DANIEL OFORI v. ECOBANK GHANA LTD & ORS
2018
SUPREME COURT
GHANA
CORAM
- DOTSE, JSC (PRESIDING)
- YEBOAH, JSC
- BAFFOE-BONNIE, JSC
- APPAU, JSC
- PWAMANG, JSC
Areas of Law
- Commercial Law
- Corporate Law
- Banking and Finance Law
- Contract Law
- Civil Procedure
2018
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court of Ghana, per Pwamang, JSC, allowed the plaintiff’s appeal arising from a CAL Bank share trade executed on the Ghana Stock Exchange in May 2008. Databank Brokerage acted for both sides, and NTHC, the bank’s registrars, transferred the sellers’ shares into buyer William Oppong-Bio’s name. On T+3, the 1st defendant bank made funds available and, per the plaintiff’s instructions, issued banker’s drafts and placed GHS 6,162,420 in a fixed deposit. A Bank of Ghana letter prompted the Exchange to suspend the trade, but the notice reached after payment. The 1st defendant stopped the drafts and Oppong-Bio later purported to withdraw; the SEC Director-General opined the trade had failed and directed reversion. The Supreme Court held that under Rule 50(2) and Rule 52, a trade is not automatically dead after 11:00 a.m. on T+3; settlement may occur within three additional days. Delivery versus Payment in Ghana is sequential, and entry in the company’s register constitutes delivery and transfers title under Act 179. Frustration did not apply; nemo dat was inapplicable; payment by direct remittance satisfied Exchange rules; and the bank owed the plaintiff, with interest and nominal damages. Reliefs were granted and SEC’s contrary directives set aside.
PWAMANG, JSC:-
This case comes before us upon the invocation of our appellate jurisdiction by the plaintiff/appellant/appellant who was dissatisfied with the judgment of the Court of Appealdated6thJune,2013whichjudgmentwentinfavourofthe defendants/respondents/respondents. The case arose out of trading of company shares on the Ghana Stock Exchange. Unless otherwise stated, we shall in this judgment refer to the parties by the descriptions they had in the trial court.
FACTS
The essential facts of this case are quite straightforward. Because the processes of the securities market with which we are concerned in this case are time bound, we shall set out the facts in chronological order. In May 2008, one William Oppong-Bio who was 2nd Defendant in the High Court engaged Databank Brokerage Ltd (Databank), a licensed dealer at the Ghana Stock Exchange (the Exchange), to act as his agent and buy for him 14, 130,000 shares in Cal Bank Ltd which are listed on the Exchange. Around the same time, plaintiff offered his shares in Cal Bank Ltd to Databank to sell for him. From the record, it appears that the movement of the shares at the time was in anticipation of an impending General Meeting of shareholders of the bank. The rules of the Exchange permit a single broker to represent the seller as well as the buyer of the same securities traded at the Exchange so in this case Databank represented both plaintiff as well as the 2nd defendant. Consequently, on 27th May, 2008 Databank executed on the floor of the Exchange a trade in 14, 130, 000 shares of Cal Bank Ltd from plaintiff and two other shareholders to 2nd defendant. Generally speaking, by the rules of the stock exchange, from the day a trade is executed the brokers involved are required to undertake certain stipulated activities daily up to the third day 11 am when the seller's broker and the buyer's broker are expected to undertake the exchange of the securities and the payment for the securities. This is done under the supervision of an officer of the stock exchange but where a single broker represents seller and buyer, then the broker effects the exchange and reports to the Exchange that the trade has settled. Once a trade is settled it becomes irrevocable by the parties to the trade, unless there is proof of fraud or misrepresentation.
In this case, the clearing and settlement of the trade progressed from 27th May, 2008 and, apart from a request for further particulars about the transaction which the broker