December 20, 2006
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court of Ghana, per Dr. S. Twum, J.S.C., allowed the appeal by the 1st Defendant/Appellant (Standard Chartered Bank Ghana—Stanchart) from a Court of Appeal decision that had upheld High Court liability for a US$82,000 loss suffered by the 1st Plaintiff, a customer of ANZ Grindlays Bank Ltd (the Co-Plaintiff). The fraud involved two telex instructions purportedly sent by the 2nd Defendant, E. O. Effiong, posing as Mr. Egbe, to ANZ Grindlays, which then executed SWIFT transfers to Stanchart’s Liberia Road Branch. Emphasizing that SWIFT messages are not negotiable instruments and that conversion protects only tangible documentary instruments, the Court held the Bills of Exchange Act 1961 (Act 55) sections 81–82 inapplicable to electronic transfers. Section 81 is a banker’s protective defence, not a general duty or cause of action. The beneficiary bank could not be liable in conversion absent handling of cheques or covered instruments. The Court struck out conspiracy pleadings and suggested that proper remedies might lie in contractual claims against ANZ Grindlays or restitutionary tracing, but ultimately set aside both lower court judgments.
J U D G M E N T
DR. S. TWUM, J.S.C.: This is an appeal from the judgment of the Court of Appeal dated 12th November 2004. It substantially confirmed the judgment of the trial High Court delivered on 24th May 2001.
Even though the Court of Appeal claimed to have confirmed the judgment of the trial High Court, dated 24th May 2001, its final order dismissed the trial Court’s holding that “the 2nd Plaintiff is liable to the 1st Defendant in this matter and must indemnify the 1st Defendant who raised indemnity in its Statement of Defence.”
It is against this judgment that the 1st Defendant/Appellant (hereinafter called “the Appellant”) has appealed to this Court. It was aggrieved by the decision of the Court of Appeal holding it liable for the loss of the sum of US $82,000.00 belonging to the 1st Plaintiff/Respondent (hereinafter called “the Respondent”)
The Appellant filed three grounds of appeal, namely:
The Court erred in the light of statutory and case law position to the contrary, in affirming the decision of the High Court that the 1st Defendant/Appellant is liable for the loss of the 1st Plaintiff/Respondent’s money. The Court of Appeal should have held and ordered the 1st Plaintiff to take out a Writ against the Co-Plaintiff.
The Court erred in holding that the 1st Defendant/Appellant was liable in negligence for the loss of the 1st Plaintiff/Respondent’s money.
The High Court having found out that the Co-Plaintiff must indemnify the 1st Defendant/Appellant, the Court of Appeal erred in law by refusing to make a consequential order that the Co-Plaintiff should pay the Plaintiff to the extent of the loss occasioned the Plaintiff. This grave error of law has occasioned the 1st Defendant/Appellant substantial miscarriage of justice.”
Pleadings
The Respondent in the High Court sued the Defendants for:
The sum of US $82,000 being monies fraudulently transferred by the 2nd Defendant to Account No. 010010279101 at the 1st Defendant’s Liberia Road Branch and negligently paid by the 1st Defendant for the 2nd Defendant.
Damages for the conversion of the said sum
Damages for the conspiracy to injure the Plaintiffs financially
General damages and special damages
It pleaded extensively and elaborately facts on which it relied to prove its case against the Appellant. For a better understanding of the issues thrown up for Your Lordships’ decision, permit me to reproduce important paragraphs of the Amended Statement of Claim as well as some paragraphs of