unlawful retention of the Appellant’s shares by the Defendants/Appellants/Respondents (hereinafter referred to as Defendants). FACTS On 27th May 2008, Mr. William Oppong Bio sought to buy the listed shares of Mr. Daniel Ofori in Cal Bank Ghana Ltd. Funding for the acquisition by Mr. Oppong was through a loan facility from the 1st Defendant.
The Plaintiff had agreed to use his shares also in Cal Bank as collateral to secure the repayment of the loan facility granted to Mr. Oppong Bio.
Thus, the Plaintiff deposited the share certificate in respect of his 18, 120, 000 shares with the 1st Defendant and kept by the 2nd Defendant.
The share sale transaction between Mr. Daniel Ofori and Mr. Oppong Bio was suspended by reason of a Bank of Ghana directive to the Ghana Stock Exchange dated 30th May, 2008. The said suspension was subsequently lifted but the share sale transaction could not resume because Mr. Oppong Bio claimed to be no longer interested.
The parties contended that the trade had failed by virtue of the Ghana Stock Exchange Rules.
Mr. Oppong Bio by a letter dated 11th June, 2008 to the 1st Defendant and purportedly cancelled the loan facility.
The 1st Defendant by a letter dated 16th June, 2008 accepted the revocation of the loan facility by Mr. Oppong Bio and refunded the facility-processing fee.
Thus, the Plaintiff also wrote to the 1st Defendant and demanded for a return of his shares which was used as security for the loan facility.
Pursuant to the sale, the 1st Defendant had already issued three bankers draft in favour of Mr. Daniel Ofori for the amounts of GH¢400, 000. 00, GH¢7, 200, 000. 00 and GH¢1, 296, 807. 50 to SG – SSB, Zenith Bank Ltd and Data Bank Brokerage Ltd respectively.
As at the time of the issuance of the cheques, the account of Mr. Oppong Bio had been credited with the loan facility.
The 1st Defendant on receipt of the BOG directive stopped the payment of the drafts but the SG – SSB draft was paid.
Aggrieved by the decision of the 1st Defendant, Mr. Daniel Ofori sued the 1st Defendant and four Others including Mr. Oppong